Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JULY 2, 1992

Volume 5, Number 12

[ Page 3329 ]

The House met at 10:07 a.m.

Prayers.

Orders of the Day

Hon. D. Miller: I call committee on Bill 78, hon. Speaker.

FOREST AMENDMENT ACT
(No. 2), 1992

The House in committee on Bill 78; E. Barnes in the chair.

On section 1.

Hon. D. Miller: Mr. Chairman, there are several amendments to the bill, and I would take your direction. I would move the first amendment standing in my name on the order paper.

[SECTION 1,

(a) in the proposed section 168 by deleting subsection(2), and

(b) by deleting the proposed section 171 and substituting the following:

Order prevails

171. If an order under this Part conflicts with

(a) this Act or a regulation made under this Act,

(b) an agreement listed in section 10, or

(c) a permit, licence, prescription or plan listed in section 167(1),

the order prevails.]

Perhaps you could advise whether or not you would like me to move all of the amendments standing on the order paper or....

The Chair: Thank you, hon. minister. The Chair neglected to indicate that there are two amendments to section 1. On the first amendment I will recognize speakers; otherwise I put the question.

On the amendment.

D. Mitchell: Just for the benefit of the committee, I wonder if we might ask the minister to explain this amendment -- its purpose and what exactly is being affected in this section of the bill.

Hon. D. Miller: Mr. Chairman, the amendment is fairly straightforward. It deletes the section referring to the requirement to carry on construction of a road or timber-harvesting activities.

D. Mitchell: I know the minister is going to be moving more than one amendment to this bill. It's an interesting bill in the sense that's there's only one section, and I think there may be other amendments moved by other members of the committee.

But under this section, I'm not sure that the minister's explanation really clarifies for me what he is doing here. What he is saying is that the order prevails if an order under this part of the act conflicts with this act or any agreement. What are we saying here? My understanding of this bill is that it gives very broad powers to cabinet. There's a concern about accountability. there are very broad powers delegated to cabinet, and under this section of the bill, I guess, orders are made by cabinet. Is that correct?

Hon. D. Miller: No, the orders are made by me.

D. Mitchell: That confirms my very worst fears. If the minister has complete discretion under this bill and this amendment to make orders that allow for the designation of study areas, for looking at legal licence documents that are held by operating companies in this province -- of whatever size; they might be small, medium-sized or large companies -- and the minister can pass an order that is going to affect the annual allowable cut under a licence and basically amend any agreement, why would we delegate that authority under this bill? If this bill becomes an act, why would we delegate that power to the minister alone? Has consideration been given to giving this kind of power to the chief forester of the province?

Hon. D. Miller: There are a number of questions there. I suppose in terms of the difference between the powers that the chief forester should have and exercise and the powers that a minister of the Crown should have, it seems to me that the difference would be.... The current Forest Act requires the chief forester to establish annual allowable cuts using criteria outlined in the Forest Act, and I have argued that the chief forester should be politically unimpeded to exercise the job that's laid out in the Forest Act. In other words, the establishment of the annual allowable cut levels and those kinds of things should be removed from political interference. Using that as an example, when it comes to a determination to establish a park -- or any other designation such as a park -- it seems to me that it's a political exercise. It's not strictly a technical exercise. That's the distinction, I would say, that lies between powers that are allocated to the chief forester and powers that are undertaken by the Crown and that are frequently the subject of debate in this chamber. It is, in the broadest sense, a political decision to establish a park, wilderness area or ecological reserve. The decision we take is political, as opposed to the more technical nature of the decisions required to be taken by the chief forester.

[10:15]

D. Mitchell: I appreciate the minister's discussion of the differences between the powers of the chief forester and those of the minister, which the minister admits are political in nature. Surely one of the most wide-ranging debates we've had about public policy with respect to forest administration in the province over the last generation has been to do with the political nature of decisions that are made with respect to the management of our forests. That's a major concern we have. It's a concern that the minister had when he was the official opposition Forests critic in the last parlia-

[ Page 3330 ]

ment. He spoke eloquently many times in this House about the nature of political management of our forests -- political decision-making -- which has harmed the management of our forests and been harmful to the credibility of the data that his own ministry makes available to the public and to the industry.

Here we have a bill and an amendment being proposed which give, to the discretion of the minister alone, the ability to make political decisions. The minister has very frankly admitted they are decisions that are political in nature. That's what I think we need to discuss in a little more detail here. Is the minister saying that it's entirely appropriate, under this bill, that...? There are absolutely no criteria whatsoever in this bill for what would go into determining a study area or a study licence. What would the criteria be? The minister has said that these are political decisions. What political criteria would the minister be referring to?

Hon. D. Miller: I would say, first of all, that the amendment is quite consistent. If you look at the Forest Act, there are numerous instances throughout that act where it says "the minister will," "the minister may" or "the minister shall." This amendment is really quite consistent with the current Forest Act in that certain powers are allocated to the minister. I'm sure that if the member went beyond the Forest Act and looked at legislation governing other ministries, the member would find references to "the minister may," "the minister will" or "the minister shall." So in that sense there is nothing nefarious about the amendment or the wording of it. Many acts of the Legislature confer powers on ministers, and I suppose there's nothing wrong with that.

If we want to talk about study areas and how those were determined, the member should also be aware that the unveiling of the protected areas strategy, which the Premier, the Minister of Environment and I did some months ago, contained a map. That map was made available, and I'm sure members of the opposition have seen it. The thrust behind that protected areas strategy was this government's decision and commitment to attempt to reach a doubling of our parks and wilderness space by the year 2000. That was a commitment that the government made.

We're constantly hearing from the opposition that the government has not lived up to the 48 points. Last Friday there was an attempt by the Liberals to try to read the 48 points, because they wanted to say that the government hasn't lived up to some of those measures. One of those measures was the view that, given our large land base, we could double the parks and wilderness space by the year 2000. We pointed out at the time that the process was started under the previous administration through Parks and Wilderness for the '90s. There was extensive public consultation done in determining those study areas. I can't recall the exact number of submissions, but at the time I described it as the most comprehensive public consultation process ever undertaken in this province to come up with that list of study areas.

In addition to that, there was an exhaustive interministry process, whereby various ministries -- the Ministry of Forests, Ministry of Parks and Ministry of Environment -- also, on a kind of technical basis, assessed proposals put forward by members of the public. So if an area were put forward as a candidate for preservation because some member of the public felt that it had unique qualities -- whether they were the qualities of the timber or the uniqueness of the habitat or those kinds of things -- that was assessed on a technical basis by the interministry people.

Having gone through that exhaustive process, we came out with the protected areas strategy. That has been made clear for all to see. We said: "There's the document that lays out how we think we can achieve this doubling. We think this is a desirable goal. The 12 percent notion is one that certainly has been promulgated by the Brundtland commission. We are carrying forward, and this is an attempt to do that."

I would say that that is a political decision, and one that I suspect is a laudable goal, generally shared by all the citizens of this province. I would hope it's even shared by the opposition. I don't know if the Liberal opposition supports that goal or not. I don't think that they've ever really stood here in this House and said whether they support it. I don't want to get into that kind of debate.

I do know that being the Minister of Forests and having to exercise these responsibilities is an awesome responsibility. There are some calls that we reject. I have politically stood here and said that I reject them as being too outrageous. If I accepted some of these requests, the impact on our forest land base would simply be too great. I couldn't do it. I would literally throw most of the province out of work if I accepted some of the cries that I get for setting land aside.

For example, when the Liberal Environment critic -- and I assume this is Liberal policy -- writes a letter and says that there should be an immediate moratorium on old-growth forests, I have taken the political decision not to agree with that. I disagree with the Liberal Party's call for an immediate moratorium on all old-growth forests in the province. I think that's a responsible position to take. I would hope the Liberal member who's questioning me now would agree that I have taken the correct position in rejecting the Liberal policy of an old-growth moratorium in favour of a much more reasonable process, as outlined in this bill.

D. Mitchell: I asked a question of the minister with respect to the political criteria, which he referred to earlier. He said, very clearly, that they are political. What are the criteria, then, that are going to be used in Bill 78 for setting aside study areas, or study licences? The minister has said very clearly that he doesn't think it's appropriate for an independent officer such as the chief forester of the province of British Columbia to be determining study areas. He said no, he wants that power. He wants this broad discretionary power in his office alone to make political decisions.

I've asked him what criteria he would use. I'm not sure that his answer really clarified that, although I thank him for his interesting discussion of Liberal policy, which I encourage him to study further. Under this bill and under this amendment that the minister is

[ Page 3331 ]

proposing, there is absolutely no criterion for determining what a study area is or what would go into classifying an area as a study area or licence. Therefore there is absolutely no guarantee whatsoever that decisions will be made in the best interests of both the economy of the province and the environment.

I know that setting aside study areas has important environmental implications. Now because those decisions rest entirely with the minister under this amendment that he's proposing, those kinds of decisions, I would argue -- because the minister admits they are political in nature -- are vulnerable. Those decisions would then be vulnerable to undue influence from, perhaps, pressure groups that might be lobbying the government for whatever reason -- pressure groups from any part of society here in British Columbia. Perhaps because the government might not want to be scrutinized, or not want media attention that might come from a pressure group, they might make a decision that would be admittedly political. The minister has said political decisions will be made. Therefore there is no guarantee that the decision will be the best decision, and it provides an outlet for the government to study areas in order to avoid public criticism. Is that what the minister is really getting at here: he wants the ability to make political decisions so that he can protect the government from any further criticism from pressure groups or others, and that's why he wants the power enshrined in his office under the Forest Act with this amendment?

Hon. D. Miller: With all due respect, I can now see how Westar got into so much trouble.

There are several amendments here, and we're dealing with one which actually removes power that was contained in the original bill -- that is, the requirement that we could have that a forest company continue to build a road or continue to harvest in a study area. That's being removed by this amendment.

The member has it all wrong. The bill makes provision for the cabinet -- the government, in fact -- to designate a study area. Any powers delegated to the minister are ancillary to the original determination of a study area being designated by cabinet. It's a pretty reasonable proposal. We have made, as I indicated, a political decision to attempt to reach this 12 percent by the year 2000. The member refuses to say -- or doesn't know -- whether or not his party supports that. It would be interesting if he wanted to attempt to guess at what his policy or his party's policy might be, because I'm having some difficulty.... What I think is the Liberal policy calls for the complete elimination of harvesting in old-growth stands in the province. I find it strange that the member has concerns about the powers conferred upon me under this act, when in fact his party's policy is to shut down logging in all old-growth forests in this province. I'm a bit mystified, a bit baffled, I suppose.

F. Gingell: Point of order, Mr. Chairman. We should be discussing the specific amendments to this bill, not what our policy is. We are dealing with the policy of this government, and the minister should restrict himself to that subject.

The Chair: Thank you for the point of order.

D. Mitchell: While not speaking to the point of order, I think it would be wise for the minister not to try to discuss future Liberal government policy but to focus on his government's policy. Mr. Chairman, it's so interesting to note that the member forgets that he is no longer in opposition; he is now the Minister of Forests. We come here asking fair questions of the Minister of Forests. He should learn the rules of the House. He should study the rule book to learn that government ministers are not here to question the opposition on their policy when they should become government -- which won't be too long; some three years down the road. You don't have to wait long. At that point, perhaps we could try to answer some questions for the hon. minister. But the minister has an obligation today to answer some questions on this bill and on the amendment that he's providing.

The minister used to work in the forest industry; in fact, he worked for a company that I also worked for. He made a tremendous contribution during those years, and I would hope that he would learn some of the lessons during those days....

The Chair: Order, hon. opposition House Leader. At the same time as you are admonishing the minister, you might attempt to follow your own suggestions and speak to the amendment.

D. Mitchell: Mr. Chairman, I apologize for detracting from the debate.

In the interests of getting through this bill and trying to deal with the amendments proposed here, could the minister simply tell us more specifically than he has what the political criteria are? He has made some large general statements. What are the political criteria that are going to be used to make orders under this amendment to the bill? Could he give some examples of the political criteria that would be used?

[10:30]

Hon. D. Miller: With all due respect, Mr. Chairman, the amendment, as I earlier indicated, does two things. It removes a provision that was in the original bill, which would have given me the power to require a forest company to continue to build a road or to continue to harvest. Secondly, if an order is made under this part of the bill, it clears up or confirms that the order takes precedence over any other orders that have previously been issued under section 10. So that's the thrust of the amendment, if we want to deal with that. Because there's only one part of the bill, I don't have any trouble dealing with a broader discussion or answering specific questions on the whole section. But that's the amendment, and if we want to confine ourselves to whether or not the amendment is agreeable to the members opposite.... Once we've dealt with the amendments, we can deal with what I think is the

[ Page 3332 ]

political argument that the members opposite seems to want to advance in their own fashion.

W. Hurd: With respect to the amendment -- and I seek the direction of the Chair in this regard -- the opposition also has a series of amendments to this bill which we have prepared. One, under section 166 I believe, might resolve some of the contentious areas that are coming out under section 171. I just wonder if the minister would be agreeable to attempting to deal with this bill on the basis of sections 165 through 171 in that particular method, so that we could move our amendments and arrive at a strategy for dealing with this bill on that basis.

The Chair: Is the hon. member seeking to amend the present amendment? If not, we would dispose of the present amendment and other amendments would be in order.

W. Hurd: If that's your wish, we could certainly deal with the minister's amendments first; although when we start debating the aspects of a study area, that particular aspect of the bill pertains to just about every other section of the act. It would seem to me that it would be of more benefit to us to deal with the definition of a study area and the powers that accrue to the minister in the course of a reasoned and rational debate on this act rather than deal with the amendment first. If it's the wish of the minister to deal with the two amendments that he's introduced first, we have no difficulty with that.

The Chair: The procedure will be as I indicated: addressing the current amendment before us. Other amendments would be in order or could at least be presented after we have a decision on the current one.

Amendment approved.

On section 1 as amended.

Hon. D. Miller: I move the amendments standing on the order paper in my name.

[SECTION 1,

(a) by deleting the proposed section 167(3) and substituting the following:

(3) A variance, suspension or refusal under subsection (1) expires when the area of Crown land it relates to ceases to be a study area or on an earlier expiry date, if any, ordered in writing by the minister. ,

(b) by deleting the proposed section 168(3) and substituting the following:

(3) A condition under subsection (1) expires when the area of Crown land it relates to ceases to be a study area or on an earlier expiry date, if any, ordered in writing by the minister. , and

(c) in proposed section 170(6) by deleting "affects" and substituting "relates to".]

On the amendment.

W. Hurd: In the spirit of getting this bill resolved with reasoned debate, I would hope the minister would avail himself of the opportunity to offer the committee an explanation of exactly what the intention is on the second amendment to section 1.

Hon. D. Miller: The primary purpose is to clarify that orders under these sections cannot have effect after an area ceases to be a study area. If an area designated as a study area by cabinet under the provisions of the bill ceases to be a study area as defined under the bill as well, then this clarifies that those orders that were issued while it was a study area cannot have effect.

W. Hurd: A further question to the minister regarding that amendment. It's the understanding of the opposition that elsewhere in the bill there is a time-limit on the study area to the year 2001. One would assume, then, that this amendment would also be governed by that previous section in the bill as far as the time-frame for the study areas. If they are not dealt with by the year 2001, would the opposition be reasonable in assuming that they would then cease to be study areas and would be subject to the amendment being proposed by the minister?

Hon. D. Miller: The member is right in the sense that the bill designates January 1, 2001, because as I indicated earlier in the discussion, it's our desire to achieve that 12 percent by the year 2000. Therefore we would have an expiry. But the amendment, as I indicated earlier, makes it clear that if an area ceases to be a study area prior to January 1, 2001 -- some will come out before as we deal with the study areas as outlined in the protected area strategy as outlined in the protected areas strategy. They will come out before January 1, 2001. So some areas will be removed long before then.

W. Hurd: With all due respect to the minister's explanation, in examining the language, it appears to clearly indicate: when it "ceases to be a study area or on an earlier expiry date, if any, ordered in writing by the minister." One would assume that the order in writing by the minister could come after the year 2001 under the previous subsections of the act. Perhaps he could assure the committee that, by the simple whim of the minister, in writing, he could extend the study area past the year 2001 if the 12 percent figure hadn't been reached by that particular date.

This amendment seems to us to have broad significance in the fact that there appears to be a ten-or 11-year time-frame for all the amendments to the Forest Act. Perhaps it would have been better for the minister to have included in this particular amendment some mention of the year 2001 with respect to an order by the minister in writing. Would the minister accept the fact that maybe the year 2001 should appear somewhere in this particular amendment?

Hon. D. Miller: No, Mr. Chairman. The bill is pretty clear on January 1, 2001; it's in the bill. If you read the amendment, it says: "...or on an earlier expiry date...." Clearly it refers to areas that will be removed

[ Page 3333 ]

as study areas prior to.... If we did nothing by the year 2001, under this act all areas would be taken out.

So there's a clear process to designate a study area as defined under the act, and these ancillary powers once that's done. This simply deals with the fact that it could be taken out earlier. So I don't think there's a need to have that in there.

Amendment approved.

On section 1 as amended.

W. Hurd: We've had a spirited discussion this morning on what exactly constitutes a study area and the powers of the minister to so designate. The official opposition has an amendment under section 166 which would, in our view, clarify the minister's direction in reducing the annual allowable cuts within a study area. I'd like to read our proposed amendment to section 166(1), which would add, after the words "Crown land," the words "previously identified as a contentious area" in the protected areas strategy document."

On the amendment.

W. Hurd: I know that one of the concerns expressed by the official opposition House Leader today was that under this particular act the minister is asking for the power to designate study areas beyond the protected areas strategy, which was, as he so eloquently pointed out, one of the few commitments that the government has kept in its 48-point election platform. We certainly welcome the opportunity in this bill to clarify that the minister's powers will apply only to the areas that his government has indicated are part of the protected areas strategy and will not enable the minister to, simply at his own whim within the minister's office, designate an alternative study area elsewhere in the province. The opposition believes it's important for that type of limitation to be put on the minister's power to designate a study area. In light of his spirited defence of the 12 percent goal on protected areas and the fact that the areas, as he's indicated, have already been designated.... There are maps available on the existing forested areas of the province. We would certainly look forward to the minister welcoming this amendment so that the forest companies in the province would at least have the assurance that if the annual allowable cut in their licensed areas was to be reduced by the minister, they would know that, in fact, it only applied to the protected areas strategy, which, as the minister indicated, was jointly announced by the Minister of Environment and the Minister of Forests. The opposition believes that the amendment is critically important.

One of the concerns we expressed on this bill in second reading was the impact it would have on investment by forest companies in the province. Were they to find themselves in a situation where the minister had the power to come along and designate a study area outside this 12 percent protected area, they would, in fact, be subject to the amendments in this act and, furthermore, would find themselves unable to negotiate with the ministry until the year 2001, which is, in our view, a total disincentive to investment in the province. We believe this is a responsible amendment that clarifies the powers of the minister and confines them to the existing 12 percent protected areas strategy identified by his own government. We look forward to the amendment being supported.

Hon. D. Miller: I can't accept the amendment, partly because of the way it's worded. I want to assure hon. members that I certainly don't make decisions based on the fact that things might be contentious or not contentious. The word "contentious" has no place in legislation. It's not the basis for making decisions. I'm not prepared to accept the amendment. In addition to the protected areas strategy, there are other initiatives that have yet to be integrated and incorporated into that. The old-growth strategy is one of them. That report will be coming forward soon. We indicated at the time that that clearly needs to be integrated into the protected areas strategy. We're not going to be fettered in terms of doing what we think is proper.

The member talks about the impact on annual allowable cut -- we might as well use this opportunity now to talk about the issue -- and he's absolutely right. He talks about the investment climate, and he's absolutely right in that as well. We have quite a difficult situation in this province when it comes to that whole issue -- in fact, extremely difficult. Members may be aware of the decisions made by the chief forester, which the Liberal Forests critic has described as arbitrary -- the determination of new annual allowable cuts in some areas. They are very difficult decisions we're making now. We're paying, in some sense, for what's happened in the past.

[10:45]

I note a column from the leader of the Liberal Party in Powell River on June 15, where he talks about two things. I want to relate that specifically to this bill, because I think the members need -- and indeed, more British Columbians need....

W. Hurd: On a point of order, we're trying to debate the amendment put forward by the Liberal opposition, which is merely attempting to define the study areas under a subsection of the act. The hon. minister is referring to a column in the Powell River News, which I don't see reflected in any clause of the bill. Therefore I'm totally incapable of understanding how it relates to the protected areas strategy and this amendment.

The Chair: The point of order is well taken. I would ask the minister to comment on the amendment as placed before the committee.

Hon. D. Miller: Mr. Chairman, I was trying to point out why the proposed amendment was not acceptable, and I think I did that. I was going to broaden the discussion just a little and use the specific example of what happens when we don't do the right thing at the right time. I was going to use statements made -- not in a negative way -- by the leader of the Liberal Party. It seems to me that there's some testiness

[ Page 3334 ]

over there. Most parties would be quite happy to have their leader's words quoted in this forum. The fact that there was a rush of points of order leads me to believe that they're not too happy with it.

D. Mitchell: Point of order, Mr. Chairman. We're dealing with Bill 78. I'd just like to remind the hon. minister, who seems to be incapable of understanding the procedures of this assembly, that we're dealing will Bill 78, an amendment to the Forest Act. We're dealing in particular with an amendment proposed by the member for Surrey-White Rock. The minister is wandering into all kinds of arcane areas. It's interesting to note that he has some great research documents and letters that he wants to read from, but in the interest of doing the business of this committee, could we please get back to the amendment?

The Chair: Thank you, hon. opposition House Leader. I think the point of order is well taken. I would ask the minister to address himself to the amendment, which is quite clear. It inserts after the words "Crown land" the words "previously identified as a contentious area in the protected areas strategy document." That is the extent of the debate. It would be helpful if members would try to keep their remarks as precisely to this amendment as possible.

D. Mitchell: I'd like to speak in favour of the amendment that's been proposed by the member for Surrey-White Rock, because I think it's reasonable. What the amendment seeks to do....

If the minister has a problem with the language in the amendment, we have no difficulty with changing the language to make it acceptable to the minister. If the minister has difficulty with the way it's drafted, his legal draftsmanship may be better than ours. I don't dispute that. But I have some problems with the explanation that the minister offered, and I'll tell you why.

The amendment seeks to define or put a limit on the areas that might be defined as study areas under this bill. If the minister wants to say that there are other areas in addition to those under the protected areas strategy document that could be considered, that's fine. Let's include those as well. If there are other strategy areas or plans that the ministry or the government has that they would like to include as being within an area where study areas would be established, that's fine. But without putting some reasonable limit or defining where these study areas might be, the bill is really saying that any portion of the province could be designated as a study area by the government. We find that unacceptable.

The minister has a 2001 strategy document. The minister has a bill that says that up until the year 2001, any area that he so chooses can be established as a study area. What that's going to do, as the member for Surrey-White Rock has already said, is scare investment away. Is the minister saying that up until the year 2001 we want no further investment in British Columbia, because every piece of land in this province could be designated as a study area if the minister so chooses? We need some limits. That's all we're asking for in the amendment.

Could the minister please address that?

Hon. D. Miller: The member is mixing two very distinct issues. The government did not develop what was termed "the protected areas strategy" under legislation; we developed the protected areas strategy after consultation, which was essentially initiated by the previous administration. We accepted the recommendations as they came forward, put them through a fairly exhaustive technical process and came out with a map, which is the protected area strategy. The member is confusing that process, the government's ability to come up with a strategy -- the protected areas strategy.... Call it what you want. I've already indicated that we intend to roll the old-growth process into it. He's confusing that with the term "study area" as defined in the bill. The member is mixing the ability of government to do what they will with respect to a policy with the wording of this bill. It's completely inconsistent, contradictory and, quite frankly, after listening to that member's explanation, out of order.

D. Mitchell: My question to the minister is: surely, should there not be some provision in this bill to define which areas of British Columbia can be determined as study areas? Should there not be some limit to the range of land in British Columbia that could be defined or decided on by the government as a study area? Surely there must be some limits to the political power that this minister wants to exercise. He has admitted that it's political criteria which will be used. The opposition would be very willing to accept whatever limits the minister wants to put. He can identify them as beyond the protected areas strategy document -- whatever he wishes. But surely there must be some limits to the range of powers that this minister wants to have within his office. Is it not a reasonable request to the minister to have some limitation within this bill?

Hon. D. Miller: I really don't know. I suppose this is an educational process as well as debate on a bill. I've already said that I reject the Liberal Party position, which is to take about 70 to 80 percent of the harvest areas out of active logging.

J. Tyabji: Point of order. I've listened with great patience to this minister constantly misrepresenting a letter that I sent out some months ago, and just so that I don't disrupt the proceedings....

The Chair: Would the hon. member state her point of order.

J. Tyabji: My point of order is that he's misrepresenting policy of the Liberals by saying that we want to have 70 percent of the jobs lost in British Columbia.

The Chair: Hon. member, with the greatest of respect, that is not a point of order.

[ Page 3335 ]

Hon. D. Miller: I would also point out to the member that under section 53 of the Forest Act currently.... I would really plead with the member to read the Forest Act. It would probably make debate in here go a little smoother. I'm surprised, given that you were an official with Westar, that you aren't familiar with this Forest Act. But, oh well. If he reads not only this but other sections, he will see that the minister may -- this is a power that is currently conferred on the Minister of Forests -- delete Crown land from a tree-farm licence. The minister may delete from a woodlot licence. It is in the act already.

I know what the Liberal members are trying to say through this amendment, but it's completely contradictory and out of order. You can't limit the power of the Crown through an amendment in an act. The current act allows me, as the minister, to delete areas for specific purposes. It has many provisions. I suggest you read it. We find the amendment unacceptable.

The Chair: Hon. members, I think that the Chair has heard sufficient debate on the amendment to put the question. I would recognize the hon. member for Surrey-White Rock in the meantime.

W. Hurd: The minister has not really provided us with an explanation. If he already has the power under the act, why are we debating an amendment to define a study area? The issue here is what constitutes a study area and the fact that the minister can take an area of productive forest land in the province out of commission until the year 2001 under this amendment.

Given the investment climate today in the forest industry in the province, it's baffling to the opposition why the minister would not seek to allay the concerns of the industry. We already have a situation where no company in its right mind is going to invest money within the boundaries of the protected areas strategy; there's no point, because those areas have been designated as potential parks and wilderness preserves. We now have a situation where the minister is suggesting to us that if for any reason one of those areas under review doesn't fit the bill or doesn't fit the explanation of a wilderness preserve, he can designate another area outside.

We believe that the amendment is reasonable. I am certainly concerned by the minister's suggestion that he has the power under the act to do all this anyway. Why are we dealing with an amendment under the act if we're only redefining what's already in the existing Forest Act?

Hon. D. Miller: I would refer the Liberal Forests critic and all members back to the debate on second reading. I thought I was quite clear in explaining that the Forest Act currently does not allow us to return an area that has been deleted. We currently have the power to delete for cause, as outlined in the Forest Act, but we have no power under that act to return it. I know that that point was made when my officials briefed the Liberal caucus and researchers on this bill. I hope that it was made and understood -- obviously it wasn't understood.

Let me give you one example of a government's refusal to deal with an issue, when it comes to study areas and the ramifications of that, to try and impress upon members that this is not some game or something that we look upon frivolously. The issue of the Nitinat triangle on Vancouver Island, which people are familiar with, took 15 years to resolve. In that sense you could say that it was a study area; it fit the definition of what we're talking about. During that 15 years, the Nitinat area and the timber supply in that area were kept in the operable land base. In other words, the AAC was calculated as though the Nitinat would be harvested. Instead of being taken out at the time, it was kept in. What did that lead to? It led to overharvesting on the remaining land base. That's exactly what happened.

I was going to refer to a column, which the Liberal members didn't want me to read, stating how the neglect of silviculture has led to harvesting in the Carmanah and Walbran. Not at all. The refusal of a government to make the decision then to take the Nitinat triangle area out of the active harvesting area led to overharvesting, and that's what led to going into the Walbran, Carmanah and Hadden valleys. We have now had to reduce that timber supply by 34 percent, at a considerable cost to people who rely on that and resulting in considerably uncertainty for people making investments. We have had to do it now. If we had taken the Nitinat out when it should have been taken out, we would have had to make only a 17 percent reduction.

[11:00]

What we're trying to get at here is some stability in this province. For the first time, we have to stop fooling ourselves. There's a real price to pay when we create parks or wilderness areas. It's the height of folly to suggest that there is no price, that we can somehow designate these areas and continue to harvest all the wood we want to harvest and that we never have to pay the price. This bill talks for the first time about facing up squarely to this issue.

We get this kind of rhetoric out of the members opposite, where on the one hand they're talking about shutting down logging in all old-growth forests, and then I have to put up with this from the Liberal Forests critic. We're talking about finally being honest with the people of this province and doing the right thing. I wish these people would support it.

D. Mitchell: That was a great speech by the Minister of Forests. We appreciate that, because we're finally getting to the crux of what this amendment is all about -- and that's important. What we're witnessing here, in terms of the debate in this committee right now, is really nothing more than a debate you will find in any legislature in the Commonwealth. You have an opposition suggesting that perhaps there should be some limits on the power of the Crown, and in particular on the power that might be exercised under the discretion of a minister of the Crown without any checks or balances whatsoever. We have a government trying to defend the fact that they should have unrestricted power. That's a debate that the minister himself will be familiar with, because he was involved in similar debates not too long ago.

[ Page 3336 ]

In this amendment we're simply asking the minister to take a look at reason. We're not referring here to the Forest Act, which does grant discretionary powers to the minister. We grant that that does exist. But in terms of this bill being brought forward, we believe that it's reasonable to have some limits to the study areas being proposed. The minister says: "We will not be fettered with doing the proper thing." The word "proper" is a code word for political. The minister himself, in his opening statements on the bill today, said that decisions made under this bill will be political. We're saying that perhaps there should be some limits on the nature of political decisions made. That's all we're suggesting -- that there should be some limits.

If the minister wants to define which areas of the province will be open to designation as study areas, we're open to whatever definition he might want to propose. But without some reasonable definition, without some reasonable limitation on the power of the Crown and on the power of a minister -- whether it be this minister or a future Minister of Forests -- the opposition is not comfortable. That's why we proposed this amendment. We encourage the minister to think about that, because it's only reasonable.

If the minister can cast his mind back to about a year ago, when he was on the opposition side of the House, could he ask himself if he would be comfortable with this kind of measure coming forward, granting this kind of power to a different minister of a different party? If he could just look at it from that perspective, he might understand the reasonableness of this proposal. If he wants to redraft it, take another look at it, adjourn the debate and come back another day to take a look at this -- after having his officials in the Ministry of Forests take a look at this amendment and redraft it in language that's acceptable -- we'd be willing to wait. It's only reasonable to have a limitation on unrestricted powers of the Crown, especially when it's something as important -- as this minister says it's important -- as the designated study areas under the protected area strategy document. That's all we're talking about. For that reason, I encourage all members to support this amendment.

If the minister has anything further to say on this we would certainly appreciate it, because he has not yet addressed the specific concern.

Hon. D. Miller: The government will exercise its powers responsibly. I have already assured the members that we have taken the responsible position. We have rejected the Liberal position, which calls for the total elimination of harvesting in all old-growth forests in B.C. -- something we will never, ever agree to.

D. Mitchell: Point of order. I'm addressing the specific amendment to this bill which the minister has brought forward. He continues to want to talk about future government policy on the part of a Liberal government. He is totally out of order. I made a reasonable request. If the minister has a response to make to that request, we'd really appreciate hearing it so we can get on with business.

The Chair: Several times the Chair has asked all members to address their remarks specifically to the amendment. We have had some latitude on both sides of the House, but I think the point is well taken, and all members should keep that in mind.

L. Fox: The minister referred earlier to section 53 of the Forest Act and said that he had the power that is given to him under this act. I therefore would support this amendment. As I understand it, this act gives the minister the opportunity, through designating an area as a study area, to reduce the annual allowable cut. In section 53 of the Forest Act the minister may delete Crown land from tree-farm licence areas or woodlot licence areas where the deletion does not affect the annual allowable cut. Obviously this act gives the minister more powers than he already has under section 53 of the act. Given that situation, the minister should revisit the act before he makes those kinds of statements.

I am concerned as well about the lack of confidence with respect to forest investment that in the long term would improve the AAC and the opportunity for the lumber industry to do well in the province.

I support the amendment based on the fact that the minister -- as I understand the act and this amendment -- does have the ability, as it sits, to reduce the AAC by the designation of a study area. I think he should have some definition within this act explaining how and on what basis a study area can be created.

Amendment negatived on the following division:

[11:15]

On section 1 as amended.

W. Hurd: The opposition continues to express concern about this bill and is somewhat disappointed that the last amendment failed, but we are a determined lot here and we will again try to make this bill more palatable to the people of British Columbia. I have a

[ Page 3337 ]

further amendment under section 167 -- another excellent amendment by the Liberal opposition -- which seeks to rein in the power of the Minister of Forests, who hopefully recognizes the wisdom of this particular amendment. I would move, under (5)(b), after the word "relates," that "the order shall not come into effect until at least seven clear days following the serving of the order."

We are convinced that this rather reasoned and responsible amendment will give the companies and individuals affected by having their land designated as a study area, or having their cuts reduced outside the boundaries of a study area because of the impact the study area might have, an opportunity to scrutinize and review their problems and the effect the act might have on their harvesting operations. Certainly I think it's an excellent amendment.

The Chair: Order, hon. members. There is someone attempting to speak. Would the hon. members please take their places or leave the chamber. Please continue, hon. member.

W. Hurd: The existing language of the proposed bill has a great deal of concern for us: "...the order is not invalid by reason only that it is not served." What we're asking is that the order not come into effect for seven clear days following the serving of the order, which provides an extra window of opportunity for the licensee to engage in discussion with the minister. Although we would hope that he won't exercise the....

K. Jones: Point of order. This House was meant to have debate that would be heard by other members of this House. There is continuous babble going on that is totally unrelated to the subject matter. Could you please direct members who are not participating to leave the chamber or else be quiet?

The Chair: I think that all members will agree that the point is well taken. I would ask members to please conduct themselves accordingly.

Hon. member, on the amendment that you have proposed, it appears to be a direct negative to the intent of the section you are attempting to amend. The Chair, with regret, finds the amendment as written to be out of order.

W. Hurd: This particular subsection (5)(b) is a particular concern to the opposition. I would respectfully request more amplification from the Chair as to what problem is perceived by the amendment the way it's worded.

The Chair: The Chair will attempt to do that in a moment. The member is attempting to amend subsection (5)(b): "a special use permit to which the order relates, but the order is not invalid by reason only that it is not served." It seems as though the member is asking what appears to be the opposite when he suggested we delete the words following the word "relates" and adding the following: "...the order shall not come into effect until at least seven clear days following the serving of the order." In the view of the Chair, this seems to be a contradictory expression.

W. Hurd: We regret that there seems to be a misunderstanding here. The intent of the proposed amendment was not to annul or invalidate the explanation under subsection (b). It was merely to provide a seven-day window of opportunity for the order to be served. Although I appreciate the ruling of the Chair, I'm still unclear as to how it nullifies the order. The opposition does, however, have further amendments. Perhaps we could deal with those under later sections.

The next concern we've identified comes in section 171. Perhaps what I could do is move this amendment. The amendment to section 171 proposes adding (a) and (b) portions.

"Where a study area has (a) affected, reduced or limited a permit or licence as defined in section 167, or (b) caused the annual allowable cut of a timber supply area, tree-farm licence, forest licence, timber sale licence or woodlot licence to be diminished by the chief forester, the minister or the regional manager pursuant to section 170, a comparable area outside the study area shall be appended to the permit or licence, wherever possible, in order to maintain the annual allowable cut and the sustained economic viability of the permit or licence affected."

I'd like to move that amendment, Mr. Chairman.

The Chair: The Minister of Forests on a point of order.

Hon. D. Miller: I would argue that that amendment is completely out of order and, secondly, that it would be virtually impossible to abide by it. It is completely contrary and out of order.

The Chair: Thank you, hon. minister. Just a moment.

Hon. member, the amendment, the section you're proposing to add, is beyond the scope of the bill, and the Chair finds that it is out of order.

D. Mitchell: With respect to a previous amendment moved by the member for Surrey-White Rock, which the Chair indicated would not be in order because it nullified that section of the bill, the sense of what we were trying to propose could be moved in the form of a different amendment. I'd like to propose that perhaps it could be moved in the following way. This is an amendment to section 167 of the act: to delete the words in the amendment proposed here following the word "relates" and add the following: "if the order is not served, it shall not come into effect until at least seven clear days following its issuance."

In that way perhaps the amendment could work, and going back to the comments made by the member for Surrey-White Rock, it might have the same effect. Could the minister just comment on that? I would move this re-amendment.

The Chair: Hon. member, before the minister comments on it, the Chair should consider the amendment.

[ Page 3338 ]

The amendment, with the changes you've just indicated, does appear to be in order.

Hon. D. Miller: I would maintain my argument. I don't think we can make a shopping list here, bounce back and forth and think that if that amendment doesn't work, we'll try something else. I don't think we can get through debate in this committee stage on that basis. I would argue that the amendment is still out of order. I would urge the members to debate what is clearly the substantial effect of the bill and say whether they agree or disagree. The amendments are really deviating from the central argument. Let's have our reasoned debate on the essence of the bill, which is to set areas aside if required because they happen to be a study area designated by cabinet. That's really it. It's nothing more and nothing less.

D. Mitchell: I hear what the minister is saying. He thinks the amendment is out of order; the Chair has ruled that it's in order. I'm confused about whether the minister is trying to challenge the Chair or not.

We've had our debate on the principle of this bill in second reading debate. The minister will recall that the opposition voted against this bill during second reading debate. He knows that we're opposed to it. What we are seeking to do in this committee stage is to try to amend the bill to limit the powers of the minister himself, because we think there is possible room for abuse. The discretionary power granted to the minister under this bill is too broad. The minister said: "We don't really want to do anything to the bill; we don't really want to amend it." He has taken a very belligerent attitude towards the amendments that are being offered in good faith by the opposition.

An Hon. Member: Cavalier.

D. Mitchell: If that's the approach that he wishes to take -- a cavalier approach, as one member said -- then that's extremely unfortunate. These amendments are not offered frivolously. These are serious amendments that are seeking to curb some potential abuses of power. That's why they're being offered.

With that, if the minister has any further comments, I'd like to proceed with this.

Amendment negatived on division.

W. Hurd: A point of order. We were voting on division on the amendment proposed by the Liberal opposition. Is that correct?

The Chair: We have defeated the proposed amendment on division.

W. Hurd: That was the second amendment proposed. At least we tried to make the bill more palatable. The third one, I understand, has not been accepted either.

I would like to speak to the principle of the proposed amendment, which we believe also impacts on the bill itself. I'm particularly concerned about the impact on a tree-farm licence.

[11:30]

J. Beattie: Point of order. It seems that the Chair has ruled against the amendments. You've ruled that they're clearly out of order, yet the member insists on speaking to the proposed amendments. I think he should continue with debate that is in order.

D. Mitchell: Speaking to the point of order, I think the member for Okanagan-Penticton is confused. The amendments were not out of order. If he's referring to the fact that an amendment was defeated, that is the case. I believe the member for Surrey-White Rock is now speaking on section 1 as amended. The committee debate should continue so that we can get this bill completed.

The Chair: Both members make points of interest, because the fact is that the member is speaking on the principle or the intent of the defeated amendment, which is in order, in general.

W. Hurd: I'm glad the minister earlier in the debate brought up the problems in the Nitinat triangle, because in proposing some of our amendments to this bill, we're seeking to address that very problem. As the minister well knows, deleting land, particularly from a tree-farm licence which is supposedly managed on the basis of sustained yield, puts serious pressure on the land base that surrounds it. The purpose in attempting to propose a different treatment for tree-farm licences as opposed to any other type of licence is merely to recognize the fact that when a tree-farm is being managed over the long term on the basis of sustained yield, if a study area cuts through the corner of it or is proposed for part of the TFL, then the long-term sustained yield of the TFL goes right out the window. In seeking to deal with that under section 171 of the bill, we were attempting to urge the minister to accept the notion that tree-farms in the province deserve to be treated in a different manner than other types of licences, just because they are being managed on the basis of long-term sustainability.

I'm glad the minister did bring up the issue of TFL 46 on Vancouver Island, because as the minister well knows, part of the problem with that TFL was the land taken out for the Pacific Rim National Park. He's quite correct in pointing out that that put severe pressure on the annual allowable cut on the existing TFL. In fact, overcutting occurred because of a decision that was made by government to protect an area that has now become the Pacific Rim Park. As the minister correctly points out, that has had disastrous consequences in the Cowichan Valley. It has reduced the employment at the Youbou sawmill. The short-term decision of the government of the day has come back to haunt us now.

In proposing this particular idea under section 171, we were merely attempting to impress upon the minister the need to treat tree-farm licences quite a bit differently than other study areas and urging him to recognize the fact that if you're going to cut an area out

[ Page 3339 ]

of a TFL, surely there has to be some recognition of designating an area outside the boundaries of the TFL into that area-based tenure to promote sustainability.

I certainly express my concern about the apparent failure of this bill to recognize the unique characteristics of a tree-farm and the fact that we have had so many problems in the past with areas being taken out of tree-farms for various purposes -- the small business enterprise program, the creation of parks -- and the destabilizing influence it has had on communities like the Cowichan Valley and other areas of the province.

Hon. D. Miller: I think I'm hearing a sort of broad support for the concept of.... Let's not fool ourselves. If an area is as the Nitinat was 15 years ago, let's not load up the cut. I appreciate what the Liberal Forests critic has said.

Very quickly, the timber supply area -- the management unit that the Crown manages -- is equal to a tree-farm licence. It's a sustained cut; it should be. Forest licences, which are volume-based and are taken from the timber supply area, are sustainable cuts. There is no difference between a timber supply area and a tree-farm licence. The fact is that if an area is to be taken out, if it is large enough it will have an impact on the harvest level, whether that be in a tree-farm licence or a timber supply area.

If I were simply to expand the boundaries of a tree-farm licence I would be making the forest licence cuts unsustainable. So there's no room to move. There's no difference between a timber supply area and a tree-farm licence.

W. Hurd: I believe the minister is talking about principles rather than about reality. His own chief forester is currently involved in an enhanced inventory project on the timber supply areas in the province, because: "We don't have an adequate inventory on those areas."

Hon. D. Miller: TFLs and timber supply areas.

W. Hurd: He says "and TFLs." I would ask that he check with his own ministry staff to determine whether the inventory data available from TFLs is better than that from timber supply areas. If he makes that check, I think he will find that it probably is. To take an area of the province that is undergoing enhanced forest stewardship and cut part of it off for a study area and make no provision for the sustainability of that tree-farm licence is, in our view, shortsighted in the extreme.

The minister has to avail himself of the opportunity to talk to tree-farm licence-holders in the province about some of the computer models they have for assessing inventory on the TFLs and the fact that in many cases they're light-years ahead of the ministry in dealing with the kind of inventory data that's required. So it's a little presumptuous of the minister to suggest that the information his ministry possesses on timber supply areas in the province is exactly the same as what is possessed by tree-farm licence-holders, when at the same time we've had acknowledgement by the minister and the chief forester that they're woefully behind in inventory data on timber supply areas.

Again, we appeal to the minister to look at the tree-farm licence concept, the concept of sustainability, and the impact of designating a study area within a TFL. As the minister has correctly pointed out, the impact of that would be destabilizing to a community like the Cowichan Valley. Surely he can appreciate that although in theory the amount of information on timber supply areas is supposed to be the same as for TFLs, in reality it is not.

Hon. D. Miller: I previously pointed out the situation with respect to the Nitinat, and I thought the member had acknowledged that. The timber supply information on a tree-farm licence is no better or no worse than it is on a timber supply area. You might recall that we reduced the annual allowable cut for tree-farm licence 46 by 30 percent. The company itself was calling for about a 20 percent reduction. The inventory information is no better or no worse. The fact is that the reason it had to be reduced goes back to the issue I talked about: we didn't have a bill like this, and we didn't take the right actions at the right time. I thought the member understood that.

W. Hurd: There's an important principle here. The minister has acknowledged the woeful lack of information on timber supply areas, and he's quite correct. The reductions in the annual allowable cut, which he claims were necessary, were the result of the fact that his ministry does not possess the information it needs to make long-term sustainable decisions. But if he were to have serious discussions with tree-farm licence-holders in the province, he would find that they do possess the information on their own tree-farms to enable them to sustain the harvest in perpetuity. Indeed, that was the purpose of setting up a TFL in the first place.

The opposition simply rejects the notion that TFLs are no different than timber supply areas or that the information available on them is exactly the same as what is possessed by his ministry. On the one hand he's saying that over the past 20 years the ministry didn't do the job, and therefore the job wasn't being done on the TFLs either. Well, he's incorrect. The fact of the matter is that some of the most serious problems we've had in this province have occurred when governments and past Forests ministers made the choice to reduce the annual allowable cuts within the boundaries of tree-farm licences, which, as the minister knows, are the longest licence arrangements offered by his ministry -- 25 years with five-year renewable terms. As he may recall, the purpose for setting up that type of tenure was to achieve enhanced forest stewardship. Although there have been some examples in the province where the concept of tree-farm licences has not worked as well as it could have, generally speaking it has worked reasonably well.

I thank his ministry staff for the excellent briefing they gave us, but one of the things we were concerned about during that briefing was the acknowledgement that as many as five tree-farm licences in the province may be affected by the protected areas strategy and

[ Page 3340 ]

designated as study areas. The fact of the matter is that the opposition is convinced, after extensive discussions with tree-farm licence-holders, that there is better available data, there is better inventory data, there is an honest effort being made to achieve long-term sustainability -- where the harvest and the silvicultural activities are in complete balance, and by attacking that concept, by designating study areas without any recognition that the area-based tenure outside the boundaries needs to be addressed as well, in our view is really an affront to responsible forest management.

L. Fox: It's my understanding that we're discussing a whole bill under section 1. Is that correct?

The Chair: That's correct, hon. member.

L. Fox: One of the major areas of concern that I have with respect to this bill is the fact that it really doesn't allow for any appeal process. Study areas previously were made under a ministerial order which could be appealed. We now have a study area under this proposed bill that will not allow for appeal. The government argues that these study areas are more flexible and temporary, and they tried to explain, therefore, that an appeal wasn't required because of those two significant factors. However, I don't believe that really explains why there shouldn't be, given the fact that this study area would reduce the annual allowable cut of a licensee. I really don't understand why there shouldn't be the right of approval by a licence-holder.

Hon. D. Miller: If the member canvasses the Forest Act, I don't believe he will find anywhere where a minister's order is appealable.

L. Fox: Sorry, I couldn't hear that.

Hon. D. Miller: If you canvass the Forest Act, you will find that there are decisions that are allocated to the minister and there are decisions that are allocated to staff. Decisions made by staff are appealable; decisions made by the minister are not.

L. Fox: The minister referred to section 53 of the Forest Act earlier, saying that he may in fact reduce the annual allowable cut, tree-farm licences and woodlots. As I look through section 53, I find that in fact if he reduces the AAC by over 5 percent, there is a mechanism for compensation. There's a mechanism as well for going before an arbitrator if in fact compensation is not agreed upon. I see that as being a form of appeal, at least. That's certainly something that isn't being offered in Bill 78. Perhaps the minister might want to comment on that.

Hon. D. Miller: In other words, if you look at section 53, where it says "The minister may," those decisions are not appealable. If you look further in section 53, where it then refers to "actions undertaken to reduce annual allowable cuts," they're done by the chief forester, and those decisions are appealable. My decision in terms of deletion is not. That really is consistent with the Forest Act.

[11:45]

I pointed out earlier the difference between what decisions are made by government and decisions that are properly made by staff. Really, I am being consistent.

L. Fox: I accept that explanation. It still doesn't give me any comfort that this minister can define a study area within a licensee's particular licence, reduce the annual allowable cut and not allow that licensee the right to appeal it. Whether that has been the case and is the case under the act now, I think there should be some extra consideration given here, given the long-term commitment that has to be made by the licensee with respect to continuing to develop and promote the silviculture development within his licence in order to protect the annual allowable cut for future years of harvesting.

This kind of action could really reduce that particular licensee's opportunity to maintain his plant, for instance. He should have the right to appeal. I would urge the minister to give that some consideration.

Hon. D. Miller: As I pointed out, under section 53, if I make a decision as a minister to delete for a particular purpose, that is not appealable. If the chief forester, as a result of my decision, then has to adjust the annual allowable cut, that is appealable. Those are on a permanent basis. I would remind the members that under the provisions of these amendments to the Forest Act, we are talking about temporary.

I would remind them that we are also providing a provision that currently doesn't rest in the Forest Act. In other words, we can return allowable cut to a licensee, whereas currently the Forest Act can only result in a permanent deletion. So where the area is returnable -- in other words, there's a period of study time, etc. -- it would not seem prudent to have appeal provisions on a temporary situation.

I don't know what I can say to convince the members that I understand the problems we are faced with in this province when it comes to timber supply. I deal with them every day. It's not a pleasant task, I can tell you, because the impact of decisions that my ministry has had to make have resulted in people losing their jobs, and I take no satisfaction, believe me. Any of those things have to go through a pretty rigorous examination.

I don't take any delight in trying to bring about proper forest management. People are now having to pay the price because we didn't do things in the past. Believe me, there are times when I get extremely angry about that. I don't treat any of this lightly. Before an area can be designated as a study area by cabinet, it has to go through committees; it has to go up through my committee and to cabinet. People won't realize the full implications of doing that.

I repeat that we're finally, I think, being honest. We understand the implications of fooling ourselves by thinking that we can take areas out and not deal with the implications on cut levels. We're finally starting to

[ Page 3341 ]

deal with them. I don't take it lightly at all, so with that in mind and understanding the importance of this to proper forest land management, I urge the members to give speedy approval to the bill.

W. Hurd: The opposition certainly appreciates those concerns expressed by the minister and the dramatic and negative impacts that annual allowable cuts can have. In the excellent briefing that was provided by his staff it was pointed out that while the chief forester will continue to have the power to reduce the annual allowable cuts overall, it will then be the responsibility of the minister to move into the licensed areas and reduce the cuts of the licence-holders.

Surely the minister can appreciate that for a minister with less altruism than he might possess, that confers a great deal of power on the minister to make a decision based on pure politics, as he mentioned earlier. The minister may not have much regard for an existing licence-holder within a timber supply area and decide that, for whatever reason, he's going to make that licensee pay a higher price in terms of annual allowable cut reductions than another licensee elsewhere in the timber supply area. That's the type of power being conferred on the minister with this particular bill, and the opposition is expressing concerns about it.

Surely there has to be a recognition, for example, that tree-farm licences should be sacrosanct; surely there should be some recognition that a licensee who has had his cut reduced because of the impact of a study area should have some appeal mechanism. The minister has acknowledged that the appeal mechanism exists where the chief forester has reduced annual allowable cuts. We're seeing an appeal on Vancouver Island involving two major companies who are disputing, as is their right, the annual allowable cuts in tree-farm licence areas on Vancouver Island. Surely the minister recognizes that there should be some appeal provision. If it isn't in the existing act, it certainly should be there.

The Liberal opposition had suggested two additional amendments to the bill with respect to the right of appeal and the fact that there needs to be a compensation clause in here: "...that nothing in the act shall limit, diminish or eliminate the right of a person or persons affected by measures taken pursuant to this act seeking due compensation out of the Expropriation Act." Although the minister indicates that it's only a temporary situation, the fact of the matter is that the reductions in cut can go all the way to 2001. How is a company or an individual expected to make an enlightened decision about investment, buying logging equipment or doing anything else when for the next nine years they don't even know whether they're going to get the cut back or whether they're going to be permanently reduced within the timber supply area? We're only seeking to make the bill more palatable to the people in the woods, who are the ones who have to generate investment to secure employment.

Let's make no mistake about it. It's not just the annual allowable cuts that cost employment; it's also the fact that investment capital dries up. Mills and owners no longer have the confidence of their bankers to borrow money to invest in the forests, forest management or forest harvesting. That's the type of impact that this type of legislation can have, not only on the cuts in annual allowable cut and the impact that they have on employment, but also the fact that investment is also impacted. Surely a compensation clause in this bill and the appeal provision would make the act more palatable.

We understand the dilemma faced by the minister and some of the difficult decisions that have been faced in the area of cut reductions and in designating more areas for parks and wilderness study in the province. We have to recognize that on the existing land base that remains outside the study areas there is an industry that is still ongoing in the province. It's generating $11 billion of the province's $22 billion in exports. There has to be some security. There has to be something in this bill to indicate that if the minister does decide to deal with one licensee differently than another in terms of reducing the cut, then there has to be some appeal mechanism so that the individual affected has the assurance that the minister isn't singling his licence out for special treatment within a study area.

I recognize the fact that the minister is anxious to see this bill pass. The proposed amendments might have the effect of delaying it. I certainly ask for the minister's comments on those two important issues: compensation and appeal. I urge him to consider the positive impact that including sections in these amendments pertaining to those important issues would have in allaying some of the concerns of not only the opposition to this bill, but also the investment community, forest community and forest companies that have to invest money to protect the existing jobs.

Hon. D. Miller: The chief forester ultimately determines the annual allowable cut for only two areas in the province: a tree-farm licence or a timber supply area. There are 64 in total -- if you add up the number of tree-farm licences and timber supply areas. That is it. The chief forester establishes a sustainable, allowable annual cut for only those two units. If you look at section 54, once he has done that, let's say, for a timber supply area.... A timber supply area could contain a number of forest licences, one or more woodlot licences, have a small business forest enterprise program and a number of programs ongoing within it.

Once the chief forester establishes the annual allowable cut, the Minister of Forests proportionately allocates that cut to each of those activities. The minister, not the chief forester, does this under section 54 of the act. The chief forester is not interested in that. His job is to establish a sustainable cut. My job as the minister is to do a lot of other things, including.... I should tell you that what we do is proportionately reduce. So if there's a 20 percent reduction in the annual allowable cut of a timber supply area, and there are forest licences in there, they get a 20 percent hit on the head. If there's a woodlot licence, it gets a 20 percent hit. If there's a small business program, it gets a 20 percent hit.

Any reductions in the annual allowable cut that the chief forester makes under section 53 -- and, ultimately, that's where they would be made -- are appealable and also subject to all of the other provisions of section 53

[ Page 3342 ]

that deal with compensation. If you read section 53, there are clauses that deal with compensation. The current provisions of the Forest Act do apply. All we're doing with this series of amendments to the Forest Act -- I don't know how much clearer I can make it -- is saying that we think it's desirable, and I believe the opposition shares that view, that we have a system of parks and wilderness areas in this province and that it is a desirable goal we want to get to by the year 2000. It is supported by not only the people in this House, but by British Columbians.

This bill says let's not kid ourselves anymore. If it's socially desirable to take an area of land as a park, if that's the wish of the province and the people of this province, then let's be clear and honest and take that land out of the working forest. Let's not leave it in the working forest and maintain an accelerated cut, because we'll pay a heavier price in the long term. That's what this bill is all about. The members seem to think that there are some nefarious aspects to it, that somehow it needs protection.

Don't you think everybody understands how difficult it is to deal with these issues, to expand our parks and wilderness system? Do members think, along with some ill-informed people out there in the public, that we can suddenly snap our fingers and achieve these objectives? No, of course we can't. Do they think that we can't, or shouldn't, have the proper type of legislation that will enable us to have proper land management on our forest lands? I have yet to hear an explanation. I hear the suspicions that are raised, and I can only say that they are unfounded. If we're to achieve those things that I hear the members over there talking about all the time, in a responsible way, then we need this kind of legislation. If the members don't think that's true, I've never heard them say that.

We've spent about two hours debating this thing, and I suppose we could spend another 20 -- and I'd be happy to. I don't care. If you want to spend another three weeks doing it, I'm your man. But I think we've canvassed the sections in this bill thoroughly. I guess we're spinning our wheels, to some degree. If the members remain unconvinced, then.... I think we should just move on.

[12:00]

W. Hurd: I have no desire to hear the minister speak for three more weeks on this bill. Certainly the issues raised by the minister with respect to this bill cannot be allowed to pass unchallenged. We're trying to deal with the designation of a study area and the impact that has on the licence-holders within a tree-farm timber supply area, for example. The sad fact of the matter is that in this province some of the most negative motives have been attributed to past Forests ministers over a long period of time. As the hon. minister will well be aware, we've had a somewhat checkered past with Ministers of Forests in this province. Part of the reason why we've had that is the powers possessed by the minister to designate licences within timber supply areas and various forested areas of the province. The minister has to appreciate that designating a study area within a timber supply area reduces the annual allowable cut -- and that is a decision of the chief forester -- but it also empowers the minister to look at the licences, as he indicated, within that timber supply area and reduce their quotas accordingly. That still confers the same tremendous powers to the Minister of Forests, without the right of appeal. It's the kind of power that has resulted in Ministers of Forests running into trouble in the past, by allowing for the right of appeal -- appeal beyond the appeal to the chief forester. Some appeal mechanism for the way in which the licensee is treated is an important principle.

When I first took over the job as Forests critic, the first individual I dealt with was the owner of a forest products company in the northeastern sector of the province, who has spent 12 years -- as the minister well knows -- fighting a battle in which he feels he was unfairly treated by the Ministry of Forests. He has virtually bankrupted himself to fight that battle because he believes he has been dealt with unfairly. I ask the minister to consider that: there had been a proper appeal mechanism in place for his particular licence, a proper appeal which he could have dealt with and been satisfied with, wouldn't we all have been better off? I know I would have been, because I wouldn't have had the number of meetings I've already had with this individual in the past six or seven months.

Again, the fact of the matter is that it's not just the annual allowable cut and the decisions of the chief forester we're dealing with here. We're dealing with the power of the minister, as he has indicated, under the act to move on licence-holders and suggest to them: "Hey, as a result of this decision of the chief forester, your cut has got to come down by this amount, by that amount." If the minister could assure the committee that in fact the cut reductions were going to be 20 percent across the board for every licensee, then that would be acceptable. But my reading of the act certainly doesn't indicate that that's a possibility and that the minister has to move into those licensed areas, deal with the individual licence-holders and make an arbitrary decision on how much of the burden of a cut reduction they're going to have to bear in the overall timber supply area.

With those remarks, Mr. Chairman, I have nothing else to offer on this bill, but certainly we will be expressing our opposition to it when it comes time to vote.

J. Tyabji: With regard to the provision in section 170.... I don't know if I should be referring to the minister as the minister or the czar, as he's described himself, in reference to the power of the minister and the fact that the decisions are not appealable. This section, where it's says that the minister may, by written order, proportionately reduce the annual allowable cut, etc., brings to mind some of the comments of Sandy Peel and some of the previous debates in this House about what will actually be left for the forest companies. So that the minister is aware.... The minister has made some frivolous comments in the past about the Liberal policy on forestry. However, I'd really like to know, with regard to this one section, what the minister sees as the percentage that may be cut. How does this

[ Page 3343 ]

rate vis-�-vis other ministries potentially having some impact on his decisions? Based on 170(2)(a) and (b) specifically, it seems more or less to be at the minister's discretion, and I would put to the minister that although this minister seems genuinely, in his own way, to have the forest industry's best interests at heart, what would happen to the annual allowable cut if someone else came in who was perhaps more inclined to go toward the parks end of land use?

To quote this minister, land use is not taken lightly by this minister; however, I would point out that the current parks plan that his government has put forward, a joint venture between this minister and the Minister of Environment, shows green spots where use has halted, and 50 percent of the areas indicated are not going to make it into the final plan. Most of those areas will be affected for five years, and I would say that that is taking land use very lightly in those respects and that you're certainly not sending out the right signals to the resource industries with regard to land use if you're going to allow what I consider arbitrary designation of 12 percent of the province for five years, where 50 percent of it isn't going to end up in a park anyway. There doesn't seem to be an overriding strategy there.

If he's trying to be convincing with regard to not taking land use lightly, and if we are to take this section of Bill 78 seriously, I'd like to hear from this minister how his future policy -- or how he's going to use this section of the bill -- is going to depart from what he's done in the past.

Hon. D. Miller: I think there's a statement about the road to somewhere being paved with something.

This isn't about good intentions. I'd like to point out that in the early part of the term of this government we made some difficult decisions on what was called at that time log-arounds. The member might recall that that impacted on areas on Vancouver Island and some areas in the interior -- the Cariboo and Nelson areas. In some instances we simply determined that the plan that had been developed was adequate, and we allowed activities to proceed. In other areas we shifted the harvest to try to ensure that the companies could still obtain the same volume, but protect the area that had been identified as being concerned. In doing that, we asked companies -- and I want to stress this -- which had been given the right to harvest and to build roads, to not do that. They were within their rights to proceed, having received in some cases road building permits and in some cases harvesting permits or approval of cutting plans.

In no case did we have a disagreement. When we said, "Please defer; we know you have the right, but please defer," they did. As a result of that, those areas are now being studied by Mr. Owen and the CORE commission, and hopefully, once Mr. Owen reports back to government, a final decision will be made.

What I want to stress is that it was completely voluntary on the part of the companies. Any one of them could have said: "I don't care what you want. You have given us authority to proceed, and we're going to." These amendments to the Forest Act give us the power, which we currently don't have, to temporarily deal with those kinds of situations. I think I've made it as clear as I can, so I don't know if there is much more I can say at this time.

The Chair: Hon. members, the Chair has allowed fairly wide-ranging debate very close to second reading of the bill, which, as all members know, is not really in order. We should be addressing specifics of the section when we are in committee, and I would ask members to attempt, at least, to speak about the details that are outlined in the sections.

J. Tyabji: Very briefly, the minister didn't answer the question. With regard to 170(2)(a), where it says that the minister may, by written order, proportionately reduce the annual allowable cut.... At the time that Sandy Peel gave us a percentage for annual allowable cut reduction, the minister took exception to it. I am assuming that exception was based on some idea on the minister's part of what the annual allowable cut should be. Under this section, what does the minister think he is going to do as a discretionary order to reduce the annual allowable cut?

Interjection.

J. Tyabji: It's right here.

The Chair: Shall section 1 as amended pass?

The hon. member for Prince George-Omineca.

L. Fox: I have one very brief question, and I'll try to keep it brief, as the minister appears to want to get out of here. I could look at this bill with less suspicion, had it come out of a Social Credit government or out of deliberations of the Owen commission, or if CORE and the Schwindt commission had both had an opportunity to bring forth some findings prior to....

The Chair: Hon. member, I would like to remind you that we are in committee. It would appear as though your remarks are in second reading. Would you please address the section that is before us.

L. Fox: Indeed, I'm not. In order to set the stage for the question, I had to first give some idea as to where I was coming from.

As I started to say, I am concerned about the bill mainly because neither of those commissions have had an opportunity to come forward with recommendations. Can the minister tell me how this intertwines with the work of those two commissions? What role will the Owen commission play in the implementations of this bill?

The Chair: Hon. member, the questions you raise are out of order. You're talking about the evolution of the bill, the principle of the bill. These are matters that do not relate specifically to sections of the bill. I'd like members to address their remarks to the section that is before us.

[ Page 3344 ]

L. Fox: With all due respect, hon. Chair, I think the mandates of the commissions that I referred to are very similar to the issues dealt with in this bill. My question was: how does all that intertwine? I'm sure the minister is prepared to answer that.

Hon. D. Miller: The Owen commission is a separate commission that, in addition to the areas that I previously described in debate, is charged with advising government on a far better process for land use planning and how we can involve the public in a more meaningful way. It's very important. It doesn't exactly tie in to what we're doing here, but certainly if you look at the land use issues, the protected areas strategy and Mr. Owen's commission, there is a broad linkage. But in terms of specifics, no.

[12:15]

Section 1 as amended approved on division.

Section 2 approved.

Title approved.

Hon. G. Clark: I move that the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 78, Forest Amendment Act (No. 2), 1992, reported complete with amendments.

The Speaker: When shall the bill be read a third time?

Hon. G. Clark: With leave of the House now, hon. Speaker.

Leave granted.

Bill 78, Forest Amendment Act (No. 2), 1992, read a third time and passed.

Hon. G. Clark: I call committee on Bill 51.

BRITISH COLUMBIA TRANSIT
AMENDMENT ACT, 1992

The House in committee on Bill 51; E. Barnes in the chair.

Sections 1 to 3 inclusive approved. On section 4.

F. Gingell: As I understand this, section 11.1(2) of the British Columbia Transit Act and section 4 of this act set up a situation whereby the British Columbia Transit authority or any of the regional transit commissions have a series of choices on the way they can raise their agreed share of the subsidies to transit. This leaves in the hands of the Lieutenant-Governor-in-Council or the cabinet or -- more likely in the end -- the minister the ability to tell the transit commission not what they can do but what they can't do.

During second reading the minister spoke very strongly on the proposition that regional transit is a regional concern. If they have the authority for determining levels of service, geographic coverage and all those kind of things, then it should be the role and responsibility of the transit commission to determine the way in which their share of the subsidies are raised. I would like the minister to respond to the question of why the Lieutenant-Governor-in-Council should retain this power relative to raising tax funds for the local share of subsidies.

Hon. G. Clark: I think I understand the point. Let's take property taxes for municipalities as an example. The Lieutenant-Governor-in-Council retains the right to approve exemptions from that. Even municipalities' rights with respect to property taxes were fettered by the provincial government. This is consistent with that. It allows the province to have some role. There's no intent to insert the province in a routine matter, but it does require provincial government approval in this regard. This is consistent with the way property taxes are treated by municipalities generally.

I would say that I might be open over the longer term, when we move into questions of governance, to review these kinds of questions and make sure that they're working adequately. This bill, at this time, is really consistent with the way both the current transit commission operates and the current laws governing property tax operate.

Section 4 approved.

On section 5.

F. Gingell: The basic change brought about by section 5 is the ability of the Vancouver Regional Transit Commission to run a deficit for this current year. Mr.Minister, don't you think this is a somewhat dangerous precedent?

Hon. G. Clark: Yes, and I don't like it. The provincial government could solve the deficit problem in the Vancouver Regional Transit Commission, and there were certain tools available for us to take action. Any action the province would have taken unilaterally might not have been appreciated by the municipalities involved; so we chose not to take action and solve the problem, but sour relations with the local communities and forgo an opportunity to rethink the governance of transit. The price you pay for not solving the problem unilaterally but, rather, trying to work with the municipalities, and more importantly with the transit commission and the GVRD, in terms of how we are going to govern transit over the next few years is that it was unlikely we could solve this deficit problem right away. So unfortunately, from my perspective, we put this section in to give us some breathing time to negotiate and work with the local communities to fundamentally change the way transit is governed in the province, and, in some respects, the way it is funded.

[ Page 3345 ]

That's why we had to do this. I don't really like it. We limited it to one year. I might call the opposition's attention to the fact that this is basically sunsetted -- it's a one-year carryover -- so that it does not become a habit. In fact, it continues to put pressure on both parties to come to some agreement. I wanted that pressure there as well. I saw this deficit as an opportunity, really, to rethink the way we govern transit. We needed this to give us some time to work through very complex governance questions.

F. Gingell: I would like to bring to the minister's attention that the amount of money required for the subsidy in the year ending March 31, 1991, was some $18.5 million more than in the previous year. We don't have available the figures for the year ending March 31, 1992, but recognizing that the subsidy fund had a balance of some $18.4 million at the end of 1991, it was probably enough for them to just get by in 1992. But if we have used up the $18.4 million and have a history of the amount required for the subsidy going rapidly up, then the problem for the first three or four months, or whatever the period between this act being declared and the transit commission being in a position to act... I would imagine we really do have a rapidly escalating problem. Surely it is time for a complete review of where B.C. Transit funding is coming from. Rather than bringing new factors allowing them to run a deficiency, I thought perhaps it was time to draw a deep breath and try to re-evaluate this whole process. I'd hate to think it's getting out of control.

Hon. G. Clark: Generally speaking, I couldn't agree more. To see the deficit numbers, if we do nothing, at $28.8 million in '92-93, $37.9 million in '93-94, $43.5 million in '94-95, and it goes up in '97-98 to $56.3 million.... Those are the sort of numbers. I have the assumptions; I can give you that if you like. You're absolutely right: we have to come to grips with this. But again, my inclination is to fix these problems myself. I'd rather get on with it and fix it.

Because we're dealing with other levels of government and the province is paying more than any other jurisdiction in North America for local transit and fundamentally the government structure is flawed, we chose to go the softer route of providing a couple more options and allowing a deficit for one year in order that meaningful negotiations can take place. I assure you that those negotiations must be meaningful. If they're not, then we're going to have to fix this problem ourselves unilaterally. This is a real problem that has to be dealt with. The member is correct: it will escalate dramatically.

Let's be honest in this chamber. We have to build new rapid transit to the Coquitlams, and as some point we have to build transit to the Richmond area. Those two routes are going to be required. Major billions of dollars of money are required to do that. These numbers that we're talking about, which are rather frightening for a Finance minister, are to deal with the existing line, not to deal with new expansions that are required. This is a serious problem that has to be dealt with.

H. De Jong: Given the figures that the minister presented for the next three or four years in terms of the increasing deficit by the transit commission, is that because of a growing scale, if you can call it that, in terms of repayment of the facilities? Or is it the lack of ridership or perhaps the increased ridership? I don't quite understand why there would be such a dramatic increase in the expected deficits.

Hon. G. Clark: A good question. The bulk of it is the cost of the Whalley extension to the SkyTrain, which doesn't hit us financially until '93-94. That's the big increase. The deficit we have now does not include the extension to Whalley, which your Premier undertook when she was the MLA for Whalley, surprisingly. In any event, no one is quibbling with that. It's a good idea, it should be built and I fully support it, but the costs come due in '93-94.

In addition to that, you're correct: there are some assumptions that provide a modest increase in service as well, because it is a subsidized service. As population grows by 2 percent, you should at the very minimum be expanding your system by roughly 2 percent a year in order to service the same number of people. That's very crude, I guess, but there are cost drivers in the system. The big one is the SkyTrain extension in Surrey.

[12:30]

A. Cowie: I wanted to pick up one point and deal with the logic. I realize that the way government has dealt with transit in the past is not really appropriate in that it deals with it separately from the total transportation system. That's where the real problem is. I also recognize that the minister has to look at the whole issue. But I can't quite see why this particular time one couldn't treat it just as if it were roads and have the provincial government simply pay it as originally agreed. We're really reneging on an original agreement. They could get it in order and then bring in the municipalities. I think what's going to happen -- and we can deal with it under section 7 -- is that we're going to set up a system to just recover from this year, but that system is going to continue on; it's going to be part of the revenue source. It's going to take a year or so to set it up. It would be better to review the whole thing and get more money in the next two or three years to pay for it, rather than just put this in at this time. I wonder if the minister could comment.

Hon. G. Clark: Obviously we had these discussions. I don't mind saying that it's $30 million that we don't have. We have a huge financial crisis left behind by the previous administration, the likes of which the province has never seen before. You're quite right: it would have been a lot easier to negotiate with the local municipalities if the province had coughed up the other $30 million this year and whatever it takes for the next couple of years while we negotiate. But I chose rather to see the deficit as an opportunity to put some pressure on both parties to try to deal with the problem. The municipalities and the regional transit commission like to talk about the fact that they don't have any control, but they don't have a bad deal right now. They don't

[ Page 3346 ]

have to raise any revenue; it's all raised by the provincial government. We raise the revenue, the government pays the price, and then they just go on TV and complain that the government is not giving them enough money. That's been the routine.

To some extent, they have a good point. "Well, the province has foisted on them a very expensive system...." You get this kind of circular argument. But they really don't have a bad deal right now. If the province were to pay this $30 million, then what's the pressure on them? They just keep saying we're not giving enough money. So essentially, I agree: at the end of the day, the province is going to have to come to the table for major capital expansion. There's no question that that's going to cost the taxpayers money. But we chose to leave the deficit there, allow it to carry over for a year, give them some other tools and try to work with them on how we can solve this problem in the longer run. It might have been easier to come up with the money and then negotiate, at least in terms of our relationships; I think it would have been more pleasant. But it's a lot of money, and we just don't have it this year.

F. Gingell: Subparagraph (3)(c) requires the commission, for the fiscal year ending March 31, 1994, to raise under section 11.1 -- which, as I understand, has all the various options for raising the local share, the subsidy -- the total amount of the funding obligation for that fiscal year, the amount of the deficiency plus accrued interest on the amount. It seems to me that if you cause them to do that all in one year and you're going to be covering not only the cost of that year but the deficiencies of the prior year plus the interest, they are going to have to establish a taxing rate that is substantially greater than required for that current year. That creates a precedent as to what tax rates may be put into place for following years, recognizing also, as we discussed earlier in the debate on section 5, the ever-increasing amount of subsidy required.

I can appreciate that subparagraph (c) might obviously include (i), the funding obligation for the fiscal year, but perhaps it would be more reasonable to cover the deficiency and the interest that has accrued over, say, the three following years. I would be interested in the minister's comment on that.

Hon. G. Clark: I think you're absolutely correct if you assume the funding formula is not going to change. Essentially, this implies that with governance changes the funding formula will change. So if everything stayed the same -- the current formula, just what we've done here -- then you're right: you would have to raise more revenue from parking lots or whatever is required for that year. That's not what we're assuming; we're assuming that we're going to review the entire way in which the wage trend is governed and the way in which the formula works. So that's why I'm confident that the scenario you've outlined won't happen. If it did, that would be unfortunate and not intended. We are really looking at revamping the whole system.

F. Gingell: I'm not sure whether it's an appropriate question, but I would be interested to know whether the minister, having expressed what sounds like an intention to have a good review through a bipartisan committee.... In the list of select standing committees of the House, I'm sure there would be one that would adequately fit. I think it would be a good start to the thirty-fifth parliament if there was a greater opportunity for a bipartisan discussion and approach to looking for solutions. I wonder if the minister would like to comment on that thought.

Hon. G. Clark: I'll give it some consideration. The problem is that it's very complex, and it's not....

Interjection.

Hon. G. Clark: No, I would be delighted if members opposite want to participate in it. But the problem is that it's really negotiations with other levels of government, so you have all these municipalities involved. They all have different views, and there is more than one party involved, if you can call it that. So there is a sort of multiparty view at the municipal level. The GVRD is involved, and they have their own views as well, and then the provincial government has a view.

To involve members of the House, other than government, and try to insert them into that negotiation process may be very difficult. I'll give some consideration to the general question of governance, because I think the members opposite might be delighted to have some input into how we might structure it. I think the member next to you has some expertise to lend to the debate, and I'll certainly look for ways in which I can involve members of the House in that discussion.

H. De Jong: In looking at this section and the sections that will follow, a person wonders.... Since I've been in municipal government for many years.... Municipalities are allowed to establish development cost charge bylaws to look after these growing facilities and the facilities that need to be expanded.

It seems rather strange to me that this has never been thought about by the GVRD in terms of establishing a development cost charge bylaw, because it is the growth of the communities that requires the additional transit facilities. I don't think it makes any difference whether it's an overhead SkyTrain, another two lanes to a highway that leads into the city or other roads; I believe that would be a reasonable way to look at it and perhaps a more reasonable way than what is being proposed in this bill.

Hon. G. Clark: That's an excellent point from the member; I don't mind saying that. Development cost charges.... I think there's.... I don't have.... I'll be careful of what I say here. I think the option for municipalities to apply development cost charges to pay for capital facilities, transportation facilities, transit facilities, is well worth considering. I can tell you that I am considering it, but I'm advised by my colleague the Minister of Municipal Affairs that there are lots of demands to use development cost charges for all kinds

[ Page 3347 ]

of things. At this time the government chose not to allow development cost charges to be used for transit or transportation, as you've suggested, but it's an idea very much worth considering. It makes a lot of sense to me, but I know there are other demands; developers in particular are very concerned about escalating development cost charges. We have to weigh that as well.

I'll take your comments in the way in which they were offered. I think it's an excellent suggestion, and one we certainly should consider over the next little while.

H. De Jong: I appreciate the minister's comments. However, it should be noted that whether it's the district of Matsqui or Abbotsford or Mission, many of those communities do have development cost charges, recognizing the needs for additional roads, wider roads and better transportation systems. I don't see why the GVRD could not consider this on a regional basis, as they do within their own local municipalities.

A. Cowie: I couldn't let this pass without making some comment, just to clarify, about development cost charges. I think your Minister of Municipal Affairs probably gave you good advice. Be very careful with this one. Development cost charges already vary tremendously and skyrocket in one municipality versus another, and there are no plans to base it on. So right now at least, that wouldn't be an appropriate place to put the charges.

I did mention earlier that it makes a lot of sense to rezone and charge the development cost charges around a public transit station. That means forward planning, and that's where I hope we're going, rather than these piddly little changes that we're dealing with.

Sections 5 and 6 approved.

On section 7.

Hon. G. Clark: I move the amendment to section 7 standing in my name on the order paper. [See appendix.]

Perhaps I could explain it, in case it's not clear. We originally brought in the ability to establish a parking tax on the basis of square footage. The Assessment Authority has been doing some work in that regard. It's fairly easy to do, it seems to me, in places like downtown Vancouver. If you want to apply it broadly, however, the option is still in the bill. It was suggested that it would be a lot simpler if we literally counted the number of white lines. We provide both options here, again for consideration of the transit commission, to do what is simplest, cheapest and most effective. A lot depends on where they plan to apply it, and it can be regionally specific.

This is a simplifying amendment to save some costs, and to make it quicker should it be decided to do so. It was really at the request of the Assessment Authority, who said that both options gives maximum flexibility, that we chose to bring it in.

A. Cowie: For many years the downtown area in the city of Vancouver, Delta and other places, looking at the whole energy conservation system, have been introducing small parking spaces in order to encourage small cars that use less gas. This flies directly in the face of trying to introduce energy conservation. I think it's an amendment -- and I'm sorry I didn't speak to it earlier -- that I personally cannot support, because it flies in the face of what municipalities and the Minister of Environment have been trying to do and what everybody has been talking about as far as conservation goes. I would say that it may be a little more difficult to measure the spaces. I assure you that what will happen in some parking lots is that people will change the white lines and have lots of big parking spaces, and then put two cars on them. I would suggest that this amendment is flawed. I'll be voting against it.

Hon. G. Clark: I think that's a good comment. I guess the motivation, largely, is cost. It's about ten times more expensive to do square footage than as it is suggested here. I think that the transit commission will keep your comments in mind. I'll make sure they do.

Both options are now available in the bill. I would prefer the original intention, not this amendment. But recognizing the cost implications, I think they said something like over $1 million to do the work to measure parking spaces versus a tenth of that for the number of parking spaces. It's more of a cost efficiency move. But both options are available. I think that if there were some jiggery-pokery or an attempt to get around it in the way you suggested, that would allow the commission to move in the direction of the square footage. I think it's a fair comment.

F. Gingell: I'm not that sure whether I should be speaking on the amendment or waiting until the amendment is dealt with. My ears suddenly perked up when you said $1 billion.

[12:45]

Hon. G. Clark: A million.

F. Gingell: Thank you, $1 million.

Hon. G. Clark: Also, I want members to know that there will be a deemed size -- I'm just advised -- to the parking lot. So you won't be counting white lines in abstract; there's a size that will be deemed to be the size to impose the tax. It has some definite parameters. You can't simply say, "I've only got three spots," even though it's a huge parking lot.

A. Cowie: I want to remind the member for Oak Bay that it has 12-foot sizes because of the people who drive in big cars. There's no consistency in sizes of lots throughout the lower mainland. That causes even more problems where there is consistency when you measure area.

J. Tyabji: I'd like to ask the minister to define "jiggery-pokery." I also want to know if that's parliamentary language.

[ Page 3348 ]

The Chair: I can advise the hon. member that the Chair, as well, had some concerns. We've checked. We find that it is merely an indication that someone may be wheeling and dealing, more or less. However, we didn't have a problem with it with respect to parliamentary language.

Amendment approved.

On section 7 as amended.

F. Gingell: Recognizing the problem that this bill gives the right to determine which geographic areas, have you got any guesstimate of how many spaces?

Hon. G. Clark: I'll just give you some of the numbers. The downtown peninsula, excluding the financial district, 49,300; the financial district alone, 12,000; the rest of Vancouver, about 12,000 to 13,000; city of North Vancouver, 2,800; all other areas of the GVRD, roughly 50,000. I think if you add that up, you'll see it looks like about 140,000.

Interjection.

Hon. G. Clark: Oh, sorry. These are just estimates prepared by Peat Marwick Thorne, commissioned by B.C. Transit. Just for members, Peat Marwick did a study for the previous administration on some transit funding questions. One of the options that they identified at that time was taxing parking, so B.C. Transit commissioned them to do a more detailed examination for the purposes of this before we decided to do the bill, just to give us a sense of the numbers. So that gives you a sense of parking in that region.

F. Gingell: The Greater Vancouver Regional District, if I'm correct, goes out to the easterly border of Langley and the easterly border of....

Hon. G. Clark: Agassiz.

F. Gingell: No, I don't think Agassiz is in the Greater Vancouver Regional District.

Interjection.

F. Gingell: Langley. On the north side of the river it goes to the Coquitlams, but not to Maple Ridge, I believe. So when you come up with this count, have you made an assumption that the whole of the Greater Vancouver Regional District would be included in this tax?

Hon. G. Clark: For that number, yes, but the transit region is actually bigger than the GVRD. It actually now includes, I believe, Maple Ridge, Pitt Meadows and the like. I think that's the only area that it includes -- North Van, West Van. I think it's just a little bit bigger than the GVRD. The numbers we have are basically GVRD numbers at the moment.

F. Gingell: I have come up with a series of types of parking spaces, because it's hard to tell from this. What you've excluded is residential; then there are some references to the School Act. I'm not quite sure what that applies to. Would shopping malls be included, or parking spaces in schools, churches, parks, at the beaches and at lovers' lane? How about the PNE and sporting venues such as Nat Bailey Stadium, out at Swangard Stadium and those kinds of places? How about parking spaces at the universities? Maybe we could start with those few.

Hon. G. Clark: The bill broadly defines parking, so conceptually all of those things would be included. We're looking at possible exemptions. The regional transit commission has now, I gather, authorized further examination. The possible exemptions would be churches, except spaces that are rented during the week; schools; universities; colleges; charities; park-and-ride facilities at Transit; the inventory of car dealerships, although we may not do that -- I'm just kidding; and service stations.

I want to stress that the 125,000 is very crude. Peat Marwick has done a fair amount of work, but these are just very rough numbers. Obviously much more detailed examination is required. And then the question is what to exempt. That's what the transit commission will be looking at. So I agree with you, and that's why we allowed the bill to be flexible.

As for the question of malls paying a parking lot tax, current economic circumstances are very difficult for many malls; the regional politicians involved may have some difficulty. And then there's the cross-border shopping question. I agree with the members opposite that all those factors have to be considered. That's up to the transit commission, but they will be given the power. By regulation we will establish, working with them, exemptions to the parking lot.

As is normally the case, we have broadly defined it in the bill, and then we can provide exemptions from the parking space tax on the basis of the transit commission's wishes.

F. Gingell: How about metered street parking?

Hon. G. Clark: Yes, that's currently included.

F. Gingell: I was wondering under what portion of the act you can tax municipal streets.

Hon. G. Clark: It falls within a general definition, and everything is included except for exemptions. But remember, municipal politicians on the transit commission will be deciding these questions, not the government of British Columbia.

F. Gingell: I can't let it pass without saying that it's the municipal politicians that the minister has appointed to the transit commission, who will be making these decisions.

Section (a) of the proposed subsection (3) would seem to allow an exemption only for areas rather than

[ Page 3349 ]

for classifications. Do you think that they'd have to actually go along and define everything on a map?

Hon. G. Clark: You're right. They have the power to exempt areas; the province has the power to exempt by regulation exemptions to the act. We were talking earlier about the province retaining the power to do that the same way it retains the power with respect to property taxes.

F. Gingell: That brings me to the next question I was going to ask, because I wondered whether the ability for them to establish different rates in different areas under subsection (b) would be subject to the same veto rights that the cabinet will hold under section 11.1(2)(b) relative to how the subsidy is raised to be split up.

Hon. G. Clark: Overall that's correct. As when they previously asked the government to raise the gas tax and we said no, they still have to pass a regulation. The transit commission still has to be approved by the provincial government; at least, at the moment in the current government structure that's correct.

With respect to parking in particular, we can't veto the rate specifically. They just set the rates, but then in their overall funding -- how they are going to meet their funding target -- they have to pass a motion, which then is forwarded to the province for it to make effective.

F. Gingell: Just so I can summarize this and make sure I've got it clear in my own mind. What you're saying is that the Lieutenant-Governor-in-Council will have a veto over how much of the subsidy is raised from gasoline tax, hydro tax, tax on vacant land, parking tax, or residential tax, if it's all done in one, but the Lieutenant-Governor-in-Council will not have a veto on the decisions made by them as to the rates between different geographic areas, or which geographic areas are to be included and which geographic areas are not to be included.

Hon. G. Clark: No, that's not quite correct, although I did think that was correct when I answered it. It is stated in (4) that: "A bylaw or a regulation under this section does not take effect until it has been approved by the Lieutenant Governor in Council," so that's correct that we do have a veto over how they apply the legislation, in a crude way.

A. Cowie: I just have a couple of questions. This tax doesn't apply to residential parking spaces. If that's the case, then what if somebody -- as is the trend in other countries now -- buys their condominium commercial space? In other words, they don't pay somebody to park there; it's theirs. That's one question. In other words, I own my parking space in an office building. The other question, which you might as well answer at the same time, is what if it's a residential parking space at night and a commercial parking space during the day? Do both these apply?

Hon. G. Clark: First of all, the only statutory exemption is residential parking. That's the only statutory exemption. Other exemptions can be made, as I've suggested, by the Lieutenant-Governor-in-Council. If it's for residential parking, and they've purchased their parking spot, it makes no difference, because it's exempt in any event. If it's commercial and they try to purchase the parking as part of their commercial building or something, I don't think they could do that. I think the transit commission could still deem it to be a parking space to be taxed.

A. Cowie: I'm sure you'll find a way around it to get them. I mean, after all, there's no point.... I want to get down to cost just a little bit. The way I worked it out, there are approximately 49,000 parking spaces in the downtown area. I think I was adding it up correctly...

F. Gingell: No.

A. Cowie: I'm not talking outside; I'm just talking in the peninsula.

F. Gingell: Sixty-one.

A. Cowie: Let's say 50,000. If you're trying to get $30 million and you divide that out, you get approximately $2 a day.

F. Gingell: A dollar and a half.

A. Cowie: My colleague says $1.50. What's your figure?

Hon. G. Clark: A dollar.

A. Cowie: Okay, about $1.50. Most people pay about $6 or $7 a day in most parking spaces downtown, let's say just outside the very core, so you're increasing it about 15 to 20 percent.

[1:00]

Hon. G. Clark: That would be correct if you were assuming the entire $30 million was coming from downtown Vancouver and nothing else. If they raise fares in certain regions, if they raise the B.C. Hydro as the critic recommended -- and I'm not supporting that, but if they did that.... There's B.C. Hydro; they have that option. There's residential property tax; generally they have that option. There's now, with this bill passed, vacant commercial land. If they do a very, very small rate of parking in the region, and maybe a little larger rate in the downtown, all of those options mitigate it. So the worst case scenario, funding the entire deficit on just downtown Vancouver, would result in a 15 percent increase in cost to many people parking downtown.

[D. Streifel in the chair.]

A. Cowie: I just basically want to make the comment that I think it's so complicated. Region-wide, they're just simply not going to do it. The storekeepers or the shopping centre owners will just simply....

[ Page 3350 ]

There's not a way of doing it, because the parking is as a whole. They can't go out and put meters on every single space. They just simply don't charge for that kind of space. It won't work regionwide; it will have to be just downtown. I would predict that it's simply not going to work -- or else it will just be downtown.

Hon. G. Clark: I just want to make the point that I made very briefly in second reading. If there was a tax on parking downtown coupled with free bus transportation downtown, then I think you would start to change the mix and fundamentally change the modal split, which is what we're really trying to do here. I'd say to the environment critic across the way that that's good environment policy and good public policy. Again, I want to tell you that I don't expect the entire $30 million to be funded by a parking lot tax in downtown Vancouver.

A. Cowie: I don't want to prolong this. I think that a free bus service is basically a good idea, but a minor charge is also a good idea, because it controls it to some extent. That does work in other cities. Otherwise you'll have every drunk, or whatever, wandering onto the bus, sitting there and wandering off again whenever they want. It's better to have some small charge to control it.

F. Gingell: There was one other question that I had marked up, and I missed it. When you define residential parking, you talk about having the exclusive right to park on the entire parking site, or any specific part of it, of a specific building. Are you intending to have a blanket exclusion for parking that is clearly residential? Or are you going to have a situation whereby you might end up with lawsuits, because visitors can come and park in one particular space and the residents don't have exclusive areas?

Hon. G. Clark: You're right. We want exclusion for residential parking, including people who come and visit and the like. There is no reason for it to be that broadly based.

H. De Jong: One more question on this area of the bill. The minister said that the estimate of Peat Marwick was that there would be approximately 125,000 spaces. Given the flexibility, you might say, that is in this bill, as I understand it each municipality will determine which type of parking lot will be assessed, except for those lots that are permanently exempt under the bill. As the minister stated, there is probably a lot of flexibility in the bill for the individual municipalities or for the regional district as a whole for that matter. I'm wondering who made the recommendation for a parking tax. Was it the Vancouver transit commission, the Crown corporations secretariat or the consultant himself?

Hon. G. Clark: It was certainly not the commission; it was B.C. Transit, a Crown corporation. They gave several options, as a result of a study done during the previous administration, and we reviewed those. By the way, Richard Bridge of the Crown corporations secretariat works for Julian Paine, who works at the Treasury Board. After reviewing those options, we chose to proceed with one of them -- the parking lot one -- and that was a political decision.

D. Symons: I'd just like to carry through on a few questions that my hon. colleagues here have asked regarding the cost of this to either the person or the business that's going to be having these parking spots. I noted earlier that you were adding them up for the Greater Vancouver Regional District, and you come up with around 120,000 to 125,000 parking spaces that could possibly fall under this bill.

Also, you mentioned earlier that this parking fee -- or option, I should call it -- that you're giving the Greater Vancouver Regional District to help pay for transit is going to be somewhere in the neighbourhood of $30 million. If you divide those two figures, you get somewhere around $240 to $250 per year per parking stall. That's not taking into account, as you said earlier here, that we're looking at just the greater Vancouver area paying off the whole amount; that's using the whole regional district. So if you're going to differentiate between people out in the Langley area paying a smaller amount than in Vancouver, that would be the average. It would certainly be more in the city and less elsewhere. That works out to about $20 per stall per month on an average basis.

My daughter happens to be renting a spot that she's paying about $45 a month for in an open area in Richmond, and this is a 50 percent increase in that. A lot of people are going to be experiencing a rather rude shock if the city of Vancouver takes that option. I use the word "option," though I don't think there's much of an option for them, the way the government has presented it. You've simply said: "Here's the bill. We're giving you this way of paying it, and we're not going to help you any other way, so you don't have much choice." Are my figures roughly correct -- that on an average basis, this would be somewhere around $20 per stall?

Hon. G. Clark: Yes, you're roughly right. Let me make a couple of points, though. First of all, it assumes that all $30 million will be paid for by this one tax, and I don't assume that at all. Secondly, it has to be paid for by a tax in any event, so the question is, what tax do you want to...? I mean, the government can pay for it, and we can raise income tax, the sales tax or whatever. The gas tax is what they requested. I said no. I've given them another option, and they can pursue it. But I think we shouldn't be alarmist. One should not assume that the full $30 million will be paid for by this one tax.

Section 7 as amended approved.

Sections 8 to 13 inclusive approved.

On section 14.

Hon. G. Clark: I move the amendment standing in my name on the order paper.

[Section 14, by adding the following paragraph:

[ Page 3351 ]

(i.1) respecting the manner of identifying and determining the number of parking spaces located on an unmarked parking site,.]

On the amendment.

Hon. G. Clark: This is, I think, a consequential amendment to the amendment that we brought in which adds a provision allowing the Lieutenant-Governor-in-Council to make regulation regarding how the number of parking spaces is to be determined -- either the square footage or the number of spaces. This is a consequential amendment to the amendment that we passed on section 7.

F. Gingell: As I understand it, again they're giving these rights to the commission to determine how you're going to do this, how you're going to do that and how you're going to do anything, but you're retaining a veto in the end to be able to cause them to do it in your way.

Hon. G. Clark: No, this is the formula as to whether it's square footage, marked spaces or some combination thereof. Those are the regulations that we need the power....

C. Tanner: It always makes me nervous when the government does this late in the day, and I can't see any reason they couldn't have put it in the legislation in the first place. Why can't they put the formula there?

Hon. G. Clark: First of all, it's enormously complex. Secondly, it hasn't been determined yet, because we're working with the regional transit commission on what option they would prefer. We're devolving the authority of the transit commission to look at this question to make recommendations as to what kind of parking tax they'd like, if at all, what the varying rates are and how they'd like it applied -- all of that. This is permission for the transit commission. After they come to us with their suggestions, then we will have to incorporate a very complex formula. We need the regulations in order to be able to do that.

C. Tanner: Is there any way the House can be assured that whatever they come back with is what they're going to get, or is the minister going to say: "That looks okay, but I don't like it; this is what you're going to get"

Hon. G. Clark: I don't know. The whole purpose of this is to work with the regional transit commission in order to get something that is fair and reasonable that they are requesting us to initiate. Any regulations require an order-in-council. That order-in-council is public; members of the opposition will see it. I'm sure that if it's not in keeping with the regional transit commission, they'll let us know.

C. Tanner: Can the minister give this side of the House the assurance that if the transit commission comes to us next year and says, "We were messed around by the government," you'll bring it back in again so we can have another go at it?

Hon. G. Clark: I want to remind members that this is simply the mathematical formula that will be used to calculate the number of parking spaces. I can tell you that I'm sure I'll bring it back if there's some dispute between the transit commission and us. I don't believe there will be. We're simply imposing a formula by regulation that will be worked out with them.

Amendment approved.

Section 14 as amended approved.

Section 15 approved.

Title approved.

Hon. G. Clark: I move the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 51, British Columbia Transit Amendment Act, 1992, reported complete with amendment.

The Speaker: When shall the bill be read a third time?

Hon. G. Clark: By leave now.

Leave granted.

Bill 51, British Columbia Transit Amendment Act, 1992, read a third time and passed on division.

Hon. G. Clark: Hon. Speaker, I call committee on Bill 66.

ASSESSMENT AND PROPERTY TAX
REFORM ACT, 1992

(continued)

The House in committee on Bill 66; D. Streifel in the chair.

On section 17.

F. Gingell: First of all, I would like to say that although the minister has stated on numerous occasions that there's agreement with UBCM on the question of Bill 66, from the work I tried to do over the weekend, I don't think that there has been any agreement on the questions of sections 17 and 20. I think there was a great deal of discussion about averaging provisions and annual assessments, but I don't believe that sections 17 and 20 were brought in with agreement. It is important to mention that, because I do want to establish that we're not just talking about a housekeeping bill that is being presented on the basis of a request from UBCM. I

[ Page 3352 ]

think that this bill clearly identifies the differences between this side of the House and the government side. I believe this particular section will make it much more difficult for individual homeowners to appeal their assessments.

[1:15]

It's not going to make any difference to the large corporations. They can afford to employ appraisers. You know as well as I do that you can go and have five different appraisals done with five different valuations for any piece of commercial or residential property. That isn't difficult. All you've got to do is have enough money to pay enough appraisers to come up with enough values. I'm not in any way suggesting that they will come up with the numbers that you want. But appraising property is an art. It is subjective, not objective. It is someone's opinion as to what the particular piece of property may be worth.

As you may be aware, the changes in sections 17 and 20 take out the words: "...to adjudicate on the assessments and complaints so that the assessments shall be fair and equitable and fairly represent actual values within the municipality...." It is proposed to be changed to: "...so that the assessments are at actual value." I'd like to assure the minister that when you're dealing with property, whether it be residential, commercial or industrial, there is no way of finding out what its actual value is until there is a sale. The only things that you can discover actual value of are things like metals -- the price of copper, the price of gold, the price of silver -- hydrocarbons, the price of West Texas light crude oil delivered in Houston or the price of Brent North Sea crude oil.

Hon. G. Clark: Only if somebody's buying them.

F. Gingell: Only if somebody's buying them; true enough. Those particular commodities are sold every single business day, but my particular house, for example, has never been sold. It's 34 years old. It's getting creaky, but it's never been sold. The actual value of that house has never been determined, and it certainly hasn't been determined on what the value was on July 1 of any particular year, which I believe is the time-line that is required in this exercise.

Each property is unique. Even comparisons that are made are subject to the vagaries of the buyer. If you look at the comparison method of valuing properties, which is a method that is often used, you are still dealing with the fact that the comparative property may be subject to all kinds of things. It was the only house I could get that was within 100 yards' of my daughter-in-law's house, or my grandchildren. It was the only one that was close to some other thing specific to the buyer. They use different methods for valuing things. We talked about metals. That is done on a commodity exchange, and there are buyers and sellers every day.

There is the income approach, which is used in the majority of cases when they are dealing with commercial properties such as hotels, a subject we'll be getting onto a little later in this discussion. They say: "This is what this hotel should earn. If it will earn this much money, how much is it worth?" Of course, that's subject to who is measuring it and whether the economy is up or down; it's subject to a lot of vagaries. But if everything is done on a consistent basis, it's perhaps the most reasonable way of approaching this. There's also the replacement cost method: what would it cost to build this property as it exists in this year and then depreciate it for its age in relation to its useful life?

There are many ways to value property, and each is unique. The important thing about property tax assessments is that they be equitable. Property tax assessments are nothing more than a means of taking the municipal tax bill and deciding who pays what. They do not determine the amount of money that each person pays; they determine, by the way it is done, by the process, what share of the total bill everyone pays. The important key for equity and fairness is to have a question of comparability. Is the assessment or the valuation of this property fair in relation to all other properties? The amount of tax that I pay isn't related to how much my property is valued for; it is related to how much my property is valued for in relation to every other person's piece of property. I heard the minister suggesting that the answer to that was no, but I assure you that it is correct. That is the way it works. The purpose of the assessments is purely and simply to split up the total bill.

When we got to this question the other evening, before I spoke on sections 17 and 20, the minister brought up four particular cases that were the reason they want to see this change made, to take the words "shall be fair and equitable" out of the bill. That was the Coast Apartments case. What was involved in the Coast Apartments case was clearly the question of consistency. It was dealing with a property located on Balsam Street in Vancouver. A property close by, within two blocks, had been sold at around the time of this appraisal. They actually came up with a market value. It was not the value at which the property had been assessed. It was not the value that the appraiser for the property-owner said he believed it was.

The property had originally been assessed at $6.172 million. The owner came in and said: "No, it is only worth $5.355 million." During the course of the hearing, they all agreed that the fair market value of the property was $6.375 million. What the appeal board did was look at the other sale of 5805 Balsam Street, where there was a selling price. It had been clearly established what the fair market value was at that particular time. They applied the same relationship -- the assessed value to the selling price -- to 6060 Balsam as existed on that sale. It is a sensible and logical means.

When the minister spoke about it, I was under the impression that what the board had done was say: "You're going to make the assumption that the assessed value is the market value. Then we're going to apply this ASR to the assessed value." But they didn't. They applied it to the market value -- the most clearly established market value they had. That was a matter of consistency. It was not a matter of coming down to the lowest common denominator; it was not a case of their being able to go out and find some other property. It was, to me, a sensible decision, one that I would have thought the minister would have supported. It obvi-

[ Page 3353 ]

ously dealt with equity. The property owner didn't get their way. The property owner wanted it valued at $5.335 million. The board valued it at $5,928,750, and that made sense.

The second case the minister brought up to us during the course of the early debate was the Dueck's on Marine Drive case. This is a fascinating one, because it deals in the end with a subject that concerns this side of the House. I agree with the minister's concern; he's absolutely right. The board took the assessed value and called it the market value, not having established what the market value was, and then applied the ASR to this assessed value and reduced it.

The Chair: Hon. member, your time has expired.

[1:30]

F. Gingell: May I have leave, Mr. Chairman?

A. Cowie: I would be pleased to give my right of speaking to my colleague.

F. Gingell: No, no. Speak for a moment, then sit down.

A. Cowie: Okay, I'll speak to this.

My main concern on this particular bill is with sections 17 and 18, is as my colleague's. My main concern is the actual value. There are a number of....

Interjection.

A. Cowie: Yes, certainly. I'm dealing in general so that we can get on to the section. I would prefer to continue, if we could, and give my colleague my time.

F. Gingell: Hon. Chairman, I'll make note of the time.

The problem in this case, with which I thoroughly agree with the minister, is the question of patronage appointments, this government's favourite exercise. It is terribly important to appoint to the assessment board people who are competent and capable.

This isn't a patronage appointment of yours; it happens to be a patronage appointment of the previous government's. But I agree with you; it is a nonsensical decision, as is the decision of government to make appointments to boards of people who obviously don't have the right qualifications. In that particular case I agree with you. You shouldn't change the act just because Dueck's on Marine got a reduced assessment.

Let's move on to the third one that you brought up and held in front of us: the Lynn Holdings case which, as members may not know, is this beautiful Grand Pacific Hotel just down the street.

We have spoken about the subject of consistency. When the assessor who had produced this valuation was questioned, he was questioned on the basis of how he had arrived at this value, and the value was produced by the cost-replacement method. Now every other hotel around the community had been valued on the income approach, but he had not been consistent. He had assessed this hotel just starting up in business, but the appeal was heard during this session, and he admitted in the evidence that yes, the cost-replacement method was not an appropriate method. He should have used the income because that would have been fair and equitable, and that's the way the board ruled. They didn't get into a discussion about whether all these valuation methods were correct or not correct. They dealt purely and simply with the methodology. They said it has to be consistent and it has to be fair, and the assessor admitted that in the course of the appeal, so I don't think that is a reasonable basis.

We have also, of course, discussed at some length the question of this Bramalea case, which has brought a lot of this about, which is the case of the Hyatt hotel. What is involved there is purely and simply a question of consistency, that all properties have to be valued the same way. What happened was this: you can either take apples and multiply them by 100 over 9.5 or use a capitalization rate of 9.5; and you would use a capitalization rate of 9.5 if you were dealing with triple net rental income to an owner who has leased his hotel property to a manager. Or you would deal with a capitalized rate of 12 percent if you were dealing with the actual management and operation of the hotel.

When the original assessment was done, they used a 12 percent capitalization rate against the operating income. When Bramalea, the owners of the leasehold interest, appealed the assessment, the assessor came in and applied a 9.5 percent rate to this operating income level rather than to a net lease income level and, in effect, applied it to the apples instead of the oranges. The board -- again, another of these questionable patronage appointments by you-know-who to the Assessment Appeal Board -- agreed with the assessor and increased the assessment.

I've made this statement a couple of times here and in private discussions. I get concerned about the fact that assessors become very awkward about people having the audacity to question their assessments. It was suggested to me by the minister and his staff in other discussions that that simply doesn't happen. This is a typical case of when it does happen. This is a case when the property had been assessed at $36.5 million, and the owners of the leasehold had the audacity to suggest that it was only worth $29.5 million. So they brought in a new and incorrect appraisal at $43.3 million, and the board upheld it. Quite naturally the respondent went to the Supreme Court of British Columbia, and they won their case. It was sent back to be reassessed.

Mr. Chairman, if you read the case, you will know that justice has been done; that fairness and equality have come about. They were required to assess that hotel on the same basis that all the other hotels around them were assessed. I fail to understand why the government wishes to bring in these changes. These changes will hurt the little people. They'll hurt the people who own homes. Right now an owner of residential property can go into the municipal hall, look at the assessed value of his neighbour, the people up the street, realize and substantiate to themselves that they have been unfairly assessed and go and make an appeal to the court of revision. The moment you take that out,

[ Page 3354 ]

you are now into the business of actual value. That requires appraisals to be done. Certainly the owners of the Grand Pacific or the owners of the Hyatt Regency can afford to hire appraisers, but you can't even hire an appraiser for the amount of the taxes that you'll be trying to save.

Individual homeowners will have a very real problem of ever winning a case when it's their word versus the assessor's word on the question of actual value. They will be arguing with an assessor who does it eight hours a day, five days a week, forty-whatever weeks a year. They will only be able to argue it on the basis of actual value. If that is not the case, why has this change been proposed? The amendment has been done for a purpose. It's quite clear: it's to take the words "fair and equitable treatment" out of the section. The big boys will have no problem. They will be able to smother anybody with talent and with appraisals.

There is one more matter; I think I've got a little time left yet. The minister has said that one of the problems we have is that people always go in looking for the lowest common denominator and trying to get their assessments reduced to that amount. Surely we all know that is not the way the system works. Yes, if there is a comparable property and if the assessor who is there and fighting his case doesn't find a series of other properties that are more comparable, then obviously the assessor is going to win. I simply cannot accept that this is to stop the whole assessment base from being eroded down to the lowest common denominator.

When I was speaking to the commissioner of the British Columbia Assessment Authority, he told me how good their assessments are. Of course, they keep track of what properties actually sell for compared to the way they have been assessed. That ratio is up in the 95 percent range. If they're so good, why do they want to change it? What's the problem? There surely isn't one. We have a system right now that works very well.

One other thing is that it has been suggested to us that we are only representing the interests of -- as they are called in this business -- the hired guns. Well, I can assure you that when you've been in this House for as short a period as I have and have spent your life worrying about a whole bunch of other things, not about assessments and the way the B.C. Assessment Authority works and all the court cases, it is simply inconceivable that we would be expected to study and understand this subject in the very short time that elapsed from the introduction of the bill, along with -- we're up to Bill 82 now -- all the other bills, without listening to people who are knowledgeable and can help us with this.

I notice that I stand here just with other MLAs, while the minister is surrounded by bureaucrats. He's got assistant deputy ministers and commissioners of the B.C. Assessment Authority. He has people who work in policy and planning. He has deputy ministers, and they're all there. We have not, I assure you, been bamboozled by the hired guns. They, Mr. Chairman, have been bamboozled by the bureaucrats. The bureaucrats have been waiting a long time to get these changes in which will simplify their lives. This is their big opportunity: the first session, neophyte MLAs. They swamp us with their bills -- 82 of them -- and then they'll just slip this through. The UBCM agrees with it. We'll just slip in sections 17 and 20. Well, I can assure you, as you can probably tell, that I am not the spokesman for the hired guns. I listen to them. I'm also not the spokesman for the doctors of this province, although it was appropriate to listen to them, too.

[1:45]

Whether it be Bill 66 or whatever, when you're on government side you have a whole army of advisers, paid for by the taxpayers. But if anybody in the opposition benches listens to someone, they are considered to be in their pocket.

Although this proposed amendment doesn't really do quite what I would like it to, I accept and recognize that the intent of my amendment must not change the intention of the motion. So I have prepared this. If I may, Mr. Chairman, I move that Bill 66, Assessment and Property Tax Reform Act, 1992, be amended in section 17(a)(b), line 4, by adding the word "estimated" before "actual" and adding the words "applied in a consistent manner" after "value."

On the amendment.

The Chair: Does the minister wish to comment on the amendment while we're examining this?

Hon. R. Blencoe: I will comment on the amendment, but first, because we've had a lot of words from the other side in the last few minutes....

An Hon. Member: Overwhelming?

Hon. R. Blencoe: No, no. First let me say to that hon. member and....

The Chair: Hon. minister, until we dispose of the amendment, we would be talking and dealing with the amendment.

Hon. R. Blencoe: Yes, I'm going to get to the amendment in a minute, hon. Chair.

A lot of things were said prior to the introduction of the amendment, which I really wanted to respond to very quickly.

C. Tanner: On a point of order, the Chair has accepted an amendment, and the minister should be talking to the amendment, not what went on before.

The Chair: Hon. minister, would you like the Chair to read the amendment, and then we could keep comments focused on the amendment?

The amendment to section 17(a)(b), line 4, reads: "...adding the word 'estimated' before 'actual' and adding the words 'applied in a consistent manner' after 'value'."

Hon. R. Blencoe: Yes, I hear the amendment, and I'll make some comments and suggestions about it, but there were some preliminary discussions leading up to

[ Page 3355 ]

the amendment, which I assume was the member's intention to give the rationale for the amendment.

First, regarding the member's comments about inadequacy of staff to prepare the member and his colleagues for this bill, the hon. member fails to remind the House that I have made every opportunity for the member to be briefed by my staff -- and the Assessment Authority. Numerous discussions and briefings were held, and if the hon. member still doesn't understand the intent of the government, I can only conclude -- or one can be led to conclude -- that he's a little a slow in terms of the intentions of the government.

D. Symons: On a point of order, I believe we are speaking to the amendment, and I haven't yet heard any words from the minister regarding the amendment. I wish he would keep his comments to that, and the Chair should order him to do so.

The Chair: The Chair is sure the minister will be participating in the debate on the amendment when he resumes his debate. Thank you for the point of order.

Hon. R. Blencoe: In regard to the amendment, in the buildup to the amendment, the member referred to three cases that I indeed utilized to give the reasons we wanted to move in the direction we were actually going in this bill. In terms of the Coast Apartments, the value of that property was reduced, even though the Assessment Appeal Board accepted that the assessment market value estimate was correct.

The reduction was based on equity with only three comparable properties. Of course, the question that arises and that we are concerned about is: what about the rest of the properties in the area? Where is the equity for them? Clearly there was no equity for them. The value was already in the range of accuracy required. So that deals with Coast Apartments.

In terms of Dueck's on Marine, the assessment was reduced by $400,000 by comparison to the sale of only one property. You cannot make a determination on equity based on one sale. That's the kind of so-called equity we wish to deal with, which clearly is not equitable.

Interjection.

Hon. R. Blencoe: In time, hon. member, in time.

In terms of the Lynn Holdings case, the assessment was reduced by 40 percent on the basis of an unsubstantiated value on one comparable hotel suggested by the appellant's agent. One! Just one. That saw the assessment reduced from $16 million to $11.5 million, based on one comparable hotel suggested by the appellant's agent. That's not equity, hon. member.

Interjection.

The Chair: Order, hon. members. Through the Chair, please.

Hon. R. Blencoe: That has nothing to do with equity at all. Hon. member, in the buildup to your amendment, you mentioned that individual homeowners are going to be affected in their appeals, and that they're not going to be able to appeal using the neighbours' property values.

Well, you're quite wrong; you're absolutely wrong. The individual homeowner can still appeal and can still point to the value of nearby properties. Evidence about nearby properties will still be conclusive if it is consistent with actual value, and, indeed, I have the training manual for the 1992 courts of revision. Let me give you an example we are using in the courts of revision that they may come across in terms of listening to appeals.

Here's an example:

"As you see, the home was assessed at $125,000. That's almost 20 percent higher than our last assessment. We've made some calculations with other houses in our neighbourhood. I calculate our assessment to be high by about $10,000. For example, the home at 926 on my block is of the same vintage and the same style, but the owner of 926 says his assessment is only $113,000. I have a photocopy of my neighbour's assessment notice and photographs of both houses to show how similar they are. We also live next to a school playground, something I believe makes our home less attractive to a prospective buyer. The noise from the playground can get pretty loud during school."

Hon. member, we give an example of the very thing you're saying we're not going to allow to happen. It's right here in the manual, based on the....

Interjections.

Hon. R. Blencoe: No, no. The court of revision is not changing, hon. member. That's where you're wrong. You're completely wrong, hon. member. Individuals can still appeal, and they can look at their neighbour's property. But that member knows what we're trying to get at -- he knows exactly -- and so does the third party opposition. We are trying to get at those examples of the lowest common denominator, which clearly have got nothing to do with real market value. But because of this so-called equity issue, major reductions in assessments are being allowed, and of course the consequences are that the very person you wish to protect, the individual homeowner, is having to take up the slack.

Does the hon. member not realize that a reduced assessment for a large property owner means big tax increases for the average property owner? That's the case that we're trying to make, hon. member. That's who we're trying to protect in this legislation, and that member knows that.

I move the committee rise, report progress and ask leave to sit again.

The House resumed; the Speaker in the chair.

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

Hon. G. Clark moved adjournment of the House.

Motion approved.

The House adjourned at 1:56 p.m.

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