[ Page 11795 ]

CONTENTS

Routine Proceedings

Ministerial Statement

White Paper on heritage legislation. Hon. L. Hanson –– 11795

Mr. G. Hanson

Oral Questions

Export of water. Mr. Gabelmann –– 11796

Pulp mill pollution limits. Ms. Cull –– 11797

Sale of Fletcher Challenge Sawmills. Mr. Chalmers –– 11797

Sewage treatment In Victoria. Mr. Sihota –– 11797

Ministerial Statements

"Buy B.C. First" program. Hon. Mr. De Jong 11798

Mr. Barlee

Takla Agreement. Hon. Mr. Richmond –– 11799

Mr. Miller

Compensation Fairness Act (Bill 82). Committee stage. (Hon. Mr. Veitch) –– 11800

Mr. Clark

Mr. Sihota

Ms. A. Hagen

Mr. Perry

Mr. G. Hanson

Mr. Peterson

Ms. Edwards

Ms. Smallwood

Ms. Cull

The House met at 2:05 p.m.

Prayers.

MR. PELTON: Hon. members, I'm very privileged today to have the opportunity of introducing to you three very nice people from Sidney: Mr. Phil Perry and his wife Gwen, and Mr. Irv Lang. Would you please all give them a warm welcome.

MR. HARCOURT: Mr. Speaker, I have the honour of introducing back to this House a member for many years, the previous Attorney-General, Alec Macdonald, QC.

HON. L. HANSON: I would like to draw the House's attention to the gallery where members of our heritage community have gathered for an announcement today. Will the House please welcome: Mary Liz Bayer, chairman of Heritage Canada; Don Mitchell, director of the Heritage Trust; Martin Segger, an alderman for the city of Victoria; and Wilma Wood, president of the Heritage Society of B.C.

HON. MR. JACOBSEN: Mr. Speaker, on behalf of the first member for Dewdney and myself, I'd like the House to welcome a good constituent, a very good friend, Mr. Gordon Gardner.

Ministerial Statement

WHITE PAPER ON
HERITAGE LEGISLATION

HON. L. HANSON: I have the privilege today of introducing a significant initiative on behalf of our provincial heritage. I offer for the perusal of this Legislature and all British Columbians a White Paper on the future direction of heritage legislation in this province.

The proposed legislation is the product of a long and exhaustive process of public consultation and involvement. I'm pleased to tell you, Mr. Speaker, that more than 75 percent of the recommendations made by the 1987 Project Pride Task Force are incorporated into this proposed legislation. I'm also pleased to say that this White Paper is the last step in the process, the final look before legislation is introduced.

The legislation we're proposing makes three important changes. It contains a community heritage tool kit for municipalities, which will help local governments manage and conserve heritage resources through proposed amendments to the Municipal Act. There's increased protection for the heritage sites important to native peoples and a foundation for a closer working relationship between the province and the native community. And there are new provisions to protect the rights of owners of heritage property.

Mr. Speaker, I am satisfied that the proposed legislation strikes a fair balance between individuals, property rights and the province's need to preserve our shared heritage.

There are compelling reasons to introduce this White Paper today. B.C. is experiencing change at an accelerating pace. The pressure on heritage sites is going to mount, and it is high time we created a legislative framework that recognizes these values and furthers the conservation and development of the heritage resource.

British Columbians will agree that the proposed legislation goes a long way toward achieving that goal. I want to stress that this is a discussion paper, and with continued consultation and input, I hope we will create legislation that will guard our heritage resources and develop them into the next century. In this spirit, please accept the draft heritage legislation and the interpretative material accompanying it.

For anyone who would like to see a copy, we have numerous copies in my office.

MR. SPEAKER: Standing orders don't provide for a particular process during the introduction of a White Paper, so the Chair is going to view this as a ministerial statement in conjunction with the introduction of a White Paper. Therefore a response will be allowed.

MR. G. HANSON: This side welcomes this initiative. We understand it's a White Paper or a draft document that will ultimately form legislation in this House.

All members of this House are aware that there was not a written history of the heritage of British Columbia — the 10,000 — year heritage prior to European and Asian contact. Those particular materials, evidence and cultural assets of this province are largely destroyed. Ten percent of the archaeological sites of the province of British Columbia are partly or completely intact. The other 90 percent are destroyed because of the transportation corridors and the townsites that have been developed in areas where prior occupation existed. So that particular part of B.C.'s history is extremely valuable, extremely scarce and being damaged and destroyed at an alarming rate.

With respect to the non-native heritage, it is very important that those sites, the early settlements of British Columbia — Quesnel Forks in the Barkerville area — early heritage buildings and the history of this province be preserved and protected.

Many other jurisdictions have extremely strong legislation to protect their heritage — Japan, for example. In the city of Tokyo, when buildings are going to be replaced or reconstructed, there is a proper heritage inventory, archaeological work is often done, and particular types of studies take place rather than obliterating it. We've been wasting our heritage, Mr. Speaker. Therefore we applaud any steps that will be taken that will improve this and safeguard our heritage for future generations.

[ Page 11796 ]

Oral Questions

EXPORT OF WATER

MR. GABELMANN: I have a question for the Minister of Environment. Last Thursday the minister indicated that no water licences would be granted until a full review, as outlined by the Minister of International Business the same day, was completed by the government. Yet reports circulate in both British Columbia and in California that correspondence has in fact been sent by the government of British Columbia to California saying that a favourable decision will be made concerning water exports. Can the minister tell us whether he or the Premier has in fact communicated with principals in California saying that a favourable decision will be granted?

HON. MR. SERWA: It's apparent to me that, with perhaps the best research staff that money can buy in the opposition caucus, the research for the questions is being done by the hon. members on the opposite side by themselves. If they would care to expand their research beyond what they read in the headlines and in the stories in the local newspapers, perhaps they could ask more appropriate questions.

I answered that specific question the other day in the House, and my answer stands.

MR. GABELMANN: My question, then, is to the Premier. Given that the Minister of Environment indicates that no such correspondence or indication has been given to Sun Belt Water, the Coleta water board or any other principals in California, has the Premier or anyone in his government given any indication to people in California that a favourable decision could be expected?

[2:15]

MR. SPEAKER: The question "Has the Premier..." is in order. The question "Has anyone in his government..." is beyond the scope of asking one member to do it, unless that authority is there.

HON. MR. VANDER ZALM: First of all, again, the question is based upon newspaper reports, and that's unfortunate. I think the opposition should do a little more research, as the Minister of Environment said, and get all of the information on the question based upon what they might have received firsthand.

However, again let me say that I do see an opportunity for this resource in future. Obviously, some further work might need to be done, and the Minister of Environment is very involved in this work. But it could well be that there is an opportunity for all the people, including native people, to utilize this resource very effectively — not just to provide a much-needed commodity for those in dire need of it south of us, but also as a means of creating employment and export opportunities, with revenues to government, which will help provide social programs and the like, in which we've done extremely well in this province and will continue to do so but for which we need the resources.

I don't know exactly what the contents of that letter might have been or the exact contents of letters that have been sent, but we do correspond with people who make inquiries about the province and about what they may do by way of seeking business opportunities for us and for themselves. We're always courteous and kind; we always encourage all opportunities and do so in a very nice, effective manner.

MR. GABELMANN: I gather from that admission that a letter does exist. Given that there have been press reports in Santa Barbara and in British Columbia and comments indicating what might be in it made by individuals who have seen the correspondence, I wonder if the Premier would agree to table that particular correspondence.

HON. MR. VANDER ZALM: Obviously there is much correspondence. It comes from government to various people who make inquiries about the province and the opportunities that exist here. I don't think every bit of correspondence provided someone, or every piece of information provided to anyone, needs to become something that necessarily makes for some public issue. I think this would make it very difficult for people to do business with the province or to make inquiries about opportunities as they exist here. That would be a wrong approach, and I think we as a government — familiar with proper business practices — would keep that in mind. Perhaps the same might not apply to the socialist New Democratic Party. But for us, I think we give recognition to proper business practices in our dealings with people from all over the world who are seeking to create jobs and business opportunities in this province.

I will, however, consider the request.

MR. GABELMANN: Mr. Speaker, I'll ask a question of the Minister of International Business and Minister of Finance. Given that he indicated to the House on Thursday that no decisions would be made until a full review — I think he referred to a nine-ministry committee — of this important issue was held, and given that the Premier has just admitted to the House that in fact decisions and commitments have been made, can the minister tell us what the status of that review is now?

HON. MR. VANDER ZALM: On a point of order, I realize this is a common practice from some members opposite, but I do not intend to have that member put words in my mouth that I have not spoken. Therefore I would suggest to the member of whom he has asked the question that he ignore the question or the contents of it, because it's fabrication.

MR. SPEAKER: Hansard will be the final test.

[ Page 11797 ]

PULP MILL POLLUTION LIMITS

MS. CULL: Last week the Minister of Environment said that he was comfortable with the new pulp mill regulations that allowed 11 mills to legally dump levels of pollution that would have been illegal just one year ago. He also said that raising the legal pollution limits for the 11 mills was "only legalizing it so we won't fine them repetitively." Will the minister agree that this government has simply converted an illegality to a legality?

HON. MR. SERWA: Mr. Speaker, I assume that there was a question there. Again, I answered the question on that very topic with respect to the interim standards. I said that the interim standards that were reached do not represent any change in the actual discharge levels of pulp mill emissions. The interim standards were put in for a specific purpose: to allow the mills to upgrade — to put in secondary treatment facilities to reduce the emissions, the biochemical oxygen demand, the total suspended solids and the organochlorines. That tremendous capital investment by the pulp mill industry, which was over $1 billion, required a certain amount of time to plan, to actually construct and to take place.

There are some mills — Skeena is lone, in the riding of the hon. member sitting next to you — that have actually completed their construction program.

They are working on a test basis right now. Their compliance order expires on June 30 of this year. So that's the type of action and activity that has been inspired by the reasonable nature of good Social Credit government.

I am very proud of that, hon. member. We are succeeding. We're tending to the environmental concerns, and we've created jobs as well at the present time. We've kept British Columbians working. That's different than your solution, hon. member.

MS. CULL. Mr. Minister, your actions in raising the legal levels of discharge make about as much sense as raising the legal blood alcohol limit so we won't fine as many drunk drivers. Is it the minister's policy that the right to pollute supersedes the public's right to a clean environment?

MR. SPEAKER: The scope of the question sounds to me more like something better put during estimates, because it will certainly take the time of question period. I'd ask the minister to give a brief reply, because there are other people who wish to ask questions.

HON. MR. SERWA: Again, I have difficulty reaching that hon. member. For clarity, the recent emissions under the interim standards do not exceed the capability of the present plants at the present time and do not exceed what has been happening in the past. The interim standards were required in order to leverage over $1 billion of capital investment. That's what we have accomplished, and that is the situation.

Do you understand, hon. member, that we have not exceeded the status quo on the pulp mill emissions? There has been no increase. We have only legalized what has existed to the capability....

Interjections.

HON. MR. SERWA: I hope all of British Columbia is watching and listening to the antics and activities of Her Majesty's Loyal Opposition, who would like to see everything shut down in the province. It would be as repugnant to this side of the House to cause all of those thousands of men and women their jobs....

MR. SPEAKER: Order, please.

I recognize the second member for Okanagan South.

SALE OF FLETCHER CHALLENGE SAWMILLS

MR. CHALMERS: My question is to the Minister of Forests. Fletcher Challenge has just put six sawmills on the market, employing over 2,000 workers in places like Kelowna, Armstrong, Boston Bar, Williams Lake, Fraser Mills and others. What action has the minister decided to take to ensure continued employment for these workers?

HON. MR. RICHMOND: Fletcher Challenge finds itself in a position of being short of cash to complete some of the programs it has entered into, one being in the neighbourhood of $400 million to clean up the pollution standards in its pulp mills. They have already invested in the neighbourhood of $400 million. They find they're having to divest themselves of some properties, one in Quebec. They are seeking an equity partner in their Crofton mill and they have decided to put some of the solid wood side of their business on the market.

Mr. Speaker, this is an opportunity for many people in British Columbia to get into the solid wood side of the business. In fact, it goes against some of the fears people have of corporate concentration.

I don't see this as a bad-news announcement in any way. There is no intention to close any sawmills down. Should that situation arise, then we will deal with it as per government policy, which is to tie the resource to the communities involved. I see it as a great opportunity for investors in British Columbia to get into the solid wood side of the forest industry.

SEWAGE TREATMENT IN VICTORIA

MR. SIHOTA: I have a question to the Minister of Environment dealing with sewage treatment in the Western Communities. On September 4, your predecessor announced there would be an innovative funding formula for sewage treatment here in the greater Victoria area by the end of October. On November 28, he gave details saying that the program would cost homeowners between $200 and $250 a year per household. On December 17, he indicated

[ Page 11798 ]

it had gained cabinet approval. Could the minister advise the House whether or not a funding formula, which would cost homeowners between $200 and $250 a year, has been put in place by the minister, or was the former minister just mistaken?

HON. MR. SERWA: No, I cannot advise the member whether this has in fact taken place. I can advise the member that the Ministry of Environment, in conjunction with the Ministry of Municipal Affairs, is certainly looking at the type of funding that is necessary to implement the objective of this government with respect to the secondary treatment of sewage throughout the province. The objective of this government, which cares about the environment as well as the economy, is to strive to have secondary treatment established throughout all areas of the province by the year 2000.

MR. SIHOTA: May I suggest, Mr. Speaker, that either the minister doesn't know what is going on in his own ministry or the previous Minister of Environment was mistaken — or, shall I say, fibbing.

The question to the minister is this: on December 19, 1990, government officials indicated that they were basically "dotting the i's and crossing the t's for a program" under your ministry that would allow for funding for sewage treatment in the Western Communities. On January 30, 1991, you indicated that you did not know of any such program. Could you advise the House now whether you know what's going on in your ministry? Is there or is there not a program in place? Was your predecessor fibbing, or are your officials wrong?

Interjections.

MR. SPEAKER: I have to ask the member to withdraw the offensive word.

MR. SIHOTA: Instead of "fibbing," I'll say "mistaken," Mr. Minister.

MR. SPEAKER: That's acceptable.

Interjections,

MR. SPEAKER: Hon. members, before we proceed to the next order of business, it would seem to me that question period has degenerated somewhat into statements with a little question, and a small answer with a ministerial statement — in some cases no answer, but a ministerial statement. It's only fifteen minutes. I don't think we're going to be here too much longer, so perhaps we could review the process. I see some doubt being expressed by members on the government benches. The Chair is happy to sit here as long as members wish to, but question period will be more strictly enforced.

Ministerial Statements

"BUY B.C. FIRST" PROGRAM

HON. MR. DE JONG: Mr. Speaker, it is my distinct honour today to address the House on behalf of this province's agriculture, fisheries and food industries. This morning in Vancouver I launched "Buy B.C. First," an initiative designed to create a new level of awareness of the tremendous importance of British Columbia's agrifood industry.

Agriculture in British Columbia has been showing steady and even remarkable growth, despite dramatic declines in most other provinces. Fisheries have always been a mainstay of the British Columbia economy, and I'm happy to report that the wholesale value of the 1990 catch exceeded $1 billion.

It is time that all British Columbians recognize the true value of the agrifood industry. British Columbians need to know that when they support British Columbia agriculture, they are supporting the economic well-being of the entire province.

Seventy-five percent of the population of British Columbia lives within 50 miles of the U.S. border, and I worry when I hear that the border crossings are considering express lanes to move traffic through more quickly. That means that British Columbia's earned dollars are supporting the U.S. economy at an alarming rate. The numbers are already damaging enough — a 400 percent increase in across-the-border shopping trips. Perhaps as many as 1,200 jobs a year are lost to British Columbians due to across-the-border purchases of agricultural products, tobacco and liquor. That is what "Buy B.C. First" is all about — British Columbians making a conscious decision to purchase food products grown and processed in this province.

[2:30]

I want the best for my family as well. British Columbia food products are the best. No other Canadian province can match British Columbia's diversity in agriculture. British Columbia produces 130 basic commodities. They are used in over 4,000 items found in grocery stores throughout the province, and British Columbia's standards for quality and freshness are world-class.

Consumers tell us of their concerns for the environment. Food producers share their concerns and have shown that they are prepared to do something about them. British Columbia's agriculture leads the world in its efforts to reduce and possibly eliminate the use of pesticides.

I would like to remind the House that British Columbia's agriculture, hospitality and food-processing sectors do more than feed us and earn millions of export dollars; they also feed the economy. There are 210,000 British Columbians employed in the agriculture, fisheries and food industries. That's a lot of jobs and a lot of paycheques, and those jobs aren't confined to rural British Columbia; they are in urban processing plants, transportation networks, equipment— manufacturing centres and retail outlets.

[ Page 11799 ]

Annual sales in the food sector of British Columbia's economy total over $10 billion, including a $4 billion processing sector. An additional $1.3 billion in food products are exported to over 100 countries.

This generates a full $300 million in tax revenue toward the support of schools, hospitals, road systems and generally the quality of life we've all come to enjoy.

I believe that this government has provided the industry with the business environment for growth, and we continue to develop frameworks to support and enhance that growth. "Buy B.C. First" is one of those supports.

Over the next two weeks, 1.27 million British Columbia households will be receiving the "Buy B.C. First" information piece. It communicates the scope and impact of our agriculture, fisheries and food industries. Commercials on provincewide radio will reinforce the "Buy B.C. First" message, and billboards at 15 U.S. border crossings will encourage and remind Canadians to shop at home. To assist shoppers in identifying a locally grown or processed product, we have developed a "Buy B.C. First" symbol. It will be available for use by companies whose products meet the criterion as B.C. products.

Mr. Speaker, agriculture and fisheries play an important role in the development of this fine province. The industry is part of our cultural and economic heritage, and it's up to each one of us to ensure that it is part of our future; "Buy B.C. First."

MR. BARLEE: I think that the minister is concerned and sincere about this legislation, but I think it's a little too late. I think we're all concerned about it.

We applaud the principle of a "Buy B.C." campaign. I think, however, that it may be a bit of a knee-jerk response. This has been going on for some time now. In my own particular riding, the border crossings have increased up to 800 percent. In Osoyoos, two-thirds of a million people cross the border. The American traffic is one-quarter of that. We're all aware that $800 million is spent by British Columbians in Washington State. These are one-way dollars. There are several reasons for that. Most of those reasons lie on the side of the government.

First, the government applauded the free trade deal. This is part of the free trade deal, and it has been very hard on our small businessmen who, in some instances, were members of your party. They are having second thoughts about this. Second, the very high taxes in British Columbia have also led to this. And third, the initial attraction to Washington State was the price of gasoline. The price of gasoline is disastrous in British Columbia; 25 percent of the price of gasoline is taxes placed by the government of British Columbia — the second-highest taxation in Canada and only exceeded by Quebec. We're even higher than Newfoundland.

You individuals have done quite a good job....

MR. SPEAKER: Order, please. We're listening to a response to a ministerial statement about agriculture.

I'm not sure how we got into gasoline prices. Perhaps the Chair could.... Order, please. If the member for Surrey–White Rock–Cloverdale could restrain himself.... It would help the Chair if during these ministerial statements, there was a little less of this cross-court banter. Maybe they could be viewed a little more seriously.

MR. BARLEE: I hardly think that the billboards at the border are going to dissuade people already there. I very much doubt that they are going to turn around and drive back to Vancouver or Penticton. They've already made up their minds, so the flow will continue.

You can thank your government for much of that. The flow has increased dramatically since the free trade deal. I'm sure all the small businessmen in British Columbia are going to thank you. Certainly the farmers will thank you during the next election.

TAKLA AGREEMENT

HON. MR. RICHMOND: I'm pleased to advise the House that yesterday a historic event occurred at Takla Landing, located approximately 150 miles north of Fort St. James in the province's central interior. My colleague the Minister of Native Affairs and I were at Takla Landing, where Chief Roy French, other band councillors, the Minister of Native Affairs and I signed a historic agreement.

This agreement is between the British Columbia Forest Service, the Takla band and the Takla Development Corp., which is owned by the band. This agreement will increase the band's participation in the forest sector, it will provide economic and employment opportunities for band members; and it will also foster cooperation and help to increase native involvement in forest management.

The agreement is the result of discussions over the past six months with representatives of the band, forest licensees operating in the Prince George timber supply area, the Takla Development Corp. and the Forest Service. A key goal was to identify opportunities within existing forest programs and the Forest Service's legislative mandate while not prejudicing the land claims of the Takla Indian band or the Carrier-Sekani Tribal Council, nor the provincial government's position on the land claims.

Under the agreement the band will have an opportunity to acquire through competition a forest licence to harvest timber. Native employment will be a key factor in the Forest Service's evaluation of any proposals. The forest licence will have clauses requiring that there be no blockades of industrial activity during its term, and B.C. Rail will be used to transport forest products from the licence area. The band will get for its members jobs and experience in forest management and contracting by bidding for and successfully completing silviculture, forest protection and other contracts advertised by the Forest Service and forest licensees. An improved inventory of the band's hunting, trapping and herb-gathering

[ Page 11800 ]

interests will be considered in integrated resource-use planning at all levels.

I am confident that this agreement will establish an atmosphere of cooperation and mutual trust in the development of more native involvement in our number one industry.

MR. MILLER: Of course we welcome the announcement by the minister that there will be more involvement. I know from my own experience that this native band and the tribal council have had a fair amount of experience in forestry matters. I am confident that their involvement in this particular process will prove to be successful.

I would just take a moment to elaborate on what I think needs to be done to expand this opportunity to far more native bands and tribal councils in the province. Last year I discussed with the Minister of Native Affairs the need to have an ongoing program such as was contained in the initial forest resource development agreement. There was a native land component attached to that agreement which provided a modest amount of money, but that money was used fairly effectively in providing an extensive training program for native Indians who wanted to learn more about forestry, who were in a position in British Columbia where they could avail themselves of economic opportunities in the forest industry. As we all know, there is a need for training and development to take place so that those ventures succeed. Once we put people in those kinds of positions, we want those ventures to succeed. Unfortunately no new program has come about to replace that existing program under FRDA I.

I am aware of the task force that currently is looking at this issue, and of the members appointed within British Columbia. It's my hope that they would bring back recommendations that not only allow increased participation by native Indians in the forest industry of this province, but also identify and establish some money so we can do the kind of training and work that will ensure that those ventures are successful and that native Indians break down the barrier of economic alienation and take a more meaningful role in the economic lifeblood of this province. So we welcome the announcement, and we hope there will be many more to come.

Orders of the Day

HON. MR. RICHMOND: Mr. Speaker, committee on Bill 82.

COMPENSATION FAIRNESS ACT

The House in committee on Bill 82; Mr. Pelton in the chair.

HON. MR. SMITH: Mr. Chairman, I wonder if I might have leave to make a brief introduction.

Leave granted.

HON. MR. SMITH: With us today in the members' gallery are two young people from North Vancouver, one has previously lived in Victoria and the other is visiting for the first time. Will the House please join, me in welcoming Steve Mair and Jan Simpson.

On section 1.

MR. CLARK: I'd like to begin this debate by asking a few questions about section 1 — the definition section. At the very beginning it defines ability to pay, and I understand that this is the first time an attempt has been made to define ability to pay in legislation.

Maybe the minister could first indicate to the House whether all the guidelines that have been distributed — including those that deal with pay equity, productivity or skill shortages — are subject to the ability to pay. In other words, the guidelines say that there are certain exemptions for certain things. If there is a certain productivity and improvements can be measured, then a larger pay increase may be afforded that group of employees — and so on down the line. Pay equity appears to be in the guidelines. If there are pay equity plans, there may be a different view of agreements by the commissioner. Could he confirm for the House that those exemptions in the guidelines are all subject to the ability to pay as defined in section 1?

[2:45]

HON. MR. VEITCH: All compensation is subject to ability to pay. However, the hon. member will note that enough flexibility has been built into the plan to provide for certain exemptions, such as pay equity and the like.

MR. CLARK: It seems to me difficult for the minister to say that there is flexibility in the plan if it's still subject to the same parameters. In other words, if someone were to negotiate a pay increase of 10 percent, and if that were to be submitted to the commissioner, certainly the ability to pay would be defined by the commissioner, and it may or may not be rolled back.

The bill contemplates that there be bonuses — sort of — so that if there are productivity improvements, slightly more could be paid. If there is a pay equity plan, slightly more could be paid. If it's all governed by the same ability-to-pay section, then presumably any of those improvements have to come out of the same pool of money. In other words, it's as American economist Lester Thurow points out: a zero-sum game. Any improvements in pay equity in legislation have to come out of other areas that might have been improved. In other words, it all comes out of the same pot. Therefore all of the flexibility built into the legislation isn't really flexibility in the sense that they can pay more; it's all governed by exactly the same ability-to-pay definition. Is that correct?

HON. MR. VEITCH: Yes, the act has to deal with ability to pay. It also has to deal with the ability of

[ Page 11801 ]

the taxpayer to pay. That's where our funding comes from, as the hon. member is very well aware. However, if productivity gains can be established, it means you have completed more work within a particular unit and done more things. A couple of examples of this might be class size in certain areas or hours of work in certain areas. If this effects an efficiency, then individuals within that unit have the ability to receive a bonus, as you so correctly pointed out.

MR. CLARK: The minister has made an argument. Clearly there are savings somewhere; therefore more money can be included in the pay package. That's what the minister is saying. I understand that.

But I don't see how you could make the same argument with respect to skill shortages or pay equity. In other words, if the ability to pay is X, and if it's an objective fact that a school board or a library board has a certain ability to pay, if you can demonstrate that there's a skill shortage and therefore the public sector employer wants to pay more because it's trying to attract that skill, which is in short supply — which is quite commonly the case — how can you do that if the ability to pay is defined in advance of those decisions?

HON. MR. VEITCH: The whole act is tied to ability to pay. First, the taxpayer's ability to provide funding to the particular government entity that pays it.... Within this particular act, you may very well have a specialization that is in short supply. You still have to have an ability to pay for that. You may have to find, within the total scope — the total money available to you — a way of paying more to that particular specialist discipline that is in short supply.

MR. CLARK: If there is a skill shortage in a certain area, and the public sector employer wishes to pay what would be perceived, generally, as beyond the prevailing rate of the day, is it correct to say then that that extra money to pay to that group of employees has to come out of the pay of other employees in the same bargaining unit?

HON. MR. VEITCH: Again, we have to go back to the ability to pay within the amount of money given to the particular government entity by the taxpayer, through a budgetary process or whatever. The commissioner does have enough flexibility within this act to allow extra payment or a bonus or whatever to a particular discipline that is required or is in short supply. So flexibility does exist within that act.

In general, the ability to pay is defined in the act as the taxpayer's ability to pay the amount of money given to any particular unit from all sources — whether it's a school board, Crown corporation or whatever. They cannot exceed that ability to pay. If they do, the contract will be returned by the commissioner.

MR. CLARK: Maybe the minister could just answer the question that I tried to pose fairly clearly: if a public sector employer decides to pay more to a group of employees who legitimately should get more because of skill shortage, in order to attract them, does that extra money have to come out of the same envelope? In other words, does it have to come out of the pay of the other employees?

HON. MR. VEITCH: No, Mr. Chairman. There is an ability to pay more money. The government can pay more money. The municipality, the corporation or whoever it is can pay more money. It doesn't come out of the pockets of the remaining employees.

MR. CLARK: Does that mean that the ability to pay is a floating definition? Let me give you a concrete example. Say a school board received from the provincial government 5 percent, and the school board decides to pay 10 percent. The school board has no taxing authority. They give their employees 10 percent, and then make an argument with the government that we have to pay that because there's a serious skill shortage and they need to pay more to attract people. Say it was Fort Nelson or Fort St. John, and they were having difficulty attracting teachers because of the climate and the like. Even though the government has given 5 percent, they decide that they're giving 10 percent. They make an argument. And the commissioner, just to keep the logic, says"Yes, that's a reasonable thing to do." Does the government then give more money to that school district? Is that what's contemplated by this legislation?

HON. MR. VEITCH: What we're contemplating here are exceptional cases. It may be in nursing, a special discipline in a hospital, a Crown corporation, post-secondary education or elsewhere. But we're not contemplating groups or classes of people receiving more than the next class of people down the line.

Of course, there is one way that a school board can increase its ability to pay, and that is to have the taxpayers in a particular area accept a referendum. That legislation is in place now and is available to any school board in the province that wishes to exercise it.

MR. SIHOTA: Further to what my colleague from Vancouver East has put forward, let me put it to the minister this way. Let's say a hospital gets a budget of $100. It then gets an increase of 5 percent, so it has $105. It then goes and negotiates with the nurses and realizes that there is a nursing shortage. It wants to pay its nurses more to attract more nurses, and the cost comes out to be, say, $117. For the difference between $117, which is what they negotiate to be their cost, and $105, which is their budget, (a) does it fall within the definition of ability to pay, and (b) is that additional $12 to be made up by the government giving it to the hospital, or does the hospital have to make it up within the pool of money that it's got — in other words, $105?

[ Page 11802 ]

HON. MR. VEITCH: In any area, if there is a request to go beyond the ability to pay, it would require special consideration of the reason, of course, for the request for the additional compensation. It would have to be carefully examined by the commissioner and the government, and if the commissioner felt it was correct, additional funding would have to be found. If there was a skill shortage in a particular area, no matter what it was, there is flexibility within the act whereby the commissioner can recommend that the guidelines be exceeded.

MR. SIHOTA: So in the example I just cited to the minister, the commissioner would say: "There is a skill shortage here. You are entitled to $117 instead of $105." Would the government provide that additional money outside the envelope of money the hospital would have gotten in the first place? Would you provide extra money — an additional $12? I see the minister is being talked to by his advisers. I want a clear answer from him. We'll see if he can now answer the question.

HON. MR. VEITCH: If the employer did not have the ability to pay and required some special assistance for a specific area — it would be the exception, certainly, and not the rule — then that employer would have to find that ability to pay, whether it was from the government or, in the case of a school board, through a referendum. But in the event that the only revenue to the particular entity you're speaking of — or to a municipal government, a hospital board or whatever — comes from the provincial government, then they would have to make a special case that they don't have the ability to pay. They would say: "We do not have the ability to pay more, yet we still need this particular specialist. We need more money for that." They would make a special case to the commissioner to find that ability to pay.

MR. SIHOTA: But the question the minister is not answering is: would that money come from its existing envelope — in other words, the $105 — or would it come directly from the provincial government? That additional $12 would take you to $117.

Hospital boards, for example, don't have the ability to go to referenda, so put that example aside. Just tell us, Mr. Minister, where the money would come from. Would it have to come from within the existing budget of the hospital or, once Mr. Lien has made the approval and said that the skill shortage is legitimate and you have to come up with additional money, would that additional money come from outside the envelope, directly from your ministry?

[3:00]

HON. MR. VEITCH: We have school boards in place, and we have hospital boards in place. They're there to manage the operations and to give policy guidance to the operations of the particular entity, whatever it may be. Now it may be that a hospital board has to find some efficiencies in one area in order to pay more in another. I don't think there's anything wrong with exercising good management, whether it be within the educational system, the hospital system or indeed in a Crown corporation. Those are the avenues that would have to be explored first before any other consideration would be given.

Many times, with a little reordering of priorities, a little tightening up in a certain area, they can find the ability to pay if they need a certain specialist or if they need to pay someone.... So it may come from within the amount of money that has been allotted to that particular entity. Indeed, in the case of school boards, it may come from without, through referenda. Again, in certain very exceptional cases, they may make a special case.

MR. SIHOTA: I heard the Premier say to the Minister of Finance: "Take a hard line." It's obvious that the Minister of Finance is trying to do that. But if you follow the logic of what he is saying, Mr. Chairman, it's this. It is recognized by the commissioner that there is a skill shortage. For example, in the case of nurses — let's stick with the hospital example — it is recognized by the commissioner that to attend to that skill shortage, the hospital is entitled to pay its nurses more to lure them into employment. What the Minister of Finance is saying is that in order to make up for that money you're going to be paying nurses to get them to work, you're going to have to close hospital beds to make up the money from within your own budget. That's the logic if you accept....

HON. MR. VEITCH: That may be your logic.

MR. SIHOTA: If I am wrong, Mr. Minister, then tell me that the system is not fixed, that the envelope is not fixed, that the government will give money to hospitals outside their defined budgets in light of a finding of skill shortages.

HON. MR. VEITCH: Mr. Chairman, that's the difference between socialism and free enterprise. We on this side of the House realize that there is only one taxpayer, and from that taxpayer comes the money that goes to Ottawa, to Victoria and to the municipalities. There's only one taxpayer; there's no magic pot of money. Right now a lot of those taxpayers, hon. member, whether you know it or not.... Don't sit there smirking. Whether you know it or not, these taxpayers are hurting. Small business doesn't have the ability to pay; a lot of people in the forest industry are being laid off.

Everybody has to take a little bit of this burden to ensure that we don't get into the same sort of straitjacket they're getting into in Ontario, where they're predicting somewhere between a $10 billion and $15 billion deficit next year. We don't intend to go down that road in this province. We're heading this thing off at the pass. With better management most institutions, most entities, can find the money they need to do special projects — or indeed to pay a specialist. You're talking about hospital beds and everything else. That's the same sort of garbage

[ Page 11803 ]

rhetoric that we've seen time after time in election after election. It hasn't worked, and it won't work now.

Our payments to medical care this year have been the highest they've ever been. We've done more for education, more for health care and more for social services. We've spent a full 80 percent of our budget in that area. It's going to take a little more management during tough times, during these times when the taxpayer has no money to send to Victoria so that they can send it to the school boards, to hospital boards or to Crown corporations. Everybody's going to have to tighten that belt just a little more and do a little better job.

We ask a little more of management to manage more effectively. There's nothing wrong with that. There is no government tap that you can just turn on somewhere and get money from — unless you borrow it on the international marketplace. And then you put not only yourself in jeopardy, but your children and your children's children. If that's the socialist way, that's fine. It is not the Social Credit way.

MR. SIHOTA: I don't think the minister understands what I'm saying. In the example of skill shortages, if you are working within a fixed budget, then the choice is either you increase the stipend paid to nurses to attract more nurses and then make up the money within that envelope and close hospital beds.... Now is the financial pressure going to be on the hospital, or is it going to be on you? If, for example, the decision means that it's going to cost the government $30 million more, are they going to have to make a choice between cutting their TV advertising program and funding those hospitals? So it's a question of priorities. And it's a question of where the financial pressure is going to be.

Is the financial pressure going to be placed on you, the Minister of Finance, to cut those kinds of programs — $50 million in TV ads, $25 million to doctors, $7 million for the jet for the Premier — or is it going to be on hospitals within their budget to cut and close the hospital floors? What's it going to be? Close hospital floors or cut the double standard of this administration? That's the choice. It seems to me, from this side of the House, that you ought to put an end to your double standards. You're not prepared to take the financial heat to get rid of the advertising program, but you're quite prepared to say to hospitals that they have to close their floors. That's what wrong, Mr. Minister. Your spending priorities are out of touch with the priorities of British Columbians.

HON. MR. VEITCH: Well, it's interesting that the member for Esquimalt–Port Renfrew, of all people, should talk about double standards. I wonder sometimes whether you even have a single standard.

MR. SIHOTA: Answer the question.

HON. MR. VEITCH: I'll answer the question, hon. member. There are spreads in administration — at top administration levels — where some hospital administrators in this province are receiving $150,000 a year plus benefits. There are other areas where hospital administrators are receiving $250,000 a year. Over time, the legislation provided here will bring equity across the board for those people.

You sit there and wag your head. I don't know how.... You're do quite well being smug, but don't lecture me about double standards — you of all people.

MS. A. HAGEN: Mr. Chairman, I want to pursue this whole question of fairness and equity, and go back to some comments that the minister made a moment ago in respect to school districts. He noted that school districts have an option to go to referendum to provide essential services for children in the province.

I want to put this in the context of skill shortages and of two British Columbias: lower mainland British Columbia; and the north and the interior, where there exist, and where we know there will be more, teacher shortages. What I hear the minister saying about ability to pay is that those districts will have to find an ability to pay through referenda rather than through those school boards being treated fairly by this government and this minister. In defining ability to pay — in relation to those boards and their needs — the minister clearly stated that if the boards do not receive in their envelope an amount of money that enables them to attract teachers into their district, those small towns of British Columbia, which are being hit at this stage of the game by layoffs and cutbacks, will be asked to dig deeper.

We're not talking about a water-bed, where there may be more to the north and less to the south; we're talking in fact about those boards having to take specific initiatives, which will mean that there isn't equity and fairness for the children and the families of the north. The minister clearly said that they have a choice of referenda, rather than this government treating them fairly — another example of a double standard, which is the hallmark of this legislation.

HON. MR. VEITCH: Thank you very much, member for New Westminster. We in fact do pay more now to teachers in, say, Bella Bella and the northern communities in British Columbia. Higher rates have been negotiated because a lot of people do not want to live in Bella Bella. They might rather live and teach in downtown New Westminster, so they are paid more than other teachers. What we're talking about here is wages. We're not talking about general skill shortages for teachers, because there is just simply not a general skill shortage for teachers in British Columbia.

If a board knowingly has made the decision not to go to a referendum, is not going to raise money that way and knows that the aggregate amount of money they have on hand from municipal taxation and from the provincial government is exceeded by the amount that they have settled for, I don't think that board is being fiscally responsible. They're not being responsi-

[ Page 11804 ]

ble in managing the affairs of that particular school district — if they understand that.

There is higher compensation and there are bonuses paid for people who teach in the north. They receive higher wages at the present time. That scale will continue, hon. member. This is all about fairness: in compensation; in the amount of money they receive in their paycheques; in comparison to a teacher's duties and responsibilities at certain levels; and, of course, fairness in comparison to what teachers at that particular level may receive in other parts of the country. All of these things are taken into consideration.

MS. A. HAGEN: The minister has just confirmed what I stated, that districts have only one option in dealing with the needs of their community: to go to referendum if the "ability to pay" argument is defined by government. In many communities of the province, where we do already have teacher skill shortages and difficulty in terms of them meeting the needs of those communities, it's going to mean that those communities are unfairly treated by this particular legislation. There are other aspects of this legislation that we will come to as we go through the bill which will clearly put those boards at a disadvantage. The idea that referendum is a means by which we will rectify that, I think, simply points out the basic unfairness of the bill.

We are dealing with a whole variety of ways in which the minister says this government will make decisions: we'll have special cases, we have referendums and we may have this approach or that approach. Instead of letting the boards— hospital boards, community boards — manage, this government is attempting to tinker with something that it is refusing to define. It's refusing to define "ability to pay," except as some kind of package which you, sir, in your infinite wisdom, have defined.

We don't have a budget in this House. We don't have any indication whatsoever of the basis for the argument that you are making about ability to pay. That is the reason that this legislation is, in fact, double-standard legislation that will be perceived by people all over the province as unfair, inequitable, and as producing unfairness and inequities as it is implemented.

[3:15]

HON. MR. VEITCH: Would it not be a double standard if we expected that the public service would receive 3, 4, 5 or 6 percentage points higher than the private sector, which, after all, is paying all of these bills in the first place? If we're settling at 4 percent in the wood sector, for instance, and that's all they can pay — and they are the people, in the final analysis, who are paying your wages, my wages and the wages of everyone else in government — would it not be a double standard to expect to pay teachers 7 percent or 8 percent? Why in the world would someone in the public sector, during austere times, expect to get more than their peers who are earning the money and paying their wages in the first place, and they don't have the ability to pay it?

What do we do? Do we do it as Ontario does and go out to the marketplace all over the world and borrow and borrow to pay for our daily needs, until we get ourselves into the same kind of situation that the NDP is rapidly getting itself into in Ontario and which Ottawa has already arrived at? That is what's wrong with this country: we've exceeded our ability to pay for years and years in government.

I see no reason.... I believe you are right: there would be a double standard. If the public sector expects to receive more compensation than the private sector that pays them the money in the first place, there is something wrong with that kind of expectation.

MS. A. HAGEN: I believe what the public sector expects is fairness. I would just note to the minister that, as he well knows, the relationship between public and private sector increments is very close at this stage of the game. It is something that, over a cycle, has tracked very remarkably.

We are talking about interference with that very effective means by which compensation has been determined. I think it's quite clear to all of us that we should not be introducing legislation that would attempt to undermine the success of collective bargaining and those compensation factors that all of us can see in the charts as being fair to both public and private sector workers in the province.

HON. MR. VEITCH: I know the hon. member understands that it's the nature of the public sector. Indeed, this bill is designed to provide permanence of employment within the public sector. It's always been the nature of the public sector not to feel the same pressures when the economy turns down, but they are always there with the wage increases when the economy rises on the other side of the cycle.

What about the unemployed sawmill worker? What about fairness for that particular individual? Would fairness for that individual not mean simply having a job? Shouldn't you share some of your ability with that individual? There's a person who for years has been paying the public sector's wages, and finally finds himself or herself out of a job, and yet the public sector must go on. Surely that person would ask government that we not borrow against his future or against the future of his children and cause that greatest tax of all upon that person — that's inflation, that's borrowing and that's paying interest rates. We're not going to let ourselves get into the position that your NDP government is getting itself into in the province of Ontario. They are going down an economic rathole. That is not the kind of policy this government espouses.

This bill is designed for fairness, hon. member. It is designed to provide fairness for the public sector. It is designed, wherever possible, to provide job protection for the public sector. But it also takes into consideration the ability of the private sector to pay those wages. It is the generator of wealth in this

[ Page 11805 ]

province the same as it is the generator of wealth in Canada or in Ontario — although the governments in Ottawa and Queen's Park don't seem to realize that. One day the chickens will come home to roost; that will be a few years down the road. And I can tell you, they will be thrown out just as quickly as they came in.

MR. PERRY: Sometimes I begin to wonder if I'm actually in Toronto, you hear so much discussion about Ontario. The last I checked, the Premier of Ontario still warrants a 65 percent approval rating in the public opinion polls. When I came over here from Vancouver this morning, I thought I was coming to Victoria. I thought we were still in the province of British Columbia.

Mr. Chairman, I've been listening very carefully to the Minister of Finance. I admit to being slightly troubled by his sanctimony, as if he were the only British Columbian who was concerned about the pockets of the taxpayer. I'm a taxpayer myself; my wife is a taxpayer; my parents, my brother, the vast majority of my constituents are taxpayers. I know my colleague the first member for Vancouver–Point Grey and I feel that we work very hard and attempt to give the taxpayers good value for what they put into our salaries. And I think most of them recognize that; I certainly hope so. But we take their concerns every bit as seriously as the members opposite — perhaps more so.

I find myself reflecting a little bit on the sanctimony of the Minister of Finance. I see him smiling now. I find myself reflecting once in a while when I think of the abuse of the government jet service and how the members opposite ran up $1.2 million extra last year on the provincial ambulance bill just so they could gadfly around the province attending various functions, some of them flying one person to the jet.

As a taxpayer, I find it offensive to sit here in this Legislature and think that somehow the members opposite are concerned about the taxpayers' pocket and we aren't. We are at least as concerned. If we occupy those benches opposite, I hope we will present a more favourable record with regard to the taxpayer.

[Mr. Ree in the chair.]

I listened very carefully to the discerning line of questioning pursued by my colleague the second member for Vancouver East and my colleague the member for Esquimalt–Port Renfrew. They were onto a very important issue. As I listened, I thought back to the Sallis case. I know that the minister can not be expected to comment publicly, but nothing precludes me from speaking in this Legislature about the Sallis case.

Just under a year ago, a woman named Mary Sallis from Langley died a preventable death in Vancouver General Hospital. She was denied timely heart surgery for a very rapidly deteriorating heart condition. She required the replacement of a heart valve....

MR. CHAIRMAN: Order, please. Hon. member, the Chair has been very lenient with your straying from the principles of section 1. Possibly you could get back to the principles.

MR. PERRY: I think I'll make clear momentarily the connection to section 1(b).

HON. MR. VEITCH: You're circling the field now; you're going to land any moment.

MR. PERRY: The minister says I'm circling the field and about to land; I think the vultures are circling over his head.

Mr. Chairman, Mrs. Sallis was denied timely surgery in the Vancouver General Hospital. The surgeon who requested that she be booked for surgery told me personally over the telephone last year that the immediate reason she could not receive her surgery in time to save her life was that there weren't enough nurses staffing a stepdown ward in the Vancouver General Hospital.

As it turned out, she eventually got surgery, but only when she was already moribund, and the hospital presided over her death rather than attempting to save her life.

This was a disgrace to the province. That case has gone to the court, and the provincial government is now facing a lawsuit from the aggrieved husband of Mrs. Sallis, as I think we all know.

Interjection.

MR. PERRY: That case is still in court, yes.

MR. CHAIRMAN: Order, please. You're discussing something that is sub judice.

MR. PERRY: Mr. Chairman, the relevance is to the points raised previously by my two colleagues. How in this province are we going to meet the needs — as subsection (b) refers to — and levels of public service required by our public?

We know — and it has been well recognized in this House in the past — that although we have a public health system in this province for very good reasons, we compete with private health systems elsewhere in a global market for labour. In this case, for example, it is the global market for nursing skills. We compete with the private sector in the United States and in many other countries. We must remain competitive. Clearly, we must also respect the ability of the taxpayers to pay for necessary health services, but there are times when the world market for skills — in a highly competitive field such as nursing or other health disciplines — suggests that occasionally the price must rise. In fact, that's what happened consequent to the nursing strikes in 1989 and 1990. We know that the former Minister of Health stood in this House and predicted that. Had we listened to his advice, we could have avoided those strikes and all of the unfortunate consequences.

[ Page 11806 ]

But as I listened to the minister's responses to my colleagues the second member for Vancouver East and the member for Esquimalt–Port Renfrew, I heard the same simplistic answers to their questions that I've heard for the last two years: if the hospital finds it necessary to negotiate a wage increase in an area of labour shortage, it will have to find resources elsewhere in the hospital budget. Naturally, all of us would agree that that goal is admirable. We want to see the maximum efficiency in our health care system, just as in all public services in this province.

But what happens when there is nothing left in that budget that can be cut without sacrificing another service? What happens if it's the case of Burnaby General Hospital, where a necessary standard program — such as an out-patient chemotherapy program for people suffering cancer — is forgone because there is no money in the budget? People from Burnaby must traverse the Second Narrows Bridge to the Lions Gate Hospital in your riding, Mr. Chairman, for a service that ought to be provided close to their home.

What happens in the case of a problem raised by a constituent of the second member for Cariboo, who recently wrote and described a wait of six months for neurosurgery on an initially failed neurosurgical procedure? This man has an unstable neck. I couldn't help but think of him when the minister spoke so sanctimoniously of unemployed forest workers. This man has been unemployed for over a year due to an injury to his neck. He has an unstable vertebral column in his neck, and he lives in fear — perhaps exaggerated, but nevertheless real to that individual — that he may snap his neck and become paralyzed from the neck down. That man has been waiting six months for an operation at Vancouver General Hospital. When I consulted with the neurosurgeon involved, I was told that the hours of operation for that surgeon had been cut from ten hours to seven hours per week. The ability is there within the system to look after this man from Williams Lake properly, but he is not looked after.

How can any of us seriously as members of this House stand here and admit that we would, quietly and patiently, wait six months with an unstable neck for necessary surgery? Of course we wouldn't, we know that's wrong. We know the hospital must find the resources to deal with the problem. Yet when I listened to the minister's answers, I found it very difficult to discern any sensitivity to the hospital's dilemma.

I think I've outlined the problem for the minister, and I would be interested to hear his response.

HON. MR. VEITCH: At the outset the hon. member was talking about what he found offensive in the way this government operates. He said he found it offensive that sometimes cabinet ministers would fly on jets. Well, I found it very offensive that at one time during the NDP administration a seaplane actually used to land right in front of the minister's home. It used to take him home; he used it like a shuttle service.

I found it offensive that you took $97 million, I think it was, in dollars of that day, back in 1972, and turned it into a deficit of over $500 million, because you hired every hack you could from Ontario. You hired every socialist hack you could find. You folks literally turned ore into rock in this province. I found that so offensive that I went into politics to beat you, and we're going to do it again. That's why I'm in politics.

[3:30]

I want to tell the hon. member that in an ideal world you'd have everything you wanted in every given situation. This is not an ideal world. There are times whet there are economic pressures upon society that need to be borne by all of society — the private sector and the public sector alike. You can't separate these two things.

What we're talking about here is wages — salaries for people. When you really boil it down, you're talking about an amount of increase for a class of people or a group of individuals, or for an individual. If you would look to section 21 of the labour market guideline of the draft regulations, you would find that it says: "A group is permitted a level of compensation based on (a) demonstrable or measurable increases in productivity, (b) settlements or awards in the provincial private sector, (c) the ability of the public sector employer to recruit and retain employees in areas of demonstrable shortages of critical skills." Where these are demonstrated, there is flexibility within the act and within the regulations to deal with them.

That's what this act is all about — fairness. It's maintaining employment levels within the public sector while realizing that there is only a certain finite amount of money out there in the private sector to pay for it.

There is a difference, hon. member. You happen to have been in the medical profession for most of your life, where you have received funding indirectly from the private sector, and you are comparing yourself with the first member for Point Grey in saying that you give value. Well, I guess that's an open question whether you give value to this Legislature. I don't know whose standards you apply.

I can tell you that this act does provide for flexibility; the drafts provide for flexibility. This act is fair to the public sector, and we're asking them to bear a bit of the economic downturn that the private sector is experiencing at this time, so that we don't have to go so far into the hole to mortgage future generations.

I know that that would be the easy way out. It would be a lot easier in an ideal world for me to stand up here and bring in a borrowing bill that would borrow vast sums of money from goodness knows where in the world and pay for whatever you wanted. But that's not the way things work. Some day someone has to pay the bills.

Ottawa is finding that out now. They'll find out at long last, after profligate spending for years and years, that the chickens have come home to roost. They're now trying to deal with their deficit prob-

[ Page 11807 ]

lems in a host of ways, but they haven't had the courage, like we had here in 1983, to reduce the size and scope of government. We'll never solve this problem of overspending in Canada until someone at the federal level, someone in that large province of Ontario, musters up the intestinal fortitude to get government down to the size that 27 million people in this country can afford.

We've just got too darned much government at all levels. Everybody is going to have to pay and to experience some of this recession. If we do that, if we work our way through it, we'll be all right.

MR. CHAIRMAN: The members of this House are the people who brought in the relevancy section of our orders here, and possibly the members could remember that. I think we should have more relevancy on section 1, which is an interpretation section. The debate that this member has listened to in the chair since coming in here has been second reading debate and not committee debate. Could the members please address themselves to the relevancy of the particular section under debate.

MR. CLARK: The minister has been making speeches, of course. We'd never accuse members on our side of doing that.

However, because of committee stage debate, I really want to ask how this works. On the question of ability to pay, it seems to me that either the ability to pay is a fixed cap and therefore any change or special treatment to any group of employees as a result of the guidelines must come out of the pay of the other employees; or the ability to pay is itself a flexible concept — a kind of arbitrary concept that can move as a result of the guidelines.

Mr. Chairman, I just want to make clear what I'm saying. It's either a fixed cap, like the hospital board has a fixed budget.... Therefore any use of the guidelines with respect to pay equity or productivity improvements.... Essentially it has to come off the pay or the cost of something else. It's a fixed cap and then you can only deal with wages within that fixed cap; or the cap itself. In other words, the ability-to-pay question.... That's movable, depending upon the arguments made by the union or by the compensation commissioner. So that if a decision is made to pay the nurses more money than is contemplated by a plain reading of the regulations, but the argument is made that we must do that because of skill shortages, and the commissioner agrees, then the ability to pay is redefined in light of that new reality — if I can use that term. It seems to me it's either one or the other.

The Premier, I think, in his banter was very clear that in fact there is a fixed cap on hospital boards, school boards and library boards; that the ability to pay is an objective, definable term; and therefore the guidelines which allow more money for certain things.... Any extra money to be given for skill shortages or productivity improvements or pay equity had to come out of some other aspect of the budget. That seemed to be very clearly what the Premier was indicating in his banter and in his remarks, and I'm trying to find out just what it is. Is it a fixed cap, and any money paid for skill shortages or other things has to come underneath that fixed cap — in other words, they have to take it off somewhere else, whether it's efficiencies or something else? Or is it not a fixed cap, but the ability to pay is a variable that can be arbitrarily changed by government to meet the challenges of skill shortages or pay equity? Could the minister explain which one it is?

HON. MR. VEITCH: Within a particular bargaining unit — and I think that's what you are speaking of — if it was a unionized unit, there would be an ability to pay. It would be equal across the board, but in exceptional cases where management made a proper case that they required a certain level of skills and they had to pay a higher compensation to receive the extra skills, they could do two or three things. They could look for efficiencies within their own administration. And efficiencies aren't always people working; they aren't people's wages. They could be the way they're managing something. It could be a procedure. It could even be the way they're getting rid of their garbage. Goodness knows what. Especially if you're looking at hospitals. They may have to restructure the financial and management affairs of the particular unit. Failing all else, if they still required money in exceptional cases — for a specific case where a specific talent or discipline was required — they would then have to approach government. They would have to find an extra ability to pay those individuals or that class of individuals or that particular individual. The draft regulations and the bill allow for that eventuality.

MR. CLARK: We're getting closer to understanding the section. I appreciate the minister's remarks.

It seems to me that what you're saying is that the flexibility contemplated in the guidelines is fettered or tempered by the overall ability to pay, and that in fact it will be the government's contention that efficiencies or cuts in other areas.... The minister is quite correct. Obviously it doesn't have to be in other employees' wages, but in other efficiencies....

Interjection.

MR. CLARK: The minister says it never will be another employee's wages. Okay. So let me get this right now. The nurses are bargaining. They negotiate a settlement which is roughly, say, double the private sector — I'm just making this up — a large increase. It's clearly beyond the guidelines. The nurses and the hospitals go to Mr. Lien, the commissioner, and say: "We realize it's double the prevailing wage increase; however, there clearly is a problem in terms of skill shortages that we have to address. We want your permission to pay double the prevailing rate because of these sections of the guidelines." The question is, of course: where does the money come from to pay for that?

[ Page 11808 ]

You are saying that the first obligation would be for the hospital to find the money itself. It would be unlikely for government to give extra money. Let me ask that question. If the commissioner says that the hospitals are correct, that they really do need to pay this because there clearly is a skill shortage.... The commissioner, hospitals and nurses come together to government with a wage settlement which is beyond — double, perhaps — the prevailing wage increases of the day, but make the argument successfully. Then the government would look favourably upon that to provide the extra funding required. Is that what is contemplated by these guidelines?

HON. MR. VEITCH: I doubt very much it would be within the commissioner's capacity to determine whether or not there was a skill shortage in any given area. It's only within his capacity or, indeed, within his purview to determine the ability to pay.

I would think that were a school or hospital board or anyone else to double the wages and be way out beyond what the norm was in the private sector or in comparison to other units, hospitals or school boards, they would know right away that they would have their contract returned to them by the commissioner. You are quite correct. If they wanted to find a greater ability to pay, they would have to look to efficiencies within their own departments first.

Secondly, of course, what you would be looking at is a specific skill shortage and maybe a small class of people — not a large one. That would be generally what would happen. If they couldn't find efficiencies within their particular unit or entity — they just weren't there, and it was determined there was no ability to pay — then they could make a case. Government would realize that if you can't find a particular medical discipline or whatever it is — someone who practises a particular medical discipline, or a particular type of nurse or whatever — then section 21 of the act allows for these special circumstances. We would expect it would be the exception rather than the rule.

MR. CLARK: The minister said something interesting there. He said that whether or not there is a skill shortage is beyond the commissioner's ability to determine.

Interjection.

MR. CLARK: Okay. The minister is heckling at me that it's the employer's job. This is an interesting question. Is it the commissioner's mandate to look solely at the ability to pay, and those guidelines are for public sector employers and unions to use to negotiate? But if the union and employer agree that skill shortage should result in increased pay for certain people, that productivity improvement should result in increased pay for certain other people and that there's a pay equity program, that they will automatically be returned.... The commissioner has no mandate to review all of those arrangements. He really only has a mandate to review whether in fact there is the ability to pay. It's quite a distinction here. I'm trying to get at it.

[3:45]

If the union and the employer agree that there is a skill shortage that should result in a mutually agreeable significant pay increase for a certain group of employees, will the commissioner review the question as to whether or not the public sector employer and employee are being reasonable? Will the commissioner then review and say: "Is that a reasonable argument that the union and employer are making with respect to a skill shortage?" Does he have the power to review that question, or does he simply look at the ability to pay, first and foremost, when making a decision on a contract?

HON. MR. VEITCH: The argument may be reasonable and the case may be made, such as the hon. member has pointed out, but he commissioner still has to be convinced that the employer has an ability to pay or knows how to find a way to increase its ability to pay. They have to find a way of paying. They have to first of all make the argument to the commissioner that, yes, there is a skill shortage; yes, we have done all of these things; no, there is no other way of finding any other money; and it's imperative that we have it. Then the commissioner could make a recommendation that funding in certain specific cases may be increased.

We would find that normally, I would think, to be the exception rather than the rule. They would still have to make the argument that they have an ability to pay, and they would have to have a plan to show the commissioner they had that ability to pay. That's management. That's not too much to expect of management.

MR. CHAIRMAN: Possibly both members would like to make their comments through the Chair, which should then allow for the complete debate to enter into Hansard. Hansard may not be picking up answers now that are coming from the other side when you direct your comments to the other side. If you direct them through the Chair, Hansard....

MR. CLARK: No, no. They'll know, Mr. Chairman, who is answering and who is asking the question.

I want to make it clear that the guidelines are more than window-dressing. The guidelines themselves are subject.... The minister comes back to this all the time. All of the nice language in the guidelines that refers to pay equity and to bonuses for skill shortages, and that says that more money may be forthcoming as a result of productivity improvements, is subject to the overarching definition in this clause of ability to pay. Therefore it's really rather meaningless. The flexibility is within very tight bounds. It isn't that you can have a pay equity program over and above a wage settlement which might be the same as the private sector; any pay equity program, any skill shortage argument, essentially comes out of the same pay packet, so the rest of the employees would take less. That's essentially

[ Page 11809 ]

what the minister is saying. I'm glad he said it, because it's now clear for the record.

I'd like to move on a little bit in this section. Subsection 1(b) defines ability to pay....

HON. MR. VEITCH: I'll answer your question.

MR. CLARK: Okay. I'll let the minister respond.

HON. MR. VEITCH: As the public's ability to pay improves.... In other words, when the private sector does better, when they're able to export their softwood lumber, when the sawmill workers are back working in the sawmills, when the loggers are back working in the forests, when people are back repairing automobiles and doing all of the things that they do, the public's ability to pay will increase. That will then be passed to the public sector as well.

We're not going to continually borrow and borrow like you would, hon. member. I want to make that very clear. It's the ability to pay. The people out there who provide the money for you and me and every other public servant have to have the ability to pay. Some of them are hurting right now; many of them are unemployed. They don't have the ability to pay. Everybody has to share equally in this problem in order to find a solution. You agree with me, don't you? That's very good. You're becoming a closet conservative; I can see it right now.

MR. CLARK: The only problem with the minister's remarks is that there is a whole set of guidelines that refer to things like pay equity and say that we're going to exempt pay equity from the wage controls. The government likes to make the argument that we're going to exempt skill shortages from wage controls. But the minister's last speech made the point, and made it very well: essentially, this is the same as the previous legislation, the compensation stabilization program; this is wage controls. All of the stuff they put in the guidelines gives.... The minister says "flexibility," but I would suggest from his remarks today that the flexibility is extremely limited, subject to the ability to pay.

I'd like, if I could, to move to the next question, which is how the ability to pay is defined. It says in (a): "...any fiscal or financial policies to which the public sector employer is subject...." What I want the minister to confirm for me is that that means the government can determine, through its policies, what the ability to pay is. In other words, to take hospitals again, the government, through its normal course of business, assigns a budget to a hospital. As I read this, the government may say: "We believe hospitals should only get 4 percent more" — or, being generous, 10 percent more. That will then constrain and give guidance to the commissioner in terms of his interpretation of any agreements which arise out of it.

In other words, it could be — at least it seems to be contemplated by this — that cabinet or the ministry can direct public sector employers, whether they be hospitals, library boards or others, and, by their financial policies, give guidance to the commissioner and therefore define for him at least a large measure of the public's ability to pay. Is that correct?

[Mr. Pelton in the chair.]

HON. MR. VEITCH: On this very narrow point, as you well know, hospitals receive most of the funding from the public purse in one way or another. Oh, they receive some extra funding perhaps from Workers' Compensation cases, ICBC cases, or people from other jurisdictions who have to pay cash — sure. But by and large, where government pays the whole shot, they ought to have some ability to control as well where that money is spent, and this is the case in hospitals. But it isn't necessarily true when it comes to certain types of Crown corporations. They may find efficiencies of scale. They may find ways of increasing their production or doing things more efficiently and thus increase their ability to pay. And that should be shared with and passed on to their workers. That's the difference between this bill and the previous legislation. There is a flexibility within this act that did not exist within the previous legislation.

MR. G. HANSON: I can't resist the opportunity to say a few words on this section, because as members know, the greater Victoria area has many public employees, people who do good work on behalf of the citizens of the province, keeping the Medical Services Plan going, working in educational institutions, health, safety and all manner of projects. And you know, Mr. Chairman, when we look in context, here we have the twilight of a five-year mandate expiring, and now we have the revival of a 1982 program that's being desperately resuscitated by Social Credit who hope that their political fortunes somehow will turn upward.

What I wanted to talk about, Mr. Chairman, is the narrowness of the definition of ability to pay, because ability to pay is used by this minister as the ability to pay our own public employees but was never utilized for the public's ability to pay to clean up the Expo lands after we got a poor deal from this cabinet in negotiating with Li Ka-shing — the hundreds of millions of dollars involved to clean that up. We never once heard "ability to pay."

What about the overruns on the Coquihalla? Did we ever hear from the cabinet about the ability to pay and the ability of the province's citizens to cover massive overruns?

Mr. Chairman, the B.C. Resources Investment Corporation — not once in this session have I heard the cabinet on the Social Credit side beating their chests about BCRIC. Does that minister still have his five free shares? What about the citizens' ability to pay for that massive boondoggle expenditure of funds down a very black hole? Some people argued it was even in the wrong place.

So now, at the twilight of an emerging provincial election we get a bill where you look at the polls and say: "Who can we try and earn some political kudos

[ Page 11810 ]

on the backs of? Let's go to the old standby — our own employees." You can't have it both ways, Mr. Minister. You can't on the one hand say, "We've got great public employees doing wonderful work for the province," and on the other hand make them the whipping-persons for the next provincial election. That's a rather foolish — and cowardly — way of doing the public's business.

So when you're'talking about the people's ability to pay, you should talk about restoring those Crown lands over at Expo to some kind of health — all the toxic wastes and so on. The public has to pay. Was the ability to pay taken into that equation when the sale of those Expo lands was made, when the overruns of the Coquihalla and SkyTrain were made, when there were massive public investments into BCRIC? Not once was the term "ability to pay" ever used.

You know, the failures of this government are not lauded in this assembly. We don't hear about the B.C. Resources Investment Corporation anymore, and we heard about it prior to previous elections. We heard about Expo lands and so on, We don't hear about them anymore, because the province got a poor deal. What was the people's ability to pay? Li Ka-shing is going to make a billion dollars off that deal. Do you think the public had the ability to absorb that, when we had an opportunity to generate capital by longterm leases by selling those parcels in small pieces and having a development that made sense? Instead there was a large block sale where he recouped the amount that went back into the province in no time and is now building his profit based on the citizens' own Crown assets.

I'd like to ask you: where was the province's ability to pay in the restoration of those Expo lands and the rehabilitation of those lands? That's a specific question. Where was that in the equation?

HON. MR. VEITCH: Well, the first member for Victoria goes on in a whole long litany about ability to pay and, of course, I hope you will allow me the same relevance — or lack of relevance — to this section that is being afforded to that man.

You know, your leader, the fellow who sits over there, who flies all over this province at government expense, because you pool all of your tickets, and doesn't do one whit of government business as he's not in the government, isn't in the House half the time, doesn't have to abide by the same rules as anybody else and is living right out of the public trough, flying all over the place at....

[4:00]

MR. G. HANSON: Mr. Chairman, I would ask you to ask that minister to come to order. The Leader of the Opposition does the public business all over this province and serves this province very well as Leader of the Opposition, and is going to serve this province very well....

MR. CHAIRMAN: Thank you, hon. member. I think we should bring the debate back to the section that we're dealing with: section 1 of Bill 82. I was listening to the debate when I was out for a moment and certainly anything could be relevant if you stretched your imagination enough on this one. But I trust that the minister was not impugning any motives; I'm sure he wasn't. But let's just discuss section 1 of Bill 82 and this particular portion that seems to be most interesting to the largest number of people this afternoon, and that is "ability to pay."

HON. MR. VEITCH: Mr. Chairman, I'm not impugning any motives at all, and I realize that this Legislature has the ability to pay the Leader of the Opposition, when he has his snout in the public trough, flying all over this province....

MR. CHAIRMAN. Hon. minister! Would you withdraw that most offensive word, please.

HON. MR. VEITCH: Mr. Chairman, what do you want me to withdraw?

MR. CHAIRMAN: I'm sure you're aware, Mr. Minister, what I'm trying....

HON. MR. VEITCH: Withdraw the phrase that "the Leader of the Opposition has his snout in the public trough"?

MR. CHAIRMAN. Yes, please.

HON. MR. VEITCH: Or "flying around at the people's expense"? Which one?

MR. CHAIRMAN: No, that was the one, please.

HON. MR. VEITCH: Yes, Mr. Chairman. I will withdraw "flying around at the people's expense."

MR. CHAIRMAN: Minister, I'm sorry, that is not.... You understand what the Chair has requested. It had nothing to do with "flying around at the people's expense." It was this "government trough" and the use of the word "snout."

HON. MR. VEITCH: Yes, I'm sorry, Mr. Chairman.

MR. CHAIRMAN: That doesn't sound very parliamentary to me.

HON. MR. VEITCH: Sure. I'll withdraw "snout in the public trough" or anything else that offends the hon. members.

MR. CHAIRMAN: Thank you. And we'll discuss "ability to pay."

HON. MR. VEITCH: Ability to pay. We talked about ability to pay. The first member for Victoria talked about the Coquihalla. He doesn't want the Coquihalla. Does he know that traffic on the Coquihalla is up 78 percent this year and that this is increasing the people of the province's ability to pay in the interior?

[ Page 11811 ]

There are other places in this province outside Victoria and Vancouver. We're building transportation systems all over this province so that people will have ability to pay, to work and to move their goods and services to the marketplace. You live in a very privileged place, hon. member. You live in Victoria, right here in the capital city where you have a very, very stable workforce. But there are some people living in Omineca and Stewart, and maybe in Skookumchuck or Prince George, who don't have the ability to pay more to the people you represent. You see, there are other folks around this country other than those who work for the public service in Victoria or in Vancouver. What we're talking about here is the taxpayer — the private sector's ability to send money to government.

This is not an opportunity to hammer public sector workers. All we are asking them to do is to share in the wealth as the economy moves upward and to bear some of the burden when it goes into those inevitable valleys of recession that are caused mostly by the governments of Ontario and Canada. That is what we're talking about here when we talk about ability to pay. It's the public's ability to pay.

MR. G. HANSON: Mr. Chairman, this bill is not about economics or public administration. It is about politics. This bill is a desperate attempt by the Social Credit government to get another term in office. The people of this province want a change. They want a change of administration and orientation, and they want a more consultative approach to doing business. Even the chairman and president of the Business Council of B.C., Mr. Matkin, indicated that this type of legislation is not required. What is required is consultation between government, between business and employer groups and trade unions, to work on a strategic plan to maximize the God-given resources and benefits and talents of this province— not this type of legislation two or three weeks prior to an election. The public can see through it; we can see through it. We're not naive. The minister knows very well that when he defines so narrowly "ability to pay" with respect to paying nurses, teachers and people performing public services in the Medical Services Plan, the Ministry of Transportation and Highways and all over this province....

Mr. Chairman, I want to point out to the minister that government employees — federal, provincial or municipal — work all through this province in all those small communities you talked about. They plow their paycheques into those local small businesses and communities. You're constantly trying to characterize public sector workers in the way that Social Credit does — trying to earn political epaulets on the backs of their own employees, who take an oath of office to perform their duties fairly and honorably. They're duty bound. They can't publicly fight back when you abuse them publicly with your rhetoric and political propaganda. They can't stand up and fight back, because they've taken an oath of office not to do so. Doesn't that seem to be an act of cowardice, when you constantly try to present that and win political points on the backs of your own employees?

Mr. Chairman, in this section and other sections, I'm asking that the minister broaden his definition of "ability to pay" to mean.... What is the public impact of having to come in and clean up behind Social Credit mismanagement for the last four years of this administration and the last 16 years that the public has had to endure?

MR. CHAIRMAN: Hon. member, this is beginning to sound more and more like second reading debate, and we're in committee stage of this bill. I wonder if it might be in the interest of making some progress — if we could get agreement from both sides — to set section 1 to one side and go on to another.

We'll get through it? All right, then. We're still dealing with section 1. The Chair is just trying to facilitate the passage of this bill.

HON. MR. VEITCH: Mr. Chairman, the first member for Victoria talked about political cowardice. He said that we were cowards because we were bringing in this legislation. It takes a lot more courage to bring in tough legislation and to face the heat of that in tough times than to go out and borrow, borrow, borrow and spend the legacy of future generations.

We are being fair to the public sector employees. This piece of legislation is designed to be fair, to be equitable and to protect the jobs of the public sector employees in the province of British Columbia.

MR. PETERSON: Mr. Chairman, under this clause "ability to pay," I'd like to explore for my own understanding the meaning of "relevant factors including, but not limited to, (a) any fiscal or financial policies to which the public sector employer is subject...."

I wonder if the minister could explain it to me. Let's use for an example a school district which has negotiated a contract in which class size has been negotiated. Let us say that the class size has been reduced by one. That could have a significant impact on the total cost to that particular school district, but a very insignificant impact on the level of education that the students in that school district would receive.

I'd like to know if that is taken into consideration in this bill. I'd like to elaborate further, if I'm on the right track. Perhaps the minister could respond.

HON. MR. VEITCH: The hon. member for Langley is absolutely correct: that would be taken into consideration. He gave the example of reducing class size by one pupil. It probably would have no significant effect whatsoever on the level or value of education received in that particular school district, but....

MR. CLARK: You're an expert in that too, eh? Did you get a mail order degree in education?

HON. MR. VEITCH: How would you like to dry up for about two minutes?

[ Page 11812 ]

MR. CHAIRMAN: Order, please.

HON. MR. VEITCH: You'll get your chance....

[Mr. Chairman rose.]

MR. CHAIRMAN: Order, please. Let the debate continue.

[Mr. Chairman resumed his seat.]

HON. MR. VEITCH: Yes, the hon. member is exactly correct. If class size were left at a consistent level or increased by one, that would increase the ability to pay. There's no question about that. Those values and the amount of money could be spread among the school district.

MR. PETERSON: Mr. Chairman, can I also ask, when you're dealing with senior management levels — let's say municipal administrators, hospital administrators, school district administrators — and if their wage increases appear excessive.... Don't forget, when we're talking about percentages, the percentage of $100,000 per annum in dollar amounts is, of course, a lot greater than, for instance, a teacher who may be making $45,000 to $50,000 per annum. But if that has an effect relative to the ability of the particular organization or government function, it would appear to me that by controlling that, in this economy we're in now, it would allow us to hire more people who actually get the job done, such as nurses, teachers and the people in the front lines who really provide the services. It would appear to me that this particular bill provides that ability. Am I correct in my interpretation there?

HON. MR. VEITCH: Yes, the hon. member is indeed correct.

MR. PETERSON: Having established that, I have a lot of difficulty with the tack the opposition members are taking. What the government is trying to do is provide services the taxpayers can afford, maintain those levels of service and perhaps even improve them under a downside economy. That appears to me to be a responsible action by a responsible government. I cannot understand why the opposition is taking the tack in this debate that they are.

One other thing I can't understand. I couldn't help, when listening to the second member for Vancouver–Point Grey.... That's going to a pretty low level of politics when you start using individuals' names who may be faced with personal tragedies for your own political purpose. I would really ask that the opposition members try to show a little responsibility and perhaps some sensitivity. If they want to deal with items like that, fair enough. But really, to me that shows a pretty low level of responsibility.

[4:15]

[Mr. Ree in the chair.]

MS. EDWARDS: I would like to question the minister under "ability to pay" — the (b) section. It says here, basically: "...taking into account...factors including...the impact of increased costs on the levels of public service." It seems to me that there may be a contradiction here, and I would like to question the minister as to whether the direction he's been going with his statements is really what we are to understand as the public of British Columbia.

As I understand it, the minister is saying that increased costs are bad, because they mean less service. If you have to cut back, you have to cut back, right? If costs are increased, you have a certain level.... You are capped at a certain place. That's what the minister has been saying, as I understand it. The minister has been saying that there is a cap on what you can do. Unless there are very exceptional situations, he says that the ability to pay is going to limit what we have to do. He says that as costs increase — this is the reason for the legislation — we have to limit the amount we spend and therefore might have to cut the level of public service.

Interestingly enough, this phrase says that we must consider the impact of increased costs on the levels of public service. If that's the case, we are considering the downgrading, I suppose, of the level of public service. Is that the object of the legislation?

HON. MR. VEITCH: The NDP and the hon. member for Kootenay are equating level of pay to type of service. I don't think that if the Board of Internal Economy, or whoever increases wages around here, doubled your wages, you'd do any better than you are doing right now. We're not talking about decreasing services. All we're saying is that the public has a finite ability to pay.

We're in a bit of a recession. It's heading our way, mostly caused by eastern Canada, but it's still heading on our way. We're not selling our lumber the way we used to. Our revenues are down. We all have to share in that. Is it too much to expect a public servant — whether it be a teacher, a nurse, a caretaker in a school or an instructor in a post-secondary institution who was promised continuation of work, who won't be laid off no matter what happens — to bear some of the burden that the poor person in Omineca has to bear when their sawmill is shut down and they are out of work, or when their wages drop in a small business because they're unable to sell products to a community town because the mill is shut down in that particular town? Is it too much to expect people in the public service to share some of that burden? Are you going to say: "No, I'm not going to share that burden at all; I'm just not going to work as hard, because that guy over there won't pay me. He can't pay me; he's out of work"? Now that makes no sense. It may be your line of reasoning from the socialist side, but I'll tell you it isn't the line of reasoning from the public service side.

Yes, I have worked in the public service and in post-secondary education; yes, I have two teachers in my family who work in education; and, yes, my wife served on school boards for six years. So I do

[ Page 11813 ]

understand a little bit about how the education system works in British Columbia. I'll tell you, the teachers are not going to work less, they're not going to cut their levels of service, and they're not going to be worse teachers if they don't get a 10 percent increase because the public can only afford to pay them 4 percent or 5 percent. That doesn't make any sense. It may in the socialist mentality, but it doesn't in the overall scheme of British Columbians.

Your argument won't wash with the public, hon. member. It has never washed before, and it won't wash now. You're trying to throw out that old scare tactic again that unless you continually open up the doors of the treasury, unless you continually borrow no matter what ability the public has to pay, that somehow or other the people are going to rebel and not work and do their jobs. That is just pure nonsense, and you know it.

MS. EDWARDS: The minister says that there will be no difference, whether the costs are greater or not. If you don't have greater salary or greater pay, it makes no difference whatsoever. If that's the case, my question to the minister — through you, Mr. Chair — is what the impact would be of increased costs on the level of public service. If the minister thinks there would be no difference in the level of public service, this clause would obviously not be in the bill. The minister obviously must assume that there will be some impact of increased costs — which we are experiencing and which is the reason for the legislation — on the level of public service. This is what the minister is saying, interestingly enough, that we want to consider. I'm not sure. My question is: does the minister want the level of public service to go down?

MS. A. HAGEN: Mr. Chairman, I want to move to another one of the definitions in section 1, the all-inclusive definition of "compensation." So our readers or viewers can follow the debate, it says: "'compensation' means all forms of pay, benefits and perquisites paid or provided, directly or indirectly, by or on behalf of an employer or to or for the benefit of an employee."

We had some discussion a little while ago in this wide-ranging look at the interpretive parts of the bill about the flexibility there is in the legislation vis-à-vis what the minister has said is inclusive in the bill. I'd like to ask the minister if this definition of compensation means that where pay equity provisions are being dealt with, often through job evaluations or reclassifications — that's one of the methods by which pay equity decisions are made — this comes under the classification of compensation; whether on-the-job training or employer payment for training courses, the kinds of things that might in fact increase the productivity of workers and make them better able to deal with the needs of the workplace are included in compensation; whether some of the fundamental kinds of benefits that are a part of a package — paid holidays and overtime — are included.

For example, are we going to say that when nurses are called in — as they often are — to work overtime in order to staff a hospital operating room, art intensive-care unit or a special ward, the overtime that is paid becomes a part of that compensation package? Are we to look at the increments that young teachers in the north and the interior receive as they move through their compensation up to maximum salaries for teachers? Are they going to be included? How does all of this in fact impact on fairness and equity if, as this definition suggests, everything under the sun that might be part of a collective agreement can, at the discretion of the commissioner, be costed as a part of that agreement?

HON. MR. VEITCH: It's not at the discretion of the commissioner; it's clearly spelled out in both the bill and the guidelines. Compensation refers to the broader definition of compensation, rather than just plain basic wages, and it includes benefits. If you look in the guidelines, you will see what it includes.

Section 14 of this bill states that in establishing compensation plans for the public sector, ability to pay shall be given "paramount consideration." The definition provides for a broad range of considerations as to what factors may be included. "Compensation" defines the parameters of the direct and indirect cost items to which the bill applies. The intent is to capture all forms of compensation.

It's easy to say: "We don't want any increase in hourly wages this year, but we're going to take two months' holiday instead of one month's holiday." That costs money in the total package, so it is part of the compensation. If an individual receives increased insurance benefits or increased retirement benefits, that's part of the compensation. All of the factors that make up the total benefits a unit of employment receives are taken into consideration when we define compensation — everything.

MS. A. HAGEN; We're back, then, to the waterbed theory of compensation, and the waterbed theory, I would submit, Mr. Minister, is not a very effective way to implement public policy. This government is supposedly on record as stating that it is going to take action on the matter of pay equity, but this legislation appears to constrain any credibility for that commitment.

The government is on record as stating that it will indeed ensure that health care is maintained. in the health care sector, we know that overtime is a very major, but not very attractive, means by which hospitals manage to deal with nursing skill shortages. In fact, it's the way they keep their operating rooms going. What the minister is saying, according to the waterbed theory, is that when those matters come into the scheme of things, they're either going to be ignored or they're going to be dealt with at a cost to every worker in the system.

My colleague from Kootenay is making a fair case that what we're talking about is not the maintenance of the public service or, in fact, a movement toward the implementation of the kinds of policies that

[ Page 11814 ]

would enhance both the ability of workers to do their jobs and fairness within the system. We are dealing with a government that's saying over and over again: "We have our definition of an ability-to-pay argument; we have our definition of what comes into compensation. Trust us" — later on when we come to guidelines — "because in our executive council we will determine, according to the situation at the time, how we're going to operate." I don't think, Mr. Chairman, that the minister has provided us with the kind of technical information we need to understand how these various clauses will indeed be implemented.

"Compensation" just takes us back to the ability-to-pay argument and the fact that the minister is talking about the waterbed envelope and saying that everything will be captured regardless of the effect on the public service, regardless of promises around public policy that this government proposes to implement. That clearly means that the minister, if I might be so bold, is talking out of both sides of his charming, grinning mouth.

HON. MR. VEITCH: I don't know, hon. member for New Westminster, what kind of waterbed you sleep in; it must be a rather old type. You must have got up on the wrong side of it this morning as well.

This bill does not restrain pay equity.

I believe the hon. member is not listening, Mr. Chairman. Perhaps I could get her attention for a moment; I think she wants some answers.

MR. CHAIRMAN: Hon. minister, would you please address the Chair, and not the member.

HON. MR. VEITCH: I see that I have now regained the hon. member for New Westminster's attention and that I have her undivided attention while I explain to her that.... By the way, while you were talking to the member for Vancouver East I was saying that you must be sleeping in a rather old waterbed and that you must have got up on the wrong side of it this morning.

[4:30]

This does not restrain pay equity. All of the items you discuss will be taken into consideration when the employer files the compensation package with the commissioner. It does not restrain the ability to have pay equity. As a matter of fact, there is flexibility in this bill for pay equity; there is flexibility in this bill where we find that there are skill shortages. There is tremendous flexibility, but in the final analysis, all of those things have to be based on the taxpayers' ability to send money to the government with which to pay the public service. It's as straightforward as that.

MS. A. HAGEN: For years in this province women have been paid less than men. For years in this province women have been earning 60-cent dollars. What I hear the minister now saying is that in order for us to bring women into a fair pay package, the people who are going to pay for that are all the rest of the public sector workers — not all of us. Clearly, if we are dealing with a compensation package including pay equity along with everything else, it appears to me that there's no other conclusion we can reach. Equality for women is something that we are now going to pay for out of the total compensation package for public sector workers, and there are no dollars that are going to be earmarked for that as distinct from other compensation benefits. That simply means that the unfairness is going to continue.

HON. MR. VEITCH: I'll agree with the hon. member in one thing. There are still several groups of individuals in the public service who are underpaid. This government has introduced a policy that is second to none of any government in Canada. On January 1 we put $12 million into the pockets of those people who are underpaid in order to bring them up — to bring up their scales — so we can provide pay equity.

This bill provides for pay equity. It can be addressed, wherever we need pay equity, in the compensation package. The rest of the workers in the system will not be affected by it.

This government has done more to bring about pay equity than any other Social Credit government or any other government in Canada at any point in history up until now, including governments in Saskatchewan and Manitoba.

MR. CHAIRMA: It might be advisable to get back to section 1 and be relevant in debate.

MR. CLARK: The minister said that the government has moved on pay equity. Of course, before this restraint bill has been brought before the House.... Clearly, from your remarks and from the bill, compensation is defined as all forms of pay benefits and perks paid or provided directly or indirectly by the provincial government. Therefore anything that's decided from the date of this bill — January 30, or before that, according to the bill, but assuming from the Premier's speech.... Any pay equity agreement agreed to by a public sector employer and employee must be included as part of the compensation in what will be a compensation plan.

Interjection.

MR. CLARK: The minister is agreeing with me, Mr. Chairman.

HON. MR. VEITCH: Kind of agreeing.

MR. CLARK: Maybe he could....

MR. CHAIRMAN: Hon. members, you should probably direct your remarks to the Chair. The minister then would get up after your conclusion and make his comments; in which case, as I indicated earlier, we would have them in Hansard and you wouldn't have to repeat them.

[ Page 11815 ]

MR. CLARK: Perhaps the minister could then, for the record, agree with me that any pay equity agreement entered into, from the date of the Premier's speech to today or beyond, that would be covered by this bill must be included as part of the compensation listed in the compensation plan to be reviewed by the compensation commissioner. Is that correct?

HON. MR. VEITCH: The answer is yes.

MR. CLARK. The point is that the compensation plan and the ability of the public sector employer to pay that compensation plan will be adjudicated by the compensation commissioner. Pay equity, which costs money, will become part of that compensation. The ability to pay of that public sector employer will be reduced by the amount paid out in a pay equity program, and therefore my colleague from New Westminster is absolutely correct: other employees may have to take less, and other services may have to be cut.

The minister has tried to say before the House, for political purposes, that pay equity is exempt. In fact, it's not at all exempt. It's absolutely clear from this definition of compensation that those pay equity agreements must be included in the compensation plan that will inevitably impact on the ability of the public sector employer to pay wages to other employees. Is that correct?

HON. MR. VEITCH: No, it's not correct. It's not true at all. Pay equity does not come out of the agreement. It forms part of the compensation plan. It's all part of the ability to pay. If a public sector employer does not have the ability to pay— we'll have to go back over this one again, I can see — they must look to find efficiencies or ways of improving their operation; try to find some other way of improving their ability to pay. Or indeed, if it's a case of skill shortages or some other areas and they have exhausted all remedies, they would then come to the commissioner with a plan and say, "We do not have this extra ability to pay," and that will be taken into consideration. But it all forms part of the ability to pay. It is not true that it comes out of the plan; it is included in the total compensation plan.

MR. CLARK: Mr. Chairman, the minister is trying to argue a question of semantics. The reality is.... Let's get this right. A public sector employer agrees with its employees on a pay equity program. That means there is less money for that employer to negotiate a collective agreement for all of the other employees, including those employees who benefited by the pay equity plan. The employer can use as an argument with the compensation commissioner that it does not have the ability to pay certain wage increases because it has used up the money in a pay equity program.

Very clearly, Mr. Chairman, that's what this says. It says the public sector employer can use the argument that it does not have the ability to pay certain wage increases — maybe the prevailing rate — because it has used up available funds in a pay equity program. Therefore it comes out of the same envelope. Pay equity is not exempted by this legislation, as you would have us believe. There's no reference to pay equity, I might add, in the legislation — none whatsoever.

Interjection.

MR. CLARK: Maybe the minister could advise the House what section of the bill deals with pay equity.

MR. CHAIRMAN: The Chair concurs in that and wonders why for the last half-hour we have been discussing pay equity under section 1, when it's not in section 1. If we could get the debate onto section 1, we may be able to advance the bill.

HON. MR. VEITCH: We appear to be debating the guidelines along with the bill. It's included in the guidelines, which were filed with all members of the House when the bill was filed, and the second member for Vancouver East understands that.

I would think that any prudent public sector employer, before going about increasing wages, or negotiating a wage increase or — as the hon. member for New Westminster says — a total compensation increase, would check its ability to pay. I would say it would be irresponsible for a public sector employer, be it a school board or anyone else, to negotiate a 7 or 8 percent increase in teachers' salaries while knowing that it has only a 4 percent ability to pay. Where do they think the rest of the money is coming from? This is what this thing is all about. It's to keep public sector wages in line with the private sector, and when the private sector produces more wealth the public sector will get more wealth.

I think that's eminently fair. I see nothing whatsoever wrong with this. I see nothing wrong with people whose jobs are by and large protected having to bear some of the burden in hard times and share some of that with people whose jobs are not often protected, in the forest industry and in certain types of industry or in other areas.

It's all tied to ability to pay, and any prudent employers would check their entities' ability to pay before signing labour agreements, I should think.

MR. SIHOTA: Using the example of the hospital that the minister referred to and the 4 percent increase, if that 4 percent is exhausted through a pay equity program, then the hospital, having put aside money out of that 4 percent or even the entire 4 percent for pay equity, would then have to make up from its existing budget, as I understand the minister, any other increases that it wished to pay to employees. Have I got that right?

MR. CHAIRMAN: Shall section 1 pass?

[ Page 11816 ]

MR. SIHOTA: Mr. Chairman, I sat down to await a response from the minister, and I'm trusting that the minister will now respond to what I had to say.

HON. MR. VEITCH: Mr. Chairman, if any hospital board were foolish enough to advance a 4 percent lift in pay equity when everybody else was settling at 1½ percent, you'd need to take a look at the management. This is what this thing is all about: management. Public sector employers need to realize that they have to come under some of the same constraints as the rest of the marketplace— the people who work in the private sector.

The majority of the people who work in British Columbia — thank goodness — still work in the private sector, or the public sector wouldn't have any money at all. For anyone to advance a pay equity scheme or a total compensation package of any kind when they know they don't have the ability to pay.... I think you should step back and take a look at that management and wonder how soon you could replace them.

MR. SIHOTA: Either the minister doesn't understand what I just asked or has agreed with what I just asked. To cut through all the rhetoric in terms of good management and bad management, let's use your example again.

There's a 4 percent increase in the budget. The hospital....

Interjection.

MR. SIHOTA: No, no; just listen to me. There's a 4 percent increase in a hospital's budget. The hospital board then decides out of that — to use your example, not mine — that they want to put aside 1½ percent of that increase for pay equity. Got that? They do that. You're saying to the House that they will then have to make up that 1½ percent within their own budget. In other words, the pay equity cost has to come from some other component of the hospital budget. It's not a cost that's over and above the 4 percent.

[4:45]

HON. MR. VEITCH: I don't know how many times I have to say this, Mr. Chairman. But if a hospital board, a school board or a Crown corporation does not have the ability to pay an increase over a certain amount, whether they get that funding entirely from government or part of it from the private sector or by way of fees, then they must either cut the cloth to fit the coat or determine where they are going to find that additional ability to pay.

If they offer more in compensation than they have the ability to pay for, they've got to find it someplace else. I don't know where those areas are. In hospital administration, I suspect that lots of hospitals could find ways to increase their ability to pay. I'm not going to argue whether it would be in administration or in some other areas, but there are areas where ability to pay can be found. Yes, it's total ability to pay, and they have to make cases. As we've said before, if they're looking for specialists in a certain area who can't be found but require an inordinately higher wage than someone else, then they have to make the case to the commissioner. They also have to show the commissioner that they don't have the ability to pay those extra costs. There's provision for that in the bill and in section 21 of the guidelines.

[Mr. Pelton in the chair.]

MR. SIHOTA: Mr. Chairman, it's a pleasure to see you in the chair.

Then I would think the minister would concur with my submission that pay equity is not exempt. Is that correct, Mr. Minister?

Well, Mr. Minister, I know you want to talk to your staff. So you would agree with me, then, that pay equity is not exempt?

HON. MR. VEITCH: Mr. Chairman, I have a very hard time agreeing with that hon. member most times or almost any time. No. If the employer has the ability to pay, they can provide pay equity if they have the ability to pay. If they don't have the ability....

Listen, if you haven't got it, you can't spend it. Don't the socialists ever understand that? If you haven't got the money, you can't spend it. You can't continually spend the wealth of future generations or tax the people who aren't working.

What we're asking people to do is to share economic increases when those economic peaks start to rise, as they will very shortly in the province of British Columbia under a good Social Credit government. We also ask them to share some of the bad times as well, so we don't get into the mess that we've gotten into at the federal level and in Ontario, that was left behind in Manitoba, where they've literally had to freeze everything, or that they have in Newfoundland.

We are not at that stage here, and we are bringing in this legislation so we don't ever get to that stage. We're protecting jobs of public sector workers. We are offering the fairest possible increases and the fairest possible lifts in compensation, but it's got to be based on the ability of the taxpayer to send money to government.

MR. SIHOTA: The minister has an uncanny ability to retreat into rhetoric. It's like one of those little dolls with a string in the back; you pull the string, and you get the same stuff said over and over again. When there's nothing else to say, you just retreat to rhetoric. The question was: Will you agree with me that pay equity is not exempt? Of course you only have so much money to spend; no one's debating you on that point. What we're trying to say is that you can't talk out of both sides of your mouth. You can't say on the one hand that pay equity is exempt and then on the other hand say that it's not exempt.

Maybe you don't quite understand what we're trying to say about how pay equity should work into

[ Page 11817 ]

the system. Maybe that's why you're retreating to rhetoric. Let's just go through this one step at a time.

Interjection.

MR. SIHOTA: Don't tell me you don't have to, Mr. Minister.

MR. CHAIRMAN: Order, please.

MR. SIHOTA: Sometimes simplicity works for the simplest of minds, Mr. Minister. Let's just go through this step by step. Just cut the heckling, settle down and tell me why I cannot conclude that pay equity is not exempt — based on this scenario. You get a 4 percent increase in your budget, and to use your language, you can only spend what you've got. Out of that 4 percent, you take out 1.5 percent — to use your numbers — for pay equity. Step three, you then — based on what you've had to say — have to make up that 1.5 percent from within your budget that you've got as a hospital. Accordingly, pay equity is not exempt from this legislation. Would you not agree?

HON. MR. VEITCH: The hon. member is very clever. He tries to look into the television and delude the unwary out there — the host of people who are watching television. The people of British Columbia will not buy it.

What I have said to the hon. member over and over again is that anything that makes a unit of labour, and the compensation that's included within that, has to be included in the compensation plan. That includes pay equity and extra vacations. That may even mean that if a salaried employee, who is not paid by the hour, worked an additional hour, he or she may be able to put some more money back into the system so that it could be shared. This is a little bit about sharing. Maybe you don't understand that. It's sharing and caring. It's caring about the public sector and at the same time caring about the people who pay the wages of the people in the public sector. Pay equity is included, not excluded, but it must be included in the compensation plan, along with all the other factors that make up compensation. Surely I don't have to explain that to you anymore.

MR. SIHOTA.. If it's "included" — to use your word — then it’s not exempt from the legislation. If it’s included in that packet of funds that we've just talked about — let's say a 4 percent increase....

Interjection.

MR. SIHOTA: Whatever they may be. You used the example, Mr. Minister, of 4 percent. I'm just using your numbers. It may be less than that. The point is very simple: if it's included in that packet, it's not exempt from the legislation. Correct?

HON. MR. VEITCH: Mr. Chairman, I think we're getting tedious and repetitious here, and there's a section in that little book you have that deals with it.

Pay equity is included. Each public sector employer may have a different ability to pay. Certain hospital boards may have a different ability to pay than other hospital boards. They may have better management or a different skill level, or their output of production per unit of labour may be higher. There's a whole host of things that could be included. If they have that ability to pay, they can include pay equity, increased vacations and increased wages, but they cannot exceed the ability of the employer to pay.

If they do exceed that and if they sign a contract that exceeds the employer's ability to pay, they have to take a plan to the commissioner and say: "Here is how we are going to get this extra money, here is how we're going to derive this extra ability to pay." Pay equity— and a host of other things — is part of the compensation plan.

As I said, last January we put an additional $12 million into pay equity in British Columbia. Now you're trying to delude the television audience into believing that this government has not put money into pay equity. This government has done more to level out that employment field than any other government in Canada— be it socialist, private enterprise, Liberal, Conservative or whatever it might be. And it will continue, as resources become available to us, to help those kinds of people.

Interjection.

HON. MR. VEITCH: No, I understand what the hon. member is saying. Yes, there are people in the public service who are not being paid enough. Yes, there needs to be more pay equity. All this has to fit into the scope of the public's ability to pay. It is included and would be included in a compensation package.

MS. SMALLWOOD: I've been listening to this debate with some interest. It seems to me that this government is trying to do two things: they are trying to identify the ability to pay at somewhere around 3 to 4 percent; and they are trying to get as much mileage as possible out of their pay equity programs, saying that they are dealing with an historical injustice.

I would agree there is a need for pay equity and wage parity in many fields. We'll talk more about wage parity and pay equity programs as we go through this section by section.

The difficulty I'm having with the debate, in particular, is in comparing this government's proposals to other governments' and other jurisdictions' proposals. When other governments have dealt with pay equity programs, they first acknowledged the historical injustice, and then said that over time they would put aside a certain percentage of payroll to deal specifically with that injustice, to deal specifically with the wage discrimination between men and women in our workforce.

[ Page 11818 ]

Other governments have ventured further to talk about the broader public sector and, indeed, the private sector in some jurisdictions. This government, however, has decided that it will live up to its responsibility as an employer and bring in a pay equity program — just simply that. Then they used their position as employer — government to, in some way, impose those wage settlements on their whole bargaining unit.

What this particular legislation — and, I think, previous speakers — makes very clear is that with the government trying, in some fashion, to deal with the wage discrimination that is present in their relations with their employees, they are further discriminating against the rest of the bargaining unit. The problem I have is that you are imposing what is less than the cost of living to start with and, on top of that, saying: "To deal with this wage discrimination — which is not of your making as an employee; indeed, the government and the employer have some responsibility for that — we are going to make you pay doubly."

I wonder if the minister could explain how long he expects it to take for there to be real wage equity for his employees?

[5:00]

HON. MR. VEITCH: The plan that we have put into place for pay equity is a four-year plan. What is it? One and one — that's the plan that is already in place.

In Saskatchewan, they have already announced a 4 percent cap on public sector settlements. Manitoba will be limiting civil service pay hikes to 3 percent right across the board. In Newfoundland, they have frozen salaries of all 35,000 public servants for a year. People are facing the closing of 360 acute-care hospital beds and the complete elimination of some school boards.

Due to the fact that this and previous Social Credit governments have practised good fiscal policy, we have been able...

Interjection.

HON. MR. VEITCH: Listen for a minute; you might learn.

... to put away a little money for rainy days, such as today. We are able to get away from the severity of the impact on those other provinces.

This is about ability to pay. We're not asking people to take rollbacks. We're asking that they limit their wage increases relative to the private sector. Is that so wrong?

I know you don't understand that, hon. member. I know you don't understand that the money comes from the private sector. You think it comes from a public tap or something, or that you can go out and borrow and borrow your way into prosperity. We can't do that. That simply exacerbates the problem. That's why socialist governments all over the world are going down the tube. That's why socialism doesn't work. They simply don't understand that in order to pay something, you have to be able to get it from someplace else.

The private sector can't afford to pay any more to other folks than they can afford to pay to their own employees right now. This bill is not about discrimination, hon. member; it is about fairness and equity.

MS. SMALLWOOD: Mr. Chairman, this bill certainly is about discrimination. The more we delve into it, the clearer that becomes.

The minister has just given me numbers. He has said the wage equity agreement to date is 1½, 1½, 1 and 1 for four years. Under this legislation, the total compensation package — and again I'll use your figures — is somewhere between 3 and 4 percent. I'll use the 4 percent figure to be generous.

What you are saying is that for the next four years — since you have already committed this percentage to wage equity to deal in some way with the wage discrimination that exists.... I would hope that the minister would agree with me that that's the target of pay equity programs. Previous speakers have already questioned you on the impact of the wage equity program on the full compensation package. What you are saying, then, is that the only thing that will be left for negotiations for your employees in the next four years, should this bill be in place for such a length of time, is 2½, 2½, 3 and 3.

Mr. Minister, using your numbers, you have just said that dealing with wage equity, the agreement that the government has already made is for 1½, 1½, 1 and 1— a four-year package. If we are to deal with the full compensation package — which you have already admitted is a finite package — when you subtract the wage equity compensation that you have made a commitment to in the next four years, the only amount that you will have left to deal with in negotiations with your employees is 2½, 2½ and 3.

The minister seems a little perplexed, but it seems to me that we're talking simple mathematics here.

Interjection.

MS. SMALLWOOD: Well, the minister says that it's simple. I'll sit down. I think you're probably the best person to answer, then.

HON. MR. VEITCH: Mr. Chairman, you see what the hon. member for Surrey-Guildford-Whalley has done. She has picked a percentage, 4 percent, and she builds her whole argument around that figure. Why not build it around 6 or 8 or whatever the public sector can pay at that particular point in time?

You don’t bother considering the enormity of the task that the government set out on when it decided to go for pay equity. Do you know that each 1 percent in the public sector means $83 million more out of the public's pocket? That's what it means. That's what we're talking about. So you're building a whole argument around some fictitious number.

We've told you time.... I realize you were out of the room and you probably weren't watching the television in your room — but you should be. What

[ Page 11819 ]

we have said, time after time, is that each public sector employer has varying abilities to pay. It may not be 4 percent; it may be 6 or 7 percent. All of that will increase if we can stay the course and make sure we don't go into crazy borrowings and spend more money on interest payments. Do you know what we pay on interest payments in this province? Of the dollar that we bring in, we pay about 3½ percent. You know what it is in Ontario? It was 10 percent until the NDP took over. It looks like it's going to be 20 percent in the next year or so. It's 36 or 37 percent at the federal level. You're not going to have anything left over to pay for wages if you go down the road you're looking at. Each 1 percentage point in the public sector — and I want the hon. member to understand this — equals $83 million. That is a lot of money.

MR. CLARK: Mr. Chairman, we're going to go to (g) in the definition section. But let me just say that the minister has confirmed for the House — and we appreciate it — that there is only one taxpayer, that there is an ability to pay and everything comes out underneath that. So pay equity per se is not really exempt, because it all comes under the ability to pay. Likewise productivity and skill shortages — they're all factored into the government's ability to pay. We understand that, and I don't see why it's necessary to have all that nice language in the guidelines when it doesn't really mean that much.

It brings me to the guidelines — a nice segue, Mr. Chairman. I just want to draw the minister's attention to two definitions. It says: "...'compensation regulation' means a regulation prescribed by the Lieutenant Governor in Council under Part 3; 'guideline' means a compensation fairness guideline issued by the Executive Council under Part 2...." Can the minister explain why guidelines and not regulations by Lieutenant-Governor-in-Council? I am a little concerned, but we'll get to that in a minute. Maybe he could explain why guidelines by the executive council, as opposed to regulations by the Lieutenant-Governor-in-Council.

HON. MR. VEITCH: Under the last bill of this type that we had in this House, the guidelines worked very effectively. We wanted to give you a full package that included the guidelines and the legislation. Apparently, I'm told, no public employer had to fall under the regulations that were established by the Lieutenant-Governor-in-Council. They simply were able to work within the guidelines, so we expect it will be the case as well with this particular bill. All it will take is some goodwill, some hard work and some realization that we're going through some pretty difficult times in this country and in this province. If people attempt at all to make this thing work, it will work, and it will be covered by the legislation and the guidelines. There won't be any need for them to go into regulations.

MR. CLARK: It seems a bit strange to me, Mr. Chairman. The regulations that flow out of legislation are quite normal. It seems to me quite appropriate. for the government to have brought in companion regulations by the Lieutenant-Governor-in-Council, and I'm trying to understand the distinction between a guideline by cabinet as opposed to a regulation by Lieutenant-Governor-in-Council, which is essentially cabinet. You said that it worked last time and so you did it again. I still don't understand what the distinction is. Can the minister confirm that the guidelines essentially have the full force of law? Is it a difference without a distinction? I don't know. It seems to mean exactly the same thing.

HON. MR. VEITCH: Of course, you see, the hon. members are assuming that conditions will get worse in the province, or that they will remain at the status quo. The executive council route gives you more flexibility to maybe loosen up on the guidelines or indeed, if necessary, to tighten up on the guidelines, as the case may be. I expect that as the economy improves, the guidelines will indeed be more flexible, and that can be done more easily through the executive council than through the Lieutenant-Governor-in-Council —  going through the formal process of doing orders-in-council and the like. These guidelines can be revised from time to time as the taxpayers' ability to pay improves.

MR. CLARK. Mr. Chairman, I still fail to see the distinction between guidelines of the executive council.... One of the distinctions is that the guidelines don't have to be public, I suppose. The regulations, of course, are published; orders-in-council are published routinely. The guidelines have already been published by the government to date. If the guidelines change, obviously the people have to be informed about it, but there's no formal route to actually inform the public, as there would be with the regulations. It seems to me — and I won't dwell on this point — that a regulatory approach would be preferable. It would require publication of the regulations when they are passed by order-in-council. There would be the assurance of a debate, and so on.

This, the minister says, gives the government slightly more flexibility. I presume they don't have to get it signed by the appropriate officer of the executive council, and I would worry about it, given what I perceive to be the very political nature of this bill that the cabinet gives slightly more flexibility to act quicker on a guideline than going by regulation. I still don't think the distinction is too great. It seem to me that regulations or guidelines go through the same process: the cabinet has to approve them.

I want to move down to "public sector employer," Mr. Chairman. It gives a list there of all of the public sector employers — in other words, the definition of the public sector employers. Could the minister advise the House how many collective agreements will be governed by this legislation?

HON. MR. VEITCH: I was just speaking with my adviser here. He said that there are 700 employers. Some contracts would cover several bargaining units,

[ Page 11820 ]

such as maybe in the college system or something of that nature. So the best guesstimate we can give you is somewhere in the range of 350 contracts — 250 to 350. It's hard to tell right now. We can get the exact number and get it back to you. There are 700 employers, and there aren't that many contracts.

[5:15]

MR. CLARK: I won't hold you to it.

In discussing with Bob Yanow.... Remember poor Mr. Yanow, who used to be with the public sector disclosure registry and was cut adrift by this administration. He indicated that something like 1,500 contracts or collective agreements would have been covered by the public sector disclosure act.

Just for the minister’s advice, municipalities, for example.... There are something like 300 CUPE locals in British Columbia. The CUPE union alone has 300 collective agreements. It would strike me that the range might be more like 2,000 or 3,000 collective agreements covered by this legislation. It may be 700 employers, but different agreements with different people, of course. It's an extremely large undertaking that the government is proposing here and was proposing for Admiral Yanow.

Can you tell me whether this act is more inclusive than the previous Public Sector Collective Bargaining Disclosure Act or less inclusive? In other words, are there groups of employees or collective agreements that were covered by last year's Bill 79 but aren't covered by this legislation?

HON. MR. VEITCH: It's intended to cover the same groups as those employees who were administered under Admiral Yanow's legislation.

MS. CULL: I wonder if the minister could clarify one of the sections under the definition for "Public sector employer," subsection (g). It refers to a community care facility under the Community Care Facility Act which receives funds, whether directly or indirectly, from another public sector employer. I wonder if the minister could give me some examples of the kinds of employers that would fall under that and also explain what happens when a public sector employer, as defined by this section, receives part of its funds— not 100 percent — from another public sector employer.

HON. MR. VEITCH: There are several ways that community care facilities, old age homes or whatever receive funding. Some comes directly from government, from general revenue; some may come through a club or organization— but still with government money channeled in. Even the Lottery Fund provides some societies and groups with funding, which is really indirect funding.

I can't give you the names of each and every one of the entities involved, but we can certainly find out and tell you. Lots of organizations receive funding indirectly from government, through a third party.

MS. CULL: I would like to hear the answer to the part of my question which referred to those organizations which receive part of their funding. Are they covered under this? For example, a day care which has children whose parents are receiving subsidies from the provincial government — that is, funding that has come from the public sector indirectly: Is that day care covered under this section?

Transition houses receive funding from a variety of sources. Part of their funding would come from the provincial government. Are they now included under this section? Organizations such as the Arbutus Society in my riding, which I believe receives its funding from 16 different sources.... They spend most of their life scrambling around trying to put together funding every year, but a considerable amount of it does come from the public purse. Are they all defined now as public sector employers under the act?

HON. MR. VEITCH: It says: "...a community care facility as defined in the Community Care Facility Act...." I don't know that a day care facility is defined.... Is it? Well, if it's defined within the Community Care Facility Act, yes, it would also be subject to this legislation.

MS. CULL: Well, let me point out a real problem we're going to have with day cares, then. I've got the Community Care Facility Act here in front of me, and day cares are included. We're going to have problems where in one month a day care may have children who are receiving subsidies — and therefore is defined under Bill 82 as a public sector employer — and next month, when the enrolment changes, may have no children who are receiving subsidies. Block funding for special-needs children in day care comes and goes, depending on what happens with the government. Are we going to now find that we have organizations such as this, which one month finds itself under this legislation and the next month not under the legislation?

I see the minister consulting with his staff.

If that's the case, it's going to create considerable confusion for the hundreds of non-profit organizations which provide services in this fashion, and who have enough difficulty as it is coming together with budgets and trying to compensate their staff adequately.

We're waiting right now while the minister is rifling through pages of the act.

HON. MR. VEITCH: What we're doing is looking through the guidelines, and trying to determine where that falls within the guidelines. There is a section in the guidelines that we both remember seeing — and we're looking for it now — that states roughly this: where there's a fluctuation in circumstances, the compensation plan is able to accommodate that particular situation. If we can, we'll find it in the guidelines here and point it out to you. It is in

[ Page 11821 ]

the guidelines, but there is a provision for such as day care.

[Mr. Ree in the chair.]

Here it is in section 33. It says: "Where the composition of a group on the last day of a base year is not representative of the numbers or of the trades and occupations of the employees in the group during the base year, a composition that is more representative of such numbers or trades and occupations during the base year may be used in the computations under Paragraph 31(b) and (c)." It allows for that sort of fluctuation. It adjusts for fluctuation of workload and those other types of things. It's covered under section 33 of the draft guidelines.

MS. CULL: I've served on the board of a nonprofit day care. These organizations are struggling to come up with adequate budgets and to sort out their policies with very little professional help. I've just read the section that you read out to us, and it's extremely complicated. I don't know how many of those organizations would be able to determine whether they qualified, or if they had to register within however many days it is after this act comes into force.

The other thing I'd like to point out, because it was one of the....

Interjections.

MS. CULL: If I could just continue, Mr. Chairman.

One of the other things I'd like to point out was that a few minutes ago, when my colleagues were asking about pay equity and talking about guidelines, the minister said: "No, we're not debating the guidelines; we're debating the bill." These items are in the guidelines, but they're not what we're debating here today, as you pointed out to us earlier.

MR. CHAIRMAN: To all members, the debate at the moment is on section 1 of the bill.

HON. MR. VEITCH: Mr. Chairman, I'm sure the hon. member doesn't want to mislead anyone. I have never said that we're not debating the guidelines in the bill; I said they were given to you as a companion piece so you could debate them both together. If I have implied that, mea culpa. I'm sorry. It certainly was not my intention.

There will be organizations like day cares that obviously don't have accountants and people around who can do these kinds of things. All they have to do is pick up the phone and call the commissioner, and a member of the staff will come over to help them through their problems. They will make it as easy as they can to do these adjustments. So they will be looked after.

Fairness and equity, Madam Member, are the centrepieces of this legislation. There isn't any question about it. I'm sure even you agree with that.

MS. CULL: I'm not sure that this piece of legislation has anything at all to do with fairness, but I think we debated that enough during second reading.

I just want to ask one more question on this. Does the minister have some guideline — either in the official guidelines that we've received or something else that his staff will be using — which will allow us to determine if an organization that receives only part of its funds from a public sector employer will be covered? Is it 50 percent, 10 percent or 75 percent? If there's one GO B.C. grant received in a year by an organization — let's use day care again — to put up a climbing apparatus for the kids, does that mean they're now a public sector employer and fall under the terms of the act?

HON. MR. VEITCH: Mr. Chairman, if you fall within the guidelines, you fall within the guidelines. There's no partway within the guidelines. You either are or are not within the guidelines. But if a day care organization has a problem working out the guidelines or determining where they stand within the act, some of the staff of the commissioner will be pleased to work with these people to help them through their problems.

Obviously, you say that day care falls within the Community Care Facility Act; they fall within the guidelines. We are going to give them special consideration to help them work their way through here. We realize they don't have the staff that a hospital board or a community college would have.

MS. CULL: Let me be absolutely clear about this. You are under the definition of a public sector employer — as I read this — only if you are both a community care facility as defined under the act and in receipt of funds directly or indirectly from a public sector employer. So all day cares are community care facilities, but not all day cares would be under the provisions of this act — if I've understood this correctly.

I see the minister nodding; he's agreeing with me. You gave me some examples of the kinds of indirect funds that would apply in this case. Does that mean that a day care which receives a GO B.C. grant to put in playground equipment is...?

Okay, the minister is shaking his head and saying that that's capital funding. So grants for capital improvements don't....

Does a day care that has children at its facility who receive subsidies through the Ministry of Social Services and Housing qualify? So that organization qualifies. So then does that organization have to go back over its annual records and see how many children it had at any given time? Because the number fluctuates. Sometimes you have children who receive subsidies; sometimes you don't. Is that what you're telling me — that there has to be some kind of review done to determine on balance whether the day care is subsidized through the public purse?

[5:30]

[ Page 11822 ]

HON. MR. VEITCH: Surely any reputable day care organization, whether it be large or small, would keep records and would know whether it had been subsidized through the public purse, directly or indirectly. They would have that information available to them. If they need help, as you say, when their situation changes, when the work conditions fluctuate or when the subsidies fluctuate, all they have to do is contact the office of the commissioner, and a member of the staff will help them with their problem. They keep records. I don't know; maybe some need to keep better records. I haven't seen the records of a day care agency.

MS. CULL: Mr. Chairman, I'm not asking about the keeping of records or whether there will or won't be staff available to interpret the act to organizations that need help. I assume there will be. It's still unclear to me: does it only take one child a year to put a day care into the definition? That's why I asked the question about whether it is 10 percent of the funding or 50 percent of the funding. Is it the majority of the children or half of the children? Could the minister answer that for me?

HON. MR. VEITCH: If the organization receives funding from the public purse either directly or indirectly, either a large amount or a small amount, it falls under the act and under the guidelines.

MS. CULL: That is now very clear. It means that any funding, no matter how little, that is received by an organization — whether it's a day care, a transition house, a home, a shelter or whatever — is going to put it under this definition of the act.

I am really concerned about the impact this may have on day cares. There are already enough difficulties with day cares in this province that are reluctant to accept children who require the subsidy, because of the great delays in getting the subsidy and in the process through the Ministry of Social Services and Housing. What this now means is that many organizations that have a choice to avoid those kinds of funds will avoid getting into this complicated labour relations game. I don't think that's going to do a service to the children of this province or to their parents.

HON. MR. VEITCH: This is not intended to be a burden on a small day care organization. There's flexibility within the act to cover that. There are staff who will help the particular day care organization. That's why we have regulations, which can change from time to time. If there needs to be more flexibility to deal with these special cases, it can be introduced. It's not intended to be a burden to any group. If it is burdensome, we'd have to look at that particular situation, and I'm sure the commissioner would recommend ways of changing it. Regulations can be made, and they can be changed to accommodate certain groups within society.

It's not intended to be a burden. I simply don't know enough about day care administration to comment on it beyond that, but I can tell you that if it is a burden — you say there are maybe 25 or 30 children in a day care and only one receives a subsidy — then we'll have to deal with that and make it flexible so that it's not a burden to that particular organization.

MS. A. HAGEN: I'm also seeking, Mr. Chairman, to clarify the definition of "public sector employer." I want to ask the minister a couple of questions about what may be encompassed in this definition.

I would presume, under (g), first of all, that every group home for special-needs residents is indeed under the umbrella of "public sector employer." That means that all of the group homes that have now been established throughout the province for people who formerly were residents of Tranquille, Woodlands or Glendale— those small organizations, whether they be for-profit group homes or not — will be covered by this legislation. Every single one of those boards or employers will have to deal with the quite extensive demands of this legislation around their compensation package. I'd like the minister to confirm that and, implicit in that, to acknowledge the difficulties that that is going to place— consistent with the comments that have just been made by the member for Oak Bay–Gordon Head — on those struggling organizations.

My second inquiry has to do with organizations that do receive a very large portion of their funding from government: namely, continuing-care facilities, intermediate-care facilities and home support organizations. It's not clear to me in the list of public sector employers whether these organizations are indeed intended to be affected by this legislation. I wonder if the minister could deal with that group of employers.

HON. MR. VEITCH: To answer your first question, yes — if group homes fall within the Community Care Facility Act, they would certainly fall within the guidelines here too. Again, however, this is not intended to put some onerous burden on them that costs them a lot more money and wastes money on administration or anything of that nature. It will be dealt with either through help from the commissioner's office or indeed by changes to regulations dealing with those specific groups.

If a continuing-care organization falls within the definition of a hospital, as defined in the Hospital Act or the Hospital Insurance Act, then it would indeed be captured. I presume that if it did not fall within that definition, it would not be.

MS. A. HAGEN: Could I ask the minister a very specific question, then? I'd preface it with the comment that I understand that Mr. Yanow, under the Public Sector Collective Bargaining Disclosure Act, had one person working for six months to try to find out who indeed was a public sector employer. We've had some experience in this, and the minister is not coming to this without having made some attempts prior to tabling this bill to understand what a public sector employer might be.

[ Page 11823 ]

Could the minister please say very specifically whether intermediate-care facilities and organizations that provide home support under the government's continuing-care program are umbrellaed under the definition of public sector employer and are therefore subject to this bill and— forgive me, Mr. Minister — these very complicated and hard-to-read guidelines?

HON. MR. VEITCH: Admiral Yanow's organization has done a lot of work in defining who is and is not a public employer. That is work well done. It's going to be transferred to us, and we will have that information.

Now whether or not some of these small organizations that you speak of — continuing-care facilities or organizations of that type — are covered under the Hospital Act or the Hospital Insurance Act, I don't know. We'll have to ascertain that for you. If they are covered, they're in; if they're not, they are exempt. If they don't fall within the purview of the acts set out in this section, then they would not be affected by this particular legislation.

MR. CHAIRMAN: The minister for New Westminster.

MS. A. HAGEN: I'm glad I'm the minister. Thank you very much for the promotion. [Laughter.]

I know that the organizations of which I speak are not covered by the Hospital Act or the Hospital Insurance Act. So I believe that what the minister is saying is that those employers who operate intermediate-care facilities, with or without a union group of employees, and those that operate home support organizations are not encompassed by this legislation if they do not fall — as they do not — under the Hospital Act or the Hospital Insurance Act.

HON. MR. VEITCH: If the organizations to which you allude do not fall within any of the acts defined in this section, they would not be included in this act. So the act would not have control over them. If indeed they do — such as the day cares and the group homes you alluded to — they would be included. So the act is very specific. If they don't fall within any of these acts listed here, and if they're not part of a municipality; a regional district, an improvement district as defined in the Municipal Act, a board of school trustees, a community care facility or a hospital, then they would not be included.

MS. A. HAGEN. Mr. Chairman, then let me ask another question. This government has contracted out an extensive number of personal services over the last number of years of its administration. Does this mean that those contracted services are not covered, even though government dollars — if you like, public sector dollars — are providing for the servicing of those contracts and the literally thousands of workers under those contracts?

HON. MR. VEITCH: Well, the Chairman will not let me speak to what is not included in the act — only to what is included. If these groups are included within this act and in the section that describes what would actually fall within it, they are included. If they don't fall within any of these acts, then they are not. It's the same answer as to the previous question..

MS. A. HAGEN: Let me just ask the minister whether government personal service contracts are covered by this legislation. A yes or no answer, I believe, would satisfy my need for clarity.

HON. MR. VEITCH: If they are not listed and they don't fall within the definitions included in the act, they are not included. If they fall within any of these acts, they are included.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Richmond moved adjournment of the House.

Motion approved.

The House adjourned at 5:44 p.m.