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)
THURSDAY, APRIL 29, 1993
Afternoon Sitting
Volume 9, Number 12
[ Page 5655 ]
The House met at 2:05 p.m.
R. Kasper: In the galleries here we have a constituent from the Malahat-Juan de Fuca area. His name is Mr. Rob Wilson. He is the president of the Port Renfrew Community Association, and he is also a recipient of the Canada 125 award. Will the House please make him welcome.
Hon. A. Petter: It's my great pleasure today to welcome to the House 15 members of the National Aboriginal Veterans' Association, including the president, Sam Sinclair; the executive director, Gavin Rhodes; the vice-president, Randy Ester-Gage; the secretary, Ken B. Harris; and the treasurer, Claude Petit. The contribution of aboriginal veterans has not been fully recognized by Canadians, and it's a tremendous contribution. The veterans' association has taken on the task of reminding all Canadians of that contribution. I would ask the House to join me in making them very welcome.
R. Chisholm: It gives me great pleasure today to introduce two contingents from my riding, one being the district real estate board: Garry King, Liz Tutt and Sharon Labiuk. Would the House make them most welcome.
J. MacPhail: I am delighted today to report that throughout the buildings there are people who are very valuable to this province. They're the constituency assistants of the government caucus. They are hard at work, so I'm sure they're not in the gallery, but they may be in throughout the day. Would the House please make them welcome when they arrive.
L. Stephens: It's a pleasure for me to introduce today 34 grade 6 students from Langley Central Fundamental Elementary School with their teacher Mr. Hillson. Will the House please make them welcome.
Hon. G. Clark: I know that many members would like to get up and introduce members of the real estate board, so I'd like to do it on behalf of the government. There are many members in the gallery today who are members of the real estate board -- the member from North Van, of course, as well -- and I ask all members to make these citizens welcome.
M. Lord: It's my pleasure to welcome three constituents from Comox Valley here today: Shirley, Diana and Marian Bell. These women have a keen interest in the political affairs of our province, and are enjoying a visit to the Legislature and to our capital city today. Would the House please join me in making them welcome.
R. Chisholm: I would like to introduce to the Legislature: Joelle Logan from Fraser Valley College; Lynn Swinson, a constituent of mine; and my wife, Janet Chisholm. Would you make them most welcome.
P. Dueck: I, too, would like to welcome the real estate people that are here today, especially the one from my constituency....
Interjection.
P. Dueck: Why not? This gentleman sells real estate for Clearbrook Realty, of which -- a little bit of advertising -- in my former life I was the owner and manager. But anyway, would the House please make Duane Bates welcome.
M. Farnworth: This is a commercial of sorts as well. In the House today we have, from Terry Fox Senior Secondary School, a group of some 45 students and a number of teachers, including Mr. Don Van Os, who is the coach of the senior boys' triple-A basketball team from Port Coquitlam, which won the provincial high school championship earlier this year. The students are also accompanied by teachers Bill Mullan, Jo Ann Ward and Francois Jacques. Would the House please make them welcome.
D. Mitchell: Today we have in the gallery some special guests from the city of Nanaimo. Would the House please welcome Mr. Don Banting, Phillip Connelly, Ruth Margolis, Jane Gittens and Jesse Roane, who are members of the Nanaimo Democratic Action Group.
E. Barnes: I'd ask the House to join me in making welcome someone that I met many years ago, who now is greyer than I am. He was only a teenager at the time, and much younger than myself, but we used to play basketball against each other, and he was also a very active member in the community. He has worked for the federal government and for all kinds of organizations. Today -- at the age of about what, 25? -- he's going back to university, to take law at UBC. I'd like all of the House to make Paul Winn welcome.
MOTOR FUEL TAX AMENDMENT ACT, 1993
Hon. G. Clark presented a message from His Honour the Lieutenant-Governor: a bill intituled Motor Fuel Tax Amendment Act, 1993.
Hon. G. Clark: Bill 18 proposes a number of amendments to the Motor Fuel Tax Act and to the British Columbia Transit Act. The bill establishes a municipal transit tax on gasoline and diesel fuel purchased in the Victoria regional transit service area. In addition, several housekeeping and administrative measures are proposed in the bill.
I move the bill be introduced and read a first time now.
Bill 18 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
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VEHICLE TRANSFER CONSUMER PROTECTION ACT
G. Farrell-Collins presented a bill intituled Vehicle Transfer Consumer Protection Act.
G. Farrell-Collins: I'm sure the Minister of Consumer Services isaware of this issue and of the need for legislation in this area. Quite clearly, a good portion of his time, his ministry's time, and certainly of my time as a constituent representative, deals with this type of issue. There certainly is a need that greater assurances be given to both the consumer and the seller of these products about the record that goes with the vehicle. This package would try to include a number of things, and of course, all these items are up for discussion. It would include the mileage, previous owner's accident record and lien record, which would give people purchasing used vehicles in this province a bit of assurance about the product they were purchasing, and would give the seller a bit of assurance about the product they were selling.
I move the bill be introduced and read a first time now.
Bill M217 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
PATRONAGE APPOINTMENTS
G. Farrell-Collins: My question is to the Minister of Labour. We sit today on the verge of the collapse of his committee, struck to review the Employment Standards Act, over an issue with which I'm sure he's familiar: the patronage appointment of Mr. Hans Brown to do a job that the committee itself was prescribed to do. In the interests of keeping the review of employment standards on track and the consultative process a healthy one, will he rescind the appointment of Hans Brown?
Hon. M. Sihota: The answer to the question is no. The hon. member suggests in his question that the review is on the threshold of collapse. He hasn't done his homework. He hasn't checked on the facts. He hasn't talked to the people involved in the review. I take this opportunity to advise members of the House that I had occasion, during the lunch hour, to discuss the issue with some of those involved in the review. I'm pleased to advise all members that the review is proceeding, and proceeding well.
The Speaker: A supplemental, hon. member.
G. Farrell-Collins: I, too, had occasion this afternoon to discuss the very same issue with those very same people, and I'm quite familiar with what the minister has been telling them. It's quite clear that the confidence of the business community in the review of the Employment Standards Act has failed. Will this minister finally do the right thing and show some good judgment by repealing that blatant patronage appointment?
Hon. M. Sihota: If there's an absence of confidence in this province, it's in the Liberal Party.
The Speaker: A final supplemental, hon. member.
G. Farrell-Collins: The absence of confidence in this province is clearly against this government and this minister. That's why the public is shouting for the recall of the minister, the Premier and the government. Will the minister finally show some good judgment, put his friendship with Hans Brown aside, rescind the $30,000 appointment and let the province get back to work?
[2:15]
Hon. M. Sihota: I wish to remind the hon. member that the first thing the Liberal opposition did after the 1991 election campaign was to hire the former Liberal candidate in Oak Bay, Paul McKivett. The second thing they did was to hire the former Liberal campaign manager in West Vancouver....
Interjection.
Hon. M. Sihota: I know it upsets them, but let's put the record straight. In terms of Jim Bennett, they reached into Mr. Chretien's office in communications and tried to pluck somebody from there to work for the Liberal caucus.
Interjections.
The Speaker: Order, please. I'm sure the minister is just winding up his reply.
Hon. M. Sihota: I'm pleased to know that this ministry has hired someone of the calibre of Hans Brown, who has tremendous experience with the labour movement throughout this province and brings his expertise to public service.
EFFECT OF BUDGET ON AUTO INDUSTRY
J. Weisgerber: My question is to the Minister of Finance. The budget that called for higher sales taxes on automobiles, new cars and trucks, projects that those increases, along with the elimination of the sales tax trade-in credit, will increase government revenues by $56 million. I assume that projection also includes an increase in automobile and truck sales. Can the minister tell us how large an increase in sales his budget projects?
Hon. G. Clark: I'm delighted to engage in debate with the member, because I know he is very knowledgeable in this sector. Today I discussed with the automotive dealers' association the formation of a technical working group to look at some of these questions. I'd be delighted if the member opposite, with
[ Page 5657 ]
his expertise, could join with the technical group in a review of this question. I'm sure we can give the member all the information he would like.
J. Weisgerber: If the minister has met with the dealers, he knows that since the budget was introduced, dealers are reporting a 40 to 50 percent decrease in sales. Has the minister calculated the loss of revenue that those sales trends will cause his government, or is he so ideologically bound to punish automobile dealers that he doesn't care about the loss of revenue?
Hon. G. Clark: In the first quarter of this year, prior to the budget, automobile sales were down about 20 percent across the province. So there has been some decline in automobile sales for some time. We don't have any data yet, but obviously we're monitoring it. I have full faith in the staff of the Ministry of Finance, in terms of their projections. We are going to be monitoring the situation very carefully and reviewing all of the data around this question. As I said earlier, I'd be delighted to share any of that information with the member opposite.
The Speaker: A final supplemental, hon. member.
J. Weisgerber: I suppose the government's under-mining of consumer confidence goes back prior to the budget. In any event, this government has engaged in a vendetta against automobile dealers. Doesn't the minister understand that the people he's hurting are not only the car industry, but everyone in British Columbia who owns or purchases a car? And doesn't he further understand that when the government attacks the automobile industry, it hurts the people who work in the industry -- the commission salesmen, the mechanics, the clerks and everybody in the dealership? Or doesn't this government care about jobs?
Hon. G. Clark: I'm delighted to answer that question, because British Columbia has two and a half times the employment growth of the rest of the country. It has three times the GDP growth of the rest of the country. It has twice the population growth of the rest of the country. Consumer confidence is up. Retail sales are up in British Columbia. We're doing better than any province in the country when it comes to the economy.
R. Chisholm: This question goes to the Minister of Economic Development. You've imposed double and even quadruple taxation. Auto sales are down by 40 percent subsequently, and so are your revenues. To pay for your extravagant budget, 1,300 people are expected to be laid off. Has the minister taken into account how he has decimated this industry and how he will increase the social welfare rolls and cause untold personal costs with his ill-conceived, unjust tax grab?
Hon. D. Zirnhelt: It was a little hard to follow the thread in that, but I think I have to say that anybody laid off in any industry, especially in those industries that are so aggressive, as the automobile industry is.... I'm sure those people will be able to find employment if there's some dislocation.
I think what the opposition fails to see is that retail sales are more than double what they are in the rest of Canada and will remain that way. In terms of consumer confidence, it seems to me that if people don't spend it on one thing they're going to spend it on another, and there's an equal generation of jobs.
R. Chisholm: Supplemental to the same minister. Is this minister really saying that this tax -- the Maloney tax, I might add -- which really kills consumer demand, destroys jobs, destroys business and reduces the revenue to government, is a good idea?
Hon. D. Zirnhelt: I won't let that member put those words in my mouth. What I can say in response is simply that the B.C. economy is the best in the country. We have to remember that, and as soon as the opposition says that this is the best place to invest, with the second-lowest taxes in Canada, then they will do their part to restore consumer confidence as we pull out of this recession.
The Speaker: Final supplemental, hon. member.
R. Chisholm: I'm glad the minister thinks a $26 billion debt is a good economy.
There is a rumour of a meeting today of the minister, the government and the car dealers. Is the minister meeting with them to back down, or is he just wasting their time?
Hon. D. Zirnhelt: I'm not aware of a meeting; they haven't invited me to a meeting. But I'd be happy to meet with them if they ask my office for a meeting.
INVESTMENT IN PRIVATE SECTOR COMPANIES
D. Mitchell: Hon. Speaker, I have a question to the Minister of Finance. Yesterday the government announced that they had rejected the recommendation of the commissioner on resources and environment, Stephen Owen, and instead appointed Justice Seaton to carry out a public inquiry into the government's purchase of shares in MacMillan Bloedel. Can the Minister of Finance tell the House today whether or not the government has ordered agencies of the provincial government to refrain from any further investments in British Columbia companies while this inquiry is being conducted?
Hon. G. Clark: Absolutely not, hon. Speaker. I'm surprised that the member would show so little confidence in British Columbia business. He suggests that it's all right to invest in companies in New York, London or Europe but not in blue-chip companies in British Columbia. We certainly reject that.
The Speaker: Supplemental, hon. member.
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D. Mitchell: Thanks to the minister for that answer. The government's program of increasing intervention in the private sector of British Columbia has now caused a likely conflict of interest. Clearly this government cannot own part of a private enterprise while it regulates the activities of that enterprise. Given that, and that it is obvious that the government must be very careful in its investment decisions, can the Minister of Finance tell us whether or not Treasury Board, which he chairs, has developed any guidelines for such investments pursuant to the British Columbia Endowment Fund Act or the Financial Administration Act? And if so, would he be prepared to table those guidelines in this House?
Hon. G. Clark: The government and the Ministry of Finance have a legal obligation to maximize the returns for their shareholders -- the taxpayers of British Columbia -- or for the pension funds and the pensioners. The program of diversification started under the previous administration. There has been no change in the rules governing diversification with respect to that, except that in the Endowment Fund we do have a B.C. focus to try to develop British Columbia in a non-subsidized way. We are not doing anything which I think would jeopardize that, in terms of state intervention. This is prudent use of taxpayers' money to build the province and to make healthy returns for the taxpayer.
The rate of return in the Ministry of Finance this year is somewhere over 12 percent. That's good news for the taxpayers and for the people of British Columbia. And I'm delighted with the performance of the Ministry of Finance staff.
The Speaker: Final supplemental, hon. member.
D. Mitchell: I asked the minister for guidelines for investment. Clearly he has no guidelines. This is the same minister who, during second reading debate on the bill last year, boasted that he was proud that he was going to use the public sector creatively. "Creatively" was the word that he used. Now this minister's creativity has gotten the government into hot water.
Can the minister tell the House today whether this government -- as well as its growing Crown corporations -- will cease and desist from any further intervention into the private sector of British Columbia?
Hon. G. Clark: This is not intervention. These are private fund managers investing in B.C. companies. This is professional Finance ministry staff and professional staff in the private sector from Dominion Securities. Before we took office, the government owned over 1 percent of MacMillan Bloedel through professional fund managers. That has continued. We have made very good returns for the taxpayer, and that reduces taxes and reduces the deficit in British Columbia.
W. Hurd: I have a question for the Minister of Finance about the terms of reference for the Seaton commission inquiry. Has he examined section 68 of the Securities Act as to whether insider-trading laws were violated by the B.C. Endowment Fund?
The Speaker: I regret that I must interrupt the member. Because that matter has gone to an inquiry, the particulars of that inquiry are not now able to be discussed in question period. If the question is a general one that does not consider the inquiry specifically, which is sub judice because of the inquiry, then I will allow a general question.
W. Hurd: Does the Finance minister agree that section 68 of the Securities Act regarding insider trading needs to be examined in light of this government's determination to invest public sector money in private sector ventures?
Hon. G. Clark: Hon. Speaker, members opposite should think about the consequences of what they are saying. Every province in Canada, through their pension funds and public management of funds, invests in equity participation -- every single one of them. It is good business sense; it is good for the public interest.
If members opposite are saying -- contrary to what has existed in this province under the previous administration, contrary to every other government in Canada -- that the investments of the Ministry of Finance should only be in money markets, it would reduce the rate of return for the taxpayer, it would increase the unfunded liability....
Interjections.
The Speaker: Order, please. Thank you, hon. minister. The bell signals the end of question period.
Hon. G. Clark: It's tempting to continue, but I won't.
I have the honour to transmit herewith the annual report of the auditor general.
M. Farnworth: I have the honour to present the first report of the Select Standing Committee on Economic Development, Science, Labour, Training and Technology on the matter of the North American free trade agreement.
[2:30]
I would like to add that this report is the basis of a second round of hearings that will be held in the province. I'd also like to thank the committee and my co-Chair for the work they've done. We've had a considerable number of hearings take place, and this will continue the process that the House set out for us before.
Hon. Speaker, I move that the report be taken as read and received.
Motion approved.
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Hon. M. Sihota: Hon. Speaker, we will be continuing estimates debate for the Ministry of Labour and Consumer Services in Committee A this afternoon.
With that said, I call second reading debate on Bill 3.
BUILD BC ACT
(continued)
The Speaker: Before proceeding with second reading debate on the amendment, the Chair has now had an opportunity to examine the amendment to the motion for second reading of Bill 3, moved by the hon. member for Saanich North and the Islands shortly before the House adjourned at noon today.
Sir Erskine May's twentieth edition of Parliamentary Practice states at page 531: "An amendment, urging the setting up of a select committee to consider the subject matter of a bill, might be moved and carried, if the House were averse from giving the bill itself a second reading and so conceding its principle." The propriety of this type of amendment at the second reading of a bill is further conceded in Beauchesne's Rules and Forms, page 200. This House has also accepted such amendments in the course of second reading debate on various bills. The essence of this amendment is an expression of the House that it is, in the words of Sir Erskine May: "...averse from giving the bill itself a second reading and so conceding its principle."
The amendment submitted to the Chair by the hon. member for Saanich North and the Islands reads as follows: "All of the words after 'that' be deleted, and be followed by: 'Bill 3 now be read a second time, but that the subject matter be referred to the Select Standing Committee on Finance, Crown Corporations and Government Services'." It seems to the Chair that the motion itself contains clearly contradictory principles, which may or may not have been intentional. It requests, on the one hand, that the bill be now read a second time; and on the other hand, that the subject matter of the bill be referred to a committee. Under these circumstances, the Chair has no choice but to rule this amendment, as presently worded, out of order. We are now back on the main motion, which is second reading of the bill. We can continue debate on that matter.
A point of order by the hon. member for Saanich North and the Islands.
C. Tanner: While I'm sure you have made the correct ruling -- and I'm not questioning that -- it is very obvious that it is a typographical error. It should have read: "not now." Would the Chair therefore accept that motion from one of our other members?
The Speaker: On the point of order, Government House Leader.
Hon. M. Sihota: The hon. member is seeking advice from the Chair in terms of what, tactically, he ought to do next. That's certainly improper. If the opposition caucus has made an error or brought forward an amendment that's inconsistent with the rules, then they have to live with the consequences if they are wrong.
The Speaker: I have heard two submissions on the point of order and, quite clearly, the Chair doesn't have the flexibility to do what is requested. But we can continue debate on second reading of the bill at this time.
I recognize the hon. member for Chilliwack on second reading.
R. Chisholm: No, hon. Speaker, I'm speaking on the main motion.
The Speaker: Just to clarify for members, we are on second reading of Bill 3, which is the main motion.
R. Chisholm: It's very unfortunate that we have typos that people take advantage of, but seeing as we have to speak, we'll talk about this Bilk B.C. fund. Unfortunately, the members are leaving so they don't have to listen to us.
B.C. 21 allows the government to transfer hundreds of millions of dollars in debt to Crown corporations. This policy allows the government to skirt the normal legislative process by funnelling money into political blacktop projects. B.C. 21 states that it's going to have $100 million in the Transportation Financing Authority. It's going to artificially reduce the 1993-94 deficit. Unfortunately, this fund won't be counted in our deficit. Only $100 million in B.C. 21 spending will actually appear on the books this year as an appropriation to the Build B.C. special account. Another $80 million is in borrowing power for the Transportation Financing Authority, which will show up as part of the province's accumulated debt -- which, I might add, will be reported apart from the annual deficit. In other words, this Legislature will not know what the debt of this Crown corporation will be. Another $166 million will be borrowed for the education institutions building authority, $93 million for the Regional Hospital Districts Financing Authority, and $281 million for the School Districts Capital Financing Authority. All of this money will be borrowed this year, but not included in the deficit.
The fact is, the total accumulated debt of our government, Crown corporations and agencies will increase this year from $23.2 billion to $26.3 billion, and that does not include the $4 billion worth of pensions. This is a 32 percent increase since 1991, when this government took office. This is the largest debt increase in the entire history of the province. You should be ashamed of that, hon. members. The minister claims that much of this accumulated debt is secured. This argument is sheer nonsense. When was the last time hon. members saw a highway sold off to back up a debt? When did they see this particular building mortgaged to back up a debt? When will we see this building sold to pay off a debt? It doesn't happen.
The plain truth is that the NDP is running up debt at a historically fast pace, and no amount of creative accounting can hide that fact. This government believes
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in higher taxes, bigger spending and more debt -- just the opposite of their election platform, I might add. I'd like to quote from a newspaper called the Taxpayer. The Taxpayer, of course, is a critique of this Legislative Assembly and assemblies across the country. It states:
"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" -- not something to be proud of -- "rising from $1,144 to $7,657 for every man, woman and child. 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. With the exception of the Yukon, the fastest growing per capita debts are found in western Canada, with British Columbia leading the pack at 569 percent...."
If I was part of this government or the former government, I'd hang my head in shame. With the so-called economy that we do have, according to the minister, there's no way we should be in this position, because we have a growing economy, he says, a vibrant economy. Unfortunately, the statistics do not back him up.
According to this paper, we have $16.191 billion in government revenue. That sounds like an awful lot of money, but when you take a look at the expenditure, we're spending $17.98 billion. That makes a larger deficit. It states that in that revenue we pay $19,228 per four-member family per year. The equivalent costs in our family on $17 billion is $21,355. Each family is paying $7,050 to bolster our medicare system, and that's $587 for a family of four for every four-month period, and that's each and every individual. It states that our education is costing each and every member of the family $355, to a tune of $4,263. In social services it's $2,808 -- for every family, $234.
What I'm driving at here is that when we turn around and look at the wealth-generating industries, we are going to see a disparity. Unfortunately, in agriculture each and every family subsidizes to the tune of $111; that's $9 per member of the family. In economic development and trade it's $110, in tourism it's $72 and mining -- unfortunately the minister is not here -- gets a whopping $51 a year. These are the ministries that generate wealth to pay for our social services, and it's very obvious where the disparity is. If you take a look at all of our wealth-generating industries, we spend approximately $1.2 billion. Yet we have a budget of $17.98 billion. It's rather obvious who's paying the way here. It happens to be the taxpayer, and the taxpayer is basically taxed out. We have to start investing in our wealth generators, and this bill does not do that.
When we take a look at this deficit, and we take a look at our budget, we are paying out $795 million in interest payments alone, and with this bill we are going to increase that debt. Of course, once we increase that debt, we are going to have to pay more interest. So that's going to increase. Just think of what we could do with a billion dollars if we had a balanced budget. A billion dollars would go a long way in this province; it would solve an awful lot of our problems.
When I take a look at this bill, and I debate it here in the House, I find that it has a lot of problems. I'm going to talk about a few of them, and I'm going to go through a few clauses. What we've got to put in perspective is that this is a Crown corporation. This is not government; this is business. Crown corporations should not be entitled to tax. If we want to call it a toll, or anything we want -- a licence, a fee -- it is still a tax. The only organization that is allowed to tax is a government, not a Crown corporation. Unfortunately, we have too many Crown corporations around this province that are taxing. B.C. Ferries raising their rates -- guess what: it's a tax. What's happening on Saturday? All the truckers are going to block them. It's a tax, whether you like it or not.
F. Garden: It's a cost.
R. Chisholm: If it was a cost, hon. member, nobody would have a complaint, but unfortunately, we seem to put a little bit of profit into these costs.
Take a look at some of these clauses. Clauses 9 to 11 establish the B.C. Transportation Financing Authority, with a board chaired by the Minister of Transportation. The purpose of that authority is to plan, acquire, construct or improve transportation infrastructure in British Columbia. I thought that was the job of the Minister of Transportation and the ministry. Why do we need a Crown corporation to do their job? This is just more bureaucracy, and it's costing us far too much. The province cannot afford this extravagance.
[2:45]
We then take a look at clause 12, the powers and capacity of the authority. It gets a little shocking here. Under section 12(4)(a) it says it's to plan, build and improve transportation infrastructure. I've already talked about that. That's the job of a line ministry. Under subsection (4)(b) it says: "...acquire property by expropriation or otherwise." That's kind of a scary thought. We now have a Crown corporation being allowed to expropriate. I thought this was a government responsibility. Why don't we let the 7-Eleven, the corner store, expropriate? That's the next step.
Under subsection (4)(E), it says: "...provide financial assistance by way of grant, loan or guarantee." I certainly hope patronage doesn't come into play in this one, but obviously it's an open door. Subsection (4)(g) says: "...create subsidiary corporations to carry out the purposes of this Act." Not only do we have this Crown corporation, but it can give birth to other corporations. It's just going to grow and become an empire. The last thing we need is a Crown corporation that is bigger than the government -- and it could end up that way. This is a $100 million BS fund, but could become a $1 billion BS fund. This is the NDP's superversion of the former government's way of extorting money.
Clauses 13 to 15 define the powers of the board of directors. It defines the officers and employees who may be hired by the chief executive officer, whose office is established under this section. These employees will have the Public Service Benefit Plan Act, and the Pension (Public Service) Act is also applicable. In other words, we're talking about civil servants. I'd like members on the other side to explain what the
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difference is. What is the difference between an individual in the ministry who has the same benefits and an individual in this Crown corporation? There's absolutely no difference.
Clause 18 defines the financial administration of the authority. The books of the authority will be open for inspection by the minister or his designate. It doesn't say by the Legislature; it says by the minister or his designate. When do they report to the Legislature? Who makes them accountable -- the cabinet, and the cabinet alone? Then the public of British Columbia and the Legislature will never know what is owed behind closed doors. We had enough closed-door situations during the last regime. It's time that stopped. Here the door is open to do it again.
The authority will have to provide Treasury Board with a business plan with respect to projects to be undertaken, which will include: "(a) revenue, expenditure, borrowing and lending proposals, (b) statements of assets, and (c) such other information as Treasury Board may require." Clause 18(10) states that the report of the authority for the fiscal year must be laid before the Legislature by the minister as soon as practicable. The problem here is that they too are also allowed to advise the Legislature, as we're going to see just a little further on. So who is running this thing -- Treasury Board or the Crown corporation? If they're advising Treasure Board, then who's in charge?
Clause 19 provides for authority revenues from the gasoline tax. When were they allowed to increase taxes? I thought that was a government responsibility. But it goes on to say that this will allow for, at most, a 1-cent-per-litre gasoline levy to be directed to the authority. This is where it gets shocking: this section will also allow for an additional levy to be directed to the authority in any area of British Columbia, and for prescribing the amount of tax to be collected under section 11.1 of the Motor Fuel Tax Act. We now have this Crown corporation taxing the people of British Columbia. Since when has a Crown corporation been allowed that kind of authority?
The authority will also collect the net revenue from the tax revenue collected under section 2.5 of the Social Service Tax Act; that's the $1.50 on car rentals. Again, they're collecting taxes.
Clause 21 allows for tolls or charges to be paid for any use of any property of the authority. Again we're into it. Bill 3 is horrendous in what can be done with it.
Clause 22 is really spiteful: the authority, with the approval of the Minister of Finance, may invest or loan money of the authority which isn't required for the immediate purposes of the authority. In other words....
The Speaker: I do regret that I'm interrupting the member, but I need to remind the member that although I've given him quite a bit of flexibility, discussion of individual clauses of the bill must be left until committee. Second reading debate must be on the general principles and purpose of the bill.
Please continue, hon. member.
R. Chisholm: Thank you, hon. Speaker. I'm not actually reading from the bill. These are some of my thoughts prior to the bill. It's not the way it is written.
Anyway, the authority will approve of the Minister of Finance.... He's allowed to take their money and invest it. He's allowed to do whatever he wants with any overages that they have. This is an awful lot of leeway. When does he account for this?
Clause 23 sets out that this agency can borrow. It can borrow whatever amounts of money it should desire, and it may issue securities. In other words, whoever is in charge of this Crown corporation and taking direction from the cabinet may go out and borrow $1.5 billion on behalf of, and for the benefit of, the population of B.C. -- in other words, add it to our debt. Where does this stop? There are no checks on this. It never comes to the Legislature. It doesn't have to be reported in the deficit. Where are the controls? It can advise the Treasury Board. There is something blatantly wrong with this bill. We are going in the wrong direction.
I want to quote a former member of this Legislature from the party that's the government at this point in time. It was the hon. Mr. Stupich. He talked about the BS fund -- now we have a superversion of the BS fund -- and he had some very strong things to say about it. "We're opposed to this kind of smokescreen, this kind of delusion. We're opposed to this concept of setting up a BS fund that will be used simply to pull the wool over the voters' eyes and be used simply for political election purposes." This bill runs afoul of that statement. He also said: "...BS fund will not be represented by anything in the way of assets." He said: "...they will determine in advance what they want the deficit or the surplus to be when it's all over.... They can arrive at any figure at the bottom of the statement. That's exactly what's it's going to be used for."
How can this government, in all conscience, turn around and produce exactly the same bill as the former government, only enhanced and made even more devastating for the province? They told the former government what they thought of the BS fund; it was very obvious. How can this government do exactly the same thing, only make it bigger and better for their purposes? It's not bigger and better for the province. The people of the province are being devastated by this kind of politics, and we don't need it anymore.
I'm going to quote another member. This is going back a few years, but he's still in this Legislature. He'll probably recognize the words" "...resource revenue stabilization fund...that particular fund had the same motive precisely." These are all words from those people over there. It makes one wonder how in the last session they could say these words, and in this session they can turn around and refute them.
I want to quote now from an unbiased agency -- nobody from within this organization. It's the Vancouver Board of Trade, and they're asking what the rush is in handling this Bill 3. Send it to committee. Let it be debated. Let the public have a look at it. Let the board of trade have a look at it. Let all of these agencies have a look at it. What is the rush? Those are the questions they're asking. They made another couple of
[ Page 5662 ]
comments: "Bill 3 appears to be an attempt to create economic activity with the taxpayers' own money. It will create no new jobs and no new business for the province." That's a quote from their document. Obviously they're not very enthused about this bill. "Bill 3 will create more bureaucracy, which means additional public sector workers and additional patronage appointments. What does it do that cannot be done by existing ministries?" They're exactly the same questions I've been asking in the last three or four days. These people are coming to the same conclusion.
They go on to say: "Generating revenue in creative new ways is just another means of extending taxation. Bill 3 offers no assurance that the funds will be carefully spent" -- and I re-emphasize that -- "with open competition for contracts. Will it provide more openings for government patronage?" That's a good question, with the track record of this government. "Bill 3 appears to be a sleight-of-hand move to remove some expenditures from the government's accounting mainstream, thereby obscuring even further the province's true fiscal picture." It's exactly what I've been saying.
We won't know what we owe. We know right now that it's going to be around $30 billion. If they want to say that that's pensions, or if they want to say that that's Crown corporations, it's immaterial. It is debt. We have to service debt. That means we have to pay interest. That is money that we can ill afford to pay. We are mortgaging our children's future.
It's time this kind of politics stopped. It's time we got control of it. It's time we tried to get back to a balanced budget. We can't tax our way out of it, and we can't take Bill 3 and think that that's going to do it. As a matter of fact, all it's going to do is add debt to debt, and then there's no control. And then where do we get the actual figures of what we owe? If they don't report to the Legislature, who is going to have the answers for the people of British Columbia? Who is going to have the answers for the opposition? Who is going to have the answers for the next government?
They go on to say: "Bill 3 opens the door for massive government intervention in the economy -- the opposite of what is required to generate economic growth." As a matter of fact, that's very true. Government expenditure does not generate economic growth. All we do is build bureaucracies. Yes, we employ a certain percentage, but small business and economic development employ a lot more. For every job we produce in the bureaucracy, they produce dozens out in the economy. It's time we realized that's where we have to generate investment, that's where we have to generate interest, that's where we've got to make us flourish -- and that's what will pay our bills.
"What we really need is for the government to create a better climate for investment. We need to encourage private sector investors to invest money and create jobs in British Columbia," says McLean, the head of the Vancouver Board of Trade. He is saying exactly what I'm saying: we need to generate interest in our economy, but we don't do it by building a bureaucracy. We don't do it by going behind closed doors. We don't do it with Bill 3. We do it by taking profits that we see with B.C. Hydro and maybe lessening the cost of electricity for some business that wants to invest in British Columbia, and they will create the jobs. There are many ways of making money if we are wise enough, frugal enough and prudent enough to do it, but we don't seem to have this ability in this legislative chamber.
If you want to improve the environment, what do you do? You take the automobile and put ethanol into it. We have all of our grain growers bankrupt in the prairie region. We put an ethanol plant up there. We take all of the grain that they can possibly produce and put it into our gasoline -- which, by the way, will reduce pollution coming out of the automobile by 20 percent. We give them cheap power to bring in this plant. All of a sudden, our grain growers are back to work; we're not subsidizing them anymore.
This is how we generate wealth, and we turn around and put that wealth into paying off this debt. Eventually we will see the light at the end of the tunnel. But the way we're going right now, we're just going to see a bigger black hole. Unfortunately, this is not the answer with Bill 3. Bill 3 isn't making that kind of investment.
[3:00]
Hon. Speaker, at this time I would like to submit an amendment to the motion. The amendment is moved by myself and seconded by the member from Vancouver. It reads: "That all the words after 'that' be deleted and be followed by 'Bill 3 not now be read a second time, but that the subject matter be referred to the Select Standing Committee on Finance, Crown Corporations and Government Services'."
The Speaker: Continue debate on the amendment while the Chair considers the amendment.
On the amendment.
R. Chisholm: Every major business association has spoken against this bill. Can every one of them be wrong and this government be right? I find that highly doubtful. The B.C. Chamber of Commerce is against this bill outright; the Vancouver Board of Trade, the British Columbia manufacturers' association, the Retail Merchants' Association and the bankers' association are all against this bill. If they are all against this bill -- and this happens to be the mainframe of all the business in British Columbia -- there's got to be something wrong.
Why don't we take this bill and put it into a standing committee? Why don't we talk about this thing? What is this government scared of? Are they afraid of talking to a few businessmen? Are they afraid of getting a balanced decision on this thing? Why are they ramming it through? Have they got an agenda of their own? Is the money already mortgaged? Have they signed the documents in New York, or something foolish like that? Unfortunately, hon. Speaker, it's beginning to look that way.
Why all the resistance from the employers of British Columbia? The answer is simple: this bill is about debt; it's about hidden debt and hidden taxes. We've had enough hidden taxes; we've had enough hidden debt. We need to know honestly what we owe, and we need to address it. We need to get control of our debt; we
[ Page 5663 ]
need to buy it down. We can't do it by taxation alone. We have to invest; we have to cut back on bureaucracies, which we're enhancing with this bill. We're making bigger bureaucracies. We have to cut them back, not make them bigger.
It's incredible that today, as we debate this bill, the peripatetic Premier is trying to sell business in Asia when his entire business community back home is telling him he's going in the wrong direction. The wrong-way Premier was quoted in yesterday's paper as saying that the government supplies the juice, the clout and the credibility for business. That's what he's telling the people in Asia.
What does the Premier mean by "juice"? Hon. Speaker, the only juice between the business community and the Premier is what's left after he squeezes the business community dry.
N. Lortie: We heard that already.
R. Chisholm: And you need to hear it again, hon. member, because you weren't listening last time. I notice your lips are moving this time. Maybe you're reading the bill, because you're going to have to answer questions from your constituents.
Hon. Speaker, I apologize for my outbreak there, but anyway it wasn't very necessary. Some of these members don't realize that when the public realizes what they've been duped with, they are going to have to answer questions in their constituencies: "Why did you allow this to happen? How dare you? It's not your money; it's our money. You are just entrusted with it to use in our best interest." Bill 3 does not do that for the people of British Columbia.
What clout is the Premier talking about? After the clout administered by the capital business tax, business doesn't want to be clouted anymore by this government. It has been clouted enough. As a matter of fact, half the businesses are leaving or closing up. They've had enough; they're going south.
An Hon. Member: What does it have to do with this bill?
R. Chisholm: Hon. Speaker, what it has to do with this bill is that this bill is just another form of this taxation. It's another form through which people are going to take their good tax money, and it's going into this black hole this government is producing. It's high time it stopped.
Does the Premier really believe that he and his colleagues provide credibility to business? We have companies in this province that have been world traders for decades. They must be relieved to learn that they will finally acquire credibility thanks to our Premier, now known throughout Asia as Dr. Juice. The opposition has some juicy tidbits to share with our business ambassador when he finds his luggage and returns home. He has no credibility with business. In fact, his credibility is receding with a dwindling roster of NDP supporters. The bald truth is: when this Premier claims to be giving credibility to business, he's speaking off the top of his head.
Hon. Speaker, we have problems in this province. It's time for us to take our heads out of the sand and realize that those have to be addressed. It is not time to create another bureaucracy, another Crown corporation. It's time to make smaller and more efficient the bureaucracy we already have. It's time to do what the people put us here to do: govern the province to the best of our ability. I don't believe the people of British Columbia believe this is the best of our ability. As a matter of fact, I think they find it downright deceitful, and it's time that stopped.
I have a few quotes from members on the opposite side, and I did a little research so I could respond to these quotes. I'll respond especially to the hon. member for Cariboo North, who said that Build B.C. is going to "kick-start the economy of British Columbia." The Finance minister has been bragging about B.C. having the best economy in the land. If he is right, why does it need to be kick-started? Obviously, if we have to go out and use the rhetoric they're using, there is something wrong here.
The hon. member for Vancouver-Hastings had some interesting things to say too. I said we're mortgaging the future of our kids. She said: "...the future of our kids is actually at stake in this province." That is not a defence of Bill 3 so much as it is an admission that the NDP have already mortgaged the future of the next generation. There are no truer words spoken. With the $30 billion debt, which we can only pay back at $1 billion or $2 billion a year, it's going to be around for 15 years, and we'll be going through a couple of generations. Some people have to look beyond their nose and realize that the hole we're digging is one we're not going to get out of very easily. We have to put the brakes on now.
The same member said: "...the opposition focuses on money. That's all they can see." A good response for you, hon. member. The millions of taxpayers in British Columbia also focus on money and do not want schemes such as Build B.C. that will spend money they can't see. They don't mind giving us the money if we tell them what we're doing with it. They don't mind us having the money as long as we show them what we've done with it and they can see the benefits they're getting from their tax dollars. With this bill, they won't be able to. It is hidden, and it is deceitful.
The hon. member for Burnaby-Edmonds said: "...I don't see anything wrong with borrowing money, providing there is a provision to generate cash to amortize these loans." The provision to generate cash to which the member refers will take the form of legislated tolls, which are really taxes to be imposed on the people of the province. There is nothing wrong with borrowing money if the borrower makes the payments. In this case, the borrowing will be done behind closed doors, by an NDP cabinet, and the taxpayer will be stuck with double taxation to pay the bill.
You take a look at some of these statements and it makes you wonder where the members came up with their ideas. Take the member for Skeena: "Is the opposition opposed to...programs to ensure that people on income assistance receive the opportunities?" My response to that is that we have record numbers of
[ Page 5664 ]
people on income assistance because of the economic policies of this government.
F. Garden: Come on! That's nonsense.
R. Chisholm: The Build B.C. fiasco will add to debt and thus decrease employment opportunities. If it's nonsense, hon. Speaker, time will tell, won't it?
We have a couple of quotes from the hon. member from the Kootenays, the Minister of Energy, Mines and Petroleum Resources. The only thing she's got left to do is hang out the shingle saying "Bankrupt," and we're all through, because all of the mines have moved out of this province. She says you've got to compare that method of financing, which many municipalities and private companies use.... Well, comparing the borrowing programs of Build B.C. to those of private companies demonstrates just how little the NDP understands the market system. One thing the NDP doesn't understand is that private companies can be sold or foreclosed if they can't pay their debts. This does not apply in this chamber. It does not apply to government ministries, and it's high time the members realized that. That's a basic principle of business.
In another statement -- I might add, brilliant statement that this member made -- she said: "Believe me, the accountability is very rigorous." She said that they have to go to Treasury Board for their funding.
[E. Barnes in the chair.]
Since she is not part of the inner circle of the cabinet, the minister might not realize that Treasury Board essentially involves an all-in-cabinet discussion; therefore borrowing and spending decisions will not be subject to public scrutiny or accountability -- not, I might add, accountability in this chamber.
Interjection.
R. Chisholm: No, hon. member, some of them were different quotes.
N. Lortie: It's the exact the same speech.
R. Chisholm: It makes you wonder, hon. Speaker -- these backbenchers over there, with their lips flapping and nothing coming out. But no doubt they have been convinced by this government's spin doctors that this bill will save their political posteriors when the government faces election. It was promised as a slush fund which would provide them with endless ribbon-cutting opportunities in their constituencies. After years of lying in state in the back benches, it would actually create the illusion that they did something in Victoria other than flap their gums. Now they realize that explaining this to their constituency might not be so easy.
On that note I'll sit down, and I will talk again on the next amendment. But I do wish that the backbenchers of the government side would read the bill, discuss the bill among themselves, and then they might make an intelligent decision.
V. Anderson: As we look at Bill 3 and consider it, there's a great concern that comes to mind for the multiplicity of financial arrangements that this government is trying to put before the people of British Columbia. As we've discussed in this House a number of times, we have had the budget that was brought before this Legislature by the government some weeks ago. The estimates that come from that budget are now being considered in the various committees of the Legislature. What we did not have brought before us was Bill B.C., as I would call it -- B-i-l-l -- because this Build B.C., as it's called in the bill, is going to end up billing B.C. a very large sum of money. It has brought a special financial account into being -- if it is passed -- and that financial account is outside the control of the Legislature.
It begins, in this day of deficits and money shortage, with $100 million. But having brought together the $100 million, it is also open to be extended by other funds that are gradually added to it.
Deputy Speaker: On a point of order, the hon. member for Richmond Centre.
D. Symons: I believe that we do not have a quorum, and I would like more members to hear the wise words of this hon. member.
Deputy Speaker: Thank you, hon. member.
The hon. member for Vancouver-Langara may continue. I believe we have a quorum now.
[3:15]
V. Anderson: In looking at this brand-new financial account that is being brought forth by this Build B.C., we find here another item which is outside the general control of the Legislature. We find that the committee which is to manage this special account is a minister who is not named, plus "other members." So we are not even sure who is managing this special account. We look at the possible opportunities in which this account might be expended, and it is wide-open. There is no limitation to it; in fact, the wording is simply "without limitation," and then it gives only some suggestions.
What we have here is a wide-open budget -- what I call the B budget -- which gives this government the opportunity to replace the programs of the other ministries -- to replace the programs of Aboriginal Affairs, Advanced Education, Agriculture, Attorney-General and Economic Development. Indeed, the ministers and their backbenchers have indicated that in almost every area of government they will be undertaking projects outside the original budget, in a budget which is not accountable to the people.
This cannot be accounted for properly within our system of government, and it is something that must be challenged and that we must ask this government to reconsider. That is why it is important that this go out to the Select Standing Committee on Finance, Crown Corporations and Government Services -- so that they can look at this budget B in a much larger context. Not only do we have budget B, but also what I would call
[ Page 5665 ]
budget C -- and that's the creation of the new corporation. Within that corporation there are the small budgets -- one, two, three, four and five.
How many others would this bill allow? It does allow for the opportunity to extend almost indefinitely the kinds of organizations and opportunities that this government would wish to make to put forth their concerns. With this enlarging bureaucracy and opportunity for committees that is now before them -- corporation after corporation within corporations -- there is a great concern among the people of this province.
We also see that it is controlled by a very few people. When you come to budget C, whereas there are only five members on the board of this budget, only three need to be there for a quorum and only two need to be there to make decisions of this board. But further than that, the decisions of this board can be passed on to an individual member. All the power and authority of this board can be delegated to one person to exercise the full undertaking of this new corporation. It's a concern that this government is taking this direction to pass over this kind of authority, unspecified as it is, because really, as we look at the purposes, we are not given exact directions. We are only given hints and possible directions as to how this money may be spent.
We talk about the finances which are a part of the Transportation Financing Authority, and we find out that this money comes from income from the gas tax, tolls and unspecified taxes. The amount of these taxes is again increasing at an untold rate, and the accountability of either the income or the outgo is not seen here within this bill. I'm sure that residents throughout the province are concerned. They cannot operate their own housekeeping budgets in this kind of way, and so they expect the same kind of accountability from their government. We've had concern in health, education and social services about the increasing expenditure which this government is placing upon us. Here we have another bill which promises to increase, again, the amount of the expenditures of this government, and to do it through taxes, tolls and borrowing.
There is no indication in this bill, as it's presented here, that there is going to be any regular income which is not a burden upon the taxpayers. If we were finding through this bill that there would be an increase of private business and companies coming into this province so that the income of the province would be increased and more people would be put to work and, in essence, there would be a return to the government to pay off even the outstanding debt, much less the debt they're adding, then perhaps we could give some sympathy to this undertaking. But there is nothing here to indicate there will be any increase in income to the province. There is nothing here to indicate that there will be any increase in jobs by the private sector or in opportunity for our youth, seniors and those in their middle years who are finding it harder and harder to maintain their employment, and when they lose it, to find new employment.
Deputy Speaker: The hon. member for Vancouver-Quilchena rises on a matter....
A. Cowie: On a point of order, hon. Speaker, we don't seem to have a quorum. There's only one member from the government present.
Deputy Speaker: There doesn't seem to be a quorum. I'll ring the bells.
There is a quorum now, hon. member. You may continue.
V. Anderson: We seem to have a difficult day keeping our quorum here, hon. Speaker. Perhaps that's an indication of the interest in this particular bill. Perhaps it's also an indication that the future does not look too bright, either for the bill or for the government that's sponsoring it.
One of the realities we have here is an increase, if not in government, then in the number of members who will be employed if this bill goes into reality, because a number of people will be employed in order to make this particular bill a functioning part of our undertaking. There is a concern about the costs that will be added to the government debt as a result of undertaking this bill and the bureaucracy that will be put into place. It is a concern that we place before the government, and I wish they would seriously consider our request to return it a committee so that it can be fully considered.
A. Cowie: It gives me a great deal of pleasure to stand and support this amendment. This is an ideological bill, which should mainly be fought outside this Legislature. It should really be thoroughly examined by the public and by organizations, in order to get their opinion. In fact, this afternoon there was a meeting of the committee that this bill should be referred to, the Select Standing Committee on Finance, Crown Corporations and Government Services. That committee met, and only 15 minutes ago elected a chair. So the committee is ready to go, and the bill could be referred to it this afternoon, if government members were only willing to accept that it requires the maximum amount of public participation.
A bank organization recently made a statement about this Bill 3. I'll just read a few phrases of what was said:
"With its spending rate at twice the rate of inflation, the B.C. government is sending the worst possible message to individuals, business and the international finance community. Bill 3 establishes a new Crown corporation with unlimited spending and borrowing authority, and it will also attract new administration costs, a CEO and numerous staff at even more cost. Of serious concern is that this new authority can take on long-term debt with expenditures which should be provided through the annual budgetary process."
In other words, what this banker -- and this banking organization -- is saying is that he wants this bill, and the funding that would result from it, examined in the normal process, not by a special select corporation that is really made up of cabinet ministers who deal with these matters secretly.
A retail merchant also had a great deal of concern. Just a couple of lines from those comments: "Our members are deeply concerned about the high level of
[ Page 5666 ]
taxation and government debt. Bill 3 gives the NDP sweeping powers to borrow money, with little accountability to the taxpayers." That's what our retail industry, as a whole, thinks about this bill.
I have numerous quotes from a mining company executive and from business associations. A manufacturer is also concerned. This manufacturer says: "On an examination of the bill, there are no functions that cannot be handled by existing ministries." Time and time again, the message is: do it in the normal way that business is conducted. Don't start any special funding or a special organization. The government's favourite accounting firm, Peat Marwick, suggested no special accounts such as should this be created. The manufacturer also asked: "Will the Ministries of Transportation, Economic Development and Advanced Education and the Ministry Responsible for Human Rights have their funding reduced proportionately to the moneys accruing to this new authority?" In other words, what are we going to do with the staff which, it would appear, this government certainly doesn't want to reduce? What are they going to do with the staff who are currently dealing with these sorts of things? Surely the staff of the normal ministries must be worried about this new corporation.
We also heard government members say that this is just a private enterprise means of raising funds, and they are adopting a more free enterprise, middle-of-the-road approach. It seems to me everybody is moving toward the middle these days -- or trying to. People with a middle approach -- who support the Liberals or support people to the right -- are all saying that they wouldn't borrow money like this, and they wouldn't go out and invest it the way it would appear that this government is going to.
[3:30]
I look around at the proportion and where the members in the Legislature are from, and I think: my goodness, what's going to happen? Is the member for Delta North going to get a special fund that he can spend in North Delta? He's already got a brand-new bridge, and he doesn't want to build a new racetrack, which everybody seems to want. So I guess he's out. Somehow or other they are going to control the member for Delta North. At least, they are going to control that.
In the Cariboo, there aren't many.... People are moving away from the Cariboo anyway. They can't keep businesses going, so we won't have to spend the money up there. But we look around this House and there are members who will, of course, be lobbying for funds.
The Minister of Finance wants to build a great big PNE -- a new spectacular PNE, with lots of carousels; a Tivoli-type atmosphere that wouldn't even work out there. You'd have to put that in downtown Vancouver at False Creek if you were going to make it work. Yet he, along with Bob Williams, wants to build it on the PNE grounds. He wants to build commercial facilities. Here's the funding that will be available for the Minister of Finance to get that project going, in spite of the fact that the neighbours and all of the people around the PNE do not want it. They want a park with very minimal facilities. They've been promised that for over 20 or 30 years. And now that the city is getting the property back -- or should be getting the property back -- and we can get on with building a park, this government wants to move very quickly, wants to borrow these funds, and then shove it into there without examining that process through this House and through the normal procedure.
As I mentioned the other day, there are projects which are quite legitimate. I think the Island Highway is a legitimate highway, but I don't think there should be tolls on it. Other people in the province have gotten major highway improvements without paying tolls. Why? Simply because this highway has been neglected by the previous government, and for the last year and a half has been neglected by this government, should those people now have to pay tolls to build it? They should be borrowing and going through the normal process.
I can understand the gas tax, and I approve of that. They say that the gas tax is going to be only 1 cent, but I'll tell you, this government and this corporation -- which we'll have absolutely no control over -- probably within two or three years, will need 5 cents, not 1 cent. And it will be completely out of control.
I can see even the Minister of Municipal Affairs.... He's had prepared for him by an independent -- largely independent, anyway -- group of consultants a very good book on what to do with social housing. I was reading through that book yesterday in preparation for estimates, and I could agree with most of the recommendations in that report. But I doubt whether the minister is going to have enough guts to implement them. But there are some measures that he could use this funding for, and I would like to see him, at least, use it for them. But I would like to have a say in how the funding should be used, just in the normal process going through this House. I won't have that opportunity at all. I also think that some limit should be put on it, because the minister can simply go out and build a favourite project for one of his favourite members, and we will have no control. In many of these recommendations, all that the minister has to do is turn this matter over to the private industry, and they could solve the problem. If we were to build many more suites or increase densities in established communities where there already is servicing, we wouldn't need money like this. All we really need is a bit of courage. All that the minister would need is courage to try to convince municipalities of the reasons for doing that. I am sure the minister could do that very easily if he just had the courage.
F. Garden: You can't pave a highway with courage; you need money.
A. Cowie: The hon. member for Cariboo North says you can't pave the highways with courage. I agree, but you could get other people to do things, and that takes courage. Then they might build the highways -- private roads, at least -- and then they might build the houses. At least housing can be done with courage.
Interjection.
[ Page 5667 ]
Deputy Speaker: Order, hon. member for Cariboo North.
A. Cowie: Well, I am glad to see the hon. member for Cariboo North get excited.
Deputy Speaker: If the hon. member would please address the Chair, it would be of great assistance.
A. Cowie: Thank you, hon. Chair. I spent a whole two years up in the Cariboo, way out in the Chilcotin, riding a horse and just getting to know the people in general. I went through Wells Gray Park and all that beautiful area that the member represents. I even spent several days in Horsefly. That's a really exciting community that the member represents. In Horsefly they need a new community hall, and I would suspect that the member might be lobbying for that from these funds. In fact, when I was there they didn't even have any seats; they had stumps.
Deputy Speaker: Order, hon. member. Please address the Chair. The Chair hopes that there will be no need to intervene a third time.
A. Cowie: I appreciate that. Thank you, hon. Chair. I will try to control myself. I just got excited about the member's concerns in the Cariboo. They do need help up there. So there you go. This member is already lobbying for these funds. He must have the ear of the corporation already. I wish him the very best. So right here in the House, so soon, we can actually make a few decisions like that.
The government obviously depends on this funding. The minister has been to New York, and is reported in Ottawa and Toronto. I would think indications are that he has the funding in place. We were told this bill was in no great hurry and that we were going to take lots of time with it. Then the minister arrives back, and bang, we've got to get this bill through. We've got to get it through right away so we can go out and spend that money in these ridings where people need to have things done, so they can get a little support.
Interjection.
A. Cowie: There will be no money spent in my riding; I'm assured of that.
Interjection.
A. Cowie: Promises. The members have promised that maybe some money might be spent in my riding. Well, I hope so.
The thing that irritates me most about this is that I would like to see the budgets established in our ministries. I would like to see Highways establish the budget they need. I would like to see the list of the projects and then proceed. I won't have the opportunity to do that. I won't have any opportunity to debate the issue, and the public won't have any debate as part of this bill, either. However, I suppose that in three or four years' time we will be able to examine what this corporation has done. I suppose the timing is very important because some of these projects will take two or three years, and the work will be done on time, I guess, for the next election. So you can see why they want the money now and why it's urgent: so that they can get it done on time, three years from now, for the next election.
And, of course, they can hide the debt. The debt will keep going up. It will not be shown every year as a deficit; it can be hidden. That really concerns the business community, which wants to get debt under control. In fact, that's what the argument has been doing in Ontario in the last couple of days, where the government of Premier Rae has taken a very Liberal approach, a very good approach, to try to control funds. The federal Finance critic is arguing with the Premier of Ontario, saying that he shouldn't take that approach. In fact, there seems to be a complete split in the NDP over this issue. The member from the Kamloops area, Nelson Riis, says that the critic, whom he works with in Ottawa, is not speaking for his caucus.
So this great argument is going on. As I said earlier, this bill is ideological. I can see parts of the NDP government splitting over this. It could even happen in this Legislature. Some people on the government side appear to be fiscally responsible, or they would like to be fiscally responsible -- in their own words, they are acting in a more private enterprise way -- and I have no doubt that they will be tight with their budgets. There are others who want to spend. I suspect that the trend that's starting in Ontario will drift out to B.C. We're going to see, probably in the next little while, cracks developing in the government over issues like this.
I feel that I don't really have to go on at great lengths on this. I think I've made myself absolutely clear. We're going to borrow $1 billion, we're going into higher deficit, and we aren't going to have control of this money. That's what disturbs me. I think I've put this very clearly. In saying that, I will ask the members to support the amendment so that we can get on with things in the regular manner.
J. Weisgerber: It's a pleasure for me to stand and speak in support of the amendment. I think it is appropriate for us to seriously consider referring this proposal to a select standing committee of the Legislature. There is a real opportunity for the government and the opposition members to take the Build BC Act and explain to British Columbians what the government is seeking to achieve by creating this Crown corporation. If that happens, I think it will become obvious that Build B.C. is in fact designed as a way of creating and adding debt, and adding it off the government's balance sheet. It's pretty clear that if we took this Build B.C. idea and travelled around British Columbia, it would be overwhelmingly rejected.
If British Columbians had an opportunity to tell the government directly how they feel about a plan that would see government start to finance highway construction over 30 or 40 or 50 years, it's quite clear to me that the plan would be overwhelmingly rejected. British Columbians don't want to see more government debt -- quite the opposite. The rallies that have been
[ Page 5668 ]
held around this province have one focus: they want to see lower taxes. But they also are deeply concerned with the growing debt. Build B.C. will add debt, carrying charges and finance charges. It will reduce the ability of governments to provide services in future, because it's going to lock governments into debt obligations.
I am absolutely convinced that referring this to a legislative committee would achieve what we in both parties of the opposition are seeking -- and that's the defeat of the legislation. I am absolutely convinced that if taken to the people, Build B.C., Bill 3, would be overwhelmingly rejected. So it is without any hesitation that I stand up and support this amendment. I support the referral of this bill to a committee.
[3:45]
Earlier today we had an interim report from the select standing committee examining the North American free trade agreement. I have absolutely no doubt that Audrey McLaughlin is deeply appreciative of the government's contribution to her somewhat feeble campaign. I'm sure she appreciates very much the support the B.C. NDP is trying to give to her sagging campaign. So if we are prepared to spend the taxpayer's dollar travelling around British Columbia on a political agenda for the federal NDP, there should be no hesitation about referring a real concern, a concern that affects the people of British Columbia, to a select standing committee of this House. It would seem much more appropriate for a select standing committee to travel around British Columbia at taxpayers' expense discussing a plan for the capitalization of highway construction than talking about the North American free trade agreement -- which clearly falls under the jurisdiction of the federal government, clearly is a decision that's already been made, clearly is an issue for the upcoming federal election and clearly is an issue very much peripheral to what we in this Legislature are charged to do on behalf of the people of British Columbia.
There can be no doubt about the appropriateness of looking at this idea of Build B.C. -- or, as it has so aptly been called, Bilk B.C. There is no defensible rationale for the capitalization of highway construction. As you would know, Mr. Speaker, we have for many years in British Columbia built highways. As a matter of fact, the previous government was often accused of being a blacktop government: building too many highways, too many roads, too many lanes; making too attractive a transportation system in British Columbia. What is important to understand is that those highways -- this tremendous transportation and highway network that we have in British Columbia -- was financed out of current revenue, current expenditures. There was no capitalization.
An Hon. Member: Coquihalla.
J. Weisgerber: The member talks about the Coquihalla, one of the best highways ever built in British Columbia, a highway that's opened up the interior of B.C., a highway that services Kelowna, Kamloops and the Okanagan and has expanded our whole provincial economy -- a tremendous road, a road that every British Columbian should be proud of and is proud of. I certainly take an enormous amount of pride in the Coquihalla Highway. And if this government had a whit of vision -- this government that has racked up a $6 billion debt but hasn't built one kilometre of road not started by Social Credit governments -- then he would have something to talk about.
This government wants to spend $100 million on highway construction. And members will look back at previous budgets -- 1990, 1989, etc. -- where we were spending $500 million a year out of current revenues on highway construction. This government tells us that we have to push through a bill to create a capital corporation to spend $100 million on highway construction. What a sad commentary on the fiscal management of this province! What an embarrassment to a government that today is spending $900 million more of the taxpayers' money on welfare than when it took office! They tell us that to find $100 million for highway construction, we've got to form a Crown corporation and finance it over 40 or 50 years. Hon. Speaker, this bill is and should be an embarrassment to the government.
I would be delighted to see this bill referred to a select standing committee and to sit on that committee. I can think of few things that would be more fun than travelling around British Columbia and hearing what British Columbians would tell the government about their plan to capitalize, to finance, the construction of highways. I believe British Columbians are far too smart and astute. They understand the business of their province far too well to be bilked into believing that somehow the government now has to play a shell game to find $100 million for highway construction.
The incredible thing is that the Minister of Highways seems quite prepared to support this and to see his budget slashed from $380 million to $180 million to $80 million. The only Minister of Highways in the history of British Columbia to applaud cuts to his budget now says that he's quite happy to turn over the responsibility for highway construction to a Crown corporation. He's prepared to see Bob Williams decide where the roads are going to be built and what areas highway construction is going to take place in, instead of the duly elected and duly paid Minister of Transportation, who has now taken over responsibilities for apologies or something in the government, because he has no obligation to build highways. He has only an obligation as an overseer of a ministry. He has no real decisions to take, and he applauds it. That minister should be ashamed. He should be in here demanding that highway construction be given back to the Ministry of Transportation and Highways that has built roads and transportation systems in this province for 125 years.
Hon. Speaker, there is no justification for this bill or what it sets out to do: simply to hide debt. It seems most appropriate to take this little idea on a road show around British Columbia. Let's give people an opportunity. Let's invite people to come out, and tell their legislative representatives. Let's have them come out and tell a select standing committee of the
[ Page 5669 ]
Legislature what they think of a government that has raised taxes by $1 billion a year, raised taxes by $1,000 a family and added $7,000 each to the debt of each family in British Columbia in this year alone -- the same government that can't find $100 million to contribute out of current revenues to highway construction. Instead, this government wants to see the people of British Columbia saddled with a $100 million debt, financed over 40 years.
I don't have a table in front of me, but I can tell you that the calculation of the interest on that $100 million debt, financed over a 40-year term, will be incredible. We will pay that $100 million back again and again, and the money won't go to British Columbians; it will go to the bankers in New York, who the Minister of Finance was just down arranging credit with. It will go into the pockets of investors in New York, Arabia and maybe a few from Montreal and Toronto, but it won't come back to British Columbia.
If the government gets its priorities straight and finds the $100 million by cutting some of the new layers of bureaucracy or getting rid of that idiotic fixed-wage policy, it could put the money into highways and pay for them and build another $100 million worth of roads next year. But instead they want to saddle us with debt.
I have no hesitation about seeing this referred. As my colleagues have said before, the kindest thing we could do for British Columbia would be to kill this bill altogether. It's going to take us a little longer to do that if we refer it to committee. I don't have any doubt that we would accomplish that if the government dared to refer this to committee. You don't think they will, hon. Speaker, and neither do I. It's pretty obvious to me that the government is going to push this bill through. It can't build $100 million worth of highways anymore in this province without creating a Crown corporation, setting up a new bureaucracy and finding some folks to make the decisions outside of the Ministry of Transportation and Highways.
I know the staff at the Ministry of Transportation and Highways well enough to know that they are capable of managing capital construction at five or 10 times the amount that's proposed here. You have to ask yourself why they would refer it to a Crown corporation and take it away from the accountability of the Legislature. Why would they take it away from the professional management of the Ministry of Transportation and Highways? Could it be that this Crown corporation would like to contribute to the political aspirations in certain areas of the province? Is it possible that this Crown corporation is being created so that at appropriate times leading up to an election, important little pieces of highway construction can be done without having to justify it to the bureaucracy at the Ministry of Highways? The bureaucracy has priorities that are not partisan and that have been developed through regional processes and transportation advisory committees made up of non-partisan groups, in all eight regions of the province, who have identified, from one to 20, or 50, the priorities that the people in the region see for Transportation and Highways. Is it possible that the government wants to create a Crown corporation and take these decisions out of the Ministry of Transportation and Highways, because the decisions that would replace them might be more partisan than those made by the regional transportation advisory committees? I hope not, hon. Speaker.
But let's refer this bill, if the government won't withdraw it, to a select standing committee of the Legislature. Let's all take this around British Columbia. Let's explain it to the folks who are looking for highways to be built and who have already participated in the decisions, made the priorities and identified them. Let's take it around to them and say: "No, no, no. This new government wants to start over. They don't want to use the community process for establishing priorities. We want to use the Bob Williams system. The Bob Williams Crown corporation model will decide who needs highways, where we need them and when they ought to be built." I have absolutely no doubt that the people of British Columbia, if given an opportunity, would reject this bill in a resounding way.
I close by again endorsing, in case there's any doubt, the notion to move this bill to a select standing committee of the Legislature and to its ultimate defeat.
J. Dalton: I also rise in support of the amendment. This opposition is certainly making it very clear to the government side -- which, of course, is not a good listener, as we know -- that it would have been much more preferable if this bill was hoisted, and it certainly would have been preferable if the House in its wisdom had accepted our reasoned amendment. Now even though this perhaps is not the happiest or best approach, we are certainly going to advocate through this current amendment before us that the bill not now be read but instead be referred to the Select Standing Committee on Finance, Crown Corporations and Government Services. I'm going to suggest in my comments that this committee has the licence and certainly the capability to take a far more objective view of this bill than the government has. This bill, as we have pointed out in our arguments today, has a lot of devious approaches in it. I'm suggesting that at least an all-party committee can step back from the smoke and mirrors that is being practised not just on this House but on the province of British Columbia, and most importantly on the taxpayers of this province.
[4:00]
It is very important that some objective viewpoint be taken on the purpose and the philosophy behind this bill. The government is not coming clean. In fact, I think it's noteworthy that the government is no longer even getting to its feet in support of this bill. I guess they are going to use their majority, in the ultimate sense, and ram this thing through, which is unfortunate. I'm suggesting that instead of the government ramming it through, let's have the parliamentary committee that is charged with the responsibility to look at such provisions as are contained in Bill 3 have that opportunity. An all-party objective viewpoint which will ascertain some of the concerns that we have.
I would like the House to pay some attention to the purposes that are stated behind this bill. We are told that the purpose of Bill 3 is to facilitate expansion and
[ Page 5670 ]
diversification of the B.C. economy. That's a nice statement. This is what is provided as one of the stated purposes of the bill. But I must confess that I don't have any particular confidence that the cabinet and Treasury Board and the Committee on Building British Columbia's Future, which is chaired by the Finance minister and by a Crown corporation which is created in part 4 of this bill.... Quite candidly, I have no confidence that any of the stated purposes and the objectives of this bill will be met by those bodies and agencies. I think those bodies and agencies are clearly biased in their approach. Clearly this bill has a bias that this opposition is very concerned about. Again, this opposition wants the bill to be referred to committee for at least a sober second thought. Perhaps it would be a nice idea if the committee, after considering this bill, would come back with a report and say: "scrap it." Let's have that opportunity as well.
Interjection.
J. Dalton: The member for Cariboo North says: "Yes, that will be the day." Of course, it won't be the day while this government is in power.
Coming back to the question before us, referral to committee. We go again to some of the other stated purposes that are found in Bill 3. Coordinating government activities is part of the stated purpose. Again I have to point out to the House that allowing the cabinet and the cabinet process to control government activities, I guess, is self-evident. I do not think that is the approach. If this government truly wants to initiate economic growth through this rather curious creature called Bill 3, I would suggest that it would be a meaningful approach for the parliamentary committee, the select standing committee, to re-examine that purpose. Government activities, for the wrong reasons -- such as re-election campaigns.... I would suggest that what Bill 3 really is is a long-range re-election campaign. It's underway. As other members and I have commented previously, it is interesting that with this bill the government said: "Well, fine, we've got the debate started; now we'll put it on hold for a while." And suddenly we are in a great rush to get this through the House. Today is April 29. The end of April is, of course, tomorrow. Might we speculate, hon. members, that the Finance minister had some need to get this bill through prior to the end of April? I guess that expectation has been defeated.
Interjection.
J. Dalton: The member speaks of cooperation. I guess cooperation is a two-way street. I would have to make this observation: more and more I have the feeling and the concern that this government would shut down the opposition, that in things like Bill 3 they would like it just to be ramrodded through this House with no proper debate or deliberation, because that would suit their own agenda, their own purpose. I can assure you that the opposition certainly will not allow such a thing to happen.
Coming back to some other stated objectives that are contained in this bill, I think this one is noteworthy, and it's where this parliamentary committee could be very useful: ensuring that all regions of the province will benefit from the economic expansion. That is the stated objective of this bill. Again, I cannot see how a committee and a very unnecessary Crown corporation, with the surrounding bureaucracy.... I would suggest that that committee and that Crown corporation certainly are not going to ensure....
F. Garden: Point of order. It seems we lack a quorum, hon. Speaker.
Deputy Speaker: There does appear to be a quorum now, hon. member. You may continue.
J. Dalton: It was nice to have the opportunity to sit down and have another sip of water. But I'm certainly all geared up and ready to go, so I'm hoping that all hon. members will stay around until we complete this discussion on the amendment that is before us.
I was dealing with the regional expectations of this bill, this great economic plan of the NDP government to benefit all regions of the province -- which I assume is the bill's objective, at least on paper. I have no confidence whatsoever that Bill 3 is going to benefit all regions of this province. I have no confidence because of the direct cabinet and Treasury Board control of this, the usurping of the Highways minister's responsibilities and the diversion of those responsibilities to the new Crown corporation -- this Transportation Financing Authority. Nobody in this House can convince me that economic and regional development is going to occur in all parts of the province through this mechanism. That's why I would argue strongly that an all-party committee of this House should have the opportunity to determine what appropriate economic expansion and diversification should occur throughout the province.
It's well documented that when a government takes over and rams through things like Bill 3, they favour their own kind. I don't think that will come as any shock to government members or members on this side. Governments do, obviously, favour their own kind. When I say their own kind, I am of course referring to the ridings represented by government members.
Let's think for a moment about highways projects, because a large part of this bill deals with the new Crown corporation that will undertake highways initiatives and projects. It doesn't take a great deal of convincing that government-controlled ridings are obviously going to benefit from that approach.
J. Beattie: What makes you say that?
J. Dalton: What makes me say that, among other things, is the fact that last year it was documented that approximately $15 million dollars was spent on various highways projects in 12 New Democrat-held ridings. Coming from a riding that is desperate for at least one.... I will not name the project, but maybe somebody from the other side would care to. But
[ Page 5671 ]
projects that have been crying out to be done, for 30 years in some cases, are still on the back burner. Yet some immortal words of the Highways minister last year had to do with bridges leading to ghost towns. If that's his sort of rationale, if that's regional diversification, and if that's the way to promote regional economic growth, I think it's a horror story, quite frankly. If that's the attitude of the Highways minister -- building bridges to ghost towns -- how are we going to make any progress with this new Transportation Financing Authority, chaired by that very same minister? That's why I submit that this bill has to go to a select standing committee. Otherwise, we are literally spinning our wheels, and we are certainly not going to accomplish any of the stated purposes or objectives of this bill.
There is also a reference in the bill with regard to doing these things in an innovative manner. Well, that is fascinating. I cannot recall, in all of the legislation that I have looked at over my career -- both as a lawyer and as an educator in the legal world -- seeing the terminology "in an innovative manner." I have no idea what that means. I guess I could speculate that cabinet, Treasury Board and these other creatures created out of Bill 3 will be very innovative. The innovation boggles the mind. If for no other reason, I would like this bill to go to the committee so that it can perhaps give this House some guidance as to what an innovative manner may be with regard to economic development. In the meantime, I think it has to be understood that that innovative manner is: whatever benefits NDP-held ridings will be innovative; whatever might be of benefit to the province, if it does not occur in a government-held riding, forget it, because it won't be innovative or worthy of consideration. Those are some of the concerns I have as far as the stated purposes or objectives of the bill.
I would also draw the House's attention to some of the explanations that have been offered as to why this bill should be supported and put through as legislation. There's discussion of government initiative or economic development. I am going to suggest to this House that this sort of vehicle is not the way to promote economic growth in this province. We don't need the government, through the imposition of more taxes and long-range borrowing, to tell us what economic growth and development is. What we need is a government to create a healthy economic climate, and then back off and allow the private sector to do the very things that this bill has stated it will undertake.
There's no argument, for example, that we need some highway construction in this province. The Vancouver Island Highway is crying out for improvement. There are serious transportation issues in the lower mainland. There are serious issues of transportation in every region of the province. But in this so-called economic development initiative in Bill 3, for the government to undertake these things is really false economy.
[4:15]
As one business association has raised and flagged as a concern in this bill, what Bill 3 is really doing is creating economic activity with the taxpayers' own money. That will certainly not create new jobs -- not in the proper economic sense -- and it will not create new business for this province. So I'm suggesting that these stated initiatives for economic development are going to be self-defeating. If we can't hoist it and we can't defeat it, then at least let's put this bill into committee for some proper evaluation. We find that the purposes and the rationale behind it are certainly unacceptable.
I think it would also be appropriate for the committee, on the amendment, to examine the growth in bureaucracy that's going to come out of this bill if it's put through. For example, what truly is the purpose of the Committee on Building British Columbia's Future? I think it's just a PR job that's going to cost us some money and certainly is not going to be very useful in any stated objective of economic growth.
The committee also should take a very serious look at this new Crown corporation that it has created out of the bill -- a Crown corporation which clearly is directly influenced and controlled by cabinet and which will have a bureaucracy surrounding it. It will have members who, of course, will have to be paid. It's going to adopt the attitude that if it looks good for the government point of view, it'll authorize it. As I commented earlier today, it may not have any direct political benefit on the possible re-election campaign of this government, but I guess it never hurts to be too early in thinking about how, when you're a sinking ship, you're going to find ways to plug the hole and refloat. I would have to say, given the surrounding controversy of the budget and things like Bill 3....
Bill 3 certainly is a very controversial piece of legislation. This government clearly is in a mode where, if they can do something through the smoke and mirrors, the con job and the diversion away from their true agenda, maybe the people of this province will be fooled or lulled into a sense of....
J. Beattie: Point of order. I'm sure that the hon. member didn't mean to suggest by his comments that there was some kind of criminal intent, some kind of act to deceive the public. I think he should withdraw the remark, hon. Speaker.
Deputy Speaker: If the hon. member unintentionally imputed an improper motive to any member of the House, I would ask that he withdraw.
J. Dalton: Hon. Speaker, I can assure all members of this House -- and I appreciate the point that the member has taken -- that I certainly in no way meant to cast any aspersion on any member, or even on the government. I'm simply pointing out, hon. Speaker, that....
Deputy Speaker: Does the hon. member withdraw?
J. Dalton: I certainly do withdraw.
As a point of explanation on my previous comment, I was going to add that Bill 3 is really not what the government would have us believe, and I think that's a fair comment. Bill 3 clearly has some other agenda or
[ Page 5672 ]
purpose behind it. In one moment we were told there was no great rush to put Bill 3 through, and the next moment we're told to get it through in a great hurry. I think we have to question the motivation behind that, if nothing else.
Let me go on to another point, even though I would love to go on for hours -- and I'm sure the House would welcome that opportunity. I have to make sure that I cover some other points. There have been some very serious business concerns raised about this bill. I know the government doesn't like to hear criticism from business, because government seems to have the attitude that they're going to set their own agenda. Concerns of business and property owners -- and people's rights in general -- are not very high on the government's agenda. We are we told -- from the business perspective -- that more bureaucracy will be created by this. The purpose of our amendment is to have the parliamentary committee re-examine the bill. The parliamentary committee can certainly take a very objective viewpoint about the creation of new bureaucracy. The taxpayers of British Columbia do not need more layers of bureaucracy and people pushing paper around to serve government purposes.
Another very important concern of business -- and this is not just a business concern, as such, but a concern of taxpayers in general -- is that more taxation is created out of Bill 3; more revenue-producers, as the government likes to call them. I would think that the committee might like to take a very serious examination of the need for a gasoline tax and a car rental tax. The committee should certainly take a long look at the part of the bill dealing with the imposition of tolls and charges. The Highways minister made it very clear that he is quite supportive of the concept of imposing tolls on certain projects. Are we going to suggest that these tolls be imposed only in selective areas? The committee would certainly be an excellent vehicle to examine that aspect of the bill and get into some detailed examination of the appropriateness of tolls, if any. If they are deemed to be appropriate, under what circumstances would they be used? Where would they become applicable? I think this committee should examine that sort of thing.
I would also point out a couple of other concerns that business has flagged with regard to Bill 3. There's no assurance that the funds released and created out of this bill will be carefully spent -- none at all. I commented earlier about this, but I want to come back to it. Certainly the business community has no assurance whatsoever that the moneys spent out of the special account, for example, or the money's borrowed by this Crown corporation.... What assurance do we have that those moneys are going to be properly spent? And, more importantly -- and this is probably the big concern of both the business community and people in general -- a lack of accountability will be demonstrated through the spending authority of this bill.
At the moment we are going through the estimates process, whereby each ministry is held accountable for the budget within the ministry. We will not have that opportunity when you create a Crown corporation, and when you have this curious thing called a Committee on Building British Columbia's Future. These creatures are not directly accountable to the parliamentary process that we are undertaking right now, and that has to be a major concern.
I would add one other thing about the attitude of business to this bill. Government intervention in the economy -- that's really what Bill 3 is. It's this socialist government coming along and saying that its approach to economic growth will be through government intervention. Bill 3 is clearly an imposition by the Treasury Board, by the cabinet, by this new bureaucracy, dictating how the people's money will be spent and where it will be spent. This bill will create long-term debt, long-term borrowing. Certainly this province does not need more debt. What this province needs is more government accountability as to how the money is spent. We need to look at ways to downsize government operations -- not ways to create more bureaucracy through Crown corporations, committees, agencies; not through chairs of boards who will appoint their friends and neighbours to the board, who will all draw their expense accounts, per diems, travel allowances. Where does this end? It seems to me that we are on a treadmill to more wastage of the people's money, and that's the problem.
As we are debating this bill and putting forward the amendment that we're hoping will pass, I think it may also be of interest to the House to see some comments by government members who, prior to the last election, were sitting on this side of the House in opposition. It's interesting how attitudes change. As soon as you cross the floor, you certainly seem to have your mind crossed too; there seems to be a dramatic change in thinking. I'm going to make a couple of references to the attitude of members who are government members now. I am convinced they would be making today the statements they once made in opposition if they were standing here opposing Bill 3. They would be standing here supporting this amendment that the opposition has put forward.
For example, in commenting back on April 27, 1990 -- that's interesting, it's three years and two days ago -- the now Minister of Education said:
"It's accountability time, and we've just listened to a rather bland speech from the member for Okanagan South about the real issues that people out there in British Columbia are talking about these days. This is probably the last time we're going to be able to look at financial accountability before an election...."
I will stop there because that's the point I want to read into the record. The now Minister of Education is talking about financial accountability, but the business community is suggesting quite the opposite is found in Bill 3: no financial accountability. I have to wonder whether the now Minister of Education would be stating those words if she were on this side of the House and, of course, not now in cabinet and, I presume, not supportive of this legislation.
Let me make reference to one other now cabinet minister who was also in opposition. This is again from the 1990 budget debate. The member in question is now the Minister of Health. The now Minister of Health made the following observation:
[ Page 5673 ]
"I am pleased to rise to take my place in the budget debate. There has been a lot of talk over the last couple of days about whether this is a balanced budget or not and whether the BS fund exists or not. The Minister of Finance tells us it exists one day; another day he tells us it doesn't."
I'm wondering if the now Minister of Health would be of the opinion that Bill 3 is comparable to the BS fund. I'm also wondering if the Minister of Finance would be prepared to stand on his feet and comment whether the BS fund has any applicability to this legislation before us.
Those are some of the concerns that I would like to express. The bill has flaws in it. The bill has a purpose and an objective that we have not been able to directly ascertain, but we do know that it has things in mind that are clearly not in the best interests of the taxpayers of this province. That is why the opposition encourages all members to seriously consider the amendment before us and at least allow it to be considered by an all-party standing committee charged with the responsibility to examine pieces of legislation such as this.
Deputy Speaker: Before I recognize the hon. member for Langley, I would like to ask members to join me in recognizing the presence of my riding office manager and community assistant, Miss Sharon Costello.
[4:30]
L. Stephens: It's a pleasure for me to rise this afternoon to support the motion to refer the subject matter to the Select Standing Committee on Finance, Crown Corporations and Government Services. I've had the pleasure of serving on a number of standing committee of this Legislature, and I know they do good work. The members who serve on these committees are dedicated to the work they do and represent this House in a fair and balanced manner. We've just completed the first draft of the NAFTA committee report, and we're in the process of drafting the Forests committee report. I'm sure all members of the House will find them informative and instructional. I served on the constitution committee, which enjoyed an enormous amount of debate in this House.
This is a very important bill, and it's my belief that the people of British Columbia should have an opportunity to debate and analyze it. There are enormous opportunities for the power of the Legislature to be usurped through Crown corporations, which, along with this financing authority, have the power to borrow and spend without accountability in this House. I would urge all members to vote in favour of this motion, and I would impress upon them the desirability of making sure that the Legislature is open and accountable to all citizens of B.C.
Included in Bill 3 are other major initiatives to encourage private sector investment, such as a new British Columbia investment office to cut government red tape. All of us who have been and are in business certainly support that initiative; it's one we encourage, and we would do whatever we can to make that kind of thing happen. This particular office is not new. This is not something that will be created by Build B.C.; it's something we have now. By some reports, it's not working well. It's certainly not cutting government red tape.
I have a sad story to relate to you. It comes from a gentleman by the name of Mike Kennedy, and he relates his sad story through the Times-Colonist of Friday, April 23. It's a perfect example of a reason for referring this bill to a standing committee to allow the business community and other interested people to come forward and suggest some concrete and workable changes. Perhaps a sad story such as the one I'm about to relate to you will be a thing of the past. I know that all people who are involved in dealing with government regulation and bureaucracy would certainly applaud anything done to make sure that this is reduced to the absolute minimum.
One of the NDP election platform statements from 1991 is that small business is a vital part of B.C.'s enterprise economy, that a New Democratic government would help small and medium-sized businesses to grow, and that they would work with business to achieve regulatory reform and reduce the paperwork burden. That's excellent, hon. Speaker. And hopefully that's something that this B.C. Investment Office will do. The question is: when? It's not working now, according to this particular story. It is a true story, by the way, and it's a rather sad one. He begins:
"Once by upon a time, a company was created to do business in British Columbia. This company was intended to be for inbound and outbound B.C. travellers what the BCAA is to automobile owners.
"The company would establish an integrated, private-sector network of quality B.C. tourism-related enterprises -- such as diving, sport fishing and other special interest niche market enterprises -- to market them worldwide."
These are the kinds of industries that British Columbia needs and wants. The Premier has said on many occasions that these are the kinds of clean, green businesses that British Columbia should be attracting.
"The company would also operate a network of full-service travel agents in the province, as well as produce outbound tours and address the special interest tour market internationally. It wanted to locate its headquarters in Victoria.
"After extensively grovelling for the right to use the name 'British Columbia Travel Corporation' from the registrar of companies, the company representative was told it was too close to another name."
And here is where the whole sad tale begins.
"On asking what the other company's name was, the representative was told: 'B.C. Cruise Ship Centres.' "
And any of you who have gone to the B.C. registrar of names understands the procedure that you have to go through. It's very logical that companies that have a very similar name would be disallowed. However, in this case, "B.C. Cruise Ship Centres" bore no relationship to "B.C. Travel Corporation." The article continues:
"When the representative had difficulty trying to fathom the connection, he was told 'that was that.' On inquiring if there was an appeal process, he was informed that he was speaking to the appeals officer. When inquiring about a higher appeal, he was told that
[ Page 5674 ]
the registrar of companies was the next level, but that the registrar did what the appeals officer recommended. Case closed.
"After a great deal of thought, another name was chosen -- Kennedy International Travel and Tour Corporation. Same drill. Rejection due to similar name. The other company name was Kennedy Tours Ltd. A variation of the name was submitted using a personal name: Michael Kennedy International Travel Corporation. Rejected. Bureaucratic capriciousness."
This, hon. member, is part of B.C. 21, Build B.C., Bill 3. This has a direct relation to this bill that will establish less government red tape. That is not happening.
"Another round of name submissions presented the names 'Travelco' and 'Universal Travel Corporation.' Three days later, rejection. Travelco needed a name in front of it, and Universal was already taken. More submissions."
Interjection.
L. Stephens: It doesn't work: government regulation. The NDP election platform said: "We will work with business to achieve regulatory reform and reduce paperwork and burden." Build B.C. says that's exactly what they'll do. That's not what you're doing.
The article continues:
"Three days later at a meeting with the directors, one suggested that the company consider alternatives."
Deputy Speaker: Order, hon. member. The Chair is listening with great intent to understand the connection between the debate that the hon. member is making with relation to the referral motion which is before us. I think that the member will be making that connection soon, and we are anxiously waiting for that.
L. Stephens: The referral is that this bill now be read a second time and the subject matter be referred to the Select Standing Committee on Finance, Crown Corporations and Government Services. The subject matter in Bill 3 is that B.C. 21 will be complemented by other major initiatives to encourage private sector investments, such as a new British Columbia Investment Office, to cut government red tape. The British Columbia Investment Office is not new. It is there, and it doesn't work, and it is not cutting government red tape,, as this gentleman points out.
The standing committee is what we're discussing, will be discussing, should be discussing. We are encouraging it. We are trying to point out to members opposite that this is a difficult subject that many people have that is in this bill. If members opposite don't understand that, then they need to read the bill again.
So I will continue. We are now in Washington, and I will tell you that the hon. Minister of Economic Development, Small Business and Trade goes on at great length to tell us in the House that it is far better to do business in British Columbia than it is in Washington state, and that is simply, according to this gentleman, not true.
Now, it was suggested after a meeting with their directors that they consider some alternatives to doing business in British Columbia, and Washington state was mentioned. They phoned down there at no charge, and were told that "British Columbia Travel Corporation" was available as a corporate identity, and that unless a name was exactly the same as the name requested, it could be used, and they would welcome -- welcome -- new corporate citizens. Name checks cost $30 in British Columbia for a slow check and $130 for a fast check. The company found that it could rent retail storefront space in Bellingham with good parking access, good pedestrian traffic flow, and a high visibility for about half -- in adjusted Canadian dollars -- the rent in Victoria.
A few more calls found telephone and support services cheaper. Their business would be done on 800 lines, and in British Columbia that was quite significant.
There was also a service-oriented labour pool, a supportive and encouraging state and local government environment actively assisting in problem elimination, which is what this B.C. Investment Office that is in this Build B.C. is supposed to do. Again, I will say it is not a new office; it is one that has been there for quite some time.
So now the representative has a dilemma. The investors in the company from Canada, the U.S. and the People's Republic of China can't understand this problem. The investors in China cannot fathom a bureaucracy less effective than theirs. They can get $50,000 out of China to invest in B.C., but they can't get a name.
The article continues:
"Finally the company got official approval on a name it really didn't want, but the time wasted is very expensive in lost income. But now there is a corporate name, the company must file for incorporation which will take about a week unless he wishes to pay extra to have it moved ahead of others. The buzz word here again is pay, pay, pay.
"Have the hurdles all been passed? Guess again! The registrar of travel companies is next in the chain. That costs $575 and takes four to five weeks. Since a requirement of the application is a business address, a location must be leased during that period to meet the requirements (big expense) because the average lessor is a business person, not a government body."
"The cost from start to finish, from incorporation filing, including state business permit covering travel agencies and local and country business permits in Bellingham, comes to about $500 Canadian. Time from start to finish, two to three weeks. British Columbia, start to finish, eight to nine weeks, cost, $3,000 minimum".
"Maybe the representative will write a letter to the appropriate government body suggesting the problem could be solved by creating another layer of regulators. The Ministry of Lunacy, Diminished Intellectual Capacity and International Business Discouragement would be a good name. If they could get it.
"A sad, true story, not a fairy tale."
[4:45]
The people of British Columbia deserve to have some input, representation and debate on Bill 3. There are many things in Bill 3 that need to be scrutinized, the least of which is the amount of debt the Crown
[ Page 5675 ]
corporations can continue to accumulate on their own, without the scrutiny of this Legislature.
I encourage all members of the House to vote in favour of this motion to refer this bill to a select standing committee. I look forward to third reading, with a view to defeating this bill.
D. Jarvis: I rise again to speak on another amendment to Bill 3. This is the fourth time I have had the privilege of speaking on this bill, and I must say at this time that I am in support of this amendment. The amendment is that we refer this bill to the Select Standing Committee on Finance, Crown Corporations and Government Services. I intend to continue speaking out on this bill, because I sincerely believe that the people of this province do not appreciate how insidious this bill really is.
Before I go on, and before the rubber stamps on the back benches of this government start yelling that we on the opposition side of the House are against building roads, schools and infrastructure, let us make it perfectly clear that we are not against construction in this province. We in the opposition are not now, nor have we been in the past, nor will be in the future, against rebuilding the infrastructure of British Columbia. That argument doesn't hold any water for the people of this province -- when foolish statement are made about us being against the building and restructuring of this province. What we are against is the way they are moving the money into another agency that is not responsible to this Legislature. They are taking the moneys for roads, forestry and advanced education -- and on and on -- out of the line ministries and putting that into an agency, and we cannot look at the books.
This province needs an upgrading of its roads. It needs new roads and repairs to bridges, old roads and schools. But we believe that retraining is also desperately needed in this province. What we have here is an enigma in the sense that this government says that the Bilk B.C. act will be a self-financing capital spending authority, a pay-as-you-go authority, through -- believe it or not -- a 1-cent-a-litre gas tax, plus a road tax. Where they're going to put these tolls has yet to be decided upon. All this restructuring of the province -- millions and millions, and probably even into the billions -- will be added on to our debt to be financed by a 1-cent-a-litre road tax. It doesn't seem possible. On the other hand, we have a proposed bill that's basically an open-ended borrowing authority, but will add millions to our already out-of-control debt.
We all know that when you borrow large sums of money, especially in the millions, a 1 cent surtax is highly unlikely to finance all these schools, hospitals and city halls -- and the Vancouver Island Highway, which they have probably already put a contract out for. I'm quite aware what the Finance minister would say to us if the opposition had come up with a proposal such as this. He would probably suggest that it was a cock-and-bull story, such as would be proposed by, say, a desperate party that's sort of reaching out for an answer on how to defray the wrath of thousands of people in this province. That's what he would say if we had proposed this bill. Thousands of people who are angry at a government that had saddled them with taxes and debts -- that's what he would say. And that's what we are trying to say right now. This is what this government is trying to do in Bilk B.C.
In its attempt to placate the voter in the approaching election, this government has the audacity to try to create a slush fund to hide this fund, this government debt, in a Crown corporation where it cannot be examined by this Legislature. It's a gimmick. That's what this bill is. I believe the Finance minister has already committed this province and this government to megastructures and megaprojects throughout this province, and he needs the passage of this bill to advance his commitment.
In fact, I would suggest that the Finance minister already has the funds. He was quite awhile in New York. It was obvious, the way this government almost collapsed when he was gone. The backbenchers just didn't know what to do. He has borrowed the money already for the Island Highway. There's nothing wrong with that; we agree with it. But let's put it out in the open where we all know about it, instead of trying to hide it. You don't go around talking about all the grandiose projects that you want to do unless you have the money in hand or a commitment to pay for it in your back pocket.
I only hope that he hasn't sold our soul in this supposed self-financing scheme. That is why the minister is in such a rush to have this bill passed. Why is he in such a hurry? Why do we not just refer to the select standing committee for a review? It's a big commitment that we are going to put on the taxpayers of this province. We are going to add to our debt. It's not a self-financing plan.
Unfortunately, or fortunately, rush is not the opposition party's middle name; "careful and cautious" is our middle name. We have an obligation to the voters in this province to scrutinize the government's spending, to assure the voters that their tax dollars are being frugally spent and that our tax dollars are not being squandered on a philosophical idea.
That is what we are doing here tonight -- previewing this bill in order that the government does not try to mortgage this province's future away, the future of such people as Diandra Brook Laba, a young lady who will have to pay for this bill in the years to come. It is obvious that if we were to pass this bill we would not be able to debate it in the future. We would be unable to view the spending and the borrowing of Build B.C. Mr. Speaker, millions of dollars will be going in and out of this authority, and no one will know what's going on except Treasury Board. And we in the opposition and you in the back bench are not privy to what's going on in Treasury Board, at least I hope not. No one will be able to see how the mounting debt is growing, because this government has yet to tell us how much they are going to borrow. It is an open-ended bill. We know that $78 million has been transferred out of the Highways department into this bill, and another $100 million is in this authority. That will be eaten up by the Island Highway alone, just like that. Where does the money come for all the school building, courthouses
[ Page 5676 ]
and miles of highways that will be going on in the NDP ridings in the north, east, south and west, where they will be pumping it just prior to the next election? Where's the money going to come from for this grandiose silviculture plan that they have presented? Where are the millions that it will cost for the massive retraining programs that are going to advance this silviculture program?
Mr. Speaker, the whole world is talking about debt control. There is a need for a smaller government, and here we see these massive spending programs going under the pretense that it will be self-supporting. Everyone else in the world, every government and jurisdiction, is talking about control of their spending, yet this government is going out on an open-ended authority that cannot be checked and controlled and is spending, spending, spending. What on earth are we getting ourselves into? This is a philosophical nightmare, as far as I'm concerned. The ghosts of Mr. Gunton and Mr. Williams have spoken the words that no other economist or politician in this country would dare embark on. Yet this government really has no concept whatsoever of how to create wealth. I don't think anyone in the inner circle of this government has ever had wealth, except those who will be paid by this government or through the public purse, but this government is now stating that they know how it's all going to be done: they're going to borrow, spend and then tax. How simple, how stupid, how socialist it is.
It appears that this bill was conceived by Mr. Gunton and Mr. Williams, the unaccountable twosome who are going to Guntonize this province. These NDP backroom boys are telling them what to do. Mr. Gunton believes that the resources should be controlled by the state and the state should dictate to the people how much they should receive. This is the old philosophy of a classless society which replaces entrepreneurs. Socialism is a philosophy of failure, a creed of ignorance and the gospel of envy. This bill, as I said, is really the Guntonization of British Columbia. And you ask me why. All you have to do is go out and read. It was dreamed up by the doctrinaire of this man from Simon Fraser University, who this government has signed on at an unbelievable salary because he used to be the Finance minister's headmaster.
You wonder why I make statements like that. I would just refer the members of the government and the rubber-stamp backbenchers of why and what the philosophy of Mr. Gunton is. Mr. Gunton, who dreamed up Bill 3, wrote a book. Have you read that book? Mr. Gunton wrote this book....
Deputy Speaker: Order, hon. member. The Minister of Government Services rises on a point of order.
Hon. L. Boone: While I'm sure that the vast majority of British Columbians will be very surprised to learn that the hon. member can in fact read a book, I do not see any relevance at all to this debate, hon. Speaker, and I would ask that you call him back into line.
Deputy Speaker: Thank you, hon. member. The member who has his place hopefully will relate his remarks to the motion before us, which is a referral motion.
D. Jarvis: I shall do that, hon. Speaker, and refer to the motion a little more in the sense that it be referred to the select standing committee. I want this bill, which I believe Mr. Gunton wrote, referred back to the select standing committee.
Hon. A. Petter: Innuendo.
D. Jarvis: No, it's not innuendo. Mr. Gunton wrote a book on resource rents and public policy in western Canada, which is what this bill is all about. In the book he quotes from every Marxist imaginable: William MacIntosh, Tom Naylor, Danny Grache, Ajeet Dasgupta. All of these Marxists are in his book. Mr. Gunton makes statements about rational resource management -- by whom? Unbelievable.
[5:00]
Deputy Speaker: Hon. member, the Chair is very much resisting having to intervene in your speech, but I think all members realize that in order to have any order whatsoever, we must have rules. The rules for a debate on this particular motion are quite clear, and I would ask that all members who take their place stick to the text of the motion before us, which requires the referral of Bill 3 to a standing committee.
Would the hon. member please proceed.
D. Jarvis: Exactly, Mr. Speaker. I agree with you. That's what I want. I want this bill referred to the Select Standing Committee of Finance, because Mr. Gunton has said that for efficiency and equity, governments must give priority to the collection of rents. We all know what rents are. Rents are the modern text for taxation.
An Hon. Member: The Build B.C. fund.
D. Jarvis: Yes, the Build B.C. fund.
Deputy Speaker: Order, please. Unless the member who has his place addresses the matter before us, I will have to ask him to take his place and I will recognize another member.
D. Jarvis: I guess I can't say that the bill is fraudulent, nor would I say that the government is frigging around with the books or anything like that. However, the bill certainly is misleading, regardless of who wrote it, and it's full of misrepresentations.
The misrepresentations are that all is going to be well in B.C. if we allow the government to proceed with this open-ended authority to tax the people in this province. The taxpayers don't trust this socialist government. They feel that they've been deceived by the government and their scandalous taxation policies. In this bill there appears to be a cover-up of what will be the financial boondoggle of the century, and the
[ Page 5677 ]
cover-up is of how this financial bill will actually be financed itself. It's a hidden boondoggle.
Interjection.
D. Jarvis: It's not in the bill, sir. You cannot finance what they want to finance. They want to finance new roads and highways and to repair old highways, most of them in NDP ridings, I might say. Schools and hospitals want to retrain people, which is a good idea -- we all agree. However, how are they going to do it? They're going to do it with a 1 cent increase per litre. How many litres are we going to have to buy to finance those millions and millions of dollars? It's going to add to the already increasing debt we have in this province.
Again, I'd like to put it all straight and in order. We in this party are not averse to all this restructuring and a sensible billing of the infrastructure in this province, especially in the resource areas in the smaller towns throughout the province. That's where we should be looking after and rebuilding. What we need now, and what is not included in this bill, is an investment and development policy. There is no economic strategy whatsoever. Borrowing money to build roads, schools and infrastructure is not a policy which will encourage investment and development in this province.
This bill is another in a series of this NDP government's 1995 election program. They're really quite nervous, and they know that they've only got 914 days left in this government before the next election. They don't understand that class warfare is dead -- as the leaders of the Soviet empire found out. Seeing I'm not able to say Mr. Gunton's name anymore, this bill is, quite frankly, an NDP version of the old GO B.C. -- the master slush fund that was created years ago. There was so much b.s. in that that they used to say all the time: "Hey, hey, toro."
Interjections.
D. Jarvis: Someone down there cracked a joke, and unfortunately I had to laugh about it.
This government has copied the NDP... No, I can't say that; I'm not allowed to. They have learned a lot from the previous government, and they have certainly created this wonderful slush fund. As I said earlier, Build B.C. is really Bilk B.C., and they certainly have paid attention to the teachers that created slush funds in this province.
The NDP has seemingly forgotten that the public in this province does not appreciate slush funds. They don't appreciate being bribed by their own money. They realize that every cent taken from their pockets is not really going to pay for the outstanding debts, other than rebuilding the NDP's image -- supposedly in the areas throughout the province where they are fortunate to have a representative at this present time. But 914 days from now they will be all gone. The people in the province are not happy with this, and they're certainly not going to forget it when it comes time to vote.
I just want to make a few more statements. Nowhere does this bill actually address the long-run future of the resource industries in this province. The resource industries are really the true builders of B.C., not government. It's the industries that get out and build British Columbia, not a socialist government that wants to control the resources under Gunton and Williams and professes that this bill will be the builder of the province. It's the private entrepreneurs out there who do this, not government.
Under this bill, the government does nothing to encourage investment and development in this province -- not a thing. All it does is create a climate and an environment that outside investors are frightened to death to enter, because they cannot rely on the government to provide a good working area for them.
D. Lovick: Like Peru, where they can guarantee cheap labour.
D. Jarvis: Mr. Speaker, one of the backbenchers, the rubber stamps over there, just brought up the fact that there's cheap labour in Peru. They are unaware that in the resource industry, in open-pit mining down in Peru, it costs over $8.40 a tonne to mine. In B.C. it costs about $4.50 a tonne to mine. So where's your logic there? Businesses are down in Chile, Venezuela, Mexico and those areas because it's a healthy climate. They are wanted down there, and they're not wanted here. They are down there because it's a healthy climate to make money, not like British Columbia.
Interjections.
D. Jarvis: Darned right I have.
There were a few items mentioned by the rubber stamps over there earlier -- that Mr. Gunton was not the author of this Guntonization bill of B.C. However, why is it that only today, after all this time of debating, they suddenly disputed this? They haven't disputed it before. Fifty-one of the members have stood up and talked about it. It's being mentioned all the time, and not one of them has disputed it.
We've got some problems in this province, and the problem is this government over here -- these rubber stamps. I don't understand how these people can actually go back to the areas where they were elected, these resource areas, and say, "I am doing something to help your business," when it's collapsing around them. They don't understand; they don't appreciate what they are doing to their province.
I had a summary sent to me from one of the larger resource companies in this province. If you don't mind, I'll quote these statements made by large resource companies in B.C.: "The Attorney General has expressed serious reservations in the past about the use of special accounts, which have reduced the Legislature's control over public spending." That refers to statements made by our Attorney General. "The bill is contrived to make the deficit appear smaller. Immediate political accountability for spending is lost. Yearly operating costs are replaced by the fixed costs of servicing debt incurred from past spending." The meaning is that under B.C. 21 or Build B.C. or Bilk B.C. -- we don't know what they're going to call it --
[ Page 5678 ]
constraints on current spending are minimized. This shifts today's costs to tomorrow's taxpayers, exactly what I'd said earlier. But now they're listening, because it's now coming from a direct quote from a large resource company, which they should....
Interjection.
D. Jarvis: Well, I won't go into that aspect of it.
This gentleman says that it exacerbates the duplication of capability which is already in place. With respect to the B.C. Transportation Financing Authority, why should it have a board of directors which is another plum for NDP supporters? He didn't really say NDP; I just added that in there; you've got to appreciate that.
The Board of Trade wrote: "This bill should go to public hearings prior to the passage in the House." That is ostensibly what we're trying to do here when we refer it to the Select Standing Committee on Finance. In any event, this is a bad bill. It will not enhance British Columbia. It will not enhance our debt; it will not enhance our children's debts. And the future of this province is in dire circumstances.
[5:15]
I wish to thank you very much for letting me speak about the Guntonization of British Columbia, and though I'm not able to quote the statements that he has made, I would say this: if you have an opportunity to read his book, you will realize that it's scary stuff in that book, very scary. Governments are here to help the citizens and the growth of economy in a country and not to build a political economy which the Gunton and Williams organization is trying to do in this province.
W. Hurd: I appreciate the remarks of the member for North Vancouver-Lonsdale who, like many people in the province, becomes overwrought at the prospect of large-scale public debt in the province.
Interjections.
W. Hurd: North Vancouver-Seymour, yes. I keep forgetting that North Vancouver-Lonsdale is still temporarily in enemy hands, but that will change; that will indeed change.
I'm pleased to rise in my place today and support the amendment from the opposition. It seeks to refer this odious piece of legislation to a select standing committee. If ever a bill needed to be thoroughly examined by the people of this province, it's Build B.C., which is really -- as we've said so many times in this assembly -- a build-the-NDP bill, not a Build B.C. bill at all.
[The Speaker in the chair.]
It's rather interesting to reflect on the kinds of issues that this government chooses to refer to select standing committees. I know that one committee I currently serve on in the House, the Aboriginal Affairs Committee, of which the hon. member for Okanagan-Penticton is chair, is looking at a $1.5 million fund, an important fund for the aboriginal community but nevertheless a fund of some $1.5 million, on how we can better allocate those resources. This motion before us today seeks to refer a bill with spending authority of over $100 million, with unlimited potential for borrowing on the part of the government. I have no doubts that in due course the government will not support referring this bill to a select standing committee, which could go around the province and invite the same kind of input from concerned British Columbians. If ever a bill needed to be thoroughly analyzed by British Columbians for what it means to the long-term debt in the province, Bill 3 is clearly an example of something that needs to be examined through the legislative committee process. Obviously some widespread public scrutiny is needed. The members opposite ridiculed the idea that business in British Columbia is going to Peru, but I might add that this method of tax and spend, of averting and avoiding the duly elected legislative authority, is exactly the kind of thing we would expect from a Third World country or another country of the world where there is no due process and the government seeks to spend money by whatever means possible. That's indeed the road we're on in British Columbia.
Interjection.
W. Hurd: Hon. Speaker, let the record show I'm being heckled by the hon. member for Nanaimo, who has his own version of financing with the Nanaimo Commonwealth Holding Society.
The Speaker: Order, order. I would ask hon. members to come to order and recognize that the hon. member for Surrey-White Rock does have the floor. But I would ask the hon. member for Surrey-White Rock to address his comments to the Chair and avoid personal comments about other members in the House.
W. Hurd: I appreciate that direction from the Chair. Indeed I was only comparing the methods of financing used between the two bodies, hon. Speaker, because the same potential for misappropriation -- if I can use that term -- of funds is always there when duly elected Legislatures are not able to....
The Speaker: On a point of order, the hon. member for Nanaimo.
D. Lovick: Madam Speaker, we know the member's capacity to use the language is limited, but he does know full well that misappropriation is a legal term suggesting criminal behaviour, and you can't say that in this chamber unless you're a coward. I ask him to withdraw it.
The Speaker: In rising on the point of order, the hon. member has also used terms that are offensive in this House by using the word coward. However, I would ask the hon. member to clarify if he was using the term addressed to any other member in this chamber.
[ Page 5679 ]
W. Hurd: Absolutely not, hon. Speaker, and perhaps I could substitute for....
The Speaker: Thank you, hon. member. Continue with your debate.
W. Hurd: Perhaps while I'm on my feet I could raise a point of order and ask the Chair to direct the hon. member for Nanaimo to withdraw the word "coward" from his previous remarks, as I'm sure it reflects on my integrity as a speaker in the Legislature.
The Speaker: I'm not sure if an hon. member who has the floor in debate can also raise a point of order, but I think that the Chair has dealt with the unfortunate use of the word by the other hon. member. I think that having mentioned to both members the inappropriateness of remarks, I can now ask you to continue with debate.
D. Symons: Point of order. The hon. member on my right has indicated that he did not have any intention of maligning a person here. He was talking about a group rather than an individual, whereas the other one was specifically referring to an individual. We are simply asking for removal of that remark from the record.
The Speaker: I'm sure that the hon. member for Nanaimo, in the interest of continuing with the debate, would like to do that.
D. Lovick: Hon. Speaker, just as the members on the other side don't speak very well, neither do they listen very well. I said that unless he is a coward, he would withdraw. He has withdrawn; therefore he is not a coward, and therefore I am happy to withdraw.
The Speaker: Both members have now withdrawn. Perhaps we can continue.
W. Hurd: I was just seeking to compare the rather innovative methods of financing that exist around the world, and indeed the discussion of Nanaimo and Peru leads me directly back to Build B.C., Bill 3, which, in the spirit of creative financing, undoubtedly confers upon the government the same sorts of accounting possibilities that are out there in the world of private business and finance. Unfortunately, hon. Speaker, that's the concern the opposition has about Bill 3, the Build BC bill, and it's the reason why it clearly needs to be referred to a select standing committee of this Legislature. It's a motion put forth by the opposition that I clearly support.
Anticipating that the government would have no use for a motion that seeks to consult with British Columbians on such an important piece of legislation, the opposition went out and solicited opinions on Build BC from a variety of interest groups. And I know that members of the opposition have referred to some of the comments that were made, but I think it's important for me to indicate to members on the governing side of the House -- and indeed to the sponsor of this bill -- exactly what concerned citizens and organizations of British Columbia are saying about it.
I look at one comment from an association which notes that, with its spending rate at twice the rate of inflation -- referring to the spending priorities and spending activities of this government -- the B.C. government is sending the worst possible message to individuals, business and the international financial community.
Bill 3 establishes a new Crown corporation with unlimited spending and borrowing authority and which will also attract new administration costs for a CEO. It's important for us to reflect on exactly what the government claimed was the intent of this bill. It said that it was for training and development, job creation, new project development and regional diversification. There's not one of those items that couldn't be currently performed by a ministry of government. Indeed, those four line items describe four ministries in this government.
Clearly it's a duplication. It's a new Crown corporation which will be, as tradition would imply after two years of the current government, filled with patronage appointments -- a veritable swarm of them. And there's no question that the CEO, in the longstanding tradition of this government, will be hired from a very shallow and limited talent pool indeed -- as the government has chosen to appoint other people with the correct political background.
So we have another gilt-edged opportunity for another appointee of this government to surface in a high-paying Crown corporation job. And I have no doubt that when the time comes to advertise to fill these positions, yet another supporter of this government who doesn't currently have a job -- I can't believe there are any left, but assume that there are -- will surface in the running for this particular job of building British Columbia on the back of the taxpayers of this province.
It's that particular aspect of this bill -- the taxing authority that's conferred to the Build B.C. Crown corporation -- which needs a thorough review by the people of this province. It's the reason why it needs to be referred to a select standing committee.
I've been fortunate enough to serve on three select standing committees of this Legislature, and I consider it to have been a useful and worthwhile exercise. They have given people the opportunity to come forward. I have learned that there are alternative views out there on how the province needs to be developing relative to the issues that are raised by these legislative committees.
Clearly, Bill 3 represents such a fundamental change in the way this province is going to finance its projects and in the amount of long-term debt that it's going to incur. This is an example of something that requires input from British Columbians from one corner of the province to the other. As I have indicated in debate before, it's absolutely necessary that people ask the hard questions on how this Crown corporation is going to be structured. But this bill that we're dealing with is very vague on specifics. It's very vague on the kind of questions that people want to ask.
[ Page 5680 ]
Some other comments have come in to the official opposition office from other associations in the business community and beyond, and I quote one: "Our members are deeply concerned about the high level of taxation and government debt, and the perception that Bill 3 gives the NDP sweeping powers to borrow money with little accountability to the taxpayers." Accountability is what this assembly is all about, and it's accountability that the government of British Columbia is seeking to avoid with its wide parameters in Bill 3. Let us make no mistake about it.
Few bills that come before this assembly really define the ideology and philosophy of the current government. Surely one of those bills is Bill 3. It's a bill that envisions a future of government corporate investment in the economy of the province. It's a bill that fundamentally defines the philosophy of the government that public sector investment is better than private sector investment in this province. They are saying with this bill that the means of financing is indeed not taxation but revenue to be generated for the coffers of the Crown corporation. A Crown corporation, by its very corporate structure, deals with revenues and not taxes. It's supported by what could be construed as revenues in any other jurisdiction, but in fact it's a matter of taxation by whatever means you choose to define it.
These are the kinds of questions that British Columbians would ask during a select standing committee tour in the province. They would ask questions about how the government intends to appoint directors to this corporate board, and on who its chief executive officer might be. These are important considerations. If this Crown corporation is to have such wide borrowing and spending powers and the ability to decide in what corner of the province a new road, school, hospital or courthouse is going to be built, then surely the people of the province will want to know that the people on that Crown corporation are not chosen because of their sympathies to the current government.
[5:30]
Surely this type of Crown corporation should be immune -- completely immune -- from patronage appointments and what that might mean. What assurances can members of this assembly seek, particularly those in opposition, when they're dealing with the decisions of a Crown corporation that may be stacked with political appointees of this government? What kind of accountability would there be when we're dealing with a bill that confers, as its only check and balance, a regular report to the cabinet of the governing party?
The public of the province has access to ministers of the Crown. They have the ability to write letters to their elected representatives and ministers of cabinet and to express their concern about the direction taken with spending priorities. As I have indicated in this assembly before, with these functions constrained in a line ministry people can expect some accountability from their elected representatives. But Crown corporations do not possess that kind of accountability. That is the kind of issue that needs to be raised in a public forum beyond the confines of a Legislative Assembly. Obviously, one of the hallmarks of a legislative committee process is that in many ways a legislative committee is a re-enactment of the kind of committee work that occurs within a Legislative Assembly. Instead of the MLAs standing up and asking questions during Committee of Supply, it is presenters -- people who come out to centres and halls throughout this province to ask the questions that would normally be asked by MLAs in this assembly.
Given the kind of comments that are coming in to the opposition offices about Bill 3, obviously they would welcome the opportunity to ask this government questions about this bill, to question a select standing commitee which had as its makeup members from all three political parties in this House and to listen not only to their member for Nanaimo and their member for Okanagan-Penticton, but also to the member for Okanagan East and the member for Langley, who may have a slightly different view of what this bill might contain.
This bill needs to be adequately explained to the people of the province. That simply will not be done by this government, because it obviously has something that it doesn't want the people to know about this particular bill. We are dealing with a potential corporate monolith. That's exactly what it is -- a monolithic structure, where the ability to borrow money and to tax is almost universal, and the ability to spend money and the nature of the decisions on how money is spent are clearly beyond the bounds and access of normal British Columbians.
For a government that was elected based on openness and honesty.... That's what they said when they were elected. They promised open government. How anyone on that side of the House can stand and say that a corporate structure, a Crown corporation, offers the opportunity for greater openness and accountability.... It is simply a denial of the basic promise that they made when they were in opposition. As I've said before in this assembly, a corporate structure offers less accountability, not more. It offers less rationale, not more, for decision-making. It offers fewer opportunities, not more, for people to hold their elected representatives accountable for spending decisions. It is a repudiation of the concept of open and honest government.
It's also why I say that this bill fundamentally defines the ideology of the government, because while they promised more consultation and openness, they've delivered less. While they promised decision-making that would take into account the interests of all British Columbians, they've delivered less. That's the reason the Build BC bill needs scrutiny beyond this Legislative Assembly. I'm pleased to stand and support the opposition amendment, which seeks to do exactly that.
I'm sure that many of the people who have approached the opposition on this particular bill and expressed their views to us would welcome the opportunity to direct those questions and concerns to members of cabinet, in particular to the minister responsible for bringing forward Bill 3. They would welcome the opportunity. Before the budget was
[ Page 5681 ]
handed down, the Minister of Finance toured this province, allegedly from one end to the other, supposedly to consult with British Columbians. If the minister were willing to comment on it, I would ask him whether he mentioned his intention to increase the long-term debt of the province through Build B.C.
During his tour of this province, mere weeks before the introduction of his budget, did he tell people that he intended to introduce a bill that would fundamentally change the way projects are capitalized and funded in the province? Undoubtedly he did not mention that this legislation might be forthcoming and that it would be such a major adjunct to the existing budgetary process in this province. We'll give the minister the benefit of the doubt. Perhaps this major piece of legislation slipped his mind. Perhaps he didn't feel it was important enough to inform the people of the province during his prebudget tour, which was allegedly an opportunity to listen to the concerns of British Columbians.
What makes the introduction of this legislation now so insidious is that when the Minister of Finance had an opportunity to consult British Columbians about the nature of the spending authority and the parameters of this bill that he sought to introduce, he chose not to bring it up. He didn't listen, he didn't....
Interjection.
W. Hurd: The hon. member of the executive council says he listened. Well, it's the intention of the opposition to perhaps phone some of the communities visited by the Minister of Finance and ask those individuals if the minister and his coterie of advisers and ministerial assistants told them anything about their intention to introduce this bill to the assembly. What are we to make of an expensive prebudget tour of the province which didn't address a fundamental change in the way the taxpayers' money is going to be governed in this province? What are we to judge of a government that promises openness and consultation when, mere months -- weeks, in fact -- before its introduction of this piece of legislation and a bill, it chooses not to even bring it up?
I can tell you that that Minister of Finance should be ashamed of the fact that he toured this province under what amounts to false pretences. That's exactly what he did. And I would wager to say that he will be the first minister to stand in this assembly and vote against this motion to refer it to a select standing committee. This minister toured the province and dealt British Columbians half a deck, and he will not stand and support a motion from the opposition which seeks to give them a full deck of cards in the form of a legislative standing committee to review the rather odious and offensive bill which seeks to spend their money with little or no accountability. That's the kind of deceit we're seeing inherent in this bill. They didn't have the courage to raise it when they toured the province, and they don't have the courage to take it to the people of the province today. And this is a government that promised better to the people of the province. It promised openness and consultation.
But why should we be surprised that, in fact, the Minister of Finance failed to raise this rather important piece of legislation, this intention that he had, when he went out on the road? We shouldn't be surprised, because since this government's election it has chosen to evade its responsibilities; it has chosen to evade telling the people of the province exactly what its intentions were. So we can't be too surprised that the Minister of Finance should have toured the province. I am pleased to say that the opposition is sponsoring a responsible amendment here today: a referral to a select standing committee of this assembly.
As I said earlier, a government that professes to believe in the legislative committee process and consultation from British Columbians has in fact delivered nothing on this particular bill. It has chosen to deliver no opportunity beyond this assembly for people to debate and comment on the terminology of Bill 3 -- absolutely none, hon. Speaker.
The Minister of Finance, who we are told is the de facto leader of this government.... Why, only two weeks ago, they virtually collapsed without him present in the assembly. The de facto leader of the government went out on a prebudget tour and decided that Build BC wasn't really a bill that he needed to tell people anything about. He decided in his wisdom that even though his government intended to make a fundamental change in the budgetary process of the province, it wasn't a suitable subject to bring up when he toured British Columbia.
It's apparent that he will not support this amendment. I have no doubts about that. Nor will the members opposite; they will go home and put the best face on Build BC, and if members of their constituency were to raise the same concerns being raised in this assembly today, I'm sure they'd have a glib explanation of how in fact you could do more, how you could build projects where no money existed previously and suddenly find hundreds of millions of dollars to build projects throughout this province without materially increasing the long-term debt of British Columbia.
It's an absolute sham. Clearly, this bill defines the ideology and philosophy of this government and is the reason why the opposition has moved reasoned amendments to try to attract the concern of British Columbians. It's happening. People are writing in; they are realizing....
Interjection.
W. Hurd: I'm being heckled by the hon. member for Nelson-Creston. We had this discussion last night, or two nights ago, about B.C. Hydro. As I mentioned, B.C. Hydro has denied the people of Nelson and the Kootenays any opportunity to have input regarding the downstream benefits. B.C. Hydro has said to the people of the Kootenays: "We don't have to be accountable for local taxation in this region, because we're a Crown corporation. We're not responsible for answering to the people of the province as to why we make the decisions we do."
Clearly, the member for Nelson-Creston didn't listen to my comments two nights ago. He didn't realize why
[ Page 5682 ]
B.C. Hydro is not required to give him or his running mate from Revelstoke -- who I believe is still here -- any answers about the nature of its decisions. That's the kind of Crown corporation the government is seeking to set up -- one that will have no less or no more accountability than B.C. Hydro does.
When these members were in opposition, they were the first ones to bitterly complain about the lack of accountability for Crown corporations in this province. They were the first ones to probe into the inner workings of these Crown corporations, as diligent leaders of the opposition -- a place they so richly deserve in the future of this province. When they get into government -- when they finally cross the floor -- what is their strategy for building British Columbia? It's to create another Crown corporation with the same kind of accountability as B.C. Hydro, which has been shafting the constituents of those hon. members from the Kootenays for some time.
[5:45]
It's utter hypocrisy. There's no other way of describing the government's decision to support this bill. There's no other term you can use but hypocrisy for describing a tour made by the Minister of Finance merely weeks before the introduction of this piece of legislation and his decision to not murmur a word to the people of this province.
The opposition cannot stand in this assembly and support hypocrisy. There's not a chance in the world that we could endorse the kind of philosophy this represents: a philosophy of deceit, a philosophy of spending the people's money without duly constituted authority, a philosophy that at its essence emphasizes the importance of public corporate investment by public dollars in this province. That is the philosophy that this bill represents. And that is the reason....
The Speaker: Thank you, hon. member. Your time has expired.
C. Serwa: I'm pleased to rise and support the amendment to the motion. The amendment reads that the subject matter be referred to the Select Standing Committee on Finance, Crown Corporations and Government Services.
The reason I stand and support the amendment is that I recognize the significance and the impact of this radical departure from established process and procedure in government circles, and especially in the Ministry of Finance in financing capital projects.
In this situation, the expectations placed on this particular fund through B.C. 21 are much greater than the $100 million that is listed. The expectations, of course, are fuelled by one of the components. I'll read from the publication with information on B.C. 21.
"The acceleration of the government's investment program in building the facilities required to support vital services in health care, education and justice: This component will speed up the completion of community facilities needed for the long term and will deliver the immediate benefits of increased economic activity and jobs. Because these investments must be made, the acceleration of these projects will not add to the province's long-term deficit."
So over and above highways and transportation systems, we're talking about a number of projects that are already traditionally financed through the current budget and through the various line ministries.
I suppose it's fair to ask why I'm standing and speaking for the third time in second reading -- the third time on a variety of motions. I think that's a fair enough question.
D. Lovick: You love to hear yourself speak.
C. Serwa: No, it's not really that.
But I really believe very deeply that this particular initiative is absolutely wrong. I perhaps applaud the ideas behind it and the necessity for improving the economy. I have no difficulty with that, and I think it's a responsibility of this government to do that. But I have a great deal of difficulty with this particular concept, with hiding in another Crown corporation -- under the rug. so to speak -- deficit financing that the taxpayer is responsible for. I believe that the initiatives can be made and that the revenue sources are there, and that if the focus on spending was parallel with the announced concerns of the executive branch of this government, that potential lies within the capability of the government today, with today's income and today's expenses in the current budget.
In speaking for the third time, I state this fact: if in debate, from my Social Credit caucus position, we fail in our efforts to reach the minds of the government members and show them the validity of our concerns, and if we in fact fail to reach the public -- the taxpayers in British Columbia -- with our specific concerns, then I have to accept, as a member of the opposition, part of the reason for failure. It's a substantial burden, and it's not one that I take lightly.
I would not continue to speak on this matter if I didn't feel very strongly. And I don't see it as a partisan political issue; I see it purely and simply as an economic issue. And as an economic issue it doesn't make any sense. Obviously there is some difference of opinion, but I'm going to continue to try, and I do hope that the members opposite will listen and hear and perhaps look at other options or alternatives. If not, if they will take the advice proffered in this amendment and have the standing legislative committee actually tour the province and hear what the people of the British Columbia have to say, and take their direction -- as they should -- from the people, I think that would be entirely appropriate.
Interjection.
C. Serwa: I note the Minister of Aboriginal Affairs over there, not deeply concerned about this particular issue perhaps. I note also that he is an advocate and close supporter of Ms. Maloney and her taxing implications. I see that he signed and supported the article, and I respect the member for his philosophy -- his particular view of the world. But this matter is incredibly important, and I think that the member realizes that.
[ Page 5683 ]
The expectations of this fund are much greater than has tended to come out here. We talk about $100 million being dedicated to the particular account and revenue-type opportunities being made available to build up that account. We also recognize that the fuel tax -- as has been pointed out time and time again -- is inadequate to cover the type of rehabilitation of that fund, and other taxing measures will have to be imposed. That is clear, and I think that the members opposite, as well as government members, have to acknowledge that.
But what will this bill do? I think it is worth looking at some of the statements that have been made by various ministers of the Crown during second reading on the philosophy and principles of this bill. The Minister of Labour indicates that this would allow the Island Highway to finally be built from one end of the Island to the other. How rational a statement is that?
First of all, we are talking about $100 million being introduced into the fund and about building the Island Highway from one end to the other. A fair bit of the Island Highway has been completed to four-lane standard between here and Nanaimo. There is a great deal more work to be done in the way of bypasses, and certainly in the north end of the Island. It is incredibly important to the economy of Vancouver Island and to the communities on the east coast of the Island to the north. We appreciate that -- there is no argument there whatsoever. But how is $100 million going to finance this massive structure, as well as law courts, hospitals, schools, job-training programs and extensive silviculture programs? It can't, and it won't.
The total estimated cost of the Island Highway system is $1.6 billion. There is absolutely no way that this particular fund can either finance or look towards that type of capitalization. There has to be a reality check. Obviously, the only way this will be accomplished is with a great many additional taxing measures to build up this fund so they can start to do what is expected.
Our opposition has nothing to do with stymying growth and development, but with strengthening the economy of the province of British Columbia. That really is why we're all here. That's certainly one of the reasons that I sought to be an elected member of the Legislative Assembly. In the end, a strong and healthy economy means jobs for the people of British Columbia; and if we have more people working, we can then afford the quality health care and educational system that we have and the superlative social services that we provide. It takes more British Columbians working. I am very unhappy that one person in ten in the province is on welfare. I suppose if I were king for a day, what I would like to see is an unemployment rate that wouldn't exceed 3 percent of the population. I think that's realistic, and that's a personal goal that I have because I'm concerned about the social devastation that occurs with unemployment.
Hon. Speaker, noticing the lateness of the hour, if the Government House Leader would be prepared to accept a motion to adjourn debate until the next sitting, I would be.... The Government House Leader indicates that he would accept it, so I move the adjournment of debate until the next sitting of the Legislature.
Motion approved.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. M. Sihota moved adjournment of the House.
Motion approved.
The House adjourned at 5:58 p.m
The House in Committee of Supply A; D. Streifel in the chair.
The Committee met at 2:44 p.m.
ESTIMATES: MINISTRY OF LABOUR AND CONSUMER SERVICES
(continued)
On vote 49: minister's office, $350,350 (continued).
A. Warnke: I have just a few questions for the minister that I'd like to start with. I won't belabour them very long, but I do want to ask a few questions with regard to an appointment that in recent days has been somewhat controversial. When I've asked a question about tabling the r�sum� of Mr. Marc Eliesen -- I believe he is the chairman of B.C. Hydro -- I've noted that in the last couple of days his r�sum� has not been tabled. I also asked specifically for the terms of the contract upon which Mr. Eliesen was hired. Maybe the minister just simply has not had the opportunity to do that yet. I would respect that from the minister. I'm not sure.... I'm also making an appeal to the Chair on this as well. Considering that the question was taken on notice, is it appropriate to ask the minister whether the terms of the contract of Mr. Eliesen should be tabled? In any case, I was wondering whether the minister would perhaps put forward that document.
[2:45]
Hon. M. Sihota: I have not had occasion to read Hansard. I know there were some questions asked with respect to Mr. Eliesen, and I know they were taken on notice. But I honestly haven't had a chance to catch up with them. I don't have the contract here. Let me just cover off the salient aspects of the contract. The contract is for $195,000 a year, which I believe -- functioning from memory -- is an increase of about $20,000 from the previous chair's contract, which I think was at $175,000. I believe the contract is for a five-year term with a five-year renewal; I'd have to double-check on
[ Page 5684 ]
that -- I can't remember if it's seven or ten years, but that's the range. It has a relocation expense provision of some $50,000. And it provides for pension to be determined on a two-to-one ratio for the time period Mr. Eliesen is at B.C. Hydro. From the issues that tend to garner public interest, those provisions are the details the hon. member was probably looking for. I'll be happy to give him a copy of the contract in due course.
A. Warnke: I did wonder about that, and I respect the minister's response. In addition to some of the figures the minister put forward.... Actually, I believe they concur with what the minister has said: $175,000 was the salary of the previous chair, and it's been increased by $20,000. There was a relocation expense -- moving expense is the way some people would put it -- and pension and other executive benefits.
But there is one other element I'd like to draw to the minister's attention: the bonus provision that is reputed to be in this contract, 30 percent of the salary, which is quite a substantial amount when it's calculated. Two aspects of the bonus provision make it controversial. First, when the bonus provision is added to the salary, it comes close to the salary Mr. Eliesen received with Ontario Hydro. I believe the five-year term the minister has put forward is correct, and is similar to the five-year contract Mr. Eliesen had with Ontario Hydro. The second aspect is the elements that make up the bonus provisions, the terms which define whether Mr. Eliesen receives a bonus, and that sort of thing. I realize from the minister's answer that the minister has not had an opportunity to look at Hansard, and I respect that. If the minister wants time to reflect specifically on Mr. Eliesen's contract, especially the part dealing with the bonus, the terms and what not, I'd appreciate that.
Hon. M. Sihota: It is true there is a bonus provision of 30 percent in the contract. If I may, I'll make a number of points.
First, it is true his previous salary was $265,000 in Ontario and, if you add the 30 percent on top of the $195,000, you end up very close to $260,000. For the sake of argument, let's say it is. Although I have inquired, I still don't have the answer to this, funnily enough -- whether or not it was $265,000 and bonus in Ontario. That's probably a moot point.
In terms of the contract in relation to the bonus, prior to Mr. Eliesen's arrival at B.C. Hydro, his predecessor, Larry Bell, had established a system of bonuses for the chair and the vice-presidents. The quantum was in the 30 percent range. I have asked for the vice-presidents' contracts. If the hon. member would like that information on their bonuses, I'll get it for him in due course. Mr. Bell had gone through the private sector taking a look at bonus provisions, did a study with respect to bonus provisions and then incorporated those into the existing agreements of vice-presidents. Mr. Bell was followed by Mr. Wyman, who continued that practice.
When we inherited office in 1991, we were unaware of the bonus provisions in the contract. We really didn't look into the issue. Under the policy established by the previous board, determinations with respect to whether to provide bonuses were required to be brought to the board for consideration, for each individual. In the first six or eight months of our mandate, prior to Mr. Wyman's departure, the then-CEO brought to the board the issue of bonuses. If I may says this, the board was surprised the bonus provisions existed and that they had to pass judgment on people they really didn't know well, since there was a new board in place. I should tell the hon. member that we have sort of conducted a review with regard to the whole process in relation to bonuses. That work is not complete as of this date, but it is happening. In the interim, bonuses are in existence.
With respect to Mr. Eliesen generally, but particularly with respect to B.C. Hydro.... All of the other Crown corporations pale in comparison to B.C. Hydro, in terms of the revenue it generates in the province, the way it touches on the lives of all British Columbians, and the dividends it provides to the province. It is one of the major corporations in the province -- public or private sector. It is one of the biggest revenue-producing utilities in North America, and it is a major player in B.C.'s economy. We can talk about that, because it's one of the most exciting parts of the portfolio that I enjoy.
The traditional approach to Hydro is that executive salary levels ought to be comparable with those of the private sector; the private sector should set the benchmark for salaries at Hydro. I see the hon. member nodding, and I assume that he agrees generally with that kind of an approach. It's one that has been taken in the past.
If you look at Mr. Eliesen's contract with the bonus, it is interesting to note that it falls in the bottom 25 percent of contracts given to CEOs in the private sector. In other words, a full 75 percent of private sector CEOs will earn a salary and a bonus in excess of Mr. Eliesen's. It is really important for the hon. member to know this, because I thought it was an interesting comparison, looking at the private sector. Hydro has revenues of about $2 billion annually, and is a major player in the province. It would be interesting to compare Mr. Eliesen's salary, using the private sector benchmark, with other private sector companies. I will be happy to table this because it certainly buttresses my case. Take, for example, a company of similar size: Echo Bay Mines based out of Edmonton. Their chairman and CEO earns a salary of $422,540 a year, with a bonus of $268,622. The bonus alone is equal to or in excess of Mr. Eliesen's salary and bonus. Inco Ltd., which is a major corporation in Canada, has a revenue of $3.2 billion -- slightly more than Hydro. Their chairperson has a salary of $431,486 per year and a bonus of $423,500 per year. Again, the bonus alone is almost twice as much as Mr. Eliesen's salary and bonus.
To compare that to a relevant Vancouver-based company, Placer Dome has revenues of $1.32 billion, which is less than Hydro's. Their chairman has a salary of $400,000 and a bonus of $100,000. When you compare the size of Hydro, the impact it has on the province, the revenue it generates and the quantum of the salary paid to the private sector, and you add to that the experience Mr. Eliesen has, which is remarkable.... He has worked
[ Page 5685 ]
for Manitoba Hydro, Ontario Hydro and now for B.C. Hydro. No one else in Canada, I would argue, has that kind of experience. When you note that he was hired out of the private sector by the former Liberal Premier of Ontario, David Peterson, and has worked under the direction of the former Minister of Energy, the current leader of the Liberal Party in Ontario -- I believe it is Lynn McDonald -- as the Deputy Minister of Energy, it seems to me that not only do we have an individual with remarkable credentials, but we're getting him on a very competitive basis in terms of his contract. We're fortunate to have Mr. Eliesen, and we're fortunate that he has agreed to terms that are materially less than what he was earning in Ontario and what he would garner in the private sector.
A. Warnke: I recognize the general drift of the argument. The minister mentioned a couple of specifics that have to be clarified at the outset. Mr. Eliesen was clearly appointed by the Bob Rae New Democratic government, not by the previous Liberal government of David Peterson. If the minister recalls, an election was held in the summer of 1990 -- not that long after the defeat of the Meech Lake accord. It was in September of 1990 that the Bob Rae government came in.
Also, the Leader of the Opposition in the Ontario government is Lyn McLeod, not Lynn McDonald. Lynn McDonald, as I'm sure the hon. minister knows, is a very prominent New Democrat in federal politics.
D. Schreck: Liberal names are easily forgotten.
A. Warnke: The hon. member says that Liberal names are easily forgotten. I know that's part of the New Democrats' premise that the Liberals will wither away. They hope so. But clearly, in this province, in the province of Ontario and, I suspect, in other provinces, Liberals will naturally come back and represent the middle class, the middle road and the moderate.
D. Lovick: There were 1,300 people at Lyall's meeting last night.
A. Warnke: That's right. The exchange of Social Credit and New Democratic politics is pretty interesting, but I want to focus in on this particular area.
The Chair: That's a valid point, hon. member.
[3:00]
A. Warnke: What I want to pursue in relation to the contract -- because obviously the contract does go on, as the minister indicates, for five years.... Mr. Eliesen had a contract with Ontario Hydro for five years, yet within the early months of his contract he then took up a contract with B.C. Hydro. I sometimes wonder whether this is unusual. In sports circles there is something known as contacting another team for their star player, but some sort of contact usually has to take place in order to recruit someone from another team. Here, I see as well, some kind of contact would have to take place between Mr. Eliesen and B.C. Hydro. Since some initial contact had to take place between Mr. Eliesen and B.C. Hydro or the B.C. government, and he is essentially the minister responsible for hiring Mr. Eliesen, is this a practice we might see in the coming months and years, of this government approaching other chief executive officers or chairmen of Crown corporation boards? If the minister wishes to just focus in on Mr. Eliesen's case, how was the contact initially established between himself and/or B.C. Hydro and Mr. Eliesen? Is it possible -- not necessarily for protocol but for good political manners between the provinces -- that the government of Bob Rae was also contacted when this initial contact between Mr. Eliesen and the government of British Columbia came about?
Hon. M. Sihota: I'm still having trouble figuring out how this relates to estimates.
It is true that in the National Hockey League you can't engage in raiding. You can't contact Mario Lemieux through the Vancouver Canucks to come over and sign to play with the Canucks. There's no free agency in the NHL. No one is going to put him in the waiver draft, that's for sure. In the NFL you have the rule that allows for free agency, except that you can protect a "franchise player." If this was the NHL, we wouldn't have been allowed to approach Mr. Eliesen. If this was the NFL, the Ontario government would probably have protected Mr. Eliesen as a franchise player, given his skills. This is more like baseball, where there is free agency. In public sector terms, there is the opportunity for a little headhunting. Not to suggest that we are the George Steinbrenners of politics, but we, as a government, went looking for the best person available to fill the job.
A. Warnke: In my long recent statement, there were a number of questions I had hoped the minister would address. Who initiated the contact with Mr. Eliesen? I understand how the minister might respond to that. Relevant to the budget before us, will other initial contacts be extended by the government or other Crown corporations such as B.C. Hydro? Does it have any intention of approaching other members as well?
The Chair: Hon. minister, with a modest caution from the Chair as we progress into these estimates. Although the debate along these lines is somewhat interesting, if we could make the questions and answers a little more specific to the estimates, the Chair would be aided greatly.
Hon. M. Sihota: Thank you, hon. Chair. As you know only too well, I would rather be talking about the wonderful project we're doing under the Resource Smart program with B.C. Hydro at Stave Falls in your constituency. We're generating hundreds of millions of dollars of economic activity by renewing an old generating station in order to serve the growing demands in the area. But, in any event, the hon. member wants to ask personnel questions.
I'm not prepared to get into personnel issues any more than I have, except that the hon. member asked a question earlier about protocol. In terms of protocol, I
[ Page 5686 ]
can assure the hon. member that Premier Rae was advised at some point of our interest in Mr. Eliesen.
L. Hanson: I guess we've now established that Mr. Eliesen is the Mario Lemieux of public utilities. Something that struck me as being interesting, seeing that we are now on the subject of the bonus.... I apologize if I missed this discussion somewhere along the line, but maybe the minister could give us some indication of the criteria or performance requirements to justify the bonus.
Hon. M. Sihota: That's an excellent question, and that's really what we're grappling with at Hydro with the board. If I can put it this way, I'm not persuaded that they are adequately laid out. Before bonuses are considered in the next round of considerations, a board committee is establishing criteria to give the board adequate guidelines.
I don't mean to be disrespectful of the previous board or the previous chair, but I think there was simply an expectation that they would be passed on. That's not to be critical; that's just a sense one got when the issue arose at the previous board. The current board is working on a set of guidelines and evaluations. With the change we have had with chairs -- Mr. Olsen and Mr. Eliesen -- and some of the corporate restructuring that's going on at Hydro, there hasn't been a pressing set of applications, if I can put it that way, to the board for bonus considerations. We have been switching personnel around, bringing new personnel in and working on new contracts, all of which would have bonus provisions but all of which would be subject to the policy the board develops. It is not yet developed.
L. Hanson: The public issue of Mr. Eliesen and B.C. Hydro relates to the criteria that adds the bonus to his salary, as opposed to the salary itself. If it were perceived that the bonus were a matter of form, of paying a certain salary, it could be subject to a fair amount of public criticism.
It might be interesting for the public to know what that bonus criterion is, when it is finally established. It strikes me as strange that a corporation would establish a bonus without knowing what the performance requirements are to justify that bonus are. Would the minister at least give us the understanding that when those criteria are developed, he will give us an opportunity to see what they might be?
Hon. M. Sihota: I'll be happy to do that. They may well be developed by now. I've missed most of the last two board meetings; I've gone in on some issues, and then had to leave for other matters.
It's an interesting challenge in the public sector. You know, in the private sector, you return to the shareholders a dividend of a certain level, and that brings you into consideration for a bonus. I don't think it's as simple with a public utility to say: "Mr. Eliesen, if you bring in a dividend of $400 million to the province next year, that's one of the triggering mechanisms for a bonus." There are other requirements of a public utility -- economic and social as well as policy requirements -- that are imposed by government that do not lend to the theory that one ought to maximize the profit the corporation generates. There's obviously a lot of discussion about that when you are dealing with a utility the size and the nature of B.C. Hydro.
Secondly, when you're looking at a corporation such as Hydro, it would be unfair for me to say that there wasn't a policy before; it's just that it was very vague. I don't know to what extent you could make it totally objective. There are always some subjective elements to the bonus issue, and part of the subjectivity is predicated on the experience of a board and its interrelationship with the vice-presidents or the CEO. There's a relationship that develops between a board and personnel. There has to be a subjective component to it as well. Inasmuch as people might be able to meet some objective criteria, but subjectively people might not feel comfortable.
It's no longer in my portfolio, but I can think of ICBC as an example of that, where I'm not sure the subjective considerations, if there were bonus provisions there, would warrant it. To use that example, interestingly enough, it's almost easier to establish criteria when you're losing money than when you're making money. It's clear what the objectives are when you're losing money.
In terms of the range of considerations -- just to demonstrate that this is not a simple proposition -- there are other things you have to evaluate the performance of Hydro on. For example, the hon. member knows a remarkable amount is at stake with the negotiations as they emerge with regard to downstream benefits. If there is a provincial asset that can bring about remarkable return to the province, it's the downstream benefits. It would seem to me that over a two-, three- or four-year period, Mr. Eliesen and his corporation have to be evaluated on the way in which they negotiate an arrangement for the province that benefits the province and maximizes the return on the downstream benefits. I guess that's one of those subjective criteria, which you may also want to put objectively into the bonus provisions. Quite honestly, in terms of.... I've gone way beyond the point. I wish there was more discussion than there is in this House around what we're going to do with the downstream benefits. If you try to take a look at where this province should go -- and naturally where it will go in any event -- over the next four or five years, and then you take a look at things which can embellish its growth and improve significantly the economic well-being of the province, one of the things that can have the most material effect in terms of improving the quality of life that we enjoy and making remarkable returns for the province is what we do in the downstream benefits -- not just because the issue is within my portfolio but because I deeply believe this.
I think that there has to be a lot of care taken with the way in which we do those negotiations and the kind of deal that we structure for British Columbia. The hon. member knows that his party has been applauded in some quarters for the work that they did in building the infrastructure in the Kootenays, and in other quarters criticized for it. But I don't think any quarter would
[ Page 5687 ]
deny that those initiatives under W.A.C. Bennett did materially improve the quality of life for British Columbians and did give the province a return on an asset. What we've done with Mr. Eliesen is we have given him responsibilities with regard to those downstream benefits. It would seem to me that in the context of the bonus, one of the things that we have to evaluate is the performance on those very critical negotiations.
[3:15]
If I may go back to the point I was making earlier, I think we're very fortunate to have an individual of his stature leading B.C. Hydro and being part of those negotiations. It's not every day that you can take someone who's worked as the head of Manitoba Hydro and Ontario Hydro, and served as the Deputy Minister of Energy under the Liberals -- and I want to correct what the hon. member said before: he did go out with the Ontario Hydro when the New Democrats were in government, but he served as a Deputy Minister of Energy, engaged in international negotiations with Ontario and Manitoba, and that kind of experience you just can't find every day. To have someone with that kind of background leading a utility that in the past, I think, has been very well run and continues to be well run, is, in itself, an asset to British Columbians.
L. Hanson: I heard what the minister said about the importance of the negotiations on downstream benefits to the province. I suspect that there would be very few people that would disagree with their importance to British Columbia. It was interesting to hear the minister's description of the comparisons of the pay package for Mr. Eliesen compared to some other private corporations. I guess a very important thing is that those private corporations are competing in a free market. I think most British Columbians would accept that B.C. Hydro has a bit of a monopoly on the provision of electricity. I suspect that those comparisons would have to be looked at very closely. I think the minister will admit that this scrutiny of Mr. Eliesen and his pay package has come about because there has been some suggestion that there may have been some political influence in his hiring. I think it is fair that we ask questions about the pay package and the bonus so we can determine if it is a fair and reasonable package, which effectively the taxpayers have to pay, even though it may not be in direct taxation.
I don't argue that Mr. Eliesen probably has the qualifications. I'm not questioning those, because I'm probably not competent to measure them, and I don't know what they all are. I accept all of that. There is something I would like to know about the arrangement that was made. It's my understanding that in the contract with Mr. Eliesen there is a requirement, before the five-year contract expires, for the provision of notice of extension of the contract beyond the five years -- something like at the third anniversary. I think the minister understands the question.
Hon. M. Sihota: I'm functioning from memory, but as I recollect, there is a requirement that we advise Mr. Eliesen of our intentions in the third or fourth year of the contract -- maybe the third; year three does stick out in my mind as well -- so that he has some notice. I think there is a provision that also requires that he declare his intentions, so that we have some time to plan, should there be a change. But I'm really functioning from memory here.
L. Hanson: I am led to believe that unless there is notice at the end of the third year, the contract automatically extends beyond the fifth year. Is that not your understanding from memory?
Hon. M. Sihota: I think so, but I could be corrected. I can try to get the contract in here, but let's just assume that you're right and examine the contract on that basis.
L. Hanson: I suspect that it's probably fairly standard procedure. Most contracts for services, which this is, have a date on which there is a requirement to advise whether it is going to be continued or discontinued at the end of the term. At the end of three years, when there's fully two years left, seems to me to be a rather early date for that provision. If the minister could provide that information at some point that is convenient, it would be appreciated.
This has to do with ministry policy, and because we're on Hydro, I suspect it's a reasonable question under these circumstances. The minister announced that there would be a cap at two percent above inflation on rate increases. When you look at the past record, the cap at 2 percent above inflation doesn't seem to be a requirement, because history has told us that very seldom have Hydro rate increases on an annual basis even come anywhere near the rate of inflation. They've been much less than that. Now we have a situation where it is capped at 2 percent above inflation. Will the minister give us some indication of what generated that policy? Is there a concern that there seems to be a need for rate increases at that level, when history tells us that it hasn't been the requirement in the past?
Hon. M. Sihota: I think there are a number of considerations. One is consumer protection -- giving the public some assurance that it would sit within a particular range.
The second was predicated on Hydro's rate of return, on the assumption that the shareholder requested a certain rate-of-return. The formula that was developed, including the cap, was based on some rate of return considerations.
Third, the Hydro increase is subject to review by the B.C. Utilities Commission. If the commission feels that an increase in excess of inflation is not required, then that's fine as well.
Fourth, what we try to do -- and I guess this goes back to the rate of return issue -- is use a private sector model. We looked at the rate of return of comparable utilities in British Columbia and the debt and equity ratios of Hydro to other utilities. We have some comparability there, because we have some other utilities such as B.C. Gas and Westcoast Transmission in British Columbia. We use them, in part, as a
[ Page 5688 ]
consideration. We also looked at West Kootenay and smaller utilities, and said we would like Hydro to generate a rate of return equivalent to what was being generated in the private sector, and at the same time, provide some kind of consumer protection. So the formula was built around those assumptions.
Fifth, we wanted to make sure we were able to avoid rate shock. As you know, in some other situations -- ICBC is an example -- we've had rate shock once in a while. One set of forecasts with regard to Hydro would have suggested that if we had continued in the model that was set prior to our assumption of office and maintained the previous model, we'd probably be looking at an 11 percent rate shock in year three.
Interjection.
Hon. M. Sihota: Fair enough. So the question arose: if that forecast was right, are we better to say to the utilities commission: "Let's do it at 2 or 3 percent per year instead of what we've done before, then a huge shock of 11 percent"? If that forecast was right -- and you're right, history would deny that forecast, there are no two ways about it -- and we had to cover off all scenarios, then that would be another consideration to build in the caps that we did. In any event, it's all far less than the 25 percent that people were predicting when Mr. Eliesen came into office.
[D. Lovick in the chair.]
L. Hanson: If I understand the minister correctly, he has acknowledged that history would not generate anything near a 2 percent over inflation rate increase. If I heard him correctly, most of the justification was based on an expected rate of return by the shareholder -- that being the province. It would follow -- maybe the minister can confirm or deny this -- that if the rate increases do come anywhere near 2 percent over inflation, it will be because the expectation of the shareholder is much higher than has been realized to the shareholder in the past.
Hon. M. Sihota: No, not necessarily so. On one point, I can't forecast what the Minister of Finance is going to request a year ahead.
But you've got to remember that it is a regulated utility. It is regulated by BCUC, so there is a check there. BCUC itself can make determinations. For example, they can say to Hydro: "It may be that your shareholder is expecting X dollars. We want you to find efficiencies within your corporation." Quite frankly, we're talking about a corporation that works in the billions of dollars, and the frustrating thing is that millions of dollars seem to just fly by, in terms of determinations that you make. So I think it's contemplated that the Utilities Commission could put forward that kind of argument to Hydro.
I don't think it should be assumed that the government has made assumptions in terms of how much revenue it expects in following years. I understand what you've seized upon in terms of the rate of return to the shareholder, and I can understand why one would do that in the context we operate in. But you also have to understand there is some value, particularly with a utility the size of Hydro -- for some this may be a surprising comment to come from me -- in having some kind of private sector discipline in its operations, not only in setting some targets for it to achieve, but also to compare its performance with similarly situated private sector corporations. A good chunk of the consideration was that we needed something for it to compete against -- or to be measured against, if I can put it that way, in terms of its performance -- to enhance the development of the formula that is really based on the performance of private sector utilities, mostly in British Columbia.
[3:30]
Finally, at the outset of your comments you indicated that I'd have to concede -- I don't know if it was this question or last question -- that this is a regulated utility and not subject to competition. That is true in British Columbia. But remember we are a major corporate player along the west coast of North America. We compete very aggressively with other utilities in the production of electrical and other services to utilities and private sector producers in Oregon, Washington State and California. That in itself brings about a certain discipline, but also brings about more of an element of free market involvement. And let's not forget we also have an international division that does some work overseas, albeit in my view nowhere near the degree we should be able to do.
Let's also not forget, in terms of the marketplace, that the kind of competition we're engaged in with other utilities is important. A simple example here is Power Smart. We have been able to enter into contracts with utilities elsewhere in North America for the Power Smart program we've developed here in B.C. That's significant. That's something in which we compete with other organizations; we're not the only one who has a Power Smart Inc. kind of setup. So there are some elements.
It's important. I understand the point you're seizing upon, and I understand your line of questioning. But I want you to understand also that a lot of consideration was given in the development of that formula to the fact that we had to have a measuring stick for Hydro, vis-�-vis its performance in comparison to other private sector corporations.
L. Hanson: I find that very enlightening. I suspect that most of the things such as Power Smart have been a fact from the past. I'm not sure that during the history I talked about -- of Hydro rate increases over the years, relative to the rate of inflation or anything overt -- Hydro has been in that same competitive position. So while it's enlightening, I really have some difficulty in relating that argument to the new standards of 2 percent over the inflation rate. I recognize how competitive things are in this world. I know that the Ministry of Economic Development would be very concerned with hydro rates as they relate to that ministry's ability to attract new investment and industry to our province. I also recognize that the costs of hydro and the generation of the costs of power are all
[ Page 5689 ]
part of that equation. But I still have some difficulty in understanding the need for a cap at that level, unless there is some much larger expectation on a return to the shareholder.
When B.C. Hydro goes to appear before the Utilities Commission, it is likely that part of the case that it makes for a rate increase -- whatever that rate may be -- would be a statement that our shareholder expects this. I don't think there's much point in running around behind this. There is a suspicion that the 2 percent cap on hydro rate increases above inflation may be construed or seen as a method of indirect taxation, or a return to the government. If the minister is telling me that this has nothing to do with it, I accept his statement. It would be nice to have it on the record that this was the situation.
Hon. M. Sihota: I noticed your leader made headlines by making that suggestion. I fully expect the opposition to make that suggestion, but far be it from me to confirm it.
Let me just say that when the government considers its dividend requirements from B.C. Hydro, if it was simply wanting to fix on its bottom line, it would want to maximize the return from Hydro. After all, its market makes it a potentially even more profitable corporation than it is right now. The traditional approach in British Columbia, and the one that I concur with, is that Hydro is a generator of economic activity in the province, and it plays a central role in our economic competitiveness in this province. Any dividend consideration has to be balanced against that.
If I may for a moment give some credence to your argument, you say that hydro rates have generally gone up less than inflation. If you take a look at the period from 1986 -- it might be 1984, but I think it's between 1986 and 1993 -- inflation has gone up about 40 percent in British Columbia, and hydro rates have gone down by 14 percent. It shows that it has been doing very well. Even with the increases that we've brought in, the revenue that's generated is about $180 million, about 4 percent on $2 billion worth of sales.
To get to the point I was trying to make here, you have to weigh your desire to get that dividend up as high as you want against the need to make sure that we're competitive in the provision of electricity to consumers. Certainly one of the competitive advantages that we have in British Columbia is the price of electricity that flows to industry here. In terms of rate design, we try to take that into account in terms of how we design rates in the distribution of power in B.C.
You don't want to kill the goose that laid the golden egg. You want to make sure those pulp mills and sawmills, and other consumers of energy on the industrial side, benefit from what we've got. That puts downward pressure on the size of the dividend and encourages Hydro to do other things with design and so on.
The way you design the rate increases is really important. I'm very close to the numbers here: of the roughly $80 million we may generate through this rate increase, $18 million is generated out of the industrial side. We try to give some shelter to the industrial side for good reason. There are industries like pulp and paper, for example, which are high consumers. What we have to try to do is take the same industrial sector, same kind of application, to the pulp mills. This is an expenditure that in one sense has an effect on the bottom line, but in the long or short run it can also generate other benefits for the dividend.
What we're also trying to do is assist them, through the Power Smart program, in making sure the costs of the increase can be mitigated by some of the initiatives we want them to take under Power Smart. What we would do through Hydro is assist them in developing ways in which they could save energy. Sometimes we do that by grants. Sometimes we will do that by loans, where we, and they, think we're going to get a return. In the long run, we're trying to save those plants from increased energy costs by what we're doing in Power Smart, which over the long run sees up to about $600 million of expenditures to encourage that conservation to happen.
With the export issue being resolved next week, I hope we can put ourselves into position to take the power we are saving and send it to our customers to the south of us to generate more revenue for Hydro. I don't have the financial statements here, but one of last year's biggest successes was the amount of revenue we generated from export sales. The energy review would, I hope, allow us to proceed in future with export sales, something I as the minister responsible for Hydro believe we should do.
The Minister of Energy has other corporate responsibilities and we'll see where she comes down, as well as seeing the report. If we take that surplus energy and sell it south, we're going to get a better return to bring back home in increased dividends to the province.
There is a galaxy of concerns when you're doing rate design and developing dividend policy for a corporation like Hydro -- which is quite frankly very exciting. It is exciting to be involved in the development of policies with that kind of a significant utility. We have to look at it in terms of the dividend, and other considerations. Yes, we may want to enhance the dividend, but we also want to make sure we're doing our share in terms of economic development -- apart from providing energy just to pulp mills. In terms of job creation and acceleration of job programs, for example, we want to do that. That again puts downward pressure on the dividend, because you're deciding to put the money elsewhere in terms of other activity.
I'm going to give you a very simple example: take a look at what we've decided with Stave Falls. We're going to do about $121 million worth of capital works. We're going to take a 75-year-old generating station and upgrade it. Instead of generating more power by flooding another valley, what we're going to do is modernize that station to generate more energy with the water that flows over it right now to meet the remarkable growth in the Fraser Valley.
It puts downward pressure on the dividend if we want to do that kind of economic development, but it generates other benefits for the province, and it also
[ Page 5690 ]
achieves certain environmental and economic goals for the province.
We are also doing another project, which we just announced in that region of the province, on the Kootenay Canal. I understand the politics, and if I were in opposition, I would call it a tax grab as well. In the context of the discussions we're having here -- and it is an interesting discussion -- you have to understand that all of these considerations come into play in making up the policy, the direction and the objectives of Hydro, and in defining the directions that go both to the Utilities Commission and to the board of directors of Hydro in terms of the rate application.
Let me also conclude by saying this: in terms of my responsibilities as the minister for Hydro, one of my instructions to the board was that as the first step in their application to the Utilities Commission -- given what the government had done with the inflation-plus-2-percent ceiling -- they had to find as much of that revenue as possible through efficiencies in the corporation. That's the first place to start. I wasn't prepared to allow Hydro's application to go through until such time as the board -- and I guess I, as an ex officio member of the board -- was satisfied that our audit committee, our budget group and our staff had done that kind of work and had found some of the efficiencies in hand. That's what the public would expect: for us to try to find those efficiencies from within. That's exactly how it worked with regard to Hydro, which is a simply fascinating utility. As your leader said to me one day when we were talking here in the House, it captures every minister who is ever involved in it. He's right.
[3:45]
W. Hurd: I found the discussion of the goals and aspirations of B.C. Hydro somewhat fascinating.
I wanted to ask a question, however, with respect to B.C. Hydro about the role of independent power producers in the province. As the Forests critic, I am aware of numerous attempts to interest Hydro in cogeneration facilities for sawmills, to burn wood waste that would have the potential of generating a good portion, if not all, of the hydroelectricity requirements for those operations. There are even, as the minister may be aware, projects on the books that would create a power surplus which would, we assume, be transferred via Hydro lines to be exported. There is a great deal of frustration out there at the present time on the part of some power producers who feel they are in a policy gridlock as far as Hydro is concerned. Can the minister give the committee an idea of where he sees independent power producers fitting into the energy equation in the province, and also as they might relate to providing power exports for Hydro in the future?
Hon. M. Sihota: I want to say at the outset that we think there is a place for IPPs here in British Columbia. Some months ago, I believe back in December, we released a policy on IPPs and the social costing formula we would employ to allow those IPPs to go forward. I think we have just issued the first request for proposals with regard to an IPP in the Queen Charlottes to generate power up in that area. I hope I'm not advancing an announcement here, but I'm fairly certain that it was to have been done by April 15. I'm quite confident that it was. I think that reinforces the point that there is a place for IPPs within the province.
There are obvious benefits, both environmental and economic, with regard to cogen plants to deal with wood waste and use electricity for export. As I said earlier, the export issue will be determined when the report with regard to the Energy Council is released, in terms of whether or not we've got the green light to engage in more exports. I can tell the member -- without offending the Minister of Energy and without telling any tales out of school -- that the release of that report is imminent. That would eliminate that gridlock in terms of policy on our exports.
Then the point you made with surplus and the utilization of Hydro lines for export: it is an interesting question, because IPPs have argued that they should be allowed to engage in direct sales with customers to the south of us on their own, and I guess they'd want to wheel it through Hydro lines. I guess we'd probably negotiate a rate for providing that service. The other option is for them to sell it directly to Hydro -- which may be in their best interests as they've got a ready customer -- and Hydro would deal with the sale of that power to the south of us. I understand where IPPs are coming from on that point, and I can assure the hon. member that we think there's a role for cogeneration.
If the Energy Council report, which is imminent, is released, that will eliminate the policy gridlock. I think we're very close to resolving that issue. Let me just say this: if you do follow the issue carefully, you'd know that Mr. Gathercole's commission was scheduled to report by March 31, 1993. If you take a look at the statute creating his authority, you'd know that cabinet is required within 30 days of receipt of his report to make it public. That should reinforce the point in terms of the imminency of timing.
W. Hurd: For the purposes of this discussion, it would be helpful if the minister could expand upon how B.C. Hydro might feel about the role of independent power producers, recognizing the fact that the Energy Council will certainly be issuing its report. Surely B.C. Hydro, which has the potential to export this surplus power, would have some position on whether this is an opportunity to expand the amount of power available to industrial users, or whether that electric power should be put into the industrial workplace by B.C. Hydro's traditional power generation methods. I'm aware also of the idea of natural gas power plants that would be strictly in the business of exporting power. This seems to be a major emerging area waiting to be dealt with. Since Hydro is such an important player, is there any intention on the part of Hydro, or the minister responsible, to outline the position of the Crown utility on this important issue?
Hon. M. Sihota: First of all, we have no difficulty with IPPs in British Columbia. We're happy to even
[ Page 5691 ]
compete with IPPs in British Columbia for the provision of electricity, if it comes to that.
Secondly, we will do business with IPPs based on the social costing formula we've laid out. We will look at environmental, economic and social benefits that accrue to the province with every IPP project; if it makes a good business case in that sense, we'll do business with them. I know there are IPPs just dying to do business with Hydro, and that's fair enough. Look, we're happy to do business with IPPs, so there's no -- if you want to put it this way -- ideological argument here. We're quite happy to do business with IPPs. But at the same time we've got responsibilities to the shareholder and to the public. That is, we can't do business with every IPP regardless of the proposal; the proposal has to make good business sense for both parties. On that basis I've always said that we will do business with IPPs. But I don't think you, hon. member, would expect me to enter into an agreement with an IPP where it doesn't make sense to do business. As long as we have that understanding -- that we do it when it makes sense -- it'll be done.
W. Hurd: From a policy discussion standpoint, assuming a private energy company from the United States did come forth with a concrete proposal that in its view did make some business sense, are you saying that company should now sit back until the Energy Council releases its report? Or should it come forward to B.C. Hydro and undertake negotiations? Should it file a business plan with the government? Clearly there seems to be a policy vacuum here while Mr. Gathercole's Energy Council comes forth with its recommendations.
I'm aware of a specific project in Kamloops that was proposed by an energy company from the San Diego region. It proposed to provide power to the pulp mill there and was also seeking to export power through B.C. Hydro, I believe. The last I heard, the project was off the rails. Is the minister basically advising these applicants that no decision is to be made on their proposals until the Energy Council releases its findings?
Hon. M. Sihota: Hon. Chair, the difference between the Liberals and the Socreds is that the Socreds tend to recognize a good thing when they see it, and the Liberals have to find something to criticize, even though something really good is sitting in front of them.
I've told the hon. member as diplomatically as I possibly can that the release of the Energy Council report is imminent. I purposely went out of my way to give him the knowledge that he did not have with regard to what the statute requires and the time frame the statute spells out. I thought that if he added one and one, he could fill in the blank and conclude for himself how imminent that is.
D. Schreck: The Liberal caucus is only as good as its leadership.
Hon. M. Sihota: That's right.
It just amazes me. The hon. member talks as if there's some vacuum out there. Give me a break, Hon. Chair. We are engaged....
W. Hurd: On a point of order, Mr. Chair, I would suggest that the minister is engaging in a personal attack of the questioner rather than dealing with the question that was posed. I'm sure he would appreciate direction from the Chair to offer a more constructive answer than the one he was engaged in.
The Chair: There is no formal point of order there, but I certainly appreciate the point being made by the member. I would caution all members, please, to carry on focusing primarily on the items under discussion rather than on personalities and the nature of the questions.
Hon. M. Sihota: Hon. Chair, if the hon. member thinks I was questioning his intellect, I apologize.
Let me make the point, with regard to foreign utilities, which is the question he asked, that the hon. member should know that as a utility regularly doing business -- notwithstanding the fact that the Gathercole report is not public, and it will be public soon -- we are working with private sector utilities for the sale and acquisition of power. We have done a number of deals with Sacramento, Portland and Bonneville, for example -- just off the top of my head. Quite frankly, we do them daily with regard to a utility like Bonneville. Puget Sound is another one.
American utilities, to use the hon. member's example.... If you're trying to suggest that because of this -- as you called it -- policy gridlock, there has been a vacuum and things aren't happening, I want you to know that things are happening. I want the members to know that things are happening with respect to both the sale of electrical power and the conservation of electrical power. For example, last month or so Hydro executed an agreement with Portland -- the first-ever international agreement -- under Power Smart. Again, we are dealing with utilities to the south of us both on conservation and on electricity.
Yes, there are applications within British Columbia. I think I just said to the hon. member that if he wanted evidence of the government's desire to work with IPPs in British Columbia, he should take note of the fact that after we introduced -- let's take this step by step -- the new formula in December of last year, some four months later around the middle of April we issued a request for proposals for an IPP in the Queen Charlottes. That's just one example I can give you off the top of my head of where we have encouraged IPPs to come forward and contact us.
We don't always have to take an ad out in the paper inviting an IPP to phone us. In fact, IPPs approach us. Quite frankly, capable MLAs such as the member for Prince George-Omineca and the member for North Island, where there are IPP initiatives -- or the members from Kamloops who are aware of IPP initiatives in their areas -- have come to us to discuss IPP ideas in terms of cogen in places like Williams Lake,
[ Page 5692 ]
natural gas projects or projects like the one based out of the Crowsnest that involves using coal.
So there is a lot of business, a lot of activity and a lot of revenue being generated, and there is a lot more potential in terms of the market that we find ourselves in. I'm just grateful that there are people in charge of those utilities and a government in charge of this province that is interested in making a positive return on those investments. When we have something good going on in this province, it just amazes me that the Liberal opposition can't stand up from time to time and acknowledge that in this area -- and in others, but we're talking about this area -- something is happening that is to the benefit of British Columbians. They can't take off their opposition character and acknowledge that there are remarkable, significant, positive developments under the leadership of a very good government.
[4:00]
I understand politics; I understand it very well. I also understand the role of the opposition. Sometimes the opposition gets more credit for giving credit than it gets for being critical of anything they can point to just for the sake of being critical.
W. Hurd: Mr. Chairman, I certainly appreciate that direction to the opposition. I realize the governing party has had a lot of practice in being in opposition, and it is certainly well-versed on the need to be constructive, as they were when they were in opposition for 15 years. I note that that member was a particularly constructive opposition member. I'm sure the hon. member for Okanagan-Vernon would concur about how constructive he was.
Perhaps I could ask a question about the cogeneration issue with respect to sawmills that we identified earlier. A number of the independent power producers have suggested that not only could they generate all the hydroelectric requirements for sawmills, but there would be a surplus as well. Indeed, one of the problems is that they can't get a commitment for the surplus.
Has B.C. Hydro costed out how much revenue they would lose by having the independent power producers provide the power for many sawmills in the province, particularly in the B.C. interior? Is it a situation where Hydro would lose revenue by approving an independent power plan as opposed to the power they're not providing through conventional means and losing that to an independent power producer but at the same time buying the excess? Is there a cost formula available, and could the minister advise the committee whether Hydro would be the winner or the financial loser in a transaction like that?
Hon. M. Sihota: Well, we're not in the business of losing money. If the hon. member is suggesting that's what we should do.... I'd say if it makes business sense, we'll enter into an agreement.
It's not as simple as saying: "Well, if they produce their own power, Hydro doesn't get the revenue and therefore Hydro loses the money." Hon. member, it just ain't that simple. Let me give you a simple example so that it's clear. This year the snowpacks are low. This gets back to what the member for Okanagan-Vernon was saying in terms of dividends. I should mention that there are a lot of other considerations such as snowpacks. From the looks of it, depending on what happens to the snowpacks with rain, we're clearly not going to be able to sell as much power to the south of us as we did last year. A good reason for our dividend being what it was last year -- our bottom line, to put it that way -- was because of our ability to sell power to the south.
I have no doubt that in a year like this, even if someone were to produce their own power -- which means we wouldn't get that revenue -- we would easily need that either to avoid the cost of having to acquire power from the south of us to meet our needs, or to avoid the cost of starting up Burrard Thermal, to generate more activity out of Burrard Thermal. Alternatively, if it was a normal year, it may give us some surplus power that we can sell to other jurisdictions for profit. It's not that simple, but there is a formula, and of course there's an obligation on our part, as a government, to develop a formula.
With regard to the formula in question, it has been made available to IPPs. I'm sorry that the hon. member doesn't seem to have a copy of it. If he writes to me, I will send him a copy of the formula.
W. Hurd: I think this is an important issue for those independent power producers who are seeking to provide facilities for sawmills in the province. If indeed B.C. Hydro is actually losing revenue by approving these projects, it puts them in an exceedingly difficult position in terms of meeting the social benefits that the minister talked about earlier. Perhaps he could advise the committee whether the social considerations that he alluded to earlier would in effect enable Hydro to lose money by approving these projects, particularly as they relate to sawmills. Would it allow Hydro to forgo its earnings and approve a co-gen plant for a sawmill, which would utilize wood wastes, be of environmental and social benefit but might end up costing the utility money in the long run? Would that be an acceptable trade-off in terms of the policy of the utility, or would it just be a straight revenue consideration?
Hon. M. Sihota: I'm not going to deal with hypotheticals. If a case comes before us, we'll take a look at it and we'll make the decisions. As I said earlier, economic, environmental and social considerations are part of the equation. So we'll look at all of the issues in play and we'll make a determination. That's one aspect of the answer.
The other aspect is that if there is a marginal situation where an operator is experiencing difficulties, then we will enter into some negotiations. We have, for example, through the job protection commissioner, entered into negotiations with certain industries where as a part of our considerations we make adjustments to our pricing or offer assistance in terms of Power Smart. We will continue to do that. Sometimes we make money on that; sometimes we lose money when we have reductions.
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Third, with regard to larger producers which are having difficult times, such as Cominco, we will enter into negotiations with them -- as we are in right now, with regard to the provision of power as well as other considerations -- in a corporate sense, to try to make sure that all aspects of employment, unemployment, environment, economic development, and so on, are part of the larger corporate consideration. I'm not going to deal with hypotheticals. If you have a case, hon. member, in your constituency or elsewhere in the province which hasn't come to our attention, in which you think someone could benefit, let us know and we'll look at the case.
W. Hurd: The principle is pretty simple. Would the utility be willing to foster the growth of a project which might actually cost it money? That's a pretty simple policy determination.
Perhaps I could ask another question about Hydro, and it is partially a constituency matter as well as a policy matter. It refers to the interest that Hydro charges customers on overdue accounts. Has the minister taken a look at the rates of interest being charged on those accounts to residential and industrial users, and is he satisfied that the percentage is fair and equitable, given the rates of interest on other credit instruments like chargex, bank interest, and other such costs of credit in the marketplace?
Hon. M. Sihota: That is an issue we are reviewing.
W. Hurd: Thank you for that answer. Perhaps I can relay a concern of one of my constituents, who considers that a, I believe, 19 percent rate on overdue hydro bills is somewhat usurious considering this is a Crown utility and one which supposedly every citizen of the province -- with the exception, I guess, of portions of the interior -- is forced to deal with. Can the minister confirm that that is the percentage we are dealing with? Is he satisfied that that represents a fair and equitable charge on overdue accounts for B.C. Hydro?
Hon. M. Sihota: I told you that policy is under review.
W. Hurd: We'll look forward to that review. Would the minister indicate what timetable might be involved in that review? Is it contained within the current fiscal year or the budget estimates we're dealing with?
Hon. M. Sihota: I expect the budget estimates with respect to labour will end imminently. I don't think it will be resolved by then. But it will be resolved soon. I'm sorry that I'm not in a position at this time to give the member an approximate time period. If he writes to me, I will respond with a more complete answer.
W. Hurd: I want to focus the discussion again on a couple of issues that I was attempting to canvass this morning: the issue of the Residential Tenancy Act, and manufactured housing. I had asked the minister for clarification with respect to manufactured homes, which he professed to have had a great deal of experience of in his own riding. He is certainly aware -- as are others in the province -- that there is a great deal of current concern among people in that type of housing development who were looking forward, with anticipation, to the report from the hon. member for Malahat-Juan de Fuca. Since there is no firm timetable for when legislation might be coming forward, and since it isn't a matter that we can discuss, I wonder if the minister would be prepared to amplify on what current provisions are available in the Residential Tenancy Act to protect the owners of manufactured homes, who appear to be subject to rules that don't apply to other forms of rental housing?
Hon. M. Sihota: I'm not too sure if I understand your question. It almost struck me that you were trying to ask about native lands. In fact, that's the first thought that crossed my mind. Were you trying to find out about different rules that apply in different parks? Or are you asking about different rules that apply for owners of manufactured homes versus tenants in apartments?
W. Hurd: I welcome the opportunity to clarify my question. In their representations to me, the owners of individual manufactured homes indicated that by the nature of their tenancy they were subject to different rules with regards to pad rent increases than existing tenants in other types of residential rental accommodation. I just wonder if the minister could expand on exactly what types of changes they face in those parks. I'm aware, for example, that if a home in a park sells -- which introduces a different component into residential housing right there -- the park owner has the right, in fact, to raise the rent on the pad without reference to the Residential Tenancy Act. It's a critical issue, Mr. Chairman. Unfortunately, in anticipation of the legislation, as I indicated this morning, there is some concern on the part of manufactured home tenants or owners -- they're both, actually -- that they may see some of those types of rental increases before any legislative changes come down.
Hon. M. Sihota: If the landlord changes -- let's say landlord A sells to landlord B a manufactured home park -- the purchaser inherits the residential tenancy provisions. Therefore the new landlord must respect the 12-month notice provision which preceded that individual. In other words, you can't have a landlord introduce a rent increase in March, sell the place in April, and have the new landlord introduce a new rent increase in May to the same tenant. He can't do that. But the inverse is true: if the tenant moves, the landlord can increase the rent for the new tenant. But if the landlord changes, you can't do that; you're still covered under the legislation as if the old landlord had been in place.
[D. Streifel in the chair.]
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W. Hurd: If I have the information correct, in the event that the home is sold through a realtor and a new tenant enters the park as a purchaser, can the park owner raise the rent for that individual pad? Wouldn't that have the impact of creating a rather unstable rent structure -- assuming there are some parks in the province with a high number of sales and turnover?
[4:15]
Hon. M. Sihota: In that situation a landlord can increase the rent -- unless there's a lease in place, in which case that individual is obliged to comply with the lease. If it's a month-to-month tenancy, then they're entitled to increase the rent. In that situation, that would mean differences in rents charged throughout the park.
W. Hurd: Just a further question with respect to the moving provisions, which are causing great concern. In the event that there's an eviction from the park, can the minister clarify whether there's any rule in the Residential Tenancy Act that would require the owner of the park to in any way compensate for the cost of moving? Or is the tenant on his own hook for moving a manufactured home -- which in some cases, given the permanency of the structure, can result in a considerable cost of moving? Indeed, for seniors on fixed income it's almost prohibitive.
Hon. M. Sihota: These are things I would expect the hon. member to know, if he's got a lot of these pads in his constituency. I don't mind doing this, but this is all laid out in the policy of the legislation. He can call staff at any time; they are very helpful and willing to provide him with the information if he needs it for his constituents.
I should say that actual and reasonable moving expenses up to the equivalent of six months are payable if the landlord ends a pad tenancy to use the pad for himself, or changes the use of that pad such that it requires a zoning change or exemption, or ends a pad tenancy for a reasonable cause not specified in the Act. As I said to the hon. member earlier, this government has done a detailed report with regard to residential tenancy and manufactured homes. That report makes some suggestions with regard to changes, which are currently under review in the ministry.
W. Hurd: Certainly I was heading in a direction with the questions. As I indicated earlier, there is a concern out there that in anticipation of the legislation, some of these rental changes and adjustments may occur over the next short period of time. I was seeking assurances from the minister that he's totally comfortable with the current legislation; that it protects the tenants of mobile home parks, in anticipation that his government will indeed come forth with legislation that deals with some of the very real concerns out there. Is the minister concerned at all that the current rules may allow for some adjustment of rents in anticipation of legislation?
The Chair: Before I recognize the hon. minister, it would appear that we are heading into the area of examining future legislation and the need for it. As far as examination of the estimates around the structure of the report and current administration practices in the minister's office, we are in order with that line of questioning. But when we get into the structure of future legislation, the questioning becomes out of order. So I would caution the minister to keep his answers within the administrative capacity of his office being examined in these estimates.
Hon. M. Sihota: The hon. member should know that I raised these very concerns in the somewhat less stressful days of being in opposition. Obviously I'm not satisfied with the status quo; I've already said that. I've said that publicly since we've been in office. That's why we did the report, and that's why we will implement the report. As you know, there are limitations to what I can say in this chamber with regard to future policy.
I will also say that the hon. member should be confident that the government is attentive to the needs of manufactured-home owners, and that their needs will be attended to in due course. With regard to this year's budget, as I said earlier, allocations are there for us to attend to the concerns of manufactured-home owners.
Finally, I would say to the hon. member, given his concern -- and I am sure he agrees with the need to bring about changes -- that if landlords are doing what you suggest they are doing, I would sure like to have examples. The owners have said to me that in the absence of legislative change, they are prepared to engage in some policing right now. So if you have specific examples, please give them to me. I will look forward to that, hon. member.
In addition to that, I am sure I will have your full and speedy cooperation, when and if we introduce legislation, to make sure it passes quickly.
W. Hurd: The opposition looks forward to that legislation with a great deal of interest. The minister will be aware, promises being what they are, that those particular promises go back ten years. The manufactured-home park owners have heard it all before, but I hope that this government is different. We have the assurance from the minister that it may well be.
I have a couple of additional questions with regard to constituent concerns. Like most MLAs in this assembly, a good portion of the calls that come into our office are related to the Workers' Compensation Board. Questions on the operation of the board are in order, and I want to ask a series of questions about the workers' advisory council, which is the body that provides independent advice to injured workers when they are concerned about the treatment they are receiving from the board.
Can the minister advise us if he is prepared to strengthen the role of the workers' advisory council? Some of my constituents have expressed frustration with it in terms of its representation of their interests, particularly in providing legal assistance. Can the
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minister give us the benefit of his vision of how this section of the WCB could be materially improved to represent injured workers who feel that the WCB is a difficult and cumbersome bureaucracy to deal with? In fact, they should have some independent voice, like the workers' advisory council, to function better in making representations for them to the board.
Hon. M. Sihota: Yes, it will be strengthened soon.
W. Hurd: Assuming that the minister is working diligently on this and that his government is concerned about the welfare of injured workers, I am somewhat surprised that he isn't willing to amplify considerably on the role of the workers' advisory board. It appears to be the only independent source where workers can go when they disagree with the treatment they are receiving by the board. I would certainly welcome debate and direction from the minister as to what he envisages in this current set of estimates, what might done to strengthen the workers' advisory council and how he feels it might function better for injured workers in the province.
Hon. M. Sihota: I'm not prepared to make all of my announcements at 4:20 on Thursday afternoon. I am prepared to tell you there are resources being allocated in this year's budget. That should give you confidence we will strengthen them. I believe strongly that those services should be available to British Columbians throughout the province. We opened up a new office in Prince George, for example, in the past four months. That's the first time we have provided those services in the interior.
Workers have a right to be represented and represented well in front of the Workers' Compensation Board. Unorganized workers in particular need to have the assistance of workers' advisers; that will be embellished. At the same time, those who are represented by organizations need to have confidence that proper skills, training and programs are available for their representatives so they can adequately make vigorous representations on the part of workers.
Those are all government objectives, things we want to, and will be, working on. Those are all envisioned in the 1993 budget. You are correct when you say this government is concerned about injuries to workers, and you would be correct if you were to say the government has made significant progress to date. You would be also correct if you said that in your crystal ball you can see the government making significant progress in the months ahead.
W. Hurd: "Significant progress" is abounding today, but with little detail of exactly what we're dealing with. I don't want to monopolize the discussion with respect to my constituency, but the issues that come forward to me are not typical of those faced by other MLAs face in the province.
I'm particularly interested in the issue of pension reform, which is contained under one of the votes in the ministry. I note there will be resources devoted to that in the coming fiscal year.
I'm particularly interested in the unfunded pension liabilities some companies in the province seem to be able to engage in when they experience financial trouble. I can think of one specific example in my office. I was visited by a former salaried employee with Westar who pointed out to me that the pension fund for salaried employees had been underfunded by some $10 million. Is it the minister's intention, under his review of pensions, to look at the issue of unfunded pension liabilities for non-union employees in the province?
At Westar, for example, many older salaried employees are going to be experiencing considerable financial hardship because their pension has been underfunded. Those who are near retirement may end up having to retire from Westar with absolutely nothing in their pension plan for their retirement. When he looks at pension reform, is it the minister's intent to look across the spectrum, particularly at companies with salaried employees who may be experiencing unfunded pension liabilities?
Hon. M. Sihota: Yes, certainly. If you give us details, we'll forward them to the superintendent. Legislative provisions allow us to look into those situations and develop plans to deal with the issues. Although I haven't looked at the Westar situation personally, I know that his former caucus colleague has served on the board of Westar. You may want to talk to him about those details. If he wants to give me any details with regard to any other issue, we'll be happy to look at it.
W. Hurd: I approached the minister's assistant deputy minister on this issue and was advised there was no current provision under any act to protect these salaried workers in companies like Westar, as far as forcing the company to cough up the additional $10 million. In this case, the minister will be aware that Westar was being wound up in receivership. Further complicating the issue is the fact that there was no mechanism to place pension benefits at the head of a list of creditors for the winding up of a corporation in receivership. The protection of pension benefits for salaried workers -- for any workers -- should be at the head of the list of creditors in a corporation being wound up. In connection with the review that is ongoing, would the minister or his ministry be examining what happens to pension funds, and whether they should be inviolate from the receivership process? Is this the type of review that is going to be ongoing?
Hon. M. Sihota: I will answer that question with my Constitutional Affairs minister's hat on, because that's really where the answer lies. We're getting into an issue of predominantly federal jurisdiction and the paramountcy of federal legislation. Our inability, constitutionally, to attend to the problem is because of the paramountcy of federal legislation over provincial.
[4:30]
W. Hurd: Perhaps the minister can then explain to the committee exactly what is going to constitute this
[ Page 5696 ]
review of pension reform in British Columbia? Can he amplify for the committee exactly what jurisdiction the province has over protecting the pension benefits of union or salaried employees in the province? If there needs to be some involvement by the federal government, is that going to be part of the cost or the vote for undertaking this pension reform review in British Columbia?
Hon. M. Sihota: I'm not sure what review you're talking about.
W. Hurd: Perhaps the minister can correct me if I'm wrong. In the absence of the critic for Labour and Consumer Services, I was led to understand that the ministry had devoted funds during the current fiscal year to review the existing pension legislation in the province and was undertaking to make changes where they might be deemed necessary. It was my understanding that that was going to be ongoing through this fiscal year.
Hon. M. Sihota: Now I think I have a better idea of what you're talking about. There is an advisory committee established under the Pension Benefits Standards Act, whose regulations we just brought into force and effect on January 1, 1993. That advisory committee makes recommendations with respect to improvements of the legislation that we have on the books. It's not going to deal with the issues which are outside of its constitutional range, i.e. the bankruptcy issues which you referred to earlier.
W. Hurd: Leaving aside the bankruptcy issue then, would the advisory committee have the ability to study the issue of unfunded pension liability in British Columbia for salaried employees, and identify for the people of the province whether this is a major concern; whether companies are in fact underfunding their pension liabilities to their employees? Will this be part of the role of the advisory committee?
Hon. M. Sihota: Yes.
W. Hurd: That's reassuring. Perhaps the minister can describe for the committee exactly what will be entailed in this review. Are you going to be examining the books of companies in the province? Are you going to be conducting a survey or a questionnaire? I think this is an important issue. If companies do run into financial trouble and do have some latitude under existing pension legislation in British Columbia to underfund their liabilities as part of a strategy, I'm sure the minister would welcome the opportunity to tell the committee exactly what form and dimension this advisory committee undertaking the review might take.
Hon. M. Sihota: I've left it up to Mr. Clark, as the chair of the committee, to decide what process and investigations they're going to do. They will be able to exercise their discretion. If there are issues which the hon. member thinks he should be investigating, he should encourage them to do that.
The statute states that the purpose of the advisory council is to provide advice to the minister and to the superintendent with respect to any changes that are required in the legislation. They've just started up, and I'll let them develop their own processes and their own agenda. If the hon. member thinks a certain item should be on their agenda, then he should contact them or me. Finally, I will undertake to send them a copy of this Hansard exchange so they can consider what the hon. member's comments have been.
W. Hurd: I appreciate that the advisory committee will have its own terms of reference, but I would certainly welcome some comment from the minister on the rationale of his ministry for pushing this initiative. Obviously he must feel that there's some reason for it being set up. Could the minister tell us whether or not his ministry feels that there are issues out there that need to be addressed? Can he give us an idea of what he feels the advisory committee could be and should be looking at in the province of British Columbia in the way of pension reform? Given the aging population in the province, this is clearly an issue that I think most British Columbians would be interested to hear him comment on.
Hon. M. Sihota: The hon. member should know this is new legislation, and it's a new committee. We are aware of the work they are doing. I will allow them to set their own agenda, and then I will review with them the agenda that they establish. If there are areas that aren't being covered, I will talk to them. In the meantime, I'll tell the member that this minister is looking for them to give him advice on the legislation, as we don't have a life experience with legislation -- it's only been four months so far. We don't have a superintendent. We only have an acting superintendent at this stage. But as the legislation begins to take shape and form, then I think the work of that commission will also grow. At this point we're just beginning the process of getting the legislation working.
The Chair: Hon. member, before I recognize you, I think I'll caution the committee again on examining the need for legislation and the workings of the legislation within the scope of examining the minister's estimates. I remind and caution all members that we are dealing with the administrative action of a specific department or ministry, as opposed to the need for legislation or the renewed need in those matters.
W. Hurd: I'm sure the minister would agree that there's not a great deal of public knowledge about this process that's ongoing. Without commenting specifically on legislation, has the minister offered any provision for British Columbians who are concerned about pension reform and unfunded pension liability to make representations to this committee in advance of any legislation? Is there a public consultation component in connection with this review of pensions in the province of British Columbia?
In the case of Westar, there are numerous salaried pension holders who are facing the prospect of
[ Page 5697 ]
spending 20 or 30 years with the company and having absolutely no benefits to look forward to when they retire. I realize we're getting into a constitutional issue with bankruptcy, but there are other companies out there, I would assume, that may be experiencing financial difficulty. I'm sure that members of the public who are seeking assurance about the sanctity of private pension plans in the province would welcome the opportunity to comment directly to the minister. Is there any indication or voted expenditure for encouraging or fostering that type of public input?
Hon. M. Sihota: First of all, there is not a broad review going on in pension standards in British Columbia in the same way that we are doing employment standards, the same way we did the Labour Relations Code. I can't have every legislation being reviewed on that kind of scale. We are doing the Employment Standards Act this year, and that's a commitment of some $500,000. Last year it was $1.5 million on the Labour Relations Code. We are not doing that kind of wide review at this time with this legislation, because it's new. New legislation, new regulation; it just came into effect January 1, 1993. We have to have a life experience with it.
Secondly, no, this legislation as it is now developed here, is a product of extensive consultation, which I give the previous administration some credit for, together with an exposure bill that they put out, which the hon. member may not have been aware of, and input was then garnered from the public. So it's relatively fresh input from the public with regard to this legislation. We have just completed a major review over the last two years.
Third, there is some allocation here for information so the public has a better understanding of the rights that they have under this legislation. It is significant that they have that. We have allocated somewhere in the area of $70,000 for promotion of what is contained in here, the rights that people have. Seniors, part-time workers, women benefit immensely from the benefits that are founded in this legislation and the regulations that flow from them. That advertising has just commenced so that there is an element of public awareness there.
Yes, from my point of view, I am concerned about the impact on bankruptcy. Yes, from my point of view, I have always believed that wages should be attached -- or pensions for example, but wages certainly -- in the event of bankruptcy and should be the top priority before you get into any other issue. With regard to the review, it is confined to the matters that I raised earlier on. Ultimately the review will be expanded, and I am sure that it will look into these issues. But given one, the freshness of the representation; two, the fact that is closed legislation; three, that it is now new legislation; four, that we have just set up the advisory council; five, that there are some issues that you are concerned about that I am concerned about; and six, that we have provided some money, roughly $70,000, for promotion, the focus at this point is on making sure that the people who benefit from this legislation know that it is there for their benefit, and we will get on dealing with the problems as time goes on.
L. Hanson: I apologize to the minister for going back over some ground that I left for a moment. I have one more question on B.C. Hydro. I am sure the minister is aware of the West Kootenay Power and Light generating program, as well as their distribution program through the various municipalities. West Kootenay Power and Light had a supply problem, and it was being negotiated with B.C. Hydro to provide some extra supply. Was that ever resolved, and is Hydro providing WK reserve power or at least power to help them meet the demand? I know that West Kootenay Power and Light was purchased by I believe an American utility, but subject to that, they ran out of production capacity, and there were some negotiations going on with Hydro. I'm not looking for future policy, but I'm looking to find out if that was resolved or not.
Hon. M. Sihota: Well, I don't think the lights have gone out in Kelowna or Princeton, and I don't know if they are covered. Is Vernon serviced by WKPL? I don't know the specific situation, but I know this in a general way: I am confident that the issue you referred to was resolved for the following reasons. We are obliged to provide power to WKPL, and we do. It has always been a source of irritation since I've been minister as to the rate we're allowed to charge West Kootenay Power and Light for the power we provide to them, which then results in the power being provided to communities like Kelowna, Princeton or elsewhere. I think that supply problem is resolved.
WKPL and Hydro just had at one another at the Utilities Commission with regard to the rate that Hydro can charge and the rate that WKPL can pass on to its customers. It's interesting to note that both of them declared victory after the BCUC....
Interjection.
M. Sihota: Yes, it's sounds like something happened there.
I know that from Hydro's point of view, it's relatively satisfied.
When you talk about production, inasmuch as we are contractually obliged to provide them with resources, WKPL also has some obligations, which I would argue they've been ignoring, in terms of maintaining the quality and standard of their facilities. I think that they as a corporation would take issue with that. But I would strongly argue, based on the evidence I've seen, that they are going to have to put a fair bit of money into their capital assets to upgrade them, to be able to maintain the customer base they're trying to service, particularly in a growing area like the Okanagan. I would forecast that they're going to have problems.
[4:45]
You're right, they are owned by American Utility, based in Missouri. The dividend, of course, flows to Missouri as a consequence, yet the customers are all Canadians. If I were to forecast this issue a bit, I would
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think that WKPL is either going to have make some significant capital improvements to maintain its requirements -- and that would be good, because it would generate economic activity in the Kootenays -- or it's going to have to take a look at selling them. I think it's going to be an interesting public policy question in terms of how that issue is resolved, sometime after the next election, I think -- if you take a look at when it appears they may have some problems. Certainly that's my personal read of the situation. That is not necessarily the corporate read of Hydro -- and I'll put that on the record just in case someone reads this later on -- nor do I think it is the read of the B.C. Utilities Commission.
If you take a look at the economics of what's going on there, and given what's happening with Hydro rates, I'm not persuaded that that utility can give its investors the return it has been giving for the last while. As its capital needs increase and the cost supply from Hydro increases -- because obviously, from a corporate point of view, we're going to make that application to the Utilities Commission -- I think WKPL is going to be facing the crossroads before the turn of the century and probably, by my guess, sometime in '96,'97 or '98.
L. Hanson: The minister referred earlier to a review of independent power producers by Mr. Gathercole. The question is a pretty simple one. Do his terms of reference include looking at the relationship of West Kootenay Power and Light and its ability to contract with independent power producers for supply?
Hon. M. Sihota: I don't know. Actually, the Gathercole commission falls under the purview of the Minister of Energy. As you obviously know, we've taken Hydro out of Energy and put it into this portfolio. The Ministry of Energy makes broad energy policy, and that's a broad energy policy issue. I can't answer the question. I know he deals with IPPs in his report, but I just can't remember if he deals with WKPL and IPPs in his report.
L. Hanson: I recognize that that commission is not the responsibility of the minister. But he did bring it up earlier, so I thought it was fair to pose that question. It gives some ammunition for another estimates debate.
I would also like to know what the government's future policy is as it relates to the rentalsman office, but I suspect that that might get overruled.
I would like to ask the minister if we could move to the residential tenancy branch and the process of interest arbitration as far as money issues are concerned. The arbitrators handle a lot of the calls and concerns, and I think they arbitrate some of the disputes over the telephone if they can arrange that. I understand they also hold hearings around the province. Is there much of a backlog in waiting for a hearing and a decision?
Hon. M. Sihota: Not really. There's about a four-week delay, and then arbitrators have about 30 days to render a decision. In comparison to some of the other problems we've got, that's a pretty good track record.
L. Hanson: The minister gave me a good opening there about what other problems we have, but I suspect I may not get an answer to that.
In all seriousness, are the interest arbitrators, or those who are arbitrating residential tenancy disputes, still on a contract basis rather than on a permanent employee basis? And is that as it was before?
Interjection.
L. Hanson: I think that the process under the Residential Tenancy Act works very well -- I wasn't being critical of it. As a matter of fact, if all of our government systems worked as well as that, I think we would be...even though to some members of our society the rules may be questionable.
I want to move now to the issue of the Workers' Compensation Board. I notice that one of the members of the official opposition asked about the employees' adviser section. There are two sections: the employees' adviser and the employers' adviser. From past experience, I understand that while the employees' advisers will represent employees before the review board, and their main goal is advice to the employee, they will represent the employer, too.
I wanted to move to the review board -- I've forgotten the name of it; how quickly we forget -- the one that is independent and financed by the ministry. I think it is a $10 vote, because it's all recovered from the WCB in the end result. How is that progressing? What is the backlog there? I've heard some rather disturbing figures that that is growing significantly at the expense of people who wish to have a decision as expeditiously as possible.
Hon. M. Sihota: It's a good question. We're actually starting to make some progress there. We brought in Dave Van Blarcom to run that system, and he's doing an excellent job at the review board. I think it is important that I relate his view to you, because it's an indication of the progress we're making. A 6,000-case backlog is the broad number, which is totally unacceptable and won't be tolerated by this administration. Quite frankly, a lot of my time has gone into WCB in the last couple of months to deal with this issue. It's got to be cleaned up, and there is just no excuse for it.
Secondly, he has gone to a kind of two-part appeal system where people are now required to fill out a second form. What was happening with some of the cases was that people would come to WCB, file their appeal form and we would give them a date. They would show up and not be ready. So the way we are now set up is that you file your initial appeal, and we'll send you a form, reply to you and all that stuff, and then you have to send us a second form telling us when you are ready, so that we don't get adjournments in front of the board of review.
He tells me that with regard to that second category, where there are people saying that they are ready to go, we have a backlog of about 1,800 -- and 3,500 in the
[ Page 5699 ]
first one where people still haven't reported in and said that they are ready. Now I have asked them to go back, because I would like to know how many of those 3,500 are ready but just don't know that they have to file a second form. So we are trying to do some work on that aspect of it as well.
Second, with the 1,800, the objective is to try to get those dealt with over a 30- to 60-day time period. Third, what we are trying to do right now with the board of review.... We have, I think, 600 cases that are more than 90 days, where they have been waiting for five months to get on. That is, they have been waiting for a decision for some time. I'm sorry. My briefing notes have got 600 cases which are more than 90 days since hearing, which means that they are waiting for a decision. With regard to those 600, what we are trying to do is almost plan on having a spring bee, a kind of cleanup, in the month of May, when we just try to go through those and get them cleaned up. They're the ones that are really quite delinquent. We have to get those ones done up, so we're dedicating some resources to doing that without trying to add to the backlog during the month of May.
There are other structural problems within the WCB board of review which we still have to work through. Certainly one of the issues is the number of panels. I am persuaded that I have to add more panels. I'm not one who necessarily believes that adding more panels is a panacea; you do that only after some thought. I am persuaded that we need to add on more panels to start dealing in a more aggressive way with the backlog, and we will do that.
We will also set the objective of getting these things all done within a 60-day time period. That's the objective -- a sort of corporate challenge, if I can put it that way. That's the challenge that has been put out to those who work there. I will say this, and I say it knowing that it is not going to make some people happy, but I might as well put it on the record. I expect performance out of the people who are there. I have talked to the new chair about making sure that I have evaluations on the people who are there on a regular basis so that we can make some determinations as to whether or not people are performing to the level that I think they should be at the board of review.
I am not trying to run a factory there where, you know, if you don't do 50 cases a month, you're toast. Nor am I going to go the Jim Pattison route, where the person who does the lowest in a given month is out and we bring somebody else in. But I want more rigour in terms of evaluation of the talent that we have there -- far more than I think, in all respects, has been the case in the past.
So we believe the new two-part format will result in reductions of waiting time, and the new management structure will assist adjudicative staff in keeping up with their work and getting out their findings. Hopefully with new panels, which I will announce later on, we can make some progress as well. I will be announcing in due course a whole series of initiatives which are designed explicitly to clean up that backlog.
I don't think I've said this thing about anything else that we have discussed in the estimates, so I will underline the point in terms of importance. Right now, in terms of my own personal priority list.... As the hon. member knows from his experience, we all have personal priority lists. In terms of the WCB, getting the farmworkers' regulations is very important, and we've done that. This is number two on the list. We're going to do that, and we're going to do it very, very quickly. We'll have lots to say about this in the next two months.
L. Hanson: Just some clarification on the minister's remarks. It seemed to me that the minister was suggesting there were a number of cases that had been through the process, and the hearing had been completed in front of a panel, but there was a delay in rendering the decision. Is there also a huge backlog? At least currently, what is the time that a case ready for review has to wait before it actually gets the review? And after that review hearing is done, what standard are you looking for on the delivery of a decision?
[5:00]
Hon. M. Sihota: I think there are two questions there. But if you're asking me what the time delay is from when you say you're ready to go to the time you actually get your hearing, the current information is that we can get those done within 60 days -- those 1,800 that have filed the second part of the two-part form. I also want you to know that my briefing notes say: "The typical wait for an oral hearing time is five months." But I'm told that now that we've separated those into part A and part B, we can get the part B people in within 60 days. The time parameter may be that people may file early but they may not be ready to go. So within the ones that are ready to go, we're getting those in the system a lot quicker than was the case before. It's true that if you look at the production out of there, it has improved over the last few months. But with regard to the 3,500 that haven't filed, they could be quite some time.
If your other question was what happens after they've had their hearing in order to get their decision, as I say, the objective is to get that down to about 60 days. I'm told the work bee to clean up some stuff in May, plus this new two-part system that we've brought in, will achieve those goals. But I want to emphasize that there is, if I can put it this way, a corporate challenge to those people. There are certain goals that the appointments there are expected to meet, and those are to try to get us down to this level.
All those people are overworked. I don't deny that, and I appreciate the stresses that are on them. But to be candid about it, there are some morale issues that were in part our own creation and that we're trying to work through now. With the work that Mr. Van Blarcom is doing -- who's young and fairly active and aggressive, and I think is the right personality in there -- we're overcoming some of the administrative difficulties that we had. Now that's not to criticize. I don't want to publicly criticize anybody who was there in the past. I'm just saying that the personality we've got now has created an atmosphere in there that helps. I think that was an important piece in the puzzle in terms of solving the problems there.
[ Page 5700 ]
I know that your administration made some personnel changes too. I'm not critical of those, because I think for the time in which those changes were made they were the right changes. But times change and require different changes. We've made some changes, and we'd like to think we made the right change. We'll see how it develops.
L. Hanson: I suspect that with the change in WCB structure, some of the dynamics of the review board changed as well. But as I understand what the minister is telling me, there's a three-part process: whoever it may be makes their application for a hearing before the review board; then there is an investigative process that goes on, with an exchange of information; and then there is a final application for an actual hearing, with everybody all prepared. Where does the minister see the delays? Is the delay in that period after all of that exchange of information has gone on so they are prepared to hear the case, or is it from the time that the first application is made until there is that gathering of information? I'm trying to get an understanding of it, because as the minister can appreciate, I suppose constituency offices act as a mini-ombudsman in some cases, and people who are having a difficulty -- not a dispute, necessarily, but a lack of a decision from WCB as a result of a claim -- are in a pretty stressful situation, emotionally. There is usually a lack of income -- of finances, I guess -- until a decision is finally made.
The three-part process sounds like an approach to me, but it seems to be taking an awfully long time if we have 6,000 cases. I appreciate the minister's dedication to clearing that up, but information is always helpful when you talk to people with that difficulty, and if he could provide us with any of that information as a committee it may be helpful.
Hon. M. Sihota: Actually, we were just saying here that you've given us a good idea. We should write to all MLAs and give them an indication of where the problems are and how they can assist in expediting the process for the constituents that come. We're just making a note of that, and it would be helpful if Mr. Van Blarcom were to do that. The problem is on the front end right now, as we see it. It's in the information-gathering stage. Once people have the information, we can move them into hearings fairly quickly, and because we go through the two-part stage where people file a certificate of readiness, if I can put it that way, we have far fewer situations where people show up in Victoria or Cranbrook and we don't have a case to hear because everything's fallen apart at the last second and someone hasn't got a medical report or something. We have a new filing system that has eliminated that part of the problem, so we're getting real cases coming before us now. But it is on the front end. We're putting in $3,500 to gather information.
I agree with you. It is, first of all, a load on all of our constituency offices; and secondly, it's very stressful for the person involved. As an MLA, you always feel helpless, because there's a huge bureaucracy and no one really understands it -- I mean, really. You did when you were in this portfolio, and you're probably a better man than I, because it is Byzantine at times. The objective is to eliminate that stress for the claimant, not to try help us solve the Rubik's cube of how the whole place works. Therefore, the focus of what we're doing now is to try to get those stress levels down. I think what you suggested there, when we pick up even more information from the MLAs' offices in terms of how they can handle and expedite that, will certainly help. Hopefully new panels and the new administrative structures we've got will help. We'll monitor it very closely.
I'm really intent on cleaning it up. We might have to do what we did with human rights earlier on. You were chuckling about the problems we've got in other areas when I was talking about the rentalsman arbitrations. We've done some good work in terms of human rights and putting some people in temporarily to clean up the problem in that area in terms of backlogs. We may have to do the same with regard to WCB.
L. Hanson: I have a question relating to WCB that leaves the review board. Another difficulty that seems to come to constituencies' attention quite often is the length of time that the board itself.... Let me set a scenario for you: there's an individual who is hurt in the workplace and gets some interim payments to assist him to continue existing, and then there's a final determination that there is a permanent disability. The only thing we haven't established now is what level that permanent disability is and what the pension should be as a result. The delay in those circumstances seems to go on unduly long -- years, a year and a half and so on. All of a sudden we have a determination that an individual has an acknowledged permanent disability and there's no further argument, but then there's a huge time that seems to have got almost out of hand -- it always has been a bit of a problem, I must admit -- in the length of time between the determination of a permanent disability and what a reasonable compensation for that permanent disability is. Is the minister aware of that problem? Maybe some comments.
Hon. M. Sihota: I don't disagree with you. I've got to say that there are some administrative problems over there as well. We've talked about the review board, but with the whole -- almost Byzantine, like I say -- bureaucracy there is a bit of a problem, and we're trying to work through that. Let me put it to you this way: at the last board meeting on April 5, I met with the board and dealt with -- in fact I insisted it be on the agenda -- the issue of loss of earnings and the development of a sensible loss-of-earnings policy. I made it clear to the governors that I expected that that issue and a clarification and development of those policies, on the policy side, be a very high priority. In fact, I think it was only one of two areas that I talked about -- the back schedule being the other -- where I said I want some policy developed on this so we can clean this area up. That may help the delay. There may be more efficiencies in the system that we've got that will also help as well. But I think perhaps a better policy....
[ Page 5701 ]
Look, we're having a fairly good discussion about this. You were the minister responsible when the system was established. What was it? Bill 27?
L. Hanson: I can't remember the number....
Hon. M. Sihota: Bill 28, or whatever it was. It's an interesting model to get the major players on the employer's side and the major players on the employees' side and have this summit on WCB. That's really what was created in the legislation that your administration brought in. It is interesting to see how that has worked over time, and of course there are tensions. In that high level of gathering, people tend to stake out their positions, if I can put it that way, and I think what was envisioned in the legislation was that people would try to work out those problems.
When I suggest a loss-of-earnings policy be a major policy determinant, you've got to remember that there are those who would applaud that and those who would worry about the impact on assessments. Inasmuch as I guess I've articulated my priority, I will watch with great interest to see how the system that your administration established will be able to deal with that with some pace.
Just on a political science basis, not a philosophical or an ideological basis, it's going to be a very interesting case study to see how that model actually works over time, because it's not the traditional model. You know, you don't get a government that changes, and just brings in people that they want, and it goes back and forth if that's the way the political winds move. There's obviously a high degree of commitment from all the parties who have purchased into that policy policy. If you go back and look at Hansard when the legislation was introduced, you will see that I said that I reluctantly accepted it -- to be candid about it -- in part because it should have been given the opportunity to work and in part because the B.C. Federation of Labour was very supportive of it. And they still are.
I guess the frustration one has is with the pace of change under that kind of model. It will probably warrant a review after it has had a life experience of five or six years -- maybe ten -- to see whether or not the experiment that you launched actually served the objectives that everybody has in mind.
[5:15]
There's a remarkable tension between the bottom line -- the bill -- to employers and the demand on the part of workers to have ample coverage, and to try to resolve it in the summit nature. The one thing I would hope, as this experiment continues, is that it doesn't lose its summit quality, and that people don't look at it as a secondary or ancillary appointment or board.
It's interesting. I think you made one mistake. You should have put the minister on the board, because I think there is some benefit in that. But, as you and I know, nothing prevents the minister from showing up for meetings in any event. The influence of that office can be enormous. We'll see how it works.
L. Hanson: I was going to facetiously say that if the minister has that much time to sit on that board too, things have changed.
In any case, I wasn't really concerned -- because I think I agree with the minister -- that the new format hasn't really had time to shake out the kinks and the other things that come with any new system.
The concern I have run across a number of times is much simpler than that. The process has handled the claimant reasonably well. The case has been reviewed, and all the appeals and other things have happened. There's a final determination that there is an entitlement. Then the system seems to break down for a long time before determining what that entitlement might be. The individual sits there without any ability to continue. I think the decision-making process has worked fairly well with the system up to the point of determining what the person is entitled to. That's where the thing seems to have broken down in a couple of cases and left the individual without support.
Hon. M. Sihota: I'll send this exchange over to Mr. Dorsey and Mr. Dye for a response. To be honest with you, I don't think I've really got an answer for you; I don't think I've got a good answer at all. I recognize the problem. I think I said earlier that the focus has been so much on the review board and on cleaning up that backlog that, you're right, there is this additional stress that comes to workers. I've certainly seen that in letters I get and in the work we used to do out of the constituency office. I can't do as much on WCB as I used to. But I just don't have a good answer for you on that one, and I will send this exchange over to WCB.
L. Hanson: That's really what I was looking for. I'm sure the minister has the opportunity for discussions with the upper level of the administration and can point out that difficulty. That's really what the purpose of the question was. So with that, I'll pass to my colleague in the official opposition.
G. Wilson: Mr. Chairman, let me back up a couple of steps, because of the interesting exchange we've just heard, and ask the minister more specifically with respect to the Workers' Compensation Board as a creature, which I think the minister has just described as being Byzantine in its structure. I would say that from my point of view and the point of view of many people who have been trapped in the problem that's just been outlined by the previous questioner, the difficulty that I see people are having to deal with is the nature of the beast itself.
You've got this creation that is not a creation of government per se, and yet there is legislation that obviously is required to administer it. It has almost subjudicial powers in the sense that it can act in the review board, as you've just talked about, and yet it really doesn't fall in any statute under the control of an appeal process of the courts. So you've got this rather amorphous yet very powerful, very influential and very expensive animal out there which affects the lives of many employers by virtue of cost and regulation. It affects many workers who go through the appeal
[ Page 5702 ]
process, who are awarded -- justly, I would argue -- a claim and then have to sit and wait to hear what the amount of that claim is likely to be and what kind of support mechanisms are going to be in place.
I wonder if the minister might want to comment on whether or not he feels it is timely for us to look at Workers' Compensation as it is structured now, vis-�-vis its relationship with the government, and change the nature of this beast so that it can be more subject to regulation and so that there can be an appeal process that allows those people who feel they've been unjustly treated by the board to move outside of the appeal within Workers' Compensation and have restitution through the courts.
Hon. M. Sihota: No, I don't agree with that last comment in terms of going to the courts. I'm not persuaded that that will reduce the delay. I think the potential for additional litigation would probably add to the delay.
But I do agree with the point in terms of giving it more shape. I'm not going to repeat what I've said too much -- I know you joined the debate a bit later on. I just want you to know that in order to solve this problem and to give some shape, some direction and some trim to the board, and a higher level of confidence among all of us, be it claimants, employers, employees or those of us who are involved in political office, I'm trying to come at it from a series of different angles. Let me tell you what those angles are, in a broad way.
First of all -- this is in no particular order -- we are trying to reduce delays to the board of review. Let me walk through the process that most people go through. We try to help out the claimant at the front end, when they go into that office for the first time, so that they're better prepared and equipped, and the bureaucracy is better able to deal with them, both in terms of some of the work that we want to do administratively -- I'll come to that a little bit later -- and in terms of preparing the claimant. That was the discussion earlier on the work we're trying to do to embellish the resources of the workers' adviser's office and the skills of those who represent workers on the trade union side to make sure they're better qualified and skilled to make those representations for both the unorganized and the organized. In the next few months I'll have a lot to say about that aspect of the work.
People do go to the board of review. That's the second problem and the second area of attack. We have a delay of an estimated 6,000 cases to the board of review. Again, we are taking some material steps, which I outlined earlier on, to change that in terms of the structure of how we allow appeals to go to the board of review -- i.e., a two-part system, where you file a second notice saying that you're ready to go. Then we have a hearing, and we can get those hearings in within 60 days. If people say that they're ready and they come prepared with the medical evidence and so on, we can get them in quick and out quick. We're going to have a kind of massive work bee in May to clean up the backlog, particularly the 600 cases that are more than five months old. We're getting additional panels and resources in there to clean up the mess. In my view, it is unacceptable and inexcusable to have the kind of backlog that is there. With the changes that we've made in the last year in the Workers' Compensation Board and bringing in Mr. Van Blarcom, I think we've really made substantial progress.
So that's the second area of attack to give some shape to the organization. You should know that only 3 percent of all the cases that go to WCB actually go to appeal, so I'm not persuaded that we have a real problem at the next level, the board of appeal. Again, we're trying to set up far more efficient structures in the eyes of claimants as they walk through from the claim -- hopefully to be accepted, which the vast majority are; it's in the annual report how many get accepted, and it's amazing how many do -- to the board of review, to the appeal board. I think in that area we can give ourselves a pat on the back. There are other areas where we can't. Those are sources of attack.
I said earlier, in terms of administration, that we have to make some better progress. That's the fourth area of attack. We have a lot of work to do making sure administration is not only more worker-friendly, but just works better and eliminates this Byzantine sense we all have of the organization.
From an administrative point of view -- from a public policy administration, from the structure of a bureaucracy point of view -- there's a lot that needs to be done. Without being critical in making these passing comments, it's important to note that we've had a couple of V-P positions that have been unfilled for quite some time, and some turnover at the senior levels of WCB, which in itself doesn't help us achieve that goal. What I'm saying is that I've given explicit instructions that I want those problems solved by the people in there.
So the administrative side is the fourth or fifth area of attack, and that's what we're doing. We need to fill some of those top positions, get some leadership in there, and get a corporate culture that hasn't been there. For quite some time there hasn't been a corporate leadership ideology at the top that influences the rest of the administrative organization. That's been a real problem, and it's an area where we don't give ourselves a pat on the back. We recognize we have significant problems, and we're starting to work on those problems.
There are other areas. I think we are doing a very good job in terms of regulations and the development of regulations: for farmworkers, for example, and about occupational violence. Farmworkers we're announcing tomorrow, and occupational violence we'll have done by July. If there's an area where I should give Mr. Dorsey and his group a lot of credit, it's in the RAC process -- the regulatory advisory committee -- and the work they're doing on that side of WCB on the policy end of it. I think we're doing a better job in terms of regulations.
We have not, in my own analysis of the issue, perhaps paid enough attention to prevention and rehabilitation. That's me talking. I think the board would disagree with that, particularly with regard to rehabilitation. I recollect -- I don't have the report on it with me -- that we've seen about a 25 percent increase
[ Page 5703 ]
in terms of rehabilitation, in expenses flowing or attention to rehabilitation. The board would argue that it's actually doing a lot of work on rehabilitation.
I think we have some very difficult public policy issues to deal with in rehabilitation. Let me give you one example. To what extent is there a duty on the part of an employer to accommodate an injured worker, once they've gone through rehabilitation? This is a fundamental public policy issue, and a very difficult one. It's a public policy issue where collective agreements may frustrate the ability to deal with the duty to accommodate. As time goes on, we have to deal with that public policy issue in the context of rehabilitation, and the responsibilities that society has to those people who are injured at work, and need to be rehabilitated. So there's some work to be done there.
There's some work to be done in prevention and safety, I'd say, because that's the best way to reduce the frequency of claims. I think yesterday in my ministerial statement I talked about how many deaths there have been, and how many injuries, and what the costs have been. Those numbers are recorded in Hansard. The best way to prevent that is to do more work on the preventive side. So that's another area of attack we have to shoot at, to give more shape and discipline and colour to the corporation. We need to do that.
All of this has to fit in the broad framework of the fiscal situation. You and I know and everybody else knows that employers want assessments to be kept as low as possible, and there are others who want as broad a coverage as possible. The tensions within those poles are what are resolved at the board level.
In response to your question, I don't think the answer lies in saying, "Oh, maybe we should change the system and go to the courts," or that kind of stuff. I think we have a system that does have potential. We have a system that historically in British Columbia has done reasonably well. Well, maybe it hasn't, but in the fiscal sense it has done reasonably well: the lowest level of assessments in Canada, and the best fiscal picture of any board in the country in terms of our future liabilities and all that kind of stuff. From that point of view -- and only that point of view, I would argue; well, I wouldn't say only, but certainly from that point of view -- the system has done reasonably well.
[5:30]
There are violations with that fiscal thing. I think, for example, the $100 million rebate to employers some years ago was a mistake. My colleague opposite may argue with that point, but I think that was a mistake in terms of the overall fiscal picture, in terms of maintaining some stability in funding.
So those are the eight or nine areas where I think we have to attack. Particularly over the last six months we've tried to work on the first three or four, to try to solve the problems that come into our constituency offices from the eyes of the claimant. That's not to say we have administrative and structural problems that we have to solve within the corporation; we have to do that, and we will do that as time moves along. But I disagree with any solution that would say we should look for solutions outside or that we should radically change. For example, my political party has armed me with a motion that says we should have a royal commission on WCB. I've resisted that. I think that's a nice political out, quite frankly. I think we have to take a good, solid run now at solving some of the administrative and bureaucratic structural problems within the corporation, and some of the other four or five areas that remain, but I think we're making very good progress on the front-end ones in the eyes of the claimant. We will have a lot to say about that in the next two months. I chuckled earlier on when the former minister said that he was surprised the minister actually had time to go to board meetings. I did lose ICBC, and that does help. It kind of cleans something off your plate.
I want to make it abundantly clear to all members that this is now the priority in terms of the Crowns -- if I can put it that way -- that I'm going to deal with. Hydro, I think, is relatively well run; we talked about Hydro earlier on. The ministry is very well run. It's one of the leanest ministries in the structure of government. As I said yesterday, administration levels are at what they were five years ago. It's a very well-run ministry from that point of view. We have some problems at WCB that we want to tackle. We obviously need to deal with employment standards and some of the other stuff that we want to make some policy changes on. But really it's WCB that is front and centre and in target. If there's an agency in my portfolio that's being stalked by this minister, that's it.
G. Wilson: I note the time, and I would like some guidance. My understanding is that this committee was to adjourn around 5:30.
The Chair: That's correct, hon. member. The sessional orders require the committee to rise and report progress 30 minutes prior to the rising of the main House. If you would move that motion, hon. member.
G. Wilson: I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The Committee rose at 5:34 p.m.
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