Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 12, 1992

Volume 3, Number 2

[ Page 1441 ]

The House met at 10:06 a.m.

Prayers.

Hon. A. Charbonneau: I would ask the House to welcome a class of students from the A.E. Perry Elementary School in Kamloops and their principal, Mr. Hitchens. I ask all of my colleagues to make them welcome.

Introduction of Bills

FINANCE AND CORPORATE RELATIONS
STATUTES AMENDMENT ACT, 1992

Hon. G. Clark presented a message from His Honour the Lieutenant-Governor: a bill intituled Finance and Corporate Relations Statutes Amendment Act, 1992.

Hon. G. Clark: Bill 31 proposes a variety of amendments to the Company Act, the Financial Information Act, the Hotel Room Tax Act, the Insurance Premium Tax Act, the Motor Fuel Tax Act, the Social Service Tax Act and the Tobacco Tax Act, and repeals the Housing and Employment Development Financing Act. For the most part, the proposed amendments to these statutes are housekeeping or administrative measures.

Interjections.

Hon. G. Clark: I knew you would like that.

Some more substantive measures are also proposed for the taxation statutes to maintain equity and consistency in the application of these taxes.

Bill 31 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

TAXATION (RURAL AREA)
AMENDMENT ACT, 1992

Hon. G. Clark presented a message from His Honour the Lieutenant-Governor: a bill intituled Taxation (Rural Area) Amendment Act, 1992.

Hon. G. Clark: This bill amends the Taxation (Rural Area) Act covering property taxation in non-municipal areas of the province. The amendment makes it clear that penalties and interest charged on unpaid property tax increases as a result of a supplementary notice are similar to those charged on unpaid original tax bills. Such tax increases result mainly from assessment appeal decisions.

The amendment also increases cost recovery when the Crown returns forfeited rural property to the former owner. An administration fee is introduced where the property is returned in the first year after forfeiture, as is the ability to recover maintenance and hazardous waste removal costs incurred by the province on returned properties.

Bill 35 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the Day

Hon. G. Clark: Hon. Speaker, I call Committee of Supply in both sections.

The House in Committee of Supply B; E. Barnes in the chair.

ESTIMATES: MINISTRY OF FORESTS

On vote 41: minister's office, $377,000 (continued).

W. Hurd: Just continuing on some of the discussions of yesterday, I'm interested in exploring today some of the cut reductions that have been announced in the province, in particular the impact on revenues to the province and lost employment. As I indicated in question period yesterday, the opposition has received information that a 15 percent reduction in the annual allowable cut in this province will inevitably result in some fairly serious losses of revenue and jobs in British Columbia. The figures we have would suggest that a cut reduction of 3.9 million cubic metres on the coast and a total cut reduction of 11 million cubic metres across the province would result in a loss of 39,000 direct and indirect jobs and a loss of revenue of $1.5 billion to the province. I'm wondering, in calculating the impact of these cut reductions, if the ministry has looked at the issue of job losses and the loss of revenue to the province of British Columbia?

Hon. D. Miller: The terms of reference that guide the chief forester in making decisions certainly include a reference to the economic and social needs of the province.

W. Hurd: Further on the questioning, has the ministry produced any figures on these lost jobs and lost revenues, in light of the fact that the forest industry, among other groups, appears to have spent a great deal of time canvassing the impact of these particular reductions? There must be some resources expended by the minister during the coming fiscal year to assess the impact of these types of cut reductions, as not only ministery revenues but provincial government revenues. The figures are $1.5 billion and 39,000 jobs lost. Are these worst-case scenarios being proposed by the industry, or do they represent a realistic expectation of the impact of a cut of even 15 percent in annual allowable cuts in B.C.?

[10:15]

Hon. D. Miller: I guess you'd have to ask the author of the numbers you're citing. I made it clear that we're trying to take a balanced approach with respect to decisions that affect the provincial forest land base. That's been our guiding principle since this government took office. I must say that it's certainly resulted in criticism, quite often from both sides of the spectrum. When the chief forester reduced the annual allowable 

[ Page 1442 ]

harvest on tree-farm licence 46, I recall that one of the critics was quoted in the newspaper as saying that the Minister of Forests was pandering to industrial interests. I found that rather curious, given the rather large reduction in the volume that took place at that time.

As we approach these issues, we're also trying to deal with the need for accurate information, not simply accepting every statement that is made as necessarily being correct. I pointed out to the House and to the Liberal opposition that statements made by your Environment critic are inaccurate and, if followed.... I don't know if the Forests critic for the Liberal caucus wants to respond in terms of what their caucus position is. I certainly think it might be important for the public in British Columbia to try to understand what the opposition party's view is. I pointed out that we try to reject information we consider inaccurate and that we take a balanced view. I've already said that to follow the Liberal Party's policy of no more logging in "ancient forests" would result in the elimination of 90 percent of the forest activity, both harvesting and processing, in this province. So we've rejected that particular approach. We've yet to hear from the Liberal caucus as to whether they've rejected it or whether that is their official policy.

We strive for a balance. We're very mindful of the importance of forestry to this province economically and socially, for all those very good reasons that I talked about extensively yesterday. It's certainly not my place here to ask questions of the Liberal opposition caucus, and they don't have to answer any questions that I do put. But British Columbians might want to know where the official opposition stands. Is their policy that which was enunciated by the Liberal Environment critic, who is sitting opposite me, that indeed we should stop harvesting in 90 percent of the forest stands in this province? I think that's an important issue with respect to forest policy. I'd be delighted to....

D. Symons: Point of order. I realize during committee that we can range fairly far from the topic of the question asked, but I think this is getting a little beyond that when the minister is simply supposing the stand of the Liberals and is not answering the question at all. There are all sorts of suppositions coming here that have nothing to do with the question that was asked of him.

The Chair: Thank you very much, hon. member. I hope that the minister will keep in mind your concerns.

Hon. D. Miller: Mr. Chairman, I do apologize for posing that question to the Liberal caucus. In their refusal, their rather timid approach to that issue, I can only assume that the policy I quoted -- and I could quote it again, as I do have a letter here -- that was outlined by the Liberal opposition Environment critic, that we should stop harvesting in 90 percent of the forests....

The Chair: The member for Fort Langley-Aldergrove on a point of order. Would the hon. minister please take his seat.

G. Farrell-Collins: The Minister of Forests is well known for his antics in the past in this House, and he's into them again. It seems that he doesn't want to deal with the substantive issues that we're trying to deal with in a very serious manner. He is the Minister of Forests, and these are his estimates, not ours. However, if he would like to resign along with the rest of his government, we'll be glad to take their place and give our policy at that time.

The Chair: It would be helpful if the parties on both sides of the House would try to address the matter before us, which is vote 41 -- the minister's office and the minister's responsibility. Would the hon. minister please proceed.

Hon. D. Miller: Thank you, Mr. Chairman. Indeed, you've touched on the central point -- the minister's responsibility -- and I can advise you I would never resign and let the Liberal Party reduce our annual harvest by 90 percent. I think I've answered the question in substance. I'd be happy to answer any other question that they might have.

W. Hurd: I'm trying to get an answer out of that lengthy preamble, but it's not forthcoming. The information that the opposition has, since he's convinced that we're not capable of managing the provincial harvest, is that one cubic metre of harvest generates $133 in wages and government revenues, and that 288 cubic metres of harvest generates one direct or indirect job in the forest industry.

I realize that the chief forester is responsible for setting the annual allowable cuts in this province, but surely the minister is responsible for assessing the impact of the decisions the chief forester takes. My question, simply put, was: is the minister in the coming fiscal year going to develop some sort of framework for assessing the impact of these quite draconian cuts in the provincial forest revenues -- 15 percent, 20 percent, 25 percent. Surely his ministry is prepared to devote some resources to making those kinds of assessments.

Hon. D. Miller: Mr. Chairman, I did say in response to the question -- and it's not a new question -- that we did consider that. The chief forester is mandated to consider those issues, and we constantly strive for a balance and to make decisions based on accurate information.

W. Hurd: I note with interest that the province is undertaking an accelerated review of timber supply areas in the province. I am just a bit mystified as to why, if there's enough information available to achieve a balance in annual allowable cut by assessing all the factors we've discussed. What is the rationale behind the review of the timber supply analysis in the timber supply areas? Is there enough information for the minister to support these kinds of cuts in the annual allowable cut without sufficient data from the timber supply areas?

[ Page 1443 ]

Hon. D. Miller: There were several reports last year dealing with the establishment of the annual allowable cut in timber supply areas and tree-farm licences. As a result of that, some moves were made last year. There was a freeze imposed on increases in annual allowable harvest in timber supply areas and tree-farm licences. It's a matter that we treat seriously.

Last week the chief forester briefed the industry, unions and other groups on the need to move forward at a good pace with respect to establishing the cut levels in these planning units. We will be doing that as expeditiously as possible, bearing in mind that -- not to cast blame; I'm not here to talk too much about the past, but rather the future -- there have been extensive delays in dealing with the establishment of those cut levels. So we're trying to meet it with dispatch and with the best information that can possibly be obtained.

Our ultimate aim is to establish harvest levels that are sustainable, that allow people to plan and that allow communities to be reassured to the extent that it's possible that those harvest levels are sustainable over time. In addition to that, I've indicated that economics plays a significant role in terms of questions of accessibility. With respect to the harvest levels and the amount of timber that may be available for processing, I would think that there is a relationship in terms of price. Obviously that is a factor as well in terms of provincial revenue.

So we strive for a balance; we strive to make decisions based on the best information we can. We are very mindful that there are very many people and many communities in this province who rely on the forest industry for their economic well-being, whether that be timber extraction or processing that timber. Certainly we have given a very strong commitment to that industry.

In the past we have rejected statements made by former governments that somehow forestry is a sunset industry. We don't believe that. We think we've got a wonderful resource in this province. If it's managed properly, and if we can get the most value from that resource, we will have an industry that will be a cornerstone of the provincial economy for many, many years to come.

W. Hurd: My next question pertains to the issue of a forest stewardship code or a forest practices code for British Columbia. Can the minister advise the committee what expenditures in the coming fiscal year may be devoted to the concept of a forest practices code or a system of enhanced forest stewardship for the province? I know it's something that's been called for by a number of interest groups that come under the general purview of the Ministry of Forests. I'm thinking in particular of the Council of Forest Industries, forest companies, and the Association of B.C. Professional Foresters. Is this something that the ministry is actively pursuing during the coming fiscal year? Can we expect there to be a code in place on all public lands in British Columbia?

Hon. D. Miller: First of all, dealing with the need -- and we campaigned as a political party on the need to develop a forest practices code -- in vote 44 you will see that there has been $500,000 allocated to the process of developing it, primarily through the Forest Resources Commission. Speaking to the need, I really do think it's an essential component. Yesterday I talked about how governments and government ministries can only operate successfully if there is a degree of public confidence in how we make decisions; that they're not tainted decisions; that they're not ones that are made purely for political motives, but rather, on the best information available and considering the range of values that are important to British Columbians. I do think that a code is an essential component of trying to regain that sense of public confidence.

I should say, however, that there are a lot of guidelines that have been established over the years by the Forest Service to guide activities on our land base. Some of those, looked at on their own, amount to a forest practices code. I talked about the fish-forestry interaction guidelines. I talked about the requirements for green-up on adjacent clearcuts before additional harvesting can take place. I could speak with some pride about the harvesting guidelines established in the Okanagan timber supply area, which guide the activities of people who are out there harvesting timber, with respect to all of the issues that are important: wilderness, fisheries, leave strips, aesthetics. We are developing in this province a significant capability. In fact, from a technological point of view, we may be in the forefront in developing computer-modelled logging plans. I've been to many areas of the province and talked to people in the Forest Service, and in private companies, who have developed this kind of sophisticated modelling that allows a computer to take a look at a hillside from four or five different viewpoints, to....

[10:30]

Interjection.

Hon. D. Miller: I see the Liberal opposition Environment critic, who wants to shut down 90 percent of the logging, is now leaving the chamber. We'll await with pleasure her answer to the question.

We are developing very sophisticated models, as I said, to deal with the impacts of harvesting from a visual point of view, from the point of view of protecting wildlife habitat, biological diversity, and all that range of values that are very important to our future.

A. Cowie: I think this would be an appropriate time to ask a couple of general questions on forestry that I have. Regarding staffing, I was wondering how many foresters you have in charge of each of the forest districts. How many professional foresters do you actually have out in the field? What does your budget allow?

Hon. D. Miller: We've got lots.

A. Cowie: A forester is a person who has a degree in forestry and belongs to the professional forestry 

[ Page 1444 ]

association. Surely the minister would know how many professional foresters he has within the ministry.

Hon. D. Miller: I'll confess that I don't know the number off the top of my head; neither do I know the number of accountants we have, but I certainly can get it. The member may be leading somewhere. I'd be happy to get into a substantive debate that I think he may want to lead into, but I don't know if the number is that important to the debate. We'll certainly try to look it up and see what we've got here.

I should also say before the member rises again -- and maybe we'll get into it -- that it's our view that the management of the forests is done by people with a range of professional backgrounds. Certainly registered professional foresters are important; they play a significant role in what we do in terms of planning in the forest land base. We also have very highly skilled and competent people who are technicians. We have a range of people who have more of a biological academic background for dealing with wilderness. So we have a range of specialties within the ministry.

It's not our view that registered professional foresters will make every decision or, indeed, have the answer for every issue. We think it's a range of disciplines with a proper balance that allows us to make those very good decisions. We try to be cognizant of that and have that range of qualifications in our staff here in headquarters, out in the regions and in the districts as well.

I should say that I'm very happy with the program that we are able to get in this year's budget, which will see 25 biologists who are employees of the Ministry of Environment, Lands and Parks established in 25 district forest offices around the province. My staff are ecstatic about that. They think it will improve their ability to plan activities on the land base.

If you really want the number, I guess we could pore over the books and come up with it. We will continue to look for it. But perhaps the member might want to continue.

A. Cowie: I recognize that forestry is a very broad subject and that it requires technical people, people with great engineering skill -- especially in this province -- and people who manage.

What I'm really getting at is: is the forester in charge of the forest? There is so much literature out today, and when you talk to the foresters.... Recognizing that you need biologists, silviculturists and experts in all fields of forestry, when it comes right down to it, you need a management approach.

The minister has mentioned multiple-use forestry. While we try to achieve that in some areas, it's necessary that one use dominates -- and I agree with that. In areas where you intend to actually concentrate on producing lumber or wood fibre, surely the forestry use and the growing of wood fibre is the predominant use.

The reason I want to know the number is because if you go to Sweden, for instance, or Norway or Switzerland.... I can remember going to Switzerland during university times. They have 400 foresters, 400 districts, and the forester is in charge of managing the land. He or she manages the water resources and the wildlife. They have to recommend whether or not trees in certain areas are cut for furniture or for lumber -- whatever. It's very carefully managed. There's a management approach. The management is not decided in some office somewhere in downtown Vancouver or in some head corporation or head department in Victoria. Most of the management decisions are made in the field.

The reason I asked the question about numbers is that I often hear that many of the decisions are made here in Victoria or in big corporations. The foresters manage the forests up to the point where the logging takes place; then the logger takes charge. The forester is given the job afterwards of cleaning up, seeing that the trees are planted and getting ready for the next generation.

The professional forester does not agree with that approach. The professional forester believes that he or she should be in charge of a forest district within certain policies that are set in Victoria. But that means you have to have foresters out there getting their boots dirty and knowing every area of a district. I hear from the professional foresters that they don't have that mandate.

Hon. D. Miller: You raised a couple of very interesting topics in that question. I suppose if you go back to early times, perhaps in European countries, I think maybe foresters started as gamekeepers, people that managed the forests for whoever happened to own them -- kings, lords or whoever -- and over time it has developed. It is a very honourable and very important profession. I'm somewhat dismayed, when I look at our universities, that we don't have more of a rush by young people to get into that field, because it's clearly -- more and more these days -- very important in terms of managing the environment.

I'm cognizant of the fact that foresters are not just managers of timber. Not to get too philosophical, I think that in the past, the mistake we made -- not we, to particularly criticize the previous administration over a good number of years -- was to adopt what I described as a laissez-faire attitude. I was always curious about the last government and its predecessors, in that they always seemed to run against the notion that government had a role in our society.

Anybody who's followed politics in this province for any number of years will recall the kinds of statements that back up what I'm saying. They attacked people who worked for the public service, and they generally viewed government as a problem that was interfering with business and entrepreneurs. They generally characterized government in that way, thereby doing a great disservice to the thousands of extremely qualified and dedicated men and women who worked for the public service on behalf of the public, which is their proper role and which is our role. It's our role as members of cabinet, clearly, to work for the public interest.

So I think that laissez-faire or anti-government attitude led to policies being developed that were really guided by the imperatives of industry, and that's not the way you make policy, in my view. The way you make 

[ Page 1445 ]

policy, if you have the responsibility, is to look at the public interest, and that's the approach I bring as a minister.

Foresters and those others.... I submit that the practice of forestry has become far more complex than it once was, and it is a constantly evolving issue: how we manage our forest land base and in fact all lands. It now requires the assistance of people with a range of academic qualifications in biology, water, wildlife, fisheries, etc. We try to ensure that we have the kind of balance available both within my ministry and in other ministries with that mandate.

You raised an interesting question with respect to integrated use, and it's the notion that areas would be managed predominantly for timber. We discussed it a little yesterday with respect to incremental silviculture. Other countries.... This is not completely accurate, but let me try to characterize. Sweden is often held up as a model of forest practices: that's how forestry should be practised, whether it's what they do on the land or in the industrial component. It's often held up as a model, and for a very good reason. There are some very good practices developed there, but we should also bear in mind that they developed them in Sweden following the complete elimination of the natural timber that existed. In other words, all of their old growth -- everything -- was denuded; it was harvested.

Members of the royal family were very prominent centuries ago in Sweden in promoting the concept that we have to manage our land base. We can't allow the needs of a single group -- in that case it was timber interests -- to simply harvest the timber. We've got to manage our land base. They quite consciously developed a strategy -- maybe it's got something to do with being social democrats -- to manage their land base. The government developed economic policies that allowed them to do that, which reinforces my notion that governments have a central role to play in planning for the public interest.

Nonetheless they have a managed forest in Sweden. I don't think they have very much of the original forest, if you like. It's virtually a totally managed forest, and they're now on third and fourth rotation, and they practise forestry very successfully over a very long period of time.

Other countries have chosen basically a separation of wilderness, or natural forests, and plantation-type forests. New Zealand is a good example. They have said: "We're not going to harvest the remaining wilderness that we have, because in New Zealand we have the capability of growing a radiata pine in about 30 years. We will have plantation forests, which we will plant and totally harvest for the wood. But it's a plantation, and we don't pretend that it has anything to do with a natural forest."

In British Columbia we are actually in a fairly unique position, and I talked about that yesterday. Because of the extent of our natural forests....

Interjection.

Hon. D. Miller: No, it's not an attempted filibuster; I'm trying to give what I think is a reasonable answer. I don't know if the member who asked the question has any complaint. If he does, I'd be quite prepared to sit down and try and answer a question from this Liberal over here, who hasn't asked an intelligent one yet.

We are in a relatively unique position. Despite some of the criticisms that you hear, we have vast areas of natural forest that have never been touched and have never been logged. We've already said that some of those.... In fact, you might want to check with the dean at UBC, Clark Binkley, who talks about 50 million hectares in B.C. that are de facto wilderness that will never be accessed.

[10:45]

Because we have very large original forests, we think that we can develop.... We are working very hard -- and I think with some success -- at developing a truly integrated resource approach. We think it's possible to manage timber extraction along with the protection of wildlife and their habitats and the protection of fisheries. We think it's necessary -- as we unveiled the other day -- to set aside a reasonable amount, and some significant areas, of old growth for issues such as biological diversity, wilderness and recreation, and those kinds of things. But as a philosophy we think that it's possible to develop that truly integrated approach on our forest land base in British Columbia.

It may be that in some areas, in some minor way, we may develop the plantation-style model, but there has certainly been no serious attempt to do that; in other words, to say this is a plantation, always will be and that's how we're going to manage it. Rather, we've chosen the integrated approach. We think it's possible to be successful in doing that.

A. Cowie: I'm going to avoid using botanical names. We could get into Pinus contorta var. contorta in the interior and Pinus contorta on the coast -- they're the same tree, only one's gnarly and one's not -- or whether we're going to harvest Thuja plicata, and all the others. We'll just stay with the normal species.

I'm glad the minister got into the dean of forestry at UBC because I am quite excited and ecstatic about some of the things he has told us more recently. It gets down to zoning, and I trust that we didn't talk about zoning for forests yesterday. The dean has said -- and I think I'm quoting him properly -- that if we had 27 percent of the land base in British Columbia zoned for intensive forestry, we could produce the same amount of timber fibre that we're producing today, if it was the prime use. Now that doesn't mean it can't be handled so that it wouldn't be visually attractive. You would use all the latest computer technology to see that it is properly done.

If the Ministry of Forests and the private companies -- which will cut and manage most of this lumber.... I recognize the government cannot do it all and doesn't want to do it all. Even in Sweden half the land is owned privately. If someone is not managing that land properly, then the government can step in and change the ownership. It is to that extent that they have control. We don't have to go to that degree of control at this time, but we do need overall policies.

[ Page 1446 ]

What I was getting at earlier with managing by area is that if you did get down to 27 percent of intensive forestry, just think what you've got. You then have 63 percent -- if 10 percent is used for other uses -- for the 50 million hectares that will never be cut anyway. We know that. You're never going to go up the high slopes. There are other areas that would be better used for such things as producing hydro power. You probably know this, but B.C. Hydro brings in $500 million a year just in water licence fees, whereas your ministry brings in around $655 million in timber licences. These other resources are very valuable, and one has to decide which is going to be the better resource.

Tourism is now the number two industry in this province. It's very important, as we drive up the Lillooet Valley to Kelowna or wherever, that we do not see huge scars across the hillsides. I know that the ministry is taking a leadership position in seeing that even clearcut logging is done in a much better way than it has been done in the past. I have to give the ministry a great deal of credit for this and for the use of computer analysis for determining where the cutting areas are. I'm not even going to question that, because I know your ministry is up on that. I know that wherever they go, for instance around Whistler, they're very careful to follow the contours, get around the back of the hillsides and that sort of thing, so I wouldn't want to criticize at all.

If you had foresters in charge of 27 percent of the land used very intensively, treated almost as if it was an agricultural crop, the rest of the province may well be managed for multiple use. By doing that, a great number of people in this province would just sigh a great relief and say: "Okay, we're going to get the same amount of timber, but we're going to allocate these lands for forestry." The rest of the land is going to be used for many other purposes. We can preserve it for other things that people have.... The rural romantics, who live in municipalities, are the people who vote, the people we react to -- sometimes fortunately and sometimes not so wisely -- and are the ones who are more vociferous about preserving land than the people who are out there managing and working in the forestry areas.

I'd just like the minister's view on whether or not he thinks it's practical that we could zone forest areas, if we're getting the same amount of wood fibre, and reduce our forest areas to 27 percent if the dean of forestry at UBC is correct.

Hon. D. Miller: First of all, I accept the premise. I don't dispute what you're saying, and I did.... We didn't talk about everything yesterday, but I cited the fact that Sweden, with a land base that is almost precisely half of British Columbia's, produces through intensive forestry -- incremental forestry, silviculture -- approximately the same annual harvest. I don't dispute it. I agree with you.

At this point, I have described the kind of view or philosophy that guides us; in other words the integrated approach. We have to look as well at what the impact would be on the land base. From an economic view, the highest and best use should generally be the preferred use. I think if you look in the book, on page 4 of the estimates, you will see water resources as bringing in $289 million, not the $500 million you suggested.

The other issue in terms of location is: what's the impact of your suggestion with respect to the communities around British Columbia? Presumably by taking 27 percent of the land base -- and I'm not sure if you mean 27 percent of the land base or of the forested land base, which is about 45 million hectares -- you would be taking the valley bottoms. Clearly, you'd want the best growing sites in terms of the economics of intensive... You would look for the best growing sites. The implication there might be that you would take all the valley bottoms. From a broader planning perspective, with respect to the issues I talked about such as wilderness, those are the most hotly contested.

I don't think that there is necessarily a simple means of doing what you suggest. I think that we will get more and more into incremental silviculture. It is a function of the marketplace; there's no question about it, without getting into all the details. Presumably capital has to see a return, or alternatively government has to be prepared to subsidize, to view that as a social cost. We could probably have an extensive discussion around that. I think there are a number of issues you need to look at in considering what you're proposing: the impact on the landscape, the fact that we would be using valley bottoms essentially, that they're very hotly contested, and the impact of that scenario on the communities around this province that rely on forestry for their economic well-being. CORE is certainly going to be looking at that issue. I think it's one of those ongoing issues with respect to planning that we need to constantly look at. We need to try to do the best work we can with economic modelling, the impacts on forestry, communities, valley bottoms and all the other factors I might not have mentioned here that go into making those kinds of decisions.

As it stands now, we've chosen the integrated approach, because we think we can be successful at it. We think it works. What's lacking perhaps is a greater degree of confidence in the ability of the managers to do things right. Part of that is simply the problem that we're dealing with a lot of hyperbole when it comes to land management issues. Sometimes it's difficult to counteract. Our attempt here in the ministry is to try to be accurate; to try to give out information in a non-challenging way. We don't intend to shoot any messengers. We don't intend to put people down for ideas they might have or to view them somehow as enemies. Instead, we've chosen to try to deal with the issues on the basis of the most accurate information we can possibly provide. It's indeed a challenge.

I appreciate the comments you made about the advancements that this ministry has made in some areas. As I've talked to people in the last six months, I've said: "Fair enough, I'm a politician, I'm subject to criticism and I'm quite prepared to deal with it." I think that people should be mindful that we do have these men and women who work in my ministry and other ministries who are out there trying to do their level best, and once in a while they need to hear some 

[ Page 1447 ]

positive words about what they're doing. I think all of us require that, and certainly people who are dealing with these very difficult issues require it perhaps more than most. I constantly urge the critics to.... Fair enough, be critical, but if you see things that are positive, I think you should also -- particularly to my staff, to people out in the district offices; I feel quite sensitive about this -- write them a letter, or write a letter to a local paper saying we are making some progress.

A. Cowie: I consider myself a positive critic. The other day, coming down on a plane from the interior, I happened to sit beside someone who manages liquor outlets, and we got into quite a discussion. In fact, I just finished writing him a letter complimenting him on his very positive approach to marketing within a government system. So I assure you, when we get to Forests, we'll do the same.

I'm going to close my part in this with a couple of questions, which I have basically been leading up to. We are going to see major restructuring in the forestry business in the next few years anyway, through the Owen commission or whatever analysis is going to be done. It won't happen overnight, but it's a business that, if given time, people can adjust, and not all people in the forest industry are necessarily going to have the same jobs in five or ten years. Forest industry workers know that, but they want some stability. The idea of managing within a smaller land base but more intensively would give them that stability based on a European model. You would have forest villages or forest centres that in perpetuity supposedly would be managed for forestry, and the marginal areas would be left for other uses -- or maybe occasionally thinning out or whatever. I'm not saying that in the rest of the province you don't also cut trees for timber use if it's the logical thing to do and it's properly managed.

[11:00]

One of the reasons I favour getting this stabilized, and I think the Owen commission.... I really compliment the government for starting the Owen commission. I'm looking forward to participating positively in that. In fact, we've met with Stephen Owen, and he intends to keep everybody informed, all parties of the House. But if one were to manage on a smaller land base more intensively, the government could start a spirit where we wouldn't have all these problems with situations like log-around, which I don't see as a satisfactory.... It's just a very temporary thing, and I think it's not really going to achieve the goals we want. I see that as a very temporary thing to get people off the government's back.

It would be unnecessary to cut on marginal slopes. There's another idea that has been promoted by some of the environmentalist groups, and I'd like the minister to comment on it, and then I'll not ask any more questions, at least today. If in fact the environmental groups feel very strongly that they could in fact manage the forest in a different way, such as the community forest concept, if they could go in and not clearcut.... I recognize that if you're going to cut on slopes, you have to clearcut. But if one could choose an alternative system and experiment with it -- in valley bottoms or more gentle land, or near the Walbran, for example -- to see if you can't produce the same amount of wood fibre.... What the forest companies need and what we need from a business point of view is not to cut back on the amount of actual wood fibre. I'm not debating that. In fact, all the forest companies really need is the wood, because they don't make that much money getting the wood out of the forests. Where they make money, which we can tax the companies on and where we can help the economy of this province, is by taking that wood and doing something with it. I'm not going to get into that now, as I know others talk about secondary use and other uses of wood, and the industrial side.

If we were to let a contract out -- through bid -- so that groups could have a few thousand acres, such as the 5,000 acres, I believe, that Duncan has.... If we were to create a few of those areas around the province and let the environmental groups bid and manage, not only would the minister get them off his back but we would have an experiment that would prove one way or another whether they could produce the same amount of wood in a more aesthetic and more multiple-use way -- which they talk about, and for which I tend to be sympathetic.

Hon. A. Edwards: I request leave to make an introduction.

Leave granted.

Hon. A. Edwards: I want the members here to join me in welcoming a visitor from Saskatchewan. The Minister of Energy and Mines, Mr. John Penner, is here with his ministerial assistant, Dave Degenstien. I hope you'll make them welcome today. They're here for an energy conference that is going on at the Conference Centre.

Hon. D. Miller: The member and I share some ideas. I'm certainly quite open to the last suggestion that he advanced. It would be interesting -- if it were possible and within the constraints that are imposed on me by legislation -- to consider seeing if that would be possible to do. There would have to be some requirements that the land in question would have to be managed for all the values, including timber. It would also be interesting to see what the economics of that kind of operation would be, because I suspect that is where you may really develop the biggest problem. However, I'm quite open to the suggestion you made.

Just very briefly on some of the questions you asked earlier -- we have 800 RPFs in the ministry. Some statistics on Sweden for all the members: in Sweden 23 million hectares are operable, and on that 23 million they grow plus or minus 80 million cubic metres. In British Columbia the total area is 94 million hectares, and 26 million hectares are considered operable. It's really just confirming.... I think I gave the same relative numbers. But those are the numbers to really bear out the contention you have stated -- and I agree with -- that through those kinds of management tech-

[ Page 1448 ]

niques, we can produce a heck of a lot more timber on our land base.

A. Cowie: I promised that was my last question, but now that I've got the numbers, I have one other question, and then I won't ask any more.

Of the 800 professional foresters, how many would be in the fire-fighting side of the forestry? I have to say -- and I've had some personal experience here -- that the fire-fighting people in this province do a fantastic job. I believe that 75 percent of forest fires are started by lightning; they're not started by campers and people creating mischief. I just wanted to know how many people were actually allocated to that particular very fine service that the province has.

Hon. D. Miller: I wasn't quite sure of your question. How many RPFs are in the fire suppression branch? We'll try and get that, but I do want to take the opportunity to second what you've said. We have, in my view, unabashed as it may be, the best fire suppression branch of a ministry of forests in the world. I have taken great delight in discussing our program with the branch head and the people who work for it. We take a great deal of pride, as do the people in the branch, in the work that they do. We now have quite a large unit crew comprised of native people throughout the province. Our capability in that area, I think, is unchallenged. I have met visitors from around the world who have travelled to British Columbia to look at what we do in terms of fire suppression. We are currently engaged in a cooperative arrangement with South Africa. It's kind of interesting because we had developed a video on our rapattack crews, our unit crews, which someone in South Africa saw. They tried to set up their own system. It didn't work, so they've come to us, and we've lent our expertise -- they're paying for it -- for them to develop similar capabilities. I've been surprised at some of the forestry jurisdictions that have visited British Columbia to learn more about what we do. So I'm very proud of that branch and the work they do.

They face some very interesting challenges. The forest-urban interface, which is becoming more of a problem in British Columbia out in our rural communities where people want to live in a rural setting -- yet they are really exposed to extreme danger. It's the kind of situation we've seen all too often on the newscasts about California, where forest fires devastate urban areas. We're working extremely hard to try to deal with that urban-forest interface. Our people have gone out and met with communities and advised them of preventive measures that they can take to reduce risks.

Perhaps I'm deviating somewhat, but in terms of environmental issues, you're right, most of the forest fires that start in this province are started by natural causes -- by lightning strikes -- and we interfere in a massive way with the environment by putting fires out. Nobody really thinks of it in those terms, but it's nonetheless true that with nature left unchecked, there would be fires throughout the province at various locations, wherever nature created them. That's nature's way of recreating. Of course, the consequences of a fire at any given time could be devastating to the wildlife in a particular area, but we all know that nature is harsh. We interfere in a massive way with the environment. We put fires out, and in a way, by doing that, we've allowed some fuel loading to build up in some of the critical urban forest areas which we have to be mindful of.

It's interesting to note that the Lasca Creek area, which is the scene of some controversy now, was totally denuded by fire 120 years ago, which is one of the reasons why the forest there is not, in environmental terms.... I'm not saying it's not a wonderful forest, but it's not particularly unique when we're looking for areas that might be candidates for preservation. When you look at Lasca, it is not particularly unique. It is a homogeneous 120-year-old forest that doesn't have -- relative to adjoining areas -- particularly high wildlife values or indeed forest values, given that it's homogeneous. But the fact that a forest fire went through there about 120 years ago and burned the whole valley, that's kind of a reverse twist on....

I'm very pleased you mentioned our fire suppression branch and the work they do. It's certainly something that all British Columbians should be proud of.

C. Serwa: May I have leave to make an introduction?

Leave granted.

C. Serwa: This morning I am very pleased to introduce 33 grade 7 students from the Kelowna Christian School to the Legislature. This particular school is an outstanding independent school in my constituency, with tremendous quality of staff and good students, striving again for excellence in education and teaching a very strong value system. The teacher accompanying the students is Ms. L. Armstrong, and the parents accompanying the students: Mr. J. Osborne, Mrs. J. Smith, Mr. S. MacKenzie and Mrs. E. Hone. Would the House please make this group welcome.

[M. Lord in the chair.]

D. Symons: A question to the minister regarding the Highway Industrial Act, or I think more recently it is the Resource Road Act. Initially this came under the Ministry of Transportation and Highways -- at least it was administered by them -- but I believe now the act allows each of the ministries involved to administer that portion of the act. So you are sort of responsible for the highways or the roadways that are built to service the forest industry specifically, and sometimes these are also used by the public for access either to communities or to fishing lakes or things of that sort.

I'm just wondering what steps you're taking in regard to that act to make sure that the roads are maintained in such a way that they will give access to the community as well as to the particular logging industry company involved.

[ Page 1449 ]

Hon. D. Miller: We've always been responsible for those forestry roads, and there are thousands of kilometres of forestry roads used extensively by British Columbians. Some obviously were developed primarily to access timber resources, but used frequently by a range of British Columbians for a variety of activities: hunting, fishing, wilderness activities, camping.

I referred yesterday to the recreation program run by my ministry: one of the great success stories in British Columbia in terms of a public program. I think our budget is in the $7 million range, if I'm not mistaken. We accommodate over 40 million visitors per year in those recreation sites around British Columbia. Now obviously a lot of those are British Columbians, but we have just a wonderful program. The access to a lot of those areas is through resource roads. We're responsible. We coordinate with Transportation and Highways. I haven't got the exact mileage to give you in terms of the road network. We're always coordinating their use to make sure that they are available for public use and to avoid the conflicts that may arise with respect to resource extractors.

[11:15]

If you drive in my part of the country, for example up in the area between Highway 37 and Highway 16, which has extensive logging roads, you've got to be on your toes, because coming around that corner might be a logging truck. People up there know how to do it. They're pretty good, but it's visitors. There are frequent visitors to that part of the country who need to be made aware of those things. We work in cooperation with forest companies and other government agencies to maintain that network. In some cases it has broken down. In some cases I'd love to have more money to improve some of those access roads, but we don't always get what we want.

D. Symons: There is provision in the act that allows for the minister or his appointee to appoint an inspecting engineer, who would then inspect the industrial roads and decide, either during their construction or during the course of their use, to make sure that they are maintained in such a way that there are safe roads for the companies involved and also for the public who may be using those. May I ask the minister how many inspectors during your term in office have been appointed in order to see that these roads do live up to the standards that are required by the act?

Hon. D. Miller: I'm sorry, I don't have that answer at the top of my head, and neither do either one of the staff people. We'll certainly get the answer for you.

W. Hurd: Continuing on some of the issues raised by the hon. member for Vancouver-Quilchena, in particular the issue of who is to plant the trees in the province and pay for them, there's a choice of either the government or the private sector. I was somewhat surprised to see in this morning's newspaper the headline: "Province's forest firms trapped in catch-22 as low harvest, replanting figures recorded." I was rather interested to note the minister's comment regarding the need to: "...encourage companies to put 'further investment into the land base....'" In light of the comments in Hansard yesterday regarding the levels of incremental silviculture that are ongoing in timber supply areas in the province and tree farm licences and there not being a dramatic difference between the two, I'm just wondering if he could amplify for the committee what he is planning in the way of encouragement to the private sector to plant trees and exercise incremental silviculture, not only in timber supply areas but also on tree-farm licences in the province.

Hon. D. Miller: I'd like to thank the member. Maybe he could send that clipping over. I'm so busy these days that I don't have time to read the newspaper anymore. Some people might count that as a mixed blessing.

It's a significant area. I've indicated that in the past there has not been policy developed around that topic despite the fact that it has been acknowledged as a requirement for quite a number of years. We're looking at options. It's a significant policy area. It ultimately requires some consultation with the public. I am encouraged somewhat. I indicated yesterday that the level of investment on licensed lands and even on private lands has been very low. If you contrast that with what Weyerhaeuser has done historically on their private lands in Washington State, we really haven't been doing enough.

It's interesting. Since some of the reductions announced by the chief forester, I've had at least three overtures that I consider significant from private companies with respect to the question of intensive silviculture. We're looking at the whole issue of policy around that. I'm aware of the need to develop it. I said yesterday -- and I will say it again today -- that I don't think it's something you can do overnight. There are some complexities that clearly require that we make sure we know what we're doing. The issue generally has been -- if I can simplify it -- one where private companies essentially are saying that if they make the investment, whatever it might be, they want to be in a position to harvest the timber they've grown. They don't want to pay any stumpage rates on it.

I think the Peel commission made some similar references. I don't think the policy is there. It's something we have to work on and develop. I'd be happy to listen to any suggestions the members opposite might have with respect to the development of that policy. Any ideas are certainly welcome.

S. O'Neill: I would like to go back a step to the recreational aspect of our forests and the policy toward using forestry roads that are no longer being actively used for forestry extraction, but are used extensively for recreation. I'm particularly concerned with the access to the Clearwater River.

A number of whitewater rafters use an old forestry road to access that river. I realize, in this time of constraint, that it's difficult for the ministry to keep up all roads. But is there some way of either keeping up roads that are used for recreation or to come to some 

[ Page 1450 ]

sort of joint agreement with recreational users to keep the roads open?

Hon. D. Miller: I did indicate that we endeavour to meet the demands of the various users of resource roads, and I indicated that there's some heavy use in terms of recreational activities. I'd be prepared to entertain some accommodation with respect to a user group and the ministry.

Like everyone, we'd like to do more, but we have the constraints of budget. I'd be happy to talk to the member about that particular issue. I don't have details here in front of me, but I'd be happy to talk to the member and see if there is some way, if there are outstanding issues in terms of maintenance, we could involve some of the recreational users in improving that situation.

D. Symons: I'd just like to follow along with the previous member who asked about the resource roads and that. Is there any coordination between the Highways ministry, the Forests ministry and Mines ministry on the use of these resource roads, and using the facilities of the Highways ministry as well, in order to approach the question you were asking about access on roads that are perhaps abandoned, and the company no longer wants to maintain them at its expense, so that these roads can be somehow maintained in a way to give access to the public? Do you coordinate your activities? Have you had meetings? Do you have a committee or group that gets together regularly to meet on these issues?

Hon. D. Miller: I'm not certain about a group that gets together regularly, but certainly we do coordinate, and we also do coordinate with private companies. In fact, I've got a situation in my own constituency where a road is no longer used primarily by a particular forest company, who'd be quite happy to have it in a passable state, but not a state that is acceptable to some of the recreational users. The ministry staff there have attempted to bring the various people together: the private interests and the recreational interests -- and there are a number of private interests -- to see if there can't be some kind of accommodation in terms of contributions.

We do coordinate with the private sector. We coordinate with other ministries, the Ministry of Transportation and Highways obviously being one of the lead ones. We're quite flexible. If you have a specific issue with respect to a particular resource road in a recreational situation, I'd be quite happy to sit down and talk to you about the details, and see if we can't assist in some way. But we do attempt to coordinate.

They are, quite seriously, an important part of the recreational and industrial activities in this province. There's a huge number of resource roads. A lot of our paved highways that we now drive on were originally resource roads. They have generally opened up a lot of British Columbia.

D. Symons: Just one final question on that, and it concerns liability. I assume that when a logging company has built a road and is using it actively it is liable for anything that happens there, rather than the government. What would be the case with these abandoned roads that might not be under the Highways ministry but still come under your ministry as being a logging road? Is there a liability to the government in the use of that road by private people, and how do we avoid that liability?

Hon. D. Miller: Just for the information of the House, we have approximately 32,000 kilometres of resource roads.

I'm not certain on your last question. I have recently imposed a requirement for some off-road vehicles to carry liability insurance, but I don't have an absolute response at this time.

L. Fox: I want to follow up on the resource road issue. While I agree with much of what the minister says in terms of recreational users and occasional users for other values of the forestry, I think the minister will concur that one of the major problems specifically with respect to forest roads.... I'm not too sure whether the 32,000 kilometres that you mentioned is in fact forest roads or the total resource road network, including Energy, Mines. Is it just the forest roads?

Hon. D. Miller: Actually, I'll give you a quick update on that number. I quoted 32,000. I've just received some recent information, and it's probably closer to 34.000 that are forest resource roads.

L. Fox: I thank the minister for clarifying that for me.

One of the major areas of dispute with respect to the total resource road network in the province, which includes Ministry of Energy, Mines and Petroleum Resources roads and some private mining roads allotted for specific purposes to a mining initiative, has been the coordination -- or the lack thereof -- of planning and maintenance of those respective roads.

I know the minister is aware of a resource road initiative spearheaded by the Ministry of Highways two years ago, and I am under the impression that the policy is still in review by the Ministry of Forests, the Ministry of Highways and the Ministry of Energy. Could the minister give me some idea as to the status of that policy, and whether or not it's continuing to move forward?

Hon. D. Miller: I am advised that it's still proceeding.

[11:30]

L. Fox: Is it continuing, with the support of your ministry, toward putting the total maintenance of all the resource roads under one umbrella?

Hon. D. Miller: No, I don't believe so. I talked earlier about the need for some questions on the requirement for coordination among ministries and beyond that with private sector or recreational interests. Really it's an ongoing program. We attempt to 

[ Page 1451 ]

deliver and maintain an adequate and constantly improving road network based primarily, as you can tell, on forest resource roads in order to allow public access to the wonders of British Columbia. It's an ongoing development program. We're cognizant of the need to coordinate between ministries, and we work with the public as well.

L. Fox: I'm a bit disappointed, Mr. Minister, that you wouldn't see it as worthwhile to coordinate the total maintenance and planning efforts of all these resource roads under one umbrella. Obviously your ministry would have continued input within that umbrella. As a northern resident and an individual, I am concerned that the only time the forestry sector maintains its roads is when they're in use. When they're not in use, even though they may be delivering a service to rural residents in remote areas or to guiding and hunting territories, they are not maintained. Specifically, during the winter months residents in a respective area may have had the benefit of their road being snowplowed for three or four years. Then all of a sudden, because the logging has moved from that segment to another segment of that particular TSA, they no longer have the benefit of having that road maintained. It is for these kinds of purposes that I see this initiative as being worthwhile. Perhaps you could comment on that.

Hon. D. Miller: It's always worthwhile to work together with other ministries to try to deal with the broader issues that come up. I can sympathize with individuals who may live in an area where they had guaranteed access when somebody was paying for the plowing of a road because of their own private interest of accessing timber, and then they are left to deal with the issue of how the road gets plowed, because the harvesting has moved to another location. I guess sometimes it's evolved to the extent that roads are designated as provincial roads. But clearly there has to be a demonstrated need. I would not like to put my ministry in a position where we simply had an open-ended situation, where every time that kind of situation occurred we would come in and assume responsibility for maintaining those roads. I would probably seriously deplete my budget in all those other areas that every other member thinks we should be spending more money on. We need to maintain a balance, and I'm sure the hon. member appreciates that.

We do try to maintain service. We try to accommodate interests, whether they be simply a residential or recreational interest, in conjunction with other ministries and in conjunction with the private sector. I'd have to say again that if there is a particular situation the member wants to draw to my attention, I would be more than happy to sit down with him and discuss it, and discuss the options that may be available. I hope you appreciate this: I can't simply stand up and say in every instance that comes to light that I'd be quite happy to commit additional resources from my ministry to solve that problem, because there is only so much and there are a lot of programs we have to deliver.

L. Fox: I will indeed make you aware of some of the areas of concern. So you might be a bit more enlightened, I draw your attention to the Nation River area north of Fort St. James, when there was what was called the North Road, an access which had been maintained historically by the Ministry of Highways. For whatever reason, through its incentive program several years back the Ministry of Forests allowed an additional forest road to be placed right alongside that existing road. Subsequently Highways pulled away from their road, and then those people only had access when Forests were working in their particular area. It made no sense to us why all that tax credit would have been given on the stumpage for the building of that road right next to an existing road and leaving the residents without any guaranteed access.

That's one instance. I could go on and name more. But perhaps so you understand the importance of it.... I wasn't trying to get a guarantee that everybody who moves out into the bush, on a forest road, should have access guaranteed forever. That is not the point. I understand the constraints. But I do believe that if we have more dialogue, you will perhaps understand some of the need for more of a planning process to take place with respect to these kinds of roads. I'm not sure that you have to comment on that. I just gave that by way of comment.

I would like to come to a program that was near and dear to my heart. It was brought in by the previous administration. I don't see it outlined in your estimates, and it concerns me a bit. It was called -- if I've got the title correct -- community forest program. It provided a maximum of $75,000 to a community to carry on an educational program within their community on forest issues. In Vanderhoof, while I was mayor, we took advantage of this. Because of the Municipal Act we could not take part in making an investment outside of our borders, but what we did do is go into partnership with the school board. We used the $75,000 to stimulate a grade 11 and 12 forestry program that has taken off and grown. It's now in three schools.

I note with some interest the minister's concern in the 1990 estimates debate about having an avenue to get into the school system to teach children the value of the forests. Yet I see this particular program no longer appears in your estimates. Perhaps the minister might comment on it.

Hon. D. Miller: My officials are trying to get some details. Hopefully they will do that while I'm on my feet. If not, we'll get an answer to you one way or the other.

Commenting on the road issue that you outlined, again I would be happy to look at it. I assume that this behaviour took place under the previous administration. I puzzled for some time over some of the things that happened under the previous administration, and I must confess I am spending a lot of time these days solving problems that were created under the previous administration. I realize you were not part of that. Again, if there's something we can do about the parallel road problem, we will take a look at it.

[ Page 1452 ]

I agree with you on the community forestry. There have been lots of good examples. The one that I was most familiar with and that I championed along with the participants was the Vancouver Island mayors' program, where funding was received -- some of it from federal sources -- that allowed employment opportunities. It was particularly targeted at young people who had been caught up in the social welfare system and aimed at providing them skills in a field that had employment opportunities. One of the really good side benefits was the work that was done on the forest land involved.

I don't have the numbers or details on the program, but I'll get them to you later in the day if we're still in estimates; if not, I'll advise you on that program by separate cover.

L. Fox: I have to ask the question -- with respect -- because of the previous answer that was given by the minister. He identified some messes and said that there were several. Perhaps he might enlighten me, as a new member of this House, on what changes he has made in the last six months within his ministry with respect to correcting some of these so-called mistakes or messes that he assumed.

Hon. D. Miller: I'd be delighted. Certainly one of the first issues I faced upon taking office was the issue of tree-farm licence transfers. The very large one that was then on my desk had an impact on Vancouver Island and the midcoast area. When I looked at it, the first thing that struck me was that there was no internal process to analyze the transfer -- from a number of points of view. I was aware of some of the shortcomings, certainly. For example, I was aware that there had never been a policy developed with respect to the degree of concentration that we might consider advisable as a matter of policy. There had never been any work done on that. I remember asking questions when I was the critic and getting rebuffed. So that was one element that I wanted to look at to see whether by allowing a transfer we were indeed increasing concentration and whether negative consequences might flow from that.

I wanted to look at the issue of whether or not the value of the Crown's assets was in fact being passed to private hands -- whether somebody was profiting through the sale of tenure, which would be completely undesirable, hon. member. We established a number of benchmarks that we now use to guide us on tenure transfer issues. Unfortunately, what I wasn't able to bring to bear on that one, because of time constraints, was the notion that the public needed to be involved. I was happy that we instituted, in addition to those other benchmarks which I measure these requests against, a public process on the second transfer that I had to deal with -- the southern portion of TFL 23. It was a very, very good one. I'm extremely proud of it. For the first time in this province, it involved elected MLAs, who were elected to actively consider issues within their constituency, regardless of whether they happen to be on the government side of the House or on the opposition side of the House. For the first time, we struck a committee under the auspices of my very able parliamentary secretary, the member for Prince George North, who has proven to be a very able person in forestry issues. That committee is headed by my parliamentary secretary and includes the MLAs for the four adjoining constituencies that were involved in the transfer of the tenure.

We have instituted for the first time in B.C. a public process on TFL transfers. For the first time in B.C. we have made public the transmittal letters that I send to the successful purchaser of assets from another company. We have started to retie the knot, if you like, that your party undid with respect to appurtenance clauses. We are saying that if a tenure is attached to a processing facility, that gives the Crown, the owners of the resource, some say in activities.

[11:45]

We've done a number of those kinds of things, which I consider to be making up serious deficiencies in policy that we inherited. We've established a core process, and I won't go on at length about that, but it has been well received. We've been proactive in terms of the need to lay before the people of British Columbia a plan as to how we can achieve that doubling of parks and wilderness space, and what are the important areas in British Columbia that we think, and that they think, need to be looked at in terms of set-asides, parks and wilderness and ecological reserves. My time is constantly occupied trying to fill some of those very important policy gaps, and also, quite frankly, just taking care of some of the real problems.

Members are aware that the Langford-Watts report has been released, with respect to tree-farm licence 51 and the forest licence in northwestern British Columbia. If they've read the media and the report, they're aware that we have serious problems with respect to the gap between industrial capacity and sustainable supply. If that member had followed the issue at all, I know he would share my view that that should never have been allowed to develop. We should never have allowed the processing infrastructure to develop. That process harvested 70 percent sawlog components in a timber supply area that generally had about a 50 percent sawlog component. We call it high-grading.

There are lots of problems, Mr. Member. I don't wish to be engaging in cheap politics. I was kind of being cute about those two roads up in your riding. I don't know what success you had on that particular issue with members of your own party when they were in government. I don't want to embarrass you about it. But there are a lot of problems. I don't think that anybody in this province has a monopoly on virtue. I'm putting in lots of hours dealing with problems that have been there for some time. I guess what I'm saying is that they were developed by your party when they were the government. That's all I meant by it.

L. Fox: I thank the minister for his lesson in politics. I should grow to aspire to the same level, given another three to four years.

With respect to those two roads, I have to come back and suggest that a process that your government is scrapping helped to identify the need for resource road 

[ Page 1453 ]

planning and a resource road maintenance umbrella. In fact, that was a grass-roots initiative under the Nechako development region, and it was achieving some success under the previous administration. But it appears from your comments today that you want no part of it. That's one area where we, as grass-roots politicians, were able to influence the senior level of government. I would hope that you would see that as a worthwhile process.

You mentioned a study that I am extremely aware of. In fact, I wrote a letter to the Minister of Aboriginal Affairs, and I believe I copied your ministry, as well as the Premier, on the issue of the fees paid to that commission -- I forget the exact title of it, but certainly Mr. Watts was the end of it -- to tell you what was already known in that segment of the province. Certainly those of us who lived there well understood that when Westar built their new sawmill, they were going to close the old facility. Only two or three years previously they had given up a tenure on some wood. As I recall, it was up in the Nass area which they had.... Pardon me?

An Hon. Member: The North Kalum.

L. Fox: The North Kalum area. They had let that area go back, because they weren't about to perform, or whatever the reason was -- I just forget that at this time. But it was well understood by those of us who lived in the communities when Westar built that new facility that they were going to close the old facility. I believe it was cheap politics on Westar's behalf when they came back and suggested that the only reason they had to close that antiquated mill was that they no longer had wood, because only a few years earlier they had given up tenure to the wood that probably would have been able to serve that facility.

Coming back to that report that your government so conveniently found two supporters to chair, and paid them an exorbitant fee of $125 a hour over a 60-day period, I believe, to a maximum of eight hours a day, to tell the government what was already known in that area.... It was certainly known by your staff.

Now that I've commented on that, let me get back.... You want to respond.

Hon. D. Miller: I really am glad, hon. member, that you've been able to advise me that your party developed a new policy -- it must have been a good one; I'm sure they worked long and hard on it -- that allowed them to discover after the roads were built that you had two roads running side by side to the same place. I commend them on the progress they made in terms of that policy. I don't know how difficult it was to discover that there were two roads out there. I don't know how close they are. Maybe somebody thought they were developing a superhighway. Maybe they thought the ghost of P.A. Gaglardi somehow divined that these two roads should be built side by side, off into the bush, leaving this current member with the unfortunate difficult problem of having two roads going virtually nowhere and not being maintained.

I've already said to the hon. member, and I repeat with all sincerity: I would be happy to sit with you and see if we can't work out some solution to this horrendous problem that was created before my time. I don't shirk my responsibilities. I'm certainly glad the member has advised me that his party when in office did have a good program where they could go out and find after the fact where two roads had been built side by side in the same place. It may be that we have discarded that policy, and the reason may be obvious to that member.

I could talk at some length about the Westar situation. I'd just caution that member: if it's your view that there are some simple solutions to that particular problem, then I'd like to disabuse you of that right now.

[E. Barnes in the chair.]

I don't know if you were hinting into the patronage wind or not, but I don't know Mr. Langford. I never met him before I engaged him. The reason I engaged Mr. Langford, who has some experience in this forest industry, is that your previous minister of forests, Mr. Richmond, had also engaged him to look at the same issue. It seemed to be extremely worthwhile to be able to use the expertise that Mr. Langford had accumulated on that particular situation and to pair him with Mr. Watts, who has proven to be an extremely intelligent and capable individual in assisting my ministry to deal with this very difficult issue, to see if they could come up with some plan that would allow a resolution of the issue. Not everyone agrees that the report provides that, but in the main most people do. And I do. So I think it's been well worth the cost, hon member.

We are not by any means near to achieving a resolution yet. We are working on it constantly. I and my staff have devoted countless hours to the issue. We will continue to do that, because we want to find a resolution that accommodates the interests of people in your constituency and adjoining constituencies. We don't take the attitude, as the former member for Skeena did when he visited Hazelton.... They said to him: "Look, this situation is going to develop. There's too much milling capacity and not enough timber." He said to the people in that northwestern part of the province, that great part of the province I know quite well: "The problem with people up here is that they don't want to move to take a job." And look what happened to him. He just heaped abuse on the people he's supposed to be representing. He showed a complete lack of sensitivity to the aboriginal communities that have been there for thousands of years.

I'm trying to solve that problem, and it's not an easy one. If you want to keep asking me about problems we've got because your party, when in power, didn't develop proper policies, keep asking, because I'll keep telling you what they are and what we're trying to do to resolve them. I'll go back and say that there is a role for all members of this House in dealing with some of these very difficult issues. I didn't mean to start out taking cheap shots; I thought it was a rather cute shot. I'm quite prepared to trade them if you want to do it.

Finally, I'd like to respond to the question on community forestry. There has been a reduction in the budget. We've allocated $4 million this year in my silviculture budget. One of the changed policies is that 

[ Page 1454 ]

there no longer needs to be a contribution from communities. There's been somewhat of a reduction in the policy, but I do believe -- and I agree with you -- that it was a good one. Hopefully in future years we will be able to acquire more resources to expand that program and work its positive benefits in many corners of the province.

Having concluded that series of questions, I would move that the committee rise, report progress and ask leave to sit again.

The House resumed; the Speaker in the chair.

Committee of Supply B, having reported progress, was granted leave to sit again.

Committee of Supply A, having reported progress, was granted leave to sit again.

Hon. G. Clark moved adjournment of the House.

Motion approved.

The House adjourned at 11:58 a.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The House in Committee of Supply A; D. Streifel in the chair.

The committee met at 10:22 a.m.

ESTIMATES: MINISTRY OF
ECONOMIC DEVELOPMENT,
SMALL BUSINESS AND TRADE

On vote 22: minister's office, $326,000.

Hon. D. Zirnhelt: Because I know your questions will require short answers, I thought I would give you an overview of the ministry's activities. It will also give you a chance to reflect a bit on the wonderful job that we intend to do, and are doing, in my ministry.

Let me start by saying that the mandate of this ministry is the pursuit of a number of goals in all regions of the province. If I could find page 1, I'd read the goals. I now have page 1.

Before I go into this, I'd like to introduce the officials that I have here: Ian McKinnon, the deputy minister; Chris Nelson, the assistant deputy minister of the business division; Lorne Sivertson, ADM of the economic development division; Colin Smith, ADM of the management services division; Brian Dolsen, the senior finance officer; Ardath Paxton-Mann, the executive director of strategic services; and Barry Smith, vice-president of finance and administration of the B.C. Pavilion Corporation. I'd like to thank these officials and all who work with them for preparing for today. An extensive amount of work goes into anticipating questions, so that we can expedite the business of the House by having answers prepared. I really appreciate their professionalism in preparing for this session today.

First of all, the ministry's mandate. I'd like to say that the government's overall economic policy objective is to promote a dynamic economy which would create stable, well-paying jobs within healthy communities, and a superior standard of living and quality of life, within the context of a sustainable natural environment throughout the province. To achieve this objective we need a number of things: competitive resource industries; further processing of, and adding value to, our resource commodities; strong knowledge-based industries; and a healthy small business sector. The mandate of this ministry is the pursuit of these goals in all regions. It is important to recognize that we must pursue these goals not just for the provincial economy, but for all regions.

In the pursuit of these goals, the ministry is organizing its resources to concentrate on initiatives which will attract and facilitate desirable investment, diversify and increase exports, facilitate necessary adjustments in the province's traditional industries and in the communities dependent on those industries, increase access to capital by both small businesses and knowledge-based industries, strengthen services available to small businesses and communities, and increase the participation of women and aboriginal people in the economy.

In today's difficult times, all of us must tighten our belts, and we must do more with less. In the case of my ministry, our budget is less than in the previous fiscal year. However, as I said during my response to the provincial budget, the reduction in my ministry's budget is not as large as would appear in the blue book. In absolute terms, my ministry's budget for this fiscal year is not 51 percent lower than the previous year, but in effect approximately 2 percent lower, because we provided an $86.8 million one-time increase in reserves for potentially doubtful loan guarantees and investments made by the previous government. That was booked against last year's estimates.

While I would have preferred no cuts, I recognize that prudence was necessary in order to help return the province to fiscal stability. Wherever we speak, we are getting feedback to that effect. People are pleased with the deficit reduction measures, and that is the largest single contribution we could make to revitalizing the provincial economy.

Given the constrained fiscal and staff resources available to this ministry and the economic challenges we face, it's imperative that the ministry's initiatives be coordinated and complementary not only within the ministry, but also with other agencies and government ministries. To achieve this, the ministry is preparing a strategy to guide its economic development initiatives. This will involve the development of initiatives and plans which are specific to certain sectors, as well as initiatives which are generally applicable. Some of the sectors we are looking at are biotechnology, telecommunications, value-added wood products, specialized elec-

[ Page 1455 ]

tronics and software, environmental industries and mineral processing. The sector initiatives could involve: the identification, evaluation and promotion of investment and trade opportunities; regulatory and fiscal policy changes; the provision of assistance to facilitate strategic multilateral projects; and the use of public agency procurement as an instrument to facilitate development.

At the broader level, my ministry is coordinating the development of strategies to deal with issues such as cross-border shopping, interprovincial trade barriers and procurement practices. In addition, as part of our economic strategy, we are also working to restructure regional initiatives. We are currently reassessing the approach to regional development to make it more effective and more responsive to the needs of local communities. This involves building on the successes of existing programs, while at the same time looking at new ways of doing business.

Mr. Chair, we believe that local and community economic development must take place in a socially and environmentally responsible manner. My ministry is committed to assisting communities to build and implement local economic development strategies which will create jobs and enhance diversification. At the same time, we are giving careful consideration to the role that the provincial government should play in providing financial assistance to businesses. As members know, the independent financial audit concluded that the previous government's financial assistance programs had significant shortcomings. These are presently being addressed, and I expect to be able to announce government plans for financial assistance programs later this year. However, that is subject to a satisfactory conclusion that we can overcome the shortcomings.

[10:30]

I also want to stress that the new initiative will be developed in partnership and consultation with key stakeholders. We accomplish this through, for example, the Premier's Summit on Trade and Economic Opportunity, where there is input from community and business leaders as well as labour. We will be holding conferences and workshops with people concerned with long-term sustainable economic growth. We are in the process of preparing our strategy and plans.

I want to make it clear that my ministry is not, and will not be, standing still. We will be continuing with a number of existing successful programs and implementing some new programs that have already been announced. These are consistent with the framework that I've just outlined. A key part of my ministry's mandate involves providing, on a provincewide basis, fair and equitable access to the programs and services offered by the provincial government. To that end we have placed a high priority on maintaining services provided by our provincewide network of 60 government agents, offices and access centres. While my overall budget may have decreased, given the importance of government agents and access centres, I am pleased to tell members that the budget for government agents has been increased by 3.1 percent to just under $24 million. This represents 27 percent of the ministry's voted appropriations for the fiscal year. Government agents ensure that local residents and regions of the province have a quick convenient access to services that they require most frequently from government. These offices and centres are widely used and extremely popular. According to a recent survey, 85 percent of our government agents' customers said the service they received was good to excellent. The access to services provided by government agents is particularly important for areas outside the province's major metropolitan areas. By providing local access to necessary services, government agents also play an important role in sustaining economic development activity. As members know, these areas are also the ones that have to bear the brunt of the impact of the recent recession in British Columbia.

Also playing an important role in minimizing the impact of the recent international recession, especially in the non-metropolitan areas of the province, is the Job Protection Commission. My ministry has increased the funding set aside for this program by $240,000 to a total of $1 million, which is an increase of 31 percent in this fiscal year. Funding for this program is contained within the business development division. The Job Protection Commission is charged with the responsibility of assisting businesses in developing strategies to overcome temporary or transitional difficulties, particularly businesses in the resource sectors. Since its opening in March 1991, the commission has recommended $20.5 million in financing for 20 businesses experiencing short-term difficulties, thereby preserving 1,515 jobs. For example, 125 employees at Fibreco Pulp in Taylor were able to keep their jobs thanks to the assistance we provided under the recommendation of the job protection commissioner, Doug Kerley. The commission is playing a positive role in minimizing short-term downturns that have beset otherwise profitable and vibrant businesses and communities. Another example is Pemberton.

Mr. Chair, the government's commitment to meeting the needs of resource-dependent communities, especially in single-industry towns, is exemplified by the establishment of the $15 million Natural Resource Community Fund. We know that many communities, particularly those dependent on resources, are facing the challenges associated with business shutdowns or major downsizing. As I mentioned in the House during the second reading of Bill 11 last week, this Natural Resource Community Fund provides a stable source of funding to assist resource-dependent communities to plan for and adjust to the severe economic dislocation associated with business shutdowns or major downsizing. The fund will be able to provide support for community adjustment planning, program partnerships between all levels of government, including the federal government, training and skill development to assist both directly and indirectly affected workers to adjust to labour market changes, worker relocation and, if necessary, local government operating costs. Because this is a proactive fund, it will enable communities to better plan their economic futures and avoid the economic pitfalls that far too often beset resource-dependent communities.

[ Page 1456 ]

Hand in hand with the Natural Resource Community Fund, I would like to underline that the ministry is continuing to provide funding for 74 separate economic development commissions. We've concentrated our efforts on economic development commissions which are outside the major metropolitan areas, because that's where the funding needs to be focused. These commissions will provide some of the infrastructure to enable us to conduct the planning and training activities outlined in the Natural Resource Community Fund.

An existing program which is specifically designed to improve the quality in the non-metropolitan areas of the province is the communications grants program. For 1992-93, Economic Development has budgeted $1.6 million in grants for this program. In 1991-92, $1 million in grants was disbursed, and this assisted over 10,000 people in some 50 remote communities to gain access to the Knowledge Network and other television signals.

In addition to the programs and services I've already discussed, my ministry is continuing to provide services which create new economic opportunities by fostering the growth of the small business sector. Overall the ministry has allotted $3.5 million for providing services to small business. This is down, incidentally, from $3.8 million.

Small business, as members know, is responsible for upwards of 85 percent of all new jobs in B.C. Over 90 percent of all businesses in British Columbia are small businesses, according to the small business task force report. About 25 percent of the total workforce is employed in this sector, and we are especially committed to fostering the growth of value-added and knowledge-intensive emerging industries, such as environmental technologies, biotechnology and specialized electronics. Small businesses play a prominent role in many of these industries; it is where the whole small business community thrives.

One of our most successful and popular services for small business is the home-based business program. Under it, my ministry sponsors workshops on starting a home-based business, as well as providing advice on how to market a home-based business product or service. Each year 15,000 British Columbians start a home-based business. Last year 50 seminars were delivered to 1,200 participants in communities around the province. As part of the home-based business program, we cosponsor the B.C. Creative Arts Show, which provides a forum for home-based business people to market their products. In the last fiscal year two B.C. Creative Arts Shows were held. My ministry helped sponsor 250 first-time participants, who generated $1.2 million in sales.

I'm also pleased to tell this committee that British Columbia recently hosted the first-ever national home-based business conference. It was held in New Westminster and attracted over 450 participants from across Canada, as well as Texas, Illinois, Washington and Oregon. This conference, which I spoke at, was really one of the most energized conferences I've ever attended. These people knew that they were on a wave of job and business creation and were most pleased that B.C. was taking the leadership in the country on this. I'm pleased to note that our effort here, which is very modest in terms of resources expended, has attracted attention from across the country, and we're the model program in this respect.

Our ministry also provides small businesses with the services of the business information centres. This is a partnership initiative with chambers of commerce, who work with the provincial government to provide information services to businesses in communities throughout British Columbia. Some 85 chambers of commerce are part of the BIC program. In 1991-92, business information centres handled approximately 80,000 business inquiries about licensing regulation, cash flow, how to prepare a briefing plan, and others. I suspect they also helped people in preparing business plans, although that's not what the note says.

When it comes to small business, one of the areas where my ministry is concentrating its efforts is in responding to the needs of women entrepreneurs. We've appointed a full-time businesswomen's advocate to help ensure that the programs and services offered are sensitive to the particular needs of women in business or aspiring to be in business. During the last fiscal year, in conjunction with the Federal Business Development Bank and the Ministry of Women's Equality, the ministry delivered seven regional Business Success for Women conferences. These conferences, which provide information and advice specifically geared to the needs of women, were attended by over 1,000 participants. Recently we established an advisory committee that is providing expertise and strategic input to our businesswomen's advocate.

Another of our important services to business is the investment matching program, which introduces entrepreneurs to potential investors. In 1991-92, 480 entrepreneurs were introduced to prospective investors. Initiatives like the recently announced Working Opportunity Fund ensure that small businesses will continue to be a major economic force in British Columbia's economic development. This fund, which is a result of a partnership between business, labour and government, will strengthen our province's economy by providing opportunities for British Columbia workers to invest in the province's economic future. To date the fund has raised over $7.4 million, which will benefit small business people throughout the province. The fund will promote diversification of the province's economy by investing in small businesses which are involved in manufacturing and processing, research and development, environmental and cultural industries, film and tourism. Over the next five to seven years the fund will raise about $100 million in equity capital for investment. It is expected to create and preserve between 5,000 and 10,000 jobs. In the ministry's '92-93 budget, $400,000 has been earmarked to support the launch of this fund.

Aside from the Working Opportunity Fund, we provide two other important sources of equity capital for small business. Out of this ministry's equity capital programs, investment by British Columbia businesses is encouraged by providing an incentive to the private sector through a provincial tax credit equal to 30 percent of the amount invested. I'm pleased to report that in '91-92, venture capital corporations raised 

[ Page 1457 ]

approximately $26 million in equity. In addition, during the last fiscal year, our employee investment programs authorized nine new employee share ownership plans, covering some 4,500 employees, with authorization to raise $11.2 million in equity capital. For '92-93, $2.7 million has been allotted for the administration of this equity capital program -- up 1.9 percent.

Turning to the Trade side of my ministry, I can inform the House that we are involved in a number of key initiatives. For instance, we are playing a vital role in monitoring the North American free trade negotiations. We are also representing British Columbia's interest in the Uruguay round of multilateral trade negotiations. As well, my ministry is playing a key role in British Columbia's efforts to fight the 14.48 percent American countervail on our softwood lumber. Over $1 million has been earmarked in the ministry's budget to fight the countervail. If British Columbia were to lose, we would certainly have to question our whole trade dealings with the United States.

As part of our efforts to enhance our foreign investment potential, my ministry also supports initiatives such as the International Financial Centre Vancouver Society, the International Commercial Arbitration Centre and the International Maritime Centre. This year we are providing $850,000 for these initiatives.

Our ten trade offices have played an active part in promoting our province internationally, in promoting trade and in securing new corporate investment. These offices are strategically located in markets that have strong commercial and cultural ties to British Columbia. During the past year the efforts of our representatives in the offices resulted in close to 4,700 business contacts, which resulted in securing $120 million in investment in the province as well as supporting the realization of $47 million in export sales. In this fiscal year these trade offices and the domestic support for their operations have a budget of $6.5 million, which is down slightly from $7 million. We are just asking them to do more with less. As part of our trade promotion efforts, I am pleased to report that last November's B.C. Week in Japan has resulted in initial sales of over $3.5 million and the establishment of over 15 new distributor plants.

As we are a trading province, we recognize that the key to success lies in our international competitiveness. This is especially important in the present climate. In today's interdependent economy, capital knows no national boundaries. To attract capital and investment, B.C. must be competitive not only with other Canadian provinces, but with our neighbours south of the line, especially along the Pacific coast. I've asked my ministry to compare B.C.'s competitive position with our neighbours' in Washington, Oregon and California. Members may recall that earlier in this session I provided the House with the report that shows that, when it comes to doing business, B.C. is competitive with the states of Washington, Oregon and California, and we intend to keep it that way.

[10:45]

At the same time, we in this government recognize that capital, in terms of dollars and cents, is only one part of the competitive equation. Another important part is social capital. Increasingly, investment decisions are based on what we call grey matter -- in other words, people's skills and abilities. It is critical that we develop the full potential of all British Columbians. Some of you may have heard in the news this morning of the release of an Economic Council report which suggests that there are billions of dollars lost in productivity because we aren't graduating as many people as we should. The loss of skills and opportunities, both on a personal level and what it means nationally, is increasingly significant, and we will have to redouble our efforts in all training areas related to advancing our economic agenda.

In conclusion, I'm pleased to say that the combined effort and teamwork of this new ministry is allowing us to make a significant contribution to the establishment of an environment conducive to a dynamic economy in B.C. I'm looking forward to attending the Western Premiers' Conference with the Premier later this week at 108 Mile House. I'm also looking forward to the Premiers' Summit on Trade and Economic Opportunity, which will take place in June at Pearson College. My ministry is dedicated to service excellence and the principles of employment equity as we address the needs of our many client groups. In partnership with all British Columbians, the ministry will work to maximize the potential of both our social and our economic capital, and in turn create a stronger and more prosperous British Columbia.

L. Stephens: I would like to thank the minister for his opening remarks, and for trying to shed a little more light on what the Ministry of Economic Development, Small Business and Trade is going to be doing in the next year and in years to come. With your opening remarks, you did give us a lot of detail on what your ministry is preparing to do, and there will not be as many questions, I don't think, as we had initially planned. I thank you for that too.

A lot of the programs the ministry has developed over the years continue to be in suspension, and many small business people are waiting to hear whether or not the government is going to do anything to help them out in those areas. There's a lot of indication that there's either a paralysis or an unwillingness to make decisions on some of the programs that have been in suspension. We'll talk a little more about those later on.

Some of the projects and developments continue to be delayed while they've been studied to death. I think tax policies that discourage investment in economic growth will continue to be brought in by this government. We'll talk a bit about those as well.

There are two directions that we've not seen much coming out of this ministry about: cross-border shopping and businesses locating south of the border. Cross-border shopping is estimated to cost the economy of British Columbia between $750 million and $1.5 billion annually. The Minister of Agriculture, Fisheries and Food has claimed that this loss represents about 11,000 British Columbia jobs.

Another big issue is the locating of B.C. businesses south of the border or in other countries because of what seems to be a more attractive business environ-

[ Page 1458 ]

ment. The focus of the study done by the economic development group in Whatcom County, which includes Blaine and Bellingham, was manufacturing companies. This group found that in the last number of years 45 Canadian companies set up shop in Whatcom County, investing $57 million and helping to create 800 jobs for the citizens of Whatcom County. Again, the focus was on manufacturing, which is what we have to encourage in British Columbia if we're interested in diversifying the economy away from our reliance on natural resources.

There are also jobs going south of the border. We also hear forestry sector figures being raised: the 45 percent difference in wage and benefit costs between British Columbia and the American Pacific Northwest.

In the mining sector we hear about increasing investment by British Columbia mining companies in places like Chile and Brazil. On one hand we can encourage the internationalization of B.C. businesses. We all recognize that the economy is increasingly going global and that if companies are to survive, they have to reach economies of scale and realize the potential for profits wherever they are. On the other hand, increasing internationalization also means that money is not being invested in British Columbia. It means that there are not going to be well-paying jobs in the interior and the northwest of our province and that there are not going to be tax and mineral revenues flowing into the provincial coffers.

I mention all this, Mr. Chairman, because I want to make the point that the soul-searching that is going on means that there is not a strong ministry within government pushing the case for economic development. I believe that if this government had given much thought to the province's economy, we'd have seen more action earlier in economic development.

I'd just like to start the questioning by asking the minister what he thinks the appropriate role is for government in the economy.

Hon. D. Zirnhelt: The appropriate role is to encourage the climate, ensure that there is infrastructure, ensure that there is the social capital necessary and, where necessary, fill the gaps in the private sector, where it can do that with minimal cost to the taxpayer.

L. Stephens: I'd like to go through this relatively quickly, so we'll take it as you began. We'll start with government agents. With the cut in the budget to regional development, will government agents be asked to take on more responsibilities? What would those be?

Hon. D. Zirnhelt: I'll be perfectly candid with you. Government agents were not established as regional economic advisers. Essentially, the way we conceive of their role is that they are there to provide government services and information that a business might need. You can't expect every government agent to assist a company, for example, in developing a business plan. They aren't experts, but they certainly can refer people to others.

With the minimal cutbacks to regional economic and local economic development commissions, we expect that we'll just have to try harder to ensure that those commissions that exist are providing services. If the government agents can help, there's no question that they will get help there. A government agent would be very quick to phone some of our industry or sectoral experts here in Victoria in order to get information. It's our determination that resources will be there to serve the needs of business. I don't think we'll see a rapid change in the role of government agents, although I think as a long-term goal we should investigate the possibility of that service evolving to have considerable economic focus, so that it is managing government services in the area in a way that maximizes support to business.

L. Stephens: Management services -- the grants and contributions to organizations to support special projects. Do you have some thoughts on that? Do you have something that your ministry is planning?

Hon. D. Zirnhelt: Let me take that on notice, and later this morning I'll get a fuller answer than I'm able to give you on short notice.

L. Stephens: In the special warrants, if I remember correctly, there were some operating losses at the B.C. Pavilion Corporation written off. Has provision been made in this year's budget for the corporation to avoid that kind of thing again?

Hon. D. Zirnhelt: Our funding is less than last year. We wrote off a number of debts related to capital last year, and we suggested that they should reduce their dependency on government. We've reduced it to $340,000 this year. I think the long-term objective would be to put any Crown like this on a businesslike footing, to the greatest extent possible. In the end we'd like to see them run without government subsidy, but I'm not going to promise that we will see a complete weaning from government subsidy. It had to do with a number of projects, such as the Transportation Museum, which was very costly. In the past, I think this agency was used as a catch-all for a number of projects that needed bailing out and better business management. It's our determination, with the advent of the Crown corporations secretariat, to give some assistance in getting them on track if they aren't. I'm pleased to say that to date this corporation has responded in a very positive way to the new government's initiative to wean it from its dependency. Just as an aside, let me say that 90 percent of PavCo's revenue is non-government. They are taking considerable revenue, and we're hoping that that will increase and their dependency decrease.

L. Stephens: I see that the budget has gone down about 15 percent for the management services division. Could you share with us where these cuts are happening?

Hon. D. Zirnhelt: I can go through the 15 percent for you. We reduced 3.3 percent on salaries. Under supplementary salary costs there's a 15 percent.... It's a total change of minus 23.9 percent. Employee benefits 

[ Page 1459 ]

are down 1.83 percent. Under total salaries and benefits we're down 3.22 percent. Under travel, we have reduced it by 12.98 percent. Professional services are down 22.76 percent. Information operating costs are actually up 3.56 percent. Office and business expenses are down 29.6 percent. Information, advertising and publications is down 57 percent. Materials and supplies are up slightly by 0.17 percent, and building is down 5.98 percent.

Under other operating costs, data and word processing systems are down 47 percent; office furniture and equipment are down 30 percent; machinery, equipment and vehicles have increased by 42 percent. The average under total assets acquisition is down 45 percent. Grants are down 9.96 percent. Total other expenditures are down 37 percent. If you add all those pluses and minuses, on the bottom line total management services were down 15.1 percent.

I'd like to say that this is consistent with our asking all agencies of government to find management efficiencies within the existing structures. That was a campaign commitment we made, and our target was anywhere from 2 to 4 percent. This agency has achieved considerable savings, and we're really pleased about that.

L. Stephens: One area, vehicles, was up 42 percent. Could you explain that a bit more?

[11:00]

Hon. D. Zirnhelt: I'll get the actual details, but I wanted to say that it's a small amount. It's up from $4,900 last year to $7,069. We asked for four tires instead of three on the vehicle.

L. Stephens: In special warrants we talked a little about people or companies under contract to the ministry. Do you have any contracts in management services or any of the other divisions of the ministry with individuals who are not ministry employees?

Hon. D. Zirnhelt: Not as employees -- no. There are employees and there are contractors....

L. Stephens: I was asking about contracting.

Hon. D. Zirnhelt: We have some people in systems contracted through B.C. Systems Corporation.

L. Stephens: We'll leave that one and go on to economic development. Could you share with us some of the changes, programs or direction that the ministry will be undertaking to address some of the provincial and continental changes we're seeing, along with the free trade agreement and a few other pressures that are on our economy at this time?

Hon. D. Zirnhelt: I really knew the answer before I turned to my officials, but I just wanted to confirm that. We don't mind saying that the adjustment of the industrial strategy that I outlined in my remarks, which concentrates on certain sectors of the economy, is part of what we're doing.

You asked for changes. We have not tied up all the changes. We're waiting for the Premier's summit, because we want a high degree of consensus among communities, labour and business as to where we want to take the economy. The reason the summit is important is that we want to use people who are actually managing pieces of the economy and operating in it to give us direction.

We have been analyzing in this division some of the changes in commodity prices. I can use the example of mining, which I think was a subject of question period yesterday. Independent of what this government has done by way of marginal changes in the tax system, mining was fleeing the province anyway. The reason capital is fleeing is that there's richer ore in other places. In other words, they can make more money. The answer, by way of industrial strategy, would be to cut resource rent or slash taxes to nothing. To do that means a major hole in.... It means advancing the deficit for a return down the line.

I was sitting with mine managers in the province, and a lot of those mines have a limited life. We know that when they start. We are interested in encouraging mining, and one of the ways that we would like to do that is through encouraging, for example, the establishment of a copper smelter. My ministry, under the previous government, had a feasibility study done for a copper smelter, and that was then available for people to take around the world and for investors to look at. In fact, there are a number of proposals for that.

When you talk about our mining strategy, I think that rather than always increasing the amount of ore and minerals taken out, we have to find ways to add value. We are looking at the value-added parts of the mining industry. For example, we think the copper industry will make copper more viable as a commodity to this province if we can process it here. There are a number of things that make copper smelting very attractive. We have inexpensive hydro power which would, by the way, offset any of the marginal changes in taxation. In terms of B.C. as a place to do value-added business in mining, it's still a very attractive place. We have some good seaports and highly skilled manpower.

The division is carrying on with those areas, which won't change from one government to the other. Our competitiveness doesn't change overnight. We are working with our strengths, and right now if there's a weakness, it's in world commodity prices. I've used mining as an example. The biggest single factor, independent of what we have done or may do here, is that we are still in a difficult situation with a big slide in world commodity prices. Unless something changes on the world scale.... That's because production has come on in other countries, and the capital involved will of course go to the highest return. If they can do it where there are no environmental restrictions or where they pay very inexpensive labour costs, there's not too much we can do about some of those things. Even if we cut our labour costs in half, we still wouldn't be competitive with Chile. Some of their ore is four to ten times richer than ours. We have difficulty with that.

If you look realistically at the mining industry, we are at a crossroad, and there's no question about it. 

[ Page 1460 ]

British Columbians will have to agonize as to whether or not they want subsidies to kick-start it. We're saying that it's irresponsible, without sufficient research and study done on it. As the opposition, you'd realize how difficult it is to do all the homework. You come in with ideas and direction, but you have to do your homework very carefully. If the homework hasn't been done, then you have to take time to do it so that you don't waste taxpayers' money, if it involves some kind of strategy.

With respect to the competitive tax environment, I've been to quite a few meetings with senior business people. I want you to know that, sure, there are some rumblings around the sides. The major industrial and trading organizations of the province have said that they have some concerns, but they understand the situation we're in. If we can wrestle with the deficit, that will do more to provide investment in the province, in terms of both the money that we need to run the government and investment.

We're pretty optimistic that with a concerted effort for some years on both the marketing side and the value-added development side in the resource industries, we'll see some significant changes. But they aren't going to happen overnight. Within the ministry, we are continuing along those lines. In the knowledge-based industries, we are turning every stone and every lead we have to assist people who come to locate here.

With respect to the electronics manufacturing sector -- because there's high growth there -- I get very good feedback from people in that industry when I meet with them. I know that when they meet with you, they might give the downside of the argument, which is to be expected. But they are also prepared to work with this government. We are taking them at their word and working cooperatively wherever we can.

The economic development division, while it refines some of the strategic initiatives that we need to take, is going to continue along the lines of expanding our position with respect to those areas of high growth. The more difficult one is what we do in the forest industry, where there are environmental pressures internationally and locally, and where we have a legacy of insufficient investment to produce on an intensively managed basis the fibre we need to keep our cut at the level it has been.

We're facing very serious problems out there. We are geared to saving industries that are generally competitive, and that's why the Job Protection Commission has been very active. When you're in a slowdown, you look ahead to the start-ups there might be in new industries. Those that should be saved have to be saved, because at least those jobs are here and now. There's usually less social cost in saving them than in trying to ignore them and let them go down in investment. That's a long answer, but in the economic development division, there have been numerous internal adjustments that are appropriate for the economic times.

L. Stephens: I wonder if you have any thoughts, programs or direction for value-added in the lumber industry. I agree with you that we really have to pay particular attention to value-added in this province. Are there any other areas you are working actively to encourage?

Hon. D. Zirnhelt: We have a number of studies.... There is no other word; they are studies. What else would they be? They are the basis for initiatives. With respect to cross-border competitiveness, we are trying to zero in.

You have to realize that the effects of the countervail and the recession are fairly new. Trying to find out the real factors for the desire to relocate takes quite a bit of work. We are working on the value-added manufacturing industry with the Ministry of Forests by looking at the future and encouraging trade organizations to isolate those matters of policy or resourcing that will be necessary to enhance their industry.

As you know, we inherited a tenure system where 85 percent of the fibre is tied to larger tenure-holders. It doesn't leave much flexibility; the little bit there is creates a feeding frenzy and awfully high bidding. Some of the people in the value-added industry are finding that they are asking for a reduction in stumpage. Of course, with the mood of our southern neighbours, we can't make any kind of adjustments that would be seen to be a subsidy. We are looking at all of those things, and I think you'll find that as time progresses, we will be taking some initiatives to assist value-added wood industries.

The other thing I might add is that we continue to assist them in export activities. The Ministry of Forests sent a trade mission to Japan and Korea, where there is considerable opportunity. When that happens, the resources of the ministry -- the international trade side and the economic development and business development division -- all shift and prepare, so that we can make strategic moves with respect to saying: this is what British Columbia's environment is like; this is the opportunity here; this is the need. We're moving on the Asian front, because in Japan in particular there is a desire to move away from primary breakdown and some of the next-step value-added that they have. They feel that if we can provide more finished products competitively, they are prepared to buy them. With their labour and land costs, they want to build into high-rise, instead of low-rise, manufacturing, which most of sawmilling is.

L. Stephens: During your remarks you made reference to new opportunities for small business: $3.5 million to service small business. I think you mentioned that public sector procurement was one of the areas, and the environment, high-tech, biotech and specialized electronics as well. Could you expand a bit on that $3.5 million and some of the initiatives that are going to come out of that?

Hon. D. Zirnhelt: This is a number we provided in the budget for bad debts. It's a figure we will use if and when we reintroduce loan programs to provide for those that might fail. We haven't launched this program, because the Peat Marwick study did make some comments, and we have done some studies internally to know.... We want to minimize ever claiming this, but 

[ Page 1461 ]

we have to provide it in case some of those aren't successful. That's what that is. The servicing and analysis of those loan programs will all come from ministry staff.

[11:15]

L. Stephens: Do I understand you to say that this is provision for loans already made or loans anticipated?

Hon. D. Zirnhelt: It's provision for new loans. We're saying that we expect to book somewhat less than last year. It's just a provision. There have been none booked against that.

L. Stephens: Does that mean that you're contemplating reinstating the small business assistance program and the business expansion program?

Hon. D. Zirnhelt: Yes, as I said in my opening remarks, and completely candidly, we are considering it. There is no guarantee that we are going to re-establish these. In fact, I think if you were to ask the public if this was an appropriate use of public funds, you'd probably find some people saying no and others saying yes. Those who say yes....

F. Gingell: Only those applying for the loans.

Hon. D. Zirnhelt: Let's face it, there are a lot of people successfully established who couldn't borrow otherwise. I think we have to recognize that we're always dealing with the people who can't get service somewhere else, and that's one of the first things that the due diligence determines.

The banking industry is also quite interested in our re-establishing these funds. I have no hesitation standing here saying that we're not going to hurry into it. We have to make sure that we can correct the weaknesses of the past, and some of that has to do with who assesses the risk, what you take as protection for the public, and whether you can deliver the services that are necessary. As you probably know, one of the weaknesses of small business is that often you don't have the management expertise there. So we want to be very cautious on that, and I'm not ashamed at all of the caution we're taking on re-establishing these two programs.

L. Stephens: Have you a provision in the budget for a dollar amount for loans under these programs?

Hon. D. Zirnhelt: If we roll in what happens under the job protection.... Because the job protection commissioner will recommend them. If we take the other programs.... I'll read them out to you. The industrial incentive fund is $3 million. New investment projects: this is a reserve for....

F. Gingell: How much is available?

Hon. D. Zirnhelt: I'll get the figure on how much is available, but I'll provide you with how we arrive at the number, if somebody can add it up for me.

The Industrial Incentive Fund: there is a provision of $3 million, which is 10 percent of disbursements. So that would be 10 percent of $30 million that we provide for bad debt there. New investment projects: $15 million in new approvals is possible, so at 10 percent the bad-debt provision would be $1.5 million. Under job protection on new loan approvals, we expect there would be $13 million in new loan approvals. The bad-debt provision would be 20 percent of the disbursement, so it is $2.6 million. Under the job protection new loan guarantees, which we anticipate could be $5 million, there's a 25 percent provision, for a total of $1.5 million. Ad hoc projects: although I dislike the word, it is very descriptive. It means projects that don't always fit into a category, but that come up. We expect that there could be $5 million in new loan guarantees there, for a total of $1 million, which is 20 percent of the approvals. Small business loans: we could go to $5 million in new approvals and $5 million in past approvals, for a total of $1.5 million, or 15 percent of disbursements.

F. Gingell: That's $78 million.

Hon. D. Zirnhelt: Very good on the calculator! Do you want a job? [Laughter.]

F. Gingell: As long as you don't call me a bean counter.

Hon. D. Zirnhelt: It's $79 million.

F. Gingell: My list comes to $78 million.

Hon. D. Zirnhelt: The optimists say $79 million and the pessimists say $78 million. It's $78 million.

Interjection.

The Chair: Order, hon. members. It's a nice change, and relaxing, but would you continue your remarks through the Chair.

Hon. D. Zirnhelt: Thank you, hon. Chair.

Does that give you a clear picture?

L. Stephens: Could you explain how these loans will be safeguarded? The former administration had a number of defaults. Do you have some guidelines and criteria on what you're prepared to lend, under what conditions?

Hon. D. Zirnhelt: It's fairly early to say what the actual safeguards will be, because that's what we're working on. They haven't been approved by cabinet yet. I'll just leave it at that. I'd be happy to provide you with some of the dimensions of some of the things we're considering. I can provide that later today.

L. Stephens: I'd like to go back to the ad hoc for a moment. Do you have guidelines on what would constitute an ad hoc loan, or is that part of the package that you're referring to now?

[ Page 1462 ]

Hon. D. Zirnhelt: The short definition of ad hoc is that they're larger than the program guidelines would permit. Therefore they have to be considered as a one-of-a-kind project.

L. Stephens: Could you tell us what the guidelines are for these loan guarantees or grants?

Hon. D. Zirnhelt: Treasury Board approves guidelines, and they're public, because we provide them to applicants. We don't have them with us. We would be happy to provide them to you.

L. Stephens: We can talk about the position of the job protection commissioner a little bit. You did mention a dollar amount -- $240,000. Does that come close? Could you perhaps expand a little on the job protection commissioner and what his role will be?

Hon. D. Zirnhelt: The job protection commissioner's budget has gone up from $760,000 last year to $1 million. We put in an increase of $240,000. That is because we continue to experience some difficulties in some industries. The job protection commissioner usually works at the initiative of the private sector business that has trouble. We don't force any business to take the services of the Job Protection Commission.

Mr. Kerley is by background a banker, former vice-president of the Federal Business Development Bank. He's had a long, distinguished career in banking. He's very good at pulling together people who have diverse interests. What he does is come up with a financial restructuring package where every party will come up with some concession, and sometimes -- often -- he asks the government to make a concession of some kind or other, or to assist in some way. We then consider that to see whether we think his plan is viable. He operates somewhat at arm's length from us, because we do not want his credibility interfered with by government. If he recommends it, chances are it's had the business analysis we would like to see there. That's the way the act is, and that's the way he acts.

He is involved in a huge number of projects. He jumps from one to the other. When he needs special assistance, he will hire the services. For example, an individual from Price Waterhouse is assisting him in a mining town. Somebody who knows a considerable amount about that business will go in and do an independent analysis of the situation. Quite often we do that so that we have a second opinion on the viability of the business, and what it takes to regain and retain the viability.

I think the job protection commissioner has done a wonderful job for B.C. and those communities. We expect and want him to have the resources to continue to do that, depending on whether the economy picks up or not. Even if the economy picks up generally, we may still see a slide in some of the resource industries. We want to be ready for that, and that's why we have added resources to this really worthwhile commission.

L. Stephens: Moving along to another program: equity capital. I believe you said it's going up $2.7 million. This is invested in small businesses. Could you tell me what kinds of businesses you're going to be looking at?

Hon. D. Zirnhelt: I'd like to say that with the cumulative activity to March 31, 1992, $135 million in equity was raised under this program. The eligible small businesses that were invested in were 156. Under venture capital corporations, 217 were registered. We issued tax credits for $40 million. Some examples of the eligible small businesses that received investments are Trionics Technology Ltd., which designs and manufactures high-speed credit card processing equipment. There are 19 jobs there. Plum Equity invested $489,000. The Indisposable Cotton Diaper Co., baby to adult lines of diapers: 32 jobs and $919,000 invested by CID Investments. Quester Tangent Corp., which engages in research and development, manufacturing and marketing of hydrographic management systems, has eight jobs, and Island View Investments invested $93,000.

You will find that most of these are obviously in areas where there's growth, but also where there's a need for equity. Equity remains a problem in British Columbia. Part of it is because the people who invest in equity programs require a really high return -- an inordinately high return -- so there isn't room for the public sector until such time as the private sector fills the gap in a more adequate way. As you know, B.C. also has a very high debt-equity ratio, which means that when companies want to venture into a new area, their balance sheet doesn't look as good as it should. We're trying to cope with those problems, and that's why we're prepared to give tax credits.

[J. Beattie in the chair.]

L. Stephens: Could you tell us a bit about the employee investment program? What are the plans for this year?

[11:30]

Hon. D. Zirnhelt: This program began in September 1989, and it provides 20 percent provincial tax credits to employees to make equity investments in their employer company. Numerous studies have found that companies with employee ownership and involvement in decision-making have superior business performance. That promotes, in turn, competitiveness, job creation and economic growth. Similar programs in the United States have been successful, with over 10,000 companies and 10 million employees participating. We're really happy with the growth in that field, and one of the reasons we knew that the Working Opportunity Fund would be successful, is that people are really keen on it.

I think we're on track, because there was a strong indication last night, in a meeting that our caucus held with the Business Council of B.C., that we have to match management-labour relations to productivity in the resource sector industries in order to preserve jobs. If we want high-paying jobs, we have to find other innovative ways which give a return to the employee and which benefit the investor as well. I'm really 

[ Page 1463 ]

pleased that some of these programs are as successful as they are. We will do with the resources that we have. We will make as many of them as possible operate.

I can give you some of the accumulated activity to February 29, if you're interested in it. The equity invested to date is $7.75 million, and additional equity that's been authorized is $13.6 million. The number of employees that have been covered by the plans to date is 6,098. The number of employees that were investing in the plans directly is 1,882. In other words, not all employees invest. The number of plans registered is 16, the tax credits issued are $0.9 million and the additional potential tax credits are $2.7 million.

I have a running total of the companies in which the 6,098 employees.... Examples are Atlas Textile Print Ltd., Brookside Foods, Norsat International or NII, Pacific Coastal Airlines, West Coast Plywood, Western Star Trucks -- there's quite a list of them.

L. Stephens: Could you tell me what the $400,000 set aside in the WOOF Fund will be used for?

Hon. D. Zirnhelt: I'll just check my memory again. I think I've said before that the promotion of the Working Opportunity Fund is essential to its success. We provided start-up money for an education program. The printing and development of brochures, the seminars and the purchase of computer data processing they need are kick-starting the program. It is a straight grant to get up and running, and in my view they have used it very efficiently. Approximately 60 percent of the investment came from outside the lower mainland, and part of our overall strategy is to get people in the regions taking an interest. The next step is that this fund can be used to develop industry in those regions, and I think the people who bought into it will be looking toward the fund for investment in the regions. We thought it was money well worth spending, to get them up and running in a very rapid way. We approved and launched it in January, and there was a very short time to get it started. But we expect there could be $20 million to $25 million in the fund next year, and that is very inexpensive capital generation for B.C.'s economy.

F. Gingell: Mr. Minister, I'd like to move back to the employee share ownership program, a program that I strongly support. For many years, I was the only British Columbian that was a member of the U.S. organization ESOP -- so that tells you where I'm coming from -- and I was the founding director of the British Columbia Employee Share Ownership and Investment Association, an organization that was created with the encouragement, but not the control, of the previous government. An important part of the ongoing viability of that organization in its formative years -- it's being going now for about a year and a half -- is the provincial government grant. It is not a lot of money; it's only $50,000, I think, for this year. Can I have your assurance that this new administration will continue to support that organization and keep it going?

Hon. D. Zirnhelt: Like all programs of a start-up nature, one always hopes to wean them away from it. But, yes, we like the idea of working through that association, because instead of us dealing through a number of organizations, they sort out and bring their common problems to us. We have provided for funding for them for this year. I don't know if we've cut the cheque yet, but it's going to happen. I guess now I'm on record anyway -- it has to happen.

F. Gingell: That's all I needed -- the commitment.

Mr. Minister, I see that you are bringing forward a bill to make some changes to the act. In my mind, they can be classified as housekeeping. I think you would find that the organization might have some input into changes they would like to see. Knowing that it takes time to get a bill developed, and that once some changes to the act have been made it may be some years before you get an opportunity to get it back on the agenda, is there an opportunity to have a discussion about changes that may be beneficial? I supported the concept from the beginning, but I lost a lot of battles with your predecessors -- the bureaucrat Gil Blair, when he was leading this -- over some of the things I would have liked to have seen in the act. It does have a very narrow definition. It really does apply primarily to start-up situations that are reasonably small.

There are large corporations in British Columbia, like the one I was associated with, that have employee share ownership at the base of their being. It was part of their culture long before there were tax incentives, and your act doesn't give them the same opportunities to widen their ownership, just because of the roles. I'm wondering if there's any opportunity for us to have a discussion before the bill comes up for second reading. Perhaps it would be a good idea to do a revision of it rather than just these housekeeping....

Hon. D. Zirnhelt: You have some constructive suggestions. In general, I would say that because of the legislative agenda we have this year and the time we had to prepare that, we weren't able to bring in massive revisions. There are some policy implications if we change the focus too much. If there are incremental changes, then we're happy to consider them. Practically, what we can achieve this year is that.... We offered a briefing to you before second reading. It has been set up for next Wednesday. I don't even think I'll be there to watch what you're saying, but I'll get a report on it, so be careful. It's an opportunity for you to make some suggestions. We welcome suggestions as to weaknesses, but bear in mind that it is housekeeping and not more general.

With respect to contact with the organization, I'll ask Chris Nelson, the ADM in charge, to call the organization to confirm that there aren't some outstanding issues. But I think it's probably too late for drafting legislation this year. I'll confirm with you and get a note to you as to the extent of our consultations with that organization, because it was my understanding that that had happened, but at a different level than the officials that are here.

[ Page 1464 ]

H. De Jong: Just a couple of questions. I was interested in the comments of the minister about the small business program. He mentioned that it would be specifically geared to assist women entrepreneurs. Perhaps it's a change in direction or a change in application that more women go into business. Could the minister tell me what a female can get, in terms of starting a business and the policies of this program? If a female can get established under the program, can a male also get established under the same policy?

Hon. D. Zirnhelt: If you're asking whether or not we are prejudicial in our operation here, the answer is no. All programs are available equally to people of either gender. I mentioned in my opening remarks that we have put in place a full-time businesswomen's advocate. If a man wants to go to her for assistance, I'm sure he won't be turned away. In a survey of women in business, we have noted quite a significant number of problems that are unique to women. In other words, there is a higher incidence of problems and a number of unique problems.

We'd be happy to send you a copy of the report and survey that was released in March, I think. It shows that access to capital is a significant problem for women entrepreneurs; therefore they need to be even better at it in order to get established. So our advocate is banging on the doors of banks, holding seminars with bankers and showing the success rate, which is higher for women than for men starting up in business. They also have generally greater needs with respect to child care, for example. It's much more difficult, because women are usually the ones taking care of the children.

So it's designed to assist in the adaptation of programs for women entrepreneurs. Women in Business -- we might call it a program -- is sort of a collection and a focus of existing programs. I think it's highly successful, and it's one of the exciting things that was started by the previous government and supported by us.

H. De Jong: Well, I can appreciate that the minister is making this applicable to women. If there were shortcomings in some of the previous programs and women avoided even asking to be covered by such a program, then I could understand it. But I think we have to look after all British Columbians, whether they are male or female. If it's a matter of a business opportunity, then I think equal opportunity should be extended to males and females, not making a specific distinction.

[11:45]

Having said that, I'll go on to the next item -- because I've only got a couple of items to ask questions on this morning -- and that's the B.C. Pavilion Corporation. The minister made reference to a debt written off last year. Perhaps he could inform us as to the amount and type of debts that were written off in respect to the B.C. Pavilion Corporation.

Hon. D. Zirnhelt: I'll have that for you in a minute. I'd just like to go back and say that there's a difference between theoretical equality, in terms of access to programs, treating people equally and treating them the same. I think if you want an effective program, then you tune your program effectively. I don't mind standing here and saying that we would direct our officials to ensure that where there has been inequality in the past, we redress that inequality. The previous government recognized it, and we're following along. Under our regime, we have seen the completion of the study. We've released it, and it's been well received. I don't think I've received any letters complaining about it from any male entrepreneurs, but if you know of any, I would sure be prepared to defend it to them in a response.

The answer to your question is that there is a total of $8.4 million, made up of capital investment write-off -- investment they made that we decided to write off -- of $1.5 million; operating losses of $2.4 million, because the economy went a bit soft and revenues were down; and the Tradex centre was $4.5 million. With that, Mr. Chair, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 11:47 a.m.

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