Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MARCH 31, 1992

Volume 1, Number 15

[ Page 305 ]

The House met at 2:06 p.m.

P. Ramsey: We have in the gallery today Mr. Killy, who is a longtime resident of Prince George. His family has been much involved with the forest industry in the central interior, and he is president of Vanderhoof Pulp and Paper. Mr. Woodbridge, who is accompanying Mr. Killy, is project coordinator for the proposal for a pulp mill of Vanderhoof Pulp and Paper in the Prince George-Vanderhoof area. Would the House please join me in welcoming them.

L. Reid: It's a pleasure this afternoon to welcome guests visiting from Yellowknife, Northwest Territories. We have Joan Litke, Larry Litke and two very petite Litkes, Kelsey and Shawna. Welcome. I ask the House to please join me.

D. Schreck: It's my pleasure today to welcome six great British Columbians in the gallery. From North Vancouver-Lonsdale we have Mollie Bain, and with her is Yvonne Bain from the Sunshine Coast. We also have Lois and Henry Reimer from the riding of North Vancouver-Seymour, and they are joined by June and Morris Flynn. Will the House join me in making them welcome.

F. Garden: I'd like the House to join me in welcoming two constituents of mine from Quesnel -- Mr. and Mrs. Gradnitzer.

Hon. L. Boone: I'd like the House to join me in welcoming to the precincts today, from that wonderful village of McBride, the clerk of the town, Ron Brown, and Mayor Steve Kolida. Would the House please welcome them.

F. Jackson: We have in the gallery today some students and faculty from Central Washington University, who dropped in to see how our government works. I'd like to ask this House to join me in making them feel welcome.

H. Lali: I'd like to introduce three British Columbians from the great riding of Yale-Lillooet, from the nation of the Nlaka'pamux: Chief Bob Pasco, Chief Guy Dunsten and Chief Wilf Campbell. Would you please make them welcome.

Hon. J. Cashore: On behalf of the members from Maple Ridge-Pitt Meadows and Port Coquitlam, and myself, I would like the House to join us in welcoming Sandy and Donna Macdougall, recent newlyweds from Maple Ridge. Would the House join me in making them welcome.

E. Barnes: I would like the House to join me in welcoming the executive members of the administrative services component of the B.C. Government Employees' Union, who have scheduled their bi-monthly meeting here in the capital city. They represent about 12,000 clerical employees who work for the government around the province. Let's all make them welcome.

Hon. D. Miller: Visiting in the gallery today are: first of all, from Victoria, my mother-in-law, Edith Bartram; and from Penticton, her sister Marion Walton and her friend Ann Zwanjese. I would ask the House to make them welcome.

U. Dosanjh: I'd like the House to welcome 53 students and their teacher from Tupper Secondary School in the great riding of Vancouver-Kensington.

Ministerial Statement

CANADIAN ABORIGINAL LANGUAGE DAY

Hon. M. Harcourt: Hon. Speaker, our government has received notice from Ovide Mercredi, who is the national chief of the Assembly of First Nations, the National Indian Brotherhood, that his organization has declared today, March 31, 1992, as Aboriginal Language Day in Canada. This is in recognition of aboriginal peoples' efforts to revitalize their languages, many of which are at risk of dying out.

The government of British Columbia supports these efforts through the first peoples' heritage, language and culture program. We will be providing approximately $2 million per year over five years to support heritage, language and culture programs or centres in more than 30 tribal areas in British Columbia. The program has just completed its first year of operation, and I'm sure the members of this Legislature will be pleased to note that projects are now underway in more than half of the tribal regions.

I would like to close by paying a special tribute not just to the aboriginal leaders in this province, who have kept alive this dream of maintaining language and culture through many, many decades when they were actively discouraged and prosecuted for doing so, but also to an ex-MLA who, for ten years, presented a bill every year to see that such resources and centres would be available throughout this province. I'd like to recognize the efforts of Gordon Hanson in working with the aboriginal people.

G. Wilson: It's with great pleasure that I stand to respond to this ministerial statement. We in the official opposition welcome the opportunity to have this declaration made, and believe that it is indeed in the interest not only of all aboriginal people to see their language maintained and their culture enhanced in Canada, but also of the greater wealth of all Canadians. Therefore we are very much in support and very pleased to see the initiative taken by this government today.

It is our sincere hope that in the time to come the preservation of aboriginal language and culture in Canada will be more than a dream; it will be something that will be seen as a reality, as every Canadian equal to every other Canadian is able to protect their culture, their language and their heritage. We on this side welcome this opportunity to support the government in this initiative.

[ Page 306 ]

J. Weisgerber: I certainly join with the Premier and the Leader of the Opposition in recognizing this day as one to honour first nations' attempts to preserve and enhance and maintain their languages.

When we were in government, we had the privilege of working with aboriginal people around the province to develop this program -- the one the Premier mentions -- and provide the $10 million base funding that now is able to be used for the first peoples' heritage, language and culture program. My colleague, the member for Okanagan West, chaired the first committee that looked at ways we could support first peoples' language. If there's anything that goes to the heart of what's important for aboriginal people in their attempt to maintain and nurture their culture, it has to be language.

[2:15]

There is a diversity of languages in British Columbia. Seven of the ten Indian languages in North America are unique to British Columbia, and at least one other is found here. The wealth of Indian languages is in British Columbia. We will certainly support any effort of the government to continue to sponsor and support first people in their attempts at language preservation enhancement.

Hon. D. Miller: I wish to table a package of documents relative to the countervailing duty dispute with the United States. I was absent when questions were asked last week. This package clearly indicates that there is a significant amount of support in the Pacific Northwest for our position, and I would ask all members to study it.

Oral Questions

LOW-INCOME WAGE EARNERS

G. Wilson: My question is for the Premier. Is the Premier aware that a single mother of three who works as an admitting clerk in a hospital under HEU contract takes home $1,448 net, which is only $163 more than an equivalent single parent with three children on welfare, and would the Premier agree that this is an unacceptable situation in this province?

Hon. M. Harcourt: The reason our government has provided a pay equity package that is greater than any other jurisdiction in North America is to try and redress that imbalance. We as a province have to move as quickly as possible towards full equality between women and men. We all know, though, the very difficult economic circumstances that the people of British Columbia face, so we always have to balance that very genuine goal that this government certainly has. I'm sure the Leader of the Opposition would support bringing about equality between men and women with what the taxpayers of British Columbia can afford. We're certainly aware of that situation, and we're taking steps to try and remedy that situation over time.

G. Wilson: That is indeed good news for all workers in British Columbia that this government is prepared. However, it begs another question of the Premier. If, in fact, you're moving as quickly as possible to address these kinds of difficulties, why is it then that the government's first major initiative -- outside the pay equity initiative that you've suggested and the increase in welfare -- is a minimum wage for construction workers, primarily men, who are currently earning $20.21 an hour in a labourer and worker area, and have now been pushed to a rate with benefits of $23.90 an hour? This is roughly $3,350 per month for an unskilled, untrained worker in the construction industry. Why would you not spend the $200 million that this is going the cost the taxpayers of British Columbia on the kind of initiative that I talked about in the first question?

Hon. M. Harcourt: One of the first initiatives of this government -- and it's unfortunate that the Leader of the Opposition forgot -- was to raise the minimum wage. Secondly, we announced shortly after that we would be putting a considerable number of taxpayers' dollars into a pay equity program. As a matter of fact, $32 million is going into a pay equity program. And lastly, it's not the position of this government to pit workers against workers. We support all workers, whether they're in unions or not. We don't have to make construction workers the target of unfair attacks that misrepresent the pay and benefits they receive. They get paid approximately $19 to $21 an hour. They work seven months out of the year on average in very difficult circumstances, and we don't say that this is a contest between construction workers and hospital employees and other workers in the public sector who are women. We want to make sure that the standard of living within the tax dollars that we have and within a competitive economy improves for all working people.

The Speaker: A final supplemental.

G. Wilson: A final supplementary to the Premier. That is not going to go down very well with a large number of people in this province who are working barely over the poverty line to hear the Premier say it is somehow justifiable that $200 million is committed to people who are already earning $19 to $20 an hour in the construction industry. Can the Premier tell this House today why there was such a rush on getting this fair-wage policy in; why this policy came down without adequate notice -- we had no adequate notice for debate; and why the Premier had to push this policy through? Could it be that this Premier wanted to have this policy in place prior to the construction contracts being let for the Commonwealth Games, so that those people who afforded his campaign could take the benefit of government contract construction?

Hon. M. Harcourt: Hon. Speaker, you'd have to put those words under a microscope to find a question among them. But I can say to the question from the hon. member that it was not we who didn't want to debate the fair-wage policy; it was he and his colleagues who didn't want to debate it. They had an opportunity to debate it and turned it down. Now they want to 

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reintroduce the debate in question period. They want to reduce the debate to 15 minutes.

Quite frankly, we have answered this question. The leader of the opposition has once again misrepresented the impact of a fair-wage policy by coming up with a spurious amount of $200 million. As somebody who has actually implemented a fair-wage policy, as the mayor of Vancouver, I can tell you that the cost to the taxpayers of Vancouver was not identifiable, except that the quality of construction went up dramatically. I'll give you just one example. We built a new Cambie bridge, using all union labour, 25 percent under budget and seven months ahead of schedule.

HOMEOWNERS' GRANTS

R. Neufeld: Hon. Speaker, my question is to the Minister of Municipal Affairs. I'd like the minister to please inform the House whether he has done a study on the impacts of the reduction and removal of the supplementary homeowners' grants not only in the lower mainland, but also in northern communities where obviously things are a little bit different than in Vancouver.

Hon. G. Clark: I'd like to answer that question. Because we have the tax table here, I'd like to show for the record that 50 percent of homeowners in the following districts either pay zero increase or have a decrease as a result of the tax change to the supplemental homeowner grant: Nelson, Arrow Lakes, Trail, Grand Forks, Kettle Valley, Penticton, Keremeos, Princeton, Armstrong, Cariboo-Chilcotin, Lillooet, South Cariboo, Merritt, Central Coast, Queen Charlottes, Nechako, Peace River South, Lake Cowichan, Alberni, Agassiz-Harrison, Kitimat, Fort Nelson, Stikine, Terrace and Nishga'a. Those districts all have zero or a minus. In fact, 50 percent of the homes in those districts are better off as a result of the elimination of the supplemental homeowner grant and the increase in the basic homeowner grant and in the seniors' homeowner grant.

R. Neufeld: Hon. Speaker, maybe I could enlighten the minister on some of the information I have received from some of my constituents in the north. I'm glad he mentioned Fort Nelson. But specifically in Fort St. John, 2,854 people are eligible for the basic homeowner's grant, and 2,156 of those are eligible for the supplement, and of those 2,156, 94 are seniors. The changes to this are going to be drastic. I can tell you that in Fort Nelson, an assessment of $43,000....

If the minister remembers yesterday, he talked about only those people with high assessments and who earn well over $60,000 a year being impacted. Well, here's a house that's assessed at $43,000 in Fort Nelson, and he's going to have a $21 increase; $64,000 -- he will have a $140 increase; $79,000 -- he will have $221; $100,000 -- he will have $338; $110,000, you'll have $395 -- it just goes on and on. As I mentioned yesterday, my house in Fort St. John at $40,000 will even net the homeowner 26 bucks; $64,000 will give them $150; $87,000 will give them....

Interjections.

The Speaker: Order! May I remind both questioners and those replying that we need to keep questions brief and replies brief.

R. Neufeld: Sorry, hon. Speaker, I just wanted to do a list exactly the same as the minister did. My own home in Fort St. John will increase $453, and it's assessed at $117,000. Does the minister think this is fair? I tell you, my constituents are mad as hornets at this tax grab that your government is doing. And along with the percentage increase on non-residential, it is totally unfair. Can you tell us, as the minister, that you think it is fair?

The Speaker: A point of order by the Minister of Forests.

Hon. D. Miller: Well, hon. Speaker, the member has been going on for five minutes now, and I have yet to detect a question. If he has a question, I think he should pose it.

The Speaker: Hon. member, it is the practice of the House to leave points of order until after question period.

I have reminded both sides of the House that short questions and short replies meet the interests of the House. Does the minister have a short reply?

Hon. G. Clark: Very short, hon. Speaker. I have Fort Nelson here, and this table is for those seniors or disabled people who received a $720 homeowner grant. In Fort Nelson, the bottom 10 percent of homeowners is zero. For the bottom 20 percent of homeowners, the impact is zero; the bottom 30 percent is zero; 40 percent is zero; 50 percent is zero. The top 60 percent -- from 50 to 60 percent -- get a reduction of 13 percent in their property tax as a result of this; the top, between 60 and 70 percent, a reduction of 7 percent. Between 80 and 90 percent, they receive a reduction of minus 4. The top 10 percent of homeowners, with a value of the top 10 percent of assessed value, receive an increase -- it's true, hon. Speaker -- of $52 a year.

DOCTORS' PENSIONS

L. Reid: My question is to the Minister of Health. Ken Georgetti, your own Federation of Labour president, seems amazed that something that was once a contract can evaporate. Is the physician professional plan a contract?

Hon. E. Cull: I'm sorry; I didn't hear the question. Could I have the question repeated, please?

Hon. Speaker: Please repeat the question.

L. Reid: Is the physician professional plan a contract?

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Hon. G. Clark: If the member is referring to the doctors' pension plan, that was a contract signed by the previous administration. It was a perpetual contract that bound the taxpayers of British Columbia to $25 million a year in perpetuity.

L. Reid: I was referring to the correct title of that document.

You chastised the previous government for Bill 82 and said that an NDP government would eliminate the bill and restore full collective bargaining. I would submit that this contract was fairly negotiated in good faith. Is that your understanding, Minister of Health?

Hon. G. Clark: Doctors in this province do not have collective bargaining rights. They are not a union. No union can control the amount the employer has to pay out. We have been very reasonable in increasing the amount of money available for physicians' billings. We've simply said that any discussions with the doctors will have to come in within a finite budget.

Hon. Speaker: Final supplemental.

L. Reid: I just heard the Premier suggest in this chamber that every single worker in this province gets treated fairly. How can you justify not honouring this particular contract? When is a deal not a deal in British Columbia?

[2:30]

Hon. G. Clark: We are putting the doctors in exactly the same position as every other worker in British Columbia. I am at a loss to see that member stand up and say that $300,000 or $360,000 is too little money for doctors in this province.

We said they will live within the means of the taxpayers. We've improved the amount of money for physicians' pay in this province. We have taken the money from a disgusting, obscene, 100 percent taxpayer-financed pension plan that no other worker in British Columbia gets and put it back into health care, where it belongs.

Hon. C. Gabelmann: On a point of order. Hon. Speaker, I refer to standing order 47A.(b). We've now been in the House for two weeks, and it might be time for members to have a look at the book. May I just draw to members' attention that particular item regarding question period. It says: "...questions and answers shall be brief and precise, and stated without argument or opinion."

D. Mitchell: Speaking to this point of order, the Attorney General raises an excellent point. The Chair has already ruled on this previously under standing order 47A.(b). It's very clear that it says that both the questions and the answers are to be brief and precise and to the point. There's no question about that.

We also had an instance today in question period, hon. Speaker, that I would ask you to review. A question was asked from this side of the House to the other side, and the minister was not paying attention. We had to ask the question again. Of course, that eats up the clock as well, hon. Speaker, and I wonder whether or not that should be tolerated. If the ministers are not willing to pay attention to the questions as asked, then we wonder what the purpose of question period is. The questions and answers should be brief and precise, and they should be answered when they are asked, and the ministers should pay attention when the questions are asked.

J. Weisgerber: Just to follow up, if the government wants short, concise questions, it can simply start by giving short, concise answers, and the questions will follow suit. The government has every opportunity to set an example here. These are the folks who believe that they have the wealth of experience. Instead of the Premier eating up the first five minutes of question period with a long rambling answer designed primarily to eat up the clock, he could have answered concisely, precisely, and the precedent will be set and followed by all.

The Speaker: I have heard enough submissions on this point of order, and I am pleased to hear that all members of the House agree with standing order 47A.

Hon. members, on Thursday last, the House Leader of the official opposition rose on a matter of privilege relating to an alleged failure of the Minister of Finance to fulfil a commitment made to the House, which the hon. member argues constitutes a breach of privilege and a contempt of the House. The member has complied with the technical requirements on the raising of a privilege matter, and in addition has complied with practice recommendation No. 7 by giving to the Chair notice of his intention to raise the matter of privilege prior to the commencement of the sitting.

The Chair has examined with considerable care the member's statement and the material referred to therein. As the Chair understands it, the member alleges that the Minister of Finance undertook to table in the assembly certain reports, background working papers and resumés of the persons involved in what is known as the Peat Marwick report on the province's finances. The member places considerable emphasis on the official opposition's request for the papers in question to be tabled prior to the delivery of the Minister of Finance budget speech.

The requests in question were made by the official opposition on March 18 and 19, 1992. Four sitting days elapsed between the last request and the day upon which the matter of privilege was raised. The Chair also observes that on the day following the raising of the matter of privilege, the hon. Minister of Finance tabled with the House the Peat Marwick report, the curriculum vitae of the accountants who worked on the report, and a table showing a ranking and analysis of Canada's leading public accounting firms.

I have examined the Hansard references referred to in the statement filed by the House Leader of the official opposition. On March 18, 1992, the member for Surrey-White Rock requested the tabling of the resumés of all those involved in the preparation of the Peat Marwick report prior to the delivery of the budget on March 26, 

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1992. The same member then asked, in a supplementary question, that the entire financial report of Peat Marwick be tabled, together with the method of accounting used, the terms of reference from the original commissioning of the report, and any expression of interest from other accounting firms. To these requests the Minister of Finance indicated his willingness to table all of the Peat Marwick report, which he described as being in the public domain.

I now turn to the questions and answers referred to in the Hansard report of March 19, 1992, on page 38. Again, the member for Surrey-White Rock requested the tabling of the resumés of the accountants who worked on the Peat Marwick report and made a specific request in relation to one of the accountants. The minister responded that he would attempt to obtain from Peat Marwick the list of requested resumés. Finally, the hon. member referred in a general way to the Hansard report for Wednesday, March 25, 1992, when a further reference was made to the request to the Minister of Finance to table all documents related to the Peat Marwick report, in addition to the resumés of the project's accountants. On this day, the hon. minister said that he made a commitment to table in the House the reports from Peat Marwick, and further undertook to table the curricula vitae of all of the accountants who worked on the project as soon as they were received.

As I have earlier noted, both the resumés and the reports were tabled by the minister on Friday, March 27, 1992, the day after the matter of privilege was raised by the hon. House Leader of the official opposition. The member has not been able to identify, nor have I been able to find, in the Hansard report any undertaking given by the Minister of Finance to table the documents specified prior to the delivery of his budget speech. The budget speech commenced, in terms of opposition participation, simultaneously with the tabling of the documents presented in accordance with the undertaking of the minister. Accordingly, the Chair cannot find the member's ability to perform legislative duties has been interfered with so as to give rise to a prima facie case of privilege.

I again thank the hon. member for his courtesy in complying with practice recommendation No. 7.

Hon. G. Clark tabled the report of guarantees and indemnities for the fiscal year ending March 31, 1991 in accordance with section 56 of the Financial Administration Act; the Report of the Crown Proceeding Act for the fiscal year ending March 31, 1991 in accordance with section 15.2 of that act; and the statement of unclaimed money deposits pursuant to the Unclaimed Money Act for the fiscal year ending March 31, 1991, in accordance with section 3 of that act.

Hon. B. Barlee tabled the annual report for the Ministry of Agriculture, Fisheries and Food for the fiscal year ending March 31, 1991; the annual report of the British Columbia Marketing Board for the fiscal year ending March 31, 1991; and annual reports of the Provincial Agricultural Land Commission for the years ending March 31, 1990, and March 31, 1991.

Orders of the Day

Hon. G. Clark: Hon. Speaker, committee stage, Bill 16.

SUPPLY ACT (NO. 1), 1992
(continued)

The House in committee on Bill 16; E. Barnes in the chair.

J. Weisgerber: My questions of this minister and most of the ministers who are going to take part in this debate today and at later times will be quite brief. I would advise ministers who might be interested that our concerns will be with those ministries that have overspent the budget that was tabled last year. We're going to be interested in knowing where the money was spent and what kinds of requirements called for those additional spending amounts. We're going to be particularly interested in the write-downs of various loans and the write-offs of other bad debts.

With that, I note that the Ministry of Advanced Education, Training and Technology has overspent its budget by about $55 million according to the tables. The budget tabled in the 1991-92 estimates suggests that the original budget was $1,244,300,000 and that expenditures in the revised forecast are at $1.299 billion. That would indicate to me roughly a $55 million increase. My question to the minister is whether that was through special warrants or through the writing off of debts. I wonder if he could give us a breakdown of that $55-million additional expenditure.

Hon. T. Perry: Again, just in case any hon. members weren't here earlier -- or if any of the public happen to be watching -- I have with me the Deputy Minister of Advanced Education, Training and Technology, Mr. Gary Mullins, and the executive director of administration, Mr. Jim Crone.

The answer is no, we have not overspent; we underspent by about $4.6 million, as we said earlier.

The additional figures referred to by the hon. member relate to accounting adjustments on a cross-ministry, pan-government basis, suggested to the Minister of Finance by the Peat Marwick review. They include a 23.5 so-called valuation allowance for student loans which, as I explained before lunch, refers to an accounting policy of writing off, at 100 percent, any student loans in default. We think that at least some of that money will be recovered.

[2:45]

The public and members should not misunderstand: 100 percent of students do not default on their loans; about 20 percent default, as in most other provinces. Of those who default, Peat Marwick has recommended that we now write off the entire value of the loan, regardless of whether we think we may collect part of it. Of course, we're continuing to pursue those defaulters through the loan administration branch of the Ministry of Finance.

There is an additional $36 million recommended as a one-time write-off by Peat Marwick. Again, I emphasize 

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a cross-government policy of the Ministry of Finance -- and it may be more appropriate to explore these issues with the Minister of Finance -- entitled the prior-period adjustment to recognize accrued leave liability in post-secondary institutions. That's an accounting adjustment recommended by the Canadian Institute of Chartered Accountants as a new standard government policy: that we take account of accrued vacation leave, sabbatical years -- expenditures which might be necessary in the future and which had not previously been accounted for.

So the short answer is no, we have not overspent. We have underspent our estimates, with the exception of the $7.8 million I referred to earlier for additional student places.

J. Weisgerber: That certainly is an interesting answer, and it's a revealing answer. I thank the minister for the answer, because I think that it clearly makes the point that this government set out to deliberately inflate the size of this year's deficit. By this minister's own statement, he said: "We wrote off 100 percent of student loans in default. We actually expect only 20 percent of those to default." But anyway, we'll have lots of opportunity to discuss it. Clearly what the minister is saying is that he does not believe that the $23.5 million written off will be a loss to the Crown. He expects some or -- if I understood him correctly -- most of the money to be recovered from students, as I will. I totally agree with the minister. I believe most students do want to and will repay their loans.

Before I get into the next item, which I'd like to pursue as well, I'd like to know over what period of time this $23.5 million in defaults accumulated, and I'd like to know further whether the minister has examined any of those accounts to satisfy himself as to whether or not they should have been written off -- because, in fact, they were written off against his ministry. He would have us say it's a kind of pan-government decision, but the fact of the matter is that your ministry has taken claim for $55 million in additional expenditures added to the deficit.

British Columbians are being asked to believe that the budget deficit, instead of being $1.7 billion, $1.4 billion or $1.2 billion, is $2.4 billion, and central to the government's argument of a large deficit is this question of write-off of accounts. I want, as the first minister up, for us to understand clearly the process that took place. I want to understand how involved the ministers were in this process, and I want the minister to tell this House that he's satisfied that this was a good decision and not a politically expedient decision to inflate the size of the deficit.

Hon. T. Perry: I'm acutely aware that other members and ministers would like to, in view of the clock, have a chance to discuss other ministry issues. I am trying to respect that and be relatively brief and avoid repetition, but let me reiterate so it's very clear.

Roughly 20 percent of students in British Columbia in receipt of student loans default on their loans. That's approximately the same percentage as in other provinces. We would prefer it were zero, but in real life that happens. Of those who default, the loans are turned over to the loans administration branch of the Ministry of Finance for collection. The banks have a rather nice deal. They're protected during the time of the loan, but are at default across the country. This is not unique to British Columbia. As the former minister would know, it is common practice that the government accepts that liability. That's why the banks agree to administer them. We then attempt to collect the loan, and we will continue to do so.

Peat Marwick was called in by the Minister of Finance, as a highly respected independent accounting firm, to advise on the current state of the British Columbia accounts as at the time of their report. They recommended to the Minister of Finance that the government alter its method of accounting for loans in default, and at the instruction of the Minister of Finance we followed, as did all ministries, the recommendations on accounting practice of the Peat Marwick review. It's as simple as that.

We will naturally attempt to collect what we can of those loans. If so, the revenues will be shown in the public accounts, and there will be no secret about that. But we did not invent this policy. This was recommended to us by Peat Marwick on the basis of Canadian Institute of Chartered Accountants guidelines.

J. Weisgerber: I don't have any difficulty in writing down doubtful accounts. It's a fairly standard business practice. What I take argument with is that the government chose this time to write down a decade of accounts which we are, by the minister's own words, not sure that even he agrees are doubtful. We are asked to accept on behalf of the people of British Columbia that this represents part of the operating deficit of the province in the 1991-92 fiscal year, ballooning the deficit to $2.4 billion, so that the Minister of Finance can stand back and refer to his largest ever deficit in the province as as being relatively modest compared....

So I want to find out clearly if the Minister of Finance is the one who is writing this off through the Ministry of Finance and Corporate Relations. Then I would have expected the $55 million to show up in his budget as opposed to the budget of the Minister of Advanced Education. So clearly, either these are accounts in your ministry, that you write down.... And if you do, then I would like to know how old these accounts are, and in your opinion -- if you've examined them -- what percent of them you expect you will recover on.

Hon. T. Perry: These are accounts within our ministry. After all, these are funds that we control and are responsible for, so it's appropriate that they should be assigned to our ministry. Staff are advising me that the period represented by the $23.5 million in written-off defaulted loans would be approximately four to five years back at the time, reflecting the conversion from grant to loan programs in British Columbia under B.C. student loans and the fact that the earliest loans probably were written off long ago.

The precise answer -- we could look back to Peat Marwick, but the staff are not sure that the precise 

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answer is actually found in the document. We can attempt to look into it and clarify that in time for the estimates debate, if the hon. member would like. I'm not sure if we'll be able to give a more precise answer, but we'll try.

J. Weisgerber: We will have lots of opportunity, both with this minister and others, to examine this, because it's central to the argument that I made in response initially to Bill 16. The whole thing has been designed and developed specifically to inflate the size of the budget deficit in order to make the current government's first budget look palatable. I think that's quite obvious.

I'd like to move on to the $36 million one-time write-off of what I understand is the banked overtime by staff in the ministry or in the advanced education institutions. I wasn't clear on that, but I understand clearly that $36 million of banked overtime has been written off. The minister shakes his head, so perhaps he can clarify for me who the people are, where they work and what this $36 million represents.

Hon. T. Perry: I am advised that's the value of leave to which college and university faculty are entitled under their agreements, which will be carried forward from this year to next -- leave which they are entitled to take, but whose funding had not previously been recognized. We're following Peat Marwick's recommendations according to the Canadian Institute of Chartered Accountants' guidelines as to how the value of that leave ought to be accounted for in the public accounts.

I have to point out that earlier I neglected to mention that for the 1990-91 fiscal year, $14.3 million worth of defaulted student loans were written down. So there's nothing new about the policy of writing down or writing off student loans. This is not something invented between November 5 and March 31; this is standard accounting practice.

J. Weisgerber: Well, it certainly hasn't been invented. What's happened is that it has been accelerated at a rate we've never seen in British Columbia before, and for one particular purpose.

I understood the minister to say when he answered the question initially that this was a one-time write-off of accumulated overtime -- leave. That would lead me to believe that somehow we're making a particular exemption in this fiscal year. If it's a standard accounting practice, if it's an accounting practice recommended by the Institute of Chartered Accountants, I would anticipate that each and every year there would be a similar adjustment. If that's the case, if we can expect budget year after budget year a deferment and a recovery.... Most people simply take time off work; there is no cash liability unless the person leaves.

This whole thing is part of the structure, and I thank the minister for being so forthright in his answers, because these are the kinds of questions we've been asking since the day the budget was tabled with this inflated $2.4 billion amount. If this is an example, then I will take a great deal of satisfaction in having gone on the record as saying that the $2.4 billion budget was a bunch of smoke and mirrors. This is the first $55 billion in smoke and mirrors. It's clear, and I thank the minister for his information.

Hon. T. Perry: I recognize that all hon. members, including this one, are having difficulty coming to grips with the realization that accounting practices of former governments did not conform to accepted business standards. That's the struggle that we're all having. This government listened carefully to the business community. We've tried to maintain an honest and respectful relationship with the business community and with the public who pays taxes. We're trying to apply the most modern standardized accounting practices, as recommended by the Canadian Institute of Chartered Accountants, and that's why the Minister of Finance engaged such a highly reputable national accounting firm as Peat Marwick to give him the advice.

The unfunded liability for leaves, which is referred to in the $36 million item, is akin, if it makes it easier for the member and others, to the unfunded pension liability identified by the auditor general in his reports, both this year and last year. The hon. member will recall that we debated that during the brief mini-estimates debate last year. I spoke on it myself. It was alarming for the public to learn how much unfunded pension liability affected thousands of British Columbians. This is an equivalent situation where normal business accounting practice would have been to show the expenses as they accrued. What we're doing here is to catch up to March 31, 1992. In the upcoming fiscal year, the new liabilities for leave will be accrued as they go along, and we will have converted to a responsible, modern accounting system just like any other modern business or corporation would employ. We're attempting to do the peoples' business honestly and openly in a responsible modern accounting technique.

[3:00]

J. Weisgerber: Certainly I respect the minister's attempt to be honest and forthright, and he certainly has been in this debate. It's refreshing to get that kind of forthright information.

As I understand the $36 million, people accumulate leave over time during the year. The people I know who work in most post-secondary institutions and other government institutions have very strict guidelines on the amount of any leave or overtime they can carry forward from one year to the next, so I would assume that whatever situation we find in the fiscal '91-92 will occur in fiscal '92-93, '93-94, etc. Could the minister advise me if there is a similar amount to be found in this year's budget to acknowledge a similar unfunded liability that will undoubtedly accrue to his ministry during the current year?

Hon. T. Perry: It's an important question, but it relates to spending in the upcoming fiscal year, starting tomorrow. The minister had an opportunity during clause 1, 2 and 3 of the bill.... We'll be happy to come back and visit that at the appropriate time. Mr. Chair, I'll take the question on notice so that we'll be prepared 

[ Page 312 ]

for it and ready to have the details at the time it's asked again.

J. Weisgerber: I think we all know the answer, but we'll come back to it in the estimates anyway. That's quite obvious. I have all the information that I had hoped to get, quite honestly, on that particular topic.

Before I conclude my remarks, I have just a couple of questions with regard to UNBC, which I think we're all very much interested in. I'd like to start by thanking the minister for his invitation to join his MLA task force. The reason that I didn't join was that, first, of all there were no terms of reference available when the offer was made. Quite honestly, my experience in the northeast part of British Columbia suggested to me that all that the institutions and the people in the northeast wanted to see was UNBC go ahead as it had been planned and promised. At least, the one member from Terrace-Kitimat would confirm that this is what he heard when he went to Dawson Creek the day before the announcement was made that UNBC would be on hold for a year.

But what I want to hear from the minister is that the government is still committed to a full, freestanding university in Prince George: a University of Northern British Columbia with opportunities for citizens across the north for advanced education, but on -- and I want to stress "on" -- the full freestanding university model. I want the minister to confirm to me that the government has not changed its policy in that regard.

The Chair: Before the minister responds, I should again remind the committee that we are dealing with the special warrants. With all due respect, some of the questions have varied somewhat from that. The minister may respond, but keep in mind that we are on the warrants, Bill 16.

Hon. T. Perry: I'm delighted to say the answer is enthusiastically yes.

J. Weisgerber: Thank you then, Mr. Chairman. I want to again ask the minister to.... No, on second thought, I think I will defer to my friend down the way and come back to this in the minister's estimates next time around.

G. Wilson: With respect to the $1.236 billion committed, the question I was addressing to the minister prior to the adjournment over the lunch hour was one that had essentially to do with the formula funding process, particularly among competing institutions in the lower mainland where duplicate courses may be funded. I wanted to find out the extent to which an analysis has been completed so that there can be some understanding of the effectiveness of dollars committed into programs on the basis of the actual dollars put into a program in terms of delivery of FTE back. I wonder if the minister could tell us the extent to which that has been done. The reason I ask this question is that on this side of the House in the official opposition, we question whether that is in fact the proper and most effective way of financing post-secondary education in British Columbia. We suspect that it is not cost-effective, and that there could be considerable cost savings if we were to move to a different model. I wonder if the minister could first of all address that question.

Hon. T. Perry: It's an enormously complex question. I would say simply that the matter is always under review. We have a very complicated funding formula. We discussed that frequently when the institutions themselves were in constant touch through our regional supervisors. Our whole staff, along with the institutions, were in touch with the faculty associations, students, administrators, CEOs and boards, and we would welcome any suggestions. In light of the time constraints today, if the hon. official opposition leader has particular suggestions or questions, I'd be delighted to take them informally, formally, in writing or in any way and come back at the estimates debate in as much depth as he wants, because they're important questions, and I'd be delighted to explore them at length.

G. Wilson: I appreciate the willingness the minister has to get into this question in some detail. It's something we would welcome, and I welcome an opportunity to sit down and discuss some alternative formulas, because we believe there are better ways to commit these moneys more effectively.

The other question I have related to a similar one advanced by the leader of the third party, and it had to do with the underfunded liability leaves. To be quite frank, I'm confused by the response I heard from the minister. Could the minister again review, for my benefit, exactly how the $55 million remains as a liability on the question of underfunded leaves, insofar as leaves in most post-secondary educations are either part of a sabbatical or contractual agreement or are unpaid?

Interjection.

Hon. T. Perry: I've observed complete decorum this afternoon in the chamber. The hon. member says that there's a cat loose out of the bag, but I haven't seen it if it's here. I've heard some mewing from the opposition benches, but I haven't seen any cats.

In regard to the funding formula, I'm glad the official opposition leader has indicated he'll come back to that. We think it's not perfect, but the opinion we get back as feedback from the institutions is that it's the best available system at the moment. We're always happy to review things. We're pushing hard to get the maximum efficiency out of the institutions. We always welcome suggestions, and we welcome any constructive criticism, because that's how we improve the system.

I'm just looking at the interpretation of the Peat Marwick report, because the reports are enormous. I've relied on staff to relay this particular information to me. The CICA philosophy -- the Canadian Institute of Chartered Accountants -- has been that the annual statements should reflect the actual costs as they accrue. The leave earned in a given fiscal year but not taken ought to be presented as a cost in the year that it was 

[ Page 313 ]

accrued, not in the year the leave was taken. Otherwise one could end up ultimately accumulating large liabilities and defer funding the costs. The simple rationale for that is that one might end up with substantial costs in the future for which one had not planned. It's a conservative pay-as-you-go philosophy that CICA is advocating. That's simply, if I understand it correctly, the approach that Peat Marwick is recommending to us. It requires not only that we begin that approach in the present fiscal year -- the one that's about to begin in a little under nine hours -- but also that we identify the retroactive amounts which were not funded and present them as a lump sum so we in the public know how much unfunded liability there really was. There's no way we can go back retroactively and say let's apply it to the 1989-90 fiscal year, or 1988-89 -- that was the year of the big BS fund, if I recall, when there appeared to be a huge surplus. I think there may even have been a small surplus that year. It would be wonderful if we could go back and take some out of that year, but we can't turn back the clock. All we can do is act now, while we have the time. The Minister of Finance has acted boldly, competently, bravely and in the public interest, and I'm proud to stand as a member of his team.

G. Wilson: Mr. Chairman, I think this is really quite a serious issue. I have served both as president of a faculty association and as chief negotiator negotiating contracts on leave, and I'm extremely familiar with CICA contracts for post-secondary education, particularly community colleges. I'm not that familiar, I confess, with the university system. But I can tell you that it will come as a great surprise -- and one that will delight faculty at the community colleges -- that they are earned leave that is unpaid. We don't earn leave. Leave is either competed for and gained, or it is lost. So it would seem to me that the minister's statement with respect to underfunded leaves is difficult to understand. In most institutions there are a fixed number of leaves built into budget contracts each year; they are competed for, and they are granted. And if you don't take it, you lose it. Most of them are at a proportional percentage of income with some benefit, and the vast majority are unpaid. So I would like a more detailed explanation of this $55 million that seems to be unclaimed leave.

Hon. T. Perry: I guess the simplest answer is that the explanation is contained in the Peat Marwick reports which have been tabled by the Minister of Finance. The policy is exactly the same as that recommended to the Legislative Assembly by the auditor general, consistently. The government is simply applying the accounting principles recommended by the auditor general.

I think the more logical place to pursue a question of this accounting complexity might be in the Public Accounts Committee, which is designed to serve that purpose. I'd be happy, if necessary, to come back to it in estimates. But for me to be able to explain it more lucidly than I have would perhaps require a bit more study on my part. I've been trying to do my best to explain it, and I think there are logical avenues, be it the Public Accounts Committee or perhaps by questioning the Minister of Finance, who has the statutory responsibility for recommending such accounting policies to the whole government. The member might get more satisfaction and more detail out of people more familiar with the details of the subject than I am.

[3:15]

G. Wilson: I'll accept the minister's explanation for that. It would appear to me that this is one more example of how this Peat Marwick report is flawed. We've got $55 million that is unaccounted for and unexplained, from all of the information that I have heard today. If the minister suggests that Public Accounts is a better place to pick this up, we will certainly be anxious to do that.

It seems to me that faculty that are under contract to the community colleges throughout this province would be delighted to know that there have been $55 million worth of funds that could have been used for various leaves which were unclaimed and now sit as a liability.

I think that perhaps, as I say, notwithstanding the accounting complexities which you have alluded to, the people of British Columbia would be anxious to know that in this ministry there are $55 million that remain unaccounted for.

Hon. T. Perry: Mr. Chair, it would be very unfortunate if college instructors, the public, members of the opposition, the government or anyone else thought there was either $55 million unaccounted for or $55 million sitting there waiting to be spent or claimed. I would strongly encourage anyone following these debates not to leap to the assumption that there's something there for the taking. All I can do is reiterate: this is a consistent accounting policy recommended by the auditor general. The Minister of Finance has applied that policy at the recommendation not only of the auditor general but of the Peat Marwick review that he commissioned. It's appropriate that all ministries adopt a consistent accounting policy, and in the long run the province is better served if everyone knows how things are being accounted. The minister, the auditor general and the Public Accounts Committee afford us the opportunity to satisfy ourselves and the public that the accountants have, in fact, constructed a rational structure. My professional field is so far removed from accounting that I think it would be better to defer those questions to someone who can explain the pros and cons of a particular accounting structure. But I'm happy to say it's consistent, and it's honest, as far as I'm concerned.

P. Dueck: I want to say hello to my former colleagues the deputy and Mr. Crone. I'm not going to be very hard on the Ministry of Advanced Education, because it was so well run until I left and turned it over to someone else. I would also like to say to the minister that those people will make even him look good.

I want to ask a couple of questions about the matter of these student loans. We know that businesses will write off doubtful debts, but we have to also take into 

[ Page 314 ]

consideration that they do it for a very specific reason: to not pay too much income tax. But we're not talking about that now when we talk about government. When you write 100 percent off any debts that are doubtful and, by your own admission, it will be recovered, it is an indication that the deficit is being ballooned for a certain purpose. Let's face the fact that that is so. But that's not even the worst of it. The worst of it is that you're sending a signal to all those people who have a loan in default. They say: "Oh, it's written off, so why bother paying it?" It really makes me uncomfortable to hear the minister say that, and it's public knowledge; it's in the realm of the public now with the House sitting. It's a bad signal to send out, and I think it was done for the purpose of ballooning the deficit.

What surprises me more than anything is that a firm hired to do this review -- a very reputable firm -- would do this without an addendum, without some explanation, such as, "It was asked for," "It was indicated," or "We normally don't do this with government accounts." I can understand the private sector business. I've done it all my life, and if I could get away with it, I'd write down everything at the end of the year, but that's for a purpose. Governments don't pay tax. So the purpose here is to balloon the deficit, and that really bothers me.

Hon. T. Perry: Mr. Chairman, I'm not sure who should be more offended by those remarks, the business people of British Columbia -- the implication has been left that they're evading taxes -- or the accountants at Peat Marwick, whose reputations were impugned. Let me clarify one thing again. I don't know how many times I can say it. We are following the accounting policies recommended by the auditor general, who is available for questioning in the Public Accounts Committee, and by Peat Marwick in their review.

Let there be no mistake. This government does not intend to forget loans legitimately owed by students or by anyone else. This government will make every reasonable effort to collect on student loans owed back to the people of B.C., because the people of B.C. are subsidizing the loans during the students' study by paying the interest on those loans. They are enabling students not only to further their education and benefit the province but to benefit their own social and economic standing through their education. We rightfully expect, as do all governments, that those loans should be repaid. So let there be absolutely no mistake that students are expected to pay back their loans.

The loans administration branch of the Ministry of Finance will take steps to ensure that those loans are collected. The federal Secretary of State has made clear recently in a meeting of provincial ministers that he will be taking steps to ensure that Canada student loans are more effectively recaptured and that those in default are paying them where they are able to. There is no intent by either level of government to create hardship for students or recent students unable to pay their loans, but those who are able to pay are expected to.

P. Dueck: I cannot leave the inference by the minister that perhaps business people do this to evade taxes. I was very clear that they do that in order to not pay taxes if it's within regulations. There's a big difference. I want it on the record that I did not say they cheat on income tax. There are some people who do, but there are a lot of business people who are very conscientious and do not revert to those tactics. I want that on the record, because I think it's an uncalled-for statement.

G. Wilson: My final to the minister, and it's only because I'm concerned that I perhaps misunderstood or left a misimpression. I don't want to do that, because the minister has been very frank, honest and open with his statement. We very much appreciate that.

Mr. Minister, can you be clear now on this question of the $55 million? It's the assertion that it is unclaimed or owed leaves which has created this amount of money, and that that's what has created this liability. Is that correct?

Hon. T. Perry: Leave earned but not taken, valued at $36 million.

D. Mitchell: The minister has answered many questions in this committee. Some questions he hasn't answered, but he has undertaken to get the material back to us or perhaps pursue these in estimates. We accept that, although we would like to go longer on this. But in the interests of the committee doing its business and getting on to some of the other ministries, I think we would like to shortly wrap up. I do have a few short questions, though, that I would like to ask just before we do go through.

I have one question for the minister on capital construction projects that are funded and have been funded during this period that we are reviewing in the committee today -- this period covered by special warrants that are attached to the schedule to Bill 16. The question is related to the fact that during the past few years there has been a large expansion in capital construction in the post-secondary system that is funded by this ministry. I'm wondering if the minister can just very briefly answer.

How much capital construction was committed and spent in the past year -- in the year that ends today -- by the ministry? In addition -- if I could just ask this other question at the same time, in the interests of getting to this point -- how much has the capital debt, which is annually serviced by this ministry to the tune of somewhere between $100 million and $150 million a year, increased during this period under review under these special warrants today? Is it possible for you to give me some information on that?

Hon. T. Perry: Yes, I think so. Just while my officials are helping calculate that, I'll explain that projects approved are approved for the estimated total cost of construction, whereas the expenditure in any given year is the amount of money required to service and amortize that debt over a 20-year amortization period. Often the expenditure is incurred somewhat 

[ Page 315 ]

later in the fiscal year than the approval is given. Typically a project is approved, an institution puts tenders out on the project, a decision is made, construction begins and there is some delay of months, sometimes more than a year, before payments are due. So it's difficult to equate the value of a project with the amount of money spent in a year.

We committed $211 million for major projects during the present fiscal year, which is about to end today, and $45 million in minor projects. It was a very good year. The major projects are those exceeding $1.5 million, and minor projects are less than $1.5 million. Total debt servicing for repayment of principal and payment of interest on loans to service those projects was $110 million for the 1991 fiscal year and $128 million for the fiscal year that's about to end. I think you asked for the total value of all projects whose debt we service. I'm not sure if we have that at hand. It's not a commonly asked or answered question, but we could certainly dig that one out for estimates debate.

D. Mitchell: Thank you, minister.

Just to clarify, the $128 million is debt servicing charges for this ministry -- a fairly significant portion of the ministry's total budget. I'd just like to confirm that the minister agreed to communicate with the opposition, myself in particular, on what the total debt is that is being serviced by this $128 million. Is that correct? The minister has signified yes, so perhaps I could just proceed to the next question without asking him to get up. I'll just take it on record that he said he would get that to us.

I have one further question emanating from the Peat Marwick review that we discussed earlier today. The Peat Marwick review has some significant comments on your ministry, and we talked about some of them. The Minister of Finance now has responsibility for the TRIUMF-KAON project. Your ministry is responsible for science and technology. Over the period covered by special warrants, was money committed, were studies undertaken and were spinoff benefits that would accrue to the province by proceeding with the project examined? I believe the government is committed to it. Was the recommendation of the Peat Marwick study agreed to by your ministry? The Peat Marwick review referred to kaon as one of those lurking expenditures -- that was the term that was used -- and suggested that perhaps the government should abandon its financial commitment to these kinds of lurking expenditures. I'm wondering if the minister would care to comment on that in addition to the previous question that I've asked on this.

Hon. T. Perry: I realize it's confusing for some members, but in the reorganization of some responsibilities announced by the Premier at the swearing-in of the new government on November 5, all responsibility for TRIUMF-KAON was assigned to the Minister of Finance and Corporate Relations. Therefore any questions of this nature would be appropriately put to that minister.

D. Mitchell: Mr. Minister, I understand that your colleague the Minister of Finance now has responsibility for that. Can I take it from what you're saying that in the period under review here -- the period covered by all the special warrants that we are reviewing today, the fiscal year that ends today -- your ministry, which has the responsibility for science and technology in our province, did not commission any studies, did not do any work, did not do any examination or analysis on the kaon project and the possible benefits that might accrue to this province, and that the ministry has no point of view whatsoever on whether this is one of these lurking expenditures that the province should abandon? Does the ministry not have any position on that? Has it not examined that whatsoever?

[3:30]

Hon. T. Perry: Those matters were handled by the TRIUMF-KAON office, which reverted to the authority of the Minister of Finance and Corporate Relations on November 5. It had originally been with Mr. Stan Hagen, the Minister of Advanced Education at one time, then followed him when he became Minister of Economic Development, then followed him when he became Minister of Education, and at the time of the change of government it was transferred to the Minister of Finance and Corporate Relations.

D. Mitchell: I'll have to accept that answer. Although we are technically reviewing special warrants that precede November 5 as well, I won't ask you to be responsible for what happened before you assumed your responsibility, Mr. Minister. I will reserve these questions for the Minister of Finance.

Mr. Minister, if I could ask you one technical question. If you have the material at hand, I would appreciate it; if not, could you send it over to me. I would like to know how many employees the ministry you're responsible for employed on November 5, when you assumed responsibility for the Ministry of Advanced Education, Training and Technology, and how many your ministry employs today, on March 31, 1992. If the minister has the figures at hand, I'd be pleased if he could table them today; if not, if he could undertake to return them to me, I would appreciate it.

Hon. T. Perry: I'm sorry, I thought we might, but we don't have it right with us. We can certainly get that together for the estimates debate.

D. Mitchell: One other question. Some time ago we put on the order paper a written question seeking some information. That written question has not been answered yet, and I don't know if the minister can signify whether it is about to be answered or whether it can be answered today in this committee. It does cover the period under the special warrant that we are looking at today. The information was with relation to contractors or consultants hired by the ministry since the minister assumed control of the Ministry of Advanced Education, Training and Technology on November 5. Is it possible to provide a listing of all consultants and contractors hired, and the terms of reference of 

[ Page 316 ]

their contracts, from November 5 to the present? Could the minister indicate whether that information is forthcoming or whether it can be supplied to this committee today?

Hon. T. Perry: As more experienced members will know, it's not customary practice to ask a question on the order paper and then refer to it, particularly at such a short interval. The question appeared on the order paper less than two weeks or ten days ago. We're in the process of preparing answers, which will be made available in due course. Normally, details on contracts are scrutinized in the Public Accounts Committee, an excellent venue chaired by the opposition Finance critic to review and very thoroughly scrutinize details of contracts. But we'll be preparing those answers in due course.

The Chair: Before the opposition House Leader continues, the minister's remarks with respect to questions on the order paper are certainly a point to be taken, because those questions should not be canvassed under this debate. Would the opposition House Leader continue.

D. Mitchell: Thank you, Mr. Chairman, and I respect that. I was simply trying to use this committee as a way of seeking a commitment that we would be getting a return on the information we have sought. He has made that commitment, and we look forward to receiving that information.

With those questions, we could certainly move on. We could certainly go on for a long period of time; there's so much of importance in this crucial ministry in government, the Ministry of Advanced Education, Training and Technology. But in the interest of time, on behalf of the official opposition I would like to thank the minister and his officials, in particular, for bearing with us. I look forward to seeing you very soon in the estimates review for the 1992-93 budget.

The Chair: As agreed, we are proceeding through the ministries alphabetically. The next ministry that we will be discussing is the Ministry of Agriculture, Fisheries and Food.

Hon. B. Barlee: I'll just wait for my three staff members to come in, and I'll introduce them to the opposition. On my right is the executive director of finance, Mr. Rodger Hughes; on my immediate left is Dave Davies, a senior financial officer; and on the far left is Al Sakalauskas, my ADM of Finance.

I welcome your questions. I expect some substantive questions, rather than the particular.

R. Chisholm: I want to congratulate the minister on his position and thank his staff for coming in to help and assist in answering these pertinent questions about this ministry.

Mr. Chairman, this is a very important ministry to British Columbia. We're now discussing last year's budget, not the '92-93 budget that the Finance minister presented last week. One reason we are doing this is that 50 percent of the '91 budget was spent under warrants during the NDP's term in office. Due to the excessive spending under warrants, the '91 deficit increased drastically. The NDP had a blank cheque, which they used excessively. Let's look at this excessive spending of the last year.

In order for you to understand my questions on the budget for Agriculture and Fisheries, which is my critic area.... According to the Socred budget, in 1990-91 the total expenditures for Agriculture were $92.3 million. In the 1991-92 Socred budget the increased to $103 million. The NDP figures have come out as $96.3 million for '91-92. Does that mean that in your six months in office, this government decreased spending in agriculture, even though total government expenditures have drastically decreased? I'm very curious as to why the Agriculture minister would allow this to happen, since just 11 months ago, when he was in opposition, he felt that too little was budgeted for Agriculture.

Hon. B. Barlee: I believe that the member from the other side confused the budget. He said $96.3 million. That is not '91-92; that is '92-93. So would you please rephrase that question.

R. Chisholm: Mr. Minister, I agree with what you have said. I misread the figures.

I would like to maybe set a few ground rules for the minister as to how I would like to follow the questioning. I would like to question each warrant, from 2 through 8, in sequence. I will start with warrant No. 2 for agrifoods, which was a total of $12.919 million on September 19, 1991. How much of the $12,919,000 allocated to the special warrant was applied to Vote 9 expenditures in the minister's office, as described in the 1991-92 estimates book?

Hon. B. Barlee: We are a very complex ministry; indeed, we have 175 sector groups. We have financial programs like NISA and GRIP, and all sorts of other financial programs. But even with the vast support I have from my finance sector of the ministry, we certainly could not answer a question like that.

R. Chisholm: I take it the answer is no, he doesn't know the answer. Can the minister then inform the House how many new FTEs were added as a result of this?

Hon. B. Barlee: I thank the member for Chilliwack. Does he mean the new FTEs as of 1992-93? If he does, we have added nine new FTEs, from 439 to 448. That's an increase of nine.

R. Chisholm: Mr. Minister, did you instruct your staff to keep pay levels frozen at last year's level? If no, why not, when the farmers were asking you to expect less?

Hon. B. Barlee: The pay levels on staff and senior staff are the purview of Government Services, not of this particular ministry, of course.

[ Page 317 ]

R. Chisholm: The $12 million in Warrant 2 -- what was that specifically intended for? Was it for the operations, for grants, or what area?

Hon. B. Barlee: This is prior to our time of assuming government, but this is simply for continuing operations of the ministry.

R. Chisholm: Warrant 3, for Agriculture, Fisheries and Food, was $3,460,000, and it was October 29, 1991. Can you specify exactly what this warrant was for?

Hon. B. Barlee: This is again for ongoing programs.

R. Chisholm: Ongoing programs? What were the programs, Mr. Minister?

Hon. B. Barlee: These are the usual programs of the purpose of the ministry. It may be in various different areas. As I said, we have 175 different sector groups. It would apply to several of those groups, or perhaps more.

R. Chisholm: Of the money provided to Agriculture, Food and Fisheries, how much of special warrant 4, November 13, 1991, for $35 million was used to provide additional funding for the Agricultural Land Commission? It is important we know how that money was spent and how many more acres or hectares are now in or have been removed from the ALR since this minister has taken office. May I remind you that you asked the same question of the former minister.

Hon. B. Barlee: Imitation of course is great flattery. I would say this: we have not got the precise figures. There are approximately 234 million acres in British Columbia, and 11.7 million out of the 234 million are under the Agricultural Land Commission. That's 5 percent -- one out of 20 acres in British Columbia.

H. De Jong: I have a few questions for the minister in regard to some of the additional payments made to the fruit growers of the Okanagan. I know these farmers have had some tough times, and I guess I can appreciate the minister's response to the plight of the tree-fruit growers. However, I'm somewhat interested as to how much was paid to the fruit farmers for the last couple of crop years. They've been asking for various amounts of money -- 10 cents, 9 cents -- and I'm not sure how much they were paid as an additional payment by this government since it took office.

Hon. B. Barlee: I appreciate the hon. member's question. First of all, $17.6 million went to approximately 2,700 tree-fruit growers in the Okanagan, the Similkameen and the Creston areas. I think this was a statement by this government that we believe that the twenty-first century is just about here, and we have to prepare for it. To do that, we had to put this industry back on its feet. This industry impacts on the Okanagan significantly. It doesn't just impact economically, it impacts as far as the tourism industry and the environment are concerned, and it certainly impacts on the quality of life of everyone who is in the Okanagan.

Out of the $17.6 million paid directly to the tree-fruit growers.... It's very interesting -- we cannot be accused of political bias. Out of the five ridings that were impacted significantly, our party holds only two. In the interior we hold 74 percent of the seats, but it only impacted on two of our ridings. In the interior the Social Credit Party holds five seats. It impacts significantly on Okanagan West, whose member is here, and Okanagan-Vernon. Of the Social Credit ridings, 40 percent were impacted very heavily.

We poured millions of dollars of investment into an industry that we think was very worthwhile. Hon. Speaker, 8,500 jobs were at stake. As far as the opposition party is concerned, 100 percent of their members in the interior were represented. They have one member in the interior from Okanagan East, and we again showed considerable generosity in that we added several millions of dollars to Okanagan East. Three of the five ridings were not even held by the government.

[3:45]

H. De Jong: I have a further question about the replant program. I understand sometime in January an announcement was made of a $30,000 replant program which was $20 million.... I'm mixed up with my figures here. It's $30 million -- it was $20 million in the previous budget last year. Is the $30 million an additional $30 million for the replant program? How much of this is actually going towards replanting, paying off debts of existing farmers and those who want to get out of the business? I understand there are a number of categories as to how this money was going to be distributed and on the specifics within that program. Could the minister explain that?

Hon. B. Barlee: I'd be pleased to explain that to the member for Abbotsford. Out of that $30 million it went approximately like this: $17.6 million in direct payments went to the tree-fruit growers, which I mentioned previously; another $3.95 million for a replant program spanned 1985, 1986, 1987, 1988 and 1989. This is because those orchardists would have been cut out of a program when they were looking towards the future by planting exotic varieties, which we think they should have done. Another $3.3 million was promised by the previous government, but they didn't deliver the cheque. We have delivered this cheque for the sterile insect release program. This is a very important program. What it effectively does is cut down the spraying in the Okanagan orchards by about 50 percent. It gives us a leg up on our competition. I think it's the leading edge in the world, and certainly that's extremely important. Finally, $4.9 million went to the Okanagan Valley Tree Fruit Authority. This is a Crown agency, and they will use this money again for research and development and to make programs compatible with the federal ministries that we often have 50 percent programs with.

H. De Jong: I have a further question with regard to the distribution of these funds, particularly the $17 

[ Page 318 ]

million. It's not only in the Okanagan that farmers have had difficult times for obvious circumstances, but also in the Peace River area. I realize that most of these commodities -- the tree-fruit growers, as well as the grain growers and raspberry growers down in the lower mainland -- were all covered by farm income insurance programs. But the plight of the farmers from the Peace River area, apparently, up to this point, has not been heeded by the Minister of Agriculture -- for some additional funding for the years prior to entering into the GRIP program. Perhaps the minister could explain why he has turned a deaf ear to those farmers up until now, when he responded so willingly to the tree-fruit growers.

Hon. B. Barlee: I'd be delighted to respond. First of all, the individuals that we're concerned with -- the raspberry growers -- got, I believe, $2 million out of $16 million that we managed to pry out of the federal government. That $16 million went almost exclusively to the farmers of the Fraser Valley, who had been, as you well know, hard hit last year.

Concerning the farmers in the Peace River district, I don't think the opposition has done its homework, for several reasons. First of all, they have $9.1 million coming from GRIP and NISA, both programs which we participated in with the federal government. There is another $5 million from FSAM II. That's a total of $14.1 million. Out of that $14.1 million these farmers are going to get $12.5 million, and $10.5 million of that will be delivered prior to May 31 this year.

Let's examine this very closely. That's $10.5 million to the farmers of the Peace River area, who have been hard-pressed. I quite admit that. I know Ross Ravelli, Jim Collins, Frank Breault and a number of them up there. But that's $10.5 million, and 780 farmers are affected. Take that $10.5 million and add on another $2 million, which they'll get later on this year, and they have averaged $16,000 per farmer in the Peace River district.

Let's compare it to the 2,700 farmers in the Okanagan. If you take that $17.6 million, they average $6,500. A $16,000 average in the Peace River district, and a $6,500 average in the Okanagan. I think there's a fair comparison there, and I simply think that you did not do your homework on that. Even if you include the entire amount in the Okanagan, which would be $26.7 million, taking out SIR, which was promised by the previous government, it still only comes up to $9,900 for every Okanagan orchardist, compared to $16,000 for those who were impacted in the Peace River district. So that argument really falls quite flat.

H. De Jong: I'm pleased that the minister has given that good an explanation to the funding process that has taken place, and certainly I'm sure that it will be appreciated once this money arrives in the Peace River area. It will be deeply appreciated, I'm sure.

Getting back to the raspberry growers, though, I know that they have made an approach to the minister hoping perhaps to benefit from some replant program. The way I understood it from the raspberry growers, they're quite prepared to have it in the form of a loan. The raspberry growers have an opportunity there, particularly in the lower mainland, to grow Jonagold apples. It's the kind of apple that's really good for export purposes. The markets are there, but they can't meet the demand for the volume required. There are a lot of raspberry growers that would want to change over and diversify into more than one crop, that being raspberries in the past. I think that the government has a real opportunity to help the farming industry in the lower mainland to broaden their production line in terms of growing these Jonagold apples. I know the raspberry farmers in particular have had tough times. They simply haven't the wherewithal to plant those apple trees, because they're fairly expensive with the preparation of fields and everything that goes along with it.

Up to this point, as I understand, whether there isn't a program available for them or it needs the development of a program, they have not got any satisfactory answer from the minister. I'm just wondering whether the minister would in fact consider.... I guess we're going a little bit into this year's budget or next year's budget. Perhaps I should rephrase my question. Has the minister considered providing a similar type of program, be it on a loan-type basis, to the raspberry growers, so they can also diversify their production line and be a part of a market that is available and, as we know today, would provide a fair return in terms of their input, land costs and everything else that goes along with it?

The Chair: Hon. minister, I would suggest that I've had some difficulty relating the questions to the schedule. We have had some latitude throughout the debate, but I would hope that we can get to the schedule itself.

Hon. B. Barlee: Point well taken. Indeed this does impact on '92-93, as the member knows.

I will say this: because of a threatened U.S. countervail action, we cannot give a direct subsidy to the raspberry growers out of the $2 million, and that makes it rather difficult. We have had consultation with them. We know there are some difficulties out there. We are looking for options. We are looking for niche markets. We are looking for alternatives for those growers in the Fraser Valley who have been impacted very heavily, and mainly because of U.S. dumping.

H. De Jong: I have a little difficulty understanding that one, because I cannot see how a loan can be considered a subsidy to a product. If, for instance, 8 or 9 nine cents is being paid to apple producers for a crop of apples in 1990 or 1991, I can see that that is a direct subsidy. However, I fail to understand that if a loan was provided to farmers for the purposes already mentioned, it can be considered a subsidy under whatever trade agreements are in place.

Hon. B. Barlee: Unfortunately, any loan that is below the standard rate is considered a subsidy under the countervailing rules, and we can't do a lot about it. Those growers could go through ALDA. We have 2,400 

[ Page 319 ]

loans out in ALDA, which is our only loan program. Our rate of success there is really quite remarkable. Out of those 2,400 loans we've lost 19, which is under 1 percent. They have this option, but because of U.S. action, they don't have the option to take a subsidized interest rate.

G. Wilson: The minister rattled off some figures with respect to Peace River farmers pretty quickly and suggested that a per capita payment to farmers is an indicator that things have been fairly applied. I think the minister would agree that per capita payment means nothing unless you look at per capita cost, and it also means nothing if you don't see what kind of subsidy has been provided to farmers in the Okanagan over the last 15 years in comparison to what's been done for Peace River farmers over the last 15 years. Having made that point, the case can be made that there is a serious crisis in farming in the Peace River, and we need to look at how we can deal with that. I'm sure that this minister is as aware and as concerned about that as we in the official opposition are.

Coming specifically to this question of the money that comes in from the federal government, the minister said $9.1 million and $5.1 million, which is a shared program between provincial and federal authorities. Could the minister outline to us exactly what percentage is provincial and what is federal on both those amounts?

[4:00]

Hon. B. Barlee: For GRIP the federal amount is 41 percent, the producer amount is 33 percent, and the provincial amount is 25 percent. NISA is shared fifty-fifty with the provincial government plus 25 percent coming from the producer. Excuse me, it's 50-25-25; 50 percent from the producer and 25 percent from each government for a total of 50.

G. Wilson: Thank you. I thought maybe there was a way Peat Marwick found that you could have 50, 50 and 25 make 100. I was quite interested in that.

An Hon. Member: That's the kind of budgeting we used to have.

G. Wilson: I'll reserve comment on that for the time being.

I wonder if the minister might want to give us a bit of an accounting of the farm income assurance program and the extent to which there has been adequate supply provided to it. Could he give us some comments in terms of how that money has been committed?

Hon. B. Barlee: It's rather involved. There are a total of 4,250 participants. Of those, 1,896 are in beef, and they receive $8,248,000. The province's share is half of that. There are 113 blueberry producers, 83 potato producers, 155 strawberry producers, 35 vegetable producers and 108 sheep producers. Total is $2,226,000; our share is half of that. There are 271 hog producers.

G. Wilson: Don't forget them.

Hon. B. Barlee: No, I could never forget them, and I'll tell you why. It really stands out in my memory, because the other night I was the first minister in 25 years to attend a hog committee meeting -- annual general meeting, it was. I think they had the last minister there in 1966. I got out of there at 11 and went back on the Hope-Princeton for about three hours, got tired, slept for two hours and arrived back at 4:30 in the morning. Another marvellous day. However, I digress, so I will continue.

Tree fruits -- 1,589. The hog producers, by the way -- for the members' edification -- $1,040,000; half of that, of course, is provided by the province. The tree fruits industry -- $17,676,000; half of that is provided by the province. The total comes to $29,190,000.

G. Wilson: I'm delighted that the minister is taking such an active interest in the hog producers of British Columbia. I think that of all the farmers, the hog producers probably have the greatest room to grow and produce for our economy.

In the breakdown, I wonder if the minister could say if all of those are on a fifty-fifty share basis? Are all of the programs there on a fifty-fifty fund basis?

Hon. B. Barlee: Yes, every one of those programs is on a fifty-fifty basis. The hog producers, of course, produce about $50 million a year. I'm driven to that by an old friend of mine called Bob Forshaw, who thinks hogs are marvellous.

R. Chisholm: My question again is to the minister, and we'll go back to warrant No. 4 for $35 million to the agri-fisheries and food industry, November 13, 1991. Mr. Chairman, I'd like to ask the minister: with respect to the above warrant, how much was given to agriculture? How much of it was added to the ministry operations -- vote 10? Can the minister please provide this House with a better idea as to how some of this money was spent? Were there any major appropriations in that $35 million?

Hon. B. Barlee: No, I can answer the member that there were no major differences. This is simply to continue the operations of the ministry, and the ministry fluctuates rather wildly. Most of the pressure, as far as money is concerned, comes to the ministry in the latter part of the year and the early part of the next calendar year. So January and February, of course, would be very heavy payments for us, because of agreement with the federal government.

G. Wilson: To the minister. I wonder if you could turn your attention perhaps to the question of fisheries, which is also under your jurisdiction. With particular reference to the aquaculture industry in British Columbia, I wonder if you could tell us the amount of dollars that have been committed to that industry with respect to subsidy, research and development grants and also the amount of money that has gone into new product production.

The Chair: Minister, will you be responding?

[ Page 320 ]

Hon. B. Barlee: Yes, I will. We have pages and pages of figures to sort on aquaculture. We'll be a moment, if you'll grant me that indulgence.

To save the time of the House, we will get back to you on that, and we'll give you the precise figures. I should add -- very briefly, of course -- that we consider aquaculture perhaps the wave of the future. I've been up the coast three or four different times to Ucluelet and various other places, flying all around the islands. We're well positioned in the world market. We have some competitors -- the United States, Japan and Chile -- but we feel that we are better positioned than they are. We think it will be one of the areas where we'll be gaining jobs. This ministry, in essence -- perhaps the member does not know -- gains about 10,000 jobs, not according to our figures but according to Ministry of Finance figures, in a time of economic duress. We feel that aquaculture will play a significant part in this.

G. Wilson: I appreciate the Minister saying he will supply me with that information. Coming from a community that was hit relatively hard by aquaculture and where there are still a large number of unpaid outstanding obligations to local business from bankruptcies that occurred in this area, I find it interesting that this government is under the same delusion the former government was under that aquaculture is the wave of the future. It certainly will not be unless there is a good deal of money committed to research and development in terms of the technique that is used in particular -- and this is my question to you now -- with respect to disease and pest control. I wonder how much money was committed in the last year to research into three items: (1) disease transfer control from the domestic stock to wild stock; (2) disease control within the domestic stock in terms of marketability of fish; that is the extent to which fish have been withheld from market, and research into that; and (3) research in this industry to overcome some of the very significant problems this industry has faced over the last eight years.

Hon. B. Barlee: I believe the member realizes that business is now stabilizing in the industry. There are some big players out there who are doing relatively well. They are gaining both national and international markets, both on the Pacific Rim and in the United States, which I think is quite important. It started as a boom, and there were a number of people who fell out of the industry. The aquaculture incentive program, by the way, was not started by the Ministry of Agriculture; this was under small business, trade and development. So that was not one of our programs. We have one, which is ALDA.

[D. Streifel in the chair.]

G. Wilson: Thank you, Mr. Chairman, and welcome back. The minister said he had only one program. Could the minister then tell us this: was the portion of your ministry dedicated to aquaculture, which had an independent director, terminated in the last year? Is it no longer a functioning part of your ministry? Or, indeed, has there been research and development into those disease problems that we've talked about? Secondly, how much money has been committed? Because one of the largest problems for this industry in aquaculture is the question of morts and the dealing of morts in community landfill sites. I know that your ministry has spent a substantial sum of money to assist local communities in dealing with this problem. I wonder if you could outline exactly what the budget is for that portion of your ministry dealing specifically with aquaculture.

Hon. B. Barlee: The total allocated to aquaculture last year was $4,105,000. Of course, morts are a difficult and ongoing problem. We are working with several educational institutions right now. Malaspina College is one of them; UBC is another one. Our full commitment on research is slightly over $800,000 -- $821,000. For a ministry of our stature it's really quite significant. It's a little less than percent of our usual allotment.

G. Wilson: That is a good sum of money, and I'm delighted to see that. We are most anxious to see that research continue. Was that primarily money committed to the matters of mort reduction and product production out of mort reduction, or has there been a portion of that money dedicated to disease control? One of the larger concerns that's out there in the commercial fishery is to keep a handle on disease transfer from domestic to wild stock, and I understand your ministry has committed some substantial sums of money in the last year to that kind of disease control.

Hon. B. Barlee: We're working on disease control. One of those is marine anemia, which is an ongoing problem. We're also trying to pick up the arrangement between wild and domestic fish, which is very important. A number of this amount -- slightly over $800,000 -- is disbursed through various areas, and as I say, we have allocated more funds to that area in the last year and will be continuing to do so. We feel that these coastal communities need the help, certainly in hake production and other areas where there is a steadily growing market. We're searching out these markets, looking at the losers, looking at the winners.

G. Wilson: I only have a couple of questions on aquaculture. It is an important industry to coastal British Columbia and certainly those people that I represent, and I think the minister would agree. With respect to the matter of egg incubation and the supply of brood stock into this industry, can the minister tell us what amount of money has been committed in combination with the Department of Fisheries and Oceans, and what amount has been financed independently to provide for both a shared incubation program with DFO and an incubation program that is domestic to British Columbia?

[4:15]

Hon. B. Barlee: I believe the Leader of the Opposition knows that I concur with some of his remarks, that it's a very important industry. We are, 

[ Page 321 ]

however, slightly overwhelmed by the Department of Fisheries and Oceans. They have about 1,500 employees. We have 18 working directly in aquaculture. That's not quite 5 percent of our workforce, and it's usually growing per year. We're giving them more support and devoting more moneys to that particular area.

G. Wilson: I recognize that some of these are difficult questions when you're dealing with DFO, because you really get into a pretty tangled web when you deal with that federal department. I wonder, though, if the minister can tell us.... One of the more controversial issues last year and the year preceding was the commitment that the former government had made, and I wonder if this government has continued that commitment in terms of financing for research and implementation of Atlantic salmon in Pacific water, or whether or not the proposed moratorium, which I understand has been lifted, still applies. Are we putting Atlantic salmon into the Pacific? What kind of dollars has been allocated for monitoring and for maintenance of that program?

Hon. B. Barlee: Perhaps this will shed a little more light on the various topics the opposition leader is referring to: in 1991-92 there was a grant for research to a Dr. K. Groot of $35,000 to identify the importance of oceanic conditions at the farm site. So that relates directly to the topic you're referring to. There are several others: $21,000 to Dr. J.N.C. Whyte to assist in determining the potential for farm salmon to interbreed with wild salmon -- that's an ongoing and very important study we're having; $17,000 to Dr. Groot for a survey of the occurrence of Atlantic salmon on Pacific salmon beds; $14,000 to Dr. Michael Kent to study the effects of crowding, starvation and stress on the severity, time to onset and incidence of marine anemia, which I just mentioned some time ago; the fifth one of $10,000 to Dr. Robert Devlin to undertake hybridization studies of Atlantic salmon with Pacific salmon and trout species -- so we're covering virtually all of those areas; and the last one is $5,000 to Dr. Robert Devlin, an analysis of tissue samples gathered as part of the chinook brood stock development program and to contribute to the knowledge of relative survival and early growth rate differences in male and female salmon under culture conditions. So those are some of the grants we have given to various people.

G. Wilson: Am I to believe, then, that we are actually financing Mr. Devlin and Mr. Kent -- excuse me, not Mr. Kent; he's doing crowding and stress control, but certainly Mr. Devlin -- in terms of the possible hybridization of Pacific and Atlantic salmon? Are we actively trying to promote this, or are we trying to prevent it?

Hon. B. Barlee: This is simply a major research program to study the issue, and I think it's worth studying. I know there are some questions from the individuals who think it should not be studied. We think it is worthwhile researching.

G. Wilson: The $15,000 that's been committed.... I don't know if the $17,000 alluded to earlier is a combination of that. I think it's important that we recognize whether there is a policy of this government to finance over the last year the hybridization of Pacific salmon with Atlantic salmon. It is a highly controversial issue with Pacific commercial fishermen, and it's important that we know whether the government is financing a hybridization program to try to build the so-called "super salmon," which is a combination of the two.

Hon. B. Barlee: No, certainly we are not promoting hybridization. We are being very careful in that area. We realize it's a difficult concern, and it concerns many individuals who are familiar with the industry. We are certainly not promoting it.

G. Wilson: I have only two more questions about aquaculture. I do appreciate the minister's giving me such a detailed explanation of the research dollars that have gone into the industry. One of the matters that I notice, however, is that, with the possible exception of Mr. Kent's research, there is very little research going into potential damage to habitat, with particular reference to eelgrass beds in aquaculture development areas. This is a major threat to the commercial fishery, because it is an area for potential herring spawn, which we all know is a component of the food chain.

Hon. B. Barlee: Through the MAIAC review, commercial fisheries were there. I have a list of a number of research grants that we have given out to cover a number of areas. I would be quite pleased to pass those out to the member concerned. There are several pages of them, so if you wish to have that list, we'd be quite willing to supply it.

G. Wilson: I appreciate that, and I would very much like to have that list, at your convenience. It would be useful for our side.

My last question on aquaculture has to do primarily with money that is being committed to regulation, with respect to packaging, labelling and marketing of farm fish, in a market that is of course competing now with commercial fish. Again, there has been a growing controversy, with respect to commercial fishermen, that there is adequate research done on the potential confusions that arise and potential damage to the commercial fishery if there is not adequate money expended on packaging, marketing and product maintenance, if you want -- making sure that we have quality product on the market. I wonder if the minister can advise us how much money and what portion of the ministerial budget he has just outlined that goes to aquaculture, that is dedicated to that kind of enforcement.

Hon. B. Barlee: We are working with both sectors. I went to a meeting last Friday, I believe, and both sectors were there; 14 people were at the table. We're trying to enhance salmon sales on both sides. Certainly it is part of the competitive sphere that we live in. Both species, by the way, are commercial 

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species, although the farm salmon are sometimes not looked upon as a commercial species. We have no preference for either, but we think that the commercial fish farms may be here to stay. We're being very careful that we are treating them the same as we are treating the so-called high-seas commercial fisheries.

G. Wilson: A final question to the minister. I think your point is well taken: both are commercial fish. We often do not give that credit. In the marketing, your ministry is prepared to spend money, and has spent money in the last year, on regulations for packaging, labelling and adequate market control of farm fish going into the commercial market. Can I take it then that your ministry has those programs in place and that dollars have been committed to making sure that those programs are effective?

Hon. B. Barlee: According to my staff, we have not given any moneys, as such. We have given some staff time, but no moneys have been allocated to this particular area.

In reference to another question, the Salmon Marketing Council for the commercial high-seas fishery is starting with -- and I haven't got this figure at my fingertips -- $500,000, I believe.

L. Fox: Over the past year your ministry, in cooperation with the Cattlemen's Association, commissioned a review of the beef industry in British Columbia to study the packing industry and competitiveness in the B.C. beef industry versus the U.S. and Alberta industries. I'll ask you essentially a two-part question. What was the cost of that study, and is it on budget? The second part of the question is: what is the status of the study, in terms of where it's at now?

Hon. B. Barlee: That was the Sparks study you were referring to. The total cost was $200,000, and it is on budget. When I went to the hog producers' AGM, I happened to talk to this individual for some time. That is a draft study, which will be ready within several weeks. When it is ready we will make sure that you get a copy.

L. Fox: Several weeks.

Hon. B. Barlee: I would think two weeks. He said two weeks; it may be three weeks. It's still a draft copy.

R. Neufeld: Hon. minister, there is an overexpenditure of $15.1 million from the estimate of 1991 to the revised forecast. Could you please explain to me what the money was spent on and what it was used for? Are there write-offs, or what is in there that makes up that $15 million?

Hon. B. Barlee: I thank the member for Peace River North, but I believe that's a mistake. I believe the revised forecast was $111 million, and the original was $103 million. That doesn't make $15 million, but rather $8 million approximately.

R. Neufeld: Maybe we're just using different paperwork, but I have the 1992 budget here, and unless mine is misprinted, it says $96.4 and $111.5.

Hon. B. Barlee: You have deducted ARDSA, which is $6.65 million, so that does make a difference of $15 million if you deduct that.

The Chair: I would remind the members to wait until they are recognized before they speak.

R. Neufeld: Then I ask what the $15 million was spent on. That's the original question.

Hon. B. Barlee: Well, to clarify that -- which probably won't clarify it; I'm not being purposely obtuse -- we take that $6.65 million off the $103.003 million and we get to $96.353 million. Eventually you say: "Well, why the $111.5 million?" Well, that includes the tree fruits special warrant -- a total of $25.5 million approximately, which is not here but that's what it is. Not $30 million.

R. Neufeld: On page 45 of your budget document you state that $30 million of assistance was paid to the tree fruit producers. I don't quite understand what you're trying to say when you talk about reducing $6 million here and that there. I'm going by the exact numbers, and what I want to know is what the $15 million was specifically spent on.

Hon. B. Barlee: Your statement is correct. On the $25.5 million, we added about $4.5 million from our own operating budget to make up the $30 million.

R. Neufeld: Am I to assume that the $111.5 million, the revised budget figure, is inclusive of the $30 million that was spent by your ministry on a one-time basis for the tree fruit industry?

[4:30]

Hon. B. Barlee: The $111.5 million does include the $30 million which was paid to the tree fruits industry, but of that $30 million, not all of that came from special warrants. We provided $4.5 million.

R. Neufeld: I appreciate that. I would suggest that the budget could have come in at $81.5 million had the minister not decided to single out one particular section of the agricultural industry for a $30 million grant. Is that correct?

Hon. B. Barlee: Yes, if we take that $103 million, the revised estimate was $81 million; add $30 million to that and it comes to $111 million. That is correct.

R. Neufeld: Then I would like to have in the record that that budget was inflated completely by one quick decision, just to make the final deficit look worse, as our leader said before.

I have some other questions of the research that you had talked about. I think you said it was $821,000. How 

[ Page 323 ]

much of that $821,000 would have gone in to the Beaver Lodge research station?

Hon. B. Barlee: Beaver Lodge is federal, so none of our money would go into Beaver Lodge. And in reference to the previous statement you made, I think I should reply that the $30 million which was extended to the tree-fruit growers was an investment. We feel that's an investment. Out of that $30 million....

Interjection.

Hon. B. Barlee: Well, it was a re-election for two of your own members. We impacted 40 percent of the Social Credit members, 100 percent of the Liberal members and 12 percent of our members. So you can't be more fair-minded or even-handed than that. Certainly you did much better about it than we did, because we were trying to do the right thing.

R. Neufeld: Mr. Chairman, I notice that the Peace River grain farmers have continually asked that the Agriculture ministry help fund the Beaver Lodge research station with regard to the products that are grown in the north. They have in the past, I know. Does the minister know when it was cut off, and does he feel it will start again?

Hon. B. Barlee: I believe I can safely say that the previous government -- and you are a member of that particular party -- cut that off some years ago to the great....

R. Neufeld: Mr. Chairman, I guess we will have ample time in estimates to ask those questions, and I was maybe a bit out of order to ask that one. But I will keep that in my notebook.

The grain farmers from North Peace came down to see you and gave you this submission, I believe, just recently on March 23. You had talked about all the grants they had received. I think that what you didn't make clear to the members was the fact that the B.C. grain growers and the NFU both, working together, have found some large disparities between farming in the North and South Peace and Alberta. Really, the money requested by those farmers was to help make up that difference, because in British Columbia there are higher farm fuel costs, fertilizer, crop insurance, debt financing, land taxes and insurance.

I would like to ask the minister if he turned down that request because it really referred to the drastic losses they had in 1990, or whether it was because their lobbying effect was not as good as it should have been, according to the newspapers when you were in Fort St. John.

Hon. B. Barlee: Several things: first of all, the fertilizer program you are alluding to has been cancelled in Alberta. Secondly, you said the drastic losses in 1990 -- that's about two years ago. I don't think we were in power; I believe your government was in power at that precise time.

R. Neufeld: Mr. Chairman, I quite realize that this party was in power at that time, but this study was commissioned at that time and just more or less came to fruition lately. That's why they approached you. Are you saying that for anything before your time in office you're going to totally ignore? Is that what I hear the minister say?

The Chair: I would remind the members that we are dealing with the special warrant. Keep your questions as such.

R. Chisholm: We'll go fishing again, to the hake industry this time. We have a quota of 100,000 metric tonnes of hake for this shoreline. Of that, 15,000 metric tonnes is British Columbia's. We are now processing 6,000 metric tonnes. My question to the minister is: what are we doing to increase the processing industry in this province so we fulfil our quota instead of having the Americans do it offshore in cannery ships?

Hon. B. Barlee: We actually have been concentrating on the hake issue. We think it's very important. At the present time we are processing about 6,000 marine tonnes. With those 6,000 tonnes we employ around 135 people. We have had continuous consultation with the federal Minister of Fisheries, Hon. John Crosby. We said we want to start out with 25,000 tonnes this year. He agrees, but he's having some trouble with External Affairs in Ottawa. I believe they will resolve that issue. If we do get 25,000 tonnes, those 135 jobs, basically on Vancouver Island, will go to around 400 jobs. I anticipate that we'll achieve that goal this year.

R. Chisholm: Of said warrants 2 through 8, has any of that money been spent in this industry?

Hon. B. Barlee: Out of that vast sum of money I imagine some would have gone towards our study on hake, but I don't know precisely how much. It would be very difficult to follow that up. We could attempt to do so. With a very complex ministry and the complex programs we have in the ministry, it would be hard to give you a very precise answer on that. My apologies for that.

R. Chisholm: I'd appreciate it if the minister would follow that up for a future date.

Back to warrant 4, the $35 million to the agrifisheries and food industry, November 13, '91. Was any of this warrant money granted to tree-fruit growers, grain farmers, dairies or any other farm industry that you know of?

Hon. B. Barlee: The member asked me about the $35 million in warrant 4 before. I'll reply again. This was specifically to provide ongoing funds for ministry operations. None of it went specifically to the tree-fruit or grain growers of that region.

R. Chisholm: I just wanted to get back on track, Mr. Minister. After all, there were a lot of people in between the question.

[ Page 324 ]

Warrant 6, $7 million, January 8, 1992. Were any funds allocated to the tree-fruit growers, grain farmers, dairymen or any other farm industry that you know of?

Hon. B. Barlee: Again, simply general disbursements to the Ministry of Agriculture for ongoing operations.

R. Chisholm: Warrant No. 5, December 11, 1991, $15.3 million; warrant No. 8, February 28, 1992, $10.250 million to tree-fruit. Were any other moneys of these warrants allocated to any other farm segment?

Hon. B. Barlee: Yes. Out of that $10,250,000 and the $15,300,000 -- I alluded to that before.... That is specifically for the tree-fruits industry. We took $250,000 of that to give to the Peace River farmers for an extended NISA program. So $250,000 of that went into the Peace River.

R. Chisholm: Thank you. Mr. Minister, after what I've heard in the last few minutes, it's no wonder that the farm industry is a little upset. It seems to be a little bit lopsided, that one segment of the farm industry is the beneficiary of a large amount of money, and other areas that are in bad shape themselves have received very little.

Back to warrants No. 5 and No. 8 -- the tree-fruit growers. I would like to know specifically how many farmers benefited by this $30 million in warrants.

Hon. B. Barlee: I mentioned that prior to this. There are approximately 2,700 tree-fruit growers. That may vary by 50 on either side -- the final figures are not in. Concerning the other groups that were in severe difficulty last year, I should state that the berry and vegetable growers of the Fraser Valley area received about $16.1 million as well, and that the Peace River grain growers and oil seeds producers will receive about $14.1 million this year. So it hasn't been feast or famine all the way across the board. Like everything in the agriculture and aquaculture industry.... It's a difficult industry. We range from scallops to ginseng to hazelnuts, right down the line, so it's rather difficult to keep track of them all.

R. Chisholm: My apologies to Hansard for sitting in the wrong chair. Apparently they couldn't get me on TV.

My question to the minister again: of the landowners who are not growers, how many received benefits from this program? Of people who had leased their land to other growers, how many received benefits from this program and the growers did not?

Hon. B. Barlee: Basically, anybody who is eligible for farm income insurance is eligible, so you'd have to be eligible for that particular program before you were eligible for any of the $30 million.

R. Chisholm: My question to the minister again: just exactly what made them eligible -- ownership of the land or the growing of the crop?

Hon. B. Barlee: Basically it does not matter whether they own the land or not; it's whether they ship the crop to a bona fide packing house. Then they would be eligible.

[4:45]

R. Chisholm: To the minister again, on these special warrants. We'll go back to 3, 4, and 6. Have any consultants been hired out of this vote under any of these NDP special warrants?

Hon. B. Barlee: We have one or two: the Peat Marwick imitation milk product study -- economic impact study, that is, basically -- and the review of statistical and informational roles of the aquaculture and commercial fisheries branch in the ministry by ARA Consulting Group Inc.

R. Chisholm: Exactly what did Peat Marwick do for the ministry?

Hon. B. Barlee: Basically, Peat Marwick is not a high priority on this list. They had one small study, that's all, which I mentioned previously.

R. Chisholm: Has any advertising been paid out of this vote with moneys from the special warrants passed since November 5, which takes into account warrant 4 and warrant 6, I gather?

Hon. B. Barlee: Specifically, some would go toward advertising the tree-fruit industry, advertising the various programs we've extended to the farmers who qualify -- for other areas in radio, television to a degree, newspapers and various media and programs. Typical operations of the ministry.

R. Chisholm: How much total would this be, and how much would have gone to the "Buy B.C." program specifically?

Hon. B. Barlee: The "Buy B.C." program has not been inaugurated yet. We have talked about it. It may be important down the line. We will probably accomplish that aim sometime this year. I'm assuming that. Nothing would have been devoted to the "Buy B.C." program.

R. Chisholm: The total amount spent on advertising out of those two warrants.... The question was whether anything had been allocated to "Buy B.C.", which you've already answered.

Hon. B. Barlee: Again, nothing to "Buy B.C.", and a fraction of that money was devoted to advertising. That would come under administration on those special warrants. I believe administration was something like $300,000. That would cover all administration costs, all advertising costs, sending out the cheques and so on.

R. Chisholm: I will change the subject just a little bit for the time being and go back to the Okanagan 

[ Page 325 ]

Valley Tree Fruit Authority. How much was spent on this authority?

Hon. B. Barlee: The total budget for the OVTFA is $3.8 million per annum.

R. Chisholm: How does this breakdown in salaries, research, replanting and overhead?

Hon. B. Barlee: The break down is relatively simple: a total of $700,000 in salaries; $145,000 for office rent from the federal government -- located in Summerland at the research station there, by the way, which is very important; community relations, $110,000 over the calendar year; $85,000 for travel; $80,000 for rent and utilities; $50,000 for board; $50,000 for computers; $30,000 for telecommunications. The rest is spent on orchard renovation: $1.9 million. Issue paper is $670,000, and under the issue papers there would be a number of things that are quite interesting to the tree-fruit industry people.

First education and skill development: to provide growers with the skills required to effectively manage orchard operations. Some of the growers are illiterate and need this particular program.

Second, Research and development: the industry adopts new technology to achieve revitalization. This program provides funding for selected projects to achieve this adaptation.

Third, market research and development. This program involves the pilot project to test the value of enhanced merchandising at the retail level to improve customer satisfaction.

A growers' marketing education program is also to be initiated to provide information to enable growers to make informed marketing decisions. In other words, they have to be able to choose those exotic varieties; it's a business decision that allows them to compete in the international marketplace against their offshore competitors. In China, for instance, they have half a million acres of apples between the age of one year and seven years. They're going to be a major competitor. Chile is now coming into the market in a big way. The United States, specifically Washington State, has been in the same category.

Finally, there's the industry development plan, which we think is quite important. The funding will be used to establish a planning process that will identify the strategic plans required to achieve revitalization of the industry. Many of the orchards in the Okanagan have been there for 30 or 40 or 50 years. I think this plan is working, and I'll tell you why. There are several ways you can check it. I used to check all the for-sale signs in about four or five miles between Oliver and Osoyoos. It used to be 28 signs; now it's down to seven. So we must be making some progress in that area.

R. Chisholm: What percentage is this of your whole budget?

Hon. B. Barlee: Well, $3.82 million would be approximately 4 percent of $93 million. It would be within a fraction of that. That's doing it mentally, and I think that's correct.

R. Chisholm: Is this not duplicated by the ministry itself? I quote. The act creates "a corporation to be known as the Okanagan Valley Tree Fruit Authority" with the powers "to ensure an efficient and coordinated approach" be taken to resolving the numerous problems of the tree-fruit industry. I just wonder if this money could not have been saved and...been done by the ministry itself, instead of making a separate organization to do this.

Hon. B. Barlee: I think there are advantages in having the Okanagan Valley Tree Fruit Authority in the Okanagan. The bulk of the growers are there. Well over 2,200 of the 2,700 growers are in the Okanagan. The headquarters of the OVTFA is housed right in the dominion research station in Summerland, and they're one of the world leaders in research. They've done marvellous work. I think they have to be there, and this is the right way to coordinate it. Summerland is approximately the centre of the Okanagan, as well, so geographically it's central.

R. Chisholm: Now we want to change to the funding for the sterile insect release program and how this is broken down into salaries, overhead and implementation.

Hon. B. Barlee: I think the sterile insect release program, which is commonly known as the SIR program, is at the leading edge of technology. There's not much doubt about it. It places us in the forefront of the industry not only in North America but in the rest of the world. No other country has a program to equal it. It has been tried before, in 1972. Our total funding for that is $3.65 million. That is a 50 percent funding with the federal government, also $3.65 million. The operating expenses are carried by the industry, so we do not contribute after this initial funding.

R. Chisholm: On the proposed multimillion dollar building in Osoyoos, how much money is going to be spent on this research building and what is the purpose of this building? Is this out of these warrants that we are referring to?

Hon. B. Barlee: As I stated previously, this is slightly over $7.5 million, provided equally by the federal government and the provincial government, and it is simply the headquarters for the sterile insect research station. We do not provide ongoing funds. I think it's a very fine program.

R. Chisholm: Out of these two warrants, No. 4 and No. 6, to refresh our memories, were any moneys provided to the Ministry of Agriculture allocated to the farm assurance fund?

Hon. B. Barlee: Yes, because this is part of our ongoing operations.

[ Page 326 ]

R. Chisholm: My apologies to the minister. Did you give me a total of how much had been allotted to that fund?

Hon. B. Barlee: I believe that was $29 million.

R. Chisholm: Crop assurance. How much out of those same warrants has been allocated to the crop assurance fund, Mr. Minister?

Hon. B. Barlee: We happen to have the figures here. The province's total was 25 percent, $3.25 million, as well as administration costs of $1.321 million -- a total of $4.571 million.

R. Chisholm: You are stating to me, Mr. Minister, that you have spent almost $34 million out of those two warrants on two programs, the crop assurance and the farm income insurance program?

Hon. B. Barlee: No. Those are total costs for the year. Part of the ongoing costs of running the ministry over the year is $35 million.

R. Chisholm: Has the minister commissioned any new studies or reports with the moneys provided by those same two special warrants?

Hon. B. Barlee: It doesn't say, but we spent $50,000 for a hog industry paper, which we feel is quite important. They are in some difficulty right now. There are cyclical highs and lows in the hog industry, as the member may know, so we have an ongoing study there, hoping to resolve some of those problems.

R. Chisholm: I would like to ask how much of these two special warrants went to the funding of the British Columbia Marketing Board, if any.

Hon. B. Barlee: I haven't got the precise figures in my head, but it's very close to $250,000 per annum.

[5:00]

R. Chisholm: Have funds been spent in this period or budgeted -- or supplementary -- out of these warrants to assist the farmers in the ALR to deal with the problems of urban growth?

Hon. B. Barlee: Specifically, there was a study called the Delta study, funded by my ministry for $50,000, which does impact upon those lands in the lower Fraser River delta. That is one of the studies that we have commissioned.

R. Chisholm: Specifically how much was spent on that study, Mr. Minister?

Hon. B. Barlee: Perhaps the member didn't hear me. I just said $50,000.

R. Chisholm: To the minister, I want to thank you for your openness and your forthrightness to my questions, but it has become painfully obvious that some areas of this province have benefited from some of these programs more than others, and I certainly wish -- or hope -- that during your tenure you will do something to right these injustices and help other areas of the farming industry, such as the raspberry, dairy and grain farmers. And while we're at it, if we're going to "Buy B.C." and spend money on these programs, we should do so out of warrants or whatever moneys we are spending.

I thank you again for your openness. I appreciate the time and effort and the assistance of your personnel who helped you today.

The Chair: We move on to the Ministry of Attorney General. The Chair recognizes the member for Richmond-Steveston.

A. Warnke: First off, I want to extend my congratulations to the member for North Island for his appointment to the Ministry of Attorney General. I certainly look forward to working with the Attorney General and, as a matter of fact, I'd like to say that up to now -- and I hope it continues in the future -- I have certainly enjoyed the relationship I have had with the Attorney General.

When looking at a society that is quite civil and so forth, and where one cherishes democratic government, I believe that the laws are the foundation on which democratic society and government can work, and it's critical in some ways that governments and oppositions in our democratic system be civil in this regard. The laws are most important here.

I also want to mention at the outset that I appreciate we have an interesting situation here whereby the Attorney General and the Solicitor General have become amalgamated into one ministry -- a very difficult challenge, I'm sure, for the Attorney General. When we go through the special warrants, I appreciate the complexity of bringing this amalgamation about. I hope the Attorney General appreciates that we will try to explore both of them, and I in turn will appreciate the difficulty that may ensue here.

I want to turn first to warrant No. 2, September 19, 1991. In the schedule before us we have the amount spent by the department of the Attorney General, $42 million, and of the Solicitor General, $57.5 million. Would the Attorney General offer the breakdown or rationale for the expenditure by the department of Attorney General?

Hon. C. Gabelmann: My thanks to the member for Richmond-Steveston for his kind opening comments. He and I have had a few conversations about a few issues, and I made it clear to him, as I do to every member of the House, that my door is open at all times. If there's anything we can do to help in any way, we certainly will do our very best.

Before I respond to the question, Mr. Chairman, I'd like to introduce to members of the House my deputy minister, Mr. Bob Edwards, on my immediate left. On his left is Mr. Rich McCandless, who is director of resource planning in the remerged Ministry of Attorney General.

[ Page 327 ]

Warrant No. 2, as the member knows, was necessitated by the fact that estimates were not concluded in the session last year, and by whatever the date in September, the money had run out. This was the money required at that time for normal operations of the ministry for the ensuing period. That is probably the best explanation I can give at this point.

A. Warnke: For clarification, I would like the Attorney General also to comment, if possible, on expenditures for the department of the Solicitor General.

Hon. C. Gabelmann: As the member knows, in September there were two separate ministries, the Solicitor General and the Attorney General, and some other bits and pieces that are now inside this ministry. The numbers that were chosen in both those instances were simply calculations based on the blue book, on the estimates that had been presented earlier in the year. For the period of time that this warrant covered, the simple arithmetical determination was made as to what proportion of the budget would be needed for that proportion of time. That's what these numbers reflect.

A. Warnke: I would also like to take a look at warrant 3 of October 29. I want some clarification here particularly, because it's my understanding that this is the last warrant spent by the previous government. I was wondering whether the Attorney General also has some information with regard to the amount authorized for the Attorney General and the Solicitor General. Following that, I would like the Attorney General, as we go into warrant 4, November 13, to outline what he considers was the financial state of affairs with regard to those departments that contributed to the government's decision to amalgamate the ministries.

Hon. C. Gabelmann: First of all, the answer to the question on the warrant of October 29 is that it's the same as the September warrant. It was a continuation of the blue book calculations, as in fact was the warrant on November 13. Clearly the October 29 warrant was under the previous administration in the transition period between election day and swearing-in day. The November 13 warrant was our first as a new government.

The amalgamation of the ministries was not a cost item as such. In the final analysis it may well prove to have been a bit of a saving in terms of some efficiencies in amalgamating. I'm not able at this point to calculate those kinds of numbers. It may be possible at some stage, and if it's possible to do that, I'd be glad to share it, but at this stage I don't have any ability to give you that.

A. Warnke: In the amalgamation of the Attorney General and Solicitor General ministries, I've noted vote 14, the minister's office for the administration of the Attorney General, and vote 54, the minister's office for the administration of the Solicitor General. I would like it explained whether warrant 4 covers the two ministries or the one ministry. I'm seeking some sort of clarification here as to the operation of the minister's office. Could you elaborate on that?

Hon. C. Gabelmann: The November 13 warrant was simply the combined warrant, which was more than the combination of the Solicitor General and the Attorney General; it was also other elements that were merged into the ministry. It was a projection of the remainder of the year from the blue book. Those numbers simply were to take the various components that were merged, work out on a pro rata basis what they were and project through until the end of the warrant period.

In respect of the ministers' offices -- if I take your question there and if my memory is correct -- there were five FTEs in the Ministry of Solicitor General, five in the Ministry of Attorney General, and I suspect you could probably prorate one or two out of Labour and Consumer Services and other parts of government in respect of ministerial office expenditures -- ten, 11 or 12 people. We're down now to doing it with five or six. I stand to be corrected on that. I'm not quite sure where we are at this point.

An Hon. Member: Not enough.

Hon. C. Gabelmann: I could tell you it's not enough from the long days of trying to do the job in our office.

What we've done essentially is that for the remainder of the year, from November 5 to March 31, we have been operating with five or six doing the equivalent of up to a dozen people from the ministers' offices from last year's budget.

[5:15]

A. Warnke: Since the November 13 warrant is the first warrant that brings the ministries together, I'm wondering if the.... Actually, I would like the Attorney General, if he could, to outline in some detail the breakdown of expenditures from $81 million to $100,000.

Hon. C. Gabelmann: The $81 million covers the period for the operation of the combined ministry. The new ministry, the one that you see in existence today from the period of November 13 through to January 8 -- approximately a two-month period -- is pro rata off the blue book. It's essentially the same answer as before, except it's organized on the basis of the new structure.

A. Warnke: I would like to perhaps focus in on one aspect: how much of the money of warrant 4 of November 13 has gone to the operation of legal services and, if possible, the justice support programs?

Hon. C. Gabelmann: In respect of legal services, in general terms and in rough numbers, the budgeted allocation from the blue book of last year for legal services is still contained within this November 13 warrant. We still had enough money out of the budget that was made available to cover the warrant in this period through to January 8.

[ Page 328 ]

In terms of justice support, that's a more difficult question to answer quickly, and if we can later on I'll try to answer it.

A. Warnke: I'd like to turn to the schedule on page 5, warrant 6 of January 8. The amount authorized here is $143,953,000. It's quite a substantial amount. I recognize that there's quite a variation in the warrants spent here, and this is an awfully large one. I would, nonetheless, like the minister to explain the large amount compared to the others, if he could.

Hon. C. Gabelmann: There are a couple of answers to that. January 8 to March 31 is a longer time-period than November 13 to January 8, so that accounts for part of the larger amount and, I would suspect, the larger proportion of the additional moneys. In addition to that, the RCMP contract is $50 million a year. That's done twice a year. One of those two occasions happened in this warrant period, which also adds a considerable amount to it. If you had divided the number of days in each of the warrants by the number of dollars, you might have said: "Why is there such a difference in the latter warrant?" It's the RCMP contract that accounts for that in large measure.

A. Warnke: I'd also like to pursue with the minister some aspects of the operations of the ministry itself, primarily focusing in on the Attorney General and vote 15. What I have found, which may be of interest, is a substantial increase in the justice support system -- in particular, grants and contributions to the justice support system. There's a substantial increase there, and therefore I would appreciate it if the Attorney General could elaborate on just what is involved in the grants and contributions and what part of the grants and contributions has contributed the most to this increase.

Hon. C. Gabelmann: I just want to be sure that the member, when he talks about vote 15, is talking about the 1991-92 fiscal year, the one that ends today. Right? In that budgetary item, we're talking about money that mostly goes for legal aid purposes. You may want to ask the question again if I'm not answering it.

A. Warnke: Perhaps I could seek some clarification with regard to the justice support programs, grants and acquisitions. Legal aid is a part of that. Could the minister be more precise and perhaps give me a breakdown of how much has been allocated to the legal aid program?

Hon. C. Gabelmann: In the ordinary course of estimates debates, we both would have this book in front of us. I suddenly realized that you don't have the detailed estimate book in front of you from last year. Justice support programs, vote 15, 1991-92 total: $47,918,635. So that's roughly $47.9 million. Of that $47.9 million, roughly $47.8 is for legal assistance. An additional $69,000 went to the Law Reform Commission. That's about it. It's almost entirely legal services, so the other amounts that are a part of this are so minor as to not be a major factor -- if I can put it that way.

A. Warnke: Thank you, Mr. Minister. That does clarify that one little situation quite a bit. If I could, I'd like to look at warrant No. 9 of February 28, specifically allocated to the Attorney General. The total amount authorized to the Attorney-General here is $30,465,000. If I could, I'd appreciate perhaps focusing in on one aspect here with the Attorney General. I did note that the amount of funds to the judiciary has declined. Perhaps some comment could be made about that compared to the previous year. In particular, this warrant includes retroactive salary increases for judges and masters. Perhaps initially I could ask the Attorney General to make a distinction here in what is meant by judges and masters. For laymen that wouldn't be a bad idea.

Hon. C. Gabelmann: This is Provincial Court. The 13 masters were appointed under a program that was established a few years ago. These individuals are paid at the same rate as Provincial Court judges, and there was some retroactive.... No, it wasn't retroactive as much as it was unexpected wage increases that tied in with the judges' wage increase, and that's why that money came along -- I think.

C. Serwa: I have a few questions for the Attorney General. The estimates for 1991 were $665.9 million, and the revised forecast of expenditure is $755.7 million -- an increase of almost 15 percent over budget, or $90 million. Would the Attorney General give me a detailed accounting of where that $90 million was spent? Normally the Ministry of Attorney General, like the Ministry of Finance, works in fairly tight parameters without these wild gyrations. Could the Attorney General answer that?

Hon. C. Gabelmann: If the member would like, I'll give some figures that should add up to the $89.8 million, which is what we're talking about. Then, if you like, I can tell you what the $30.4 million in the special warrant is comprised of. That might help all members to focus the debate.

Of the $89.8 million, $9.5 million was Criminal Injury Compensation Act, which is a statutorily driven program; $13 million was for the Election Act -- you will remember we had some money there in October. Under the Flood Relief Act -- again, statutorily driven -- is $29.2 million. Under the Crown Proceeding Act is $7.7 million. And $30.4 million is the special warrant that is attached to this bill.

If you like, I'll take a moment now to tell you about the $30.4 million. Those numbers should add up to $89.8 million, which is the number that the member for Okanagan West was asking me about. In respect of the roughly $30.5 million in this special warrant: information systems, $4.3 million; legal services on behalf of other ministries of government, $3 million; $12.7 million for legal aid; $1.7 million to the criminal justice branch for additional staff and operating costs associated with the law-and-order initiative and some un-

[ Page 329 ]

funded building occupancy costs; $3.8 million in court services expenditure -- higher than originally estimated. The $3.8 million was needed because of a 3 percent reduction that was imposed in the budget but never implemented by the previous government. I don't want to get into the politics of this, but there was a 3 percent cutback and it was never implemented, so we had to find the money to maintain the full program. The judiciary required $2.1 million more, effective January 1, 1991, which was before the fiscal year started, but nonetheless built into this fiscal year -- that's mostly for pay raises that were granted at that time, I understand. The corrections branch required $2.2 million to deal with an increased number of adults incarcerated in the correctional system. The police services branch required $1 million to deal with a salary increase for the RCMP provincial force. That was not known at the time the budget was established.

C. Serwa: Were not a number of the components that have had significant increases already incorporated in your budget -- for example, a charge with respect to the responsibility for emergency flood relief?

Hon. C. Gabelmann: There are a number of programs, some of which are in this ministry, which are statute-driven and are therefore unable to be predicted. You can't predict how much money you're going to require in any given year for flood relief. Nor can you predict with any certainty how much money you're going to require for criminal injuries programs. Because these programs are driven by the law, the statute requires payments to be made if certain things happen or if certain conditions are met. As a result of that, there is absolutely no ability to control expenditures in these kinds of programs. So we had, as you know, some significant additional expenditures to make in both criminal injuries and flood relief, to name two.

[5:30]

J. Weisgerber: There are just a couple of areas I'd like to pursue briefly. First of all, in the $90 million that the minister was kind enough to outline the expenditure of, when I look it over it would be difficult to identify areas where the government -- regardless of which government might have been controlling this -- would have been able to realize any particular savings. It seems to me that most of these things -- elections, floods, other things.... So what I hear the minister saying is that despite a lot of talk over the last four or five months of government spending by the previous administration that was out of control, there doesn't, in any of the expenditures of this ministry over the last 12 months, appear to be any evidence of that in this particular ministry. I'm wondering if the Attorney General would care to comment on that.

Hon. C. Gabelmann: I had decided at the beginning of this exercise not to play politics, but to answer the political question I have to be political to a certain extent. It's a fair comment to make that almost all of this would have occurred whoever was in power. Certainly the criminal injuries, the Election Act, the flood relief and the Crown proceedings are all statutorily driven and out of our control, in a sense. In terms of some of the programs, clearly the decision by the previous government to reduce court services by 3 percent and then not to actually cut back on the services could be described as a political decision to bring in a lower budget last year. But unless you want to, I don't want to get into the political game.

J. Weisgerber: I don't particularly want to get into the political game, either, but there have been a lot of statements and allegations made, and it's simply my intention, as we go through each of these estimates, to look at the ministries where there were significant expenditures beyond what was forecast in the April 1991 budget and try and identify the reason for them, simply to determine how we moved from a $1.2 billion deficit to a $2.4 billion deficit. My questions simply were to try and identify the causes, and as my colleagues were the causes of the overruns, I'm quite satisfied with the answers that the minister has given.

Hon. C. Gabelmann: I'll just add a bit to that. I think I've mentioned the one area where there was a predicted expenditure less than the programs actually required. In terms of legal aid, the same kind of issue arises where, effective July 1, the tariff was effectively doubled by the previous government, thereby creating an expenditure considerably larger than anticipated. Beyond that, in these numbers, you and I are in agreement about how they developed.

J. Weisgerber: The other area I want to canvass is the decision to replace Russell and DuMoulin with regard to the appeal of Delgam Uukw. We understood in discussions with the Minister of Aboriginal Affairs last night that the primary responsibility, at least, for that decision rests with the Ministry of Attorney General. I'm not going to ask the minister to predict the ultimate cost to British Columbia of that decision, because I don't think any of us will know even after a decade what the cost of that decision will be. But I am specifically interested in the physical and immediate costs of removing the law firm who had prepared the appeal. We understand that the firm had prepared a 1,500-page factum to argue the appeal and was then replaced by another firm. I don't want to cast any aspersions on the new firm, but it just seems to me that yanking out a company that has been preparing for a case for many months and replacing them with someone new must have generated significant additional cash outlays for the ministry. I wonder if the minister could comment on that.

Hon. C. Gabelmann: Yes, it was my decision to change counsel. I'm not going to go into a lot of detail about that at this stage, but I did it to give us an opportunity to get a fresh look at the arguments with respect to the issues at stake; and also to help us in trying to move the whole issue along so that it was no longer in the courts, but rather, could be dealt with through a negotiating process. That's an ongoing exercise. I should reassure the member and the House that 

[ Page 330 ]

all of the work and material that was produced, including the factum produced by Russell and DuMoulin, is our property in a sense: we paid for it; it's ours. It's in the hands of the new counsel.

I need to say that Russell and DuMoulin have been exceedingly cooperative in all of the issues relating to these changes. The whole exercise has gone smoothly and with great cooperation, and I don't believe at any additional cost. I'm hopeful, in the long term, for considerably reduced court and trial costs as a result of some of the initiatives that are underway and hopefully will come to some fruition. That's not to say how much the treaty commission costs will be just in terms of actually conducting negotiations, nor does it comment on the final consequential costs of all of these proceedings -- that's another issue. But then, when you're in the courts, it's a winner-take-all proposition, and the outcome there, too, can be pretty uncertain at times.

J. Weisgerber: I'm sure the Attorney General would agree that it's unusual to replace a law firm after you've been successful in your initial arguments in the courts. I would expect most people would normally take that kind of action after they'd lost a decision. I wondered about the motives. I suspect -- and I've said it before and I'll it say again -- that the government would be happy to see some result other than the one it achieved in the original case. I think the government, quite honestly, would like to lose this appeal. I can't imagine any other reason for doing what it has done.

If the desire is to get a fresh look.... But to go forward with the factum that was prepared.... Those two things, to my simple way of looking at it, seem contrary. If you want to take a fresh look, if you want to take a fresh approach, would you then use all of the material? To put the argument the other way, if you are going to use the same factum, why not use the fellows who prepared it to argue it? They would clearly be more familiar with the arguments.

Hon. C. Gabelmann: First of all, I think the reality is that the former government and the present government have different positions with respect to native issues. The former government, in the former minister's words, "won the case." We're determined to try to get a situation where we don't have winners and losers. If you have a winner, as you talk about, then you have a loser. In this area in particular, we are determined to find a way that we can proceed so that every British Columbian will be a winner. We think we have some approaches whereby we can make sure that there are no losers in resolving unresolved questions with respect to native issues.

I don't want to go too much into where we are today as there are still a lot of issues being resolved. The dates in front of us are imminent. The trial is scheduled to resume on May 4, I believe. Effective next Monday, April 6, there are a series of dates that have to be met in terms of presenting arguments and a revised factum, if one is to be presented. All of that is ongoing at the present time, and I would be delighted at some stage later on, when we're past this whole exercise, to give a full accounting of just what has transpired. But at this stage we're very much in the middle of working toward -- I think I said trial date -- an appeal date in a month or so.

J. Weisgerber: I don't want to start arguing this case or the merits of one argument or the other, because I don't think this is the place for it. But clearly if the decision was to stay out of the courts, to find a way of avoiding the courts, I could agree with you. But as I understand the Crown's position, you're going to go to court and argue the appeal. It baffles me how you can.... Whether you like it or not, either you win or you lose. That's the greatest argument, I agree, for staying out of the courts. If you came to this House and said, "We have found a way to stay out of the courts, to negotiate claims, to stay away from litigation," I'd say hurrah for you, good on you. But the fact of the matter is that you are going to go to court. You're going to ask a judge to give you a decision. Win-win sounds great, but the fact of the matter is that there's going to be a winner and there's going to be a loser, and I'm not certain that you best serve the interests of all of the people you seek to represent by replacing your legal counsel at this late date.

Hon. C. Gabelmann: I understand the argument made by the member. It has many adherents. I'm not going to respond in detail as to why I believe the member is on the wrong track at the present time. Who knows? History will judge this. I'm convinced that we are on track toward finding a different way to begin to deal with and hopefully narrow some of the issues that are dealt with through litigation, which I think will lead to the win-win situation that we all so desperately want.

A. Warnke: Perhaps I may just pursue a couple of other questions, particularly again in reference to vote 55. One thing I would like the Attorney General to comment on is the increase in operating costs as opposed to the decrease in salaries and benefits. Can the minister possibly outline some of the factors that have contributed to this?

Hon. C. Gabelmann: Mr. Chairman, with your indulgence I'm going to ask the member if he'd be a little more precise. I will try to help him, but I'm not quite sure what he's driving at at this point.

A. Warnke: That's quite appropriate. I was in particular focusing in on such things as administrative and support services, and perhaps corrections as well. I've noticed, for example, that operating costs have increased for corrections quite significantly while salaries and benefits have decreased.

Hon. C. Gabelmann: I don't know whether it captures all of it, but the major issue here is building occupancy charges for the new prisons. The rent, in effect, for the new prisons, the buildings, comes out of our operating costs. I think there's $6 million or $7 million you can attribute to that in that line.

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A. Warnke: I'd like to ask the minister to comment on the increase in the adult correction centres. As the minister pointed out a little while ago -- and he was quite correct in this -- there has been an increase in this particular area. Again, I'd appreciate it if the minister could comment on maybe some of the factors contributing to that.

[5:45]

[E. Barnes in the chair.]

Hon. C. Gabelmann: It's an interesting thing to look at the graphs of unemployment and the recession. If you take a line graph and chart the unemployment numbers and the economy, and then take a line graph dealing with the numbers of people incarcerated, particularly adults, you'll find they track each other. When the economy is bad we have more people in prison. When the economy gets better we have fewer people in prison. The line just follows -- I was going to say perfectly, but I don't mean it that way. But it really tracks together, and in these bad economic times we've had, our adult incarceration rates have gone up. It's as simple as that.

A. Warnke: Along with that, could the minister provide us with some idea of crime in the urban areas -- whether there is some correlation, as he was discussing, between the nature of the economy and, unfortunately, the increase of adult correction centres? Has he noted something similar? I'm not sure whether that's totally relevant, but I think it might be a contribution here to adult correction centres. Could the minister perhaps just respond to that?

Hon. C. Gabelmann: I'm not sure that I can give a detailed answer. Maybe when we do get to estimates later this spring we can have a try at getting more detail, and we'll have Corrections officials here at the time. But in general terms, what has happened is that we have more crimes such as break and enter; that level of criminal activity is very much on the increase. In terms of major crimes, despite the coverage in the media, if you track back even 30 years, you'll find that it goes up and down in a way that's fairly consistent over the years. It evens out over the years. People talk about the big city -- Vancouver and whatever -- having increasing major crimes. In fact, the argument can be made that this is not necessarily so. So what we're looking at here are more of the crimes relating to what I would describe as poverty in terms of people looking for money, and also, of course, drug-related criminal activity, which is not petty activity, but it's not the kind of major crime that we hear of every night on the TV news.

A. Warnke: I want to thank the minister for those comments. They're quite helpful and useful, which we will perhaps relate to in a different context later on.

I want to turn my attention now to probation, family and community services. I notice that there is an increase here, and yet probation services and family and community services are quite different from one another. I'm wondering whether the minister can provide some sort of a breakdown as to the increase of expenditure for probation services as opposed to family and community services.

Hon. C. Gabelmann: Family and community services deal a lot with counselling in a time when there are -- again partly depending on the economy -- a lot of family breakups, a lot of family trauma and a lot of difficulty. Unemployment and other circumstances lead to that. Family counsellors end up being busier in these kinds of times, and you can attribute much of those numbers to that reality.

A. Warnke: If the minister wouldn't mind, I'd like to probe just a little bit further in terms of probation: whether there's any significant change in the expenditures allocated towards probation.

Hon. C. Gabelmann: We are making an increased, determined effort in particular to reduce the number of kids in institutions. And in order to deal with that policy direction, you need to spend more money on probation and community resources. While you're keeping down the numbers of young people who are incarcerated, you then increase the cost of community and probation work as a result.

A. Warnke: I would now like to turn my attention to motor vehicles, which also falls under the Ministry of Attorney-General. In particular, I noted, with regard to expenditures in the motor vehicle branch in the area, that the general expenditures has decreased but, in particular, there has been a decrease of expenditures in traffic safety and licensing. I am wondering, first of all, whether the minister could elaborate on why there is a decrease here and compare that to the increase in commercial transport and inspection. Considering the fact that traffic safety and licensing and commercial transport and inspection appear prima facie to be somewhat similar, it is interesting to note the differences between the two. I'd appreciate it if the minister could elaborate on that.

Hon. C. Gabelmann: May I just draw the Chair's and the member's attention to the fact that I think he is getting into the 1992-93 estimates and making the comparison between 1991-92 on the one hand and 1992-93 on the other. Under the rules, it is not really appropriate to do that. But let me just try to answer the question, and maybe we can move on to what is in order.

In 1991-92, $2.6 million was allocated for what is called refuse-to-issue. I'm just going to have a look at my notes here. It's a system plan to withhold licences for failure to pay and for bad driving records. That particular program didn't proceed and is not there in the 1992-93 estimates that you refer to. I'll be more prepared on '92-93 when we get to that, and I'd be delighted to do that, but that will be in a month or two or so.

A. Warnke: Just a point of clarification. I wasn't taking a look at the '92-93 estimates; I fully appreciate that such would be out of order. I was trying to 

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compare the previous year with what the special warrants would be allocated to, but perhaps I'm incorrect here. Maybe they did not increase or decrease as I described. Perhaps the Attorney General could just comment on those two years.

Hon. C. Gabelmann: I'm not able to give a really good answer to this, because we don't have the '90-91 numbers here with us. But in general terms, what's happening in commercial transport is that inspection and enforcement is being accelerated. As you know, we had the Kamloops situation, the Kicking Horse Pass and a number of other incidents. There's an effort, not only because of that but in general terms.... There is a need to upgrade the enforcement and inspection, and you're seeing that happening in each year's budget.

G. Wilson: I wonder if we could address for a moment the moneys that have been expended with respect to provincial policing. I wonder if there can be a breakdown in terms of the manner by which those dollars have been committed in terms of the contract with the federal government for RCMP policing service, and also if you could indicate what percentage of increase in this year's expenditure has gone to additional policing, particularly for interior communities that have requested them.

Hon. C. Gabelmann: First of all, just let me tell you that the provincial-municipal police service costs in 1991 were about $450 million. I'm just waiting for a note on the specific question. Questions of this detail in these estimates are probably better answered by me communicating with you by letter. Nonetheless, I'll try to do it in a general way here.

In 1991-92 the provincial force comprised 1,460 officers, at a cost of about $100 million; in 1992-93 -- again, we're out of order but I'll do it -- $112.8 million and 1,503 officers proposed, if that answers the question. That's for policing communities under 5,000, many of which the Leader of the Opposition is aware of.

G. Wilson: I thank the minister for that commentary. The reason that we are interested in looking specifically at the expenditures in '91-92 with respect to that is because of the increasing population at the 5,000 margin and the additional cost to municipalities that are now finding it very difficult to afford to bring in that cost burden, if you want, to the taxpayers of their region. We were interested in taking a look at the comparative figures. I appreciate your providing that.

With respect to the question on policing also, there is a line for the Coordinated Law Enforcement Unit. I wonder if the minister might want to describe the Coordinated Law Enforcement Unit in terms of the actual dollars that are committed and how that program functions, again, in relation to the services provided for small communities.

Hon. C. Gabelmann: First of all, in respect of the small communities, let me say that I guess Sechelt is facing the problem that Port Hardy faced a few years ago, and that's the threshold of 5,000. Port Hardy sits at 5,200 people and, as a result, pays a pretty substantial policing bill. When it was sitting at 4,900 it didn't have that bill. Sechelt is in the position. View Royal is another community that's in that kind of position. It's one of the realities of the existing structure. I find it interesting. I'm not going to say much more than that about it at this stage. It's the way this system is designed; it creates some difficulties, and I'm well aware of that.

In respect of CLEU, I'm not sure that I understand the connection between CLEU activities and the policing in smaller communities. The Coordinated Law Enforcement Unit performs a particular and unique role in terms of major crime and on a coordinated basis. Maybe I didn't understand the Leader of the Opposition's question as to the connection between the two.

G. Wilson: I'd be happy to provide some clarification. The Coordinated Law Enforcement Unit.... Unfortunately, I don't have the statistics handy with me now, but with respect to major crime it is my understanding that the percentage of major crime that is shifting into smaller communities now, particularly with respect to the movement of illegal drugs, is fairly substantial. The fallout of that, socially, on communities has become quite significant. I wonder what percentage of that budget can be committed to maintaining some kind of policing service with respect to major crime in communities that ordinarily would not have the provision for that service. That's the thrust of my question.

[6:00]

Hon. C. Gabelmann: Before I move the committee rise, I'll try to answer that question.

CLEU is a coordinated effort between the RCMP and the major police forces in the lower mainland and lower Island. It will pursue criminal activity wherever it exists in British Columbia. If it's in Sechelt or downtown Vancouver, it doesn't matter -- CLEU will actually pursue that criminal activity in any part of British Columbia in an effort to deal with it. So in that sense it is of some assistance to small communities if there's major crime in those communities. There's no cost to the communities in a direct way for that.

The House resumed; the Speaker in the chair.

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

Hon. Mr. Clark: I move the House, upon rising, do adjourn for five minutes.

Motion approved.

Hon. Mr. Clark moved adjournment of the House.

Motion approved.

The House adjourned at 6:02 p.m.

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