1993 Legislative Session: 2nd Session, 35th Parliament HANSARD
The following electronic version is for informational purposes only. The printed version remains the official version.
(Hansard)
TUESDAY, MAY 4, 1993
Morning Sitting
Volume 9, Number 15
[ Page 5791 ]
The House met at 10:04 a.m.
Prayers.
Hon. M. Sihota: It is with great pleasure, with the consent of all those involved and without my knowledge, that I call Committee of Supply. I should also advise hon. members that Committee A will be dealing with the estimates for the Ministry of Labour and Consumer Services.
The House in Committee of Supply B; E. Barnes in the chair.
ESTIMATES: MINISTRY OF HEALTH AND MINISTRY RESPONSIBLE FOR SENIORS
(continued)
On vote 47: minister's office, $419,400 (continued).
Hon. E. Cull: I just want to remind members of the House -- because a bit of time has elapsed since the last time we discussed my estimates -- that I did have the opportunity to discuss the agenda with the opposition Health critic. I haven't had a chance to talk to the Health critic for the third party, but we agreed this morning that we would start with a number of items, including Shaughnessy, the accord and the Medical Services Commission. Accordingly, I have my staff here for those particular areas of my responsibility. If there is an intent to move on to other areas of the ministry and if the opposition critic could give me some advance warning, then we can arrange to have those staff come in.
L. Reid: With the comments of the minister uppermost in my mind, I would advise that the hon. member for Powell River-Sunshine Coast wishes to address some questions pertaining to his locale later on this morning. I will find out when and send you a note -- in the fullness of time.
In this morning's estimates debate we are certainly going to revisit the Shaughnessy question, in the sense of the necessity for process. In the words of Ken Georgetti, consultation ends with a decision; it doesn't begin with one. Our comment, and the question that I posed to the minister last day, looked at the costs of the health labour relations accord, and whether or not that had an impact on the Shaughnessy question. I would certainly pose the same question to the minister because I'm still interested in her response to this. We talked about labour costs. We talked about 4,800 positions, and we talked about the 4,800 positions being an ideal situation. The minister says that 4,800 FTEs will be eliminated through attrition, transfers and early retirement. What I'm looking for today is the number in each of those categories. Would it be possible for the minister to give me a breakdown. How many through attrition? How many through transfers? How many through early retirement? I believe the numbers that flow from those categories will allow us to proceed with a better estimation of whether or not a reduction of 4,800 positions can be achieved.
Hon. E. Cull: The numbers I'm going to give in response are the best of our estimates. They apply over three years, so I'll give you the years first and then read you the numbers. Perhaps you can form your own chart in this. We start with 1993-94, then there will 1994-95, and then 1995-96. The numbers for attrition are: 900, 840 and 820. The numbers for transfers are 200 in each of the three years. The other areas of reduced workweek, hourly reduction, job-sharing and early retirement apply only in the year 1993-94: we're looking at, for reduced workweek, 940; workweek backfill, 750; job-sharing, 240; and early retirement, 270.
L. Reid: Certainly it's my understanding that the minister is defending the accord based on direct labour costs being reduced for the hospitals. We don't take issue with that; in fact, we support that as being true. However, we want to look at the substantial direct labour costs which would increase by providing job security in return for 4,800 positions. We are still of the notion that there will be two sets of books, because we're still looking at 4,800 positions as being ideal. I don't believe it's possible for the minister to guarantee that 4,800 positions will leave the system. If it is, I'm certainly interested in hearing that.
I believe there will be incremental costs for moving thousands of employees to the community care sector. A number of those positions.... They may indeed be separate and distinct from the numbers the minister has just laid out. Could she elaborate on the costs of transferring those individuals from the acute care sector to the community sector? I know that will have an impact on the current HLRA discussions.
Hon. E. Cull: If the member adds the numbers over the three years, which I have given her, they add up to 5,360 FTEs. The point of giving this breakdown of the figures is to show quite clearly that we believe that a reduction of 4,800 FTEs over the lifetime of this accord is quite reasonable and quite doable, given the assumptions we've made and the past experience we've had with turnover in the acute care sector, with the size of the sector, the age of the workforce and the interest that has already been expressed in early retirement and job-sharing.
You have to notice that a lot of these positions are not going through transfers. In fact, the transfers add up to 200 a year. Early retirement is 270 over the entire three-year period. The rest of the positions that will be reduced or eliminated from the system will be at no cost to the employer or the government -- if someone leaves because their family is relocating or they retire or quit for some other reason, such as has happened in the past. Last year, for example, 5.7 percent of the workforce left through attrition.
[ Page 5792 ]
L. Reid: Hon. minister, what happens if indeed there is not a reduction of 4,800 positions? Is there a fallback plan in this estimates process?
Hon. E. Cull: For 4,800 positions not to be reduced, it would mean that no person would leave the employment of a hospital in the next three years, and no person would turn 65 and retire in the next three years. That is not possible or likely.
We have to then make assumptions about what the likely turnover will be. Instead of taking the 5.7 percent attrition rate that existed in the acute care sector last year, we reduced it to 2 percent, which I think is a very conservative estimate. Let's assume 2 percent is achievable and usable in the year. Instead of looking at all of the employees who are or could be eligible for early retirement, we took a very conservative estimate of the number that might actually take advantage of that option, and used that for our calculations. We believe that 4,800 is quite feasible, given the past history of turnover and retirement, and the express desires of workers for reduced workweeks or job-sharing within the three-year time period.
[10:15]
L. Reid: What I'm hearing you say is that you are prepared to guarantee at least 4,000 of those 4,800 positions will leave the system. Or are you guaranteeing that all 4,800 will definitely leave the system?
Hon. E. Cull: What I'm saying is that we have confidence -- based on the figures that we have just shared with you, which total well over 4,800 -- that 4,800 is achievable in the industry over the three-year period. We recognize that some institutions may have some difficulties in realizing usable attrition in their facilities. Based on that, we're quite able to provide assistance to those hospitals, and that's been contemplated in the accord.
L. Reid: You've often couched the New Directions strategy in terms of somehow spending smarter. In terms of realistic achievable goals, when will we be able to see some dividend as a result of a shift to community care? How many years or months are we looking at for a direct cost-benefit return to the province?
Hon. E. Cull: We're into a much broader discussion here, but let me start by saying that we have never set out the reduction of expenditures on health care as one of our objectives. We recognize that health care has taken approximately one-third of the provincial budget over the last four to six years, and that that's probably quite a reasonable amount of the provincial budget to be spending on health care. What the royal commission told us very clearly -- and the position that we have accepted, based on their analysis -- is that there is enough money in the health care system. So it's not a question of increasing or reducing expenditures; it's a question of reallocating expenditures. By starting to transfer resources from the acute care sector to the community sector -- as we did last year, as we are doing this year and as we propose to do over the next three years -- by the end of the three-year period we should be able to see a change in the balance between acute care and community-based care, a levelling off of acute care services to come to the target bed rate of 2.75 over the province, and a dramatic increase in community-based services, which have been in great need of enhancement for many years.
L. Reid: With regard to this direction and your stated intention -- the necessity for the HLRA accord -- where do we now sit regarding opposition to this accord? The hospitals were not prepared to support it with a two-thirds majority. Are we back to a situation where we are looking for more dollars to ensure that they can meet the conditions of the accord? Is there opposition to it based on more than dollars? Is this a philosophical question of the shift from acute care to community care? It seems to me that the umbrella agreement you have proposed ties very tightly to the shift to community care to allow for labour peace and the other comments that you have made on this particular agreement. Is it dollars we're talking about today, or is there some philosophical opposition to the accord from the employer group, in that only 55 percent were prepared to support it the first time out?
Hon. E. Cull: I think it's fair to say that in the discussions we've had with both the employers and the unions since the HLRA ratification vote was announced at 55 percent of their membership -- insufficient to pass the accord -- it's clear that everybody wants an accord. The HLRA has said they want an accord, the unions have reaffirmed that they want an accord, and the government believes it's in the best interest of all parties to have an accord. Last week the HLRA had its annual general meeting and gave instructions back to their board to resume discussions with the three unions and the government to seek clarification on a number of matters that they felt were not clear in the accord. That is now ongoing between the unions and the HLRA.
L. Reid: There have been numerous discussions in terms of why it is 55 percent. Based as it is on 150 hospitals, is there a weighting system in place that somehow determines that vote, or is it directly one hospital, one vote in the province of British Columbia?
Hon. E. Cull: The HLRA constitution has bylaws setting out their voting procedures, and indeed it is a weighted vote based on the size of hospital. All of their ratification votes are handled in that manner.
L. Reid: So it would be fair to say that something like Vancouver General or St. Paul's would carry far greater weight under the accord than Salmon Arm hospital or Fort St. John General Hospital. It seems to me that it would be easier to accommodate the conditions of the accord in a larger hospital. Again, I'm quite prepared to hear your comment on that.
Hon. E. Cull: One of the dilemmas in sorting out who voted against the accord and why they did so is
[ Page 5793 ]
that we're dealing with a secret ballot process. We don't know which hospitals voted in favour of the accord and which did not, and as a result we're not able to ask them: "Why did you support it?" or "Why didn't you support it?" That does make part of the analysis of all of this somewhat difficult, but clearly within the HLRA board and their own membership they can discuss these matters. They probably choose not to discuss them publicly.
With respect to the small hospitals, the very smallest hospitals in the province have been well protected by this year's budget decision. They all automatically got an inflationary uplift, which in most cases is larger on a percentage basis than most of the other hospitals not experiencing significant growth would receive. That's recognizing that if you're dealing with a very small institution, you don't have the flexibility within the size of your staff; the loss of one staff member may be problematic. So there aren't a lot of options for those very small hospitals. They were protected in terms of the budget decision, and that has always been the case.
Hospitals of the next size above the very smallest probably do have some concerns because, depending on which people leave through attrition, that attrition may or may not be usable. If it's a clerical position, the institution may be able to pick up that clerical function or redefine the duties of those individuals so that the position is not missed in the overall scheme of things. If it's a direct patient care person, then there may be more difficulties. That may have to be replaced. That is why we've recognized in the accord the need for some flexibility around the very smallest institutions and have provided the hospitals with a fund that they can then use to target those hospitals which may require additional assistance or a longer period of time to accommodate the requirements of the accord.
L. Reid: Your comment about a secret ballot is well taken. However, it was reported extensively last week that there were a number of HEU-HSA individuals who were aware of which hospitals had voted in opposition, and certainly the list was reported in the newspaper with a great deal of detail. If it's the case that the list that was reported is indeed factual, it seems to suggest that the larger hospitals are having more difficulty. I appreciate your comments in terms of the smaller hospitals, but the larger hospitals, from my understanding of this accord, should have greater mobility within their system in terms of relocation. I support the comments you made. Even with the increased mobility to transfer individuals throughout their system -- again, based on whether or not the reporting was factual -- it certainly suggests to me that it was the larger hospitals which did not support the accord.
So if it's not dollars or an inability to relocate individuals within their system, what other possible reasons could there be? Is it a philosophical question about maintaining the medical model? Is it a philosophical uncertainty with shifting to the community? From your comments it doesn't seem to be based on dollars. It seems that the dollars are in place and the mobility is in place in larger institutions, yet they are still not prepared to support the accord. I'm interested to know what other reasons could possibly be firming up their decision.
Hon. E. Cull: I think the member perhaps would get the best answers by talking directly to the HLRA. If they wish to share this information, they will do so. I do not know which hospitals voted for the accord and which didn't. Some board members have indicated to me that their board did vote in favour, but certainly I haven't got enough information to be able to form a reasonable database to be able to draw those conclusions. I think we have to assume that because 55 percent of the vote went in favour of the accord, the majority of the larger institutions did vote in favour of the accord. Otherwise the numbers just don't add up. You can play with the weighted voting as well as anyone else and see what combination of votes you have to get to come to 55 percent.
From the reports I had back from the annual general meetings and, in particular, the direction that was given to the HLRA board to return to discussions with the unions, what is clear is that, in general, the HLRA members support some form of accord. They have expressed to me that they understand and support the need for new directions in health care, including a shift to community-based care. They support a role for hospitals and hospital boards in forming new health councils and doing the local decision-making that has to be done.
They've raised some questions around issues that were to be resolved through arbitration, such as what a comparable job in a comparable region is and some of the mechanics of the accord. That may be part of the concern for some of the hospitals. In some cases hospitals may not have calculated their budgets using both sets of assumptions, and they may not have been fully aware of the cost implications of this year's budget without the accord. In other cases, there may have been a philosophical difference.
I don't have the information from the hospital boards to be able to comment on why individual hospitals voted the way they did, because I don't know how all of those hospitals voted. If you think about how the voting process takes place, the board has a discussion, they have a vote and the majority position of that board carries all the votes of that hospital. It's a fairly complicated issue, trying to peel away what people thought and what they didn't think, what they knew and what they didn't know, and what information they were working from.
L. Reid: I would like to return to the mobility question: i.e., whether or not it's possible to shift people more easily in a larger setting than in a smaller setting. I support that, so I was not at all surprised to hear Ken Fyke of the Greater Victoria Hospital Society suggest that he has ample opportunity within his region to do that. Having four separate hospitals in which to accommodate the individuals under the accord puts him in probably one of the finest positions of anyone in the province as far as being able to meet the conditions of the accord. My thinking is that his is a rare situation.
[ Page 5794 ]
I would be interested in hearing from other hospital administrators who are not in such a unique position. For him to stand up and sell the accord based on how easy it would be for him to put it in place makes sense to me. Shifting employees within the system would certainly be a reasonable exercise when you have four physical plants that you are responsible for in which to do that. That seems like the ideal framework for the accord. In fact, it will probably be one of the models for the accord and do some very good things. There is a contrast between that situation, which is probably the finest in the province in terms of mobility, and other hospitals in the province that only have one physical plant.
I respect the minister's comments about definitions. I trust that this will become more than a semantical argument in terms of how to define "a region" and "a comparable job." Even though the minister has said that we will look at funding for smaller hospitals -- i.e., the lift, and all of that -- at the end of the day, unless we're prepared to fund every person who is not able to leave the system through attrition or early retirement, we will need to ensure that those folks stay in place, because they will not have any other opportunity to work outside their region. I think that touches on the family question. A partner in a relationship may be tied to employment in that region of the province. I think we should look at relocation in a much broader perspective: i.e., how it touches families. I don't think it's going to be as simple as moving a hospital employee between regions in the province.
[10:30]
My comment is more to point out the contrast between the ideal situation with the Greater Victoria Hospital Society and the less ideal situation as you move to smaller institutions that only have one physical plant. I'm interested in your comments on that, because I think it's a much bigger issue than the actual number of employees who will be leaving the system. There are shades of the Cassiar mine relocation in a project of this magnitude, in terms of the kinds of services and support will be put in place for families.
Hon. E. Cull: It is important to keep in mind that the vast majority of the employees in the health system, and in the acute care part of the system, are in the large centres. That is where we have the greatest flexibility, where the hospitals have the greatest flexibility and where the attrition rates are most usable. Also that's where we're hiring new employees in the acute care sector. Someone who may be losing a job at Shaughnessy Hospital, for example, may find a job at Richmond Hospital or Surrey Memorial where we are opening up new beds. Within the large centres we have the greatest flexibility, and that's where, in terms of numbers, we have the greatest "problem." It's where we have the greatest number of people to try to reallocate.
I remind the member that last year, when we didn't have quite as tight a budget, and certainly not this type of a program to facilitate the transfers, we had far more hires in the community health care sector than we had layoffs in the acute care sector. With this redistribution of resources that we are committed to over the next number of years, we will be continuing to expand opportunities in the community health sector. Not only will there be new acute care jobs in the growing parts of the province where the vast majority of employees are, but there also will be community health jobs throughout the province, again where the vast majority of the population is. The solution and the problem come together very nicely in the high population centres.
L. Reid: I ask the minister to direct her comments to the cost of relocation. Certainly under your category of transfers it makes sense, but in terms of perhaps needing to relocate a family into a different region. I appreciate the comments about the problem being centred where the hospitals are of a larger capacity; I don't take issue with that. My question pertains directly to the estimates process in terms of the cost of relocation of employees who will be moved. Where does that fit into the overall scheme?
Hon. E. Cull: As the member knows, we've had a labour adjustment plan this year, and the elements of that plan, as they've been developed over the last number of months, formed the basis of our relocation package for the labour accord. The total budgeted is $9 million, which, in a $2 billion-plus budget area, is quite a reasonable amount. This covers both the retraining and the relocation aspects of our program.
L. Reid: Certainly we've covered a number of topics this morning. The original question posed was: what is the resistance? Why are we only having 55 percent of hospitals supporting the accord at this time? We've covered the costs, the categories and the relocation. You certainly have made mention of the semantics of it, in that there are things that need to be decided to find more readily, i.e. a region, and what is a comparable job in a comparable region. Assuming that those are the only conditions which are not allowing the accord to go forward at this time, do you anticipate no further resistance to this accord? Do you believe that most of these issues are just of a mechanical, technical nature, and can be sorted out very soon?
Hon. E. Cull: I have a certain amount of faith in the positions that have been expressed to me by the employers and the unions: they see value in an accord. They are willing, as a result of the decisions taken at the annual general meeting of the HLRA, to return to discussions to see what can be done to put it back on track and to clarify anything that needs to be clarified. I've had no indication from either side at this point that there is not a willingness to try to sort this out. I have to accept what they're telling me, that they do want to sort it out, that they see some value, but that they need to have some of the aspects clarified.
L. Reid: I would like the minister to provide us with some detail regarding a possible time line for reconciling this issue. It's been in the works for a number of weeks and we've had lots of discussion around the question. Perhaps that's been valuable; people now understand a little bit more about the
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accord than they did originally. Do you have any idea when we can expect a resolution to this question?
Hon. E. Cull: The parties are working on it right now. I think they know the urgency of dealing with the matter in a fairly expeditious manner. They will be meeting and discussing it. We'll have to wait until they have had a chance to come together and report out.
L. Reid: With respect to the mediation that's allowed for under the accord, could you provide me with some background on that process?
Hon. E. Cull: It's a fairly standard, straight-forward arbitration process. The two parties pick an arbitrator. The arbitrator hears from each side and makes a report.
L. Reid: Are you standing firmly behind the need for arbitration and mediation in any type of contract negotiation?
Hon. E. Cull: The agreement to go to arbitration on these matters was part of the agreement negotiated between the parties.
J. Beattie: I ask leave of the House to make an introduction.
Leave granted.
J. Beattie: In the gallery today are some fine young students from my constituency of Okanagan-Penticton. They are from Naramata Elementary School. There are 23 students, accompanied by seven adults; one is the principal, Jean Tonksi, and one is their teacher, Roberto Kihn. I'm not sure whether there is more than one teacher here or not. We're going to be having lunch in the dining room at 1 o'clock, and I'd like to invite all members to come and introduce themselves at that time. Please make them welcome today.
L. Fox: It's a pleasure to enter into the debate. Last Friday morning when I spoke on the estimates, the minister assured us that she would bring forward some numbers with respect to Shaughnessy. I haven't found them in my mail, and I wonder if she has brought them here.
Hon. E. Cull: I have quite a bit of information on the University Hospital situation. I'll share some of this with you, and then you can direct your questions to the areas you're most interested in.
The total hospital budget for all of the University Hospital facilities is $137,832,755. It is reduced by $23 million for this year. Fifty million dollars will be transferred to other programs. For the next year, the University Hospital site budget is $44,832,755. The savings for the first year -- from the closure of 81 beds at Shaughnessy -- is estimated at $23 million. The transfer of beds programs with no overhead or administration is estimated at $50 million. The final savings of cost associated with beds, programs and administrations is $20 million for the total $93 million of the Shaughnessy Hospital operating budget. The closure of the 81 beds is annualized this year at $14 million.
L. Fox: As I understand it, then, the savings in this first year will be $23 million, the transfer costs will be $50 million, and that will be transferred to other hospitals throughout the lower mainland.
Okay, I'm wondering if the minister has given us.... Obviously those are all after-the-fact numbers, numbers that she came upon once the decision was made to close Shaughnessy. What I was really looking for were the numbers that created the decision: what the costs were going to be for the transferring of spinal-cord patients from Shaughnessy to Vancouver General and what the costs of refurbishing that hospital to accommodate those patients were going to be. Perhaps she might also suggest to us what the savings to the government were when, within two weeks of the emergency unit being completed, she cancelled that contract or stopped the construction process. Those kinds of issues are of great concern to me and many people throughout the province. What were the fundamental financial issues that drove the decision to close Shaughnessy?
Hon. E. Cull: We did canvass the decision to close Shaughnessy in some detail the last time we were in estimates. It started with these needs: the need to balance the beds and deal with the surplus of beds in Vancouver -- the 500 surplus beds that the Greater Vancouver Regional Hospital District identified in their planning studies and the shortage of beds in the Fraser Valley; the need to deal with Children's Hospital expansion; the need to deal with unused beds that were fully capable of being used but were not being operated because of the lack of operating funds right now; and the reality of a 3 percent budget for hospitals. All of those things came together, leading to the conclusion that there had to be a reduction in the number of beds in the Vancouver area.
The analysis that was done looked at what was the advantage of taking those beds out of a number of hospitals and spreading them around the Vancouver area. That would have meant no direction with respect to closure, just having it reflected through the various individual hospital budgets and leaving hospital boards to make their own decisions as to whether they needed to close beds, what beds they would close and where they would close them. That would have created some difficulties in the Vancouver area because of the lack of a very good mechanism currently to coordinate not only between hospitals but also between hospitals and the community sector, making sure that the decisions of one institution or one body are not negatively impacting on patients, because there is another group in our health care system that is able to pick up those services. That was one option, and we rejected it.
The other option was to look at taking all of the beds out of one facility. That also was part of the consideration when we had to look at what to do about Shaughnessy anyway, because Shaughnessy had been under discussion for many years. The fact that the last
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set of renovations or improvements to the hospital were completed or almost completed didn't mean that there weren't more still needed.
[10:45]
So there were options that related to doing nothing, which meant continuing to invest that money you've just referred to, continuing to pour money into an old structure that virtually everybody had agreed needed replacement; replacing it at the cost of $80 million, but not dealing with all those other issues that I've very quickly summarized -- because we did go into them in some detail several days ago; or deciding to close the hospital and realize $40 million worth of savings. The estimate that we have on an annual basis is actually $43 million. That is reduced to $23 million for 1993-94 because of the closure taking place partway through the fiscal year. It's estimated that there will be $15 million saved through administrative and corporate services with the closure of the building because it no longer needs to be managed. Significant reductions can be made in all areas of administrative support: finance, human resources, general administration, staffing, etc.
There is an estimate of $10 million to be saved through reduction in services for on-site plant support services, another $14 million in direct patient care services, because approximately 50 percent of the operating costs incurred at the University Hospital's Shaughnessy site relate directly to nursing, rehabilitation programs and other direct patient services. The majority of these costs will be transferred on a proportional basis to those hospitals that are going to be receiving the services, but because there is an anticipated net reduction in beds in the overall system, there will be savings recognized in direct patient care. And finally, $4 million estimated in diagnostic services.
L. Fox: Can the minister tell me how much money the province saved by not allowing the emergency centre to be completed?
Hon. E. Cull: I'll get that figure for you, if you want to continue with questions.
L. Fox: Well, I'm surprised, hon. Chair. This was a decision that, in my view, was a vindictive one; it was to get back at the medical professionals for fighting the closure of Shaughnessy. The real fact, I think we'll find, is that there were no savings to the government. In fact, the government had to meet the contract, because it was a signed contract. Even though this facility was within two weeks of being completed, and it was a very elaborate and highly technical facility to meet the specialized needs of that particular hospital, there were actually no savings to the province, and it was a very vindictive move by the minister.
I would like the minister to tell me what the cost is going to be to shift the spinal cord unit from Shaughnessy to the proposed location, and whether that's actually going to happen in two phases and how much it's going to cost the province to upgrade that facility to handle this specialized care.
Hon. E. Cull: The major difficulty I have in answering that question is, as we discussed the other day, that the task force -- now looking at the enhancements to the spinal cord program, what they should be and how they should come together, what the configuration of the program should be and the possibilities for relocation -- has not yet reported out. For me to start speculating on whether it will be one move or two moves or where it will go would be undermining, I think, the work the task force is doing. They have to be allowed to complete their work without any suggestion, even here in these debates in answer to a hypothetical question, that the government has a solution in mind. The task force has got to make recommendations. When those recommendations are made, we will consider them and take appropriate action.
L. Fox: So the minister is admitting, then, that she doesn't know what the financial impact is going to be of this transfer. That, to me, is surprising. You make a decision to close a hospital, to move a very state-of-the-art facility, a world-renowned facility in terms of the spinal cord unit, on the basis of reducing beds, not on the basis of what's in the best interests of the patient, not on the basis of actual financial data, but on the basis of moving beds. That's what the minister is suggesting to us. We're going to find out after the fact, through this task force, what those costs are going to be. I'm appalled at that. These are the kinds of decisions that are being made by this government that are not fundamentally decided on the basis of what's in the best interests of health care, what's in the best interests of our fiscal responsibility, because we don't have those answers.
Can the minister give us the names of all of those people who are on the task force, and whether any of the spinal cord professionals are on that task force?
Hon. E. Cull: I beg to differ with the member, because indeed the decision that we made about Shaughnessy Hospital was made first on the basis of patient care. We had a look at how we could best provide acute care services to people in the Vancouver region and the Fraser Valley and drew our conclusions based on that analysis. Before the decision was made, we had Bert Boyd come in to do an analysis of what the potential savings were in terms of this particular option versus other options that were available to the government. Patient care has always been at the top of the list of our priorities. In some cases the financial considerations have had to take second priority to patient care, because patient care does have to be the absolutely most important thing that we look at.
With respect to the spinal cord unit, the task force is headed by Dr. Peter Wing, who is an expert in this field. I'm not sure if his title is director, but he's the head of the spinal cord program. We've had involvement with the Canadian Paraplegic Association. Rick Hansen has been consulted on the task force, and I would be happy to get the full list of names of the task force members for the member and send them to his office.
[ Page 5797 ]
L. Fox: I'm amazed that the minister suggests at one time that patient care was the absolutely essential ingredient in making the decision and at other times she says the major decision around the closure of Shaughnessy was the fact that it was going to cost the province an additional $40 million. That $40 million was the key issue that was stated at every question period in this Legislature; there was no explanation of how she achieved that, but that was the issue. Now the minister is suggesting that patient care was the driving issue. I have some difficulty -- and so, I think, do the people of British Columbia -- as to just exactly where this minister is coming from, because that's the first time I've heard that particular statement.
I obviously have to reinforce my concerns. When we look at a decision to close down a facility such as Shaughnessy.... Hon. Chair, I must reiterate that I've never suggested that we shouldn't do it, but I have suggested constantly that the homework wasn't done in order to make the right decision.
Interjection.
L. Fox: The vindictive part that I hear -- from I believe the assistant to the minister -- was in fact over the closure of the emergency centre. That was obviously vindictive, because there was no cost saving to the province.
But I've got to get back to the issue of how this decision was arrived at. I still have not heard the minister give the fundamental background information that drove this government and cabinet to make this decision; only some platitudes. I hear that these are some of the things that are going to happen as a result of the decision, but we haven't seen all the impacts come forward. We talked about the direct patient care being $14 million. In fact, that is going to be transferred; it is not going to be a savings; it's going to continue to be spent, only in other facilities.
I would still like to know what the cost of renovations to Vancouver General are going to be. I cannot believe that we're moving a department without first doing some estimates as to what it's going to cost us to do it, and that the minister would make the decision to move it without knowing what the impact of that move would be. I also cannot understand, because I haven't heard a lot about it from this minister, what's going to happen to UBC's teaching program, how that and those costs are going to be redistributed and whether or not at the end of the day there is going to be a savings and an improvement to the program.
I still would like to have the minister address exactly what the costs of moving that spinal cord unit to Vancouver General are. There must be estimates out there; there has to be. I would like her to share those with us.
Hon. E. Cull: Hon. Chair, I'm actually shocked that this member does not recognize that there is a direct and very important relationship between patient care and the costs of providing that patient care. In fact, it was the party he represents that established the Royal Commission on Health Care and Costs. There is a direct linkage between what we pay for health care services and the quality of care that we are able to provide. If we are willing to spend $43 million on acute care services in the Vancouver area that even the Greater Vancouver Regional Hospital District concludes are unnecessary, that's $43 million that we are not spending on needed patient care in other parts of the province -- including the part that you represent in the north -- and in community care, which has been terribly neglected by your government in the past, particularly the area of mental health. I think it's vitally important that wherever we can identify cost savings in acute care, in community care or in any part of the health care system, we realize those savings and reallocate that money to areas where it can do the things that need to be done in health care to improve the health status of people in this province.
You asked again about the reason and the analysis behind Shaughnessy. I have gone over that a number of times in this debate, even though we've only had a day and a half of it so far. The compelling reasons for the closure of the Shaughnessy Hospital building and the reallocation of those programs were: a surplus of 500 beds in the Vancouver area; a shortage of 800 beds in the Fraser Valley and in the growing parts of the province; 300 perfectly good, closed beds in Vancouver area hospitals that were not able to be used because of a lack of operating funds; the need for Children's and Grace Hospitals to expand, and the inability for them to expand on the Oak Street site while the Shaughnessy building was still there; and the compelling need to be able to reallocate some of these funds into other areas of the health care budget.
You asked specifically about the UBC teaching programs, and I'll refer you to Hansard of Friday, when I did read the answer to that directly out of the Shaughnessy report of April 26.
L. Fox: The minister suggests that I don't want to support efficiencies, and that I wouldn't recognize the importance of a cost-saving measure to move the dollars elsewhere in the province. She couldn't be further wrong. What I'm concerned about is the fact that the lack of homework by the minister in this decision will not result in a cost-saving measure, and that we'll continue to find increasing costs because of the lack of understanding of what it's going to take to move the acute care facility as well as these other patients.
The minister also talks about the moving of beds in the Fraser Valley. Well, everything I've read thus far suggests that we're looking at moving some extended care beds into Chilliwack. I haven't seen a great movement of acute care beds, other than directly to the Vancouver hospitals. Perhaps if I'm wrong the minister might stand up and point out where I'm wrong.
Hon. E. Cull: Again I'll refer the member to Friday's estimates, when I did read a number of the new beds into the record from our statistics. But I'll just give you some of those: 50 acute care beds in Richmond; 37 acute care beds at Surrey Memorial -- and that's not talking about the 135 beds that are being reallocated into other Vancouver area hospitals. In addition, we're
[ Page 5798 ]
planning a new hospital with 350 acute care beds in the Abbotsford area MSA General Hospital.
But remember that what we have been discussing in this debate is not only the reallocation of beds but the reallocation of funds, and in the figures that I gave you a few minutes ago we talked about $14 million being redistributed to other hospitals around the province. I'm going to read you the list of hospitals that received additional funding in this year's budget that would not have received this funding -- which totals $14 million -- if Shaughnessy had continued to operate, because we wouldn't have had that $14 million to reallocate. The hospitals include St. Paul's, Fraser-Burrard, Lions Gate, Burnaby, Peace Arch, Delta, Greater Victoria, Cowichan District, Lady Minto, Saanich Peninsula, Vernon Jubilee, Kelowna General, Penticton Regional, Shuswap Lake General, Nanaimo Regional, St. Joseph's General, Mission Memorial, MSA General and Maple Ridge. All of those hospitals benefited from the reinvestment of savings from Shaughnessy in the hospital budget, which were then reallocated according to a formula worked out over considerable time and discussions with the hospitals' association and the unions.
L. Fox: I appreciate the minister making that available to me. I haven't had a chance to go through Friday's Blues, although I do have them before me. While I appreciate the fact that those dollars have been made available to the various hospitals, I have to wonder whether there are some real efficiencies in it when you split up $14 million into that number of hospitals. However, I suppose we will find that out in upcoming years.
[11:00]
I'm still concerned that we do not understand, nor do we know, what the total impact is of the closure of Shaughnessy Hospital. I made reference the other day -- I know that the minister recognized it -- to the fact that Shaughnessy Hospital was not just a Vancouver hospital. It was a provincial hospital. In fact, 40 percent of the patient load of Shaughnessy came from areas around the province. Just recently, for instance, four patients from my constituency went through the spinal cord unit. They went in there not knowing whether they would ever be able to walk again. Now they're functioning, and functioning very well. The great work that Shaughnessy has done is probably characteristic of the concern that residents of B.C. have over its closure. They want to be assured that that expertise and the kind of program offered at Shaughnessy will continue.
With respect to the spinal cord unit, one aspect of Shaughnessy has been the advantageous emergency measures at that location. One was the ramp from the second floor. If a fire started in the building, people could be evacuated with the least possible discomfort. It would appear, from what I have seen so far, that the spinal cord unit is going to be on the fifth floor of VGH. I guess there are some concerns about whether or not that same kind of emergency facility is going to be available to those patients. Perhaps the minister could tell us whether or not it is going to be located on the fifth floor. What kind of measures are going to be taken to provide some comfort that should a fire break out, these kinds of patients could be moved out with the least possible disruption?
Hon. E. Cull: The first concern of the administrator in going into Shaughnessy Hospital and making decisions of any sort has always been the health and safety of the patients. That is uppermost in our minds in making all decisions. When it comes to the location of the spinal cord unit from Shaughnessy Hospital, the decisions have not yet been made. There is a task force that involves people who have given years of their lives to developing the spinal cord program at Shaughnessy. They have a very strong interest in not only seeing that program maintained as excellent as it is now but also in seeing it enhanced.
Until that task force has completed its work, it would be presumptuous of me to start speculating about where it's going to go. I have to respect the integrity of that group of people, who have asked to focus first on function and second on location. Until they have completed that work, I won't enter into speculation about where it's going to go.
G. Wilson: I welcome this opportunity during this set of estimates to focus on some of the health care issues that are critical in Powell River and the Sechelt region. As the minister well knows -- because she's had a lot of correspondence from practising physicians, as well as people who have family members in the extended care facility there -- it is an area that really does need attention, and needs some urgent solution to some of the problems that we face. I would like to break down my questioning so that we can have some order to what I'm going to attempt to do here.
I would first like to talk about the whole question of extended care, and look at long term care facilities and what kind of programs we are likely to see in Powell River for long-term care. We have a new facility coming on stream, whether or not that's going to provide us adequate beds for extended care patients. I would also like to look at how that might relate to the private facilities which are there.
Then I'd like to talk a little bit about some of the community services that are essential to the health care system in both Powell River and on the Sunshine Coast. In particular, I'd like to talk a little bit about the Care Sharing for Seniors, which was not given funding this year. As we know, it has now been relegated to the programs that we used to have, in favour of a private system that is coming in to replace it.
Lastly, I'd like to talk about the whole question of regionalization in health care delivery with respect to the Sunshine Coast-Powell River area, because it is a unique area, to the extent that it really doesn't fit very well with the Island or Squamish, so in the whole question of community care it's something that needs to be looked at.
The first question has to do with the extended care facilities. I am sure the minister is aware that we have a facility nearing completion. It could be completed but for the sum of about $150,000, in round figures, I'm told. This would make available beds that are currently empty, and would alleviate what is a chronic and very
[ Page 5799 ]
serious problem in the Powell River Hospital with respect to the extended care facilities, where extended care patients are taking up needed acute care beds.
Could the minister give us some assurance that what in the scope of the larger budget would seem to be a very small amount of money could be applied immediately so that we could have those -- I think it's 12 -- beds available? We could then move people out of the acute care beds and into extended care. If the minister could give us an affirmative on that, then we could move through the first section fairly quickly.
Hon. E. Cull: Could the member clarify: are we talking about extended care, long term or intermediate care, or are you just talking generally about both? Is this an extended care facility or an intermediate care facility?
G. Wilson: I am talking about both. There are people in long term that are essentially an overflow from existing long term care facilities. But there are people that are also in extended care who are now being forced into acute care beds because the extended care portion of the hospital is not complete -- for want of a relatively small sum of money, I'm told. Those are the people that I'm talking about. Some of the doctors are concerned, because acute care beds are taken up with extended care patients.
Hon. E. Cull: I am going to need a little more clarification. I understand the difference between acute care, extended care and intermediate care, but are you talking about the extended care beds at St. Mary's Hospital? Are you talking about a particular long term care facility that needs $150,000 for completion? If so, the names would assist me in giving you a precise answer.
G. Wilson: I'm speaking specifically about the Powell River hospital. We haven't got to St. Mary's in Sechelt yet, but that's coming later down my list of things to talk about. I'm talking about the Powell River hospital where a wing that was built on was not completed. I understand that roughly 12 beds are available, but they cannot be used, because the physical plant has not been completed. A relatively small sum of money would be required to open those beds, and that would then free up acute care beds that are currently being used by intermediate care patients and, I understand, some extended care patients.
Hon. E. Cull: I'm attempting to get the figures for this year's capital approvals -- which, of course, haven't been announced yet -- to see if I can give you any indication of where we're going with the $150,000 that's required to complete those beds.
Perhaps what I can do at this point, while my staff are checking the capital budget for this year, is give you an idea of how we go about making those decisions. There is an overall five-year plan to increase the number of multilevel-care beds, which includes both extended and intermediate care, by about 3,000 over the next five years. We've approved 436 beds for this year's capital budget. That was announced earlier this year, and the details of particular projects have started to be announced. Not all of them have been announced yet, because of various bits and pieces that have to be concluded before the announcements can be made.
We do an assessment of every community in the province to determine its needs for multilevel-care beds. That's based on the existing supply of beds and the age and size of the population. As you can well imagine, the need that we have identified in the province right now exceeds our ability to provide beds in any one year. That's why we have a five-year plan which says that we need to increase the number of beds by almost 3,000.
In any given year, how do we decide where the money to support those 436 beds is going to go? We rank communities in order of their priority. There are always going to be communities that will have a need, and certainly it may be a very legitimate need, but they will be beyond the cutoff point for the 436 beds that we are able to fund out of our budget this year.
With respect to the completion of that particular project, it may indeed be that in past years -- and I'm speculating somewhat here, because I don't know the Powell River hospital well enough -- we approved construction of the shell of the major part of the construction, because when you're doing an expansion it's cheaper to do that than to do a smaller size -- but in the recognition that Powell River would have to wait until its turn came up on the priority list before the completion funds would be granted. As I said, I'm taking a guess at this, and my staff will continue to look for the information on the particulars around Powell River. Perhaps we can move on, and I'll come back to this when I get a bit more information.
G. Wilson: I appreciate the minister's comments. Powell River has a brand-new hospital which is soon to be opened, and I'm sure the minister will be there ready to cut the ribbon and show what a great, responsible government this has been.
Interjection.
G. Wilson: I appreciate that I'll be invited. I can tell you, Mr. Chairman, that I will have been the third consecutive MLA to have been involved in that project.
To give credit where it's due, the Powell River hospital was initiated by Don Lockstead, who was an NDP MLA from Powell River years ago; now he's the mayor. That just shows you how you can rise in politics. There you are.
L. Fox: At least he's not a planner.
G. Wilson: That's true -- at least he's not a planner. It just goes to show you that no matter how life treats you, there's always room for you in politics.
Having said that, let me just say, under the new facility, that I think some of the problem may be alleviated, given that there's adequate money. As soon as we have those figures, they would be useful.
[11:15]
[ Page 5800 ]
In the assessment of the community -- and this is a more specific question about how one allocates these dollars -- Powell River is, by nature, an isolated community, because it is essentially detached from the south portion of the mainland. You'd have to take two ferries: the Earls Cove ferry and the Horseshoe Bay ferry. It is detached from Vancouver Island by the Comox-Powell River ferry -- which should be docked in Powell River, by the way; and the minister might want to work with her colleagues to get it docked in Powell River. Having said that, I repeat that we are an isolated community. As a result, the ability to find secondary facilities is not great. We are also subject to some severe weather conditions that make flying in and out very difficult for Medivac. I wonder if the minister can tell whether or not that has been taken into consideration when providing additional funds. When that question is answered, would the minister recognize that the mill, being a very significant employer, is an area that could be subjected to -- although, thankfully, it has had a reasonably good safety record -- some very serious problems if there were ever a major industrial accident requiring the use of the very limited resources of that hospital? I wonder if the minister could say whether or not isolation and proximity to a major industrial employer is a condition that might mean we should get more money in Powell River for that hospital.
Hon. E. Cull: In particular, with respect to just the extended care, the multilevel care and the seniors aspect of care, we're very conscious of the isolated nature of a number of communities and the fact that communities do want to try to remain intact. People do want to be able to stay where they've grown up and lived much of their lives. What we're trying to do in many respects is to turn the system that existed in this province for a number of years around a little bit. We haven't had a lot of time. It's just like the challenge we have in trying to change the health care system. It's a huge ship that's plowing along. Trying to change it takes not only a lot of effort but also a considerable amount of time to get it going even a few degrees in a new direction.
With respect to care, whether we're looking at people who require long-term or ongoing care or people who are looking for acute care services, ours is a philosophy that has been recommended by the royal commission. As much as possible and practical, health care services should be closer to home. They should be in the community. We're now starting to change some of our policies that have been very standard policies. Let me give you an example. It doesn't apply in Powell River, but I think it will give you an example of what we have been trying to change. For many years the Ministry of Health has had a standard that said: "CT scanners should only go into communities that have a population to be served of 125,000." There are some parts of the province that are never going to have that population -- certainly not in the foreseeable future. But they are isolated; they have geography and weather to contend with. We have now begun to change our policy to reflect that and to recognize that you can't just have a simple number ratio that dictates everything. The realities of British Columbia, particularly the geography, mean that we have to be a little more sensitive. For that reason, I was able to review our policy, change our criteria and announce a CT scanner for Terrace even though it doesn't have the population.
We're looking at long term care facilities in a similar way. We're also looking not only at the facilities but also at how we provide services. One of the things we're attempting to do is provide more services to keep people out of hospitals if they don't need to be there. We're looking at the development of quick response teams that intervene in the emergency ward to determine whether someone should be admitted or whether there can be appropriate community and home support services to keep them as healthy and allow them to recover in their own homes.
We have moved away from providing institutional care for the elderly unless they are at higher levels of care. It's the kind of thing we used to call personal care, the very lowest levels of care for which years ago someone might have gone into a nursing home or a fcility. We now provide those people with home support, home nursing, Meals on Wheels, adult day care programs, and respite programs for family caregivers. A whole variety of programs is available to support people continuing to live in their own community and, indeed, their own home. We are starting to change our policies over a whole variety of health care services, particularly in the areas of acute care and multilevel care. If you bring that back home to Powell River, where you not only have a smaller community of about 20,000 but, as you pointed out with the ferries, you have an isolated community, it becomes more important because what may be an hour's drive somewhere else in the province can be much longer for people who have to rely on ferries.
Through our policy approach we are trying to recognize the geography of the province, allowing hospitals like Powell River to repatriate services that may be being provided in other hospitals because of past practice, always recognizing that it's a bit of a balance that you have to work out here. You need a certain critical mass of patients and physicians to perform some services. Unless that critical mass exists in the community, you can't safely provide those services. In fact, people would indeed be better served by leaving their community to get the health care services they need. So there's a balance between being closer to home and making sure that we do provide high-quality services. That is the philosophy driving the decisions we're making right now.
When will you see the results? Well, they're not going to happen overnight. The decisions we can make in the health care system have to be, for the most part, incremental. It means adding resources to hospitals so that slowly and progressively they can start to change the services they provide, adding resources to the multilevel care budget so that beds can be built up in communities where they're needed.
G. Wilson: I note with interest that the minister talks about the critical mass needed. I understand that
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the mass of doctors have been exceedingly critical of this government. I would think we have to pay some attention not only to what practising physicians are saying but also to people who are involved in the delivery of health care: registered nurses, people in support staff and so on. There's no question that Powell River General Hospital has an exceptionally fine complement of physicians and an excellent staff of trained nurses in both full-time employment and part-time employment. That's a big issue there because the budget requires that there be some modifications and changes in the Powell River General Hospital. By what the minister said -- and I note that the federal Member of Parliament, Ray Skelly, essentially intervened in the north Island section of Comox Valley with respect to a $25,000 donation toward the CT-scan fund in that area.... That $25,000 was lost as a result of the Member of Parliament intervening in what was a very strong community-based organization trying to raise some money within the community. I think Powell River would be no exception.
There is no problem with respect to adequate staffing levels of trained personnel. There's no problem with having a critical mass of doctors. Believe me, you've got masses of doctors in this province, and they're well trained. In Powell River they are exceptionally well trained. We've got a good diversification of specializations, although we would obviously like them to be able to practise more fully within the hospital. The problem is money. I recognize that there is a limited amount of money. I'm not arguing that we should be ballooning budgets, even though I'm sure that at some point today it's going to be suggested that this is what I've done. I'm saying that we need to commit the dollars that we have more wisely and more thoroughly throughout the province.
I'm certain that there isn't an elected MLA who wouldn't stand up and argue that their own constituency is a special case and needs more money and that their particular hospital is more in need than some other, but in this case it's true. In Powell River it happens to be the fact. It's perhaps a little less so in Sechelt, I would argue, because we're just that much closer to Lions Gate and St. Paul's, which are referral hospitals. But in the Powell River area, because of the weather and the inability to get Medivac in and out in a timely manner, it's a real problem.
Where I think this minister needs to be aware of it and to account to the people is with respect to the Powell River senior community. I don't know if the minister will recall this letter, but I certainly brought it to her attention. I think a member of her staff has responded, and my constituency assistant has dealt with this family. Because of medical requirements that couldn't be met at home, an elderly woman had to be moved from Powell River to Port Alberni, for heaven's sake, to get the kind of extended care that was needed. So it's not just a question of having in-home care.
I'm going to deal with this a little bit more, to find out why the minister cut off Care Sharing for Seniors -- I flag that so she can start to look it up. It was a very effective program that was doing exceptionally good work with very limited money -- excellent return for the dollars. Its budget has been cut off only to allow some private group to come in to provide something that may or may not be as good.
But when you have a situation where seniors have to be flown out to communities that they haven't lived in and grown up in, it makes it extremely difficult for those people responsible for children and siblings within families to have to share responsibility and care for parents. It becomes extremely difficult if they have to move to an Island hospital; it's not only expensive but it becomes very difficult to get access. Surely the better expenditure of money -- given that there is some assistance provided on occasion for this kind of thing -- is to simply put the dollars into making sure that this new facility, when it comes on stream, will have adequate beds and an adequate budget, based on the isolation of that community, to be able to look after the expanding need as a result of the people within the community who are aging. Maybe the minister could respond to that so I can take that back to those constituents.
Hon. E. Cull: The member has raised a number of very good points. I want to address both the funding issue and the seniors having to move to other communities.
Let me start with the funding issue. The member is correct. I don't think there are going to be any members who will stand up in this House and say their hospital has enough money and the additional funds that were granted to it should be reallocated somewhere else. We are all, I think, very aware of the work that's happening in our own hospitals and the need for those services to be enhanced in most cases and for better services to be provided to people in our communities. We have worked very hard in this last year with the hospitals association and also with the union representatives of the hospital employees to arrive at a funding formula that everybody agrees to.
As you said, you're not going to argue for ballooning funds to hospitals. I'm glad to hear that, because often people who are arguing for their own hospital are doing that or they're demanding a solution of putting more money into it. We have put 3 percent additional funds into this year's hospital budget. We believe that while that is a challenging budget -- there's no doubt about it -- for many hospitals, it is an adequate amount overall in the system to be able to provide for the acute care hospital needs of people in this province.
Having established the overall budget, which is essentially what we're debating at this point, the job then is to determine how you distribute that to all of the hospitals in the province. Certainly, one way is to give everybody a 3 percent increase. We've been through that before: it's not equitable, because not all communities are equally well served; they don't all have the same level of resources. Some communities are growing very rapidly and require additional resources, while other populations may be declining. Recognizing this and that different communities need different levels of service, because of the age of their population as well.... Obviously, if you have a larger seniors
[ Page 5802 ]
population, you are going to use more acute care hospital services.
[11:30]
We've come up with a fairly sophisticated formula which distributes the 3 percent additional funding that is provided to hospitals this year. That formula was hammered out over many months in discussion with the hospitals association and the employee representatives. Making sure that we get agreement on how to divvy up the pie is one of the things that I was absolutely adamant that we do this year. We'll all argue that the pie isn't big enough, but if we accept that there is a financial situation in the province that has to be addressed, the pie is going to be fixed. The real question is: are we distributing that money equitably? The decision about how much money goes to Powell River, St. Mary's, Victoria General or any of the other hospitals in the province has been arrived at through a consultative consensus process, with the hospitals and employee representatives working with Ministry of Health staff.
One of the questions that you may ask is: "Gee, you're only talking about 3 percent. What about the other 97 percent of the budget, which right now may be unequally distributed?" I accept that. It is unequally distributed right now, because of the shifting population and past decisions that we can't account for today. We had a look, through this process, at what would happen if we actually took back a bit of the money that was already in hospital-based budgets, put it into the funding formula and then redistributed that. It would have improved the equity, there's no doubt about it; it would have made for a more equitable situation. But the hospitals association looked at it and said that the shock to the system of that kind of redistribution would have just been too much.
Back to my comment about having to make incremental change. Sometimes it's frustrating or not fast enough, but we have do deal with incremental change for a lot of what we have to do. I'm really pleased that we were able to come to agreement with the hospitals and employees about how best to rejig this formula.
This formula will go under more review in years ahead. One of the things I'd like to see added in it is a recognition of the health status of the community, because the age of the population is a good indicator of how many health care services will be consumed in a community. I think we need to refine our system so that we're targeting it not only on the basis of population -- numbers and aging -- but also on the basis of real need. We should be able to look at all the health units around the province and rank them in order of their health status on a number of health indicators, whether it's life expectancy, the number of accidental deaths among males, low-birthweight babies or infant mortality. There are a number of things we could rank communities on. Then we have to start to change our formula so that we're targeting resources to communities that are the least healthy, because that's where we should be able to make the most impact. That's what's behind the funding formula.
I appreciate that you can look at any of the hospitals in the province, and in most cases they'll say: "Gee, we could have used more money this year." That's probably true. But 3 percent is the amount that we feel is equitable and affordable and will allow us to do the other things that have to be done in health care. The distribution was determined with the industry and employers.
Any time I hear about a senior having to relocate outside their community in order to get health care, it makes me very concerned and sad. I don't want to see that happen. But we have a shortage of multilevel-care beds in this province right now. The royal commission pointed out very clearly that 25 percent of hospitals beds are filled by people who shouldn't be there; the vast majority of them need to be in multilevel care, and we don't have enough multilevel-care beds.
Before you came into the House to join this debate, I was talking to the Health critic for the third party about a redistribution of some of the resources. There was a suggestion that some of the resources going from acute care to multilevel care were not really a redistribution, and we should be going acute care to acute care. I disagree. I think it's very important that we start to get at some of that 25 percent of acute care beds and redistribute by reducing the number of those beds and putting that money into the multilevel-care-bed part of our budget. That's what we're doing this year. We're creating another 436 beds. But that's not going to solve all the problems for all of the people needing long-term care this year.
That's going to require a consistent plan of funding multilevel-care beds over a number of years. That's why there's a five-year capital plan to do that, and at the end of the five years I hope we will have the appropriate number of beds. Our best estimates now tell us that we'll be more on target at that point. But it's going to take some time to be able to meet that need in our community, and to meet it in every community out there.
In the meantime, trying to keep people out of hospital beds who don't need to be there means that you don't have people who really need to be somewhere else in the system blocking those acute care beds. You don't have to then move them to another community to receive the treatment. If we can provide home care that will allow a senior to not be institutionalized, we may be able to keep them in their own community.
When it comes to extended care, there's not an awful lot of choice. That's a very high level of care. That person does need to be in an appropriate facility, and what we need to do is keep working on making sure we don't have multilevel-care people blocking beds, or acute care people blocking beds who shouldn't be there, and that we have the appropriate level of community resources to make sure we're putting whatever facilities we have to the best possible use -- making sure that they are there for people who really need to be there.
G. Wilson: I think the difficulty in Powell River, however, is that there is a significant blockage. In fact, some might even say there's a thrombosis existing in
[ Page 5803 ]
Powell River that very much needs to be dealt with now. We've got a problem in the extended care facilities available in Powell River. It's more than a problem; it's a crisis, in my judgment and in the judgment of many people who are involved in the administration and delivery of health care and, in particular, those people who have relatives in Powell River General Hospital. That needs to be addressed. It simply isn't enough.
I recognize the problems when the minister is looking at the broader picture and at the province as a whole. Although I've not been in the minister's chair, I can appreciate that she has to make these decisions and that there are difficult decisions to be made. I don't doubt that for a second, and I don't doubt that whatever decision she makes is not going to please all people. That's the nature of the business we're in.
But surely to goodness there has to be some practical information, some data that is looked at in a very pragmatic way, which says that if we've got a crisis existing today in a particular community with respect to extended care, we have to act and act now. It may be an extraordinary move that is not well received by other communities that might think they have an equal problem.
What I'd like to communicate to the minister through these estimates today is that the amount of money required to alleviate this blockage that is going to create a massive stroke -- to use the analogy -- is rather small in the larger picture. Unfortunately, we're not talking about moneys needed to patch holes in roads, to get rid of a few school portables to expand classes or to provide housing enhancement for people in need -- and all of those are important. We're talking about the last years, months or, in some cases, the last days of the lives of people who have toiled and paid taxes all their lives and who now want to have their last days, weeks and months spent with some dignity. They want to have some facility that allows them to be able to enjoy that dignity in the last days of their lives. Their families, in particular, go through that kind of crisis. Maybe the minister has an answer.
Hon. E. Cull: Thank you for carrying on this debate to the point that I actually have an answer specifically on the extended care units. I do not normally make announcements of this sort in the House, but we have had a chance to look at the capital budgets and the many projects we're funding this year. Indeed, there is money available to finish those 15 beds in the extended care project at Powell River. More details on that will be forthcoming, but that is available now.
You're absolutely right; we do look at these things in terms of criteria. The comments I made a few minutes ago about having some standards -- but also having some sensitivity and flexibility -- is the way that we're trying to operate. We're doing more of that all the time. When there is a crisis in a community, sometimes we will have another look at it and bump it up in the list, despite the fact that it does sometimes annoy others who feel that they've been on the list for a while. More details on this will be forthcoming.
G. Wilson: I'm sure that the people of Powell River will be absolutely delighted to hear the news that there will be money to complete the 15 beds. I know they were originally asking for 12; I know there were three additional, and 15 is great. I look forward, hopefully very shortly, to the minister's visit. I'll even hand her the scissors as she cuts the ribbon, and will stand out of the picture to allow this.
Interjection.
G. Wilson: It could be dangerous, this is true. The member opposite says that handing her the scissors could be dangerous, but I trust that member of the government.
With respect to the second portion, Care Sharing for Seniors, I understand that the Closer to Home program and the movement that the government is showing towards a greater degree of in-home care.... I don't think there are too many of us on this side of the House that argue that we shouldn't move in that direction. That's a good way to go from a humanitarian point of view. I think the jury is out as to how cost-effective it's going to be. We need to see how that's going to work.
With Care Share for Seniors, we had an excellent organization that ran on a comparatively very small budget. They did marvellous work. Some of it was by volunteers, and there were some staff on salary, but for the most part it was an inclusive, community-based support system for seniors in Powell River. It was a marvellous activity with great people, and it had its budget cut. I wonder if the minister could explain how it's possible, under the privatized system that's coming in now, to have better service for the money delivered. These people were actually doing what this minister is seeking to move toward doing. The budget they requested was relatively small. I don't know that they want me to go through the details of it, but it was in the neighbourhood of a few thousand dollars. In looking at that money in terms of what it delivered to the public, it was a tremendous service. Can the minister explain why she would stop funding an organization like Care Sharing for Seniors, basically put it into the hands of a private company and have that private company access money, when there is an existing service that is first-rate and very well supported by members of the community?
Hon. E. Cull: I'm glad the member has raised this issue, because it gives me an excellent opportunity to talk about how frustrating it is when the federal government funds seniors' programs or programs for social support for a number of years and then cuts off the funding. Unfortunately, this was funded by the federal government, and the funds ran out in January 1993.
The federal government often comes into provinces with all kinds of ideas about great programs that they're going to support. They don't consult very closely at all -- if at all -- with the appropriate provincial ministries. These programs get up in the community, and they get valued by the community. Then suddenly the federal government pulls the funds out from under them, and
[ Page 5804 ]
the province is left scrambling to see whether they can pick up funding at that point, without having any real involvement in the overall design of the program or anything like that.
Unfortunately, the funds that ran out in January 1993 were federal funds. There are probably many projects across Canada that are now finding themselves in that situation: scrambling to keep themselves going.
We funded a caregiver support program in the community both last year and this year. Again, what we're moving towards in terms of deciding how to spend our community health dollars is to work with the community to get them to help us set some priorities. Last year we went through a process that we'll be going through again this year, where we use the union board of health or whatever other organization exists in a community -- it may be these emerging health councils that are starting to form in communities -- to have a look at what the real priorities are for the new community health dollars. If Powell River comes to us and says that this program is extremely important and ranks above some of the other things that were funded, we will respect the wishes of that community and work with them to maintain a program like that.
[11:45]
G. Wilson: I'm sure that Hansard will be made available to people in those community groups, and I'll let them take at face value the minister's commitment and see that they can be in touch. If I can facilitate that, I will.
I would like to move to a second area, which is essentially the whole proposition for community-based care. We're now looking at the development of a new system, and I think it's fair to say that it's a fairly new system. I'll use Sechelt as the example of what we're talking about. I notice with interest that there is limited, if any, community involvement in the selection, election and eventual accountability of these new community boards that are being established. I wonder if the minister might give us some comfort that we are not moving into another level of local "government" on a regional scale, despite the fact that in the first years there is going to be widespread appointment. Looking at the model that has been put forward and is being widely touted, there are those who would argue that what we're essentially doing is setting up a regionally based health care administration system, which, like all administration systems seem to do in government, is going to.... Without meaning to be in any way disrespectful to those who work as civil servants, senior or junior, these systems tend to mushroom into larger and more expensive propositions. It concerns me, because it would seem that the public is not widely included in that selection. The minister might want to comment on what safeguards are going to be put in place to stop those kinds of escalating administrative costs.
Hon. E. Cull: I guess the member hasn't heard me speak on the subject in the past, in terms of how these councils and boards are going to be formed, what their responsibility will be and what will happen to the other bureaucracy that exists in our system right now. First of all, we're looking at community health councils at the community level and regional health boards at the regional level. The regional health boards will be composed of members from those community health councils within their region. The community health councils will not be additional bureaucracy or governance structures layered on top of what already exists. They will replace some of the existing governance structures that are already there in a community. A typical small town anywhere in British Columbia might have a hospital, a long term care facility, services provided by the public health unit under the union board of health, other services provided directly by the Ministry of Health and the regular collection of non-profit agencies that may be providing everything from Meals on Wheels to caregiver support groups. We are anticipating that the functions of the major boards -- the hospital long term care facility and the union board of health -- would come together under the community health council. Instead of having, in that case, at least three boards making decisions about different parts of the health care system, we will now have one community-based board that's able to span the spectrum from community to acute care and to do the kinds of trade-off, decisions, integration and partnership that is necessary to make this all work in each community in the province.
We are in a transition period between now and the 1996 municipal elections, because the next set of municipal elections this fall is simply too soon to be able to immediately move to the approach that we have recommended for 1996. We are proposing that in 1996, one-third of the community health council be directly elected by the citizens in the community, one-third be indirectly elected, as the union boards of health are right now -- in other words, people who are elected to municipal council or school board will be designated by those bodies to serve on the health council -- and one-third be appointed by the Minister of Health. That's in 1996.
How do we get from here to there? We're in a transition period and we have started to encourage communities that are interested in moving in this direction to come together with all of the players in the community. We want everyone who is interested to be able to have a seat at the table to form a transition board. They are not being appointed by me or anyone else in government; they are coming together voluntarily with people from hospital boards, union boards of health, seniors' organizations, women's groups, unions, professional associations and the medical societies. All of these groups are starting to come together around the table to form transition community health councils. They look different in every community right now because they're very new. They're emerging; we're in a pilot phase. We are in the process of advising communities on how to make sure that they are inclusive as they put these boards together, both through the direct work of six executive directors whom we have reassigned from other duties to work with communities on this and also through the preparation of a community workbook, which is almost
[ Page 5805 ]
ready to go out to communities and gives a very long list of the types of groups and individuals who should be invited to join in this process of forming a health council.
G. Wilson: If I could just stick on this topic for a little bit, perhaps, with leave from the opposition Health critic, I'll be able to wrap up some of these questions after the noon adjournment.
The difficulty that I have with this is not so much that there's an attempt for integration. On paper, anyway, that looks like it might be a sensible way to go. But just so the minister understands where I'm coming from in this, I have served on the board of the Sunshine Coast Community Services Society and therefore have a working knowledge of volunteer action such as Meals on Wheels, the transition house and other kinds of community facilities that do on occasion have a direct interface with health care. I also sat on the regional hospital board and therefore have some background on how the financing of these activities works. I am also very acutely aware of what happened in Sechelt when there was an attempt for integration last year, an attempt to put an overall community health plan in place.
The difficulty is that this transition phase is a little like having a nice parcel of property with a home on it that needs renovation. The home is the existing system. You then bring in the royal commission, which is your architect to tell you what you should do with this existing house. They design you a brand-new home, which you say is a better proposition -- i.e., the integration of services. We then decide to break turf and build a new home. But while we've got the bulldozer on site, we start to bulldoze and dismantle the existing house.
I don't think I'm being facetious when I say that in the interim we have to be able to deal with the obvious problem that is going to result, in terms of keeping tabs on the expenditures in those regions, how we're going to administer them, where the jurisdictions are going to fall and who is going to look after them. I understand the problem that the minister faces with respect to the '93-to-'96 municipal election transition period. But in a community such as Sechelt, where we have an absolutely first-rate hospital -- slightly underfunded, but which hospital isn't slightly underfunded? -- with an excellent team of doctors and nursing staff, we already see the cracks starting to appear, because there is some considerable fear that in this integration process, people who have had traditional turf, have protected that traditional turf and done an excellent job in doing that now feel that somehow they're going to have their position undermined with a new agency coming on top which will be less accountable to the public.
The minister can correct me if I'm wrong, but in this interim period I understand that there is basically going to be an appointment to these boards until we can put in place some kind of recommendation on how those appointments can at least -- by one-third, I think -- be moved toward community election.
The other thing I would ask the minister to comment on is that as this integration occurs -- and maybe we can pick this up after adjournment -- we also find that people who have a special interest in one particular part of health care and little interest in others tend to become very dominant in the debate as to what should or shouldn't be happening in terms of the allocation of funds.
At the community level it's a real problem, because there are people better organized, better connected and much more able to articulate their position with respect to one narrow aspect of health care who will dominate and override the ability to have a more comprehensive funding program in place. I wonder if the minister can tell us what safeguards are there to check against that.
Hon. E. Cull: The whole question of turf is a very real one, and one that has to be addressed. In fact, in some communities the tendency to protect turf above all else has created some real problems in providing health care services. I have story after story, which I won't regale you with right now, where people in communities have come to me and said: "Here's the problem and here's the solution, but we can't make that solution work because of the turf, or the barriers, or the fragmentation of the system." Everyone sitting around the table can see that that's what you should do. It makes sense, it's cheaper, it's better for the patients; but you can't get from here to there because of the way we're structured right now. So we have to have a different way of administering and governing the health care system, because the system we have right now is getting in the way of sensible decisions.
I appreciate that there are people sitting on elected and appointed boards across this province to whom we owe an incredible debt. Without the volunteer trustees who serve on hospital, long term care and other non-profit boards around the province, we wouldn't have the health care system that we have right now. Those people been very valuable in the past; they're going to be very valuable in the future. They have the skills and expertise to put these councils together and really make them work. In the interim period we are looking at those major boards. In most cases it's going to be three or four coming together and voluntarily reorganizing themselves into one board. It's already starting to happen in many places across the province where we have hospital boards and long term care facilities voluntarily amalgamating and coming under one administration. It makes more sense, because you have one administrator, human resource system, laundry system or whatever. You can start to really effect some efficiencies there. You can then start to work on some of these other issues that we were canvassing over the last hour -- people in the wrong facility, blocking beds and all the rest of it. That trend is already there; it's starting to happen. What we're looking at in the transition period is facilitating it so it continues to happen.
You talk about the imbalance in power that different groups have right now. The institutions and professions have the loudest voices when demanding their share of the health care dollars that go into their community. I
[ Page 5806 ]
don't fault them for that. They're better organized; they have bigger budgets to begin with. They do have more power than the community groups or people who have been lobbying on behalf of the mentally ill, for example. We're trying to balance that off a bit and give some of those community groups more of a voice and an ability to say: "Hey, our needs are important. Even though we're fractured in terms of how we provide our services, we can have a clear voice to articulate our needs on behalf of people in this community."
The role of the province in all of this is going to be to establish some standards. When we get to the point of regional health boards allocating dollars to communities and parts of the health care system, the Ministry of Health will continue to have the role of saying: "This is the basic level of service which we expect you to provide in your community with those dollars." That is in the future; I certainly don't see it happening in the transition period at all. Our responsibility has to be that wherever you live in British Columbia, you can expect a similar level of service in keeping with the size of your community. One of the tasks that we have to work out with the communities over the transition period is what the standards should be that are established by us as conditions for getting those dollars to spend them as you want in your community. We already have it in terms of hospital funding criteria. When we hand over a global budget to a hospital we don't say: "Here, do what you like with it." Some expectations have been established by the province as to how that money will be spent. When we allocate money to mental health services in a community -- when we decide that Powell River is going to get this much money, Nanaimo is going to get that much money -- inherent in those decisions are standards of what the appropriate level of care in that community is. We have to take some of those less visible things in standards that are kind of buried in our funding decision, make them more explicit, and then provide those to communities. We have people working on that right now, sorting out what those standards should be around funding criteria.
[12:00]
Mr. Chair, I see that the time is upon us to move to lunch, so I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; E. Barnes in the chair.
Committee of Supply A, having reported progress, was granted leave to sit again.
Committee of Supply B, having reported progress, was granted leave to sit again.
Hon. E. Cull moved adjournment of the House.
Motion approved.
The House adjourned at 12:01 p.m.
The House in Committee of Supply A; D. Streifel in the chair.
The Committee met at 10:22 a.m.
ESTIMATES: MINISTRY OF LABOUR AND CONSUMER SERVICES
(continued)
On vote 49: minister's office, $350,350 (continued).
J. Weisgerber: I'd like to pick up where I was yesterday. At that time I raised concerns around the water level in Williston reservoir, particularly as it affects the town of Mackenzie. The projections for the water level in Williston Lake that seem to be accepted in Mackenzie by the municipality and the parties affected -- particularly the sawmills, the pulp mills, etc. -- suggest that this year the water level will drop to somewhere very near the 2,150 mark. That seems, in my recollection, to be the minimum level that had been accepted as Hydro's minimum level, even though their water licence would allow them to take the water down to, I believe, 2,100 feet. The great concern in Mackenzie -- and I think it's a very legitimate concern -- is that projections for the spring of 1994 are that the water level would drop to between 2,140 and 2,115 feet.
The 2,115 foot level would be a disaster for Mackenzie. It will not only effectively leave high and dry the log dewatering systems and make ineffective the barging on the lake, it will leave the water intake and discharge pipes high and dry for one of the two pulp mills, putting 300 or 400 people out of work, and it will leave the municipal sewage discharge system also high and dry -- and very likely out of compliance with provincial regulations.
So my concern is to determine what kind of factors suggest that 1994 will be the year in which we hit this low level mark. I have projections that suggest 2,150 or thereabouts in the current year, dropping to 2,115 in 1994, and then gradually improving through 1995 and 1996. Unless the science of weather prediction has improved considerably at Hydro, I expect there would have to be more factors at play here than precipitation. The purpose of my questions today is to determine the accuracy of these forecasts and to see whether there are ways we could mitigate this water drawdown for the town of Mackenzie. It is going to be a serious hardship for the people of Mackenzie and for the people who work in Mackenzie's industries, and it behooves us all to look at ways that this drawdown could be mitigated.
Hon. M. Sihota: Let me make a couple of comments. First of all, let me advise the committee that joining the committee today are Thom Thompson and
[ Page 5807 ]
Ray Hunt from B.C. Hydro. I think they're well known to the former Minister of Energy.
On the issue that has been raised, I'm advised that the level is currently around 2,150 and 2,155, as the hon. member indicated. He points out that it could go as low as 2,115, which will obviously have some effect on the community.
We work on a four-year sequence at B.C. Hydro. My information is that what has transpired because of the precipitation levels over the last while is that we have put the parties on notice that we may have a problem in April or May l994. It's certainly an obligation that we have to put the parties on notice that there might be a problem at that time. We don't know whether or not there will be a problem at that time -- that depends on precipitation and precipitation levels. But 2,155 seems to be the number at which we bottomed out, and the situation appears to be improving. Nonetheless, out of caution and because we are under some obligation as a corporation, we advised the community and the users in that area of problems.
Accuracy, of course, is dependent upon things that we can't predict, and the weather is not always predictable.
J. Weisgerber: As is the normal practice in these projections, there is a worst-case scenario, a best-case scenario and the most likely scenario. In the spring of 1994, the worst-case suggestion is 2,115. The best scenario is 2,141 or 2,142, which still leaves at least the dewatering system high and dry, and in fact is a foot or two below the minimum operating level for the pulp mill. Even in the best scenario, assuming the best kinds of water conditions and the best kind of snowpack, according to this projection it would leave the pulp mill high and dry for a month or two. The median kind of projection is at around 2,125.
I understand that water levels in the reservoir are affected by two things: the amount of precipitation and the management decisions at Hydro as to how much they draw down the system. I would make the argument that there must be some ways that Hydro can look at mitigating the need to draw down Williston Lake to a level that it's never been drawn down to before.
Hon. M. Sihota: First of all, with regard to the forecast that we're dealing with, the hon. member should know that the forecasts are predicated on what was happening last month. As I'm sure he knows, and as we've all witnessed here, there has been an increase in precipitation since then, over this last month. Because of that, those forecasts have to be considered in light of what's happened, as opposed to what may happen. The rainfall that we've had recently will result in those averages being adjusted -- in this case, given the increase in rainfall, adjusted upward. I hear what the hon. member has to say in terms of how close it is, in any event, to the requirement in that area. I would think that that would augur well at this point.
[10:30]
As we get closer to the critical period in April-May of 1994, in February or March 1994 we will obviously have a better understanding of what the snowpacks and the water levels are, so as to prevent any kind of problems in the community. Things are improving in April of this year, and obviously as time goes on we'll have a better reading of the situation.
In terms of accuracy, let me just say that it is dependent upon weather, as I think you would concede. In terms of mitigation, we are prepared -- as we always have been -- to purchase additional electricity when it makes economic sense; and, as the hon. member may be aware, we would of course move to use Burrard Thermal to the maximum degree that we can in order to mitigate against some of the negative effects. In addition to that, it is in the interest of Hydro to keep those reservoir levels as high as we can in that area, given the quantum of electricity that is produced there. So the combination of the additional rainfall now and our ability to get better reads on snowpacks and water levels in February and March of 1994, combined with the fact that we can take the mitigation measures that I've outlined already, should indicate to the hon. member that there's a mutuality of interest here in terms of not exposing a community to a hardship if we can avoid it.
J. Weisgerber: It seems to me, first of all, from living in the area, that the amount of rainfall, while it's been substantial on the coast, hasn't been that significant in the northern part of the province. But if Hydro is prepared to reforecast on the basis of the amount of rain that fell in April, I'm sure that certainly will give some comfort to the folks who are there.
I'm not convinced, however, that this drawdown is as directly related to weather as the discussions that we've had here earlier suggest. Given the fact that there's the big drawdown forecast for 1994 and an improving scenario in 1995 and 1996, it seems to me to suggest that other factors are the major players here; for example, things that are happening on the Columbia River system, decisions that government has made or is planning to make, and decisions that Hydro has made or is contemplating. I'd like to try to explore these to see whether or not some of that can't be moved forward so as to take the 1994 bump out of the system.
Hon. M. Sihota: First of all, with regard to the first point the hon. member made, we do a renewed forecast every month. That may give you a little more comfort as time goes on and certainly may give your constituents a greater degree of comfort.
Second, with regard to the relationship and you saying that the drawdown isn't related just to weather, but that other issues could be involved, we are essentially not exporting at all right now, and that is based on some fairly obvious reasons that we canvassed the other day. But, as the hon. member knows, there is a correlation between the Columbia River system and the Peace system. We have noticed that the Columbia River area is drier than it normally has been, and that has been pronounced for some time. Again I don't think that's any news to the hon. member. That means that one makes greater demands on the Williston reserves and the other system we've got within the Peace, and
[ Page 5808 ]
we tend to drive those a little harder. Given what's happening in the Kootenays and the interrelationship in terms of our need to draw down, that does create some problems.
If I may, I want to consult on another issue because I am working from memory here. I just want to double-check it. As the hon. member knows, last year the Peace was actually quite wet in the beginning, and then there was a lot of drying. At the time the feeling was that we would have adequate resources in that area. Nonetheless, the point -- is whether there is an interrelationship between the two systems. Obviously there is. How is this interrelationship affecting the Peace? It's being affected because of the drier than normal situation with regard to the Columbia. Again it goes back to our ability to predict the snowpacks and the water levels, and the realities of precipitation that we've experienced over the last little while.
J. Weisgerber: I'd like to continue in that vein but move away from the weather issues. It seems to me that the whole business of projecting energy needs in British Columbia is a major function for Hydro. For a while now we have been forecasting, and Hydro has been projecting, that all of the growth in demand in British Columbia can be made up through PowerSmart and other conservation measures. There has been an enormous reluctance to bring new capacity into the system; whether it be Site C, or whether it be bringing dams in at Keenleyside. There has been a whole range of options that have been promoted and not accepted. I would like to put forward the notion that what you're seeing on the Columbia and the Peace systems are as much driven by new demand as they are by weather conditions, and we can't control the weather. Even Hydro can't control the weather.
Therefore you can only look to those things that you can control. If that means having 5 percent extra capacity through those years when weather conditions are good, that's part of the responsibility of the system. So I'd like to see some indication that the government and Hydro are thinking about moving forward on some extra capacity for the system, because that's where the real issue is.
Hon. M. Sihota: I'd be lying if I said we weren't thinking about it. Obviously we are, and obviously we must. We have to be able to engage in the forecasting that you talk about, and take a look at capacity and what we do on the demand side. There are a lot of opportunities on the demand side that we have to take advantage of. I think the hon. member will agree that the demand side system has worked reasonably well. No program is perfect but it's worked reasonably well, and we've been able to better utilize the resource that we have because of the programs that we've initiated on the demand side -- be they PowerSmart or Resource Smart programs.
In addition to that, just recently there's been a report on conservation which lays out tremendous potential in terms of conservation here within British Columbia. I only peripherally looked at it yesterday. It had an astonishing statistic in it: it said that if we were able to achieve 100 percent of the conservation that we potentially can -- which I guess we won't -- that we would not have to do anything at all on the capacity side until the year 2010. I'm not saying that the government is putting all of its eggs in that basket, by any stretch of the imagination. I just point that out as some reference for you.
Obviously we also have to take a look at capacity, and we have to take a look at options such as Keenleyside, as well as options in terms of using our resources smarter. The Resource Smart program is looking at the feasibility of a project at Stave Falls, again designed to make sure that we've got that end of the equation looked at.
[G. Brewin in the chair.]
If the hon. member's point is that we ought not to put all our eggs in the demand-side basket, that we've got to look at all sides of the equation, he's right. I buy into that kind of thinking. Obviously as time goes on, we will be in a far better position as a corporation to talk about capacity than we are today, because there are some decisions that have to be made at the board level. But you shouldn't have any illusions about whether or not we've ruled out the capacity side; of course, we haven't. As you mentioned, in terms of a facility like Keenleyside it is quite possible to be able to generate more power without any environmental impact.
J. Weisgerber: Could the minister confirm, firstly, that in fact the projections for demand through the year 2000 can only be met if Hydro makes the assumption that Kemano 2 is going to come on stream on target; and secondly, that the Columbia downstream benefits will start to flow back to British Columbia before the year 2000? Can you confirm, essentially, that if either one of those things don't happen Hydro will find itself in a capacity crunch?
Hon. M. Sihota: The projections do make some assumptions with respect to Kemano and to the downstream benefits, both in terms of returns of those downstream benefits, and ultimately with Kemano coming on. There are problems with both Kemano and downstream benefits. With regard to Kemano, obviously there are some negotiations and a review going on there, which could have an effect regarding the time in which it could be implemented. In addition, with regard to downstream benefits, we have just started negotiations concerning those.
[10:45]
As I said earlier, as a corporation you can't put all your eggs in those two baskets. You've got to have contingency plans as well, in the event that those aren't realized. And those contingency plans are also developed.
J. Weisgerber: Well, I'd like to have the time to go into all of the arguments around the downstream benefits. Let me limit myself to saying that I think there are tremendous opportunities available to the province to extend the Columbia River Treaty to take advantage
[ Page 5809 ]
of the markets that are there, while developing other sources of capacity here in British Columbia. When you look at all of the logistical problems of bringing that energy back to British Columbia where you receive it, and the problems of transporting it, all of those things seem to me to make a really strong argument to sit down and come to an agreement to extend the Columbia River Treaty for the benefit of British Columbia. I'm hoping that the government is working in that regard.
I recognize that there need to be some negotiations, and I'm not expecting the minister to lay out in front of a committee anything that would compromise ongoing negotiations. But it seems obvious to me that the thing we have failed to do over the last couple of years is take advantage of two areas. One is the independent power producers, who are crying out for an opportunity to produce and sell electricity to Hydro. When I look at the projections for the drawdown at Williston Lake, I can't imagine why Hydro continues to resist purchasing electricity from independent power producers.
The second thing that concerns me is that in 1991, when I had the honour, or the opportunity, or the privilege of being the Minister of Energy, we did bring in a program for wood waste cogeneration. We had instructed Hydro to pay up to a 25 percent premium for electricity generated from wood waste. Our information at that time was that that premium would have allowed for 80 percent of the wood waste in British Columbia to have been turned into electricity, that the program would have generated 4 percent of the province's requirement for electricity, and that the net cost to consumers would have been 1 percent across the board. The minister doesn't see any problem in adding 1 percent to Hydro rates, because he has already agreed that the Hydro rates should go up by inflation plus 2. Certainly something as environmentally solid as the wood waste cogeneration wouldn't, I am sure, give him a problem rate-wise.
I wonder what the effect would be on the drawdown at Williston Lake if the wood waste cogeneration project had been allowed to go ahead. Could not at least this issue have been mitigated had we not got ourselves spun off into an Energy Council? I review endless studies of an issue that is adding directly to a problem that is now a critical issue for my own constituents.
Hon. M. Sihota: In terms of the first point you made on downstream benefits, I appreciate what you have to say. I understand the concerns which arise with regards to delivery, and where, how it is structured, where it is returned to and how it interlocks with the existing grid. I see the point that you are making in terms of options, if I can put it that way, that may be available to the government -- i.e., return or just renegotiate the agreement. But you know as well as I do, and you certainly made the point, that I'm not going to talk much about that aspect of it. It is a remarkable asset to the province, and obviously we have to maximize the return to the province in terms of that asset. I don't think it would be fair for me to tip our hand in terms of where we are going in those negotiations at this level or at this time. Obviously at some point there needs to be an opportunity, I believe -- and I said this the other day -- for all members from the different parties to have greater knowledge of that issue. As I said in estimates to your colleague the member for Okanagan-Vernon, I think this is one of the most remarkable opportunities available to the province. I'm always frustrated with the lack of attention to or knowledge of this opportunity. I think there's a calling for government to be able to handle those downstream benefits in a mature way in order to maximize the return. I don't think there's any disagreement on that issue; I think we all appreciate the potential.
As for your comments about IPPs, we canvassed this issue in estimates last Thursday. The government has not ruled out IPPs. As I said yesterday, we acknowledge some of the environmental benefits that would flow from certain IPPs. We've got a request proposal to go up to the Queen Charlottes with regard to an opportunity there. Obviously we understand the argument with regard to wood waste and cogeneration.
We have developed a new formula, and in developing that formula we obviously looked at what your administration had done with regard to Williams Lake and the announcement that was made there by the former Premier on that issue. Be that as it may, we have developed a new social cost formula, and we laid that out to the industry at the end of December of last year. The basic point is that we are prepared to entertain IPPs, but it's got to be on the basis of that formula, and it's got to make some sense.
On your thesis that if we had proceeded with the wood waste projects we would not have the problems with respect to Williston, that makes a lot of assumptions. It makes assumptions in terms of how quickly we could have gotten those projects up. There is no assurance that they would have been up by 1994 or 1995 in order to deal with the immediate problem that you referred to at Williston. In any event, what we didn't know then but we know now is the precipitation problems that we've got. Again that factors in. You can't ignore the fact that that's a variable in the Williston problem.
The quantum of electricity that could be generated or indeed is generated by some of these programs now may not be sufficient to solve the problems you think we have. There are a lot of assumptions there that I think would question the thesis you put forward. There's absolutely no assurance that, had everything that you think should have happened in 1990 or 1991 occurred, we could have avoided the concerns you're articulating today.
J. Weisgerber: I can assure you that they would have been 18 months further down the road if the government hadn't immediately put a moratorium on cogeneration, which still hasn't been lifted. I don't know that they would have been finished by 1994; there could be some argument about that. I suggest that some of them would have been, and that the projects would have been 18 months further along.
I also know that there is a correlation that those wood waste projects alone -- not other IPPs or other
[ Page 5810 ]
projects, but wood waste cogeneration alone -- by the projections I saw, would have generated 4 percent of the province's electricity needs. There has to be a direct relationship with the amount you draw down Williston Lake. I think the people here with you could tell you how many feet annually 4 percent of our provincial needs relates to in terms of Williston Lake. That will tell you, at least to some degree, where we're at.
Let me say further that I agree that projects like IPPs, cogeneration and others should meet some of the social requirements of the province. One of the wonderful things about Hydro is its ability to influence the direction that the province goes.
But don't overlook the social costs that are going to be extracted from the people of Mackenzie because those projects didn't go ahead. We know that at least one pulp mill and the 300 or 400 workers there are going to be put out of work. We know also that we are going to add about $17 to $20 per thousand cubic feet to transportation costs if the industry in Mackenzie can't use the barging system on the lake. Those are very real social costs for my constituents, so I want to see all of the costs measured.
I believe that we're entering into a situation at Williston Lake that we shouldn't be in. We all know that we're going to have dry years and very dry years. There are all kinds of forecasts and hundred-year lows, and all of those kinds of things. Quite honestly, I don't think we should be in this situation. And I would like to see us put our minds now -- we've got 12 months -- to finding a way of avoiding what is a very real problem for the people I represent.
Hon. M. Sihota: In terms of the opening comment you made, that we would have been 18 months further down the road, it was implicit in my comment earlier -- and if it wasn't, let me be explicit about it by saying this -- that I don't think it's fair to say one could predict the effect that would have had if we had proceeded with those projects and had had the benefit of that 18 months. It would probably have had some effect, but whether it would be significant or not is another issue, and we both have to accept that reality. I think that's probably the truth of the matter. I think that it is presumptuous for you to conclude that people will be out of work in Mackenzie or that those transportation costs will be incurred. We don't know at this time, based on the situation as we see it developing, and it does change from month to month.
This system is based -- as you may or may not know, and as I've just learned -- on the assumption that we could go down as low as 2,100. But obviously no one wants to go down to that level. And obviously we have to be cognizant of the effect on communities such as Mackenzie, or elsewhere in the province, when we make those kinds of decisions and trade-offs. If those kinds of decisions have to be made, we try to weigh the social costs on all sides of it. That's only the logical and the prudent thing to do. Even if we had the potential to get all the energy that we could, we still might not be able to solve the problem.
[11:00]
At this point, you're asking us to take steps to try to prevent a situation from occurring. It's not a situation that we want to occur, either. Obviously you want some stability for communities like Mackenzie as much as you want stability for communities like Golden or Cranbrook. That's how we try to operate the system. Yes, those social cost variables will be taken into account. Yes, we'll take a look at what's happening in various communities. Yes, we hope that with a little help from nature, and with some of the planning we're doing and some of the backup contingencies we've got, that we will prevent the situation from occurring, and that we won't have job losses in Mackenzie.
J. Weisgerber: There were very real projects on the table 18 months ago. There were people who were serious about moving ahead and who wanted to move ahead immediately. There were people planning, and proposals on the table. To suggest that we don't know whether they would have proceeded doesn't reflect fairly on them. It would behoove the minister to acknowledge that the formation of this Energy Council has delayed some decisions that would have served the people of British Columbia, the environment and in particular my constituents well.
In any event, one of the great benefits of these forecasts is that they give you an indication of what the experts think is going to happen -- a best-case scenario, a worst-case scenario and a best-guess scenario. Having looked at the most likely probability, if that creates undue hardship, we have a responsibility to start making changes and to take action to mitigate it. It's not acceptable simply to say: "I hope it rains and snows a lot in the Peace and the Columbia systems." That's not good enough. We've already said that with the most favourable weather conditions, we're still going to be drawing down to 2,140.
There has to be some action. That's my point. We've got a year now to make sure we take action to head off a very difficult situation.
[D. Streifel in the chair.]
Hon. M. Sihota: It may well have been that there were proposals on the table 18 months ago, but 18 months ago there was also a change in government. Surely you would not take away from the government its right to re-examine issues and to determine whether or not there are different or better ways to deal with the problem. There was a mandate given at that time, and we have exercised the prerogative to which we're entitled.
It may be that the council process resulted in delay. It may not be -- I don't know. I can tell you this: that's a question you should put to the Minister of Energy -- and I'm sure you will -- when you get down to her estimates. Surely you don't expect me to be here to criticize the Minister of Energy with regard to the Energy Council.
Hydro obviously has a corporate view. You know full well it does. For me to fall into that trap would be silly. You're right that the old system may have served your constituents, or the people in British Columbia, or
[ Page 5811 ]
the environment of the province, well. The release of the Energy Council report is imminent. It had to be in by March 31, and we as a government can review it for only 30 days, so you know it's imminent. Who's to say that what now emerges won't serve the people of British Columbia or the environment or your constituents better? Obviously that will be a focal point of debate, and we'll have that debate both during question period and in those opportunities arising during the estimates of the Ministry of Energy. In terms of my responsibility for Hydro, I will have to talk about how that interrelates with Hydro.
On the scenarios you outlined, I will go back to what I said. No one is relying exclusively on weather, on snow or rain. The point is that we recognize the concerns you express. I've been upfront with you on that, and we recognize that there's a year to watch the situation as it develops. I don't think anybody is suggesting sitting passively on the sidelines watching the situation. We're watching it with the kind of diligence you would expect from Hydro in terms of its observations around the issue. If there are opportunities to mitigate, we obviously owe it to all residents of British Columbia try to mitigate to minimize adverse effects any of these decisions may have on any region in the province.
J. Weisgerber: When the people of British Columbia decided to change governments, I'm sure they recognized there were going to be changes. I genuinely didn't expect the wood waste cogeneration project to be caught in that change of government. Of all of the programs in government, I anticipated the one most likely to be embraced would be a project stopping 80 percent of the wood from going into beehive burners to be turned into electricity. So I don't accept the minister's argument that the people of British Columbia should have expected to see the project delayed or deferred, or a moratorium placed on it. I believe that it would have served my constituents in a way that isn't being done today.
I don't want to extend this simply for the sake of debate, but I really would like to come away with some sense that there is some specific action being taken -- not weather activity -- that would see a change in that forecast; that would see, somehow, some plan in place that would reduce the need to draw down Williston Lake. I don't think that that short-term gain you're going to get by drawing it down.... The water licence is 2,100 feet. Hydro is well within its legal authority to draw down the lake that far. Under previous administrations, it -- it being Hydro -- had always assured the people of Mackenzie that 2,150 was the bottom line.
Interjection.
J. Weisgerber: Well, it is true. Regardless of what is being said, it is true. There were discussions with the various players around what kind of mitigation, what kind of activity would have to take place if there was going to be a drawdown below that level. But it was always an assumption. Why would a community build its sewage pipe out to the 2,150 level if it expected Hydro to draw down below that? Why would pulp mills and other industries build their water intakes and outflows at below the 2,150 level if they expected it was going to go down below there? It is pretty obvious to me that there was an understanding in the community as to where the water level was going to go down to.
The reality is that we have 12 months to either reduce the drawdown or start taking some action with the community to mitigate the damage that is going to result from it. Those are the only two options that I see, and my purpose here today is to try and get a sense of the direction in which the government and Hydro intend to go. Are you going to try and reduce the drawdown, or are you going to try to mitigate the damage that is going to result from a further drawdown?
Hon. M. Sihota: I may end up repeating myself here a bit, but let me make a number of points. First of all, as I said at the outset, we're not taking the view that we're just simply going to sit there passively on the sidelines, watch what happens with water levels in that region, keep our fingers crossed and hope that it snows and rains. Obviously there are things that we can do. I referred earlier to options we've got with regard to Burrard, and options for dealing with our customers to the south of us and in Alberta to try to deal with the issue. So if you want to put those in the category of mitigative potential options, that's what they are. I don't want to repeat myself, but I think that point has to be made.
The legal requirement, as you say, for Hydro is 2,100. I am advised that it was upheld by an arbitration between the parties, and so it seems to me that the others may have taken some risks in making their decision on the probabilities of it not going below 2,145 or 2,150 or whatever. So I guess there was a canvassing of probabilities. Regardless of the decision they made, we appreciate as a government that you don't want to create a scenario which costs jobs in a particular community. Those decisions aren't lightly made.
Obviously we're prepared to take the mitigation steps that we think are required, on the social basis that we talked about earlier on. I'm not trying to suggest that somehow we will come and save the day if they have serious problems. I'm just saying that we accept your argument with regard to mitigation, and you've got to accept our position through Hydro that it's not necessarily in our interest to draw that reservoir level down too low, because of the benefits that accrue from the power that's produced there. That's part of the equation and the balancing act that we have to engage in ourselves, and we will engage in it.
Finally, if it is your purpose -- which I'm sure it is in part -- to come here and make a case on behalf of your constituents for us to be aware of the situation and to take some steps to try to look after their interests during the course of the next year, then you've made your point.
[11:15]
[ Page 5812 ]
J. Weisgerber: First of all, let me say that the arbitration decision, just to clarify it, came at a point after all of those facilities were in place. So the decision as to where to put the outflows and intakes was taken on an understanding between Hydro and the parties involved. In a later dispute there was arbitration, I'll grant that. But let me also say that I believe sincerely that the province and Hydro should do everything in their power to avoid drawing down Williston Lake to that 2,115 or thereabouts. It's a reservoir, and so that option should be there only in a really serious emergency. If we draw down in 1994 to 2,115, I don't think there's any guarantee that the moisture levels will ensure that it fills back up again in the next year, or the year after. It seems to me to that it's almost as easy to keep it at 2,150 as it is at 2,115, except that you get that one-time drawdown.
My point is that I sincerely hope that the government and Hydro take whatever action they can to avoid that drawdown, and to put again on the record that I regret the government decision to avoid taking advantage of wood waste cogeneration -- independent power production -- which I believe could have eliminated the need for that drawdown.
In closing, I want to thank the minister for bringing the Hydro people here. I think they have added a good deal to the discussion. I'd like to thank Mr. Thompson and Mr. Hunt for making themselves available this morning.
W. Hurd: I have a series of questions on Hydro, specifically on the representation made by a joint industry steering committee on the latest rate increases at Hydro. The steering committee has pointed out that one of the parameters for these rate increases is that the Hydro corporation earn a rate of return comparable to that of a private utility. In assessing rate increases for industry, is that an accurate statement? Is a determination made based on what a private utility would charge in similar circumstances?
Hon. M. Sihota: Are you asking whether we predicated the formula that we developed on what comparable utilities in the private sector would be achieving in terms of rate of return? Is that basically what you're asking?
W. Hurd: Yes. The rate of return is the impression that the major industrial users have of what they should be paying, or what Hydro should be charging them for a rate increase. My question is: how does Hydro compare rates of return with private utilities, and which private utilities might they use in making that determination?
Hon. M. Sihota: I just wanted to check my memory, because I answered the question the other day in Hansard, and what I said stands. We took a look at the rate of return by other comparable private sector utilities, and we looked at a whole range of options. We looked, for example, at WKPL, we looked at UtiliCorp, we looked at Westcoast Transmission, and we looked at B.C. Gas. At the end of the day, the case that we would be making is that the Utilities Commission was predicated on what we see as the rate of return with B.C. Gas and Westcoast Transmission. As the hon. member knows, this is an issue on which the Utilities Commission will ultimately pass judgment.
W. Hurd: So the minister has confirmed that West Kootenay Power and Light is indeed one of the firms that is used to make comparisons. The minister will be aware, then, that the West Kootenay Power and Light is facing a rather dramatic or draconian increase in their property taxes over the current fiscal year -- I believe in the range of $6 million up to $10.3 million -- which the opposition was led to understand could result in a 3 percent rate increase from West Kootenay Power and Light, based on that increase in property taxes alone. Does the minster see any problem in factoring in a firm like West Kootenay Power and Light, which is facing this kind of an increase in its property taxes, whereas a firm like Hydro doesn't have to face that eventuality? When it comes to factoring in the property tax increase, what allowance is made for the differing costs related to government?
Hon. M. Sihota: First of all, I mentioned WKPL. But you have to understand that I listed a whole range of utilities that we looked at. You would be wrong to assume -- and I thought I made this point clear -- that we rest our case on WKPL. I can see where politically you'd want to make that point, but you should know that in terms of our administrative analysis of the issue, you are functioning under a false assumption if you are trying to make the case that we based it on WKPL.
W. Hurd: Mr. Chairman, the industrial users who are appealing the latest rate increase to the Utilities Commission have made the point that in their view the request by Hydro represents a rate of return more than double that which a private sector utility would expect to earn under similar circumstances. Surely, if the major industrial users of Hydro are under the impression that the utility is seeking to, in essence, double the rate of return from the private sector, these types of issues, with respect to West Kootenay Power and Light and other private utilities, become of critical importance. When one of the utilities being used in the ministry's comparison is facing a draconian increase in property taxes in the range of 75 percent, that has to give credence to the claim by the major industrial users of Hydro that apples and oranges are being compared here when it comes to Hydro's application to the B.C. Utilities Commission to increase its rates. Can the minister give the committee categorical assurance that these types of comparisons are comparing real cost between private utilities and Hydro -- not issues like property tax, which Hydro doesn't have to deal with?
Hon. M. Sihota: The answer to the question is yes. You should remember that it's based on the return on equity, which isn't affected by property taxes.
W. Hurd: I'm sure the minister would welcome the opportunity to correct the impression of this coalition
[ Page 5813 ]
of major industrial users -- the Joint Industry B.C. Hydro Steering Committee -- which is comprised of forest, mining and electrochemical producers. It's a broadly based group of Hydro customers who are convinced on the basis of their appeal that Hydro is seeking a rate of return more than double that of a privately owned utility.
I ask the minister to assure the committee that these industrial users are wrong in their impressions. Or, indeed, what kind of increase are we in fact dealing with?
Hon. M. Sihota: A couple of points. First of all, these issues are not resolved here; these issues are resolved before the B.C. Utilities Commission. If they want to make their case, as the hon. member says they are, then they make their case there. It's not for that case to be made here; this is not the Utilities Commission. They have some difficulties with the way in which we've looked at the return on equity, and they make their argument. If they have concerns about the range of companies we looked at in putting together that rate of return, then they make their argument there.
It's becoming increasingly apparent, as I listen to these estimates, just who the Liberal Party speaks for. Given the fact that we've taken some measures with regard to this situation to protect the consumer interest, in terms of capping them -- for reasons we've already amplified on during the course of these estimates -- it's obvious that the Liberal Party stands not with consumers but with the major big business conglomerates within this province. I guess that's only to be expected, given the difficulties that party has with its fiscal situation, in its desire to become a force in B.C. politics.
W. Hurd: I'm sure that the Joint Industry B.C. Hydro Steering Committee will be interested to read those comments in Hansard, that they're being singled out by the minister to, in short, give a break to private Hydro consumers.
But I think there are some issues with respect to the Utilities Commission which have to be raised in conjunction with this debate. My understanding is that the rate increase has taken effect on April 1, 1993, regardless of the progress of appeal through the Utilities Commission. He can confirm that as of April 1, 1993, the 3.9 percent increase and the $79 million increase have in fact taken effect and would only be rolled back by the Utilities Commission in the event of a successful appeal. That's obviously the scenario we're dealing with.
Hon. M. Sihota: I know the hon. member is a leadership aspirant for the Liberal Party, and I guess he must have been out doing his fundraising, and that's the reason behind all these questions. But I note that the....
Interjection.
Hon. M. Sihota: I appreciate that it bothers at least one of the Liberal members here, but that's to be expected, hon. Speaker, because those are the realities of politics. Let me say that I understand the group originally suggested $200 million; and now you're suggesting $179 million -- a figure that's probably a little more realistic. Secondly, let me also say....
The Chair: The hon. member for Fort Langley-Aldergrove on a point of order.
G. Farrell-Collins: I just don't want to leave unchallenged that comment by the minister. To insinuate somehow that the credibility of the member for Surrey-White Rock is impugned by the fact that he's a leadership candidate and is bringing forth the concerns of individual citizens or groups of citizens in British Columbia is unfounded and unnecessary. I think the minister should withdraw that comment.
The Chair: Your point of order is heard by the Chair, and I'm sure if the minister had in any way intended to impugn the character of the member for Surrey-White Rock, he would consider carefully the answers that are to come in the rest of the estimates.
Hon. M. Sihota: I would think that the hon. member would want to take some credit for the fact that he's out raising money among big business, given his political alliances.
In any event, with regard to the issue that is canvassed here, it is true that there was an interim rate increase, effective April 1. As the hon. member knows, there's the opportunity for the Utilities Commission, after hearing the case, to roll that back, as they have done with other utilities.
W. Hurd: As I look at the release by the Joint Industry B.C. Hydro Steering Committee, I know the minister has no empathy for industrial users of Hydro. He has certainly indicated that in this debate. But I think that there are some rather serious claims being made by these major industrial customers of Hydro. I quote: "The hydro application has deviated from normal regulatory accounting practices by redefining its equity in a way in which a private utility would not be allowed to do."
[11:30]
I would certainly welcome some clarification from the minister. I'm sure he would seek the opportunity to assure all Hydro customers, particularly industrial users, that in fact Hydro is not engaging in accounting practices which are different from a private utility. If it is seeking to set a rate structure based on the private utility as reference point, Hydro customers have to be assured that the comparisons are valid and that they are undertaken according to normal accounting practices. I'm sure that all members of the House, be they leadership candidates or not, would be interested in hearing the minister's assurances that at-normal comparison is being made.
The Chair: Hon. Minister, with an eye on the clock, and in view of the sessional orders point no. 5, the Chair would entertain a motion to rise, report progress and ask leave to sit again.
[ Page 5814 ]
Hon. M. Sihota: With the eye on the clock -- at 11:29 and a half -- if I can, I will take just 30 seconds to answer this questions.
A number of points need to be made on the hon. member's suggestion. First, all he is doing is reciting the case that the users are pleading before the Utilities Commission. I expect them to make -- with vigour -- the arguments he's reciting here, and I am sure they will. That's the venue for them. He knows that, and for me to acquiesce to that argument or to reject it out of hand is showing disrespect for the Utilities Commission. The commission will deal with those arguments when they are made with full force and effect at that level, and he knows that. If he doesn't know that, he knows it now -- and therefore understands the process better.
Second, let me say that with Hydro we have enjoyed some of the most competitive and lowest rates in North America -- certainly within Canada. The benefits we provide to industrial users are significant. In British Columbia since the mid-eighties -- as I was saying the other day -- inflation has gone up about 40 percent and rates have fallen by about 14 percent. Of the $80 million being raised here, about $18 to $20 million will impact on industrial users, so it is about one-third of the potential cost should the application in its current form be approved by the Utilities Commission. That demonstrates some empathy for the industry. We recognize the competitive advantage we give the industry with the lower rates we provide and the excellent services provided to B.C. Hydro.
With that said, Hon. Chair, I move that the committee rise and report progress, and seek leave to sit again.
Motion approved.
The Committee rose at 11:32 a.m.
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