Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JUNE 9, 1992

Volume 4, Number 9

[ Page 2355 ]

The House met at 2:05 p.m.

Hon. G. Clark: I have the pleasure today of introducing to the House a distinguished member of the Alberta Legislature who hails originally from Vancouver East, Tom Sigurdson, the member for Edmonton-Belmont. I'd ask the members to make him welcome.

In addition, I have a former constituent of mine, who is now a constituent of the Leader of the Opposition in Sechelt.... We're everywhere, hon. Speaker, people from Vancouver East. I'm very pleased to introduce Arnot Tuffs to the House.

Hon. L. Boone: Today we have a special guest from Ottawa in the members' gallery. I'm pleased to introduce His Excellency Bruce Brown, High Commissioner for New Zealand to Canada. The high commissioner is accompanied by Mr. Irvin Paulin, the newly appointed consul general of New Zealand in Vancouver. The high commissioner is retiring after a most successful appointment to Canada. He was returning to New Zealand from Vancouver, and we wish him well. Will the House please welcome him.

D. Symons: It's my pleasure today to introduce to the House Jim Wainwright, CD -- that's Canadian Forces Decoration. I first met Jim about 20 years ago through my son, who was a member of a Cub pack. Jim was teaching these young people to shoot straight in both the figurative and the actual sense of that word. Jim has been a member of the Armed Forces for 33 years, serving Canada well and decorated because of that. He is also involved with the disability committee of Richmond. This group has received five-star awards from the government of Canada for its service to the disabled. I would ask the House to make him welcome.

G. Janssen: It gives me great pleasure to introduce to the House today two hard-working people from my constituency and my constituency office, Eleanor Gulstene and Marlene Dietrich, alive and well and living in Port Alberni.

N. Lortie: I'm extremely pleased to introduce a beautiful young lady to the House today: my daughter, and the mother of my two grandchildren, Elizabeth Craig. Will the House make her welcome.

Hon. L. Boone: It gives me a great deal of pleasure to introduce my executive assistant, Sheryl Kozyniak, who is in the gallery with her fiancé, Darwin Thower. Would the House please welcome them.

J. Doyle: It is a pleasure for me to introduce a very good friend of mine, Kim Bennett, who is in the gallery today. Kim lived in Golden for many years and now lives in Duncan. Also, my wife, Judy, and I are godparents of her son, Jesse. I'd like the House to make her welcome.

M. Farnworth: It's a pleasure today to introduce 63 grade 7 students in the gallery from Cedar Drive Elementary and their teacher, Mr. G. Foulkes. I'd ask the House to please make them welcome.

Hon. A. Charbonneau: I would ask the House to make welcome my executive assistant, Shirley Dorais, from the beautiful city of Kamloops.

D. Mitchell: I notice in the gallery today a former Member of the Legislative Assembly in Saskatchewan, who was a member when I sat as a Clerk at the table in that House. He also went on to become a very distinguished member of the executive council in Saskatchewan. Could members please welcome Dr. Lorne Hepworth.

Hon. D. Marzari: I have the very special honour today of introducing the distinguished couple in the gallery who happen to be my parents. Would the House please welcome Mr. Bill Smith and Mrs. Frances Smith?

Hon. T. Perry: I'd also like to welcome the Smiths.

I've noticed a couple of other people in the gallery, although I'm not familiar with their names. I'm in such a good mood today, and I'm sure all other members are. Perhaps we could welcome everyone else who hasn't been introduced yet today.

The Speaker: Before I call on the Clerk, I would remind all hon. members that they should have a notice on their desks reminding them that the official photograph will be taken tomorrow. Members are asked to be in their seats by 10:45 precisely.

Introduction of Bills

COOPERATIVE ASSOCIATION
AMENDMENT ACT, 1992

Hon. L. Boone presented a message from His Honour the Lieutenant-Governor: a bill intituled Cooperative Association Amendment Act, 1992.

Hon. L. Boone: The Cooperative Association Amendment Act, 1992, which I'm introducing today, amends the Cooperative Association Act to permit provincially incorporated cooperatives other than non-profit cooperatives to transfer out of the province to another jurisdiction. Cooperatives incorporated in other jurisdictions will also be permitted to transfer into the province. The bill will permit members to dissent to the transfer out of the province and obtain repayment of moneys they have invested in the transferring cooperative. The bill also clarifies the application of membership termination provisions for housing cooperatives.

Bill 60 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.

[ Page 2356 ]

PERSONAL PROPERTY SECURITY
AMENDMENT ACT, 1992

Hon. L. Boone presented a message from His Honour the Lieutenant-Governor: a bill intituled Personal Property Security Amendment Act, 1992.

Hon. L. Boone: The Personal Property Security Amendment Act, 1992, corrects a number of technical problems with the Personal Property Security Act. These problems are creating uncertainty in the law and are adding to the expense of obtaining commercial loans. By reducing the uncertainty in the law, this bill will reduce legal fees for arranging loans and lower the cost of obtaining credit.

The amendments contained in this bill clarify the intent of the statute, but do not affect the underlying policy. I commend this bill for your consideration and urge its passage.

Bill 57 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.

ATTORNEY GENERAL STATUTES
AMENDMENT ACT (No. 2), 1992

Hon. C. Gabelmann presented a message from His Honour the Lieutenant-Governor: a bill intituled Attorney General Statutes Amendment Act (No. 2), 1992.

Hon. C. Gabelmann: I'm pleased to introduce Bill 58, the Attorney General Statutes Amendment Act (No. 2), 1992. This bill contains amendments to seven statutes administered by the Ministry of the Attorney General. They are the Correction Act, the Escheat Act, the Family Relations Act, the Land Title Act, the Liquor Control and Licensing Act, the Supreme Court Act and the Wills Variation Act. I will elaborate on the nature of these amendments during second reading of this bill.

Bill 58 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.

[2:15]

COMMISSIONER ON RESOURCES
AND ENVIRONMENT ACT

Hon. C. Gabelmann presented a message from His Honour the Lieutenant-Governor: a bill intituled Commissioner on Resources and Environment Act.

Hon. C. Gabelmann: I am pleased to introduce Bill 56, the Commissioner on Resources and Environment Act. The purpose of this bill is to create a Commission on Resources and Environment and to affirm its independence from any government ministry. It establishes the commission's comprehensive mandate, which includes the development of a provincewide strategy for land use and for the management of related resource and environment issues. It defines the commissioner's role at the regional and community levels, and requires him to facilitate the development and implementation of a dispute resolution system. It makes the commissioner responsible for the provision of independent advice to the government in land use matters.

Bill 56 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the Houses after today.

SECURITIES AMENDMENT ACT, 1992

Hon. G. Clark presented a message a from His Honour the Lieutenant-Governor: a bill intituled Securities Amendment Act, 1992.

Hon. G. Clark: Bill 59, Securities Amendment Act, 1992, proposes a variety of amendments to the Securities Act. The primary purpose of this bill is to make miscellaneous technical amendments to the Securities Act that are needed to correct deficiencies in the legislation and to respond to recent developments in securities markets and interjurisdictional regulatory arrangements.

Most importantly, the bill includes an amendment that would authorize the commission to apply to the Supreme Court of British Columbia for assistance in obtaining evidence from persons outside the province. I am particularly pleased with that.

Bill 59 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.

Oral Questions

INTERPROVINCIAL FREE TRADE

G. Wilson: My question today is to the Premier. The question is fairly direct, and I hope we will get a succinct answer.

Does the Premier agree with the statements made by the Minister of Government Services at a business seminar on domestic free trade in Vancouver, where the minister spoke out against an interprovincial free trade agreement?

Hon. M. Harcourt: Hon. Speaker, I'd like to see those comments. Quite frankly, I am not aware that she made such comments, so I think you should ask the minister directly rather than through a go-between. If you want a direct answer, ask the person you want an answer from.

G. Wilson: I am asking directly; I'm asking the Premier if he agrees. Let me direct my question more specifically. With relation to the common market clause on social and economic union that is currently being negotiated back east in Ottawa, can the Premier tell us what instructions the Minister of Labour and Minister Responsible for Constitutional Affairs has been given, given that the B.C. Federation of Labour has taken a position in opposition to an interprovincial free trade agreement? What position is the government taking 

[ Page 2357 ]

with respect to this particular clause in the constitutional amendment?

Hon. M. Harcourt: Well, our government is participating across Canada in a major initiative to remove as much as possible barriers to the free flow of capital, of people, of services and goods between the provinces. The commitment of the first ministers and our trade and government services and other ministers is to remove those barriers as much as possible by 1995. That's the position of our government.

The Speaker: Final supplemental.

G. Wilson: Given that the government is committed to an interprovincial free trade agreement -- and I would take it that that's the Premier's statement -- can the Premier tell us whether or not this government holds the position that that should be an individual right to free trade, or whether or not that in fact will be done by government agreement?

There's a significant difference, as the Premier will recognize, because it essentially is a difference that will recognize the individual's right to free trade as opposed to the proposition of governments putting in place protectionist legislation with respect to special friends and insiders, shall we say.

FUNDING FOR AMATEUR SPORTS

L. Fox: My question today is to the Minister of Health. Has the Health ministry conducted any research to quantify the long-term cost saving to the health care system associated with preventive health strategies, particularly in the area of physical fitness? Can the minister specifically tell us how the 13 percent cutback to amateur sports and the 40 percent cut to Sport B.C. fit into that strategy?

Hon. E. Cull: The questions with respect to amateur sport should be directed to the minister responsible, the Minister of Municipal Affairs, Recreation and Housing.

I don't have any specific reports that I can quote to you right now about the impact of preventive health care and the impact on costs; but I can say in a very general way that a royal commission spent 20 months.... I've received over 500 presentations from around this province. I'm sure that we'd find many examples we could point to in the material that is archived from that commission's work.

L. Fox: My supplementary goes to the Minister of Tourism. Has the Tourism ministry determined the extent of the negative impact that the funding cuts to amateur sports and the elimination of lottery support will have on local tourism in British Columbia? Does the Tourism ministry have any idea how much local economies will lose as a result of the government assault on amateur sports and reduced travel assistance?

Hon. D. Marzari: The government is constantly in awe of how the opposition and the third party can ask for more and more money. The opposition and the third party do not vote for any bills on taxation and do not vote for any measures that we are trying to take to deal with a budget deficit that could have reached $3 billion. The opposition and the third party do not seem to....

The Speaker: Relate it to the question, please, hon. minister.

Hon. D. Marzari: The third party is now asking for a study in Tourism as to the impact of cutbacks for amateur sport. This government is strongly behind amateur sport. This government is strongly behind the Commonwealth Games. This government will be supporting to the hilt, with the federal government and the communities, the Commonwealth Games in 1994. This year's cutback for amateur sport is a cutback which not everyone likes. However, it is a necessary cutback. We will be refuelling, redeveloping, and planning towards the Commonwealth Games in 1994 in a way that this province has never seen before.

L. Fox: Given that the Minister of Health really understands the importance of preventive health strategy and given that the Minister of Tourism is extremely committed to amateur sport, perhaps I could address my second supplementary to the minister responsible for lotteries. Given the fact that the minister has requested input from municipalities and many societies all across British Columbia on how lottery dollars should be allotted and what type of projects should qualify, which seems to indicate to me that there are some lottery dollars available, perhaps the minister can now agree to restore the $2 million that was axed from amateur sports and insist that the government immediately redirect lottery funding to the purposes for which it was intended.

Hon. L. Boone: I thank the member for the question so that I can clarify some of the misunderstandings that are out there. There is no such thing as the Lottery Fund anymore. There is a community grants fund in my ministry for which I am getting information from the public as to their needs and what they see as their priorities. However, the dollars that have been taken from lotteries are now in general revenue. They have been allocated, as you know, through Treasury Board to various ministries. They are voted money and are responsible to the ministries. There is no slush fund. That existed in the former government. We do not have a slush fund that we can dip into at any given time. The dollars that we have are voted. I would suggest that you wait until next year to see what the voted dollars will be for the various programs.

[ Page 2358 ]

NORTH AMERICAN
FREE TRADE AGREEMENT

W. Hurd: I have a question to the Minister of Economic Development, Small Business and Trade. It's regarding this headline: "B.C. Bucks Trade Talk to Cheers of Workers." We know that this minister likes making major trade announcements before placard-waving trade unionists, but perhaps he can indulge the people of the province and the business leaders by telling them why, of the ten provinces in this country, British Columbia is apparently no longer going to be involved in North American free trade talks.

Hon. D. Zirnhelt: Needless to say, I'm pleased he asked the question. I didn't see any placards. I went to a meeting of people who were seriously concerned about the downside of the globalization of the economy. I spoke to people about the seriousness with which the government of British Columbia takes the need to have some kind of efforts in place to deal with the dislocations that affect our workers and our communities when capital is freer to move around the world. I think it's time that somebody in Canada stood up for the working people.

W. Hurd: The opposition notes that the Premier has urged the government to withdraw from these particular free trade talks as well. My question to the Minister of Trade is: how can British Columbia's case on NAFTA be pressed when we aren't even at the table? Who's driving our trade and development strategies in this province -- the B.C. Fed or this minister?

Hon. D. Zirnhelt: The answer to your question is that the government is driving this government's trade policy.

W. Hurd: I appeal to this minister for a straight answer on one question. What point is there in this minister and the Premier globetrotting on trade initiatives around the world when he won't even commit his government to supporting our participation in the most important round of trade negotiations in this century? Is this minister even aware that half our exports in this province go into North American markets?

Hon. D. Zirnhelt: I guess I have to inform the member that we have been at the table. We've been passed secret document after secret document, been told not to discuss it with anybody and to expect the people of B.C. to support an agreement that can be changed by the U.S. Congress. The gutless government in Ottawa would not have a chance to do a damn thing with it.

[2:30]

Interjections.

The Speaker: Hon. members, question period is a limited time. In order to give respect to those who are asking questions and to those who are answering them, we must have order in the House.

D. Mitchell: The Minister of Economic Development and Trade indicated that he has had access to documents. I wonder if the minister might be willing to table those documents in this House. In a letter to the Prime Minister, the Premier has urged the federal government to withdraw from the North American free trade talks. His reason is that the Americans have on occasion dealt unfairly with Canadians.

My question is to the Premier. Does he really believe that the Americans will be more inclined to trade fairly with us when, instead of trying to stay in the game, we have taken our marbles, left the game and run home?

Hon. M. Harcourt: I think what the opposition House Leader is suggesting is that we stay mute, stay at the table, have the Prime Minister initial that agreement, have the President of Mexico initial that agreement, have the President of the United States initial that agreement, and that's it. The only people who can change it after that are not the people of Canada, not the people of Mexico, but the Congress of the United States. If that's the way the opposition House Leader wants to conduct the affairs of the people of British Columbia, that's not the way we want to do it as government in British Columbia.

D. Mitchell: The Premier has indicated that British Columbia will have nothing to do with the NAFTA negotiations. He and his ministers somehow think that we in British Columbia can resist globalization of trade. The Premier seems frightened that if we somehow participate or sit at the table, we will somehow be hypnotized into not being able to resist an agreement or say no to it once we know what it is. My question to the Premier is: how can British Columbia's interests be represented if we're not even at the negotiating table?

Hon. M. Harcourt: We are at the negotiating table, and we'll stay at the negotiating table. What we are saying loud and clear is that the hub-and-spoke trade strategy of the United States is not acceptable to the people of Canada, not acceptable to the people of B.C. What we would like to see instead is a hemispheric trade deal among free, democratic nations without one party predominating. If the Liberal opposition is saying they favour the Ronald Reagan, George Bush, U.S.-driven trade strategy, I want you to know that that is not the path that this New Democratic government wants to take. We want to see a trading relationship from Antarctica to the arctic of free, democratic nations, not having one nation predominate.

The Speaker: The bell signals the end of question period, hon. member.

D. Mitchell: Point of order. I think question period is 15 minutes long, but that does not include filibustering by pounding on desks like hon. members opposite.

Hon. Speaker, I would ask whether or not we could be permitted one more question, given the fact that there was a filibuster exercise going on.

[ Page 2359 ]

The Speaker: I regret, hon. member, that the Chair has been consistent, when the bell has rung, that it does signal the end of question period.

Presenting Petitions

F. Garden: I beg leave to present a petition, hon. Speaker.

Leave granted.

F. Garden: The petition is from my constituents and deals with Bills 13 and 14.

Orders of the Day

Hon. G. Clark: I call Committee of Supply, both sections. In section A is the Ministry of Government Services; in section B is the Ministry of Tourism. Upon completion of the Ministry of Tourism, we will go on to the Ministry of Finance estimates.

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

ESTIMATES: MINISTRY OF TOURISM AND
MINISTRY RESPONSIBLE FOR CULTURE

On vote 58: minister's office, $308,000 (continued).

Hon. G. Clark: I'm delighted to participate in the Ministry of Tourism estimates. But I see the minister has arrived, and I know the other members have pressing business to pursue. For the sake of speeding up the business of the House as we move into June, I'll defer to other members of the House.

J. Tyabji: We have a curator at the Kelowna Centennial Museum who would like to get some conservation services for artifacts in British Columbia's museums. I'd like to know if the minister has any plans for this, or what she has in mind.

Hon. D. Marzari: I have not personally reviewed that particular grant application, so I will take it on notice and get back to the member.

A. Cowie: A question for the minister regarding heritage, which comes under the minister's jurisdiction. It used to come under another ministry. I think probably this is the right place to have heritage -- in with Tourism and Culture -- as long as there's a great deal of cooperation with the Minister of Municipal Affairs, Recreation and Housing.

We probably all recall Barclay Manor in the West End in Vancouver. Barclay Manor was preserved and redeveloped into a very nice community facility with a grant of some $50,000, which started it off. The same thing happened some years ago to Brock House, which is now a seniors' centre as well as a restaurant that pays for most of the upkeep. There are a number of other heritage community facilities around Vancouver as there are elsewhere in the province. Perhaps the minister can give me a brief summary of the programs she intends to have within this budget for carrying on the tradition of helping with heritage homes and other buildings that are used for community facilities.

Hon. D. Marzari: Mr. Chairman, I should offer to share the guide to programs of the Heritage Trust with the member, because the guidelines for Heritage Trust basically spell out the criteria by which heritage homes, places or trails might be adjudicated. Heritage Trust, as the member probably knows, is an arm's-length trust paid for by government to the tune of $2.5 million this year so that Heritage Trust can get involved with the activities of adjudicating, acquiring and fixing up heritage properties. The guidelines for such activities are spelled out in Heritage Trust.

Vis-�-vis the Heritage Trust, it is not the minister's position -- because it is at arm's-length -- to comment on the validity or the saliency of any particular application. Rather the Trust itself, guided by staff from the cultural ministry, do most of this work. Other programs that are involved in culture include heritage properties, which is another division of the ministry that actually does maintenance and upkeep of properties that have been acquired in the past. Another program that the ministry runs or funds is the Crown stewardship program, which basically looks at government-owned properties and assesses their heritage merit. Also, the archaeology branch looks at, investigates and adjudicates, very often with native communities, the importance of sites and findings as construction occurs throughout the province. There are a multiplicity of programs, but the one that delivers in the way the member is speaking about delivery of goods is the Heritage Trust.

A. Cowie: I want to thank the minister for reviewing that with me and the House. I notice that in the past it's quite often MLAs who delivered the cheques. I don't know how that happens.

I'd like to ask a question regarding Engine 374, which used to sit in the park in Kitsilano, has since moved as an exhibit to Expo and has now been moved into the roundhouse. It has a high profile, in that a lot of people want to preserve that particular engine. Does the minister recall if that is in the Heritage Trust Fund, or is there a special fund through her ministry for that?

Hon. D. Marzari: The Heritage Trust has helped to contribute toward the preservation of that famous engine that I think of as Evie Atkinson's own project. I think it was her efforts over many years that have kept that engine, taken it from Kits beach, placed it at the Expo site and now found it an indoor place where it will be preserved hopefully for as long as the roundhouse stands, at least. The Heritage Trust, having entered into a partnership arrangement with the private sector and the local group, has put some money toward the preservation of the engine. It is now keeping an ongoing eye on how things are going and is offering to assist.

[2:45]

[ Page 2360 ]

A. Cowie: Yes, the engine is in the roundhouse. There's not absolute agreement on whether it's going to be in the roundhouse or whether it's going to be in an addition to it or not, and that's where the ministry staff come in. I have personally experienced the good work of the staff, who are very consistent as to what is heritage and what is not. On some occasions it takes a lot of leadership even in a committee to make sure that these buildings get preserved in a heritage-type manner, so I would appreciate if the minister can continue keeping on track of that, because Evie Atkinson needs help and so do the train buffs.

One final question, because as the minister probably recalls, another building which may or may not be classified as heritage but is certainly within the heritage area of Shaughnessy is the Glen Brae house -- the Canuck Place, as it's called now -- that is for parents and children, where the children have a terminal disease or they're terminally ill, so they can spend the last few weeks or months of their lives together. It's a very worthwhile project. I wonder if the minister has any information on whether the ministry is going to help with that particular project.

Hon. D. Marzari: Once again, I'll get back to the member with an update on whether or not the Glen Brae house -- the Canuck House -- has in fact applied for funding to the Heritage Trust, or whether it has approached other divisions in the ministry. I will let the member know and keep him informed and in touch on both items that he's raised so far.

A. Cowie: My last question has to do with the heritage of old houses that are really not quite class A or class B -- as they are called in Vancouver. There are a lot of delightful old homes in our province, and sometimes the only way to preserve them is perhaps to allow an extra suite, allow some flexibility for what goes on inside of these houses and to give the people that work very hard to upgrade these houses some kind of recognition.

I know that the minister will recall 10th Avenue in Vancouver, not far from the city hall, where in fact the city has plaques on a number of the houses. Now it's caught on and people are just simply doing their utmost to preserve the houses. I wonder, from a general point of view, whether the minister has a program to help honour people who go through all that hard work and help try to preserve old homes, and also to honour municipalities that actually will go forward and be quite flexible with their zoning to allow flexible use in some of these older buildings.

Hon. D. Marzari: There is draft legislation coming forward from my ministry. Not in this session, because I'm strongly of the opinion that the legislation needs further consultation. When it is brought before this House -- hopefully next spring -- it will be the most progressive heritage legislation in the country.

One of the things that it will provide for will be an increasing visibility of areas or communities or houses of local significance so municipalities might feel more heartened by a piece of provincial legislation that would enable them to preserve neighbourhoods, blocks and individual homes from a heritage point of view, from a heritage standpoint.

You're not talking about class A or class B here; you're talking about a neighbourhood. I live in a neighbourhood that is very specifically affected by legislation such as this, and my neighbourhood has been actively engaged in a local area planning process with Vancouver city hall. They have been saying that the neighbourhood wants the ability to renovate and add suites rather than have the demolition of blocks of housing, which is rapidly happening. So personally, as a citizen, I am very much aware of the need in my own constituency for such legislation. I am aware of the need of municipalities to have the backing of a provincial piece of legislation to preserve their heritage. I think that the member will be seeing some assistance in this legislation -- although municipalities will not be forced to accept it -- to help local communities preserve their heritage.

C. Tanner: Following up on a brief note about what the last member to ask a question was saying, he asked whether it was going to be the policy of this government to have MLAs deliver cheques to various societies. I saw the minister grin. I hope it's not going to be the policy that we will be delivering either lottery cheques or any other grant unless the recipient specifically asks for it.

Hon. D. Marzari: The Heritage Trust is an arm's-length trust. As far as I know, certainly no politicians in this government have been delivering cheques to any communities on behalf of the Heritage Trust. The Heritage Trust makes its decisions and adjudications and has guidelines. It is a trust program and has all the advantages of being one. It is somewhat removed from the political decision-making, which occasionally is not as rational as the adjudication of a sponsored trust.

C. Tanner: Prior to the House rising for lunch, and prior to the little pieces of nonsense that occurred for ten or 20 minutes before we rose, the minister and I were discussing legislation that was coming down from Ottawa. She mentioned, in passing, that legislation was going to be coming down for people working in the arts. I take it that it will be labour legislation.

I have had two very distinct points of view on this, both from societies that have cultural affiliations. One said very strongly that we need it immediately; the other, equally as strongly, said: "My God, don't give us that sort of legislation; it will be the death of the societies!" I wonder what the minister's point of view is and what she intends to bring down in legislation.

Hon. D. Marzari: Basically, at the ground level, the intention is to ensure that performing artists and artists working inside agencies have basic employment standards and workers' compensation. There are a number of other working benefits that artists might qualify for. The whole area is presently encased in a bill in Ottawa, which is coming up for third reading and, I 

[ Page 2361 ]

gather, should be through the House within this month. As we develop our legislation, it will be done in close consultation with the cultural community. I'm sure that there will be debates, but I want those to occur within the cultural community before that legislation comes before this House.

I am not waving any flag here to scare underfunded arts organizations; I am saying that this government respects the cultural worker. Cultural workers are very often the cultural managers as well as the workers. Status-of-the-artist legislation will be coming down, and we will be establishing a council on the status of the artist to advise me as the legislation develops.

C. Tanner: That is reassuring. I would like to think that a committee of the Legislature might be involved in it, because it is a particularly specialized subject. As the minister well knows, many artists -- while we would consider them deprived with regard to some rights they deserve as workers -- in actual fact have made that choice for themselves, and I don't think it's the place for the government to interfere. However, there are circumstances where they deserve protection.

Changing the subject once again because we haven't got a lot more time left, I would like to specifically ask the minister how lottery funds are going to affect her ministry. There has been a great change, and there's a great deal of confusion apparently in this House and abroad as to what is going to happen with lottery funds. Does the minister have a specific amount allotted to her ministry now? Does she have them allocated to specific programs? Could she tell this member and the other members present what specifically her ministry intends to do with lottery funds?

Hon. D. Marzari: The good news of this whole budget year for Culture is that there are no longer any lottery funds in Culture. What has happened this budget year, and will remain true forever, I hope, is that lottery funds and cultural budget are no longer equatable. They are not the same thing. No longer will the cultural services branch in the cultural ministry have to go cap in hand to the lotteries branch to say, "Please, sir, may we have more gruel?"

Now, as of this budget, we have a situation where the funds allocated for Culture come directly out of Treasury into cultural branch. Totally speaking, the cultural side of the ministry has a budget of $38 million. Had things gone along the way they had been going, $14.3 million of those dollars would have come out of lotteries. The way the restructuring has occurred, that $14.3 million has come to us and is now in our budget. There is no further necessity for cultural services to approach the lotteries branch.

What will happen to lotteries? My colleague, I believe, is in the Douglas Fir Room doing her estimates. Lotteries is now looking to the public and to the community to say: "What is it that you would like to see lotteries do?" They are soliciting proposals and briefs from communities around this province to find out what the future role for lotteries should be. Included in that mandate is obviously an area which the cultural services branch and this ministry have not yet captured, and that is capital funding. Capital funding is a major part, obviously, of cultural policy, because if you build something, you've got to fill it. If you've got one party building it and another party funding the artists who will fill it, you've got the possibility for a dysfunctional operation.

The lotteries, as far as I can see, are still involved with seeking a mandate. They will not be involved with the performing or visual arts -- the workers and the performances. They might possibly have a small role in the capital funding. For the next while we've got to work out within our business plan a comprehensive plan for the cultural funding and the operational funding for arts and culture in this province. That is the logical thing to do. When you ask me what lotteries is doing this year, I say: "In our budget, nothing." In this ministry we have captured the whole ball of wax. What remains outstanding is the question of who is going to fund the capital construction of new venues, new theatres and new performing arts centres. That is a question which remains outstanding.

C. Tanner: I thought the minister came on strong to start with. It sort of petered out a little at the end, which makes me think that these decisions haven't been finalized. I certainly appreciate that they haven't been finalized, as far as capital funding is concerned. I wonder whether they've actually been finalized within the ministry. For example, is the British Columbia Cultural Fund, which originally came from lotteries, still a fund of money? Is the Heritage Fund, which originally came from lotteries, a fund of money for which you're now using interest to fund various cultural and heritage tasks?

[3:00]

Hon. D. Marzari: The B.C. Cultural Fund was established about 25 years ago. It was funded out of general revenues and has always sat there as a special fund which has delivered a portion of its interest into the cultural services branch. That has been the function of the Cultural Fund. Ostensibly, that will continue to go on. The Cultural Fund delivers a certain amount each year into our budget. This year it's $1.615 million. That is its contribution as a special account.

C. Tanner: I understood that from time to time that original set-aside of funds -- I suspect your party over the last 20 years has never liked it, because you never did like special funds very much -- has been enhanced by money from the Lottery Fund, hasn't it?

Hon. D. Marzari: First of all, I don't think that government has any aversion to special accounts. However, from review of the special accounts that have been established over the last number of years, I must say that most of those have been shell accounts and there's no money left in them. It's interesting to be able to answer people about special accounts. In fact, most of these are just numbers on a ledger somewhere with absolutely no money. Most of the special accounts have been depleted. I'm not even sure whether the British Columbia Cultural Fund has money in it at this point. 

[ Page 2362 ]

All I know is that over the years the cultural services branch has received the interest. Lottery funds have never been involved, except -- I am told by my assistant deputy minister -- from time to time to top up the contribution of the B.C. Cultural Fund.

C. Tanner: Can this member, can this side of the House and can the public then assume that we have now made a basic decision as far as lottery funds are concerned? Are they no longer, as they were originally in 1972 when we first brought lotteries to this province, to be used for culture, sports, recreation and specifically for health? Are they now going into general revenue? Will some of it come back through the departments? And will a system be worked out where people can apply through the department for some of those funds?

Hon. D. Marzari: I almost prefer to have these questions asked of my colleague in the other room, but it is my understanding that.... I know that the funds that are designated for the arts are now firmly contained in the cultural branch, in our ministry here. That is the basic message. There is no confusion about that. It was a major achievement -- although, as I said this morning, it doesn't seem major -- for arts planning and strategic development that the money be in one place so that it can be properly allocated by arm's-length agencies. That is clear. The lotteries branch is presently investigating what it might do with some of the money it collects. My colleague the Minister of Government Services is at present conducting that public consultation to find out what the logical role of a lotteries fund, if there's to be one, should be.

C. Tanner: The last word on this. It is with some hesitation that I ask the corollary to my last question, and that is: will this also apply to casinos and bingos?

Hon. D. Marzari: The Gaming Commission, which is under the Attorney General's ministry, is presently reviewing its relationship to the organizations it funds. Arts organizations -- I know this, because I've done it myself; perhaps you have as well -- have spent many years angling to be positioned in the right place at the right time to get the right casino night to raise the $11,000 to be able to do a performance. All of us have spent many evenings, I'm sure, in smoke-filled rooms until three in the morning, acting as the volunteer banker or whatever to ensure that a favourite theatre company or dance company gets some bucks. It's not the way to do business, and it's certainly not the way to sponsor cultural activities. The Attorney General is presently conducting his own review with the Gaming Commission as to the future development of bingos and casinos, which, admittedly, is a piece of the life stream of community services, some of which go into culture.

C. Tanner: I wanted to bring that up so that the minister could tell the world, particularly other organizations like the ones that she and I have obviously been involved in, that there is a slim chance that sometime in the next year or so people won't have to spend their time in those smoke-filled rooms. That money will be raised in a more civilized manner.

I'm going to change the subject now and ask the minister whether she could specifically and quickly give us some idea of how she is going to support the following activities: the B.C. Arts Board, the B.C. Festival of the Arts, the Pacific Rim Institute of Tourism and the B.C. publishing industry.

Hon. D. Marzari: Let me update the member on information that I've just received on the Glen Brae house, Canuck Place, in Vancouver. As far as we know, no application has been formally made to the Heritage Trust around this property. Some discussions have taken place with ministry staff to determine whether or not the site is eligible for any of our various programs. We're looking forward to receiving an application. I shouldn't say that. Heritage Trust would undoubtedly want to see an application, and if it complies it will go on the list that Heritage Trust deals with every year. Our staff and cultural services branch will continue to provide assistance where it's required.

On my plans for the various councils, boards and agencies which come under the purview of Tourism and Culture.... I believe I spoke this morning at some length on the Arts Board. B.C. Arts Board has a good reputation in this province and seems to be well respected by artists and agencies alike. It has been operating with a group of about 14 people appointed by government, who basically make their decisions based on review panels that are established to review the individual artist, performing arts grants, dance, music, theatre, etc.

It has been, to this point, what is called in the ministry a wrist-length board, meaning that occasionally decisions have been made which are not necessarily the decisions of the peer review process. It is very strongly felt in the artistic and cultural communities that we have to establish rules and regulations to make ourselves consistent with the Canada Council and certainly bring ourselves in line with what other, more progressive provinces have done, to refine and define and hone the Arts Board into a true arm's-length board. At present the Arts Board's funding is $11.4 million, and that's for the grants it distributes.

One of the first things I did on coming into this job was to ask the Arts Board to do a review of itself and review the Ontario model and the Ottawa model, the Canada Council model, the chair of which -- I must correct myself from this morning -- is Allan Gotlieb. Ms. Jocelyn Harvey is an assistant director of the Canada Council, and that was the person with whom I had my conversation. When I asked the Arts Board to do a review of itself, we did not go out for a fancy consultant or ask for a special mammoth report to be written, and it is within the parameters of a study that the Arts Board has structured for itself that the Arts Board and the cultural services branch are in fact developing a business plan and a prototype agreement about how it wishes to be perceived.

In the next six months, as we go through this business plan and refine it, this ultimately will become the B.C. Arts Board. Hopefully, it will have its own 

[ Page 2363 ]

legislation and will be its own body. I believe that as this province evolves to a more sophisticated cultural policy and a more sophisticated attitude towards culture and the arts, it will be better serviced by a body such as this. It will be its own trust, so to speak.

The next body the member asked me to speak about is the B.C. Festival of the Arts. I had the special privilege of attending the Festival of the Arts and opening some of its activities last week in Vernon. This province has a great deal to be proud of in the Festival of the Arts. It's an event that brings together the talent of young people around the province once a year. It concentrates the young dancers, singers, musicians, orchestras, performers and theatre people, and gives young people a chance to mentor each other, look to their peers for inspiration and to be adjudicated by respected professionals in the field. It is also a visual arts gathering place.

I must say that the curling rink in Vernon last week was one of the most splendid art galleries I have ever had the privilege to be in. It was a beautifully mounted show of work that has been done by artists throughout the province over the last year. It was adjudicated, and awards were given. It was a well-done, highly professional show, which the staff should be commended for.

This government has everything good to say about the B.C. Festival of the Arts. Its funding in this year's budget for next year's program has been protected at $800,000, and we will continue to encourage the B.C. Festival of the Arts to work on its inner administration. Some difficulties have evolved as it grows to an adolescence, if you can call it that, but it's working well. The five groups that sponsor it are working well and are constantly coming up with good ideas. I am in touch with those people and want to see them build its infrastructure in a way that everyone can continue to work together.

The third area the member talked about was support for book publishing. The ministry has a number of programs that support publishing. In fact, we in B.C. do very well in publishing. I believe we have 57 or 58 different publishing companies in British Columbia, which is far more than most provinces. After Ontario we're probably the second-largest publishing province in the country, which comes back to my suggestion this morning that our artists and writers are the ones who are helping save this country and helping define what the constitution should ultimately say about the future of arts and the artists and the country.

We have a $450,000 publishers' grant allocation, which services the industry by injecting money into the infrastructure of the book publishing business. We will have a similar amount this coming year. The $450,000 will not be cut back. The applications that come forward from publishers are reviewed by an advisory committee that represents the whole publishing industry in this province. We also provide an annual operating grant to the Association of Book Publishers of B.C. We will continue that grant. We support annual B.C. book awards, programs that assist literary periodicals, involvement in the western magazine awards, assistance programs for individual writers and a scholarship program that includes awards for literary merit. I believe we also have a Writers in Libraries grant program, which provides community writers a chance to apply through their libraries for a small grant. Many of these grants are very small, but they do provide some assistance to creative writers and publishers in our province.

[3:15]

The last agency that my ministry is responsible for that the member asked about was PRIT, which stands for Pacific Rim Institute of Tourism. This year the grant to the Pacific Rim Institute is $380,000. The Pacific Rim Institute is basically developing a training blueprint for the Tourism ministry.

Tourism cannot come into its own unless it has got quality service. Service cannot be quality until we are encouraging the profession of tourism and developing an ambition in young people to think about tourism as a career. The Pacific Rim Institute is doing that and developing a blueprint for action around training and developing mechanisms to upgrade quality of service through education and talking to school kids, setting up an expo, which they did a few months ago downtown. Hundreds of school kids from around the province came to look at what was available in tourism down the road. We believe that this is a very good investment. In fact, the federal government has partnered with us in establishing the Pacific Rim Institute of Tourism. Its board is hard-working and has an excellent staff that operates out of Vancouver. We are looking forward, in a few weeks' time, to unveiling the blueprint for action around tourism training.

C. Tanner: I appreciate the thoroughness of the answers that I got. I have to be a little careful here, because I don't suppose it is a secret that I've been involved in the book business for the better part of 25 years. I have some very strong feelings about what's happened to the book industry in this province and in this country. I'm not always sure that both federally and provincially we follow the right course. One of the things that I've always been concerned about is that authors and artists sometimes are neglected because they don't make themselves known, or because they can't find their way through the labyrinth of bureaucracy to get to whomever to get some support to continue to do their artistic endeavor.

In that respect, I was wondering whether there has been any review at all with regard to the amount of money that is allocated to publishers vis-�-vis the amount of money that is allocated to authors.

Hon. D. Marzari: The $450,000, which was a grant in 1991-92, remains. This was a grant straight to the publishers allocated, as I said, by an advisory committee that I trust. The book publishers of B.C. are very much involved with the allocation of these grants. The book publishers know who's having troubles and who needs to be bolstered. It's very important to us to use this $450,000 to bolster our publishing industry. It is also very important for us to be conversant with the federal regulations and new supports or distractions from the support for book publishing that are coming down from the federal government. We are keeping a 

[ Page 2364 ]

watching brief and occasionally making phone calls or visits to the federal Minister of Communications and Culture on these issues. The book publishers in B.C. are, as I say, looking closely at what happens to the constitutional language and how we hold the country together. That's one of the things that I'm involved with them on.

C. Tanner: I suppose because I feel a certain delicacy in this matter, in that my wife derives an income from it, I was probably being too delicate, and the minister misunderstood my question. I am sorry. Let me be very bold and blunt about it. It is my view that rather than giving subsidies and help to publishers, the federal and provincial governments would do better to give money to the artists, to the authors. In that respect, I think the money would be better used. I think the industry would become more competitive, which it needs to be. The government would spend its money more rationally, and I suspect the results, in the long run, might be better than what we're experiencing now. Could the minister comment on that?

Hon. D. Marzari: We're actually doing both at the present time. There is project assistance for creative writers in the province, and that total comes to $100,000. But I take the member's suggestions seriously. It is certainly something that should and can be discussed both with the book publishers and the authors. I do not want to set one against the other, because both depend on each other, but I must say that distribution is a major factor in Canadian culture -- distribution of film or books -- and before any decisions were made around the reallocation of these dollars, I would want to know the impact that it would have on the ability of Canadians to read Canadian material. That is, if anything in this day and age, in this very year, of utmost importance.

I will take the member's suggestions very seriously. I will discuss these with the industry itself and see whether or not we can continue to do both and continue to do both better.

C. Tanner: Madam Chairman, by any reasonable standards any civilized and cultured person would know it's teatime. As a consequence, I would point out to the minister and to everybody else that I've got no more questions.

Hon. D. Marzari: Just to bring up to date some of the questions that have come forward, may I read into the record that the total revenue from museum admissions in 1991 was $1,742,959. How much are kids spending to get into the museum? In the '91-92 fiscal year, 48,393 children from B.C. schools got in free; 16,591 children from out of province got in for $1. That raised the obvious amount. In '91-92, six-to 18-year-olds generated $55,669. So the total direct fees for 87,319 children was $72,260. We sold 84,823 family passes for revenue generation of $1,017,000. Each family pass allows unlimited visits by two adults and any number of children. These are numbers I want to put on the record.

We canvassed the issue this morning. The issue is, obviously: should a museum, which is a reflection of the continuity and the heritage of a community's past, be charging money in the first place, and does it really contribute massively to the operating costs of the museum? At this point, at $1.8 million, the revenue is generating a substantial chunk of the operating costs of the museum.

As I say, it's a difficult decision, to say that should be turned off. My position, and the position of government, is that ultimately we will turn off that revenue stream. In the meantime, however, there are capital adjustments -- additions and new projects -- that the museum very much wants to see. Although the museum has a very active Friends society that works on its internal operations and a very active fund-raising society, we are not in the position where we can say this is a museum which is living up to the expectations and the aspirations of the community that it serves. I want to see that happen ultimately, and perhaps we will look at slightly more innovative ways of funding the museum over the long haul.

[3:30]

C. Tanner: Thank you to the minister for giving us those figures from this morning's debate.

Just wrapping it up from this side of the House, I think I can tell the minister and her department that as far as this member is concerned, he is satisfied that the minister is doing a far better job than her predecessors -- in plural, because there have been all sorts of them in the last five years. In this respect the government is doing better than the last government, as far as I can see so far. There is a definite improvement.

I appreciate that the minister has worked hard in her department for the last six months. However, I do have one improvement to suggest, and that would be in about four years' time, when I sit in her seat and she sits in mine.

Vote 58 approved.

On vote 59: ministry operations, $58,734,000.

Hon. D. Marzari: Vote 59 covers ministry operations: administration and support services, cultural and historic resources and tourism. It is basically the operating budget of the ministry.

Vote 59 approved.

ESTIMATES: MINISTRY OF FINANCE
AND CORPORATE RELATIONS

On vote 35: minister's office, $325,213.

Hon. G. Clark: Hon. Chair, I'm delighted to make a few introductory remarks, which I think would serve to summarize, for the benefit of the committee members, the 1992-93 estimates of the Ministry of Finance and Corporate Relations.

The estimates for the ministry operations comprise six votes. Vote 35 is the office of minister, as we're 

[ Page 2365 ]

debating. Vote 36 is for the operations of the ministry's nine divisions.

Registries and ministry support services, as you know, has temporarily been assigned to the Ministry of Government Services. For the purposes of the members opposite, they may want to ask questions about that, because they were denied, essentially. It may be difficult to ask questions of the Minister of Government Services. Second, Treasury Board staff; third, economics and policy; fourth, government personnel services; fifth, planning and statistics; sixth, office of the comptroller general; seven, revenue operations; eight, financial institutions commission; and nine, the TRIUMF-KAON project office.

Vote 37 is a $10 vote for the operation of the Crown corporations secretariat, which means it's fully cost-recovered from the Crowns. Vote 38 is a $10 vote for the disbursement and recovery of pensions and employee benefits contributions. Vote 39 is for contributions to the B.C. Ferry Corporation, and vote 40 is contributions to B.C. Transit.

I'm also responsible for vote 64, which is in a different place in the estimates book, for management of public funds and debt; vote 65, which is contingencies and new programs; and vote 66, which is the government accounting systems strategic plan, better known as GASSP. These three votes are shown at the back of estimates under "Other Appropriations."

The total expenditure requested for ministry operations in votes 35 through 40 amounts to $366.97 million. As well as funding in votes, the ministry operates self-sufficient programs through the following five special accounts.

British Columbia Securities Commission. This special account provides for the operations of the commission and the cost of administering the Securities Act and Commodity Contract Act. Fee revenue is obtained through the industry and is credited to the account, and expenditures related to operating the commission are charged to the account. That account is fully cost-recoverable, so the securities industry essentially pays for the Securities Commission in British Columbia.

The provincial home acquisition account is also governed by my ministry for the purpose of paying grants to British Columbia residents obtaining a home and to make loans secured by second mortgages. In June 1989 most of the second mortgage portfolio was sold to the private sector.

Provincial treasury operations is another special account. This special account provides for the operation of the provincial treasury including investment, debt management, banking, cash management and loans administration services to its clients. The provincial treasury's expenditures are charged to the account, and fee revenue earned from clients is credited to the account.

Provincial treasury revenue is another account. This account provides for net revenue generated from various financial agreements managed by the ministry to be credited to the account. On balance, as you know, there is a very large surplus in those accounts because the fees charged are generating significant revenue from an outstanding staff in the Ministry of Finance.

Finally, the insurance and risk management account was created for the purpose of providing insurance and/or risk management services to the government. Revenues to this special account represent amounts paid by participants and expenditures or costs related to administering risk management services, agreements, self-insurance services to hospitals, schools and colleges, and for the settlement of claims and purchases of insurance. The member should know that the insurance and risk management services provided by government have saved the taxpayers millions of dollars. Again, that's a relatively new innovation in the government of British Columbia.

My ministry's main purpose and goal is to maintain strong fiscal integrity in this province. This is achieved by ensuring that public money is collected, managed and disbursed in the public interest, and that the provincial marketplace is fairly and effectively governed and has the confidence of all who use it.

The Ministry of Finance, which I'm privileged to represent, has historically been the main engine of government in British Columbia. Under the Bennett years the Treasury Board was a very powerful organization, and to this day it obviously retains some of the best staff, in my view -- and I say this with respect, because I'm not sure all my colleagues would agree. Arguably, anyway, it has the best and the brightest staff of government and, in some respects, the toughest. Very rigorous analysis takes place in the Ministry of Finance. I'm very proud to be the minister responsible for that. In addition, we're trying to expand the scope of the Ministry of Finance operations in order not just to look at narrow expenditure control initiatives, which is of course very important, but to marry that with the broader perspective of the public interest in general and with the kind of policy agenda the government wants to pursue.

In fiscal year 1992-93, there are some other major initiatives that we are reviewing, which I'd like to canvass briefly. One is the pay equity initiative, which takes place under the government personnel services division. Although clearly the lead ministry in this regard is the Women's Equality ministry, the actual nuts and bolts of negotiating pay equity agreements, and most of the work being done, is being done under government personnel services division.

In addition, implementation of the Peat Marwick recommendations is a major task. As you know, we have an internal committee with the comptroller general. My deputy minister and others review that. There are some major recommendations that we are reviewing, which will consume significant energy to implement. They're by and large worthwhile, but we're reviewing them. Provincial treasury is a good example of a place where we can do more. I'd like to see us do more, but in some respects the rules conspire against it in the government right now. Peat Marwick recommended certain changes which would give more flexibility and more autonomy to agencies like the provincial treasury, without making them Crown corporations and outside the ambit of either this Legislature or in some respects the government itself.

[ Page 2366 ]

In addition, we have enhanced the value-for-money auditing, which is a term that I'm not sure is well-defined. In the literature, it's not a strict accounting technique but one that involves policy and program evaluation. We're reviewing how best to undertake that. There is going to be some resources added to that, because it's obvious there has been no program evaluation, no value-for-money auditing and no zero-based budgeting -- at least, for many, many years in British Columbia. In terms of cost containment, we need to do more with less, and that means we have to look at more efficient ways of managing certain programs.

In addition, we have the Korbin commission initiatives which I could answer questions on. I know that opposition members have been briefed. No reports have been filed by the Korbin commission, but it's a very interesting exercise. They're going through it, and I hope and expect that opposition parties and members of the House will be involved and consulted in that endeavour. It's a major undertaking, because of the convoluted way in which government has developed in British Columbia. We have FTEs and shadow FTEs and contracting in and contracting out. We really need to get a better handle on that side of the equation; in part, so that we can maximize expenditure control.

We're looking at ways in which we can do more with less. That means maximizing some revenues. There is significant leakage in some of our taxes, which we hope to tighten up, not in any draconian way, but it's in all of our interests to make sure that everybody pays their share of taxes. If someone manages to cheat the system or escape taxation, all it means is that those people who are law-abiding, who aren't taking advantage of a loophole or trying to cheat the system, have to pay more, and that's not in anybody's interest.

On balance, we have a ministry of government which has played a major role in British Columbia's history and continues to do so. We do have some very fine staff working in the ministry in all of the areas -- and there are many. As you can appreciate, we did inherit a structure from the previous government which had gone through some changes, as you can see by nine different divisions. It really is a very broad ministry with quite a varied mandate: registries, revenue, Treasury Board, economics and policy. It's in some respects a little broader than some other line ministry functions. That might be partly the nature of the Ministry of Finance, as a horizontal ministry that deals with all avenues of expenditure and revenue and all ministries. However, it does present certain management challenges.

In addition, as you know, the Premier has assigned to me direct responsibility for B.C. Ferries and B.C. Transit, two heavily subsidized Crowns which we're working on to reduce the level of tax per subsidy. In addition, as the chair of the Crown Corporations Committee of Cabinet, the Crown corporations secretariat attached to that committee reports through me, and through that committee deals with all the activities of the Crowns. We're very optimistic that there is tremendous potential for cost-cutting and efficiency measures in the Crowns as well; in fact, in some cases, for revenue generation for the public through those Crown corporations.

[3:45]

Finally, we do have the TRIUMF-KAON project, the PNE and some other ancillary areas, which I'd certainly be delighted to answer questions on. With those brief opening remarks, I'd be delighted to answer any questions that the members opposite have. Before I do that, let me just introduce the staff that I do have here. On my immediate left is Michael Costello, the deputy minister. Next to him is Pat Jackson, manager in the budgets and planning division of the Ministry of Finance.

F. Gingell: Thank you for that opening statement.

As one appreciates, the role of the Minister of Finance in government is a very important and a very critical one. We are just at the start of the mandate of this government, so as far as the past is concerned, I can appreciate that the minister has a desire to clean the blackboard somewhat and put his own stamp and imprint on the operation of his ministry. I appreciate that he spoke briefly in his opening remarks about the Peat Marwick reports, but if I may I'd like just to go back to them, and maybe we could have some exchange on the issues.

In my mind, there were really four main issues. The first one that Peat Marwick focused on was a lack of planning. You spoke about the number of different departments that report to your ministry, and Peat Marwick focused in some depth on the need for there to be some central, well-organized core group within Treasury Board with an overall role in planning, not just planning for 1992-93, but being concerned about what we do in '92-93 and the effects on '93-94 and so on. This being the important subject that it is, I can appreciate that it isn't something that the minister will delay on, and I would be interested in your comment to that.

Hon. G. Clark: You're absolutely right. Lack of planning and coordinating the policy and fiscal objectives of government is pretty clearly evident. We do have a system now of incremental budgeting, which you can't totally get away from, but it's a bit annoying. Frankly, what happens is that you go before Treasury Board in the budget process which we inherited from the previous government, your base budget is protected and you're applying for further funds for either enhancement, maintenance or new programs.

You focus all your attention scrutinizing the incremental budget items, and meanwhile you have big ministries like Health and Education which have huge budgets and really go unexamined, at least in a major way. So you're absolutely correct, we want to enhance and improve the budget process and enhance the planning capacity both of the Treasury Board and of the government generally in terms of marrying the policy and fiscal objectives. We're working on doing that.

F. Gingell: During my short time in this House playing a different role in life to what I've done in the past, one of the things that has really struck home is the 

[ Page 2367 ]

size of government: the size of provincial government, the size of the federal government, the size of the municipal and regional governments, and how all these four levels of government -- five if you want to include school boards -- really overlap, and the costs that taxpayers incur because of this.

During the minister's opening remarks he said that it was very important that we learn to do and struggle to do more with less. Actually your subsequent reference was to revenue collection, but I think it was intended to be more in the field of expense control. Has the government and your ministry given any thought to the question of shrinking government? It's a subject that is close to my heart, as you know.

Hon. G. Clark: Your friend -- and I was going to say and mine -- the former minister, Mel Couvelier, at a federal-provincial conference for Finance ministers, actually managed to engineer a major analysis called "Overlap and Duplication." I don't believe that it has actually been published yet, but it may be coming out soon. Obviously we've been a party to it.

Unfortunately -- certainly for the member opposite and, in many respects, for me as well -- the conclusions of the study, which all provinces and the federal government participated in, did not say that there would be significant savings in our federal-provincial system; in fact, they said rather the opposite. They said that while the federal government has a ministry of the environment that spends a lot of money, it has tended to focus on niches which were not filled by provincial ministries of environment. So even though there are two big ministries of the environment operating in British Columbia, with lots of staff and money, and intuitively you might think that it would be better to have one, the cost savings of doing that aren't nearly as significant as you might think. In general, that is the result of this major analysis.

However, there are some cost savings. I don't want to be blanket about it. I'm very concerned about it, and I've raised it at federal-provincial meetings in a general sense and in a constitutional sense. I think that some changes may come out of this constitutional discussion which may deal with these problems and make sure that the accountability is where it should be. One of the problems with this overlap and duplication is that the taxpayer doesn't know who's responsible. If it's the Ministry of Environment, constitutionally it's the provincial government, so people should quite appropriately ask the provincial government, or complain to that government, about environmental questions. Yet there is a large federal government presence in that field as well. I think that confounds our system of democracy, and we really need to make that much cleaner.

In a general sense, any overlap or duplication within the government of British Columbia is a great concern of mine. I think you're correct, we have to do better. As part of this budget cycle, rather than just reviewing the incremental budget, we'll be looking at people's base budgets for overlap, duplication and cost savings.

It is a tough area though. We have intractable social problems which, by their nature, cross boundaries of ministries. If you deal with children in poverty, for example, you have to deal with the Ministry of Education and the Ministry of Social Services. In many cases you also deal with the Ministry of the Attorney General. In some cases you deal with the Ministry of Health in terms of maybe alcohol abuse or the like. So you end up setting up committee after committee -- interministerial committees, they call them -- of officials and the like to try to deal with complex social problems. I find that frustrating, to be candid, when you want to get a job done, because these various ministries overlap with each other, and it becomes extremely difficult.

We're working very aggressively on ways in which we can streamline those processes but still involve the major players. I'm fairly optimistic that we can do better than we have done, but I'm not as optimistic as I was before I got elected about how complex these challenges are. We're certainly working on it.

F. Gingell: The minister spoke about the need to do zero-base budgeting for the development of budgets and how in the past they had been developed and prepared on an incremental-budgeting formula or methodology. Could you advise what method was used for your 1992-93 budget and whether you plan on ensuring that that is changed for '93-94?

Hon. G. Clark: The process is under review, and I really can't say right now what the shape of the budget process is going to be, but I hope to do that. I think it will become clear. Any jurisdiction that has tried zero-based budgeting every year has really failed because of the enormity of that task. What we have to do is devise a way of perhaps doing cycles of reviews of ministries and looking for fruitful areas of cost savings and efficiency gains. We're going through that now. The exact process will become clear as the year goes on, but we haven't made any firm decisions. Certainly no decision has been made regarding how we're going to proceed, but we've narrowed it down to a range of options.

I think and hope that when we come before you next year, I can explain in more detail -- or certainly if there are public announcements made -- about how we intend to proceed. The current system is not acceptable for another year, and that won't take place. Trying to go to a pure zero-based budgeting system is not going to happen. It is simply too expensive, too difficult and too onerous. Somewhere in the middle where we're doing more proactive reviews of base budgets, in addition to some tougher guidelines and scrutiny about future spending, is probably where we will end up.

F. Gingell: In looking at the Peat Marwick report, there was also a major focus on the need for the integration of all the accounting systems within all of the various government ministries, agencies, Crown corporations and boards. I was wondering if you could speak about that for a moment, and also deal with GASSP, I think it's called, and whether those two things are the same.

[ Page 2368 ]

Hon. G. Clark: Yes, they are really the same. The corporate accounting system that the government uses is outdated and antiquated. As we've said, there are, I think, 79 accounting systems in government with the advent of computers. They don't talk to each other, they don't use the same software, and frankly, it's almost scandalous that the government could operate this way. Having been in this position for a while, I can sort of see why, because to fix it is extremely expensive. As you know, in this budget I believe it's $5.9 million just for the first phase of the GASSP program -- the Government Accounting Systems Strategic Plan -- for this year. That, in a tough fiscal environment when we have competing demands for funds, is difficult to swallow. We've done that. I'm actually very pleased that we've done that. It will consume more resources next year and the year after that, I believe, but once it's up and running, there should be significant cost savings and certainly efficiency gains in rationalizing the accounting systems of government.

The comptroller general is, as you know, seized of this matter. It is expensive. We're using private sector consultants. I would be delighted, if the member hasn't done so, to make sure that he is fully briefed on where they are moving. It's, as they say, Greek to me -- the accounting systems of government. I'm not sure, but Public Accounts may, in fact, be reviewing this. That would be worthwhile, because it is a bit of an arcane world. We could certainly benefit. I think I would benefit and the public would benefit by more debate or discussion by learned people like yourselves on this subject. We're very optimistic that with a few years of these kinds of expenditures we can in fact rationalize accounting systems in the British Columbia government, and thereby improve cost savings, efficiencies and probably accessed information for members and for the public.

[4:00]

F. Gingell: You indicated that 1992-93 was the first year. I quickly went through the estimates and couldn't put my finger on it. I was under the impression that it was the second year, and I was wondering if you could advise us if there is any view of the total cost of this program and how many years it will take to come to fruition.

Hon. G. Clark: I'll just try and get that information for you. Sunny Mathieson has come in. Unfortunately the comptroller general and some other senior staff are at a major retreat for senior financial officers in government, dealing with precisely some of these questions as we speak. Ms. Mathieson will review it.

You're quite correct that last year the government spent $3.3 million on GASSP. This year it's $5.9 million. This year there is a pilot implementation project currently underway in two ministries of government that have a real need in this regard.

I'm just checking to see what the total cost of the project is. I'm a bit suspicious. These accounting and computer projects tend to cost slightly more than they usually estimate. Nevertheless, as Peat Marwick pointed out, it's really endangering the ability of the government to function. At some point you simply have to invest in that kind of needed infrastructure.

The total estimated costs are $14 million. This is the third phase of this initiative. Money spent to date on the GASSP project is $5.9 million plus $3.3 million. We still have next year. You can anticipate further spending.

I want to be candid with you that I'm not agreeing now in the House to exactly how much we'll spend next year on this project. We do have a very tough environment again. It may take slightly longer to complete this project than, I am certain, the comptroller general or my staff would like, faced with the pressures of the day. We certainly plan to complete it as soon as possible.

We continued funding this year in spite of the environment because of the problems we face as government and the Peat Marwick recommendations and because the project had already gone through. This is the third year. It was really false economy. The division completed the second phase of the project in 1991 and recommended the software solution after an independent investigation and evaluation. This is the third phase. We're starting with a pilot implementation project for a small part of the government accounting function, and then we can expand it from there. We're certainly committed to doing it. It makes sense, but it will also save money on the long run. I'm just babbling a little bit. I'll get the information.

The total cost for GASSP is expected to be $17.5 million. The total efficiency savings is expected to be $14 million. The net cost to us is supposed to be $3.5 million. That's the independent review. This has gone through rigorous analysis. While we're spending money, we know we will save money when the project is complete. As I say, I can't predict exactly how long it will take to complete. We'd certainly like to complete it in another year, but it may take a couple of more years to get fully operational.

F. Gingell: Just dealing with this one last time, it seems to me, listening to you now and subsequently finding out what is happening with GASSP, that Peat Marwick's criticism was a little unfair in that the provincial government had already started work. They had a clearly defined program. They were moving along on it. Do you think that is fair comment? Do you think that many of your senior officials, who are working on this and have in past years, felt a little hard done by?

Hon. G. Clark: First of all, I'd say that a lot of staff felt hard done by by the Peat Marwick report, because it was critical of many aspects of the way government operated. In this case, I don't think you're right. I think Peat Marwick demonstrated that the comptroller general was absolutely correct, and -- if I can be candid -- it probably helped me persuade my colleagues that we should continue to put resources in this area. I think the criticisms of the systems were absolutely accurate, and those were criticisms that the comptroller general had already identified, by and large -- although perhaps not as amplified. While they were working to rectify it, every year they had to come before Treasury Board and get approval to spend. In a tough year that might be 

[ Page 2369 ]

difficult to do. I am, of course, delighted that we managed to convince Treasury Board because, as you know, unlike other Treasury Board decisions, that's one I don't get to participate in, and I think that makes a lot of sense.

If I can clarify the record -- I think my staff said that the savings is expected to be $14 million a year. The total cost of GASSP implementation -- my recollection is a little different -- is about $20 million. That's probably realistic. One of the reasons we could sell it, of course, is that not only does it make sense, but it makes economic sense as well. Nevertheless, you're still dealing with those expenditures, and it's tough to squeeze $5 million or $6 million out of Treasury Board.

F. Gingell: All of the improved procedures and accounting systems and the standardization of accounts so that they become clearly more understandable are not going to have the necessary results unless we do one simple thing: change all the year-ends of all the various organizations to the same year-end. In businesses we tend to look for a year-end that is the end of a natural cycle, but the provincial government works on a March year-end and always has. When we look at the public accounts, many of the Crown agencies have December year-ends. It really does confuse the issue. I wonder whether a decision had been made to make those changes and what your thoughts are on that subject.

Hon. G. Clark: No decision has been made, and, to be candid, you're the first person who has brought it to my attention as a concern. I think you make some good arguments. I'll certainly review that. I think it would make sense to have a common fiscal year where possible. There may be peculiar reasons for some of them. I don't know, but certainly I'll investigate it.

F. Gingell: Another of the items that concerned Peat Marwick, and the third of the four subjects that I wanted to focus on, was what they described as lurking expenditures -- costs of land claims and all kinds of various commitments that the province has made. They make a commitment in one year, and they don't really worry about it from that point on, but the costs go up and up. The Vancouver Island gas pipeline is perhaps a good example of that. I'd like to ask the minister whether any work has been done on a thorough review of all of the various matters in which the province is involved for the purpose of getting some kind of feeling or delineation of the size of the problem.

Hon. G. Clark: Certainly that is one of the things being investigated by the committee in my office which has been charged with looking at the Peat Marwick report. You're quite right. It's hard to quantify some of these. Land claims is a good example. The VIGas project is an excellent example. The problem with VIGas is that it's really predicated on the price of oil, and you have to make certain assumptions. Mind you, almost any assumption is a bit frightening, given that project. So we are cataloguing those. We're reviewing them. We have to come to grips with how we're going to deal with them. We will certainly make that information available to the public so they can participate. In the abbreviated budget process last year we tried -- I tried, at least, with my officials -- to convince people of the state of the financial affairs of the province, not for partisan purposes but because we simply have to do a better job of informing people of the situation so that people can at least, if they.... They can criticize me if they like, and I don't have any problem with that, but we really want to make sure that everybody has the same information base.

These lurking expenditures.... By the way, I thought it was quite a clever phrase, not one usually expected from an accounting firm. I think it is a very serious problem for all governments, because they tend to focus on three-or four-year time horizons rather than on some real problems.

Another expenditure item which I'm dealing with almost daily is B.C. Transit -- which we may get to. It is quite frightening in terms of the costs of SkyTrain extensions which were decided upon and are virtually built now, but for which the bills come due in the next year or two and for which there is no budgeted appropriation. They're extremely expensive items. I guess as a politician one has a temptation to build something today that someone doesn't have to pay for for three or four years, on the assumption that I might not be there and whoever's there can deal with it; but it's clearly not very good public policy. We faced it a lot under the previous administration, and we're looking at some of those problems now.

Trying to get a handle on all future expenditures is a major undertaking that we're certainly beginning -- just beginning, really -- to do the work on.

F. Gingell: Not exactly in the field of lurking expenditures, but we do carry on the books of the province a whole series of what I'd like to term at the moment "accounts receivable" that will be paid by future grants from this same government -- a grant from the government to the hospital authority or the school board or the university, which in turn will pay it back to the fiscal loan agency to make payments on their long-term debt. I must admit, from a practical point of view, that I'm satisfied in my own mind that all these debts deal with buildings that have been built and equipment that has been purchased, things that have a long life. However, the auditor general has brought this matter up in his report, and it is a subject that has been considered at some length by the Canadian Institute of Chartered Accountants. who have made certain pronouncements and recommendations.

I wondered whether your ministry was planning any change in the presentation of the financial statements for the year ending March 31, 1992, which we expect at any moment.

Hon. G. Clark: We're reviewing the whole question of capitalizing expenditures. I guess the question is.... It is tax-supported debt, these financing authorities. No one pretends otherwise. The rating agencies certainly understand that this is debt carried by the province. We have no ability to pay it back except as a 

[ Page 2370 ]

result of appropriations from the government. But I think there is some merit, philosophically, to this notion: you don't run deficits for consumption today; you don't deficit-finance for consumption. But for a school or hospital, which lasts for 25 or 40 years, it's quite appropriate for future generations to pay a share of that if they take advantage of it. On that basis, I'm quite comfortable with the financing authorities.

The only question the auditor general dealt with was: should we move the debt from indirect debt to direct debt? It wouldn't affect the deficit in any way. It wouldn't affect very much. It's just a matter of saying that it's not really indirect debt, because it's taxpayer-supported debt, and it should be freed up as direct debt. We're reviewing that. I don't think it's a big issue in the minds of the public, to be candid. I don't think it's a huge issue in terms of reviewing it when we look at other provinces. The fact is that everybody knows it's taxpayer-supported debt, unlike the previous government. I've certainly not tried to hide that. I think everybody knows that. Philosophically I'm comfortable with the rationale.

[4:15]

The question that arises, which I'd be interested in the member's comments on -- not in the House but at a future date -- is whether we should capitalize highway spending in the same manner. The same principle applies if you're building a major road. If you're going to drive on it for 30 or 40 years, then you could apply the same principle. You could also apply the same principle to silviculture costs. These are expenditures for which you expect to get a return. In that case, there is a return, but it's 80 years hence. You could make a pretty good argument along the same lines. The downside is that debt service eventually costs what you might pay if you did a pay-as-you-go approach and crowds out the ability for government flexibility.

It is an interesting area. I would certainly welcome any member's input on that, because we are actually reviewing it as we speak.

F. Gingell: The fourth item that I wish to briefly focus on from the Peat Marwick report is the question of revenue collection. That is one area where your staff were subject to a great deal of criticism. I wondered what action you have taken with respect to that particular subject.

Hon. G. Clark: I think most of the criticism was fines and fees, which aren't really the Ministry of Finance; perhaps they should be. We are reviewing that question as well. A lot of the criticism was around, I think, traffic fines, which are administered by the Attorney General's ministry.

We do have a loans administration branch, a fairly new creation that is doing an outstanding job. The marginal return to the government for each additional loan collection officer is about $600,000. That will presumably go down as we hire more. That is a fairly new creation -- a couple of years old. There are very capable staff doing an excellent job recovering moneys from, say, student loans. Very often when the student or ex-student is phoned up they are surprised that they're supposed to pay this back. They didn't realize that. When they're informed that they're to pay it back, they pay it back. We are doing extremely well in recoveries.

The fees and licenses are by and large administered by the individual ministries. The traffic fees, which was a big problem.... The government as a whole and the Ministry of Finance are involved in a review of that. At this moment the responsibility lies with the Ministry of Attorney General. I know that they are working hard on a project to do a better job than has been the case in the past.

F. Gingell: Without my going back to the Peat Marwick report, because I didn't bring it, it seemed to me that as well as those things it dealt with timber royalties and a whole bunch of other subjects. From memory, I thought there was a very strong recommendation in the report that all those collection functions be concentrated or focused in one staffing under your ministry. Could you respond to that?

Hon. G. Clark: Not surprisingly, I'm sympathetic to the view that we should centralize some of the collection functions. The trade-off is that the line ministries are often the interface with industry. Forestry is a good example of that. There is a sense that the industry which is paying the bills should be serviced by the ministry that understands that business. I hate to keep saying this, but in fact it's the case: we are reviewing these questions. I'm sympathetic to centralizing them. I think there are some efficiency gains, but there may be some problems with industry particularly in having what they might perceive as tough, mean accountants in the Ministry of Finance doing a job which traditionally has been done by people who perhaps understand the industry a little better. That's certainly the argument that we're receiving, and we'll review it.

I think the Peat Marwick report has indicated that there are problems in collecting in those line ministries. The Ministry of Finance does a better job, and can do a better job. It's not clear that the solution has to be that we centralize in Finance; it may simply be that we need to enhance the capacity of the line ministries to collect and to work with Ministry of Finance officials in some way in which we can do it more efficiently but still retain the interface between those ministries and the corporate sector. Mining or energy are other good examples, as the member knows. In terms of the Ministry of Energy, it has always been the agency that deals with those questions. We're reviewing it. I'm very interested in dealing with it in a way which enhances efficiency. I know government generally is, so there may well be some changes, but at this point no changes have been made.

F. Gingell: While we're on this subject, Peat Marwick also recommended that we have a consolidated computer system set up for use by the loans administration branch for integration with the loan portfolio system of program ministries, and eventually integrate it with the entire program ministry systems. 

[ Page 2371 ]

Are we moving towards that, or are we presently staying with separate electronic fiefdoms?

Hon. G. Clark: We are reviewing loans and administration. I'm just advised that there has been a loan program which has been transferred to the loans administration branch. In my view, that's the appropriate mechanism, but obviously we have to move slowly, in consultation with the ministries affected. We do have an odd situation. It's not odd, but the ministry gives out the loan, and then says, "Oh, here, you administer it now." Sometimes that isn't particularly helpful either. It would be nice to have one centralized system. This is sort of what we're moving towards to deal with any loans administration, and to have the loans administration branch consulted before loans are given out, so the appropriate security is taken and the like. That is where we're moving, I think. There has been significant progress to date. We're going to continue over the next few months.

F. Gingell: Dealing with the subject of loans, it always seems to me that if the province provides financial assistance through the means of guaranteeing a bank loan, we tend to get the worst of both worlds. I appreciate that the banks are required to monitor them; they are required to report. I'm sure there's a system set up to make sure that the process works, but it never really works quite as well when it isn't your own money. I was wondering whether the ministry has any policy with respect to the future of matters such as student loans and other loans that may be made. Is there a policy developing to move away from bank guarantees and into more direct loans from government?

Hon. G. Clark: I think it's fair to say that that's really been our experience. Loan guarantees tend to have less diligence applied to them by the agency giving the loan. The downside to us giving loans directly is that we have to borrow a whole bunch more money to do that. But you're right; in the past loan guarantee programs have perhaps not been as well handled as they might be. My hesitation at this point is to give you a blanket statement that we should do more lending but not loan guarantees. I agree with you that there is a problem, but there may be an array of solutions that we can deal with.

Ideally, from my perspective, we'd like to make the banks or the private sector institutions share the risk. Any risk that they would be exposed to at all would enable us to make sure that there's due diligence. That's kind of challenging, because you're either guaranteeing it or you're not. The problem is correct, but the solution is not self-evident. We have to look creatively at all of the options that are available.

F. Gingell: During the Peat Marwick study, while they were doing their work, they seemed to have reviewed a whole series of loans that were held in various government portfolios and recommended that in 1991-92 the provision for bad debts.... I'm not sure whether the provision for past loans and guarantees that were either bad or were going to be called in was increased to $316 million or increased by $316 million. The message that came out was that almost 50 percent of the loans made to businesses had gone bad or were expected to. When we look at your estimates for 1992-93, Mr. Minister, our calculation comes to a provision of roughly 15 percent of the amount of the loans that will be made in this current year being provided for in the form of a loss provision. I wonder why you feel that all of a sudden things are going to get so much better under your jurisdiction.

Hon. G. Clark: First of all, the real problem was the ad hoc loan program, which was by and large politically driven. I don't say that in a really pejorative way. In fact, it's just that they didn't come through the normal bureaucratic route, did not have the checks and balances that that entails and tended to be large dollar amounts. We haven't engaged in that. I'm not saying that we would never exercise the right of government to intervene to try to help a community and the like. We certainly haven't done so, and we're reluctant to do so. The Cassiar experience demonstrated to everybody that we're not prepared to throw money at a problem unless it makes good business sense. We're still hopeful, of course, that that may work out very well for us. So if we're not giving the magnitude of loans that the previous administration did, we're not vulnerable to the same kinds of losses.

I would like to ask where you got the 15 percent, because that doesn't ring a bell with me or my staff here.

F. Gingell: If I may, I would like to reverse the question, because I got it out of this piece of paper, which I'm not sure means a great deal. I'd be interested to know what your provision is for the year 1992-93.

Hon. G. Clark: The loss provisions -- any provisions -- are distributed by ministry. There's a provision in the Advanced Education ministry for student loans, a provision in the Economic Development ministry.... To be candid, I don't know the total amounts. We can provide that for you, but we have to go through each of the ministries and give you the amount that we're providing this year for the coming year.

F. Gingell: I was wondering whether you expect the comptroller general to be here, or whether he's going to be away for a day or two. I appreciate that we mustn't let things go, because obviously this session of the thirty-fifth parliament is shortly coming to an end. You assured me, Mr. Minister, in a private discussion that your estimates would come up right at the very end, so I presume that when we finish these tomorrow or the day after, the House is going to be prorogued.

Hon. G. Clark: Sunny Mathieson, at the end of the table here, is the acting executive director of the internal audit branch of the comptroller general, and the most senior person available today. I think she, my deputy minister and other staff here are competent to answer any questions you might have. If you prefer to 

[ Page 2372 ]

wait for the comptroller general to come back, we could do so, but I honestly think we could deal with almost all of your questions. I prefer to try to do it today. If some questions are not answerable, we could do that on another date or provide answers for you later.

[4:30]

[R. Kasper in the chair.]

F. Gingell: This question has been asked in little pieces, really. I'd like to, if I may, put it into one area. You appreciate, Mr. Minister, that the auditor general has qualified our financial statements for the past three or four years. It is a subject that has been discussed in the Public Accounts Committee, as you can appreciate. Clearly they have responsibility. I wondered whether, when one considers all of the factors involved -- and it seems to be a fairly simple solution -- you intended this year to have the comptroller general prepare the financial statements of the province in a manner that will not cause the auditor general to make a qualification.

Hon. G. Clark: The answer to that is yes. I'm not sure whether it has to go through a few more hoops in government, but certainly it's my recommendation to change the financial statements to show the liability so they won't be qualified.

F. Gingell: The report of your ministry which finally came out yesterday speaks of the electronic data interchange with major suppliers. It was anticipated that that would be functional and in operation right now. I wonder what the latest status report is on that.

Hon. G. Clark: That's correct. We have a pilot project underway with an oil company. In this day and age, if we can pay the bills and deal with invoices through electronic transfer, it does save us staff time and expenses, and the suppliers, I think, will like it. I fully anticipate that it will be coming, but this year we started with a pilot project.

F. Gingell: If I may, Mr. Minister, I would like to move on to the subject of government personnel services. I was wondering if we could start off....

Hon. G. Clark: Mr. Chair, it's not appropriate to ask questions on this. Would the member be so kind as to inform whether he has more questions about the comptroller general? If he does not, then I'll ask Sunny Mathieson to exit, and I'll bring in someone from the government personnel services division, if that appears to be where you're moving towards.

F. Gingell: Yes, except that I'm looking around for the third party caucus. I wonder whether they were going to ask some questions at this time.

An Hon. Member: That's going to be very difficult if they're not here.

F. Gingell: Very difficult when they're not here.

Perhaps before the lady from the minister's office leaves, I have one question. Could you advise us what has been happening with respect to investors in the failed Principal Group since your appointment to the position of Minister of Finance? I would also be interested in knowing where that shows up in the accounts.

Hon. G. Clark: An excellent question. It gets more complicated. I'm not sure how familiar the member is with the arrangement between investors in Alberta, British Columbia and Nova Scotia to recover funding. If the member is aware of the pooling arrangement between Alberta, British Columbia and Nova Scotia, then it would be easier for me to explain what we've just done. I'm not sure how up to date you are.

If I can assume that you understand that, we have just agreed to expand.... The new NDP government in Saskatchewan has decided to compensate their investors. They're the only ones who weren't part of the pooling arrangement between Alberta, British Columbia and Nova Scotia. We have just decided to reopen our settlement offer until July 31, 1992, to provide more British Columbia investors with a final opportunity to file for compensation.

The arrangement was that first Alberta decided to compensate, and they compensated quite generously, including compensating some British Columbia taxpayers and investors. When the previous administration in British Columbia decided to compensate, the arrangement was that they would essentially compensate all investors, regardless of whether they were in British Columbia. In other words, any provincial government funding would go into a pool to be divided up among investors, because of the shared responsibility, with Alberta being by far the principal payer in this arrangement. Saskatchewan was the only area where they had Principal Trust branches and investors who received nothing or received only the Alberta component. I'm not quite sure. Anyway, Saskatchewan has now agreed to fund into the pool so that their investors can have access. When you do that, it opens it up for everybody.

I actually struggled with this, because there was a deadline. Twice now there was a deadline for people to file for compensation. The question was: should we lift that deadline again and extend the time for people to file so they can access Saskatchewan money, further Alberta money and further British Columbia money? We chose to do so, in fairness to our people.

The extension depends on how many people take that up. The cost to the government of British Columbia for the Saskatchewan extension is a maximum of about $1.5 million, but it could more likely cost us somewhere in the neighbourhood of $500,000. In a tough fiscal year you're reluctant to do that, in a sense, because it costs money, and there are other uses of money in this day and age.

Just so we know, government compensation accounts for 22 and 25 percent of their recovery: 15 to 18 cents from Alberta, 6.2 cents from British Columbia, 0.6 cents from Nova Scotia and now a further sum, which I don't have here, from Saskatchewan. This enables more people from the various provinces to come in and take 

[ Page 2373 ]

advantage of that offer. It's a fairly modest expenditure, but several hundred people who simply didn't get in, weren't informed or didn't take advantage of the offer will now be able to. That announcement was made fairly recently. That means that all of the provinces with investors in Principal Trust have now come to the table and are jointly compensating people who lost their funds in that venture.

F. Gingell: I started with your May 15 news release. That release talks about British Columbia's original offer of 15 percent. When I added your numbers up, they seemed to come up to 21 or 22 cents on the dollar. I wonder if you could give us an idea of the amount of the recovery for the investors of British Columbia now, how much in total that has cost the province and, thirdly, if the amount of $500,000 to $1.5 million is the total cost in our 1992-93 anticipated expenditures.

Hon. G. Clark: Actually, nothing is in the estimates for '92-93. That $500,000 or $1 million will increase our deficit by that amount or we'll have to cut during the year to accommodate it or it will come out of contingencies. Just so you know, the people who accepted government compensation have now recovered 79 percent of their losses.

The government of British Columbia is suing Donald Cormie -- who owned a rather nice home in the Saanich Peninsula -- under the Trade Practice Act. Mr.Cormie has an application before the court to have that dismissed. It's currently before the courts, so we can't talk about it. But essentially the government of British Columbia decided to compensate holders of First Investors Corp. and Associated Investors -- subsidiaries of Principal Trust -- and is now taking it upon itself to try to recover from Mr. Cormie. I'm not quite sure of the breakdown between how much we're paying and the assets, but I think it's what I said. The difference is in the assets of the corporation. It wasn't completely insolvent; it still had assets.

So 79 percent of their losses, which is relatively.... One might always argue that it should be more, because I think governments clearly played a role in that failure. Nevertheless the governments have come to the table. The offer British Columbia made was pursuant to a very thorough ombudsman's investigation, and we have now extended that offer to late filers as a result of Saskatchewan coming in and providing some funds.

F. Gingell: I appreciate that any costs incurred in 1992-93 will be charged to the contingency fund in all probability. I appreciate that we can't discuss the Cormie lawsuit, but we wish you well on that point. I am wondering if you could tell us what the cost in total has been to the taxpayers in all the years.

Hon. G. Clark: I'm sorry; I used to know that, actually, but I don't. So I will provide that for you. I have forgotten. It was certainly in the millions, but I can't recall precisely.

F. Gingell: The Peat Marwick report also recommended that the use of the contingency vote should be evaluated and carefully thought about. I can tell that you did; you increased it from about $55 million to $105 million for 1992-93. Could you please advise us why the amount of the contingency allowance was increased this much?

Hon. G. Clark: There are a couple of explanations. First of all, I think there are some pay equity considerations. Secondly, there is funding for the normal contingencies, which are smaller than that, I agree. Thirdly, Peat Marwick also recommended significantly enhanced statutory expenditure appropriations.

For example, we lose money every year in court -- we get sued or we lose money -- and in the AG's ministry there's very little budgeted money for that. Because it's a statutory obligation, you don't have to budget for it. In other words, we lose a court case and we have to pay $20 million. You don't have to come to the Legislature to get that approved. The Crown Proceeding Act authorizes money to be spent -- paid out -- without appropriation in the House. Peat Marwick in one of their reports said: "You know you're going to have to pay some money, so you should budget that."

What I did in some respects is put a little more money in contingency in order to be more realistic in terms of reflecting how much the government is likely going to spend in the course of the day. I could have cut the deficit by $50 million by cutting contingency by $50 million. But realistically, because of these other lawsuits and pressures that we're likely to face -- and we did put some money in there for pay equity considerations rather than salt it through the ministry, which we could have done -- it's slightly larger than it is normally.

[4:45]

F. Gingell: Moving on to the pay equity subject and government personnel services, I was wondering if you could give us a breakdown of the number of government employees by male employees and female employees as of November 5 or some appropriate time around there when you took over, and what you anticipate that breakdown will be at the end of the 1992-93 fiscal period.

Hon. G. Clark: I'm not quite sure. First of all, Ron McEachern is the director of negotiated services in the government personnel services division. Are you asking for the total number of government employees?

F. Gingell: Yes.

Hon. G. Clark: The breakdown between men and women is about 53 percent women, 47 percent men. We do have all that information, which I could certainly provide for you, in terms of the wage gap, but I'm not sure if we have all the detailed information which you might require today. But we'll certainly try. I'm not sure what the other question was.

[ Page 2374 ]

F. Gingell: Recognizing the government's desire to engineer some of these relationships and ratios.... I do believe that the population actually has more men of working age than women; it's relatively close. I was wondering if you have any plan on what the percentage relationship will be at the end of this current year. Where are we going?

Hon. G. Clark: Just because 53 percent of the workforce are women and that overrepresents women relative to the public is obviously not indicative of very much. It's probably indicative of the fact that we have a lot of low-paying jobs in the public sector that only women are prepared to perform or because of systemic discrimination against women. What we really need and the challenge that government faces is not the absolute percentage of women versus men or the fact that 53 percent of the workforce are women, but that virtually zero percent of the workforce at the senior levels are women. We have very few women in management positions in government, certainly nowhere near the percentage.... Do we know the percentage of women on management staff on average? It's roughly 18 to 20 percent women at the senior level in government. The challenge is to ensure that women are not discriminated against in the pursuit of management positions so that management positions more accurately reflect the public sector.

We are taking a number of initiatives, although they might more appropriately be addressed in the Women's Equality ministry, to try to address this serious imbalance both in terms of women and in terms of other issues -- visible minorities and the like. It's quite clear that at the deputy minister level, the assistant deputy minister level and the director level, those groups in society are underrepresented in spite of the fact that we have an overrepresentation of women in the public sector generally. Again, there will be a number of initiatives taking place over the coming years to deal with that, I hope and expect, including affirmative action and some other ways in which we will go about doing that.

At this time that is really being driven by the Ministry of Women's Equality, although my staff -- you're quite correct -- will be the line ministry that has to implement any policy changes. To this date there have been no policy directives or changes made with respect to that initiative in terms of targets or levels or how we might achieve that. They're just beginning a process of working with the various personnel agencies -- GPSD and the like -- and engaging in discussion on that subject. Obviously there have been significant strides on the pay equity side, but on the hiring and promotion practices of government generally, nothing concrete has taken place other than the beginning of a dialogue and a commitment on the part of government to try to deal with what we believe is systemic discrimination.

J. Tyabji: I find the minister's comments really interesting. I know that his government has expressed, both through his ministry and through many members of cabinet, a sincere and commendable commitment with regard to increasing the number of women in senior management. In the event that his ministry does end up with a policy objective of increasing the number of women in senior levels, and in the event of there not being women available to take on those positions, what is his ministry prepared to do to find qualified applicants who fit that policy initiative?

Hon. G. Clark: It's a hypothetical question that's difficult to answer, but at senior levels we do engage, and will continue to engage, in advertising the normal recruitment practices of a major employer like the government of British Columbia, and we will ensure, where qualifications are equal, abilities are equal, that women will be chosen. I think that's likely what will take place. At this point, other than a commitment on the part of government generally to promote women and to recruit women to these positions, there's no formal objective -- other than the Ministry of Women's Equality is leading towards that.

There are, I think, two issues that my staff have brought to my attention which are absolutely correct. One of the problems we do face in government is what you might call bridging positions. In other words, it may be hard to recruit a woman to be a deputy minister in a certain field, and the main reason for that is that there are no assistant deputy ministers who are women and no directors who are women. So you can't promote from within. It's just simply too high a jump. So what we need to do is put more women in positions at the director level, which is just below an ADM, and at the assistant deputy minister level, so that if we're not filling the senior positions immediately with enough female representation, then we at least are starting to fill that second tier of management. Then, over the course of time, there will be a natural evolution to promotion.

In addition to that, we're looking at some secondment opportunities, so we may be able to second people from the private sector or from different ministries to give women more experience in other areas -- broader experience -- so that we have very qualified women. For example, I'm very privileged to have several senior assistant deputy ministers who are women in the Ministry of Finance: Brenda Eaton in charge of all the debt and investment side of the government; Thea Vakil in a, frankly, powerful position as secretary of the Treasury Board, a superb public servant; Pat here; and we have directors Lois McNabb and Ann Kirkaldy in Treasury Board staff. We have a lot a women in the level that I am talking about. It may be that those women.... I'd be very reluctant to lose them from the Ministry of Finance, but it wouldn't surprise me that, over the course of time because we've done well in the Ministry of Finance, they may well be able to move to higher senior positions in other ministries. In fact, it may be that there are secondment opportunities for them as well, to broaden their experience through the ranks.

So there are a number of initiatives. To my knowledge, there is no actual formal position stated of what we're required to do. There's certainly a commitment on the part of all of us, and we're working on it. There's lots of discussion, and lots of direction given from me 

[ Page 2375 ]

and other ministers in the government. But we haven't got a document that you can point to that says exactly what we're doing.

J. Tyabji: In the event that the Women's Equality portfolio does demand some kind of quotas, or whatever policy is implemented, does this minister see it a higher priority to be hiring women from outside the province or internally? Basically the question is whether it's a higher priority to have women in those positions, or is it a higher priority to give employment to people of B.C.? Where do the priorities lie, and how do you judge these things? What kind of balancing act would you put in place?

Hon. G. Clark: I think that would be more appropriately addressed to the Minister of Women's Equality. I'm not trying to duck it, but it is kind of a hypothetical question. Just speaking personally, I reject the notion that we can't find qualified women in British Columbia, both internally as I suggested a minute ago and within British Columbia in the private sector, to take positions of influence and authority in the government of British Columbia. I really don't think it's a choice between an unqualified woman and a qualified man, or a choice between a woman from outside British Columbia and a woman from inside British Columbia. I think, provided we're looking at bridging positions and secondment opportunities to broaden people's education and experience, that it's very doable to simply not have to have that choice. We can work very solidly and progressively over time to ensure that women are more represented in senior ranks.

J. Tyabji: I don't want the minister to think for a minute that I don't think there are women qualified to do the job. Obviously there are, but you may find yourself in the position of trying to fill a position when there is no woman who wants it. You do get into a lot of problems when you're starting to deal with quotas.

The minister put several qualifications on the idea of having gender parity in terms of senior positions: provided there's secondment and bridging. To what extent is this minister responsible for placement of staff within his portfolio, and to what extent is he going to be accountable to the Women's Equality policy that is coming in? You may say it's hypothetical or future policy, but we are dealing with a new Ministry of Women's Equality, where we're not sure how that kind of policy is going to be affecting your ministry. So to what extent do you have control over things? What would you do in the case of a policy objective coming forward that you couldn't meet? How are you going to deal with things if the qualifications that you've just listed are not included in those policy objectives?

Hon. G. Clark: I'm not absolutely certain of the question. In a sense, the minister has no real responsibility in terms of staffing. It's basically the merit system, and people compete for the job. The Premier appoints the deputy minister. I like to think that most cabinet ministers are consulted in that decision, but in reality there is a Public Service Act that prescribes certain rules and regulations. We're not going to break those rules in terms of merit and the like, but we have a policy of trying to promote women and visible minorities to positions.

The Women's Equality ministry is what we call a horizontal ministry, as opposed to the Ministry of Energy or Ministry of Forests, which have line ministry functions. That does present challenges for government, because you can't -- nor should you -- compartmentalize Women's Equality and say, "There's the minister; talk to her about everything to do with women's equality," because that would be defeating the purpose. You're quite correct that we have to apply those kinds of principles in all of our actions in all of our ministries.

The Women's Equality minister, by and large, plays an advocacy and bridging role in terms of interministry coordination and is the lead minister for moving these things through the ministries. But if we expect the Minister of Women's Equality to be the sole agent of government pursuing a women's equality agenda, then it won't happen. We know that as a government. It's a corporate decision of government, if I can use that term, to promote women and women's equality.

The Women's Equality minister is the vice-chair of Treasury Board. She's also the chair of the committee of cabinet.... She works hard with the staff, and her staff works with all the staff in the Ministry of Finance and other ministries in interministerial committees and the like to promote the women's equality agenda for the government of B.C. In addition to that, Treasury Board and the planning board of cabinet, which have the major planning functions of cabinet -- both of which I sit on, and I believe the Minister of Women's Equality does as well -- have as a major part of their agenda the promotion of women's equality. That's how we ensure integration among ministries.

J. Weisgerber: Mr. Chairman, just to pursue this line a little further, when the new government took office on November 5 or so, at least two women were deputy ministers; unfortunately, as of the news today, I think both of those have been relieved of their positions. For a government that, as part of its platform, was advocating the advancement of women to senior positions in government and the promotion of women within the bureaucracy, I find it somewhat ironic that it was announced today that the Deputy Minister of Health would no longer be serving.

I'm wondering whether or not the government has any program. I have no knowledge of why the government would have chosen to make those personnel decisions. I suspect, from my knowledge of both those people, that they were very capable. I'm wondering if, in the interest of maintaining and increasing the number of women at the deputy minister level and at other senior levels, there is any particular attention paid to try to arrange lateral transfers or to do something else.

[5:00]

I must note in passing that the last member asked how the government would react to the tough decision of whether to hire a British Columbian or someone else. 

[ Page 2376 ]

It would seem to me that the track record would suggest that a Manitoban would probably be at the top of the list, and someone living in Saskatchewan would probably be running a close second. If you were from the Yukon, you'd still be in there just slightly ahead of a British Columbian.

I am concerned about the government's record with women, particularly in the role of deputy minister.

Hon. G. Clark: First let me say that deputy minister appointments are the prerogative of the government and are absolutely no reflection on the abilities of the people -- and those individuals in particular -- in terms of any decisions being made on the part of the government. I mean that seriously. You're absolutely correct. Those are people who have served the people of British Columbia, and I have the utmost respect for them and for their abilities.

I will say further that there are still two women deputies, as we speak, which is certainly no worse than we had when we came to office. We are working very hard to recruit senior people who are competent and also women in senior positions. The Ministry of Health will be undertaking a major national search for a deputy minister. I hope there will be women applying for that. I'm not sure you were here when I was discussing the fact that that is one of the problems we face. It's not just the deputy minister level. There aren't enough women at the assistant deputy minister level or at the director level. We need more women in what you might call bridging positions. When the Deputy Minister of Social Services leaves.... I'm not sure of this case, and maybe that's not a good example. I'm not sure how many assistant deputy ministers or directors are women who could naturally compete for the job of deputy minister. We have to work hard at making sure that women are recruited to positions at the director level and the assistant deputy minister level, so there is that natural evolution to deputy minister. While I share your concern -- if that is what it is -- and the government generally shares the concern that we don't have enough women deputy ministers, we also recognize that we need to do more at the assistant deputy minister, director and manager levels in order to ensure that there are lots of women who can compete for senior positions in government. That's not the case today.

It's not good enough just to replace the deputy minister levels with women. Frankly, we have to continue working on that, but we must also go much deeper than that so we have a pool of women in senior management positions -- hopefully reflective of their makeup in society -- that we can draw upon for the positions of deputy minister.

J. Weisgerber: I don't want to start discussing in the House the qualifications of the two women who have been dismissed, I guess. We've never been given any indication that either of them chose to leave government; rather, we've been given the distinct impression that it was the government's choice that they leave their positions. Knowing that both of those individuals came through the ranks to deputy minister -- not necessarily in those ministries -- it would seem to me that a strong argument could be made that if the arrangement within the ministry was not satisfactory, for any number of good reasons, there may have been the opportunity to do some rotation of deputy ministers and finding yourself in the position of having the four left there.

I agree with the minister wholeheartedly that you need to have more women in senior positions in the ministries and have the opportunity to promote. Clearly you shouldn't lose sight of the fact that having deputy ministers there as a demonstration of the government's willingness to promote to those senior positions provides some stimulus to attract well-qualified people to government.

I don't think that we should get too hung up on the deputy minister thing. This government has made a whole range of appointments -- many of which have been the subject of some attention not only by the opposition but also by the media -- and I think that the vast majority of those have been males. If the minister would like to suggest that there was gender equity in those appointments.... I'm not talking about appointments to college boards; I'm talking about the kinds of jobs for which this government has attracted a number of people from around the country. The vast majority of those were given to men as well.

Hon. G. Clark: I wouldn't be surprised if the government does a review of the appointments very soon. I hope we do, because you will see the appointment of hundreds, or probably thousands, of women in positions. You talked about college boards, and that is correct. Almost all college boards now have gender parity, which is a first. Almost all Crown corporation boards have gender parity. Those are senior positions and appointments in the government. We have a principal secretary -- a deputy minister, for all intents and purposes -- to the Premier who is a woman. I think we've done a good job. We can certainly do better, and we're working on that, but we have filled many positions. It will stack up, I'm sure, with any government in the country. Certainly hundreds more women have been appointed to positions now than in the previous administration.

Just briefly -- and I don't want to dwell on this -- deputy ministers don't have the right to retain their jobs in perpetuity. That's a prerogative which is exercised by the government. There is nothing nefarious or untoward about it. It is appropriate, and it happens all the time. That's what happens when governments review their senior personnel. In the administration that you were a part of, Mr. Poole changed almost all of the deputy ministers during that term. No one criticized the previous administration for making changes at the deputy minister level. That's quite appropriate and done all the time. It's no reflection on the individuals; it's a reflection of changing priorities or the natural evolution of change at the senior management level.

I might say further that some deputy ministers who left their positions have found employment with the government. I'm not sure of the status of the two 

[ Page 2377 ]

women you're talking about, but I think that is being discussed as we speak.

With respect to Eric Denhoff, who was the deputy minister that you are familiar with, I'm absolutely delighted that he is now working on a special project in the Ministry of Finance, the TRIUMF-KAON project. I hope to use him, if I can, on a whole variety of other initiatives, because he is a superb individual, a public servant who worked his way through. Because of a change in personnel and a decision that was part of the prerogative of government, he is no longer a deputy minister in Aboriginal Affairs. We asked him to stay. We looked for and found some options, and we're delighted with that. By and large that's been the practice with other people. They may have moved out of their particular position. I just want to reject the notion that there's any problem with that. It's quite appropriate.

I do agree, however, that we have to work hard at women's positions. You're correct that while we need to do better on the management side, deputy minister positions are also important in terms of assuring the public and women generally that the potential exists to be in that senior position. I don't dismiss that criticism.

F. Gingell: While we're on the subject of deputy ministers who are no longer in that position, could you please tell us what the government's severance policy is with respect to these?

Hon. G. Clark: The contracts entered into by the deputy ministers that we inherited are subject to the Nemetz formula. Deputy ministers that were appointed subsequent to that have been put on notice that that formula is under review. For example, my deputy had to sign that as part of the terms of the contract. I don't anticipate a radical revision in the terms and conditions of employment for deputy ministers, but it is under review. There will likely be some changes to that current formula. People who signed contracts under the previous administration had the Nemetz formula for severance as part of their conditions of employment.

F. Gingell: Could you please advise us, if the person who has left the position of deputy minister is re-employed in government immediately, whether it be as an FTE or on a contract basis, are there are any changes to that policy -- if the individual obtains new employment either within government or, secondly, outside government?

Hon. G. Clark: This is not in any way a cop-out, but I really think that this is more appropriately asked of the Premier. I'm not in a position to discuss what happens with deputy ministers and the like. I have tried to accommodate questions, but to be candid, it's simply not my responsibility. I can assure you that there's no double-dipping, if that's what you're sort of leading to in terms of your question; that certainly would not be contemplated. But any detailed questions around deputy ministers should probably be asked of the Premier and his deputy minister.

The Chair: It's the view of the Chair, hon. members, that the line of questioning that has been taking place has been informative, but I've come to the conclusion that it's well beyond the scope of the Ministry of Finance's purview.

J. Tyabji: My understanding is that we are allowed to ask questions of the Finance minister on personnel services. With that in mind, the Finance minister has made several references to women and visible minorities. I'm wondering if he has a policy with regard to the hiring of visible minorities -- because that wouldn't fall under the Women's Equality portfolio -- and what that might be.

[5:15]

Hon. G. Clark: Again I don't mean this in any way as a cop-out, but that is the domain of the Ministry of Women's Equality -- employment equity and the pursuit of gender equity. There is a policy being developed, to be quite candid, but if you want to canvass that issue, you should canvass it with the Minister of Women's Equality.

Interjection.

Hon. G. Clark: Yes, employment equity generally is being.... The lead minister in that regard is the Minister of Women's Equality. You are correct that the implementation of that will necessarily require the services of the government personnel services division, but if you want to ask questions about the policy that's being developed -- and there is no policy to date, I believe -- then the person doing that is the Minister of Women's Equality.

F. Gingell: I noticed in the minister's report for the year ended March 31, 1991, the very short sentence that the pay equity program has been allocated $40 million over several years. I was wondering if you could advise us how many years, and how much of that $40 million has been allocated to 1992-93.

Hon. G. Clark: I believe this $40 million is just the B.C. Government Employees' Union costs for pay equity. To date, we've expended $23 million, and I believe roughly half of that is in this fiscal year. There are other pay equity initiatives taking place in government, as you know, which end up being funded by the government through appropriations.

F. Gingell: I take it that this 50 percent of the $23 million that you anticipate will have been expended on this program as of the end of last year is included in your budget as a specific item. Can you tell me where?

Hon. G. Clark: In contingencies. Just so you know, the reason is that it varies by ministry and is also subject to negotiated agreement between the BCGEU and the government. Even though the commitment was there, government is reluctant to simply give the money. We want to make sure there's a rational plan for spending it, and that can be the subject of, as usual, 

[ Page 2378 ]

tense negotiations between the parties as to how the money should be allocated. I'm very pleased that there has been a second payment as a result of an agreement. The first payment took place last year. This was a second payment. In addition, there's agreement on a framework or plan to deal with how we might continue on in the pay equity arrangement. The money spent this year, or roughly half of that, was in contingencies. One of the reasons is that we're not quite sure of the exact amount and how it would be spent by ministry, and so we put it in contingencies.

F. Gingell: From what you're saying, it sounds as though these are annual lump-sum payments. Can you explain to me exactly what the program is?

Hon. G. Clark: It's not really that simple. In most pay equity agreements generally in the public sector, there's an agreement of one.... In the case of British Columbia it's 1.5 percent of the payroll, and 1.5, and then, I think 1 percent thereafter, to solve the pay equity problem. That can go on until it's solved, essentially. But in most cases there is an initial payment, a good-faith payment, that bottom-loads the situation. In other words, you don't need a plan to realize that there are some women in low-paying areas who are clearly going to benefit from any pay equity. They're clearly underpaid. In the first round there was simply an elimination of a couple of classifications at the bottom of the pay scale. That cost the government some $10 million or $12 million to do that, and they were all women -- 99 percent women, if not all women. The second year it gets much tougher, because you've dealt with the obvious thing, and you've dealt with it in a rather crude way, frankly, as you know that any rational analysis would show that that's where money would go in the end anyway.

Then you want to get into a much more sophisticated job evaluation. The second instalment, so to speak, generally tends to be much more debated, because it's not quite as obvious how the money should be spent -- at least, there's usually a different view between management and the employees or the union. But you try to develop a much more comprehensive process for how money should actually be spent to fix the problem. What you don't want to do, as some jurisdictions have done in the past, is simply give money. Then they do their rational analysis and find that they have not solved the problem; they may in fact have exacerbated it. You try not to do that.

This year it was lots of work from the government personnel services division and the union. There was an agreement to pay out the second 1.5 percent in a way which was mutually agreeable. But perhaps most importantly, there was also an agreement on the rudiments of a plan of how we would solve this problem. Believe me, these can be quite complicated because of different philosophies and a division about women's work and how it should be compared: should it be compared internally between men and women; should it be compared between firefighters and nurses? This is a major subject of public debate, which I'm sure the Minister of Women's Equality could debate with you. I'm certainly not equipped to do that, except to say that the second payment has been made. There is now a plan in place. Once the plan is in place and you budget, say, 1 percent of payroll, then it's very easy, because you know where it goes. The plan is in place and it continues on until the problems are fixed. If in the interim you negotiate wage increases which are, for example, skewed to male-dominated classes, then you exacerbate the problem. All that happens is that the 1 percent a year continues on for a few more years, because you're still trying to close the gap.

That's where we're at. I feel quite comfortable about it. I think both parties agree that we're moving towards a resolution or at least a process for resolving this problem. The second payment has been made. The rest of the money -- there's a little bit of money left over in that 1.5 percent in addition to future years -- will only be paid after the plan is in place. They have a way to go in detail, but they have really come a long way in the last year.

J. Weisgerber: Perhaps the minister could tell us, first of all, when the first payment was made under that program, and whether or not his government has made any modification either to the amount that's going to be paid or to the time-frames in which it is going to be paid. Or is the government of the day simply happy to carry along with the policy as it existed when they took office?

Hon. G. Clark: Essentially the commitment was made by the previous government. The first payment was on January 1, 1991. The second payment was retroactive to April 1, 1992 -- just recently -- and it has just been paid out. Essentially it's the same process, but we're a lot further along in the negotiations with the parties -- the union -- to agree upon a plan. To be candid, we're sort of driving the development of this much more sophisticated approach.

You're quite correct, the previous government can be commended for initiating the process and for making the first payment. It was essentially a good-faith payment, which made sense. We have picked up the ball and worked hard to develop it in a way that future payments aren't made in good faith in abstract, but are based on some logical, rational, agreed-upon criteria. It is essentially the same process, but we're now quite a way along toward agreeing to the formula.

J. Weisgerber: Thank you, minister, for acknowledging it.

I agree that the former government, my Social Credit government, did take an initiative there. By the same turn, I think the current government is making some strides. I was pleased to see the approach taken through the arbitration or negotiations with the HEU, which seemed to me to start setting out settlements in terms of dollars per hour or some other formula that tended to at least equally reward those at the bottom of the scale, as opposed to those at the top. I'm curious to know whether that was an initiative of the government. If it was, and if it's the kind of initiative that we will see in 

[ Page 2379 ]

future negotiations, I'd like to commend the minister for taking that approach. I think it's a positive one.

Hon. G. Clark: I have to be a little careful here. The HLRA is the accredited body that negotiates the collective agreement. The government is not a party to that negotiation. They have their own board, and they negotiate the agreement, and obviously the union negotiates their agreement. The extent to which the government influenced the debate was to very clearly and aggressively make the point that we wanted to ensure pay equity was addressed. It was addressed fairly and in a forthright way, and I'm pleased as well with the results of the settlement. But we are not a party at the table, as much as I might like to take credit for the details of the resolution of that problem. I think that the government is very sympathetic to the way in which it's been resolved. It's funding the pay equity component of it because it's in keeping with our philosophy -- what we've been saying and what we said during that dispute. We can take some credit for that, I suppose, but in reality those negotiations are separate from government.

J. Weisgerber: I appreciate that the health settlements are, at least to some degree, arm's-length from the government. There will be other negotiations that are closer to the government and to the minister. I wonder if the minister, having looked at this settlement, can give us a sense of whether or not we will see similar offers, if not similar settlements, coming from government to basically bottom-load the wage scale in order to achieve some pay equity and also to bring people up, whether men or women, who are at the bottom rungs of the government pay scale. When dollars are scarce, it seems to me that if you have a limited amount of money to direct, that is the most logical area in which to direct it.

Hon. G. Clark: I'm just a little reluctant to discuss our negotiating strategy on the floor of the House. I think it's pretty clear from everything we've said as government -- and from what I've said -- that we are very sympathetic to the approach that the member talks about. But when two parties negotiate, it would be foolish of me to predict the outcome of those negotiations in any way at all. You have to make a deal, and you have to work hard. Our view is that we want to make sure that pay equity is a consideration in every public sector agreement. We support that, and we provided some funding for that. But beyond that, I simply can't give you any more at this time. I think it would be counterproductive.

F. Gingell: When you speak of a payment being made January 1, 1991, I visualize a payment being made on that day. Was the 1991 one done by just cutting off these two lowest levels, and everybody's pay from that point on was increased because they had gone up one or two grades? Is that the way that happens, so it wasn't all incurred in that month? Or did it go back and cut these two grades out for the previous year?

Hon. G. Clark: Effective that month there was a 3.3 percent increase for thousands of women employees in British Columbia, and for a small number of women employees about 6 percent. So we're not bargaining; collective bargaining hasn't even begun, and thousands of women in B.C. received a 3.3 percent increase. That was not a lump sum; it's right on their base rate.

The government of the day eliminated some classifications, which resulted in moving up on the pay scale -- I'm not sure exactly how many -- close to 11,000 public sector workers in British Columbia. The April '92 agreement was retroactive to April 1, 1992, and was just recently made. I'm not sure of the percentage increases; I don't think they were as large.

[5:30]

F. Gingell: So when you talk about the payment being made as of April 1.... I'm sorry to be fussy, but I'm just trying to understand it clearly. What you're actually saying is that these increased pay rates commenced as of April 1; and maybe they didn't come in until May or June. So there was some retroactive pay, and that's the way that it's handled.

Hon. G. Clark: The annualized impact.

F. Gingell: Yes, the annualized impact. It is the annualized impact of this particular adjustment effective April 1, 1992, that will be charged to the contingency account; and not to raising salary costs under STOB 1, or whatever it is, in the various ministries.

Hon. G. Clark: Yes, you're absolutely correct. Then in the budgeting process for next year there will be what's called a base adjustment. Then, for accounting purposes, it flows through all ministries. So next year, when you see a 2 percent increase for a ministry, you know that it's on top of that adjustment for this wage increase.

F. Gingell: In the process of dealing with pay equity, are there any salary scales in primarily male-oriented job classifications that have been reduced?

Hon. G. Clark: No, certainly not. There were some males who got increases as well as a result of that pay equity adjustment, because they were in classifications -- not very many -- overwhelmingly dominated by women. I think that it would be very divisive and counterproductive to achieving pay equity if we were to take away from male-dominated classes money and put it in the bottom end.

Having said that, as you know, there is a kind of zero-sum here in terms of government ability to finance things. We also want to skew the money in the ways which we were discussing, and that makes it difficult. There are many male-dominated classes, and they do tend to be better paid -- although in some cases not as well as the private sector or competing areas. In that respect we have to be conscious, I think, as men, if I can say this candidly.... I'm always conscious of the fact that we want to make sure that pay equity is something that all people can support.

[ Page 2380 ]

I think it sets up real tensions in the labour relations community if we're giving raises only to women and not to men. I think it makes it a very challenging prospect for the success of any program, and so we have to ensure that we involve men and women in the discussion of these issues. When we deal with pay equity, it's on a rational basis. It's not viewed as something just given away to women workers; there's a real rationale to it. We ensure that male employees also receive wage adjustments -- it's obviously difficult times right now -- that are competitive with what's taking place.

F. Gingell: In your report, Mr. Minister, the department that deals with government personnel services speaks of the work that is done by the people in this division of your ministry relative to the labour relations branch. It speaks there of some 32,000 provincial government employees who are dealt with under various labour contracts. Could you please advise me which other departments outside ministries of government, those that we don't see as government, are covered under these contracts? Obviously 32,000 is a lot more than the number of provincial civil servants you are admitting to.

Hon. G. Clark: I'm not sure of your question. I think we bargain with 28,000 BCGEU members. We bargain with 1,500 Professional Employees' Association members. That number is about right, except that we also bargain.... I'm not sure if this is what you're getting to.

F. Gingell: I'm sorry. It was how much?.

Hon. G. Clark: It was 28,000 BCGEU, 1,500 PEA and 2,500 provincial government nurses. In addition to that -- and maybe this is what you're getting at; I'm not sure -- the government personnel services division bargains with ambulance attendants and bargains and does fee-for-service negotiations with physicians, podiatrists and what they call supplementary practitioners. We're currently discussing if not bargaining with Crown counsel, as you may have heard. The government personnel services division directly covers those ones I mentioned and also provides services to other agencies, like the ambulance service. It used to do the bargaining for the B.C. Buildings Corporation. The Crowns do their own bargaining. I've commented before about my concern about coordination in terms of bargaining. But the services provided by GPSD do extend in some respects to other agencies besides the ones that are more narrowly described.

If I could, Mr. Chairman, I know it's a bit early, but with the members' indulgence, I'd like to 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 resolutions, was granted leave to sit again.

Hon. G. Clark: Hon. Speaker, the other committee has not yet entered the room, so I apologize for the uncoordinated way in which we're handling this today. I guess as we move to the end of the session we're not quite in sync here.

Hon. Speaker, if we could, though, I would like to move that the House at its rising stand adjourned for ten minutes. That would give time for reporting back by the other committee.

Motion approved.

Hon. G. Clark moved adjournment of the House.

Motion approved.

The House adjourned at 5:40 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The House in Committee of Supply A; S. Hammell in the chair.

The committee met at 2:43 p.m.

ESTIMATES: MINISTRY OF
GOVERNMENT SERVICES

On vote 45: minister's office, $330,000 (continued).

K. Jones: There was an interesting comment by one of the members from Nanaimo last year on May 30, 1991 in Hansard. She said in the House that dollars were allocated "out of the Lottery Fund, which lacks accountability, as the auditor general continues to point out year after year." We on this side are very concerned, and can see that the government is trying to provide some accountability by putting the dollars under ministry vote, but we worry about those dollars getting lost in the shuffle -- those lottery dollars -- and really question why the government wants to do this.

Hon. L. Boone: Lottery dollars are the same as any other dollars that come into the government revenue, be it social service tax, sale from liquor, sale from tobacco, etc.; those go into general revenue. Tobacco sales, for example, are not earmarked for services to provide help to stop smoking, nor alcohol to prevent alcoholism. Lottery dollars are going into general revenue. They are therefore voted on by Treasury Board and applied to the areas that the government feels are pertinent for that particular time.

[2:45]

At this particular time the government, as I said, has decided that one-half of the revenue would be going into a special health care fund and the rest of the moneys would be allocated to various ministries for programs that meet the priorities of the government.

[ Page 2381 ]

K. Jones: With these moneys available this year to respond to the whims of various ministers, my question is: how would this minister feel about setting up individual advisory committees for each of these ministries that have lottery dollars -- something along the lines proposed by the member for Rossland-Trail last year in a private member's statement? He stated:

"Back in 1981, ten years ago, when the lottery program was seven years old, the ombudsman responded to a complaint by the Downtown Eastside Residents' Association. Their application had been rejected, and they had reason to believe that they had met all of the published guidelines.... The ombudsman recommended, in his response to the complaint, that procedures and guidelines be formalized, that grant programs must be clear about their goals and decisions, and that guidelines need to be adequately publicized. He also recommended -- and this is a key recommendation, Mr. Speaker -- that a lottery advisory committee be appointed pursuant to section 3 of the Lottery Act already in place. The minister rejected the idea of a committee on that day ten years ago.

"Even today, in 1991, we still do not have an arm's-length advisory committee."

This was a statement by the member for Rossland-Trail last year.

A further statement: "I would hope that the government...in the latter months of its term in office, will see fit to put in place a sunshine policy -- if not a sunshine act -- relative to the approval and disbursement of funds from the lotteries of British Columbia. It's way overdue."

Hon. L. Boone: I seem to have difficulty getting this point across. The Lottery Fund does not exist anymore. No dollars go into the Lottery Fund. The dollars are going into general revenue; from there they're allocated by Treasury Board according to the priorities of government.

I think that this government is listening to the people. That is what we are doing through my ministry, which has the community grants program, which will be a scaled down program from what there was before with GO B.C. What the people want is what we are going to do. We are getting public input to decide what their priorities are, where the dollars should go and what the maximum level is for those community grants. Our program will be based on input from the public according to their priorities.

As to putting in an advisory for other ministries, I keep telling you that I have no responsibility for other ministers. Much as I may sometimes want to and would like to give them advice, I can assure you that they would not like me to give them advice on how they use the moneys allocated within their budgets.

K. Jones: I just wanted to let the minister know that we know that she's a very influential member of cabinet and that she does have the experience of this background in this area of the lotteries and therefore would be able to advise and encourage her fellow members on the type of program in which, I'm sure, she would be quite prepared to provide leadership -- namely, establishing an independent body. I'd like to propose that an independent group be set up outside of government with lots of community representatives on it. Would the minister be in favour of supporting that concept?

Hon. L. Boone: The input that we will be getting we'll be getting through the advisory group; the advice that we're getting is through the community programs. We have not even set up the programs yet on how it's going to be administered. That's future policy.

K. Jones: Maybe we could talk a bit about the sale of lottery tickets offshore.

I have another interesting quote from June 25 of last year. The former official opposition critic for the Attorney General said:

"There are matters relating to the allocation of lottery funds and offshore sales of lottery tickets, which is a significant issue. I find it interesting that this government talks tough all the time on matters of crime and law and order, and yet we have in this province the criminal element, as has been evident in this House by earlier debate, involved in the sale of offshore lottery tickets. Other jurisdictions in Canada have indicated that they want to put an end -- and have, through legislation -- to the sale of offshore lottery tickets. One jurisdiction stands out as one that hasn't done that -- British Columbia, notwithstanding that there was a recommendation from a committee consisting of representatives from every province insisting that British Columbia put an end to that practice. Yet this government hasn't taken action in that regard. Surely the Provincial Secretary should have to explain why the government will continue to allow an activity to go on here in British Columbia that other jurisdictions, such as Ontario, have deemed to be unlawful."

My question to the minister, which I urge other members of this committee to comment upon as well, is why no action yet has occurred from this government on this question. I personally have a problem with this practice and think we in the Legislative Assembly should decide to end it within the coming 12-month period.

In some of my research I've been able to identify one particular operation out of Vancouver that is selling Lotto 6/49 tickets at the rate of 2,000 tickets at $1 each -- that's Canadian dollars. They are sold to the U.S. in the form of shares, 150 shares being provided, and these shares purchased in the United States cost $74 (U.S.). There is a maximum of five shares per person. This is done by telemarketing out of Vancouver. My calculation of the profit on the $2,000 (Canadian) investment amounts to approximately $11,100 (U.S.) revenue.

Hon. L. Boone: I appreciate the question around this issue, because it's one that the Lottery Corporation -- and ministers of the past and present -- have been concerned about for many years. As I've mentioned to the member opposite, the lottery fund no longer exists. Well, the Provincial Secretary no longer exists either. But I can assure you that this Minister of Government Services is as concerned about this issue as the previous Provincial Secretary was.

The Lottery Corporation has undergone some restructuring. We have a new board, and I'm very proud of that board. The chair of that board is a woman from Kamloops. We have regional representation on the 

[ Page 2382 ]

board. We have accountants and lawyers -- we have a broad cross-section. I think it's doing a very good job of meeting the mandate. This board recently met and is making some recommendations to the minister regarding the offshore sale of lottery tickets. We will be taking that message forward to cabinet very soon.

I think it's important to note that, as with everything, there are no easy answers. Sometimes, when you delve into it, you find a lot of grey areas -- and a lot of issues that really affect people -- for things that look relatively black and white. For example, 500 people will be affected by the sudden stopping of the offshore sale of lottery tickets -- that's 500 jobs in B.C. At a time when jobs are at a premium, you have to weigh these things very carefully and not do things in haste. It represents $46 million of B.C. Lottery Corporation sales. And $20 million dollars of it goes to Canada Post. It's an issue that we are very concerned about. I can assure you that the board is currently dealing with this issue and bringing recommendations to us, and we'll be taking recommendations to cabinet very soon on this issue.

K. Jones: It looks like the minister has a fairly good handle on this, since she knows that there are 500 jobs involved. Does she know the people who are operating them and what their backgrounds are? I've heard the Lottery Corporation would like to get a handle on this project of foreign sales. Could you explain further what the direction of the Lottery Corporation is in responding to this?

Hon. L. Boone: The member doesn't seem to understand that when I say the Lottery Corporation is making recommendations to the minister -- which I will be taking to cabinet -- those are confidential matters and will not be made public until they are through cabinet. I can't be announcing here recommendations that are going there, because who knows what will take place in cabinet discussions and what the end results of that will be.

If the member has any information that indicates there's been criminal wrongdoing from various re-sellers out there, I would suggest that he either contact the corporation or the RCMP to make those allegations known so that they can be acted upon.

K. Jones: The minister is trying to deflect the responsibility. She's already indicated she knows some information about the operations of the offshore sales. She knows how much its revenue is; she knows, obviously, who's buying the tickets; she knows how many jobs are involved. Surely the minister must know the backgrounds of the people who are involved. Has she made that report to the police? Is there a concern that these people are operating with some concern? Should the government lottery program be operating to bring this type of operation under regulation?

Hon. L. Boone: I fail to understand what the member wants. Do you want to regulate it, or do you want to end it? Earlier you said you wanted to end it; now you're saying you want to regulate it. You can't regulate it and end it; you have to do one or the other. Let's get your ideas straight on this.

It's not me who's alleging that there have been wrongdoing; it's you. The corporation is well aware of who's selling the tickets. If you are aware that there's any wrongdoing by any of those people out there in the sale of those lottery tickets, then I would urge you to bring those allegations forth to the Lottery Corporation or the RCMP so that those cases can be made. I am not aware of any wrongdoing by any of those people.

K. Jones: I think that the minister protesteth too much. Obviously there must be more here than what she's wanting to say to us, because she keeps getting very agitated about our questioning. She is trying to throw the hot potato back at us, when it's really her responsibility. It will continue to be her responsibility to do something about this.

I am not making allegations. I'm trying to find out from the minister what the facts are. That's what the minister is here for, to provide us with the facts, not give us a bunch of foofaraw about whose responsibility it is, or whether she knows anything about what's going on in the Crown corporation. Perhaps she wants to talk to some administrators in the Crown corporation. She might find out that there's an area of concern and some suggestions about regulation of the practice. Maybe she would like to reconsider her statement.

Hon. L. Boone: Isn't there something about tedious and repetitious in there? No.

The member does not understand what I'm saying. The corporation has concerns; we have concerns about the sale of offshore lottery tickets. Yes, I explained that to you. The corporation has made recommendations to the minister. This minister will be taking those forward to cabinet, at which time we will act upon them. I am not at liberty to bring things forward that are going to cabinet. You are not a cabinet member. I cannot bring them forth at this particular time. I can assure you that we will be acting on this matter. We have had no indication whatsoever that there is anybody who has done any criminal wrongdoing in the offshore sales of lottery tickets.

[3:00]

If the corporation had any such knowledge, it would be acting upon it and making sure that charges were pressed. If you, as a member, have any allegations or any knowledge about criminal wrongdoing -- not just whether or not it's a good thing -- bring them forth. We will act upon them.

K. Jones: Again, I have not made any allegations, and I have not made any indication that there were allegations. If I do, I certainly will bring them to the police at the very first opportunity I am aware of them. I am aware that there is a concern in the area, and I wanted to get the minister's position on what was going to be done. Does the minister have anything in her vote this year to take any action in this area?

[ Page 2383 ]

Hon. L. Boone: This is not within my vote. This is within the Lottery Corporation's budget. As you well know, that budget is not up for discussion at this time.

K. Jones: At this point I think there are other members who wish to comment on this area -- the lottery. Perhaps I will stand down so they have their opportunity.

G. Wilson: I have only one question with respect to lotteries. Then I would like, with your indulgence, to change the pace a little bit and move onto something a little different.

The first one concerns 1-900 numbers in British Columbia. Is the minister aware that there is an opportunity for 1-900 numbers to be used for the purchase of blocks of lottery tickets? The 1-900 numbers could be advertised. Through the 1-900 numbers, which you realize is a revenue-generating system, the lottery tickets could be made available to people who would buy blocks of tickets. Is that legal? Is that acceptable? Is there any monitoring as to how extensive this kind of thing is in the province?

Hon. L. Boone: We don't know anything about it -- whether it is taking place in B.C. or not. I'm not the Attorney General, and I can't tell you whether it's legal or not. If you have any information indicating that this is taking place in B.C., and that there are illegalities around it, I would very much appreciate your making us aware of it. At this particular time we do not know if this is even taking place.

G. Wilson: I'm certainly not competent to judge whether it's legal or not. I would be happy to find whatever research is available to me to make the minister aware. My question was simply this: with respect to the buying of blocks of lottery tickets, which could be advertised through a 1-900 number, which provides revenue to the individual who holds the lottery tickets; those lottery tickets could then be made available to people who dial the 1-900 outside of British Columbia.... I understand that these activities are underway, and I'd be happy to try and substantiate that. If it would be useful and helpful, I'll do that. That is not really what I came here to talk about, though; except that when we got onto lotteries, it triggered a light in my....

I wonder if I could pick up a little bit with respect to the Purchasing Commission working capital and government accounts, and the remarks that were attributed to the minister last week.

First of all, could the minister comment on whether these remarks were accurate -- where it suggests that.... I quote from the Tuesday, June 9, 1992, Financial Post: "I'm not prepared to let our businesses go down the tube while businesses from outside the province or the country are gaining access to our market." It was earlier suggested, and this is not a quote but is written in Mr. Schreiner's article, that B.C. plans to retaliate against other provinces that discriminate against B.C. companies. In light of the agreement that is currently underway in Ottawa which would provide for free trade within Canada, as minister of a government purchasing agency is she saying that she would not abide by that agreement, even though that agreement may well be discriminatory in light of the competition that would obviously be available through government purchase orders within British Columbia as well as elsewhere?

Hon. L. Boone: I thank the member for the question, because I think it gives us an opportunity to explain the situation that exists within B.C. We currently have the most open purchasing policy in Canada. We find that our suppliers are being discriminated against. I will use, as an example, a buy-American clause that exists within the U.S. -- for example, highways in the U.S. If there are federal dollars involved in a project, the U.S. invokes the buy-American clause, and Canadian suppliers are banned from bidding on the project. Now that is deliberately discriminatory against our suppliers. Our suppliers are wide open. We have American suppliers coming up here and bidding, providing supplies for highways or what have you. Yet when our suppliers turn around to go down to the U.S., we find they can't bid, because they invoke the buy-American clause.

We are saying that this is ultimately unfair. I'm tired of rolling over and playing dead and letting the Americans walk all over us -- or anybody else for that matter. We reserve the right to invoke a reciprocal agreement if we find that our suppliers are not being treated fairly. This is not to say that we will automatically invoke it, but if we look at an area and our suppliers are being discriminated against, then we may invoke the same type of clause that is used against our companies. I think that is a fair way of dealing with things. I think it is high time that British Columbian and Canadian firms, and Canadian governments, started to stand up for the people that they represent.

G. Wilson: I don't take issue with the need to have a proposition where government, as a major purchasing agent, looks toward domestic companies first, given that there is a fairly level playing-field and that the taxpayer is being served. It isn't so much buy America or buy Canada that's at question here; rather it's a question of buy British Columbia, as opposed to Alberta, Saskatchewan or Ontario. So what I'm hearing the minister say is that she opposed the buy-America clause, but that, given the chance, she will invoke a buy-Canada clause, and if possible -- if the quote here is correct, and I would welcome the correction if it isn't -- would even invoke a buy-British Columbia clause that would discriminate not only against.... Let's remove "discriminate," because it doesn't discriminate. What it does is provide protection to B.C.-based businesses, as opposed to Alberta, Saskatchewan, Ontario or Quebec businesses, or whatever.

I just wonder, if that is the minister's policy, if that is what's happening within the Purchasing Commission. If so, how is that going to jibe, given the thrust of what's being negotiated in Ottawa right now?

[ Page 2384 ]

Hon. L. Boone: The member is taking those things two jumps ahead. I'll deal with the international one first. We reserve the right to have a reciprocal arrangement if we find B.C. firms are being discriminated against. That's not to say that we are anxiously waiting to invoke buy-Canada or buy-B.C., but just that if we find that our people are being denied access to American markets, then we should find a way to either put pressure on the Americans so that they can open up their markets to our people or make our markets exclusive to our own people so that they have some access to that as well. There is definitely not fairness there.

The other aspect is with regard to the interprovincial areas. We have been one of the front-runners in trying to take down the barriers when it comes to interprovincial purchasing. We signed an agreement last fall with the federal government and all other provincial governments. However, there are sections of the Western Accord, which was signed by the previous government, which we are upholding and working with. There are some sections of that where we find that the Albertans are denying access to our companies again, and they recently delisted the B.C. printing companies.

We are working hard to bring down those barriers, to make those barriers open up to us, but what I am saying is that I want fairness out there. I want our companies treated fairly, and if our companies are not treated fairly, whether interprovincially or internationally, then I think we have to take some action to force the issues and make sure those barriers are brought down.

G. Wilson: Ostensibly what we're hearing is that you want to have a free trade agreement with Canada or that you favour interprovincial free trade -- it sounds like that -- but that you want also to reserve the right, where decisions are taken with respect to the sale of goods and commodities which may be seen to be discriminatory towards British Columbia, to put up protection, or make a protectionist move, against what might be seen as sort of retaliation from other provinces. That, in a sense, is a contradiction of terms, with all due respect. I think that you either have a free trade agreement, in which you essentially compete on an open market, and a free market, in which British Columbia businesses either succeed or fail, or you don't. You can't have half of one and half of the other. If you do, then you have to work out some pretty clear distinctions as to what qualifies under whatever regulations are put in place.

I wonder what the minister's preference is with respect to the Purchasing Commission -- whether it is for an open free trade agreement or a protectionist agreement.

Hon. L. Boone: I hope the member understands that I'm not talking about the areas that affect the Minister of Economic Development. My area is strictly procurement, with regard to government purchasing, and my comments must be in that avenue.

We have taken a strong stance in support of opening up the borders and trying to make them as open as possible, and we have worked hard on those areas. But there comes a time when we have to stand up and support our own people. We will not be putting up any new barriers at all -- none whatsoever -- but if we find that our companies are denied access to our markets, then we will take whatever measures are possible to try and make sure that that is removed. By doing nothing, I think we're doing our own people a tremendous disservice and we're not getting anywhere, because those barriers against our companies would stay there, as they have for many years in the U.S. with the buy-America clause.

I think it's time that we started to take some action to make sure that other provinces and other countries understand that we're serious about this, that we in fact support the open trading and purchase of goods throughout the provinces and what have you, but not at the expense of our own companies. I think we'd be rather foolish to say: well, we'll open up our markets to you, but we really don't care if you deny access to our markets. There has to come a time when we have to stand up and support our own people, and we are at that point.

[3:15]

G. Wilson: Just a couple more questions to finally clarify this. Can I give you an example? If, in whatever tender is out there, we find that a British Columbia supplier tenders third-highest and Quebec is the lowest, does the minister then say that we're going to buy Quebec if in fact it's better as a cost-saving to the province? Or does the minister say: "All things considered, we have to look after the interests of British Columbia; it's a British Columbia-based company; therefore we should buy British Columbia"? Which is it?

Hon. L. Boone: Unless there is some indication that those markets aren't open to our people, then it would be the lowest tender. That is the agreement that we made when we signed the intergovernmental procurement agreement. There are no special privileges given to British Columbia companies; we would hope that there would be no special privileges given to Quebec companies. If we found that our companies were being discriminated against in some way, then we may look at taking some action. But we're not talking about putting up barriers; we're talking about having the means of taking down the barriers that exist for our people out there.

G. Wilson: I'm almost at the final point. Having said that, though, if we recognize that if buy-Quebec is better for B.C. because the cost is down, even though you have a free market system, clearly British Columbia companies are not going to be able to sell to Quebec if what could be purchased in British Columbia is cheaper produced in Quebec. The government of Quebec is going to Buy Quebec, because it will be cheaper.

There are many different ways of discriminating against B.C. companies. For example, one of the ways is with the introduction of taxes, which governments can 

[ Page 2385 ]

implement, or with a proposition on freight rates, which is part of what we're trying to change in Canada.

My final question is: given that this is the situation, statistically one could argue -- I think I could demonstrate; I don't have the data with me, but I'd be happy to sit down and discuss it at some point -- that in many instances Alberta-based companies, or even Oregon or Washington companies if you look at the American system, were supplied if British Columbia was cheaper. The product may not be better, but cheaper. Let's just talk dollars here. At what point does the minister, then, say that we're going to sacrifice dollars in order to be able to protect B.C. business? Or will the minister always go to the question of low bid -- regardless of whether or not that company is B.C.-based, Oregon-based, Washington-based, Alberta-based or Quebec-based -- on the condition that the B.C. company has equal access to the market?

Hon. L. Boone: As the purchasing commissioner has indicated, it's the lowest acceptable bid. That takes into consideration the price, quality and any number of different things. There are areas that we can invoke. Through the Western Accord, we can put in an economic development. We can say that we are going to be purchasing from B.C. for economic development purposes. We can put in various conditions if we wanted to -- I'm not saying that we're going to, but if we wanted to -- as long as they applied equally to everybody. For example, as long as some of the environmental conditions that we're putting on our purchasing products apply equally to all the provinces, then that's entirely appropriate. We could also invoke something along the same lines with fair wages. If we want to do that, we could -- as long as it applies equally to all the provinces. A number of different measures can be taken.

We in British Columbia are doing a number of things to help our suppliers. I think the Purchasing Commission's supplier development program is enviable; it should be enviable throughout many provinces. We assist industry and businesses in British Columbia and match them up with products from the province. As I've often said, we have a gentleman in Kamloops who I'd like to clone and send throughout the province, because he does such a tremendous job at matching individual companies with the needs of government. He has, in fact, found companies in the Kamloops and Kelowna area that are able to provide services to the government at cheaper rates than services being obtained outside the country -- and providing them good services as well. They're doing a good job with supplier development in trying to match up B.C. companies with purchasers' needs.

We also have what we call the First Buy program, whereby individual companies come forward with something that has a significant value, perhaps on its environmental aspect; we can take that company and make a "first buy." We're not saying we're giving it everything, but a "first buy" to give it a boost to get going and started, and then it's able to compete. It gives the company a little bit of a start in the market.

We're doing a lot to help suppliers out there and to try and get B.C. companies going. So we've got nothing to be ashamed of with what's happening in the Purchasing Commission.

G. Wilson: I'm certainly not trying to assess punishment against the Purchasing Commission, or suggest there's anything untoward or wrong.

However, the minister's response goes right to the very heart of my final supplementary question in question period today, which the Premier was unable or unwilling to answer. That is the proposition of what's being negotiated in Ottawa now. It is quite contrary to the Western Accord, which argues and, if passed, will provide the right to free trade within Canada by the individual, not by agreement. Therefore the legal interpretation that we have on this side is that if one puts in that right that the government would no longer be able to invoke through legislation preferential or deferential action, that would essentially limit the ability of a free-market trading system in Canada, because it would be counter to the constitution. By putting in government policy, you would be subject to some form of challenge, presumably through litigation. Companies could argue that they have the lowest tender, the equal product -- I don't know how they would define that in terms of quality -- and therefore governments have to buy.

I'm not trying to be argumentative. I'm just asking you, philosophically, what we do about this. One could argue quite strongly that there are times when you want to protect B.C. business, especially with an agency such as the Purchasing Commission, which is a substantial agency in terms of the dollars we're putting into the province. It may be weakened by a constitutional agreement that in theory sounds really good but in practice might be a bit complex. My question is: does the minister have any thoughts along those lines? It may be out of order, but if you have policy toward that degree.... If it's future policy, I recognize that you can't say much. It's going to be a critical point in the negotiations over this week. I wonder what the minister's thinking is on that. It's going to affect her budget substantially.

Hon. L. Boone: I think the member answered his questions there. This is hypothetical and I can't comment on negotiations that are taking place back east, wherever they are right now. It's not something that I can comment on right now.

G. Wilson: I'd like to thank the minister for answering the questions I put to her today.

My last is with respect to the matters of purchasing priority. Is it the intention of the minister -- I'm trying not to be hypothetical, and it's difficult -- in terms of the purchasing agreements that are currently governed by the Western Accord, to put priority on that agreement over and above the proposition of the, I think, two-year delay on this new Commonwealth idea that would come in? Or would the minister, given that it does come in...? Maybe I'm being hypothetical again. If this accord is signed, would the minister move directly toward free trade, in its purest sense, within Canada, rather than what is governed by the accord?

[ Page 2386 ]

Hon. L. Boone: I really can't comment on that. You're talking about a hypothetical agreement that hasn't been signed yet. We will deal with those issues when they come forward.

H. De Jong: I'd like to back up a bit on the discussion that's taken place. My questions zero around the community grants program. I have here the open letter that was sent to community organizations. It says: "This year's provincial budget set aside half of all lottery proceeds for health care priorities." It goes on to say: "The remaining half goes to general government revenue." The minister has indicated that there will still be a community grants program. How much of that one-half that goes to the government revenue will be allocated to the community grants program?

Hon. L. Boone: I'm just trying to get the figures straight. We have $40 million in the community grants program. About $29 million of that is for previous GO B.C. allocations. As the member knows, GO B.C. is a multi-year program, so things may have been approved but not paid out until years previous. Approximately $5 million has been allocated for payback on the Halfback program for those individuals and groups that came forth for that. There's about $2 million for Expo legacy, $900,000 for in-province travel, about $700,000 for the annual grants program; $230,000 for the community archives, $650,000 for the Maritime Bicentennial and $200,000 for Sea to Sea. That comes up to a total of the $40 million dollars we have.

H. De Jong: Would it be fair to say, even though the communities throughout the province have been asked to give some indication as to what they would expect under this newly created community grants program, that the money for this year, what's expected from the lottery funds -- the $40 million -- has in fact already been started, and that for this current budget year there will be no further funding available? Would that be a fair assessment?

Hon. L. Boone: No, left over from that is about $2 million. That's providing all the money is spent in the Halfback with the individuals that come back for the rebate on that. It could be slightly more than $2 million. As I've indicated in the past, it will be a substantially reduced community grant program, but there are dollars there.

H. De Jong: I read a couple of days ago about some funding that was made available through the Ministry of Environment for environmental issues within communities. I know that our community was getting a grant of about $135,000 for that. Is that also part of the community grants program? As I understood earlier, whatever was remaining in general revenue from the Lottery Fund, the three ministries were going to share in that. Am I wrong in understanding that, or is it in fact correct?

[3:30]

Hon. L. Boone: No, you are wrong in understanding that. That would come through the Minister of Environment. He may have received some dollars from general revenue. Half of the money from lotteries went back into general revenue. It was allocated from general revenue to the various ministries. From the allocated funds that used to appear in the lottery money.... I'll give you an example: there was $1 million that was for aboriginal languages. That has gone into Aboriginal Affairs. There were some moneys that were there for sports and culture, and that has gone to those various ministries. There are some other moneys that were there for some things that went to education.

The moneys are not divvied up from the Lottery Fund but from general revenue, which are voted moneys. The Lottery Fund no longer exists.

H. De Jong: Were those commitments made since October 17, as the minister mentioned, towards those specific programs on top of the other commitment that had perhaps been made by the previous government finishing up certain ice arenas or swimming pools? They don't all finish up in the same year. They are often paid for in the following year after the approval has been given.

Hon. L. Boone: As I indicated, we have $29 million in the budget to fund those programs that were previously approved. Some were approved by the previous government, and then there were some approvals made from November until the end of March, when we finally ran out of money. At that time, any of those dollars that were to be funded are in the $29 million. There could be some moneys left that need to be funded next year, because some of those things are carried over for many years. But they will be funded. There's no reason for groups to be concerned that they are not going to be funded. The dollars have been allocated for them, and they will be taken care of.

H. De Jong: The only other question I have at this point goes back to the purchasing issue that we were on a minute ago. I'm just wondering, with the supposed agreement that was worked on between the provinces, is it really well understood, even by the province of Quebec, that if a Canadian-made product is available, whether it's in British Columbia or on the east coast, that the Canadian provinces are going to get a first shot at supplying it before it's advertised in the United States, if it is known by these provinces that these products are available within Canada somewhere?

Hon. L. Boone: There is no buy-Canada-first program as the member is indicating. It goes by the needs of the product that we are looking for: price and quality. All of these different things are taken into consideration, but there is nothing to say that we will buy Canadian or buy B.C. first. That does not exist here in British Columbia.

H. De Jong: I have a difficult time understanding the statement that the Premier made this afternoon. He urged the Minister of Government Services to have the 

[ Page 2387 ]

trade barriers removed in Canada. If we want to remove the trade barriers in Canada, certainly Canadian companies -- it doesn't matter in which province -- should have first kick at the cat.

Hon. L. Boone: We do have the Canadian barriers down, and we do have the barriers down interprovincially, but we also have free procurement policies with the U.S. We do not have a policy that states we will buy Canadian. That does not exist here in Canada.

W. Hurd: I would just like to briefly explore this issue of the community grants program. Those individual organizations in the province that had applied under the GO B.C. program -- and of course that program having been terminated -- have those groups and organizations been advised in totality to reapply to the new community grants program? Is the minister aware of how many have been rejected simply on the basis of the funding, or because that particular growth and opportunities program is no longer available?

Hon. L. Boone: The lottery portion of my ministry has advised all of those groups of the status of GO B.C. -- that GO B.C. grants no longer exist. Their applications are being held until we obtain all the information and have developed a policy around the community grants program. We will deal with them at that time. But they are currently being held and have not been categorically rejected.

W. Hurd: Further on the groups that find themselves in this situation, when the new program is in place -- if I understood the discussion on the floor recently -- there are no funds, or very limited funds, in this program for the coming fiscal year. Would it be safe for the committee to assume that even though these applications are being held in abeyance, there will, in fact, be no money in this fiscal year to deal with their applications for the community grants program?

Hon. L. Boone: Only a Liberal would say that $2 million is no money. It is considerable money, and we may have a bit more, depending on how many applications there are, and how much money we have to pay out for the Halfback program. It's fair to say that we will not have not have a program of the magnitude of GO B.C. I've made that clear right from day one. It will be a substantially reduced program. Hopefully, next year that program will be increased, if we have less payments to make on previous commitments for GO B.C.

At this time, I think it's fair to say that when you look at your priorities.... The members across have voted against every tax measure this government has introduced. We have to have some way of paying for the programs we have in place. Our priorities have been to try and sustain the health care, education and social services programs in this ministry. I don't think it would be highly thought of by the public if we continued with the type of slush fund that existed in the past, with money being channelled to friends of government for what many may consider non-essentials, at a time when we are struggling to meet health costs and to meet our commitments to maintain health care and education in this province.

This government has set its priorities. We are really working hard to keep the deficit down, to maintain our programs and also to allow some programs to be maintained. But in the economic situation this province is in, it's fair to say that we will not see programs of the magnitude of GO B.C. for some time now.

W. Hurd: My questions are not related to whether $2 million represents a lot of money or not. They're really addressed on behalf of the organizations that find themselves in what amounts to a no man's land between the termination of the growth and opportunities program and this new community grants programs. I just want to clarify the point for Hansard and for the committee that, in fact, nowhere near the number of applications now held in abeyance will be addressed by this meagre fund. I hope the minister will welcome this opportunity to assure us that those groups and organizations that find themselves in this situation are being apprised that, although their applications are being held in abeyance, because of the difficult fiscal situation the government is facing, there probably will be no money for them in the current year. Those groups that have ongoing building projects are concerned that the GO B.C. grants in some cases represent cost-sharing arrangements with other levels of government, with other private groups, in which it would be a tremendous financial advantage for the government to participate. Perhaps you could assure the committee that these individuals and groups have been apprised that they can expect no help from this program during the coming fiscal year, so that they can make plans to secure alternative forms of funding.

Hon. L. Boone: It depends on the size of the individual groups. Many groups have made applications for very small amounts of money. In the past six months or so, when we first came into government, we were regularly turning down applications for large amounts of money, based on the fact that we did not have a large amount of money we could deal with at that time.

I've not minced my words with organizations. I've been clear to them that the amount of money we will be dealing with will be substantially reduced, that we will not be seeing a program of similar magnitude to the GO B.C. program, but that we will have a community grants program that hopefully will meet the needs of many organizations.

As I said, in the future, who knows? Next year we may have more dollars. That's at Treasury Board's discretion. But I can assure you that we'll be going and making our case hard to get the dollars to maintain and increase the programs, so that we can provide as many services to the communities as possible.

W. Hurd: Just pursuing this line of questioning on the community grants program.... Has the ministry made an attempt to identify those groups and organizations which have applied under the old growth and opportunities program, to determine what alternative 

[ Page 2388 ]

sources of funding they had in place -- i.e., the percentage of public participation that the GO B.C. grant represented. Has the ministry allocated these groups and organizations to be at the head of the list for whatever funds are available in the community grants program? Is there a list of priority organizations or individuals that has come out of the termination of the growth and opportunities program? This waiting-list that seems to have existed prior to the setting up of the community grants program.... As pointed out to me in my own riding, groups have excellent programs in place. They have 30, 40, 50 and even 70 percent funding from private groups and from municipalities. The growth and opportunities grant represented the final component in what really is an excellent series of public projects.

My question to the minister is: has she identified priority projects, for which the growth and opportunity grant represented a very small component and for which there would be a real benefit for the provincial government and this ministry to participate?

Hon. L. Boone: All GO B.C. grants were one-third funded by the government and two-thirds by other areas. It is no surprise that there were other forms of funding. You had to meet that obligation before you could receive any funding whatsoever.

We have not set out any priorities whatsoever, because we are waiting for feedback from the public. As of the latest count, we had some 400 letters from community groups expressing their opinions as to the level of funding, the priorities for funding and where we should be placing the priorities from the government's viewpoint. We will be waiting until we get the full impact from the groups and determine what the communities' priorities are. Then we will base our priorities on what the people want.

W. Hurd: With respect to the community grants program, is that the only public consultation feedback process that will be in place before the grant process is set up? Or can we anticipate that the ministry may broaden its receipt of information about what worked and what did not work with the GO B.C. program? Are we to assume, on the basis of a letter-writing campaign by the groups and organizations in the community, that that will assist, or be the only driver, for the government in developing a policy with respect to community grants in the province?

[3:45]

Hon. L. Boone: Yes, it is. We looked at this very carefully to determine how we could best meet those things and get feedback from the public. We could have had it take place in a consultative process that went around the province; we could have formed a committee that did those things. We could have taken weekly ads out in all the newspapers and run various things around. We did a minimal amount. We ran some newspaper ads. We sent out letters to all those people who had been in contact with GO B.C. or who were recipients of grants. Hopefully, that will get us a good cross-section of feedback. But after much discussion, we felt very strongly that with the minimum dollars that we had, we did not want to spend a lot of money going about consulting and then not have the dollars to put into the programs for the people. I think the public information that we are getting through the letters and briefs sent to us will give us a good perspective and a good broad cross-section. But you won't see me travelling around the province to get information from people, because I need the money to provide to the groups.

W. Hurd: I'm just a little bit concerned again about the groups that have been advised to reapply. We basically have a $2 million fund, but we have acknowledged that we won't even begin to cover the grant requests that are on file. We can assume there will be new ones arriving every week -- every day -- from the communities of British Columbia as this program unfolds, once it is set up. Is there any intention on the part of the ministry to carry these requests into the new fiscal year, or do they terminate at the end of the fiscal year? What happens to the groups that find themselves in a difficult situation because of what they thought were guaranteed funds from the GO B.C. program? Would they be advised to immediately go forward and try and find other sources of funding? Will the number of grant requests continue to build up during the course of the fiscal year, when the minister has acknowledged that next year there may not even be any funds available under this program -- or certainly very limited funds? I'm just asking these questions for the benefit of not only groups and organizations in my own riding but groups throughout the municipality of Surrey and in other parts of the province that may be in this situation. Do they go on a waiting-list and stay there in perpetuity?

Hon. L. Boone: First of all, I have not said that there will be no funds next year. I have not indicated that whatsoever, so I'd like to correct that. I have said that, hopefully, we will have more funds, because we will not have as many previous grants to be paid out. But all that will be determined by Treasury Board. We have to go to Treasury Board and make our case like everybody does. There was no guarantee for GO B.C. funding. Unfortunately, groups seemed to think that there was a guarantee and that all they had to do was apply and wave a magic wand, and that would be it -- the dollars would be there. The reality is that there was no guarantee of funding under GO B.C. Groups were turned down. When we came in, there were groups that had been turned down by the previous administration. I think that for any group to continue without having received notification that a grant had been agreed upon is a little premature. They really should be thinking twice about how they are handling their finances.

W. Hurd: Just a point of clarification. Obviously the decision by government to redirect lottery funds is the major reason why, from a policy standpoint, as the minister has stated, there are no lottery funds. Unless these groups and organizations had the benefit of a crystal ball and could have appreciated the govern-

[ Page 2389 ]

ment's change of direction, it would be logical for them to assume that their applications would be received and that the funds would be available. I think that point has to be made.

Just briefly, then, to pursue this waiting-list that appears to be building up, is it the intention of the minister to carry these grant applications into a new fiscal year, or do they basically die on the order paper at the end of the current fiscal year?

Hon. L. Boone: In the past, GO B.C. grants were carried over from year to year. I would think that when this process is through, and after we get through this area, we would be contacting the various groups involved and asking if they would like to have their grants remain on file for future consideration.

K. Jones: I'd just like to ask the minister.... She indicated that there is going to be a good chance that there would be a lot more money available, with the previously committed grants being mostly ended. If she has paid attention to volume 2 of the latest document she filed with the House, British Columbia Lottery Fund Grant Commitments and Payments, 1991-92, it states that there's a total commitment under that plan of roughly $38 million, and that $10 million was paid out of that. That indicates that there's still $28 million being carried over till next year. That's about the same figure as this year's carryover. Is that the figure she's talking about for this year, or is that the figure that's going to be carried over to next year for pay-out?

Hon. L. Boone: It's interesting. I say "hopeful," and the member repeats "probable." It would be nice if we had that knowledge. I cannot tell you what the dollars are going to be for next year. I can only say that we will not have as much to pay out next year because we don't have the multiple-year program that we had in the past. GO B.C. carried over from year to year, and you had payments that in many cases were made over two or three years. That will not be taking place under the current program. The dollars are not there. It's fair to say that it's going to be a reduced program, so the payments should be made this year. We will not have those same carryovers.

K. Jones: Just to clarify, then, the $28 million that is still uncommitted in this report is the pay-out you're planning to make this year, with the possibility that not all of it, but most of it, will be paid out this year?

Hon. L. Boone: We anticipate paying out $29 million this year in previous commitments.

K. Jones: I won't haggle -- $28.063 million is the figure I've got. Is that the figure we're talking about?

Hon. L. Boone: In fact, we have about $79 million worth of commitments out there. They will not be paid out this fiscal year. Not all of the amount that is shown will be paid out this fiscal year. Some of it will be paid out next year. The staff have worked out that $29 million will be paid out this year. As I said, there's $79 million in outstanding commitments, which includes the Expo legacy and some very large projects that were approved through GO B.C.

K. Jones: Just for a better understanding, could the minister sort of walk us through these two books, volume 1 and volume 2? Volume 1 is grant payments for 1991-92, and it says that a total of $93 million was paid out during 1991-92. Volume 2, which is commitments and payments, says that $38.7 million is committed and $10.7 million was paid, giving a net total of about $28.063 million. Are these repeating the same figures, or are they separate figures? Could you explain the layout?

Hon. L. Boone: The large grant book, volume 1, is for all of the commitments made in previous years, and everything altogether. This book, volume 2, is what was paid and what was committed last year. This is the total, and this is just the one year.

K. Jones: Thank you. That's much clearer now. So really, what you're budgeting for right now is the $28 million net of the committed funds minus the pay-out in the previous year; that's in volume 2. That's the remainder that's owing. Where does this other figure that you were using come from?

Hon. L. Boone: We are estimating that, of the $78 million outstanding, we will be paying $29 million this year, plus the $2 million, plus the Expo legacy as well. Those are the estimates that we have as the amount that we are going to be paying. This book here is what was committed this year, and what was paid this year. This book here is everything from past years, back to the beginning of the history of the lottery grants here. Out of all the grants, we're estimating that we will be paying $29 million in previous commitments.

K. Jones: I was just hesitating, because perhaps the minister wanted to explain further. She's getting further instructions there. Maybe you could just elaborate further.

Hon. L. Boone: This is a list of all the cheques we've paid.

K. Jones: Okay, that's volume 1, which is the list of all the cheques, or have you got volume 2?

Hon. L. Boone: Volume 1. Volume 1 is a list of all the cheques that have been made and paid for grants. This one here, volume 2, is last year's commitments and payments.

K. Jones: So book 1, again, is the whole historical view of all the grants and programs. I think that's what you said. I'm just.... Okay, the minister has nodded affirmatively, and we'll accept that. Hansard can hear that statement by myself, meaning the nod, to save that carrying on there.

I'd like to ask with regard to the response time on many needy projects which come up. The minister has 

[ Page 2390 ]

indicated that she's going to budget for projects. Then she's going to go the Treasury Board and ask for funds. To be able to have those to spend, she's going to have to have something to justify the basis for her request. She said that there are very hard-nosed people there. Therefore, she's going to have some concrete projects to put forward. She can't put airy-fairy recommendations forward, because they're very hard-nosed and wouldn't accept that. I'm presuming that that's what we're hearing.

How would the minister establish such a budget? Would that be the budget that is made up of projects planned for next year rather than this year? They would have to go through the whole cycle before they'd be included in the budget, and they'd have to be accumulated in preparation for that budget. Would there be any vehicle for fairly urgently required grants? Many of these have been responded to in the past by a fairly fast response time program. One of the very best of these fast-response programs was the breakopen program, where the local community charities could be approached for an immediate need. They would give the cash from the money that they had raised and accumulated for such a purpose. Could the minister give us an indication of how she's going to deal with these projects and get them approved through the Treasury Board?

[4:00]

[D. Streifel in the chair.]

Hon. L. Boone: We've got a slight misunderstanding here. We've already gone to Treasury Board to make the case to get this money in our budget. This is our budget that we're talking about here. The case has already been made to get these dollars here. What I was talking about doing is making a case next year for more dollars if we can. With regard to how we will be dealing with the individuals who come forth with projects, we are currently, as you know, developing the list of priorities through the community grants consultation program. We will be setting up our priorities based on what the communities are telling are us are their priorities -- whether it's sport, whether it's social services, whether it's maintaining some kind of a community centre or whatever their priorities are for the communities.

I think it's fair to say, and I will tell you right now, that one of the things that I've been told is that there is not a tremendous fondness out there for putting community grant money into golf courses. That's becoming clear. At least that's something we know. It's not good news for the golfers out there, but I think it's probably good news for others who are listening out there. We will be setting up the priorities that we are given by the communities. We will be establishing a ceiling that reflects the needs and our budgetary restraints. Then we will be setting out to determine where the dollars are going.

K. Jones: What was the case that you presented this year to get the allocation of funding based on? It looks as if you were able to successfully get, other than already allocated funding, approximately $2 million only for community grants programs. It's been substantially more in previous years. What case did you present to get your funding?

Hon. L. Boone: The case that we made was based on the fact that, as you know, we have a tremendous number of worthwhile groups out there which have a lot of projects that require funding. This government acknowledged that there was a need for government to put some dollars into community support and into community funding. It's unfortunate that it is not as much as you and I would like, but that's the reality, and the Treasury Board accepted our proposals.

K. Jones: Does the minister have to go back to the Treasury Board each time they have a project over $100,000 or $150,000? Could you tell us what the limit is for approval before you sell that project to the Treasury Board each time? Is this an additional part of the budget?

Hon. L. Boone: As it is right now, yes, we do have to go back over $100,000.

K. Jones: Is that for expenditures over and above the $2 million, or is that for expenditures within the $2 million that you've got to play with?

Hon. L. Boone: We can't make expenditures over and above the $2 million. That $2 million is our ceiling. We don't have any more money there. We would have to go to the Treasury Board for approval for community grants over $100,000.

K. Jones: I'm not quite clear on that one. Were these the figures that you have to go to the Treasury Board for for approval for expenditures, outside of the money that you've already got approved, which I understand is the budgeted amount of $2 million plus the other committed grants up to $40 million?

Hon. L. Boone: No, I can't go for money over my budget. I suppose I could if I made a good enough case, but we are looking to get approval within the $2 million budget for any individual projects that are over $100,000. Treasury Board guidelines state that we have to get approval for anything over $100,000. Over the $2 million, given the financial state we're in, I don't think I would have a lot of success going in asking for more money over and above my budget.

K. Jones: That's much clearer. Thank you for that clarification.

How about the breakopen tickets? Where are we with regard to the breakopen lottery?

Hon. L. Boone: We are winding down to a close on the saga of the breakopen. I will not be sad to see it end. We have received -- and I will get the figures for you here -- 208 approvals from societies or communities groups that have approached us to ask for the pay-out. There are 192 in process. The value that has been approved is $1,665,037. As you know, there was a deadline for the 30th. We've extended that deadline. We 

[ Page 2391 ]

have not been hardnosed on that whole issue because some groups have not submitted enough information, or we require different information. We've gone back to them and worked with the groups. Shirley Kerr has worked to assist the groups as much as possible, so that they can get as much money as is due to them. We're doing everything we can to help those groups through the process.

K. Jones: I'm pleased that that's progressing to some extent and easing the blow that this has brought to the various community groups. It's unfortunate, though, that a lot of the community groups are impacted by this. The minister knows better than I that the Legions, the Canadian Paraplegic Association, the service clubs and literally hundreds of groups are upset by how this whole matter of change in policy has been handled. Does the minister not feel that she owes the groups something better than what she is presently offering?

Hon. L. Boone: No, I don't think so. I think we've dealt with the groups as fairly as possible. We've offered them six months' pay-out for virtually doing nothing. In fact, they get these dollars, and they don't have to do anything whatsoever. The Lottery Corporation is purchasing the machines from them. There is nobody stuck with a machine that they can't sell. There are groups, such as the Legion and the Elks, that are still sellers and are, in fact, getting increased revenue from selling the tickets. They may be minus their dollars as a charity, but they are getting increased revenue at that end of the sell. We have done everything we can to try and make this process as easy as can be. I think it's worth noting that there are a good number of societies and groups that have not come forward to ask for a pay-out. That's maybe because they don't meet our guidelines, have not used the funds for the purposes for which they were originally intended or haven't met the regulations that were set out by the Lottery Corporation with regard to the use of the breakopen tickets.

There were some substantial problems with the management of this whole program. There were problems as to how it operated, and I think the province has been more than fair in dealing with these groups. There are always going to be those who say we never consulted, but I can tell you right now that there would have been no use in consulting, because the end result would have been that these people would have told us that they wanted the program to continue, and it was not an option that we could continue as it was, as was obvious from the auditor general's report.

A lot of people out there have approached me on the other side, saying that they appreciate the fact that this program ended, that they saw a lot of groups which had no business whatsoever receiving community dollars. I think this is the proper way to go about things. The dollars will be coming into the government. The government will be making the decisions about the requirements and where the money should be spent.

K. Jones: The minister has impugned a great number of very hard-working community charitable organizations with her statements. I think she owes us, firstly, an indication of how many organizations have so far not made the commitment to apply for the refunding, and also an apology to all those others who have been very active and have followed all the rules and guidelines such that they should not be impugned, and who did a very good service to our community and to the people in need in our community.

Hon. L. Boone: About 300 groups have not applied for the rebate from the breakopen. I certainly did not mean to imply that any of those groups were not charitable organizations, but I am saying that there are a lot of groups out there -- and some of them probably know who they are, because they have not applied for a rebate -- that know they were using the funds for purposes which they were not originally intended for and that have not necessarily met our guidelines. Otherwise, I'm sure they would have applied for the rebate.

K. Jones: How many of those are groups such as the Legion and other organizations which are continuing as vendors, and therefore there was really no reason for them to apply, as they are still continuing to receive funds?

Hon. L. Boone: They would still get the halfback portion rebated to them, regardless of whether they were sellers or not. I don't think the Legions or any of those groups would have neglected to apply for that if they were in fact eligible.

K. Jones: Does the minister not feel that she will miss the involvement of many of these volunteers who were working to earn money for the local charities through the breakopen program? Will that not impact on sales? Do we have an indication of where sales are going?

Hon. L. Boone: The facts speak for themselves. Sales are up 20 percent.

[4:15]

K. Jones: Is that the result that was expected when the Lottery Corporation determined to get out of the charitable organizations being involved? They previously got out of the original founding charitable programs that started the lottery operation, once they found that they established their base and then wanted to make the Lottery Corporation more profitable. They went to a paid-staff marketing program, rather than to the charitable organizations, as the means to make a greater return on their commitment to the program.

Hon. L. Boone: The member well knows that the breakopen program was not ended to put more money back into the government coffers. It was ended because of concerns raised by the auditor general about accountability, about the fact that government had no say in how the charitable dollars were being spent and that it was, in fact, whoever could sell the most tickets or whoever could get machines into the greatest number 

[ Page 2392 ]

of bars. It had no reflection on societal needs or the fact that communities required anything. It had only to deal with who was the biggest seller and the best promotional artist out there.

For those of you who keep trying to insist that the breakopen was ended so that government could bring those dollars back into government coffers, that is totally untrue. The member knows this, because I sat him down when we originally had to put a moratorium on and explained the situation with regard to the breakopen and the problems we were facing. This was not brought about by an intent of government to grab dollars. It was something that we were reacting to with regard to the auditor general's report.

K. Jones: I find the minister being very paternalistic -- or is it maternalistic?

Hon. L. Boone: Maternal.

K. Jones: I think it sounds more paternalistic -- having "sat me down" and given me a lecture on how this thing was going. As it turned out, it was an invitation that you accepted for me to meet with you to discuss the ministry. I initiated the meeting -- requested the meeting, to be correct -- in order to try to work cooperatively with you in this regard. I really don't appreciate the way you phrased that statement -- that you sat me down and gave me a little lecture. I was the one that was offering a lot of constructive approaches to the minister and trying to work together with her in regard to the best benefits of these programs to the people of British Columbia.

I have a lot of contact with the various charitable organizations. They have expressed a great deal of concern to us about the direction the government has taken. The question of whether it was the government's responsibility to end this program certainly can't be laid on the auditor general's lap, because the auditor general made a clear statement that they only had a concern about how it was being administered. That was the government's responsibility, not the charitable organizations' responsibility. The fact of the matter was that the government could have changed the process very simply and carried on to maintain 100 percent of the funding to the charitable organizations. The minister knows that, because that was given as a suggestion and alternative to her when she first initiated the moratorium program.

She should never have cut the charitable organizations out, unless she intentionally wanted to keep the charitable organizations from having a direct method of raising funds. They need to have those funds, and should not, as she has indicated, be out there looking to bake sales and car washes as a means of raising funds. This is totally maternalistic or paternalistic -- whatever you wish to call it. It's a totally unacceptable way to treat people who work hard in our communities as charitable volunteer people. I think that that whole approach is unacceptable.

I will carry on after that slight outburst, but believe me, I'm very, very tired of hearing the minister continue to blame the auditor general for action she has taken. She had better be prepared to answer for it and not blame others.

I'd like to go on with a further question. Could the minister also share with us the names of the firms involved in printing lottery tickets?

Hon. L. Boone: There's only one firm that does breakopen tickets, and that's Pollard Banknote Ltd. in Kamloops.

I'm going to respond to the member over there who had an outbreak, an outburst, whatever you want to call it -- a breakopen, perhaps. If the member would think back a few months, the meeting that you and I had to discuss the ministry was done with Mr. Bennett present. We went over things....

The Chair: Through the Chair, hon. minister.

Hon. L. Boone: The meeting that I called around breakopen was a specific meeting to inform you of the action that was taking place and of the press release that was being put out at that particular time. I asked you to come down so that we could sit down and discuss the issues around breakopen and make you aware of that situation. It was a specific and separate meeting from the one that we had with regard to the ministry. I did so to make you informed, so that you could be aware of that situation. I also tried to contact the leader of the third party, but was unable to do so at that particular time, as he was out of town.

I do resent the insinuation that this was a money-grab by the government. We are attempting to make the lotteries, the lottery grants and the programs that are there more responsible to the public. We're talking about a tremendous amount of public money that had very little accountability -- in fact, no accountability. There was no recognition of who got the dollars or why they got the dollars. We had some tremendously worthwhile organizations out there that were receiving $5,000 in breakopen money -- really worthwhile groups that were providing services throughout the province. We had others that were performing what society might consider minimal services, and were getting maybe $100,000. There was no recognition. There was no sitting down to say: "This is a worthwhile group. We ought to fund this. We ought to provide those services to this group, because they're providing services for children or to the handicapped." It was a matter of who could sell the most tickets, and that is not a responsible way to provide funding to community organizations. That is not the way dollars ought to be spent in the province of British Columbia to assist societies. It ought to be done based on need, based on the services provided, not on who has the most access to the greatest number of bars.

That was the basis of our decision; that was the basis of the auditor general's remarks when he commented on it. He stated that government ought to be making those decisions. We accept that responsibility; we are willing to take that responsibility on our shoulders and say where the dollars ought to be going and what the groups are that ought to be funded. That is not to say that many of those organizations out there will not be 

[ Page 2393 ]

able to apply for and receive government grants; they probably will. But I think it is a responsible way to deal with government dollars, it's a responsible way to deal with funding, and this is a responsible government.

K. Jones: The minister talks about responsibility, but all that the program has created so far in proposing to deal with community service needs is a bunch of bureaucracy. People have to go begging to get funds. There is no streamlining of the process. The people who have direct need but who don't have the capability of developing a full-blown presentation, often because of their own disabilities, are really left out in the cold in this process, as far as we can see. I don't know whether the minister has some special method of making it possible for people with limited means and capabilities to come forward and obtain needed small-dollar items that would be in the under-$10,000 range, without a lot of bureaucracy being tied up in it. Present programming has not shown that to be an easy process. Do you have any suggestions on that route?

Hon. L. Boone: As the member well knows, we are currently reviewing all of those things. Some of those processes that will be put into place will, hopefully, take into consideration the smaller grants that may not have to go through the scrutiny that others have to. I'm not willing to second-guess what the end of our community grant review is going to be.

You put up a very valid case for not continuing with the breakopen. If you are concerned about the groups that are unable to organize themselves well enough to put together a brief or write a letter to us in request of a grant, then I would suggest that those same groups would find it very difficult to go out and lobby a bar or a pub to take their breakopen machine, and then go out and collect the revenue from the machine, and all of those different things. What you are finding is that those organizations that were big and had the ability to go out and seek places for breakopen tickets were the ones that were successful. Those were the ones that got the dollars coming in, and the small groups were often shut out. That's a concern that all of us ought to share.

K. Jones: The minister obviously has not read the correspondence that has been sent to her. She doesn't recognize the work that has been done by many Lions Clubs, Legions and other groups, such as Cystic Fibrosis and other directly related groups, that are supporting the demands of needy people in their communities. Otherwise she wouldn't make such a silly statement.

I would like to go back to the question we asked previously. Could the minister confirm that all lottery tickets are printed in British Columbia now?

Hon. L. Boone: Yes.

You've got to be faster on the button, Dennis.

The Chair: Hon. members, this high-tech system of buttons confuses the Chair from time to time. Would you just bear with the Chair as we learn new procedures.

K. Jones: We'll bear with you if you'll bear with us. In our enthusiasm, sometimes we get ahead of you.

Does the minister think that the public understands that you will only have roughly $2 million under the community grants program this year to meet the total needs of the communities and organizations? In other words, hardly a penny of their lottery purchases this year will go to assist any new applications. Basically all the groups that will be looking to lottery funding are going to be out of luck this year, due to the way this government is presently handling its lottery funding. My question to the minister is: is now not the time to let these community groups in on your secret? The fact is that the cupboard is already bare for this year. Don't you think you should let the community groups that are still thinking they can apply know exactly what money is available so that they will not be wasting their time?

[4:30]

Hon. L. Boone: Well, there are some dollars here. As I stated earlier, it may not be as much as what the member opposite would like. Certainly we'd like to have more. I'd like to have hundreds of millions of dollars for community grants, but the dollars aren't there.

It was made clear in our letter that we were going to be having limited dollars. As I stated earlier, those dollars could be increased if we in fact have some moneys left over from breakopen. If we do not have to pay out as much in breakopen as we expected, we could have some more money there. So we've not stated the dollar value there, but the public knows, as I've stated over and over again publicly and in our letters, that there are limited dollars there. Many community organizations will be receiving some assistance and will be helped out through this program. There won't be the million-dollar ones out there, that's for sure -- you and I both know that -- but there will be dollars for some of the smaller grants.

K. Jones: What will be the basis of in-province travel funding program awards this year? Will it be first-come, first-served for very limited funds?

Hon. L. Boone: It's a first-come, first-served basis. But, as Ms. Kerr has indicated, we've never run out of money for this program. We always seem to be right on the dollar, and that just shows what competent staff we have at the lottery grants branch, who are able to anticipate so wonderfully the needs of this province.

K. Jones: I'd like to explore one other area of the lotteries. It's something that I believe is being contemplated this year: video lotteries, or video gambling. Maybe I should just give a little explanation of what that is for people here that may not be aware. It is, in effect, an electronic slot-machine. Individual terminals are wired to a central computer and are programmed to offer electronic poker, blackjack and other card games. The system is the essence of flexibility. Video gambling terminals can be put anywhere. In eastern Canada, particularly the province of New Brunswick, where video gambling has mushroomed, terminals have ap-

[ Page 2394 ]

peared in bars, taverns and convenience shopping centres. They would possibly be ideal for ferries. It's easy to play. You just put in your money at the terminal and a ticket produced by the machine tells you instantly whether you've won. You then just take the ticket to the counter and get your cash.

I understand that the Lottery Corporation is investigating these with a concern about the fact that some of them are already being operated in British Columbia by questionable people that the Lottery Corporation may have concerns about. A question that comes up with regard to this is a matter of concern to many people in our community. This is a submission to the B.C. Gaming Commission from the Anglican and United Churches of Canada, September 1987:

"The promotion of widespread gambling encourages a flight from reality into fantasy. As any know who have ever held a lottery ticket, once that ticket is in your hand, you begin to fantasize about how life will change when you win the jackpot."

I gather that many people who have participated in this process have experienced these things.

"As shaky a basis for hope as gambling provides, study after study reveals that most of those who gamble -- at least using bingos, lotteries and casinos -- are from the lower-income brackets of our society. Not surprisingly, those with the least material possessions are most susceptible to the allure of the new life a jackpot promises to bring. In reality, those from the poorer sections of society end up paying for a great deal of 'charitable activities'. Use of gambling as a revenue-raising device in our context really means that those least able to afford it often pay for projects and activities enjoyed by wealthier segments of the society. As government policy, this constitutes a regressive tax. We are against regressive taxation."

I think the minister would also probably agree that she is against regressive taxation, and may even have some of these concerns.

Another aspect is stated here in a statement made by the Outreach and Social Responsibility Committee of St. Matthias Anglican Church in Victoria. There are three aspects of the gaming activity of particular concern. One, "the vigorous and skilful manner in which the B.C. Lottery Corporation, an agent of the provincial government, actively encourages more and more British Columbians to engage in gaming activity at higher and higher input levels." Two, "the new practice of gaming activity which has been introduced in Canada by the advent of video lottery, or video gambling action, in the Atlantic provinces in 1991." Three, "the way in which this video gambling malaise appears to be spreading westward across Canada, with the provinces of Ontario, Manitoba and Alberta understood to be considering the introduction of systems comparable to those in the maritime provinces." In fact, I've already seen them in Quebec earlier this year. They are becoming quite an attractive means of raising money. They're very captivating for the people just passing by. Because of the video aspect of it they're very popular.

Does the minister condone the direction of the government...? I'm sorry, let me rephrase that. Does the minister feel that this concern expressed by these churches is something that she would like to take into consideration in future planning? Secondly, does the Lottery Corporation currently have an investigative program underway to maybe establish video gaming in British Columbia?

Hon. L. Boone: As the member knows, the Attorney General ministry and mine are currently reviewing a number of gaming issues. The position on VLTs in the province, and future VLTs in the province, is one of those areas that is being looked at. Certainly we will be taking into consideration not just the concerns of the churches but the concerns of any number of different groups out there in determining the policy that the government establishes. I think one has to understand that the Lottery Corporation -- and this is where the policy decision comes in -- will not be proceeding with the VLTs until this government has dealt with the whole issue of gaming and come up with a policy around that. That is not an issue that the Lottery Corporation can step into without government approval.

K. Jones: Just to clarify for people who don't know what VLTs are, you're talking about video lottery terminals. Is that correct?

Hon. L. Boone: Yes.

K. Jones: So you're indicating that there is a definite review of these going on. Is there going to be a community input program established prior to any decision being made on the establishment of VLT operations?

Hon. L. Boone: The Attorney General and I will be taking a submission to cabinet within the next couple of weeks regarding the whole issue and how it will be dealt with. At that particular time it will be public information.

K. Jones: Going on from that aspect of electronic gambling to the area of the trial that's currently being run by the Lottery Corporation in the Starship bingo operation on Main Street in Vancouver, which is an electronic or video bingo operation, is the minister aware of that operation and how lucrative it is? Does she have any concerns about its operation or the direction it's going in, as an example for the future?

Hon. L. Boone: This is a pilot project. I'm well aware of how lucrative it is. It provides a great deal of money for many of these charitable organizations that you're very concerned about and that I'm very concerned about. Certainly they've approached me with regard to the future of video bingo. For the member's information, I will just tell you that video bingo, tele-betting or whatever it is...

K. Jones: Off-track betting.

Hon. L. Boone: Off-track betting -- that's it. ...and offshore sales of lottery tickets, which we talked about earlier, are issues that will be going to cabinet in a cabinet submission, and the decision with 

[ Page 2395 ]

regard to video bingo will be made at that particular time.

K. Jones: The minister indicates that these issues are being discussed by cabinet and will be going to cabinet for a decision, but at what point does the public have an input into this? There's a large number of people out in the community today who are very fearful of the direction the government is taking over all of the lottery, bingo and casino operations, strictly for their own source of funding. They have expressed that fear.

Your deputy minister -- or former deputy minister -- has attended a meeting where they were very clear in delineating that problem. It's unfortunate that the minister wasn't there, because she would have then heard it firsthand, as both the hon. member for Langley and I, who attended, got the true expression of the people in that very large meeting, representing, I believe, about 240 different charitable organizations. There was a great deal of fear and concern expressed at that meeting that the ministry should be fully aware of. I'm sure that her deputy minister gave her a good briefing on that; still, I don't think that a verbal briefing could be quite the same as being there in person. In our presence the feeling was very well expressed by many people.

Do we have a direction from the minister as to how we're going to have community involvement in the decision-making in the future?

Hon. L. Boone: I just want to clarify that Mr. Allen is still my deputy until Thursday, so don't let him off the hook. We will not let him off the hook any earlier than that.

I think it's fair to say that paranoia exists within community groups out there, fired, to an extent, by the breakopen and by the fact that people are saying that because we've ended breakopen, we're going to end this and we're going to end that, and all those sorts of things. The Attorney General and I have made it clear to the individuals involved that any changes.... This is why we're saying that any changes that take place in gaming or in the gaming field will involve public input.

[4:45]

It is not clear whether there will be changes; that is the big question. If there are no changes, if cabinet decides that the status quo will be maintained, then there are not a huge number of reasons to go out and have public input into this. If there are any changes whatsoever, and it affects the various charities, then we will have full consultation and public input around that issue.

K. Jones: The minister has already made it clear in previous statements that it is very much more profitable to operate gaming, as has been identified by the B.C. Lottery Corporation, without the use of charitable organizations. Our charitable organizations are an impediment to the profit-making process. Surely this is going to be the trend of things, since the Lottery Corporation's mandate is to establish a bottom-line profit. Their only mandate is to make as much money as possible. They have no social responsibility; it is the minister's responsibility to look after social aspects of things. The Lottery Corporation's sole purpose for being is to make as much money as possible. Therefore only through the minister's direction would they in any way have people who are not professional involved in the process of raising money.

Perhaps the minister would like to address the fact that the trend is that we're not going to have charities involved in fund-raising at all, and they can go out and have garage sales and bake sales and that.... You're being condescending again.

Hon. L. Boone: Well! I mean, I just did a whole thing and talked to you about the need for public consultation, and said that there'd be no changes. I talked about paranoia, and now you can see why paranoia is being fired out there and who is fuelling that fire when they talk about the ending of charitable involvement in any gaming aspects. Gaming, bingos and casino nights are under the Ministry of Attorney General. That is not mine, and it has nothing to do with the Lottery Corporation whatsoever. Why you're linking the Lottery Corporation there I have no idea.

You said the Lottery Corporation strictly has to earn money; that is true. That is their mandate -- to earn money. That is why, as the auditor general said, we had to remove them from the process of giving dollars to charitable organizations through the breakopen. In fact, they were breaking the law when they did that. This government has given no indication that we are removing charities from any of the gaming activities whatsoever. To suggest or even utter any words on those aspects is misleading and something that this member should really rethink.

K. Jones: I think we've done a pretty good job of exploring that area. If anyone else wishes to make any comment on the lottery area.... If not, we'll proceed.

We'll move on now to the Purchasing Commission. First of all, vehicle and equipment operations used to be under STOB 50; they still are. When the estimates were last debated, the official opposition critic was concerned that the figure for fiscal '90-91 was up 76 percent and was told that the reason was that the ministry had taken over vehicles from other ministries. Last year STOB 50 was $36 million; this year it is $38.5 million. Why all these vehicles?

Hon. L. Boone: Before I go any further, I'd just like to introduce to the committee Lesley Ewing, who is with my financial office, so that the members know who she is.

I'd be more than happy to answer that question. It is clear, as the member knows, that when a vehicle reaches the point where you have to replace it or where it becomes less than cost-effective to operate it, you are putting more money into maintaining it than you would into purchasing a new one. In fact, that is the case we had. We had a tremendous number of vehicles that were costing us, that were a drain on the public purse because of the amount of maintenance and repairs required on them. As good keepers of the public 

[ Page 2396 ]

purse, we managed to convince Treasury Board that it was good public policy to replace those vehicles with ones that would be less costly to us in the long run.

K. Jones: From that I would be led to believe that perhaps it was the incompetency of the previous government that allowed these vehicles to not be replaced on a regular basis. Is that what you're saying?

Hon. L. Boone: I think it's a culmination of years. If we go back to the restraint years, a lot of vehicles were not replaced for many years. Instead of going on a five-year rotation, which at that time was supposed to be the norm, they were kept on, and we had vehicles over ten years old out there, which were tremendous drains. But because it didn't show up as a capital expenditure, because it came out of operating costs, the previous government tended to keep those cars on the road, and it didn't show up as a capital expenditure. It's our view that we ought to be putting our dollars where they are best spent and where they are providing the best services to the people. Certainly maintaining junkers on the road isn't one of them.

K. Jones: I think the minister has obviously replied yes to my question that there was lack of good direction in the previous government, and that's accounted for some of the problem.

My next question is: who controls government vehicles today? Are they all controlled by Government Services through the Purchasing Commission?

Hon. L. Boone: We currently have all ministries under vehicle management, which is under the Purchasing Commission, and that's, of course, in Government Services.

K. Jones: How many vehicles owned by government were disposed of last year through the Purchasing Commission?

Hon. L. Boone: I'll take that question on notice and get that information for the member.

K. Jones: Is there a policy guideline that the Purchasing Commission is aware of as to who qualifies for a vehicle? Or do they just acquire what they're told to acquire by the clients?

Hon. L. Boone: The Purchasing Commission, through vehicle management, goes through a process of identifying the needs of the ministry to figure out what type of vehicle they require. We then put together a proposal which we take to Treasury Board, and Treasury Board has the final approval as to whether that goes ahead or not.

K. Jones: I heard the minister state that the Purchasing Commission identifies the type of vehicle. What about the quantity of vehicles?

Hon. L. Boone: The same thing. We work with ministries to determine what their needs are, and after determining that need we put a business plan together and take it to Treasury Board.

K. Jones: Since you determine the type of vehicle, do emission standards or mileage performance standards come into play?

Hon. L. Boone: Yes. All of those things are considered. We're currently working with manufacturers to get them to produce a vehicle that uses alternate fuel. The Purchasing Commission is very proactive in trying to deal with a lot of the environmental issues of concern to people today.

K. Jones: Thank you for that clear answer. The government is being environmentally aware. I look forward to hearing the results very shortly -- hopefully later this year.

I might say that the member for Vancouver East had a great question from the opposition benches last May 31 regarding the Purchasing Commission's working capital account in the Ministry of Finance. Last year the figure was $24 million, and apparently it enables the Purchasing Commission to buy all these cars on behalf of ministries. The answer we received was that almost all of this was to purchase vehicles. I'm just wondering if that was the case in '91-92. Could the minister tell us the total amount spent on purchasing vehicles for government employees last fiscal year and what amount is set aside this year? Also, could she find the figure for money spent on leasing vehicles for government employees. What will it be this coming year?

Hon. L. Boone: In terms of acquisition, it was approximately $11 million last year and $13 million this year. We will have to get the information for you on the leasing aspect of things.

I just want to clarify something, because this is recorded in Hansard, and you're talking for government employees. I think it needs to be clarified that vehicles are not purchased for employees per se; they are purchased for ministries to enable employees to perform their job functions. These are not vehicles that employees will be using to drive around, go to the movies in or even to drive back and forth from work. In fact, they are vehicles that are provided by government to enable them to perform the jobs that they are hired to do.

K. Jones: Are there any purchase-to-own agreements made with staff members of any of the ministries -- even up to deputy ministers?

Hon. L. Boone: At the end of the executive leases on vehicles, there are buy-out options available for deputies and ministers, as was the case when we changed government. There was a time when we had to wait to find out if vehicles were available, because the previous ministers had the option to purchase them if they so wished.

K. Jones: Still under the Purchasing Commission, we turn with great interest to the acquisition of blue 

[ Page 2397 ]

boxes for recycling -- in the great Bill Reid caper that was such an embarrassment to the former Social Credit government. The reference, for all of those in the press gallery who may wish to refresh their memories, appears on page 8980 of Hansard, April 11, 1990.

It was a sad case, said the New Democratic opposition. "A reporter covering White Rock city council uncovered the fact that a minister of the Crown was lobbying on behalf of two political supporters of his. But more than that, when you look at the record it wasn't just one grant for White Rock." The minister was meeting with the Purchasing Commission to try to make a deal so that his friend's project could be a prototype for the whole province. Then it goes on with this most eloquent speech by the younger member for Vancouver East about conflict of interest and the need for clear guidelines, etc. -- but that's off the topic.

[5:00]

Let's get back to blue boxes. What involvement does B.C. Purchasing Commission have today in the coordination of blue box purchases and joint recommendations for municipalities, regional districts, societies and the like?

Hon. L. Boone: We are doing nothing with blue boxes right now.

K. Jones: Are there any B.C. manufacturers of blue boxes that the Purchasing Commission gives preference to in their purchases or recommendations?

Hon. L. Boone: Just to clarify that: we are not involved in blue box purchases for municipalities or any such things. We are involved in purchasing blue boxes for government operations only. Insofar as there are B.C. firms that are meeting the qualifications we require for the tender, they are invited to bid on any purchases that we put forward.

K. Jones: At this point, I'll defer to one of my other members who would like to speak, the member for Surrey-White Rock.

The Chair: Thank you for the assistance, hon. member.

W. Hurd: Just a quick question about investment recovery by the various ministries -- a problem identified in the Peat Marwick Thorne report. The report noted that ministries are allowed a credit if they replace an asset disposed of in the same year. However, until recovery, small asset disposals can be passed on to the relevant ministry. The asset investment recovery operation can be expected to generate surpluses. The report noted that higher surpluses could be realized if ministries could see a financial benefit from disposing of surplus assets during that fiscal year -- indicating the present government policy of returning all recoveries, other than replacement assets, to the consolidated revenue fund.

Has the minister availed herself of this particular recommendation regarding asset recovery, and is there an intention to allow ministries more latitude in how they dispose of assets during the current fiscal year?

Hon. L. Boone: I think it's fair to say that we certainly would like to have the ability to dispose of assets and return moneys to ministries. We are currently trying to deal with the Ministry of Finance on this. What happens there is ultimately Treasury Board's decision. I can't make those decisions, but it would certainly be a good idea, and we would support it.

W. Hurd: Does the Ministry of Government Services assess or review this problem to determine what savings could be achieved -- if, indeed, assets were disposed of during the same fiscal year -- rather than wait for an asset disposal in the next fiscal year? Is that part of any review by the ministry?

Hon. L. Boone: We do not wait for another year. As soon as an asset is declared surplus, we take the necessary steps to move it out and dispose of it through whatever means possible. What I was talking about earlier was the ability to dispose of assets and have the revenue come back to ministries rather than into consolidated revenue, which is currently the system. As I said, I think probably all ministries would like Treasury Board to have them bring those dollars back into their own revenue, but that's a decision for Treasury Board to make.

W. Hurd: With respect to the Peat Marwick Thorne report, which has identified significant cost savings, is it the intention of the Minister of Government Services to identify those savings where applicable and to pass them on to Treasury Board in the form of assisting cabinet to change the policy?

The Peat Marwick report seems to indicate that by changing the policy within her ministry significant savings could result. Even though the ultimate decision may be made by Treasury Board, surely she will put in place a program to identify these cost savings and to make a recommendation to Treasury Board.

Hon. L. Boone: I think the member is referring to the fact that ministries will hoard items rather than dispose of them, if they don't get any dollars back into the revenue. We are working with ministries to identify things and to try to get them to put those areas forward for disposal as soon as possible. We are working with Treasury Board to make them acknowledge some of these concerns and to recognize the needs of the various ministries. Perhaps we will be successful in having them allow us to gain back some of the dollars we have from disposal. That's certainly a Treasury Board decision.

W. Hurd: In perusing the Peat Marwick report -- although I haven't been able to find the clause -- I believe there's a section that identifies the possibilities or opportunities for other levels of government to participate with the Purchasing Commission to take advantage of the overall purchasing power of the provincial government. Is there any intention by this 

[ Page 2398 ]

minister to open negotiations with municipal governments, regional districts and other such levels of government in the province to recommend ways in which the greater purchasing power of a central authority can achieve savings on such items that the ministry routinely purchases for the provincial government?

Hon. L. Boone: That's a very good question. In fact, we already do a lot of work for the various municipalities and school boards. The master purchase order that we have for tires is available to all those individuals. The master purchase order that we have on hotel accommodation and car rentals is utilized by the municipalities and school boards and is very popular with them. Within the first two months of becoming a minister, I met with the executive of the Union of B.C. Municipalities and brought to them ways that we could assist them and areas where we would be more than happy to cooperate to try to reduce their costs, given the fact that we're all trying to save the taxpayers' dollars right now.

I know that the Purchasing Commission has been in touch with the various municipalities as well, trying to encourage them to utilize our services when required -- not just in purchasing but in things such as warehousing. We have warehousing throughout the provinces where municipalities and school boards and many different individuals have a number of different warehouses, and we think we could provide a service by providing one warehouse that could house all those things and provide that service to them. We're more than willing, happy and anxious to service school boards, municipalities and regional districts in any way we can.

W. Hurd: Further on that issue, have any specific entreaties or communications been initiated with any governments to identify this opportunity during the coming fiscal year? I'm thinking in particular of large centres like the city of Vancouver and the municipality of Surrey which have large purchasing departments and a rather large budget for assets acquisition and disposal. It just seems that if this particular opportunity is available to municipalities and regional districts, there is a dire lack of communication or information available to these levels of government about the opportunities that may exist in this area.

Hon. L. Boone: I went to the executive of the Union of B.C. Municipalities. Mayor Campbell was at that executive meeting, and I talked to him extensively about how we could assist him. I offered and sent to the executive information that we have on how we could assist municipalities and asked them to make the information known to their members. I offered the services of a member from the Purchasing Commission to go to regional meetings of the municipalities so that we could get that information out to them as much as possible.

K. Jones: Just a quick question on Discovery Fair. The former government liked it; the Purchasing Commission was proud of it; the opposition liked it. Why isn't it happening this year?

Hon. L. Boone: Unfortunately that was one of the areas we couldn't afford this year; it was one of the budget cuts we made. But we are looking to implement it next year, in working with the Crown corporations and municipalities to put together a market discovery program in 1993. What we might be looking at is operating those things every two years. It's unfortunate, but we had to take our cut, as did all other ministries.

K. Jones: There was a bit of a new program started following the passage of the 1989 legislation for the Purchasing Commission. It was called the technology commercialization program. Could the minister elaborate on whether it has been successful and perhaps provide an example or two of the successes?

Hon. L. Boone: It is very successful -- now that Mr. Hutchings has refreshed my memory. We have in fact received revenue from that program. It's an area where we are taking technology that the government owns and marketing it. We are getting revenue back from it already. It's very successful, and we're hoping that it's going to be even more successful in the future.

K. Jones: There is a further issue I'd like to address in the Purchasing Commission area, and that has to do with bidding. Again, for the press gallery, I'll quote from Hansard, page 10653. The speaker is the younger member from Vancouver East, as a member of the opposition. The day was June 28, 1990, and the member was discussing the Purchasing Commission Amendment Act, 1990. The quotes on the importance of public bids, public tendering, are truly instructive. Says the now Minister of Finance of this government opposite, "...now we have public tendering, and the government chooses low bid -- or should always have public tendering and should always choose low bid, perhaps." The "perhaps," from that member, meant to have the public tendering always, except when you don't have reasons for it. He said: "...where possible we should have some objective criteria." The exceptions had to do with the environmental or regional reasons within British Columbia.

Read the speech; read the words. He was not talking about political reasons, but friends and insiders -- friends from another province, jobs for another province, and money and contracts for another province. No, he was talking about jobs in British Columbia.

[5:15]

At the top of the column on page 10653 -- all these numbers; I know, it's beginning to sound like bingo in here. The member for Vancouver East said: "...where possible we should have a bidding procedure to take the low bid." There he said it again.

Then again, under the second column, third paragraph in Hansard, June 28, 1990, for all to see, the younger member for Vancouver East, the protégé of the guru -- the older member from Vancouver East in those days -- said: "There has to be a way to curb politicians' 

[ Page 2399 ]

desire to serve what might be a more political interest." Bingo! It can't be much clearer than that.

Sure, he'll say that he was talking about guidelines for regional purchases. But in general, he was talking about public bidding; public tendering; public purchases; and outlawing special deals for friends and insiders -- not NOW Communications, not Viewpoints Research, not Paul Sabatino and friends, Bill Bell, John Walsh -- the Deputy Ministry of Tourism providing contracts for friends from other provinces, and the Manitoba connection that will cause further embarrassment to this government before it's over. When it comes to public money, public bidding, public tenders....

The Chair: Order, hon. member. The Chair is having some difficulty in determining the relevancy of the debates in front of us to the examination of the supply estimates of the Ministry of Government Services. I will draw your attention to standing order 61. I would recommend that you read it and stay within those limits: "Only the administrative action of a department is open to debate, but the necessity for legislation and matters involving legislation cannot be discussed in Committee of Supply, nor the conduct of certain high public servants, nor the decision of a judicial court."

Bear that in mind, please, hon. member, as you question the minister on her supply estimates as related to the ministry.

K. Jones: I was just about to conclude that line of questioning. The question I was referring to was to the Minister of Government Services, who is responsible for the Purchasing Commission. The question is: what are you going to do about toughening standards -- tougher guidelines on the spending of public moneys? My references were only two examples given by the previous government and examples currently coming forward today on the issue. I really believe that I was speaking directly to the issues in order here.

Hon. L. Boone: I think we do have very tough standards. The Purchasing Commission tenders all their projects that go out. I have nothing to do with the tenders; I do not see the tenders. I feel a bit like that skit "Sam, I am," or "Ham, I Sam," or whatever it was, last Thursday. I don't review the tenders; I don't even know when they go out. That is all handled through the Purchasing Commission. They are all tendered fairly and with the utmost discretion, I'm sure.

L. Fox: I don't have a lot of questions for this particular segment of the minister's estimates, because the Purchasing Commission has, in my view, done a reasonably sound job over the last several years. My one concern, though, was how well we'd done with a program that I believe was instituted a few years back. It was along the lines of -- I hesitate to use the words, but for lack of better terminology -- import replacement, where we were looking at enhancing our own economic opportunities through the Purchasing Commission. If the question has been addressed previously, I apologize. I would like to know how well that is going, if it is still in place.

Hon. L. Boone: The program you're talking about is one that I talked about when I talked about wanting to clone a particular gentleman in Kamloops because he's doing such a good job at supplier development -- matching suppliers in British Columbia with the needs of government. It would be nice, and I would really like to extend those services to all communities. Unfortunately, the budget restrictions we have do not allow that to take place. I know that in the Kelowna-Kamloops area -- I mentioned this in my opening remarks -- he has managed to match numerous suppliers with government contracts. In fact, we are receiving good value, because we are able to receive products that meet our needs, that meet all our standards and that are lower-priced than those we were receiving from outside the country. And we are providing jobs for local employers. So it's a good means of doing things.

We are not subsidizing those people. They are good suppliers who are capable of providing us with very good products, and they are doing so competitively. But for some reason or other, some of our suppliers don't know about a lot of the contracts the government has, and they haven't gotten used to the fact that they can go into the government agent's office and find out what tenders are out there.

It's working very well. I'm very pleased about it. I would really like to extend it throughout the province more, but the dollar restrictions prevent that.

K. Jones: I'd like to explore some of the purchasing practices -- first of all, as to the opportunities given to local businesses. Some information that has been brought to me indicates that the Queen's Printer operation has been turned into a vehicle to try and make profit rather than to break even. It's a situation where local suppliers have been abandoned, and offshore -- when I say offshore, I mean the Orient -- suppliers of giftware, pins and such have been able to get the business, because the price has been much lower. The end result is that the price the product is being sold for is the same as if the product had been purchased here in British Columbia. If it were established as a break-even operation, our local businesses would have been able to continue to supply that product and not have had to put some people out of work as a result of the decision of the the Queen's Printer trying to make its grandstand play to become a profit-making centre rather than a centre where B.C. products are being put out to the people of British Columbia at cost. Could the minister comment further on that?

Hon. L. Boone: This is not a profit-making centre; it's a $10 vote. We recover our costs from the ministries, and that's all we do. We do not accumulate any money in the Purchasing Commission, the Queen's Printer, or any of those areas. If we did, that revenue would be returned to general revenue. That does not happen. This is a $10 vote. The money is used up, and it is costed back to the various ministries.

[ Page 2400 ]

K. Jones: If that's the case, could the minister explain to us why Pressed Metal Products of Surrey was eliminated from supplying pins to the Queen's Printer, and why this operation is no longer able to employ people that were previously employed?

Hon. L. Boone: That company is not eliminated from supplying pins. They lost a tender, and that happens in the free enterprise world now and then. You take the good with the bad. Sometimes you lose and sometimes you don't. We have a supplier development person going into that company, looking to see how we can work with them. As the member knows, you take your lumps when you go into a tender process, and they lost the bid.

K. Jones: Does the minister have a buy-B.C. program, or is it just open bidding? You were expressing something along those lines to the opposition leader when he was questioning you on interprovincial trade. Do we have a position where it is possible for people to bid within B.C. and get some consideration, especially when the product that's being marketed is marketed at the same price as what they would have bid?

Hon. L. Boone: I thought the member heard when I was talking with his leader earlier.

We have no buy-B.C. program. In fact, we specifically can't do that because of the procurement agreement that we have signed with the other provinces. It states that we must give open procurement to everyone within all provinces to bid on our products. There is no specific buy-B.C. program. We do have a supplier development program, which works with companies to put them in touch with government. It shows them where there are products that they can bid on, and areas that they didn't know about where they can work. We do have a First Buy program, whereby a company that is a supplier of a new product that has some economic value to the province -- for example, an environmental product that we think would be marketable outside this country.... We will give them a "First Buy" to enable them to get some cash flow and a little boost into the market. It's worked very well. It's helped a lot of our companies get started. We, in British Columbia, have signed an agreement with all the provinces on national procurement, and we are unable to have a buy-B.C. program.

K. Jones: I believe that the procurement program, which is interprovincial, doesn't bind you to restricting purchases from outside of Canada. You can make a restriction on purchases only within Canada and still be within the bounds of that agreement, I understand.

Hon. L. Boone: It doesn't work with the free trade agreement either, or with the movement that we are trying, which is to open up markets for our people outside this province's boundaries. We're working hard with suppliers and with various companies to assist them in getting started in B.C. But in order to expand their markets, they need access to the markets in other countries and provinces. Therefore we have an open purchasing policy in British Columbia. We are enabled to implement special programs, or to put special needs on purchasing. For example, if we said that we had environmental standards, we would be able to implement them as long as they applied equally to all that were bidding. If they applied equally to everyone who was bidding, then it's entirely correct to do. But we could not put in special provisions for British Columbia firms alone.

[5:30]

K. Jones: Does the minister know of any investigation going on with regard to purchasing practices of the government or of any Crown corporation?

Hon. L. Boone: I know of no investigation that is taking place, either at the Crown corporations or in the Purchasing Commission. But I can tell you that the Purchasing Commission works with the Crown Corporations Committee and the secretariat to assist any of the Crowns with their purchasing.

K. Jones: Has the minister been in receipt of any correspondence that indicates that there would be a need for an investigation of some of the practices of purchasing, or of where there could be a cost-saving in the purchasing of certain items?

Hon. L. Boone: I'm not sure what the member is getting at. There have been allegations from a former member of the Purchasing Commission; those allegations have been reviewed by a number of different people. We have offered that person the ability to go forward and have his allegations reviewed by the auditor general, and that person has refused to do so. I would be more than happy to speak with the member about it if I'm on the right track as to whom you're talking about. But I do not feel that I want to mention the name or the allegations in this committee. I'd be more than happy to talk with the member about this privately and bring some fresh viewpoints to his attention.

K. Jones: I don't want to get into the personalities of this question, but I do want to ask the minister if, as a result of correspondence she may have received, she has undertaken to have an investigation into the way the purchasing of certain items is done by the Purchasing Commission, and if she is aware that there is also an investigation occurring in two of the Crown corporations in a similar area.

Hon. L. Boone: As I said, without getting into names -- I'm not sure, but I would imagine we're dealing with the same person here -- this has been reviewed by the Attorney General and the auditor general, and it was rejected by the ombudsman. If this is the same individual we're talking about, I suggest that I meet with you privately and deal with some of these issues at that time.

K. Jones: I'm not one to try and hide issues that are of concern. I think they should be out in the open, and 

[ Page 2401 ]

that is why I'm bringing them forward at this point. The minister may not be aware that there is currently an investigation into the purchasing practices of two of the Crowns. I've had assurance from the person who is doing the investigation that that was underway. The question is: does the minister not consider this a serious enough item to review the practices and try to make the major savings that it has been indicated should be available?

Hon. L. Boone: If you're talking about the Crowns, you're talking about the Purchasing Commission.... I'm not sure what you're talking about. I don't know that there is an investigation of the Crowns. Unless it's the Crowns I'm responsible for, there's nothing I can do at this time. The allegations made with regard to the Purchasing Commission have, as I have told you, been reviewed by the Attorney General and the auditor general, and they've been reviewed and rejected by the ombudsman.

There's a lot more to this issue than what the member is knowledgeable of, if in fact we're talking about the same individual. If we're not talking about the same individual, then this is all new to me, and maybe you should tell me who this person is and what have you, and then we can deal with it. At this time I think that any allegations brought to me with regard to the Purchasing Commission have been fully investigated by a number of different sources in British Columbia and have been found to have no basis whatsoever.

K. Jones: I would ask the minister to really seriously look at the indicated allegations and go back to her ministry and have them review the processes and try to make the major savings that are possible. I believe they are possible in the purchase of major equipment used by the government. This is not only a benefit to the present users of this equipment, but could be expanded throughout the province as a cost-saving to all persons in various levels of government and a major cost-saving in the electronics field. I think there are computers, faxes, copiers.... There's a real opportunity for substantial saving that would allow moneys to be available for community funding programs, rather than being spent by different purchasing expenditures.

Hon. L. Boone: It appears that the member opposite does not trust the decisions of the Attorney General and the ombudsman, or of any of the individuals who have expressed their opinion on this. The Purchasing Commission is guaranteed the lowest price for many of the items the member opposite is talking about.

I find it offensive that the member is talking in generalities without being specific. If he has specific allegations, and if he wants to raise them, then he should do so. We have some extremely good people that have been working for the Purchasing Commission for years. For you to allege that they are not giving us the best service, and that they are favouring some company and not purchasing the best possible product and saving us the most money, is really not appropriate here. You have not brought forth any proof. You have allegations that have come from a particular individual. That individual has met with me, with my ministerial assistant and with members of the cabinet, and has had his allegations investigated by a number of different sources throughout government. In fact, that person wants a job with the government. That's his bottom line. He wants a job with the government of British Columbia; he wants his old job back. That's the bottom line that it comes down to.

As I stated earlier, if you want to discuss specifics, if you want to mention names here, go ahead. I would just as soon deal with this with you privately. We can talk about those situations. I can assure you that there are a lot of issues that you are not aware of and that you have not been aware of, and I would be more than happy to make you aware of the situation privately. But until such time, unless you're willing to state specifics that you know of where the Purchasing Commission has not been giving us the best value for the dollar, I would hope that you would get off this line of questioning.

The Chair: I'll offer a caution, hon. members, that the reputation and the character of any individual is not subject to examination during these supply debates. This line of questioning is becoming tedious and repetitious, and I would ask that you go on to a new topic or a new questioner.

K. Jones: I'd just like to clarify one part of the minister's statement. She referred to the member wanting a job. This member is not looking for a job.

The Chair: Order, hon. member. The Chair has requested that we leave this topic, and I reaffirm that.

D. Mitchell: Mr. Chairman, we'd like to take the Chair's advice and direction on this and change the topic. Just for the record, the member for Surrey-Cloverdale, to my knowledge, was not raising concerns about any particular individual. That was raised by the minister. I would like to go on to a new topic here. But before I do, I just would like to say that I believe, as a member of this committee reviewing the estimates for the Ministry of Government Services, that some legitimate concerns were raised. We would hope that the minister would take them under advisement with respect to the Purchasing Commission and concerns that may have been raised -- not by a single individual but by a number of parties, including the member for Surrey-Cloverdale.

Before we complete the review of the Purchasing Commission, the minister indicated, in response to an earlier question from the member for Surrey-Cloverdale, that there was no buy-B.C. program per se. I believe that the Leader of the Opposition also directed some questions to the minister with respect to interprovincial trade in this committee earlier today.

I'm a little bit puzzled, and I just seek clarification on what the actual policy of the ministry is on this. Because while the minister has indicated there is no Buy-B.C. program and there is support for free trade among the provinces as far as the ministry goes, comments were certainly attributed to the minister through the news 

[ Page 2402 ]

media a few days ago, when the minister was speaking to a business seminar on domestic free trade. Perhaps the minister was misquoted, I'm not sure. The words that are attributed to her are: "I'm not prepared to let our businesses go down the tube while businesses from outside the province or the country are gaining access to our market." Is there any contradiction in there? Am I misunderstanding something? Could the minister just comment on that?

Hon. L. Boone: As the member opposite should know, you don't believe everything you read in the media.

L. Fox: You're learning that are you?

Hon. L. Boone: It's not misquoted; it's taken out of context. What I have stated is that we are supportive. I mentioned to the Leader of the Opposition that there are areas where we are not being treated fairly. We support the open trade and open procurement policies with the U.S., but there are areas where our suppliers are being denied access to U.S. markets. If there are federal dollars in anything, the U.S. invokes the buy-American clause and prevents our suppliers from gaining access to their markets. For years we've had suppliers coming into B.C., bidding on our highways and on the various projects where our money is. We have an open policy there. When our suppliers turn around and go down to the U.S. to try and bid on services there, they find that they are denied access to those markets. We are saying that we are looking at putting in a reciprocal agreement -- a reciprocal approach to things. If our people are denied access to a market, we reserve the right to review those markets and to deny similar access to U.S. markets to our suppliers, so that our suppliers are not being shut out from the markets altogether -- which is what's happening with the buy-American clause -- and then having to compete up here with the Americans as well, being shut out of those markets.

We hope that the Americans will eventually turn around and reduce their barriers -- at which time we wouldn't have anything -- but we certainly will not be putting up any barriers to purchasing or to suppliers. But where our people are denied access, we will try to bring in some provisions that will bring in some fairness for our own people.

[5:45]

D. Mitchell: A further point on this one, because I'm not really certain what the minister is saying -- whether she's saying yes, but then again, no. I'm not really speaking about trade across the border with the United States. I'm talking about interprovincial free trade. The comment, which the minister indicated was taken out of context, was really dealing with trade with other provinces, I believe. At least that's the gist of the article. I refer, for the record, to this morning's Financial Post and an article by John Schreiner, the western editor of the Financial Post. In this article the minister is quoted as disclosing that British Columbia plans to retaliate against other provinces that discriminate against B.C. companies. I take it that that's what the minister is referring to when she says "review." Is she actually meaning retaliate? If she means retaliate, what form of retaliation would she have in mind?

Hon. L. Boone: I thought I was quite clear. A reciprocal arrangement would take place. We are having some difficulties with some aspects of the Western Accord. Some of our companies are being denied access to markets in Alberta. We're currently negotiating this. If we are able to work these things out, then fair enough. An example is the printing industry. Our companies had an openness, and suddenly ours were delisted and our companies were not allowed access to the Alberta markets. Is that fair? I don't think so. You can talk about free trade; I'm talking about fair trade. If our printers are being denied access to Alberta markets, then I think we ought to be able to say that Alberta markets will be denied access to British Columbia printing through the Purchasing Commission as well. It's not a thing that must take place; it's something that we may do if we find that it becomes necessary. Hopefully we can rectify it, and I think we are already trying to deal with that issue and rectify that with the Alberta companies.

We can't just turn around and leave our companies out there to dry all the time, which is what has happened in the past. We've never supported them. They've been denied markets. Saying, "We're wide open for trade; we don't care what the heck you do with our companies; you guys can deny access to us," is not right. We are willing to take a stand here and say that if British Columbia companies are denied access to other markets, then we reserve the right to have a reciprocal type of arrangement so that we may deny access to any other province or country that's denying access to our companies.

The Chair: Hon. members, it being beyond the normal time for the committee to rise, the Chair will entertain a motion to that effect.

D. Mitchell: Since I'm on my feet, I'd be pleased to move that this committee rise and report a very small bit of progress -- with the hope that we continue tomorrow -- and ask for leave to sit again.

The Chair: The Chair would love to put that motion, but it appears that it may be an improper motion, hon. member.

D. Mitchell: Sounds fine to me.

Hon. L. Boone: I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 5:49 p.m.

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