1993 Legislative Session: 2nd Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
TUESDAY, APRIL 27, 1993
Morning Sitting
Volume 9, Number 8
[ Page 5483 ]
The House met at 10:03 a.m.
Prayers.
Hon. G. Clark: I'm delighted today to introduce to members of the House a couple of distinguished British Columbians: Len Werden from the B.C. and Yukon Territory Building and Construction Trades Council, and Bruce Ferguson from the Tunnel and Rock Workers' Union, Local 168. I would ask the House to make them welcome.
Hon. G. Clark: Section A will be sitting today debating the estimates of the Ministry of Forests. In the main House, I call second reading debate on Bill 3, the Build BC Act.
BUILD BC ACT
(continued)
The Speaker: The official opposition House Leader on a point of order.
J. Dalton: According to the provision in rule No. 9 of the sessional order passed March 31 and amended April 21, Section B can "with consultation consider bills after second reading." Therefore section B becomes a Committee of the Whole for the purpose of considering such legislation.
Bill 3 is in second reading and is to be debated in this House, not at the committee stage. I submit there is no provision in the standing orders or in this sessional order that was passed March 31 and amended April 21 for the referral of a bill for second reading when section A is sitting concurrently.
The official opposition is concerned that effective participation of all members is compromised by calling Committee A at the same time as second reading of a bill, particularly one as important as Bill 3. In addition, why is the government suddenly bringing this bill back on the order paper when we have not debated it for over a week?
With consultation, we are prepared to consider bills after second reading while Committee A is sitting -- that's the provision of rule No. 9 in the sessional order. We are opposed to a bill being considered for second reading when Committee A is sitting. We recognize consultation has taken place, but we are opposed to this process, and certainly no consensus was reached on this particular matter.
I would add one other thing. According to our findings, there's no precedent for such a practice in this Legislature -- to have concurrent second reading of bills and estimates in Committee A.
Hon. G. Clark: I'm delighted, of course, that the opposition is prepared to consider cooperation with respect to matters of the House, and I'm pleased that the member made that point. I'm also disappointed that no consensus can be achieved in this chamber with the official opposition. But of course, that's not uncommon in matters of parliamentary practice.
However, I would make the point that rule No. 9 in the sessional orders is what I would consider to be permissive, not restrictive. I think that's the key point. The purpose of all the discussion in the House and the reason for this sessional order was to allow bills to be debated simultaneously with estimates. That section referred to is put there precisely to permit the House, if it chooses to do so, to hear debate in the main House and estimates in committee at the same time. It is not, in any way, shape or form, a restrictive section; rather, it is permissive, and I'm sure you'll find that.
D. Mitchell: Just briefly on the official opposition House Leader's point of order, I think the official opposition House Leader is quite correct. There is neither authority nor precedent for this House to be considering legislation in principle in the second reading stage and to be simultaneously reviewing estimates in Committee of Supply. There is no precedent for that in the history of this assembly; there is no specific authority. Neither the sessional order that the Government House Leader has referred to nor the standing orders of this House allow for such a precedent. The Government House Leader did not ask for leave when he moved his motion today. He did not ask for unanimous consent; he simply moved the motion. His motion is clearly out of order, hon. Speaker.
J. Weisgerber: I think we should, as members of this assembly, consider our responsibility to the people of British Columbia: that is, to manage our affairs; to conduct the business in this Legislature and in these precincts in the most effective way, and in a way that best serves the people of British Columbia. If indeed we can do that by debating legislation in this House and also considering estimates in Committee A, then we in the Social Credit Party have no objection to that, and we would certainly recommend to you that you permit this to go ahead today.
The Speaker: I have heard submissions on the points of order from all three parties in the House and from the independent, and I think on that basis I would....
An Hon. Member: Point of order.
The Speaker: We are actually already dealing with a point of order, hon. member. I will take your point of order after this one.
I thank all hon. members for their submissions on this matter. The Chair does have in front of it the sessional order that was passed by the House, and indeed the sessional order does authorize the Committee of Supply to sit in two sections. It appears to the Chair that this order is not mandatory in terms of the two sections sitting simultaneously, and indeed Section B has considered estimates without Section A sitting. It seems to the Chair that if the Government House Leader calls for estimates to be considered in Section A,
[ Page 5484 ]
which is a creature of this House, and no further order is made for Section B here in this chamber, then the House must remain intact to carry on the business that the House may choose to bring before it. Therefore the Chair does feel that the call for business to continue in this House this morning would be in order.
Just to clarify that ruling, as I have just mentioned, I think that Committee A, which is obviously a creature of the House by the sessional order, can continue, which does leave the House available to consider any business it chooses to bring before it.
I will carry on with a second point of order now.
A. Warnke: Hon. Speaker, I rise under standing order 50, because the House was organized to accommodate the Committee of Supply and therefore broke into House A and House B. Considering that a sessional order was to cover this accommodation, I did not hear a motion from the acting Government House Leader this morning. Therefore, by not moving a motion, the acting Government House Leader has violated section 50 of the standing orders.
The Speaker: On the point of order that's just been raised by the hon. member, the Chair has standing order 50. It appears to the Chair that the Government House Leader has actually called for Committee A to sit and for a continuation of second reading in this House. Unless the Chair has misunderstood the point of order, no motion would be necessary. That is proper procedure for calling the business of the House.
Is the hon. member for Saanich North and the Islands rising on another point of order?
[10:15]
C. Tanner: Yes, Madam Speaker.
Some weeks ago this House undertook to change the sittings of this House to accommodate the government so that we could have two sittings of the estimates at the same time. The arrangement to change the orders of the day and the rules of sitting was made on a vote of this House. Now we've got another precedent being set, and this member is not convinced that there's a precedent in this House for debating estimates and legislation at the same time. Could the Speaker indicate to the House what precedent she's working from in the ruling she just made?
The Speaker: I think the Chair has been very flexible in allowing two additional points of order, which are basically debating with the Chair on the ruling on the first point of order. I appreciate that this is an issue of great concern to members in this House, but I do not consider the second point of order to be any different from the first two points of order that have been raised. The Chair, in making the interpretation of the sessional order, has declared that the business of the House that the Government House Leader called is in fact in order. I propose that we now proceed with that business.
On second reading of Bill 3.
A. Warnke: Point of order, hon. Speaker. I believe you sought clarification in the previous statement you made. Therefore, to clarify, the standing order does say: "All motions except the motion to adjourn" -- and a closure motion -- "shall be in writing and signed by the mover before being debated and put from the chair."
The Speaker: Hon. member, I regret that I must interrupt you. This is essentially the same point of order that was raised previously, and the Chair has already commented and ruled on that point of order. I'm now calling for a speaker to rise to debate Bill 3.
I want to correct that. We are actually still in the middle of debate on the six-month hoist motion regarding Bill 3. Is the hon. member for Vancouver-Quilchena rising to speak on that motion?
On the amendment.
A. Cowie: Hon. Speaker, you've judged that we will continue to speak, and I'm standing in order to do that.
First of all, I want to welcome the minister back from New York and Toronto -- wherever he was raising funds. The Legislature hasn't been the same since you've been away.
I am naturally disappointed that all members of the Legislature won't be able to hear the debate on this very important bill, but I will proceed. It's a very important bill for the province.
Interjection.
A. Cowie: Absolutely.
I have the pleasure to support the amendment that would essentially call for a six-month hoist so that it could be communicated to all citizens of the province, so they can judge its impact.
The province certainly must need the funds to implement a number of their programs, as it was our understanding that there was no urgency with this debate. I guess it's primarily because the minister is back and can handle it personally.
During earlier debate on this bill, the government members said that this was really a free enterprise or private enterprise type of bill. I suppose it is, in that....
Interjections.
A. Cowie: Hon. Speaker, I'm having a hard time hearing.
The Speaker: Yes, hon. member, I can appreciate that. The Chair is also having a difficult time hearing the debate. Could I ask members to come to order. Please proceed, hon. member.
A. Cowie: I suppose this bill could be considered a private enterprise approach in that funds are often needed to undertake projects, and in that the funds would certainly be paid back through mortgages or whatever process is normal. In this particular case we're living in a period of restraint, and I am definitely opposed to spending great amounts of money unless
[ Page 5485 ]
we are absolutely sure that the mechanism for spending that money is set up and that there is a great deal of accountability within that mechanism.
There is absolutely nothing that this bill provides in the way of funding that cannot be done through the normal process of government -- which has been done for years through the normal departments, through the Crown corporations. There's absolutely no reason for this type of funding. It is essentially setting up a double accounting system so that we have the accounting that's done within the normal process -- the Ministry of Highways and other ministries -- and then the Crown corporations, largely through this new committee of cabinet that's being set up. There's no accountability through this House. The government's own accountants, Peat Marwick, warned us against setting up such special accounts and said that we should go through the normal process, and yet we are proceeding.
Bill 3 is wide open. As I mentioned earlier, the minister is back from raising funds in New York. Approximately $1 billion will be needed in order to implement this bill. It will not be going through this House in the normal process, and it therefore will not be accountable in the normal process. The committee of cabinet is mentioned in the bill itself, but there is no information. In fact, the Minister of Highways, who introduced the bill, spoke on it for only 15 minutes.
There is, for instance, a great opportunity for funds to go into Crown corporations. It's an opportunity for more patronage appointments. There's a great opportunity to spend more money on senior officials in the $60,000 to $80,000 range, and undoubtedly we'll be looking for another $125,000 appointment. One can't, I suppose, be too cynical about it, but are we just looking for another appointment for Robyn Allan, for example, now that she's no longer employed?
Bill 3 outlines four areas of spending. It will establish agencies for economic development. Well, we've had processes for economic development in this province for many years. In fact, I was disappointed when that was brought in earlier. It gave an opportunity to hire economic development officers throughout the province, who really were just competing with each other for a very limited number of potential developments for their areas. In the lower mainland alone we had something like 20 economic development officers, all competing for the same industries. It was in fact an employment program for economic development officers.
Already, as I mentioned earlier, the existing ministries can go out and raise funds through the normal budget process. I'm in favour of spending some money during this difficult time. One example is the Island Highway; I'm certainly in favour of that. It's about time we got on with that facility. I'm not absolutely certain that tolls on that highway will be successful. Certainly that project has been delayed for many years, while other projects in the lower mainland and elsewhere have proceeded. Why should the citizens along that route now have to pay, while other citizens in the province didn't have to pay for their improvements?
Yes, we need school improvements -- there's no question about that -- but we can go through the school boards in the normal process. Yes, there's a need for increased hospital facilities in the areas around the province, especially if the minister is successful in setting up her new program of decentralizing health services.
As far as infrastructure goes, we have a process through the Ministry of Municipal Affairs, which I happen to be the critic for, where spending can be provided to the municipalities, where that responsibility can go out on a shared basis so that it can be monitored and we can ensure that we're getting good value for money. Under this process, we are not going to be assured at all that that funding is necessarily spent in a very wise way.
The one thing that irks me more than anything else, I suppose, is the fact that this money can be spent on training and advanced education. Certainly we need training and we need more money for advanced education, but it shouldn't be done in this way. Borrowing is usually restricted to capital projects, where it's outlined what projects are going to be implemented and how that money is going to be paid back. That's the way municipalities do it when they are forced to balance budgets. That's the way this government should do it. More and more, I am beginning to think that we should be moving into some form of balanced budgets so that the governments are held accountable at the end of at least their first term. Hopefully there'll only be one term for this government, the way they're operating.
This is a very dangerous process that we're getting into at the present time. I'll give you one example. We already know that this government has a plan for the PNE grounds -- Hastings Park. They have a plan to introduce commercial facilities, to get on with the Tivoli Gardens, when we know that Tivoli Gardens won't work on the PNE grounds. A Tivoli Gardens approach has been very successful in Copenhagen, Denmark. It has to be very centrally located near public transit, and where people -- tourists, in particular -- can go visit it. The PNE grounds is not such a facility. It's a destination facility, and has, as a whole, been reasonably successful over the years, attracting B.C. citizens primarily, and mainly to the 17-day PNE exhibit.
What do we have at the PNE grounds now? We have a board, primarily NDP-appointed except for the city of Vancouver representatives. This year is the first time that this board will have made a profit -- the projections are of only $200,000. That is well below the amount of profit that this board or preceding boards have made in the past. Normally the profit's in the $1.6 million or more range so that they can pay for the 17-day exhibit in late August and early September.
I don't know what's going to happen this year. The board will probably have to go into a deficit position. We know that they've asked the provincial government for additional borrowing capacity of $2 million so that they can see themselves over this particular period. This particular board doesn't seem to be accountable. The surrounding citizens of Hastings Park don't want the project that's being proposed. It seems to be a favourite project of the minister -- and perhaps of Bob Williams, who also lives in that area.
[ Page 5486 ]
The funding for that will come out of this particular bill and through the cabinet committee, which will not be accountable to the citizens and where we will have absolutely no say in it,. As far as the racetrack goes, we know that it's going to cost a tremendous amount of money. It's been projected that they'll need another $25 million at least to upgrade the present facility, if they do go ahead with this mad scheme of making the racetrack larger rather than relocating it elsewhere. Delta seems to be the favoured location, if it were not to go on the PNE grounds. We know that it can never be a first-class facility. Certainly it cannot be the mile track that the racetrack industry feels is absolutely vital.
[10:30]
I'm not going to speak a great deal more on this. I think I've spoken for perhaps 10 to 15 minutes, which is all the minister spoke for in introducing this bill. I want to close by saying that this $1 billion effort will lead us into even further deficit situations eventually, because that's what debt really is. This is just hiding the debt. We're borrowing $1 billion that should be shown as debt this year. As I said earlier, it's a two-tier accounting system where it will not be accountable. They're really just parking the debt. We should be living in a time of constraint. The NDP brothers in Ontario have learned that, and they brought in a very realistic budget this year. Surely that's what this government should be doing. It should be cutting out the layers of government, working to encourage small business and getting on with what I hope in the next few years will be a better economy for this province. We need more money, yes, but we do not need it through this particular mechanism.
L. Reid: I rise today to support the amendment to hoist this piece of legislation. This legislation requires ongoing scrutiny. Discussion from the public over the last week has looked at Build B.C. as Bilk B.C., as an opportunity to remove this government from ongoing scrutiny. Why that is defensible and justifiable is beyond me. The reason people elect governments is for some kind of accountability in the process, for somebody to stand up and say: "I am responsible." Creating another Crown corporation and moving scrutiny further and further afield is not accomplishing the goals that this government said they stood for.
To remove any kind of accountability and to continue to stand in this House before British Columbians and suggest that it is somehow defensible leaves the entire process of government open to question. Members in this House talk about the cynicism with which people look at politics and politicians -- the lack of regard, the lack of respect for the process. This is exactly the reason they are adopting those views. This piece of legislation allows people to believe that government is less accountable and that it will become, under this particular administration and mandate, less accountable.
It makes limited sense. The legislation didn't make any sense when it was introduced, and it makes less sense day by day. I have to ask: what is the urgency? Why are we proceeding so quickly on this piece of legislation? Is it another opportunity to ram something through and to surprise the British Columbia electorate once it's in place? I trust that this is not the case, yet my experience with the consultative process in this chamber leaves a tremendous amount to be desired. It simply has not transpired. The fact that this government is not prepared to take a second look at this piece of legislation and allow the six-month hoist to go forward simply reinforces the notion that they are absolutely not interested in consultation. There are examples all over this province where once something is in place, we'll strike a committee to examine it in some detail. Again, why is that a defensible position? It leaves a tremendous amount to be desired.
Individuals in this province have concerns about accountability. I believe that a great deal of the electorate has tremendous concern about accountability, scrutiny and due diligence. They're not willing to simply accept the notion that good decisions are made for them. They want to participate in the decision; they want to be part of the process. This doesn't allow for that. This allows for a hands-off distancing of government from the people. These corporations are a buffer zone that improve nothing, in my view, and allow more distance to be placed between the taxpayer and government.
The taxpayer is the only priority of the Liberal opposition. They are the people who fund this enterprise, who fund all of the programs in British Columbia. They have to believe in the program.
Our reading of this issue is that they are not interested in another Crown corporation, another government agency. That is why they believe they have funded ministers' offices and ministries in this province, whether it be the Ministry of Tourism or the Ministry of Health -- to provide some direct consultation and accountability, and to return some kind of accountable decision to the people. To put in a buffer -- frankly, it's this huge chasm now, where the ministers are on one side and Crown agencies on the other -- to move us through that and somehow suggest we are getting the best return on our dollar, is ludicrous. We are going to be spending more money to pay for decisions twice. The decision should be reached by the minister in question; it should not be reached by the furthest arm of government. We have paid those bills as taxpayers. All of us in this chamber and all of us in British Columbia who are taxpayers have paid once. We are not interested in paying any more dollars to an enterprise that simply dilutes the process.
At the end of the day we're here to stand up for democracy, to stand up as parliamentarians. We expect some accountability to the provisions of this House, and we expect as taxpayers some accountability for where our dollars flow. The name of this piece of legislation, Bilk B.C., is right on. There is no justification for moving something beyond the realm of control, beyond some kind of accountability, and that is exactly what we have here. We have individual ministries refusing to take responsibility and suggesting that somehow it would be better for the people of British Columbia if they didn't have that responsibility. If indeed that is the case, these hon. ministers should resign from those positions. If they are not prepared to
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do the job, if they have not accepted the responsibility they received upon appointment by the Premier of this province, they should stand back from the decisions that need to be taken and allow someone who's prepared to take those decisions to stand in their place.
Let's take the Minister of Transportation and Highways. If Bilk B.C. truly responds to transportation and highways, why in the world do we have a Minister of Transportation and Highways who's not going to be responsible for the construction of roads in this province? I have difficulty with that, and I'm sure there are British Columbians who have difficulty with that. Again, removing the process makes no sense. If we're not going to have ministers who are happy, privileged, to take those decisions, what in the world are they doing sitting in government, sitting on the cabinet side of this House? Executive council has to have some responsibility to the people.
The funding base required to create this Build B.C. -- Bilk B.C. -- legislation will be tremendous. Certainly my personal experience with this government is that they have not yet provided a reasonable cost accounting for something like the health labour relations accord. We have the Minister of Finance saying $50 million and the HLRA saying $529 million -- a tremendous variation. Indeed, if this piece of legislation had come with any cost accounting, could we trust the figures? I suspect not. I suggest this is another attempt to whitewash the true issue.
The true issue is whether or not this government is prepared to do the job of government, to have their ministries directly accountable to the people. My take on this today, and certainly my experience over the last 18 months with this government, is that they're not interested in process, they're not interested in consultation and they're certainly not interested in accountability. If they were, they would not stand before British Columbians today with a piece of legislation, Build B.C., that truly is Bilk B.C. This is an opportunity for the grandest slush fund of them all.
These are the same individuals who, when they were in opposition, took tremendous delight in discussing the budget stabilization fund, the BS fund, of the previous administration. How is this any different? How is this an improvement? How is this providing accountability to British Columbians? This is a variation on an old, old theme: remove the dollars from columns in the ledger to a situation where there is not intense scrutiny, where there is no due process of deliberation. For a government that stood up and said open government, consultation and process, they are falling into this huge trap, and I'm convinced that they believe the public will buy it. But I'm not convinced the public wants to jump into the same trap with them. Given the current tenor of the taxation discussion in this province, it seems to me that British Columbians are only interested in direct accountability and participatory democracy at this stage of the evolution of this province and politics in western Canada. They are interested in knowing exactly what their politicians do and exactly what the costs are.
My experience as Health critic looks at cost accounting as being almost an aside. To me, where we are with the HLRA accord is an example. It's like asking for a financial statement from a financial planner and only getting the notes and anecdotes, not the numbers in the columns. This is exactly what we're getting with Build B.C. We're getting anecdotal statements about what it might be and what it may create; we're not getting what it's going to cost British Columbians. We're not convinced that the value, as stated here, will actually translate into any reasonable enterprise for British Columbians.
As taxpayers, British Columbians believe that we have a Minister of Transportation and Highways and a Minister of Labour. To dissect those positions into smaller pieces by having corporations floating along out there, which are less accountable -- if they're accountable at all -- takes British Columbians on a walk through the park. We have no sense of the true costs. We have limited access to the key assumptions, if you will. I won't even dignify those with "a projection of costs," because they are assumptions on the part of this government. We have ministers who will stand up and defend removing themselves from the process. Maybe they aren't able to make those kinds of key decisions. But if that is the case, I can only assume that folks who will make some of those decisions will soon be replacing them.
As a taxpayer and a British Columbian, I don't wish, a year from now, to see many entities such as Build B.C. created, to somehow polarize themselves off the ends of the cabinet benches and just float out there to take the flak, if you will, and try to respond to issues when British Columbians come forward with very significant issues. Let's be reasonable, hon. Speaker. If the ministers aren't prepared to take their responsibility today, they won't be prepared to take it a month or six months from now. Come the next election, I certainly believe you will see ministers standing up and saying: "It's no longer my responsibility. We must address that to the Crown corporation of the day."
The whole issue for me, as a parliamentarian, is to return some fineness and accountability to this process and some sense of what it is to be a parliamentarian. For me, a parliamentarian is someone who is directly accountable to the people who put them in office. You are there to perform a task and to take direct responsibility for the task you have been assigned. For me, you can never justify shifting that responsibility to committees or task forces. At the end of the day, British Columbians must know where the responsibility comes home to roost. In this case the responsibility will never come home; it will be plunked off in a bunch of different areas around this province -- around this government.
[10:45]
We need to question the urgency for Build B.C. Why today? We only began the Health estimates yesterday. It seems to me that an expenditure of $6 billion deserves at least two, three or six days of back-to-back debate. This is the most significant budget item for the province -- $6 billion, a third of the budget. We are somehow being asked to believe that Build B.C. takes greater priority and is of a more urgent and pressing nature. I have tremendous difficulty with that. I believe that we
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need to establish the priorities of this government -- if indeed Build B.C. can be considered a priority of this government. I have serious concerns about that, because again we are suggesting that direct accountability somehow takes a back seat to whether or not we are going to create another Crown corporation, which is going to dilute even further any kind of accountability or responsibility in this province. What's wrong with individual ministries assuming direct responsibility for their jobs. In any other business, any other walk of life, people would accept responsibility. They would not come to the tough decisions and find someone else to take them -- and at the taxpayers' expense. It is not going to be an insignificant sum of money to create this entity. This is going to be a significant cash cow, if you will, for the NDP government. A significant pool of dollars will be required to ensure that this entity can take the flak from the government and from other interest groups in the province.
My colleague from Vancouver-Quilchena mentioned the urgency of the debate, and asked: "Are we looking for a new position for Robyn Allan? Are we looking for someone whose severance package is just about to run out?" I am intrigued that there is urgency for Build B.C. today; that this again would take priority over something like the Health estimates, which are truly a $6 billion expenditure for the province of British Columbia. I take tremendous issue with all of these things. If indeed this is about good government, the hoist motion is absolutely critical to ensure that this piece of legislation, at the end of the day, is good and reasonable legislation, is something that we are interested in pursuing in the province of British Columbia. We've talked about slush funds before. When these individuals were in opposition they said that was not the way to proceed. The auditor general in this province has said that that is not the way to proceed. There must be line items in budgets that people can go back and scrutinize. There must be sober second thought. There must be due diligence on behalf of all British Columbians.
Are we simply creating another layer of bureaucracy on all those other layers? I'm not convinced that Build B.C. is going to streamline the process in any way, shape or form. I'm not convinced that this is going to make the decision-making in this province any more efficient. It seems to me that we're diluting the process. It seems to me that we're involving other players in something that should rest solely and squarely on the ministers of this government. It seems to me that we are creating an entity which will be able to masquerade debt in this province. And it seems to me that Bill 3 will simply become another taxation vehicle in British Columbia, an opportunity to create funds to fund this entity which will allow the Crown -- the ministers of cabinet -- to not do their job. When we as opposition stand up and say, "What about this? Where are you headed with this? Why is this a reasonable decision?" they will simply say: "That is out of our hands. It is now in the hands of a Crown corporation, and you may receive the annual report two or three years later." That is exactly what happens with Crown corporations in this province. Why in the world this government would wish to add yet one more is alarming.
I spoke first on this bill and said it was a control mechanism, an ideological bent that I did not wish to see this government pursue. I do not believe it is in the best interests of British Columbians. I hold those views, and I hold them very strongly. And they are only reinforced by the urgency with which this government proceeds on this particular piece of legislation. If they're willing to stand up and say it is the finest piece of legislation they have ever written, they should be prepared to take it forward into a hoist motion and let British Columbians decide if indeed these cabinet ministers, this government, is truly in tune and truly responsive to where British Columbians wish to go.
Certainly it's not my understanding that British Columbians wish to proceed in that fashion. They want direct accountability; they want direct democracy. We have individuals in this province discussing recall and initiative. This is not initiative. This is removing direct accountability from the process. I want an opportunity to reflect on this piece of legislation with the members of my constituency. I want that opportunity for all British Columbians. I trust that all 75 of the MLAs in this House would have discussed at every opportunity the intent and direction of this legislation with every single person in their riding. That is our job.
This one is not being oversold by this government. The best contrast to that will be New Directions in health care -- a glossy brochure on every doorstep, and millions of taxpayer dollars to sell a product. If they believe as strongly in this piece of legislation as they would have us believe they do, then get the message out and have British Columbians truly understand the intent of this legislation. I would submit that this is not an innocuous piece of legislation. This is the tip of the iceberg in respect to where this government chooses to go, because they are not prepared to be accountable to British Columbians.
What's wrong with ministerial responsibility? How does this government define it? Is it how many Crown corporations you have created, how many committees or task forces you've struck, or how many committee that walk through the province? To me, that is not an evaluative tool. That is not a judgment of success in effecting any kind of change. It's simply taking many steps back from the process and saying: "It is no longer my responsibility." I personally don't find anything wrong with ministerial responsibility. I think that's where we should be in the 1990s. Since we now have women in government, we have people who understand responsibility. Why are they choosing not to exercise it? That is the question I believe comes to the fore every time this bill is discussed, because people want to know why this direction has been chosen.
The economic questions must play in today's discussion. Can we afford to create another Crown corporation? I think not. We have a Minister of Finance who tells us daily that we have to prioritize; we have to ensure that we have dollars for esential services in this province such as health, education and social services. That is the social agenda of this government. You will not find members of this opposition taking issue with health, education and social services being considered essential. You will find tremendous opposition from
[ Page 5489 ]
these benches about Build B.C., as a Crown corporation, being an essential service. There is absolutely no comparison, and someone needs to look at the economic impact. Someone needs to demand from this government a true and accurate cost accounting. I'm not clear why this government can't provide cost accounting on most of the issues they bring to the table.
I know it's certainly not the case in Health. The difference between $50 million and $529 million on the health labour relations accord is significant. Are we going to be faced with the same dilemma when it comes to Build B.C.? Are we going to be told at one point that it costs X amount of dollars, then a few weeks later ten times as much? It's not appropriate, because -- and I'll make the point again -- we've already spent the money on the ministries. That is what we are debating in estimates in this House: the vote for the minister's office and for the programs they wish to pursue. We've already spent the money for the minister's office to make those decisions. I believe that is what we are doing when we look at the minister's office and ministerial responsibility. I don't believe that British Columbians want to have to fund another entity which will not be accountable. I'm not clear if it's accountable to the ministers, but I can assure you that it's certainly not accountable to the people of British Columbia, who actually fund those exercises. It seems to me that we've lost sight of the relationship. Whose government is this? Whose money is this? Whose tax dollars fund these exercises? It's those of the average British Columbian taxpayer in this province.
We will have ministers on the other side of the House leap up and say: "We are spending government money." Again, I will make the point that it is not government money; it is taxpayers' money. When, magically, does it become government money -- when you have taken all there is? When you've taken all the money available from the taxpayer, does it become government money? This is another opportunity to take taxpayers' dollars and not return a viable product. They are not getting good value for the dollar. It's an abuse of the taxpayer in this province, and the litany of abuse that the taxpayer has faced over the last number of months is not going to improve with the introduction of this piece of legislation.
You will find members of the opposition who are in favour of creating an infrastructure and are looking at transportation issues in this province. But that is why we have a Minister of Transportation. We believe that is his role. We do not believe this is somehow going to return a finer product. It is an opportunity for the taxpayers to pay, once again, for the same product. They've already paid once.
My comments need to touch on the role of ministries in this province. If we are going to move to a number of different Crown corporations and agencies, are we going to delete ministries from the government benches? At the end of the day, no one from the government side of the House can stand up and suggest that we need both. Let's take the Minister of Transportation as an example. If we're shifting his responsibility into Build B.C., fine; cut the Minister of Transportation. I can't imagine that British Columbians want to pay twice for the same decision about infrastructure and roadbuilding.
The arrogance with which this government approaches the taxpayer -- as if there are bottomless pockets out there, as if they can buy in to every single whim of this government -- is absolutely unacceptable to me. Taxpayers have paid once, and taxpayers have spoken very clearly on what they are prepared to fund. If this Build B.C. legislation were to arrive at the doorstep of every person in this province, similar to the "New Directions" health care propaganda package, the question would be: why are we paying again for the same service? That's my question. That's the question my voters have in Richmond East, and it's a question that I believe the majority of British Columbians will ask. They are beginning to stop and ask: why the urgency? Why today? Why are we moving forward with the creation of a Crown corporation? Why does it take precedence over something as significant as the health estimates, something that directly impacts on every single British Columbian? We are allowing those estimates to take second place to something like this -- something that is a dilution of government responsibility.
It's shocking to me that ministers and members of the government are going to stand up and justify removing due diligence from the process. It happened earlier in the debate on this legislation. I can be sure that it is going to happen again, because there's a lack of responsiveness from this government. There's a lack of being truly in touch with the issue: creating something else to remove responsibility. I can only imagine that we're going to be treated to that in the next few moments.
Accountability, bureaucracy and decision-making are issues that this government and we as parliamentarians must confront over the remainder of this mandate. This is not a direction that I believe British Columbians would be happy with, and it is not a direction that's defensible. It allows the government to mask debt, to move money out of any kind of intense scrutiny and well away from this forum, which is the only forum where you can stand up and discuss issues that directly relate to the taxpayer's pocket. Once we have removed it from that kind of scrutiny, I'm not convinced that it's going to improve the situation and that it is in anyone's best interest. What about some reflection? What about an opportunity to take a look at it?
[11:00]
So again, I stand firmly in favour of the motion to hoist this piece of legislation. A six-month hoist would allow for some public consultation. It would allow the public to truly understand the mandate. I'm not clear that the government understands the mandate. I would hope that this is not just a trial balloon, because at the end of the day, that's why people strike committees and consult before -- to find out if an idea is viable. This government understands the committee process; it just doesn't understand the timing. They strike the committees after the fact; they create the commissions after the fact. It's not helpful, and I don't think it's going to wash in terms of where people wish to be.
[ Page 5490 ]
Again, why a slush fund? These same individuals said: "We cannot support the budget stabilization fund, because it is a slush fund." Convince me today that this is not a slush fund. That is our take on it. It gives dollars away from the chamber, the scrutiny of this House and opposition intervention. We are the checks and balances in this province. This is how a democratic system works: it is the responsibility of the opposition to provide the checks and balances. We can only do that if the actual discussion remains in this chamber. Once it is removed to a Crown corporation, there is limited access for the people of British Columbia to know where their tax dollars have gone and to exercise any kind of judgment on those tax dollars. That, to me, is the most legitimate priority in this province: the taxpayers, their dollars, and where they wish them to go. Those they elect into opposition provide those checks and balances, and that simply is not happening in this province. If we allow this piece of legislation to go forward, we are simply saying to the people of British Columbia: "Your opinion does not matter. We are taking away any right you have to pass judgment on how your tax dollar is spent." That is not why I came to this job. I came to this job because I wanted some kind of fineness in the process. The taxpayers' opinion in this province matters.
J. Pullinger: Hon. Speaker, I would like to ask leave of the House to make an introduction at this time, if I may.
Leave granted.
J. Pullinger: It's my pleasure today to introduce to the Legislature 46 grade 11 students from Ladysmith Secondary School, who are here with their teacher and some other adults to watch the scintillating debates today. I would therefore ask the House to help me make them welcome.
G. Wilson: I found it somewhat curious that in the debate leading up to Bill 3, when there was discussion on whether or not this was in order, we talked about certain creatures of the House. This is a creature of this government. On the surface it looks like a little mugwa, but add a little water to it and it becomes a gremlin of the worst proportions.
Let's take a look at why this hoist motion should be in order, because if we start to analyze what's in this document for the people of British Columbia who might want to know a little bit more about this, we can see that this piece of legislation gives sweeping powers to the Minister of Finance and the Minister of Transportation. It provides the authority for this government to move, essentially by agency, toward massive expenditures on behalf of the people of British Columbia without the benefit of debate, scrutiny or public accountability through the auditor general of this province.
For want of a better description, what is being proposed in this bill is nothing short of the creation of a new Crown agency -- another Crown corporation. While we start to look at this, the Minister of Finance and/or the Minister of Transportation may argue that it provides them with a borrowing authority that they don't have. We can see that not only does it provide a borrowing authority which is unaccountable with respect to the provisions of a normal budgetary process in this House, but also it provides an opportunity for revenue generation -- read taxation, tolls and additional attacks against the people of British Columbia -- to finance what essentially is a duplication of services, as was so eloquently pointed out by my colleague from Richmond East.
Let's take a look for a moment at why this hoist motion should be in place. If we look at the proposed purposes of this act, we see "coordinating the government's activities to achieve overall economic development and job creation goals." As was pointed out in the initial debates on this bill, we have such a ministry in existence today, and therefore any increase in expenditures on this matter is a duplication of cost.
We see that a second purpose is to provide assurance "that all regions of the province benefit from economic expansion and diversification." Well, we know full well that there is a full ministry, properly funded, with working, accountable staff members who already have as their mandate to provide that kind of economic benefit.
We see that the third purpose is "encouraging public and private sector investment...." Well, we have $100 million pumped into this as seed capital, with a proposition to be able to borrow additional dollars, to promote or provide public sector investment. I would suggest that will do exactly the opposite. It will send a signal to any individual looking at investment in this province that here again we have big, duplicative government that -- if you examine exactly what is in this document -- is now prioritizing its expenditures with respect to a Crown corporation that has sweeping powers yet no accountability.
We see that this bill is also to promote "training and investment in people as a...public sector investment activity." Let's start to really understand the words in this bill. I recognize that in this hoist motion we're dealing with its general philosophy; we're not going through the bill in detail, as we'll have an opportunity to do later in committee stage. But let's understand "investment in people" as an "investment in public sector investment activity." This Crown corporation is designed to take taxpayers' money, to raise money off taxpayers, in order to spend on behalf of the people of British Columbia in a manner that is unaccountable. I'll point out in a few moments just how unaccountable this proposition is.
It's important for the people of British Columbia to know that this Bill 3 is the most insidious of bills that have come before us yet. It transfers powers into the hands of really no more than a handful of people -- five, I think -- to make recommendations through orders-in-council to expend hundreds of millions of dollars of public funds.
It is a wrong way to go. Anybody who believes.... It's unfortunate that the Minister of Finance is not here for his rare weekly appearance, but I'm sure he's listening. He has to recognize that in this bill this
[ Page 5491 ]
government has moved toward a higher level of Crown agency involvement in what should be private sector development. This makes government more expensive. It makes government far more onerous on the people of British Columbia. It is not going to help reduce a deficit. What this is going to do is incur increased capital debt, and everybody in the province had better know that. When this government finally stands accountable before the people in the next election, it will have to reconcile the fact that it had an opportunity at this time to move toward downscaling government, reducing the size of government, more efficiently prioritizing existing tax moneys and using the line ministries in a more effective way, rather than creating a brand-new Crown agency.
[E. Barnes in the chair.]
The last and fifth purpose is "targeting activities...toward traditionally disadvantaged individuals and groups." What on earth are we doing creating a new Crown agency -- with a primary activity of looking at investment in capital construction projects, with a committee largely chaired by one minister, the Minister of Transportation and Highways -- that has as one of its five principal purposes to target activities toward traditionally disadvantaged individuals and groups? What does that mean? Why are we not doing this through the line agencies that we have now, or in the more creative, responsible manner that has been promoted -- and certainly my colleagues and I have been talking about it: the creation of a ministry of community development? It would bring together existing line ministries in a more cost-effective way to commit and to prioritize the money that is being spent now toward those people who are very much in need.
Had we gone with a ministry of community development -- as has been advocated, and certainly over the last three years I know that I have advocated that in virtually every part of this province -- we would have been able to commit existing dollars in a more effective way within the communities that need them. What we see in this is essentially the centralization of funds: taking those dollars and placing them in the hands of one minister who, with some appointed members, can then expend them in a manner that is totally unaccountable.
Some committees are structured in this bill, which is another reason that the hoist motion needs to be put in place. These committees are going to take the taxpayers' money, and they are going to have sweeping powers of expenditure that will allow this government to be able not only to increase expenditures in those areas but also to increase revenue by implementing new taxes on fuel and rental cars and putting tolls on highways. I suspect you're going to see revenue coming off Crown agencies in existence today like the B.C. Ferry Corporation, which has already increased fares, which is totally unfair to the people of Vancouver Island or of any area -- such as mine, Powell River-Sunshine Coast -- who are dependent on those ferries as an extension of the highways of this province.
Let us look at what this committee is doing exactly. If we take a look at the committee that is going to be set up by the Build B.C. special account, we see that it is going to do is provide advice to the executive council with respect to appropriate economic, regional, sectoral and equity employment opportunities for government spending. We're going to have a committee coming through a Crown agency to provide advice to Treasury Board.
Let's take a look at how many committees we've got advising this government right now. Why do we need yet another expensive committee to provide additional advice to this government? If this government wants to take advice, it should take advice from those agencies that are already working in the communities which can provide them with the necessary advice that they have to have in order to make sensible decisions. Appointing a new committee by a minister is not going to provide anything except an added tax burden on the people of British Columbia.
It has to develop criteria for reviewing, monitoring and evaluating expenditures from this special account. We have an auditor general in this province who does an exemplary job with his staff. If this government really wants to have this new agency accountable, have it accountable through a quarterly audit review by the auditor general, in an independent fashion that will allow the people of British Columbia to know exactly what is being expended. Don't provide the kind of private audit that is going to be made available to the Minister of Finance by this bill.
It is then going to provide advice to Treasury Board on the proposed funding allocations. As they prepare the budget, this new Crown agency is going to go to Treasury Board and give advice on how we should be spending our money on capital projects that traditionally has been provided through line ministries. If that is not an example of duplication of government -- of big government, more expensive government, more centrally controlled government -- I don't know what is. It is absolutely clear that this is a means of providing an end run to the Minister of Finance and the Minister of Transportation to be able to spend hundreds of millions of dollars of the taxpayers' money without the traditional accounting required in this Legislative Assembly.
I would suggest to you that the people of British Columbia should inform themselves on Build B.C. or B.C. 21, as it sometimes is called. They ought to make sure they understand fully what is being proposed here, because this is a departure from the normal process of government. It does not -- as my colleagues and I in the Liberal opposition would advocate -- make more streamlined, more cost-effective, smaller, more efficient government. It creates larger, more onerous, more expensive government that ultimately is going to go after the people of British Columbia for additional money. This special fund has already been given $100 million in seed capital at a time when we've got a massive, growing deficit in this province of $1.5 billion, and massive capital debt.
What are we going to spend that $100 million on? Are we going to commit it to finishing needed hospital
[ Page 5492 ]
projects through the Ministry of Health? Are we going to take that $100 million and settle the disputes in some of the schools that are still out, where children are having to be flown to various districts? Are we going to take that $100 million and start to look after those who, because of reasons totally outside their own control, are unable to bring in an income? What are we going to use that $100 million for?
[11:15]
I hear an hon. member of the government yawning as I go through this. Indeed, it is a tedious proposition, as we start to look at the expenditure of $100 million of the taxpayers' money on the creation of a new agency. Let's just take a look at what this government is spending $100 million on. It is spending it on the creation of a new Crown agency, with a new board appointed by the minister and approved by the executive council -- read additional patronage. This government is not embarrassed enough by the most blatant and outrageous examples of patronage to date; they have to find a new and more creative way to create additional jobs for the unemployed in their ranks, because they have to have their particular position of authority.
We've got the B.C. Transportation Financing Authority, which has the opportunity to borrow and spend. In the B.C. Transportation Financing Authority we see that there is going to be a board of four directors and the minister -- five people. What are the powers of not five of them but just a simple majority -- three? Three people in this Crown agency have the power to plan, acquire, construct and improve transportation infrastructure, without any kind of accountability to this assembly.
Let's dissect this. Planning is done by a very large and efficient staff in the Ministry of Highways right now. Why do we need to have additional staff here? Lest we hear members opposite say that this agency is going to use the Ministry of Transportation and Highways, we see that when an executive director is appointed to this new agency, that person will have the power to appoint a full staff component. That full staff component will not only increase this Crown agency to a full and major operating authority but it will also have full status, as government employees, under the Public Service Act, the Public Service Labour Relations Act, the Public Service Benefit Plan Act and the public sector pension act. If that isn't an example of an increase in not only patronage but also in government spending.... We're going to have a new Crown agency with a full component of staff who are going to be doing what is already being done by existing employees. Planning is done in Highways now.
Acquisition -- that's called expropriation. We have an expropriation process that is done through the Ministry of Transportation and Highways and the ministry of Crown lands. We have existing statutes that regulate that, and we have an existing staff. Why do we need a new Crown agency to do it? There is only one reason: because it allows this government to do an end run around due process and to plan to invest additional capital -- which they can borrow without any accountability here, on the backs of the people of British Columbia -- in projects that are going to be put into selected ridings. We'll get to that in just a minute.
We see that this is also going to allow them to construct and improve. "Construct" is generally considered capital projects, and capital projects are generally administered through the Ministry of Transportation and Highways. The tendering process comes into question here. If this new Build B.C. initiative and this new financing authority are going to allow the minister, with a majority of five -- read three -- to make recommendations to the Finance minister and Treasury Board for capital and then to the executive council, three people are going to be able to recommend the major capital construction projects in this province. This is called open government, involvement and consultation. I'll tell you what it's called, and it certainly isn't any of the above. It's called shifting the controls and reins of power to the handful of people who are going to run this province in the most private manner possible. This isn't open, public government; this is private government, which in my judgment, and in the judgment of those in the Liberal opposition, is simply going to increase the debt without any accountability for it.
It says that we're going to improve capital projects. I think the people of B.C., especially those people in small communities and the interior, ought to be aware that the improvement of capital projects, namely highway projects, is generally done through a tendering process by day-labour contractors. They are usually given out by a roster list through people who make application to the Ministry of Transportation and Highways, and now, with the privatization of the highway system, through a proper process of allocation. Bill 3 is going to allow that expenditure of money on the improvement of capital projects by targeting those activities "toward traditionally disadvantaged individuals and groups."
Let's be clear that what is going on here is a change in the manner by which small contractors have access to government expenditures for highway capital improvement projects. It is being proposed in a manner that centralizes the authority in this bill with the handful of people who will make the decisions and give approval to those projects. There is no guarantee that day labour will be adhered to; there is no guarantee that there is any process whatsoever to protect those day-labour contractors. The members opposite who may find this a trivial point have to know that contractors in many communities such as Pender Harbour, Powell River, Gibsons and Sechelt depend upon government contract work for a portion of the money that they need to keep their capital -- that is, their equipment: backhoes, bulldozers, trucks -- on the road in proper working operation. They depend on those contracts, because to go to the private sector without some kind of public sector financing on those highway projects makes it extremely difficult to stay in business.
I have grave fears that the powers and capacities of this new board under Bill 3 are going to make day labour a thing of the past. It is going to put the power into the hands of the government to assign those projects, and with this government's record of patronage, I suspect that the people who will benefit are not
[ Page 5493 ]
necessarily going to benefit in a fair and open tendering process.
It says that we're going to acquire property by expropriation. That's the building of capital by acquiring property. We're now going to have a Crown agency that can acquire public assets, but will that public asset be included in any kind of audit? Will the auditor general be able to table those accounts? No. Oh, sure, there'll be an audit. It says in here that there has to be an audit, but where does that audit go? It goes to the Minister of Finance, and the Minister of Finance takes it to the executive council, who will approve it, and it'll be done by order-in-council. When will this Legislature, with members in the opposition.... The government ought to take heed, because if this passes, they will have to be accountable for it. When are we going to have a chance to do a full and public audit of whatever capital assets this new Crown corporation acquires? The answer is that we won't. There is no provision in here to do that.
Not only are they able to acquire capital assets, but it says at the bottom here that they will be able to "dispose of property acquired under paragraph (b) by sale, lease or otherwise...." What's otherwise? If you don't sell it and you don't lease it, do you give it away? Who do you give it to? We already have a ministry for Crown lands; in an open, tendered process, the Crown lands ministry makes Crown land available to people who wish to purchase or lease it. There is a fair way to receive fair market value for Crown assets that are put into the public or private domain, so why do we need an agency with the right to sell and dispose of that property? Why is it not done under the ministry of Crown lands, where we already have an existing service? I can tell you why: because this so-called new government agency -- which is a Crown corporation by any other description -- is supposed to be self-financing. And if it's supposed to be self-financing, one of the ways it's going to get its money is through the acquisition and disposal of capital assets that will allow them to interact, in what should traditionally be a private market system, without any accountability to this Legislature. That's fundamentally, principally wrong. I find it absolutely astounding that this government, which prides itself on the dogma of a social democratic system of government and which is supposed to be among the more open governments in terms of making sure that public assets are owned, administered and cared for by the public trust, is moving toward the privatization of capital public assets, with five people -- read three, because you only need a majority of them -- having the right to decide, through a recommendation to the Minister of Finance and executive council, how to dispose of those assets without any public debate in this Legislature.
We're already seeing this government move toward foreshore leases that are now being sold off. We know that there are lands next to ski developments that are being sold abroad for less than market value. We know that this government is already moving to dispose of public assets without public debate, and without the right of the people to know how their assets are being discharged. I tell you, this is going to be a very major issue, because the people of British Columbia are not so foolish as not to know that the assets that they have now -- their lands, their waters, their foreshore, the lands that sit in the public trust -- need to be protected, not only for this generation but for future generations and the quality of life we enjoy in B.C. This so-called socially aware government's putting it into a Crown corporation, a self-financing authority that has as one of its mandates to acquire and dispose of public assets is totally astounding.
We also see that this group is empowered to provide financial assistance by way of grants, loans or guarantees. It's a lending agency. Not only is it going to be buying and selling land like a realtor -- like one of the realty agencies -- it's going to be acting like a bank, a lending agency: let's give a loan or a grant; or maybe what we ought to do is just guarantee some loans out there. Well, British Columbia -- anybody that's got a mortgage, come and apply. Let's get a guarantee. Go to this agency and say: "Let's retire the mortgage debt, because we can't afford to pay the taxes that were brought in by this government in this last budget."
Why are we creating a new government lending agency? Where does the government get its money from if not off the backs of the taxpayers of this province? And whether or not it's in deficit.... I agree that this is going to be a very effective way of hiding the deficit, because it's going to increase the debt. I think people know the difference between operating deficit and debt. This agency, which is going to be a lending agency, is going to further punish the people of British Columbia, because it puts into the hands of these five people -- no, three people, because you only need a majority -- a recommendation to the Minister of Finance and to the executive council as to how we're now going to act as a small lending institution for the people of British Columbia, using their money, of course, at whatever interest rates this government may or may not decide to use. This is crazy.
But it's not only that. Under this new Build BC Act, we as the province of British Columbia are going to be able to enter into agreements. These five people are going to make recommendations through executive council orders. It says that we are going to have agreements with the government of Canada, the government of provinces or the government of a jurisdiction outside of Canada. That's great. It means we can have the right to be able to enter into agreement with an official or an agency of any of those governments. It says "jurisdiction." What does "jurisdiction" mean? This bill now allows us to cut a deal, through this new Crown corporation, with the government of Canada, any other province or any government outside of its agency.
Let's take a look at a ski development that's taking place in Kamloops right now. Does that mean that if this Crown corporation is looking at Japanese investment coming into the province, it can cut a deal privately to dispose of Crown land -- which is taking place right now -- in order to enhance a development for condominium and other residential developments and sell off Crown assets below market value without any debate, through a simple order-in-council? In fact, they could
[ Page 5494 ]
have a mandate to do it before the deal is struck, according to this. Once they have the mandate, they don't even have to account for it.
[11:30]
Hon. Speaker, what are we doing here? The people of British Columbia should be outraged at this government for bringing in this ridiculous bill. I'll tell you who else they should be outraged at: the third party in this Legislature, which doesn't think this is important enough to even come in and debate the wretched thing. The members of the third party think that somehow we should still be having estimates while this very important piece of legislation is running at the same time. This hoist motion should be supported by every sane, thinking member of this Legislature, regardless of who they are, because it's ridiculous. Anybody who wants to read this can understand why this shouldn't be going forward. It is not the way that we should be looking at government, certainly not from my point of view or the point of view of my colleagues in the Liberal opposition. I would have thought that the members of the third party, who pride themselves on being this private sector.... My judgment is that the third party doesn't mind this, because they did it for years. They had a very simple way of creating Crown corporations: shunting off the debt into the Crowns so it would look like they were balancing budgets. It was called the BS fund. This is called the Build B.C. fund. It's one and the same thing. I think the problem is that the members of this government learned so much from the third party when they were in government that we've duplicated the kind of accounting service.
I see my time is drawing short, so let me close with two matters that I think need to be reviewed. First of all, the accountability of this and the fiscal administration and how that is set forward is totally unacceptable to the people of British Columbia. We'll have far more to say about that in committee, if this bill gets that far. The revenue collection process under this.... This is now a taxing authority, a lending authority, and a purchase and sale authority; it is one of all three things. It's a bank; it's a real estate agency; and it's an agency which will be able to spend on your behalf. The best way to describe this gremlin of a bill is that it's very much like a parent who is going to turn around and say: "I know what's best for you. Trust me. I'll expend on it. Not only will I expend the money that I'll be holding on your behalf in trust, but I'm going to come and rip off your allowance, and I'm going to make sure that your allowance is spent the way I think you should have it as well."
This is a bad piece of legislation. It is a bad bill for British Columbia. It shouldn't be called Build B.C.; it should be called "bad B.C." under this NDP government. I hope that all thinking members of this Legislature will hoist this bill, support this motion and make sure that we get down to a sound and sensible fiscal management regime that will finally look at reducing the size of government, prioritizing the expenditures of moneys to the communities that need it so that we can start to get a handle on the rising deficit and stop incurring debts that are going to shackle future generations of British Columbia.
We have to defeat this bill, because this bill is going to further enslave the people of British Columbia into a system of government that is non-accountable, is not representative of their needs and is going to make, in my judgment, the possibility of further maintenance of the budget much more difficult.
J. Tyabji: It's interesting that we are on an important hoist amendment to the bill and we've had no input from the people who are supposedly championing this piece of legislation, so I think today we will hear repeatedly from the opposition benches not only about why this bill should be hoisted but about why it should be debated around the province.
An. Hon. Member: Burned.
J. Tyabji: Or burned. Burn the bill. I think we should have banners made up, and maybe get some public awareness that way.
The most unfortunate thing about Bill 3 is not only that are we going to fundamentally change the way we're going to finance capital investment in the province but that the people of the province, who are going to be mortgaged through this legislation, are not even aware that the very financing structure we're debating is going to be passed through this Legislature before the end of the spring session. That's incredibly unfortunate, because the people of this province will be financing and paying for this ten or 20 years down the road.
We know that B.C. is leading the country in having the fastest-growing debt by a province. That isn't new with this government; that goes back to the previous administration, the Socred administration. As the previous speaker mentioned, that could be why we're not getting any input in terms of opposition to this bill from the third party.
What this bill represents to me is this government's inability to come to terms with runaway spending. The fact that this government didn't have the guts to say no to some of the special interest groups that have been clamouring for funds to go to this part of the province or that part of the province; the fact that this government had a very heated convention last fall where it passed policy that more or less called for continued funding of job creation goals.... What does that mean, when we talk about the purpose of Bill 3 and we see that its purpose is to coordinate the government's activities to achieve overall economic development and job creation goals.... Whose job creation goals? Which job creation goals are we talking about?
Well, later in the bill we see that they're focusing job creation on traditionally disadvantaged groups. I'm quite happy to find out that I happen to fit into a traditionally disadvantaged group, not only by virtue of being female but also by virtue of being from an ethnic minority. So I guess that there will be people suited to those job creation goals in terms of employment equity. I happen to oppose the kind of employment equity, the 50 percent mentality, the government has for quotas -- quotas for so many women to operate heavy machinery. I don't understand where the studies are that show that women have been clamouring to get into the operation of heavy equipment in day-labour
[ Page 5495 ]
contracts on highways construction throughout the province. If they're there, perhaps they should have been tabled for discussion around the province before this legislation came forward.
In fact, my very strong feeling is that the people of this province have spoken out repeatedly against a quota system for employment equity and in favour of removal of the barriers and removal of the discrimination that exists so that people can be on a fair playing field, on an even keel with everybody else. Removal of barriers has very little to do with a public agency setting job creation goals that have been established through NDP policy conventions that start to bring in quotas on highway construction.
If we remove the discriminatory hiring practices, that's enough. That's all the government needs to do. Government doesn't need to bring in a public agency to duplicate government, bring in more government employees, more patronage appointments, mortgaging the people of the province for ten, 20 years, on highways and bridges and hospitals and school construction, just so that we can end up having quotas brought in. We don't have the regulations that go with this bill before us, and obviously we can't debate it in any detail here. I find it interesting that in the purpose part of the bill they talk about the purpose to ensure that all regions benefit from economic expansion and diversification. What kind of diversification? Where is it outlined? Where's this diversification coming from? How is it that this government has the audacity to think that it can determine what manner of diversification is suitable for the private sector? I don't understand that. On the one hand we have the corporate capital tax; we have punitive taxation on small businesses; we have licences and fees and taxation going through the roof in the private sector. On the other hand we have a government that has the nerve to presume that not only can they impose quotas on the private sector, not only can they impose quotas on the kind of contracts that the government is offering, but that this government can assume to dictate to the private sector what form of economic diversification is acceptable.
That's just ludicrous. Not only is this bill insane.... As the previous speaker mentioned, we have a bank, we have a Crown corporation, we have a real estate agency, we have expropriation of capital that has taken place without any kind of accountability whatsoever. We know that even in the current legislation that exists for expropriation, we have had numerous examples of people who have had their homes or parts of their property expropriated because a highway needed to go through, or there was some government project and private property got in the way. At that time, when this kind of controversial issue took place, we would see that there would be a public forum for that, that there was an avenue for public debate. I witnessed an example where there was a very nice old lady who had lived in her home all her life, and all of a sudden it was in the middle of a place where a development had to go through. There was a lot of debate. A really unfair method of expropriation took place, but because there was an avenue for public debate, a forum for public discussion and some time line for the expropriation to take place, a fair settlement was reached. Under this bill, that lady would have no recourse at all. Her home would still be up for expropriation, but there would be no public avenue for debate. There'd be no way for this government to hear from that lady or for the media, who are supposed to be the medium for issues and political subjects to come forward, to even have access to that kind of information without some very skilled public relations activity on the part of the affected individual.
When we start to see that the purpose of this bill, as I said, was to talk about job creation goals.... Those goals are obviously going to be defined by this government. All we have to do is look at the policy initiatives that have come forward in terms of the convention of this government to know what kind of job creation goals we'll be looking at. When we see that this government is assuming that it has the ability to diversify the economy through a public agency, we also see that the purpose of this bill is to encourage public sector investment -- at a time when there are no public funds for the very basics.
The member for Powell River-Sunshine Coast is meeting with a representative of the youth alliance. The youth alliance has lost all their funding. We don't have the ability to have core funding for projects that are helping single teen mothers or youths who want to get into some manner of community activity. They've lost their funding, yet we see here that the purpose of this bill is to encourage public sector investment. The money for the public sector investment is going to come through a form of mortgaging the public's funds. What are we talking about here? We have a government that presumes that it has job creation goals that are so meritorious that it can second-guess what the public wants. We have a government that thinks it can diversify the economy through a public agency by borrowing money from the public. We have a government that thinks it can have some kind of public sector investment on behalf of the people, and that the public won't mind being mortgaged ten, 20 years down the road so that this government will have access to the funds on behalf of the public.
In my dealings with the public, all they want is to be able to retain enough of their paycheque to have enough disposable income to do some investment of their own. They don't want the government investing their money; they don't want the government borrowing money on their behalf to invest it. That's so far removed from what I hear in terms of what the public sentiment is. Unless this government has some kind of secret they're hiding, that they've seen into the future and in the future people have changed their minds, then I don't know how they can possibly justify this kind of bill coming before the House. We know that on an issue like Clayoquot Sound, which was a sensitive environmental decision, the investment of this government in a private industry became a pivotal focal point for controversy. The people of this province said we didn't want that to happen. At what point did governments begin investing on behalf of the public with funds that they have to borrow? In effect, they're taking out a ten or 20 year mortgage, and then investing that money on
[ Page 5496 ]
behalf of the public. I don't understand where that came from. I don't know where the mandate is for them to do that, or to put it in a bill so that when they do it, nobody can say that they're doing it. That just doesn't exist.
As the previous speaker has mentioned, we have so many things being hidden: not only do we have a deficit being hidden, which we saw the Socred administration do through various other forms, but we have a debt. Let me read from a publication called the Taxpayer that every member of the Legislature received in the mail. The headline is: "B.C. is Leading the Pack." How exciting. B.C. is leading the pack. I thought perhaps this government was leading us in a direction we could be proud of. In fact, when you read it, it says: "British Columbia has the fastest growing debt in Canada, according to a recent report published by Statistics Canada. The study revealed that between 1981 and 1991, B.C.'s per capita gross debt -- which includes liabilities -- increased by a shocking 569 percent, rising from $1,144 to $7,657 for every man, woman, and child."
That is horrifying. It is especially horrifying when we see that this budget again increases our debt and that this bill is going to increase our debt in a manner in which we won't have a very easy way of keeping track of it. The fact is this legislation is taking us further down the hole. I found it interesting that on page 11 of this bill we have one title called "Sinking funds." I thought that was very appropriately titled. That's actually what they should have called this: the sinking-fund legislation. That's what it is. We know that New Zealand experienced a similar problem when one day they went to borrow money and were told that there was no more credit rating for that country. We know what kind of hardship the people of New Zealand went through, and we know that we are heading in exactly the same direction.
[11:45]
Let me continue from the article. "In 1981 B.C.'s per capita debt was 43 percent of the average of all the provinces, but by 1991 it had increased to 98 percent." So now we're pretty well on a par with everyone else. Do you know why I find this shocking? It's not because we can say that comparatively we're now pretty well as bad as everybody else, but because in B.C. we are unique in having the greatest access to wealth generation in terms of our resources. Managed effectively and responsibly, we could be not only debt-free but the wealthiest part of the world. We have forestry, mining and agriculture, and we now have a form of liquid gold in terms of our water resources.
If we maintain sovereignty over these resources and manage them effectively, we shouldn't be worried about debt -- not to mention the fact that this is a piece of legislation by a government that doesn't have the guts to say no to special interest groups. It doesn't have the fortitude to stand up and say: "We're not going to give you that just because you're yelling loudly for it. We're not going to cater to some kind of quota system that the public doesn't want. We're not going to start diversifying the economy in some kind of partisan way through patronage appointments. We are going to prioritize not only our expenditures but the direction of the government to suit all of the people of the province, not just the special interest groups that want to entrench employment quotas or focus only on social programs" -- programs that we won't have the money to afford if we don't take care of the economy. The government should have come forward with a vision for effective management of our resources to take us into some kind of secondary industry so that we had enough tax generation and wouldn't have to have legislation like this.
If we afforded the public the ability to debate this, and if we gave the public the opportunity to have some input on this bill, I am convinced that the public would speak out very loudly against this form of financing. There isn't a person in the province today, at least among people who are what I would call the middle class -- even upper middle class in terms of income generation, and certainly nobody below that in terms of the working poor -- who wants to get further into debt. When they find out that if we break down the provincial debt, their personal debt is going to be sitting at about $10,000 in the next couple of years.... I'm sure their anxiety level is already very high in terms of taxation, personal mortgages and loans, and the payments that each of us makes every month just to keep our heads above water. That's what people are faced with right now, and the anxiety level is already high just in terms of deficit financing. But to see amortization of capital investment at a time when nobody has any money and people are personally slipping further into debt is totally unacceptable.
If this government honestly believes that this legislation would be acceptable to the people, then I would encourage them to take it forward. If the public says that they want this legislation, I will be the first to stand up publicly and say that I was wrong. I'll be the first to say that I've misjudged the public sentiment; they obviously want to amortize capital investment. I'll be the first to say that I guess I misread the public and all the tax revolt rallies and letters saying: "Please control government spending." Maybe there's a large sleeping giant out there who really wants to get further into debt. Maybe there's a large group of people who would say: "We don't care what it costs, we want to have quotas on our highway construction crews." If that's true, then I'll be the first to stand up and say that I've misjudged the public mood, and that obviously Bill 3 is the correct way to go. I would vote in favour of this bill if the government could prove that there's any support out there for it. I don't believe there is. I'm not talking about partisan support. In terms of the public support, there's no support for this bill.
Last night I was at a meeting in Nanaimo, and taxation was an important subject. At that meeting, when they learned that not only are we going to have deficit financing and a debt but we're also going to have an amortization of capital investment, they weren't surprised, they were horrified. There's a certain sense of disbelief that we could actually be slipping further down the slope in terms of responsible government.
I've received an encouraging note here: only 918 days left of this government, if they go to full term. The
[ Page 5497 ]
speaker who passed me the note also mumbled earlier that they've fallen and they can't get up. I think that is definitely true.
If this government wants a mandate for this kind of legislation, I think it's incumbent on them to take it out for public debate, because there's no support for it at all. We are standing here pleading with the government for some kind of public input on this legislation, but the irony is that while we are sitting here debating this legislation and the lack of accountability for the funding, quietly, in a back room of the Legislature, we have the estimates debate going on, which is the current budget. The people who are at home watching us right now aren't even going to get access to the current budget debate. Here we are pleading for the hoisting of Bill 3, for an amendment to the bill that would allow us some time so that we could bring the public into this debate, yet we have very little public input in the current budget.
We have to recognize that this bill represents a mind-set that is not acceptable, not only in the lack of accountability of spending and increased debt but also in this government's cavalier attitude towards expropriation of capital, which I perceive as theft. The corporate capital tax and many of the other taxes that are being proposed or that we hear discussed in thesis papers -- where people would have an inventory taken and be taxed on the private property they have within their home, in addition to the property taxes on their home -- is a form of theft. In this bill, when we see the ability to expropriate private property and sell it, or, as the previous speaker mentioned, lease or otherwise dispose of it -- which obviously is giving it away -- that's a form of stealing. That's a form of taking from people something that does not belong in the public trust and is not part of the public domain. It's not the right of the government to expropriate it for the purpose of sale.
I don't understand how this government can put such sweeping powers into a group of people who will be appointed. They won't even be elected. There is no accountability there. There is no public forum for this. There is no forum for debate of this. Once this bill has gone through, we will have a dramatic change in the way that not only financing occurs but the way that government occurs. If we are moving towards the kind of executive authority we see in the American system, if we are trying to move towards an American model, where they have an executive council around the President of the United States, and there are appointments.... That seems to be the direction that we're going, where we have a shadow cabinet making all the real decisions. Under this bill we will continue that aspect of government. We will have an executive style of government, where people who are on the inside, who have bought into the partisan agenda, who do not have any public accountability, are shuffled off.
To that end, hard as it is, I have to commend some members of the provincial media for actually picking up on that and trying to expose members of the shadow cabinet -- difficult as it -- to public scrutiny, by giving some kind of background for it.
When we have squeaky-wheel legislation in front of us, as we do now, and when we have small interest groups who are yelling very loudly and getting the ear of the government, it is critical for this government to recognize that that is not an example of how the general public is feeling. I understand the frustration of people, whether it be the car dealers, consumers, fishermen, environmentalists, teachers or nurses. We know that on the weekend there will be a demonstration by the truck drivers. Whichever group it is, I can understand their frustration with this government, because this government is not even listening. Not only are they not listening, but they have gotten to the extreme that they are not even participating in the debate.
We've stood here asking on behalf of the people of this province for a hoist amendment, asking this government to recognize that this bill is not a simple piece of legislation. This is not like regular bills that come before the House and quietly amend existing codes. This is not simply the passing of some laws; this is a fundamental restructuring of the province's financing. Passing a bill before the House does not do justice to the magnitude of change that's going to occur.
Hon. D. Marzari moved adjournment of the debate until the next sitting of the House.
Motion approved.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. D. Marzari moved adjournment of the House.
Motion approved.
The House adjourned at 11:56 a.m.
The House in Committee of Supply A; D. Streifel in the chair.
The Committee met at 10:27 a.m.
ESTIMATES: MINISTRY OF FORESTS
(continued)
On vote 40: minister's office, $404,722 (continued).
W. Hurd: A couple of housekeeping questions this morning before we proceed. Comparing this year's estimates and last year's, the opposition notes an increase of not an insignificant amount for public sector travel under vote 10. I wonder if the minister could amplify for the committee the need for the increase in the travel budget for Ministry of Forests personnel during the upcoming fiscal year, given the need for restraint and the concern that has been expressed in the
[ Page 5498 ]
House about the general increase in public sector travel. What rationale could the minister offer the committee for this year's budget increase?
Hon. D. Miller: I believe the hon. member mentioned vote 10. I wonder if he would clarify that.
W. Hurd: I'm just examining the supplement to the ministry operations -- the introduction section, which lists under operating costs vote 10, which is public sector travel. Perhaps I could ask the minister what the budget would be for public sector travel. I had assumed it was broken out under vote 10, but the concern of the opposition is that there's actually been a budgetary increase for ministry travel. Our major issue in raising it was to ask the minister whether there's a rationale for what appears to be a budget increase for travel by his ministry.
[D. Schreck in the chair.]
Hon. D. Miller: I think it's vote 41. We've tended to be, in these estimates, fairly informal with respect to the separate votes, although we're debating the minister's office, vote 40. Nonetheless, I think we've always taken the position that that allows the wide-ranging debate on all these policy issues that we've covered. So it's really vote 41, ministry operations, which the member will find in the supplement to the estimates. If you look at STOB 10, you will see the figure there of $5.8 million. Essentially, the explanation for increases in travel has to do with an issue I know the member is very concerned about -- in fact, has spent a good deal of these estimates talking about -- and that is the issue of field staff getting out and monitoring and auditing the operations of forest companies. That's generally the explanation: that we've allocated more resources for ministry personnel to do the job that the member has been asking us to do.
[10:30]
W. Hurd: Does that travel include the costs of any trips to other jurisdictions in North America, specifically trips to other forest jurisdictions, which one could argue may be somewhat of limited utility for the people of British Columbia, given the different nature of the forest resource in these countries? Can the minister provide us with an indication of whether the budget for those types of trips has in fact risen, or is scheduled to rise, in this set of estimates?
Hon. D. Miller: Well, it would include those kinds of travel. But I'd be interested in the member perhaps elaborating on the position he might hold with respect to those issues. Is he opposed to them? Does he not think it's worthwhile that British Columbia look at those kinds of trips? I recall some questions I think the member asked the House earlier on ministry personnel travelling to Mexico and Honduras to pursue issues of joint cooperation in fire protection, and the possibility of British Columbia being able to market its very excellent firefighting protection knowledge. Is the member suggesting we should not do that?
W. Hurd: I must say I find it curious that a government so concerned about the North American Free Trade Agreement would be actively interested in selling its expertise and technology to Mexico particularly, but also to other countries. I'm just questioning whether the minister is convinced that this is a role for his ministry he expects to increase in the coming years. Is indeed the Forest Service going to be into a situation where it is attempting to sell technology, to compete with whatever private sector companies may be in existence in British Columbia? I'd certainly welcome that kind of dialogue, because I think it's an important question for those in this province who may wish to organize or form a private sector committee intent on selling its technology and expertise to other areas of the world. I would certainly welcome comment on that.
Hon. D. Miller: I'd be delighted to talk about that. We do not compete with the private sector. The activities of the fire protection branch of the Ministry of Forests have in fact enhanced the opportunities available in the private sector.
The member should be aware that every forestry jurisdiction in the world obviously has to have, under government auspices, a fire-suppression or fire-fighting or fire-protection branch. We routinely in this province receive delegations from around the world. I recall last year meeting delegations from some of the European countries, and was actually quite surprised. I hadn't thought of some of the European countries as being much into forestry jurisdiction; but indeed, we had people from, I think, Sicily, France, many of the European countries who had come to B.C. because B.C. is acknowledged to be, if not the world leader, at least one of the world leaders in terms of our ability in the processes, procedures and techniques we have developed internally -- developed by the Forest Service, I might add -- to control fires.
As the member is well aware, I talked previously in the House about some of our accomplishments: the fact that last year we had in the magnitude of about 3,800 fires, 3,900 fires. The last year comparable to that was 1985, I think, when we had roughly the same numbers, or slightly less, and yet in that timespan we have managed to bring down the cost of fighting those fires by just an overwhelming amount of money. And because of our efficiency in fighting those fires, we've also managed to save just a stunning amount of forest land that previously was burnt when those fires started. So we have a very efficient Forest Service. Other countries travel to B.C. to see what we do. We routinely market our expertise and knowledge to other countries. I think that is an endeavour the opposition would want to support. I can't for the life of me understand why they would be even remotely critical.
We also have an obligation. If we can assist countries in developing the kinds of techniques that will allow them to control forest fires, are we not also at the same time doing some service -- not just to those countries, but to the world? Or should we say, no, the border around British Columbia is inviolate; we've got all this expertise, we're very good at what we do, but boy, we're
[ Page 5499 ]
not going to let anyone else know what we do? We're not going to help anybody else.
I recommend to the member that he travel up the Salmon Arm sometime, and spend a day. I'll alert my staff. Let me know. We'll set up a full day for you. We'll take you through the kind of training programs we have. We'll show you what we do: the rapattack crews that get in there and hit those fires hard before they can get going. We'll show you the initial attack crews. We'll show you the native crews that we've developed.
I was in Penticton -- no, Vernon, sorry -- a week and a half ago, talking to some staff people there. I felt quite proud when one of the members of the district office in Vernon advised me that his team, his native unit crew, were the best in the province. There was a real note of pride in the man's voice as he was describing this crew of people who go out and do that very dangerous, tough work, and save the forests of British Columbia. In fact, they save a lot of the urban interface lands from the devastating impacts of fire.
We're going to continue to market that worldwide. There is some benefit, naturally, that accrues. Every way you look at it, whether it's humanitarian or just good business, it makes sense to do what we do, and we will continue to do what we do.
W. Hurd: We're debating a set of estimates here. It's important for the people of the province to know how their money is being spent, whether it's in Mexico or Honduras or anywhere else in the western hemisphere. It's important for the opposition to ask whether or not these humanitarian ventures on behalf of the Forest Service are costing the province any money, or whether the sale of this technology and this expertise by the ministry is in fact generating revenues for the Ministry of Forests. Can he advise us whether the public is paying for the costs through its tax dollars for these types of gestures? Having received an answer to that question, I think we can then engage in a debate as to whether or not the training of fire-suppression crews in British Columbia should possibly take precedence over that international venture, given the real pressure on the revenues from the Crown.
Hon. D. Miller: The member has not listened to a word I've said. Not one word. I'm disappointed. I'll try to get some actual statistics instead of the ones out of my head, though the ones I've quoted were pretty close.
We have brought down the cost of fighting fires in a significant way over a decade. We have also in the process been so effective that we saved thousands of hectares of timberland. We have the most skilled, highly trained forest firefighters of any jurisdiction in the world. Training is an absolute precedent.
I suggest the member should go to Salmon Arm and look at the kind of training programs we have. I was absolutely amazed at those young people. They are eager. They don't say: "I've done my job, and that's enough." They say: "Give me some more work." You really get a sense of pride as a British Columbian if you go there and look at those young people and the kind of very dangerous work they do -- dropping out of a helicopter on a rope. I don't think that member has ever done that; I certainly wouldn't.
We can land these young people in the bush with a minimum of equipment and they can survive and fight fires for 72 hours straight. We know we can drop those crews in there and they're on their own. They're fit, they know what they're doing and we don't have to worry about them. We have unparalleled firefighters in this province. We have the best training. Their training is so good that people come from other countries to take part in our training programs.
I hope they don't have critics in their countries like we have here who suggest that it's foolish to travel, that it's foolish to go gain expertise. I hope they don't have critics down in Mexico like that. Otherwise, those Mexican firefighters couldn't have come up for that intensive training at our rapattack base. They couldn't have gone back to Mexico and said to their government officials: "We should be doing business with British Columbia, because British Columbia knows what it's doing."
Our record is outstanding. The member doesn't want to take my word for it. He's quite welcome to go and look at the operation, but I would ask him to have some respect for those men and women -- women too, I might add -- who do this very dangerous work on that member's and other British Columbians' behalf. At least acknowledge the very valuable contribution that these British Columbians make in protecting the very valuable resources of the province. Yes, we will continue to travel, and we will continue to seek out contracts -- as we have with other Canadian provinces, as we have with other countries -- to deploy our firefighting expertise when it is not required here in British Columbia. It makes all the sense in the world that if another country's peak fire season is at a time when we don't have one, we deploy our expertise and our equipment to assist those countries -- and we get paid for it. So there is some revenue generated. I don't know how much it is. I don't know if we have it broken out. We could probably get that kind of detail, but that's not really the point. I would ask the member to have some consideration for the men and women who work so valiantly on behalf of all citizens in this province.
W. Hurd: I'm always interested to hear the minister's responses. I recall a conversation I had at the meeting in Chilliwack on Saturday night. Somebody came up and said: "You know, the minister really tells it like it is, but I always get the impression I'm buying a used car at the same time." I know it couldn't be that, because I received a letter just the other day from a car dealer in the minister's own riding who is very concerned about the current budget and what it meant for him in a forest-dependent community. I took the liberty to respond on behalf of the minister with respect to the budget, and I am sure that he will be responding to that car dealer in due course.
Interjection.
W. Hurd: The question was simple enough: are these foreign ventures costing the people in the
[ Page 5500 ]
province any money? Are we paying out of our own treasury to send crews down to train Mexican firefighters, for example? It is an important issue.
Interjection.
W. Hurd: Is it a cost centre, or are we generating positive cash flow for the Forest Service? It is a pretty basic question -- I think one that the people of the province would be interested to know about.
[10:45]
Hon. D. Miller: I've already said that there is a cost to travel, but there is also a benefit in terms of the contracts we enter into with other countries. I don't have an absolute breakout of those sorts of the travel costs, if you like -- of staff travel versus what benefit we received in terms of contracts. I've got some staff looking to see if we can't get those numbers today. If I can't get them today, I'll certainly make them available to the member following these estimates. But my sense is that there's a net benefit to the province monetarily.
Again, I don't want to belabour the point, but we have developed in-house.... There's sort of a notion that governments either are not or should not be or cannot be entrepreneurial in any sense, which I think is a real mistake. For example, some of the equipment that has been developed -- equipment that's used in the field -- has been developed by the Forest Service.
I will give you just one example: it's a portable platform that can be erected on a hillside to allow a helicopter to land. In the normal course of events the private sector is not out there developing these kinds of things. Because we have a statutory obligation to fight and prevent fires in this province, and because we've been doing that for a good number of years, our people in the field have come up with a variety of these kinds of innovations. This helicopter landing pad is one example. It can be constructed in the field. It allows a helicopter to land on a steep hillside; obviously that's of importance in terms of deploying and picking up crews. So it allows us to strike; it allows us to get in there in some pretty rugged terrain.
Having developed this thing internally, we then routinely go to various suppliers and say to them: "Here are our specifications. Will you build this for us?" There's been a variety -- unfortunately I don't have a list with me of the kinds of innovations that have been developed by the Forest Service -- that we subsequently take out to the private sector and say to them: "Can you supply this item? We require X amount." We find with some of those items -- because they are innovative, because no one else has ever developed them -- that when other countries come to B.C. and look at what we do and go through our training programs, they say: "We'd like to buy some of those too." They buy them from the private sector suppliers.
I go back to what I said at the outset, that the work we have developed internally in the Forest Service has in fact allowed some elements in the private sector to market products they ordinarily wouldn't market. So there's been a real benefit through the kind of innovation and internal entrepreneurship that we have in the Forest Service. Again, I can't qualify that for the member absolutely -- it may be an impossible task -- but there is a net monetary benefit as a result of that taking place. And there will continue to be. We will continue to develop, in my view, as a world-class Forest Service in terms of our ability -- and I keep saying "fighting fires," but it's primarily to get in there and put them out before they manage to become large fires. That's really the key.
That's why we've been so successful in B.C. -- it's getting in and getting in early, and stomping those fires out before they spread. So we've developed equipment; we've got the private sector supplying that equipment, not only to our Forest Service but no doubt to other forest services as well, to other elements in the private sector. It's been, in my view, a very, very good relationship.
The member should understand that firefighting is generally a government responsibility -- not just in B.C., but it clearly is right across this country and in other countries as well. It is not a private sector responsibility; it is a government responsibility, and even more so in B.C., given that the forest resources in the main are owned by the Crown.
So we travel; other countries travel. It was not that long ago that I had a meeting with two public servants from Ontario -- from the Ministry of Natural Resources in Ontario -- who were here to meet with their counterparts in B.C. to discuss many of these kinds of issues and exchanges between the two provinces. We routinely do that, whether it's with other provinces, with neighboring states in the United States or indeed with European or Latin American countries. I think there's perhaps some opportunity in China as well.
I met last year with delegates from China who described their problems in dealing with their very large forest resource. They have a forest resource that's truly unique in terms of its breadth, stretching from the tropical forests to forests much like our own. They advised me that one of the serious issues they really have to come to grips with is their ability to fight fires. They've had some massive fires in China that have been absolutely devastating to that country.
To the extent we may be able to offer expertise to assist that country and any other country in dealing with these issues, I think we should. I said "humanitarian." I don't think it's necessarily humanitarian; I just think it's so obvious and necessary that it's common sense.
So I'll try to get some more precise numbers for the member. As I said, if I can't get them today I'll certainly follow up with the numbers I get.
You know, Mr. Chairman, I think the purpose of this is to have criticism. But I really think that all of us as MLAs -- not just me because I'm the Minister of Forests -- have some obligation to try to understand what's happening in the province. A simple trip to Salmon Arm and maybe a sit down with the head of the fire suppression branch would inform the member of the very good and positive things we're doing in British Columbia and the fact that we have an international reputation, which I'm very proud of.
[ Page 5501 ]
W. Hurd: Mr. Chairman, I find those comments very interesting. I think the minister has identified a significant policy shift in his ministry in terms of fire suppression in the province. I think he sells the private sector somewhat short in the expertise they have built up over the years in B.C. in dealing with the Forest Service. I find it troubling that the Minister of Forests is now saying that because he considers this to be a government responsibility, during the gaps in the year when forest fires aren't a concern, the ministry is going to be out on the worldwide stage flogging its expertise and technology. I wouldn't argue that is of world-class significance. But to me that represents a significant shift in policy for the Ministry of Forests.
There are some questions with respect to vote 42, fire suppression, that I want to address to the minister -- in particular, the increase in salary costs for the upcoming fiscal year. Can the minister confirm that it is the intention of the ministry to do more in-house training and to retain a higher complement of ministry staff in the fire suppression field, as opposed to relying on private contractors who recognize their role in providing a service during a four- or five-month period of the fiscal year? They are very concerned, when they feel that the kinds of things they have to do to survive the rest of the year -- possibly to sell their expertise and technology abroad -- may now be a role that the Ministry of Forests intends to play. Can the minister confirm whether there is a significant budget increase for salary costs in the fire suppression branch, and whether that is indicative of a policy change in the ministry to basically retain more trained personnel throughout the entire fiscal year?
Hon. D. Miller: No, Mr. Chairman.
W. Hurd: Can the minister confirm that there is a salary increase, and can he offer the committee an explanation for that?
Hon. D. Miller: There are indeed increased salary costs. If the member would check every estimate, he would note that there are salary increases as a result of negotiated settlements.
But let's really get into the issue of whether or not this is primarily up in the northeast, where the ministry has declined to employ a private contractor for forest firefighting duties -- in fact, it is going to employ those individuals on a direct basis -- and the rationale behind that.
We have discovered that in some areas the contracting crews were being paid extremely low wages. They were being required to work under unacceptable conditions. In those kinds of cases I have instructed the ministry to employ those individuals directly. We find, first of all, that we are far more efficient than the private contractors in terms of how we fight fires, the deployment of crews, etc.
Secondly, we believe that we should pay decent rates of pay for that kind of work. So the pay increases for people in those positions will increase substantially for doing that very dangerous work. Their training will improve, and their conditions of work will also improve considerably. All of that is at no increased cost to the taxpayers. We think it's good business in terms of the business we do, which is preventing and fighting fires. We think it's good in terms of how individual employees are treated in this province. That will continue to be the way we operate as long as I'm the Minister of Forests.
[D. Streifel in the chair.]
C. Tanner: Mr. Minister, when those employees of the ministry become members of the BCGEU, will they be considered as essential services during the course of a fire? Do they have to stay with the fire?
Hon. D. Miller: That's a good question. The question has never come up. I suppose it has never happened, and I haven't really canvassed the issue, hon. member. I suppose one could, but it's not a situation that has ever arisen. I hope it will never arise. It has certainly never arisen. I would assume, given the dedication of our staff, that we're not going to see a situation where people refuse to fight fires.
C. Tanner: Mr. Chairman, it might not have come up as far as the minister is concerned, but I believe it has come up as far as the employees are concerned. Perhaps the minister should give it some consideration, because it could very easily come up in the future. The province might find itself in the unfortunate position of not having people to fight fires because they aren't considered an essential service.
Hon. D. Miller: I don't mind getting into a hypothetical discussion, Mr. Chairman, but this one is clearly going nowhere. I think it's rather foolish. I've talked about our excellent track record and the pride that Ministry of Forests' employees have in their ability to do these things. I think it's a waste of time to get into this hypothetical scenario.
W. Hurd: If I read the minister's comments correctly, he's going to have fire suppression crews basically as part of an increase in the full-time equivalent employment in that vote? Are these trained individuals going to be with the Forest Service for the entire fiscal year? I really fail to see how this can actually be a cost saving when the ministry is not purchasing contracted services on an as-needed basis but is retaining these people for the entire fiscal year. Can the minister give us an idea of what they will be doing outside the forest fire season? Will they continue to be trained as part of ministry operations? Or are they going to be travelling? What kind of activities will they be involved in?
[11:00]
Hon. D. Miller: First of all, just to clarify: full-time equivalent is simply a measure that's used internally in government. These are auxiliary employees who are used as needed. They're not retained year-round. They're used in initial attacks on fires, and they are given the high-calibre training that we offer in the Forest Service. They are given, as I indicated
[ Page 5502 ]
previously, a decent rate of pay and decent working conditions. Their lives have improved considerably by being direct employees of the Forest Service. There is no additional cost to government in making this change.
W. Hurd: Mr. Chairman, it has been reported to the opposition that the Forest Service has had to retain the services of crews from Alberta. Does this change indicate to the committee that the ministry will now be able to avoid the necessity of hiring contract fire suppression crews from other jurisdictions like Alberta?
Hon. D. Miller: Absolutely not. Again the member failed to listen to my comments earlier. You can't plan a nice, neat fire season, Mr. Member. If we have really hot weather, a lot of lightning and the right conditions, we can have a lot of fires. To the extent that we adjoin Alberta and some of the U.S. states, we share resources. If they need our help, we're there. And if we need their help, they come. That's how we have to handle these great natural disasters when they occur. So you can't be nice and tidy in terms of predicting what a fire season will be like.
The member, having read the budget, is aware that our costs last year exceeded the budget by a considerable amount. That's because we had about 3,900 fires in 1992. It was one of the worst fire seasons we've experienced, It was greater than the last closest fire season which was in 1985, I think, when we had about 3,700 or 3,800. Given that, you have to commit the resources. You don't sit on your backside and let the fires burn; you go and put them out. If it costs you a few bucks to do it, you do it. We do it very well, and we save a lot of wood in this province by doing it very well.
W. Hurd: I'm sure the minister is aware of the concern that's being expressed by private fire suppression companies about the joint arrangements that the minister has indicated. I have no problem with hiring fire suppression crews on an as-needed basis. There's no difficulty with that. The concern being expressed is that the ministry appears to be shifting its focus toward retaining a complement of fire fighters who will be directly employed by the Ministry of Forests, and supplementing that with contract crews from Alberta on an as-needed basis. Can the minister tell us whether there is any priority hiring system in terms of bringing in the trained personnel from other private fire suppression companies in B.C.? Is there a British Columbia-first policy in dealing with fire fighting in the northeast? Is there a policy where companies in British Columbia are dealt with first before crews from Alberta are retained?
Hon. D. Miller: It's not a question of British Columbia first; it's a question of coordinating resources between British Columbia and Alberta to get fires out. That's the prime mandate.
I want to read into the record some of the statistics that I've been quoting out of my head. I was pretty close, but not dead accurate. So I want to put these into the record, because I think they're important and will illustrate for all members just how good we really are in doing our job.
The statistics I'm going to read you are for 1985 and 1992. There are six categories here, and I want the members to pay close attention to the numbers I'm going to read. First of all, number of fires. In 1985 we had 3,608 fires, and in 1992 we had 3,805 fires. So we had quite a few more in 1992. How many hectares were burned as a result of those fires? In 1985 we burned 312,748 hectares of forest. What do we cut in this province? An annual harvest in this province is below 200,000 hectares. I'm not saying that all the trees that were burned were prime trees and would have been logged, but in 1985 we burned the equivalent of a year and a half's harvest rate.
In 1992 we reduced the number of hectares burned to 30,452. That's an outstanding performance, Mr. Chairman. We reduced the number of hectares burned from over 300,000 to 30,000. Hold your applause.
W. Hurd: I will.
Hon. D. Miller: The direct fire cost -- the members were talking about the budget, and this is something they're clearly interested in -- in 1985 for those 3,600 fires was $134 million. It's staggering. The direct cost in 1992 was $64 million -- for more fires.
Volume lost: how much did we lose in those fires in 1985 and 1992? In 1985 we lost 12.3 million cubic metres. That is a lot of wood. Do you know what we lost in 1992? We lost 1.9 million cubic metres -- again, an absolutely stunning reduction. The damage in 1985 -- this is stumpage plus property damage -- was $54 million. In 1992 it was $20 million. Of course, things appreciate in value over time. The shipment value -- and this is really key -- of the timber that was lost in 1985 was $1.813 billion. The shipment value for wood burned in 1992 was $284 million.
Mr. Chairman, it's an outstanding record of performance. I don't take credit; I wasn't the minister in those years when the Forest Service developed that expertise. It would be hollow of me to claim any personal credit. The credit goes to the men and women in the Forest Service of this province who have done a remarkably outstanding job and should be applauded by everybody.
W. Hurd: Mr. Chairman, I must confess that those are impressive statistics. To further confuse the opposition, given the track record of remarkable improvement, the minister decides to undergo a major policy change in fire suppression toward reducing the dependence on outside contractors and concentrating more fire training within the ministry itself. This appears to be a major change that isn't reflective of the level of improvement that occurred while there was an increasing reliance on the private sector to provide training and expertise to the Forest Service.
So I must confess I am somewhat confused, given that glowing record of achievement, that the minister would find it necessary in this fiscal year to change the focus of the ministry in terms of fire suppression toward retaining more direct employees, rather than
[ Page 5503 ]
relying on the private sector. We will assume that those measures will in some way decrease costs at the same time as improve the record even more. We will be watching that with a great deal of interest in the coming fiscal year.
Mr. Chairman, I want to ask a series of questions about the small business forest enterprise program, which has been talked about at some length in the committee I'm on. I think it needs to be revisited because of the comments made by one of the deputy ministers to the Public Accounts Committee about the level of monitoring and enforcement that's required as part of this program.
I wonder if the minister can advise us what kind of additional monitoring and enforcement is required, and whether he expects that this will actually increase, given the increasing reliance of this government -- and indeed the past government -- on improving and enhancing the small business forest enterprise program. What type of costs are we dealing with? I refer specifically to the Tripp report on Vancouver Island, which did study two or three small business enterprise cutblocks as part of its ongoing review. It identified some of the same types of problems with respect to fish-bearing streams that were identified on some of the TFLs and other forest licences.
Hon. D. Miller: I don't want to separate -- and I think I said this yesterday as well -- small business from any other activity. Essentially, if there is logging or harvesting taking place on regulated Crown lands, it has to be approved by my ministry. Whether it's done under the small business program or whether it's done by a licensee on a forest licence or a tree farm licence or whatever, it has to be approved by my ministry. In that respect, everyone is treated the same.
The member refers to the Tripp report, and I think it's a very useful discussion. The Tripp report was an audit that was done under the auspices of the Ministry of Environment to determine whether or not the fish forestry guidelines, which are guidelines that have been developed by government and industry and intended to impose better management on the lands and specifically to protect fish-bearing streams, have been followed by companies operating in British Columbia. To that extent, random audit was conducted on Vancouver Island.
A variety of licensees appeared in that audit, including two cutblocks under the ministries small business forest enterprise program. The results of the audit were less than satisfactory to myself. I took the action I did in calling in the licensees -- and the ministry, I should add -- and, to use a euphemism, I laid the wood on and said it was unacceptable. I told them to get out there and give me a plan to rehabilitate and to do it within a certain period of time and have it signed off by an RFP. I imposed that same condition on the small business cutblocks, by the way.
Therefore the district managers in those areas were under the same obligation that I imposed on the licensees. I was pleased not that we had performed 100 percent but that comparatively the small business blocks faired rather well in the Tripp report, as did some of the other private licensees' cutblocks. Not every licensee was condemned by the Tripp report. Nonetheless, I wasn't satisfied with the performance, and I've taken measures to ensure that performance will be carried out.
In addition to that, we have expanded the audits. They are random audits. They are being conducted in areas like the Queen Charlotte Islands and the coastal mainland. I'm awaiting the results of that audit. I would hope that the results are somewhat better than the Tripp audit initially revealed, but we'll have to wait and see.
One of the important things I noted at the time -- and the Tripp report noted as well -- was that where the fish forestry guidelines are complied with, where people follow those guidelines and use them correctly, they work. I think that's important to understand, because some people out there suggest that nothing we do is right. But when you use those guidelines properly, they work. That's the requirement we've imposed. We think there needs to be more training of the people on the ground so they understand the guidelines and can make sure that they are being utilized in the field. We will continue to pursue that until I am satisfied that those guidelines which do work are being implemented in the field.
[11:15]
When the new results come in from the second round of audits, it will be my intention to make those public. You can't hide things like that. They'll be revealed for all to see. The licensees, I think, are aware that they are under an obligation to do a decent job out there. It's not just a question of costs for forest companies; whether you ease the guidelines or not implement the guidelines, there is some benefit for forest companies. I said to the licensees, if you want to put it into a business sense, the fishing industry in British Columbia is a billion-dollar-a-year industry. I think fish streams should be maintained in and of themselves. If there were no commercial enterprise involved in fishing, if all we did was maintain streams just because they're there and they happen to bear fish, then we should do it. There's no question about that in my mind. The fact is that those fish streams contribute to an industry that is vitally important to this province. It employs thousands of men and women -- in, as I said, a billion-dollar industry. Nobody has the right to impinge on anybody else in that manner.
So the guidelines work. I'm going to make sure they're enforced, and I'll take further steps, if steps are needed, to ensure that that happens. Ultimately we will incorporate those guidelines under the Forest Protection Act. One of the features of that act will be a system of prescribed penalties.
When you go back and look at the Tripp audit, obviously one of the options that was available to me but that I would consider, in light of the issue at stake, to be draconian was to simply withdraw the licence. I did not see at the time that that would provide any particular benefit to the province, to the employees, to correcting the program or to any other thing. So obviously I didn't take that option. Instead, I said: "Fix the problem, and don't let it happen again." So I hope the expanded audits that I think will be available
[ Page 5504 ]
reasonably soon.... I don't have a date, but it will be this year, and I don't expect it will be all that long before we get the results of that second round of audits.
W. Hurd: I hope the minister can see the direction I'm going in with respect to the small business enterprise program. Clearly the ministry has a responsibility that would normally accrue to the licensees on other forested areas of the province. Does the minister not agree that in fact as the small business enterprise program were to expand and the minister's role therefore were to expand, there might be some concern on the part of the public about the auditing procedure that might occur on forest practices that the ministry itself is engaged in? I wonder whether the minister can see the need for involving other audits, like the Tripp report, in the future. An independent audit team could go in and conduct this kind of report, particularly on small business enterprise lands, which would assure the people of the province that the ministry isn't auditing its own activities.
While I appreciate the ministry will share those audits with the people of the province, would there be any possibility or any notion of the ministry expanding the role of such contractors as the Tripp audit to ensure that small business enterprise program lands are being subjected to the same rigid scrutiny within the ministry as licensed lands in the province?
Hon. D. Miller: I think maybe some history is in order here, Mr. Chairman. I'm not sure where the member stands with respect to the issue of contractors and consultants. He seemed to be complaining a moment ago about directly employing people to fight fires. He now seems to be suggesting that we need to contract out, independent of the Forest Service, even more of the work. I had a fundamental disagreement with one of my predecessors, an individual who used to be the Minister of Forests back in 1987 and 1988. I think he was a minister for a couple of years. At the time, the previous government expanded the small business forest enterprise program. A fundamental expansion took place in 1987 with the addition of the 5 percent takeback under the Forest Act changes brought in in late 1987. That made all that wood available. As I recall, the former minister's intention was not to increase the Forest Service's ability through additional resources to deal with this expansion but rather to contract it all out, give the whole shooting match to the contractors. At the same time, that same minister said to the licensees of this province: "We're not going to monitor you or audit you anymore; we're going to make you responsible for policing yourself." Well, we all know the disaster that was. Some described it as putting the fox in charge of the henhouse.
We have an obligation in this Ministry of Forests to administer the licensees and to administer the small business forest enterprise program, which returns.... I forget. What are we looking at? We get another $70 million into Crown revenues from the small business forest enterprise account, and we will run that. We have a responsibility to run that, and we will run it. If from time to time we contract out some random audits to ensure that performance is there, I think that's good. I think those kinds of tests are good. Managers need to know that those kinds of things will happen, and they need to know that they'd better not allow people to find too many mistakes. The consequence might not be very favourable. We'll do audits as required. Hopefully over time we'll be getting even better at our job, Mr. Chairman, and those random audits will be routine, and they'll reveal that in fact people are following the fish forestry guidelines.
I'm not sure if I've clarified the member's question. In fact, I must confess that when I stood up, I wasn't sure what the member's question was.
W. Hurd: The question was pretty basic. Given the expansion of the small business forest enterprise program in the province, which is occurring naturally, I might add, as a result of the number of licence transfers.... There was a commitment made by the ministry to expand the audit and monitoring process on the work the ministry itself does. Would involving more contract auditors to come in unannounced and conduct that kind of work be important for the credibility of the program? If I confused the minister, I apologize.
The opposition notes that the small business enterprise program files a business plan each year with the Ministry of Finance. Could he perhaps tell the committee what kind of information is being conveyed to the Ministry of Finance? Does the business plan contain information about revenue collection? Auditing? Is it an all-encompassing plan? Perhaps he could expand on that for the committee.
Hon. D. Miller: Yes, we do. The member will see that we run a very good business. We generate a considerable amount of revenue which we willingly contribute to the general revenues of this province, and which is used to run the kind of programs that people and governments think are important to this province. It's a good program, and we'll continue to run it in the very excellent, businesslike way that we have.
The member was asking about audits and the hours spent on those things. Just to illustrate on the small business program the kinds of hours that are put in by 33 FTEs on the general areas of monitoring and auditing: 6,800 hours on audits; almost 23,000 hours on site degradation and waste surveys; 14,000, 7,000 and 8,000 hours on silvicultural and post-harvest surveys. So we're looking at a total of about 57,000 hours by the individuals who are mandated to audit that program. It's pretty comprehensive and exhaustive.
The small business forest enterprise program: the ministry plans this year to sell just over nine million cubic metres of timber. Six and one-half million will be sold through competitive sales, section 16, and another two and one-half through bid proposal sales, section 16.1, the so-called value-added sales. We will generate in this year, we project, just under $200 million -- a dividend of over $70 million to the Crown. We will be planting on those lands 30 million trees as a result of the harvesting that takes place. It's an ambitious program. It's a good program. It will continue to
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contribute to the revenues of this province. We'll be trying something unique this year: a couple of pilot projects. I don't know if the member is aware of these. He may want to ask me some questions about them.
W. Hurd: I must say I am intrigued by what involvement the minister might have in the business plan being presented to the Ministry of Finance. Has he ever argued, for example, that a better use for the $70 million might be to attempt some intensive forest management on the small business forest enterprise program lands to try to increase yields? I know we've had this discussion before, but as a priority, would the minister not agree from a philosophical standpoint to support a suggestion by the opposition that perhaps some of this money, instead of going into the rather limitless pockets of the Minister of Finance, should be invested in the land base? At least get a start in this province on getting the small business forest enterprise lands to a higher level of forestry, which is something that could be achieved with the money that's currently going into general revenue?
Hon. D. Miller: Just to illustrate: there's some paper there; that's the business plan.
I can advise you that I fight like a tiger for every nickel I get. The issue of "intensive" is indeed an important one. Given the age of the program, the blocks really are not yet in a state where the kind of incremental programs the member is probably talking about could be applied. Generally we're looking at thinning, at spacing and pruning, those kinds of programs. Given the age of this program, those cutblocks are not yet in the state where that kind of incremental work can be done. But certainly it's under active consideration.
W. Hurd: Perhaps I can engage the minister in a discussion on some of the pilot projects he talked about earlier. Are any of those pilot projects forestry-related, to do the kinds of things we talked about? To manage the lands intensively? I understand the program isn't that old, but surely the principles of sustainable forestry apply on any cut-block, on any forested area in the province, even areas that might not have been logged yet under this particular program. Are there any intensive forestry-related projects, even though they may be pilot projects, associated with this program during the current fiscal year?
Hon. D. Miller: It's an intriguing prospect, how we would apply incremental silviculture programs to areas that have not been harvested. If they're young stands and not ready for harvesting, we could indeed apply some incremental programs such as thinning or spacing or pruning, but I fail to understand how one would apply an incremental silviculture program to an unharvested block of old growth. It's an intriguing notion, but I'm not certain you would be spending money very wisely.
So to go back to my earlier answer -- incremental is generally the term we use to describe silviculture over and above the basic reforestation, and can comprise a variety of techniques: primarily the spacing, thinning, fertilization, those kinds of things that are applied to young stands -- ultimately I hope we get to the point where, economically, commercial thinning is viable.
[11:30]
There is a very, very small amount being done now on some private land. That is a technique that's used fairly extensively in the Scandinavian countries, but given that we are going into that transition -- the second growth -- we have never done very much of it. I think there is going to be more of an opportunity, particularly here on Vancouver Island. I know we can't apply incremental silviculture to an unharvested old growth stand. Maybe I've missed some point the member was making.
W. Hurd: I was referring specifically to areas in the Cariboo where, because they have been unmanaged in the past, there is a real falldown in terms of the timber volumes. In unmanaged stands, I was inquiring about applying those techniques to any of those lands -- in the interior particularly -- which might fall into potential harvesting under the small business program -- the issue of single tree harvesting, for example, in the southern interior, where new ideas are being generated to deal with beetle-kill wood. That type of initiative wouldn't pay off initially, but might, over the longer term in the Cariboo, for example, create the number of stems per hectare which would enhance forest growth. That was the kind of issue I was addressing.
Hon. D. Miller: No. The answer is no, and I now understand the member's question a little better. We run the small business as a separate account, as the member's aware, and we have to account for the costs of running the program. The costs that accrue -- for example, the silviculture obligations -- all of that is accounted for, engineering, road-building, etc., and it's deducted from revenue before we generate the contribution to the Crown.
I'm not certain you would do it under that account in any event. But we have not built into that the kind of investment now that you might not recoup for another 50 years. I'm not certain the appropriate place to do that would be under the small business account, given its structure -- it simply is a method of allowing the Crown to sell timber under a couple of bases, to account for the cost of doing that independently of the general operation of the ministry and to pay a dividend to the Crown -- nor would it be appropriate to include those kinds of investments, if we were in a position to make them, under the small business account. In my view, if you could make that kind of investment, then over time the benefit might be received through the small business account, in terms of all the things I've described, but I'm not certain the investment side of it should be covered under the account. I think it should be separate.
The answer is that we do not have a significant budget for that kind of thing. Our budget really accommodates the primary objective of establishing free-to-grow forests on cutblocks. We do have some money under the FRDA program, which I talked about yesterday. It is designed more to do with the stand-
[ Page 5506 ]
management end of things, and some incremental work is being done there.
There's some very innovative good incremental work being done on the Queen Charlotte Islands under what's called the SMRF account, the South Moresby Replacement Forestry account, which you will see in the budget, and it generates in the neighbourhood of about $2 million a year that is used on-Island to enhance the forests there. There's primarily a lot of thinning -- that's the primary incremental activity taking place there -- because the natural regeneration, believe me, is so thick that the best technique is to let it grow for some period of time and then get in there and thin it out.
So overall there's not a significant Crown investment in incremental. As we talked about last week, it seems to me that it's one of those overriding important policy areas we are working on now to see if we can't achieve some policy to encourage that kind of investment. My own belief is that if it's always the question of the Crown making the investment, that's not what we want. We want to try to attract private sector capital to invest in the forest lands. I think it's a good investment and the benefits are there over time.
W. Hurd: Just to continue the line of questioning on the small business enterprise program. The minister will be aware of a controversy about the cost of wood under this program as opposed to what licensees pay for their wood. Is there any work ongoing in the ministry which would identify the effect of cost of wood on a small business licence, as opposed to what licensees pay who might be responsible for meeting the silviculture costs -- replanting costs? There is an impression out there, as the minister will be aware, on the part of some small business licensees that they end up paying a higher cost for their wood because the ministry is responsible for the forest management, and the bonus bid system drives up their costs to a much higher degree than what the licensees would pay. Is there any work the minister could identify in his ministry which would look at that question; that would satisfy the people who are participating in the small bid proposal system that they are being treated equitably compared to licensees in the province?
Hon. D. Miller: We've done some very exhaustive work on that subject to deal with the issue of the U.S. countervail. The countervail alleges that the real price of timber is that which is determined through section 16. When we talk about the small business program, it's clear you have to draw a distinction between section 16 and section 16.1, which are bid proposals. We invite applicants to bid on the basis of what they will do in converting the wood to a finished product. The stumpage regime is the same one applied to licensees.
Under section 16 we establish an upset price, which is a composition of the kind of costs that I talked about -- that we have to account for under the small business account -- and also reflects, to some degree, the kind of prices that are being bid in the area. On top of that, licensees bid a bonus bid. They drive that price up, and in some cases they drive it up considerably. There have been some sales in the province this year that have exceeded $100 a cubic metre, which is a pretty fair price for wood that is standing up.
I would suggest that most of that wood finds its way to the majors, and the calculations that we've done with respect to the countervail indicate that it's an incremental cost, if the member takes my meaning. If you're a licensee, if you're a tenure holder and you've got a certain volume of wood.... Let's say you've got 70 percent under tenure and your stumpage is that determined by the comparative value stumpage system. Your additional cost, if you've wood that you may buy from small business loggers under section 16, could be spread across the total volume, and therefore you get an incremental increase.
So our calculations indicate that the stumpage being collected in this province for the combined wood that we sell is in fact an appropriate stumpage. Those numbers are very solid. We've made that case in our defence of British Columbia's system through the countervail case, and it's a very solid case indeed. Now that case is currently before a financial panel, and it will be reported on May 6, I think, on the first panel.
The U.S. has not accepted that argument. If you look at the 6.51 percent countervailing duty and read the rationale for that number, you will see that part of that, the lesser amount, is attributable to the American allegation that our stumpage system does not collect an appropriate resource rent. And part of that, the bulk of it -- I forget the actual divisions but it's greater than 50 percent -- is determined on the basis, as I indicated yesterday, that we maintain a log export restriction regime. Through some rather bizarre thinking on their part, they've determined that that is in fact countervailable, in that if you put on that kind of restriction, it's a trade barrier.
Now I find that thinking a little bit strange. In fact, I find it completely screwy, given that the U.S. federal government and some state governments maintain an absolute prohibition on the export of logs from state and federal lands in the United States. It does strike me as passing strange, and I'm sure every Canadian would say that. Some Americans have an amazing ability to put reason aside and think only of their own situation. But we're fighting that. As I said, we will see what comes down on May 6 and subsequently in July. So to make a long story short, our system does collect an appropriate resource rent. The difference between the bids that are received under the section 16 program are simply accounted for through what I talked about -- that ability of licensees to incrementally increase their costs.
W. Hurd: I guess the concern of some small business licensees is the comparison of the forest-related costs between a licence area and a small business area; that possibly the ministry might be conservative again -- and it's not conservative -- but possibly overgenerous in its assessment of the cost of rehabilitating a small business area. This gets us into a discussion of monitoring and auditing again. Is there an ongoing monitoring or audit process which compares the costs of silviculture and forest regeneration on
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licensed areas to what the ministry is paying to regenerate the small business enterprise program areas in the province? Could the minister offer an assurance to small business bidders that they are not bidding on a somewhat more generous or higher cost view of what it would cost to rehabilitate those lands, as opposed to what licensees pay in the province?
Hon. D. Miller: I don't have any trouble on that score. It's interesting. You would have to look. I would have to have a lot of numbers here. I am not certain it's about reform, but really what you have to look at is the spread between the upset price and what the price is bid up to. It seems to me that's the key. The upset is one that, as I indicated, must account for the upfront cost that we take on in terms of developing sites, roadbuilding and all the rest of it -- engineering, you name it -- plus our ongoing silvicultural obligation. The bonus bid is what the marketplace determines they are prepared to pay. How can you quarrel with the marketplace? Someone who is prepared to bid $100 per cubic metre for wood on the stump -- who am I to say they are wrong? We have to ensure that people follow through -- that they log the site properly, that they pay their bills -- and we can take some action if they don't. But if the marketplace says that they place that value on that wood, who am I to quarrel with the marketplace? So there's competition for the wood.
Now I just want to go back. I talked about the incremental cost, and British Columbia's position with respect to the countervail duty issue and the collection of appropriate resource rents. Well, the important distinction between the U.S. and B.C. is the fact that most of the forest land is Crown owned. There are some fairly large tracts of private land, but I think about 96 percent of the forest land is owned by the Crown. So we don't have a parallel. If you go down to Washington, or indeed even Oregon, the mix of land ownership is quite different. You have federal and state lands, and you have very extensive private lands.
[11:45]
I don't know what their costs are. They probably don't reveal what their costs are, in terms of managing those lands, or what it costs them per cubic metre. We do know that on the public lands where there is competition for the timber, they also drive that price up extremely high. So to the extent that there's an analogy or comparison between licensed land under the comparative value system -- I don't want to make this an absolute statement -- being equivalent to the private lands, the same situation exists there.
The private lands obviously bear a cost. They've got their invested cost and all the rest, their initial capital investment which I'm sure they've long since recouped. Indeed, given the differences in climate, growing site and all the rest, I suspect that their basic cost on the private land is extremely low. Therefore one could argue that the incremental cost of wood from the public lands can be in fact even higher, but that's getting into a bit of an abstract.
I don't mind these kinds of discussions, but I'm satisfied that we charge an appropriate amount for our fixed costs on the small business account. As I said, who am I to impede or interfere in the marketplace? If they want to bid timber up to a certain dollar amount, then I think that they should be free to do so.
W. Hurd: That sterling defence of the free market system is refreshing indeed from the Minister of Forests, given what's happening in other ministries of the government. But I think it's important for small business bidders to know that the upset price, which reflects the reforestation costs, does not confer a disadvantage as opposed to what private licensees are paying for their reforestation costs. It's an important issue because, as the minister is aware, surrogate bidding goes on, in which the major licensees participate with a small business forest enterprise to bid on this type of wood. If the upset price under the small business forest enterprise program is overly generous or higher than what the licensees are paying for their costs, that confers an advantage to the licensees that bid through a surrogate for the small business wood. Surely there has to be some process in the ministry to audit or monitor those costs in order to ensure that the ministry's upset price does not confer an unfair advantage to the licensees, particularly since they are engaged in surrogate bidding anyway.
Hon. D. Miller: Mr. Chairman, that question has thoroughly confused me. I move the committee rise, report progress and ask leave to sit again. We will pick it up again in the afternoon.
Motion approved.
The Committee rose at 11:48 a.m..
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