1993 Legislative Session: 2nd Session, 35th Parliament HANSARD

The following electronic version is for informational purposes only. The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, MAY 6, 1993

Afternoon Sitting

Volume 9, Number 19

[ Page 5939 ]

The House met at 2:03 p.m.

E. Barnes: I have the pleasure of introducing seven of the interns who will be starting their duties in 1995. They are here with the program director, Mr. Paul Tennant. The students are: Nicole Boyer, Kim Chan, Lisa Dumbrell, Wayne McIlroy, Gian Paolo Panusa, Sarah Reder and Caroline Welling. I would like the members to join me in making them welcome.

Hon. A. Petter: I rise to welcome to the House some of the 146 high school students from the Sacramento Adventist Academy who shared their beautiful voices with us today in the rotunda from 1:00 to 1:15 p.m. This choir from Sacramento is on a performing tour through the western United States and western Canada. In particular, I'd like to welcome Robert Thornton, the choir director, and Richard Carey, the school principal, who arranged for the performance of the choir. I hope they have a wonderful trip through British Columbia. I would ask the House to join me in welcoming them.

L. Reid: I have the distinct privilege this afternoon of recognizing the birth of the newest Jarvis in the clan. Emily Jarvis is the newest granddaughter of our MLA from North Vancouver-Seymour, and the sixth generation of Jarvises in the province of British Columbia. I wouldd ask the House to please make her welcome.

S. Hammell: I rise to introduce Ansa, Claudio and Dino Bulfone, constituents who are visiting Victoria with Ansa's sister, Gunnel Noren, who is from Sweden. Would the House please make them welcome.

J. Pullinger: On behalf of my colleagues from Parksville-Qualicum and Nanaimo, I would like to welcome a couple of good friends -- good New Democrats and really good golfers -- who are with us today in the gallery: Betty and Owen Kennedy. Would the House please help us make them welcome.

Introduction of Bills

INDEPENDENT SCHOOL AMENDMENT ACT, 1993

Hon. A. Hagen presented a message from His Honour the Lieutenant-Governor: a bill intituled Independent School Amendment Act, 1993.

Hon. A. Hagen: The amendments to the Independent School Act include both substantive and technical changes. One significant amendment provides for the elimination of funding for group 3 independent schools. Group 3 schools will be joined with group 5 schools to form a new unfunded group 3 classification. In addition, the preamble is amended, and changes are made to clarify the powers of the minister with respect to grants, materials and services provided to independent schools.

I move the bill be read a first time now.

Bill 20 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

SCHOOL AMENDMENT ACT, 1993

Hon. A. Hagen presented a message from His Honour the Lieutenant-Governor: a bill intituled School Amendment Act, 1993.

Hon. A. Hagen: This bill provides for a number of amendments. The preamble is amended to more fully reflect the government's education principles and goals. There are a number of miscellaneous amendments dealing with such matters as: entitling parents to receive a copy of a student record; authorizing administrative officers and superintendents of schools to suspend students in accordance with board policies; provision of a standard provincial school calendar; the tax status of school board properties; coordination of planning for school facilities between school boards and local governments; and various other house-keeping amendments.

Hon. Speaker, I move the bill be read now a first time.

Bill 19 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

CORPORATE CAPITAL TAX

F. Gingell: The Premier, when in Hong Kong recently, stated that the corporate capital tax was giving British Columbians "a sense of hope." Other than being a city at the far eastern end of the Fraser Valley, would the Premier please define hope?

Hon. M. Harcourt: Yes, it is east of Chilliwack, and yes, it is a town in Arkansas. I think what the people of this province are seeing in this government is the politics of hope. We'd hope to get on with the politics of hope if the opposition wouldn't stall one of the great initiatives in this province, which is B.C. 21, so we can get building the transit systems, the highways, the bridges, the courthouses and the schools that this province wants to see.

F. Gingell: The Premier in Hong Kong was also quoted as saying the tax is a swell idea, that it might remain after its debt reduction purpose has been achieved. In view of our need for economic development in this province, and on behalf of all British Columbians, will you please bring in recall legislation?

[ Page 5940 ]

BUY B.C. ADVERTISING CONTRACT

F. Gingell: My third question is still on the question of economic development in this province, and is to the Minister of Agriculture. First of all, I would like to apologize for our critic asking him a question on Tuesday, but today is Thursday, and I certainly hope that he is now briefed, in all senses of the word. Will he now allow Palmer Jarvis to make a submission and an offer on the Buy B.C. advertising program?

Hon. B. Barlee: Palmer Jarvis was in this equation. They were one of the four companies; they were given a reasonable chance.

This question rather surprises me for several reasons. First of all, if you had checked with the minister's council, which is 16 individuals ranging from the business community right down to the unions, every one of those people is on side. That was my privilege to overrule their recommendation. This is a Buy B.C. program; it's good for business, it's good for the farmers, and it's good for the consumers of British Columbia. I think it has to remain that way. We have submitted 12 contracts so far. Out of those 12, 11 of them are B.C.-based and B.C.-owned companies, small and medium-sized companies that deserve our business. This program is designed to keep money and jobs in B.C., and everyone who is on my board agrees with it.

LABOUR RELATIONS BOARD APPOINTMENT

G. Farrell-Collins: My question is to the Premier. I would like to quote from the NDP election platform, which he touted around this province. I know he's forgotten what it says. It says: "You won't need an inside track to get fair treatment from a Harcourt government." Did the manager from the 1991 campaign write this, and does the Premier agree with it?

Hon. M. Harcourt: I'm glad that the hon. member from Langley is finally starting to get some good ideas from the New Democrat platform. They would probably be able to ask some better questions if they were to now pass that on to their researchers.

[2:15]

G. Farrell-Collins: If that's the best defence the Premier has of his election campaign, we're in really bad shape.

I do have a very serious question for the Premier. His Minister of Labour has made an appointment to the Labour Relations Board that has the potential to seriously damage the credibility and the independence of that board. In the best interests of labour relations in this province, will he order his incompetent Minister of Labour and Consumer Services to rescind that appointment today?

Hon. M. Harcourt: The answer is no.

G. Farrell-Collins: We are reaching a point with the Minister of Labour and Consumer Services where not just the opposition but the public at large are losing confidence. Will the Premier please -- I plead with him -- do his government and the people of this province a favour by removing the Minister of Labour from his responsibilities and appointing somebody who can do the job properly?

J. Weisgerber: My question is to the Premier as well. Hans Brown is simply an NDP hack, and he should never have been considered for an appointment to the Labour Relations Board. Does the Premier understand what he has done? Does the Premier understand that this appointment has absolutely destroyed the independence of the Labour Relations Board in everyone's eyes in British Columbia?

Hon. M. Harcourt: I think the Leader of the Third Party is aware that this government has attempted to appoint British Columbians who have the qualifications to be on either the Labour Relations Board or the Vancouver Stock Exchange. Yes, sometimes they are New Democrats in background, as Hans Brown is; and yes, they are Social Credit sometimes, as Mel Couvelier is on the Vancouver Stock Exchange.

J. Weisgerber: This appointment demonstrates an appalling lack of judgment and good sense by the Premier. What special power does Hans Brown have over this government and this Premier that he would risk the independence and neutrality of the Labour Relations Board in order to satisfy his demand for a patronage appointment?

Hon. M. Harcourt: I'm sure that the Leader of the Third Party is aware that Mr. Brown has an extensive background in human resources, has worked for two of the largest organizations in this province which are important and complex areas of activity. He is one of the leading experts in Canada on human resource classifications and on a number of other areas involving human resources. He is a person who has the qualifications for the role he's now playing.

J. Weisgerber: Last spring this government fired five totally competent, independent vice-chairs of the labour relations council for entirely political reasons. The severance pay for those five chairs cost the taxpayers $1 million. Can the Premier tell us what Hans Brown's conditions of employment are, what kind of severance arrangements he has and who negotiated his contract?

Hon. M. Sihota: There are a number of errors in the argument put forward by the Leader of the Third Party. First of all, with regard to the five people who were dismissed last year, those decisions were not based on political biases; they were based on personnel evaluations. Secondly, with regard to the contract that has been provided to Mr. Brown, it is a standard contract that applies to all members of the Labour Relations Board. Thirdly, I want to make it abundantly 

[ Page 5941 ]

clear that Mr. Brown has had 13 years of labour relations experience in this province.

We as a government will not exclude qualified people from consideration simply because they have been active in our democratic institutions. In the case of Mr. Brown and others, they are qualified to do the job, and they ought not to be eliminated for consideration simply because they did what every citizen should do, which is to get involved in the political process.

CENTRA GAS NEGOTIATIONS

W. Hurd: I have a question for the Minister of Energy, Mines and Petroleum Resources. Can the minister confirm whether her ministry is involved in negotiations with Centra Gas for relief from an estimated $10 million in penalties for non-performance in connection with the Vancouver Island natural gas pipeline?

Hon. A. Edwards: No, I will not confirm that.

W. Hurd: Given the fact that the B.C. Endowment Fund owns 8 percent of the shares in Westcoast Energy, which is a fully-owned subsidiary of Centra Gas, is the minister prepared to have her ministry step back from these negotiations and urge some sort of third-party process that wouldn't compromise the position of the Endowment Fund, given the M-B purchase investigation by the Securities Commission?

Hon. A. Edwards: I have not confirmed that any negotiations are going ahead. That's what I said after the first question.

W. Hurd: Westcoast Energy has acknowledged that Centra Gas is involved in negotiations directly with some arm of this government regarding rate relief on the natural gas pipeline. Given that Centra Gas is in the energy business, can the minister tell us, in her view, which ministry of government they might be negotiating with?

EFFECT OF THE BUDGET ON THE AUTO INDUSTRY

R. Chisholm: Last week the Minister of Economic Development stated that anybody laid off in the aggressive auto industry will be able to find employment. This is to the Premier. Does the Premier have any hot job tips for the employees in Abbotsford who will not be working in a new $3.5 million dealership that has been delayed because of this budget?

Again to the Premier. Auto sales are down by 40 percent; subsequently, your revenues will be down by the same amount. Corporate capital tax revenues are down. Provincial sales tax revenues are down. Employment and income tax revenues are down. Will the government reverse this destructive policy before this whole province goes down?

Hon. G. Clark: I'm happy to answer that question because employment growth in British Columbia is two and a half times that of the rest of the country. Our economic growth is twice the rest of the country. This province is doing better than anywhere else in the country, the prospects are brighter than anywhere else in the country, and this government can take some credit for the strong growth we see coming over the next few years.

LABOUR RELATIONS BOARD APPOINTMENT

L. Hanson: In researching some of Hansard, I came across an interesting fact. The Minister of Labour told this House that personnel matters and matters of contractual arrangements with those who are working with the Industrial Relations Council, are dealt with through Mr. Lanyon's office. The question I have for the Minister of Labour is: why hasn't Hans Brown's contract been negotiated in the same manner, through the Labour Relations Board? Would the minister let this House know what personal involvement he had in the negotiation of Mr. Hans Brown's salary and terms of employment?

Hon. M. Sihota: Negotiations with regard to salary and terms of employment have not taken place between this minister and Mr. Brown. Any negotiations with regard to salary and terms of employment -- I take it you mean by that benefits and that kind of stuff -- are all matters that are negotiated between Mr. Lanyon and Mr. Brown. Secondly, I want to make it abundantly clear that this is an inclusive government that welcomes British Columbians from all walks of life to be active in public service. We welcomed Mr. Brown to be involved on the Labour Relations Board in much the same way as we welcomed Mr. Couvelier, the former Social Credit Minister of Finance, to be involved on the Securities Commission, and in much the same way as we welcome Mr. Gordon Gibson, the Liberal leadership aspirant, to be on the B.C. Trade and Development Corporation.

Ministerial Statement

SECURITY DEPOSITS FOR INCOME ASSISTANCE RECIPIENTS

Hon. J. Smallwood: As minister, I believe it is critical that the Ministry of Social Services apply the highest standards to managing the income assistance system. British Columbians who need assistance for themselves or their families must receive the full support to which they are entitled by law. At the same time, taxpayers must have confidence that benefits are only going to those who are legally eligible. Concerns have been expressed about security deposits provided to people on income assistance. We are working to bring immediate remedy to any abuse, and are actively reviewing legislative changes with the Minister of Consumer Services. In this time of economic hardship for many of us, I am angered and outraged by the attempt of abuse or of fraud of the welfare system. 

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Fraud wastes taxpayers' dollars. It brings the entire welfare system into disrepute. With thousands of British Columbians who legitimately find themselves in need of help, it reduces the funds available to people in need and victimizes people who are living in poverty. It places extra pressure on the ministry's hard-working financial assistance officers around this province.

As the welfare caseloads have grown, ministry workers have been on the front lines providing help to those in need of help, counselling and supporting people to move from welfare back to work, and defending the system against fraud by screening out any false applications. I wish to assure this House that the ministry's financial assistance workers are doing a massive and difficult job, and they are doing it well.

Over the past year the ministry has introduced many new tough measures to crack down on welfare fraud. Computer technologies identify claimants applying for income assistance at more than one of our offices. Electronic monitoring tells us the number of income assistance cheques being delivered to any one address. Canada Post now returns cheques to our offices to be identified and reviewed, rather than forwarding them on to new addresses. Any of these actions will trigger an investigation.

We are working with Employment and Immigration Canada and the Workers' Compensation Board to identify double-dippers -- those individuals who claim income assistance in addition to benefits from other agencies. We're working with the provincial vital statistics division to ensure that false identification papers are much harder to obtain. Staff are receiving extra training to help recognize counterfeit documents. Unique characteristics have now been built into our welfare cheques to make them extremely difficult to counterfeit.

[2:30]

My ministry employs 35 investigators who, in conjunction with various police forces and regional Crown counsels, investigate and prosecute cases of alleged fraud at locations across this province. Every allegation is reviewed, including anonymous complaints from the public. In 1992 the ministry's fraud detection program recovered $4.7 million from those who attempted to defraud B.C. taxpayers. During the first month of this year, for instance, we concluded investigations on 646 cases. Ministry investigators are now providing me with a monthly investigation report which outlines major causes of fraud and investigations and charges initiated during the month. I wish to thank the many police and RCMP officers who are daily working closely with my ministry's investigators to safeguard the integrity of the B.C. welfare system. But sophisticated technologies are increasingly available, making crimes like counterfeiting easier to perpetrate and more difficult to detect. This problem is not confined to the B.C. income assistance system. Technologies such as laser printing and copying are posing even greater risk to the unemployment insurance system, passport control, and banks and credit card companies.

Today I am announcing the formation of an additional five-person special investigations unit which will be based on the lower mainland. Working closely with the police, this unit will focus on major fraud investigations involving income assistance clients who collect benefits under various names, and it will cooperate with our field investigators on major cross-jurisdictional crimes. Moreover, we have reached an agreement with my hon. colleague the Attorney General to provide a senior Crown prosecutor, associated with the Attorney General's crime unit, to work with my ministry to expedite and ensure effective prosecutions of those alleged to be defrauding the income assistance system. This person will work closely with a special investigations unit to address significant major prosecutions, such as the recent laser counterfeiting of government cheques.

As caseloads rise, the challenge of safeguarding the system grows. Ministry staff and resources have been stretched to the limit to meet this challenge, so we have upgraded our computer technologies to provide staff with immediate, on-line provincewide databases. My ministry has implemented new procedures which can identify errors or misunderstandings affecting the level of benefits to which clients are entitled.

We will continue to deliver the highest quality service to those individuals and families whom our legislation is designed to help. We are committed to ensuring that those people get their full entitlement as they try to weather the storm of economic restructuring and recession, and move again from welfare to work. Be assured that we will be vigilant in addressing any allegations of abuse or fraud, and we will take necessary action to ensure the integrity of British Columbia's social assistance network.

V. Anderson: I rise in response to the ministerial statement. Over the past weeks and months there has been growing concern about the ability of this ministry to manage the program. There has been a concern about its ability to meet the needs of those who must rely on this ministry for support and at the same time provide the kind of support which corrects the abuses that the system itself seems to generate.

We commend the opportunity to detect where there is abuse and to correct this abuse. But we're angered and outraged -- as even the minister has said -- when some of the abuse -- in fact a great deal of it -- comes from the management of the ministry itself. We hope the ministry will be looking inwardly as well as outwardly, because I am sure they will discover that many of the causes are within the system itself.

This past week people have contacted us, and we are concerned about how the minister defrauds those who should be receiving help from their spouses through maintenance payments. When these payments are paid in arrears rather than when they are due, the minister takes from those people the very payments which are rightfully theirs, instead of working them out over the months when those payments should have been properly paid. This in itself is a victimization of the people in the province who are having the most difficulties: single parents with families. They have already had a breakup and expect the government to 

[ Page 5943 ]

support them, not continue the victimization. Maybe they will look inside when they are undertaking these.

I am delighted that the minister has indicated there will be better staff support, because the staff has certainly been overburdened. Probably the greatest complaint we have heard over the weeks from people who are dealing with the staff is the victimization in their lineups, the victimization in having to meet people who do not have the time or the opportunity to give them the respect they need.

Yes, we do need to correct those people who are defrauding the government. But we are very cautious, because we have a New Democratic Party that very easily may become the new detective police force of this community. We are concerned that in the government's undertaking to correct abuses that are there, the people in the province who are dependent on the system will not themselves be further punished, further victimized, because they will not be given the opportunity to maintain their privacy and will be under the kind of observation and harassment that will deprive them of the very independence they seek.

We encourage the minister, who has responded to the large number of cries in response to the abuse of this system. We're glad she's moving to overcome the abuse, but we hope she will continue to look inward rather than outward for many of the causes.

R. Neufeld: I'm pleased to see that the Minister of Social Services is finally, after about 18 months, responding in a way to allegations about fraud in the welfare system.

It's not surprising to us that an NDP government, a socialist government, would increase the budget over two years by about $900 million, or 40 percent, and then all of a sudden put a light on and say: "Hey, we're going to investigate fraud now that we have the budget way up." But it's obviously time that she listened not only to the opposition's wishes about investigating fraud within the welfare system but the wishes of the people in the province of British Columbia. I'm sure she has received many letters, and so have I. I've read many letters in the newspapers from people who are upset about the social assistance program in B.C. and the fraud that takes place within it.

I want to thank the minister for giving me a copy of her speech earlier. I noticed that she started part way through it and left out: "Misdirected federal policies are part of the problem." It's typical of this government to blame it on everyone else. She also left out: "Ten percent of British Columbians need provincial income assistance to meet their basic needs."

We just listened to the Minister of Finance talk about how many jobs are being created in British Columbia and about the fact that our growth rate is two and a half times that of rest of the country, and everything should be great. But why do we see almost a $1 billion increase in the Social Services budget? I'm not saying that's all fraud, but a socialist government will encourage that type of dependency on social assistance. Creating an economic climate that will encourage investment is the way to get people off of social assistance and back to work.

I assume that part of the reason the minister got up in the House and talked about appointing a five-member task force to help the police and her other investigators look into welfare fraud has to do with the internal report that went from the AG's ministry to her ministry, which told the minister that there was an awful lot of fraud within her ministry. I hope that wasn't the only thing that made her decide to look into fraud in the Social Services ministry. Maybe it was because of pressures from the public, saying that there is fraud within the system and that we have to get it under control.

It's not an easy job. There are those who need assistance, and I certainly agree that we need a system in place to take care of those people and to help them get them back on their feet again. That's what the system was designed for. I hope that this new five-member panel, whoever it's made up of, will be able to work very closely with the police and the rest of her organization to try and quell the fraud within the ministry.

C. Serwa: Hon. Speaker, on a point of order with respect to ministerial statements. While ministerial statements are not contained within our book, nevertheless there are policies with respect to those statements. Taking a little over seven minutes for her statement, the minister far exceeded the content with a lot of platitudes and rhetoric rather than substance. The purpose of them is to describe to the Legislature new or altered policy. The hon. member of the official opposition also took an exceedingly long time. In the book on parliamentary practice it does state that each of such statements should be brief, factual and specific. I would suggest that the minister be cognizant of this and that the responses be made accordingly.

The Speaker: On the point of order, the Minister of Finance.

Hon. G. Clark: If we were to restrict all comment in the House to substance and not rhetoric, then the opposition members would be silent all of the time.

The Speaker: I want to thank both members for their submissions on the point of order. While the Chair recognized that the minister's statement was perhaps longer than other ministerial statements, the Chair also notes that the response time was also proportionately longer. While there might have been some leeway given in the minister's statement, the Chair hopes that there was equal leeway given in the responses to the ministerial statement.

Orders of the Day

Hon. G. Clark: In Committee A, I call Ministry of Attorney General estimates, and in Committee B, I call the committee stage of Bill 3, the Build BC Act debate.

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BUILD BC ACT
(continued)

The House in committee on Bill 3; E. Barnes in the chair.

[2:45]

On section 7.

Hon. G. Clark: I think the leader of the Liberal Party has been briefed by my staff, but the real question is whether moneys can be transferred from ministry votes to the special account. The answer is no, categorically. Section 20(2) of the Financial Administration Act states: "No sum appropriated by a Supply Act shall be paid and applied to any purposes other than those described in the estimates of revenue and expenditure, or in excess of the amounts contained in the estimates of revenues and expenditure." Since the purpose of the vote description in a ministry does not or would not contain a provision to transfer moneys to the special account, such a transfer could not take place. The purpose of section 7(b) is actually to provide accountability to the Legislature. In order to increase the funding in the special account, a vote must come before and be debated by the Legislature.

F. Gingell: I'm a little confused, because when you go through the estimates and you get to page 220 regarding Build B.C., which deals with the $100 million, that's not part of a vote; it's a special account. Under what vote will the $100 million transfer be appropriated?

Hon. G. Clark: That's correct. In future years it will be a vote. That's what I tried to say. In this year, the $100 million is specified by legislation, which is the only way you can do it if you don't have a vote in the House. This $100 million is not part of the Supply Act. This is a special account by legislation. That's why this section is here. In future years it will require a vote of the House.

F. Gingell: I guess that we have just been given official notification that the deficit budget for this year is not, in fact, $1.535 billion as the minister keeps saying; it's $1.635 billion.

Hon. G. Clark: No, absolutely not. It's part of the consolidated revenue fund. The special account is taken into account. The $100 million comes within the deficit number of $1.535 million.

F. Gingell: I appreciate that we haven't got to section 8(2) yet, but perhaps this is an appropriate moment for you to explain that.

Hon. G. Clark: Can we leave it until section 8?

F. Gingell: We can do it then, yes.

I take it then, from these explanations that we have now, that the only money that will be available to the Build B.C. special account for this year is $100 million. There's no other means by which money can be moved into the special account.

Hon. G. Clark: That's absolutely correct.

F. Gingell: All of the things that are dealt with in section 2, "Purposes," are, I'm sure, greater than $100 million. So section 2 and the Committee on Building British Columbia's Future will have what seems to be a much greater role in dealing with ministry expenditures and Crown expenditures than they will with the $100 million. After all, the $100 million is less than 1 percent of the total provincial budget.

Hon. G. Clark: It's been my experience that with virtually anything in government there is more demand than the resources applied to it, so you're quite correct that you could spend a lot more than $100 million on these projects. That's why we have the authority of the House to restrict and constrain. It means that the committee and Treasury Board, reviewing expenditures out of the special account, will have to apply a great deal of rigour and prioritization to the competing demands for this money. But beyond this $100 million, the member is correct in saying that it also means, if the broad agenda of government is to promote training particularly and getting people off welfare and into work -- if that's not the number one priority, then it's a major priority of the government as envisioned in this act -- then any spending plans by other ministries.... The committee may want to review other initiatives to see if there are ways in which we can spend smarter and try to achieve these goals of training and the like in all areas of government.

Realistically speaking, there are four components of this bill. We've talked about them. That will occupy the committee's time, I'm sure, for some time to come. The special account is $100 million for this fiscal year.

F. Gingell: I'm sure you recognize that we agree with the things you're trying to do. We just don't agree with the manner in which you're going about it. We're concerned about the creation of a new bureaucracy. We believe you should be encouraging ministers; you don't need to create another Crown committee for the purposes of doing it.

To state our case, I would like to move the amendment that stands in my name on the order paper, which purports to reduce the amount of the opening balance from $100 million to $1 million. This would cause you to ensure that all these good things that you believe in so strongly would be done within their own ministries and Crown corporations, and that they would be done in the various Crown agencies without creating an additional bureaucracy. I commend that amendment to you, and I hereby move it.

On the amendment.

[ Page 5945 ]

J. Weisgerber: To follow through on the intent of the section as amended, I was under the very strong impression that the purpose of this whole bill, which indeed falls under this section, was to be able to borrow and capitalize.

The Chair: The matter you are introducing is appropriate under a later section of the bill.

J. Weisgerber: Okay. I'll defer my comments until that time.

I was responding to a comment by the minister that the only money it would have available to it is the $100 million referred to in subsection (a). But without wanting to enter into a debate, obviously, if the corporation can borrow money, then it has available to it $100 million plus whatever it goes out and borrows.

Hon. G. Clark: Just briefly I'll try to explain it. We've had a lot of discussion on this. Any money borrowed by the Transportation Financing Authority will be done by the board of directors of that Transportation Financing Authority for the purposes of highway construction or the like, which will be determined by priorities of the Ministry of Highways. The Committee on Building British Columbia's Future will be establishing training criteria and other criteria which, working with that Crown corporation, they will apply to it. The committee also has, in addition, $100 million in the consolidated revenue fund -- part of our fiscal plan -- which they will make recommendations on how to spend. This is totally separate and distinct from the Transportation Financing Authority.

J. Weisgerber: Fine. I wanted to make sure that there was no misunderstanding around the amount of money and the sources of revenue that were available to the corporation under this legislation.

Hon. G. Clark: It's not a corporation, it's a committee.

J. Weisgerber: Well then, perhaps I do require some further clarification. The minister says that we're not talking about $100 million being available to a corporation, the Build B.C. corporation. We're talking about $100 million being available to the committee to prioritize spending in line ministries. Is that what the minister is saying?

Hon. G. Clark: That's closer, yes. They are not going to actually spend the money, but they'll make recommendations to line ministries on spending the money. The Transportation Financing Authority this year has the authority to borrow $80 million for transportation initiatives. The role of the committee will, then, be simply to scrutinize the spending to see whether it's possible, without any incremental cost, to impose training and other criteria on that spending initiative.

J. Weisgerber: Fine. What I understand, then, is that we're setting up a form of contingency account, giving the committee the authority to recommend spending out of it, and that it's peripheral to the core issue around Build B.C.

Hon. G. Clark: It's not peripheral at all. It's the key component of Build B.C. in the way you've described it -- as a separate special account. Ministries can access or bid on or compete for it to achieve the purposes of this, which are, again, regional diversification, getting people off welfare and into work, training, apprenticeships and those kinds of things. Then the committee will adjudicate competing requests from ministries and, in fact, attempt to foster their own. But it is not a corporation. It's a committee which is composed of members of cabinet as well as members of the Legislature.

G. Wilson: Simply one comment. I think the minister would recognize that the amendment is beneficial, that we now have an opportunity to have a better system with respect to the allocation; also, that the question of expenditures from this special account, which we get into in the next section, would benefit by the amendment as it is proposed. So it's a perfectly sensible way to proceed.

Hon. G. Clark: If this amendment were to pass we could not do innovative new programs within the base budgets of ministries. We have tried to.... We will do some, and within existing plans....

Interjections.

Hon. G. Clark: The members are correct, but what the members are saying by this amendment is they are not in favour of any spending coming out of this special account this year. I understand that position. I disagree with it. This is incremental, targeted funding for regional diversification, for regional development, for getting people off welfare and into work, for dealing with training initiatives and education initiatives around the province, and for dealing with silviculture -- new programs, again, targeted to social assistance recipients. The members are saying they are opposed to that. That's fine. I'm glad it's on the record.

G. Wilson: I don't want to have the last word battered back and forth ad infinitum. I think what the minister misses saying is that.... Yes, that's true, you couldn't spend out of this account, but all of those programs that he's talking about can and should be done through line ministries. This opposition is not stopping expenditure on those innovative programs. What it's saying is: be innovative within line ministries. This amendment does that and allows for it.

Amendment negatived.

Section 7 approved.

On section 8.

[ Page 5946 ]

F. Gingell: I have an amendment to propose.

[SECTION 8, subsection (1) to be amended to read:

Subject to the approval of the Legislative Assembly, and on the recommendation of the chair of the committee, money may be paid out of the special account for projects and initiatives that are consistent with the purpose of this Act including without limitation

(a) community level capital projects,

(b) employment and job training initiatives,

(c) resource enhancement initiatives,

(d) infrastructure initiatives, and

(e) costs associated with the administration of the special account and committee.]

We are concerned about the reporting process involved here. We don't think the money is being voted in the normal course of events -- through a supply vote -- but is being created by this bill. We think it is important for all members of this Legislature, particularly those who live in the less urbanized areas, who are concerned about regional development.... We are trying to encourage you to create as much reporting process between the committee and this Legislature. After all, it is the legislators that are elected to be concerned about these issues. The most practical and easiest way is to allow the Legislature, through a series of votes, to authorize these expenditures. When we deal with the estimates of the Ministry of Finance or the Ministry of Agriculture or any of the other ministries, we have the opportunity to get into very specific discussions about what those ministries' programs are. The intent in this amendment is to cause you and the committee to actually bring the proposals forward to this Legislature.

[3:00]

I appreciate that you're not going to have all the i's dotted and all the t's crossed, or the trees planted. But it would require you to have it thought out before you started off, rather than just saying: "Here's $100 million. We're going to put $17 million into this and $20 million into that, and we'll see what we'll do in the future with the other $63 million." You would bring it to the Legislature, get it approved in general terms, let us all understand what is going on, and proceed from there.

Hon. G. Clark: The member is actually arguing against some of the positions he has taken, and I'll explain why. The member said at the outset: "Why don't you just give more money to the line ministries to pursue these functions?" If we had done that, there would not be any legislative scrutiny -- as there isn't in the House. When members of the House approve a budget for a ministry, they don't approve, within that budget, how much is spent on micromanaging the funds. The members of the House don't decide on the allocation of resources within a budget; that's done by ministry management personnel and ministries, and you can question them.

The way this is designed gives more scrutiny to the House than the way you suggest, because now there are two approval mechanisms. The Build B.C. committee must approve expenditures from the account or recommend approvals. Then it goes to Treasury Board to be approved. By removing Treasury Board's approval and bringing it to the House, you're saying that every microdecision and any expenditure decision made has to be with approval of the House, and no ministry goes through that. This gives better tests, because we've isolated it as a special account, and you can ask questions every year on just the details of that $100 million. If the Minister of Finance or Treasury Board gave another $20 million to the Ministry of Social Services -- so instead of being $2 billion, their budget was $20 million higher -- it would receive no extra scrutiny from members on the other side of the House. But now we've taken that out and put a specific fund in place, a special account that has to be approved by the House every year. Every year you can ask questions in the House of the minister responsible.

If operational expenditures from the special account had to come here every time for approval, it would hamstring the organization. It would be bureaucratic; it would not be functional. And furthermore, the Financial Administration Act requires Treasury Board approval before expenditures. So I say with respect that you're talking out of both sides, hon. members. If you want to do it by line ministries, then we could do it that way -- the member is correct to some extent -- but it would have less scrutiny than the way we have designed it, which requires legislative approval and questions in the House every year on this initiative.

F. Gingell: That's fascinating because if an expenditure can be made by a line ministry, it is in the vote and we have the opportunity to question those things, as we do every time. Now we can go into the estimates debate and get very specific answers about the way money's going to be spent. That's where the problem is when we ask questions in this particular case. There's $17 million going back to the small business forest enterprise program: there's going to be $20 million expended on the special silviculture program. I understand you're going to spend quite a bit of money on a whole bunch of Build B.C. 21 signs -- the paint is dry; they are all ready and just waiting to go. I presume you're going to start one of the employment programs to have people go and dig holes to stick up all these wonderful signs. That's probably what the announcement is about -- you want to make them. Well, we're not able to get any answers about the remaining $63 million, and....

C. Tanner: It's a pig in a poke.

F. Gingell: A pig in a poke -- thank you. So some other process that does allow us to have a much better feel for the way government's going to spend the taxpayers' money would be better.

C. Tanner: The minister just made reference to the Financial Administration Act, and in this very section that he's talking about, he's overriding the Financial Administration Act. The section he's overriding says: "Where a supply act and another act each contain an appropriation of the same purpose, no money should be paid out...."

[ Page 5947 ]

Interjection.

C. Tanner: Well, it's appropriate to what the minister is saying. He justifies what he's doing by saying that there's a better perusal of the accounting in another place. But that's not true. You won't tell us what you're spending the $63 million on. You've gone to a lot of trouble to override the Financial Administration Act -- written to protect the public's funds -- and that's the only way you can get this new bill into place.

Hon. G. Clark: Well, I don't mind dealing with section 8(2) as well, although it's not quite on the amendment, but we could do it all at once. Section 8(2) is essentially a technical amendment that does not exempt this special account from the Financial Administration Act at all. It is exempted from one section, and I'll explain why. Technically now, under the Financial Administration Act, you cannot spend money out of a special account until you've exhausted your supply for a program that may be of similar purpose. It means that we could not do a silviculture initiative out of this special account until we'd exhausted all of our silviculture budget in the Ministry of Forests. Even though it's quite a differently designed program, etc., it has the same generic terms. Technically speaking, we needed an amendment to allow us to spend from the special account coincident with spending in ministry areas under the supply act. So it's really a technical amendment.

C. Tanner: I appreciate what the minister said, and I understand why he's doing it, but I don't like that. In fact, if you were following normal practice and not working with this special bill and special funding source, we wouldn't have this problem; you wouldn't have to override the Financial Administration Act. The Financial Administration Act protects the members of this Legislature, particularly on this side of the House, from the very thing that you're doing. They don't want you to take any money out of this plan until you spend it out of that plan. What concerns me and the members on this side is that you have to override something as important as the Financial Administration Act to do what you want to do.

G. Wilson: Once again, what we're trying to emphasize here -- and I think it's perfectly rational -- is that we should have a greater degree of accountability. What we're attempting to do in terms of this bill is make sure there is not an opportunity to do an end run around expenditures of taxpayers' dollars without thorough and proper scrutiny by elected members. The fact that it doesn't happen that way in other ministries or other jurisdictions through different acts is no reason why we should not commence to move in that direction as we now develop this specialized committee to review, direct, reform and -- to use the minister's words -- spend more wisely. Time will tell what wisdom there is in these expenditures. But if that's the general thrust of this bill, one of the ways they might make it more palatable to the Liberal opposition would be to allow this amendment to pass. That would allow the opportunity -- whether it would be exercised to the nth degree, which the minister says we're going to do.... Who knows? We may. But if we allow, through that amendment, the opportunity for us to have greater scrutiny over expenditures, that would make this bill more palatable and easier to accept, given the newness of the concept and the fear that this Build B.C. special account may -- through topping up, through new allocations in new budget years -- simply become a vehicle for the expenditure of greater and greater amounts of social capital without proper scrutiny. That's what this is all about, and it seems to me it's a perfectly sensible way to proceed.

Hon. G. Clark: We're opposed to the amendment. But let me try to reassure members opposite that this enhances accountability; it does not detract from it. We have put in a special account -- separate and distinct, aside from all the ministry budgets -- which has to have approval every year in the House. Every year, unlike trying to deal with the apprenticeship program in different ministries, it will be singled out for special treatment in the House. The minister is accountable in the House, and you can ask for justification for every single expenditure made over the previous year and expenditure approved for future years. I think it enhances accountability; it does not detract from it.

[3:15]

Amendment negatived on the following division:

D. Symons: The vote we've just taken amazes me, because there seems to be such great inconsistency on the part of government members in changing their minds on things they stood for so strongly when they discussed the Freedom to Move initiative in this House in 1990. On July 16 of that year the member for Nanaimo said: "It went through Treasury Board, to be sure, but then by what avenue were members of this Legislature informed? When did they vote on that appropriation? As we all know, it's absolutely crucial that at some point this chamber approve those 

[ Page 5948 ]

expenditures." The member said that in 1990. That is precisely what we just voted on, but apparently he voted the other way now. There seems to be a great deal of hypocrisy or something in here. Something has changed immensely, and I should hope that it's more than simply moving from this side to the other side of the House that brings this about. I think that's a great deal of the opposition's concern about this particular portion of the bill. It's the part of the bill concerned with accountability. It's the part of the bill where we feel that legislative authority has been circumvented and they're doing an end run around it as a means of who knows what. So I think it's extremely important that that member's words from 1990 ring in the House today, because indeed they're relevant to today's debate.

He went on further to say: "The problem, however, is that we're worried that this particular measure might enable some funding to be used for highway construction purposes that doesn't really get subjected to the same scrutiny of the Legislature as is normally the case." Again, hon. Chairperson, that is precisely what our problem is. The bill here sets out various ways that things are going to be funded, various expenditures that can be made, but the one thing lacking is where somebody other than this small group of people within cabinet and Treasury Board, or a select group appointed by that committee, will have an opportunity to see exactly what is going on before the fact. Usually when we're debating in this House, we get some inkling of what's going on, some inkling of what the expenditures are going to be beforehand. This seems to remove that from us. I don't see anywhere in the bill where that will be the case, where those concerns that were raised before are being addressed.

There's one further comment on that same date from that same member for Nanaimo: "We have difficulty then with this particular measure, because it looks as if what we're giving the ministry is something like a blank cheque to spend hundreds of millions of dollars without detailed legislative scrutiny. I hope I'm wrong, but I'm not convinced that I am wrong." I could not word it any better than the member for Nanaimo did. I ask the minister to respond to his words of three years ago. If that was the position then, tell us where you've now addressed those concerns in this bill.

Hon. G. Clark: I'm delighted to tell the member the principal difference. The difference was that when we were in opposition, we supported the Freedom to Move special account. You'd do well, members of the opposition, to learn from that, because that was a major government initiative to pursue highway construction in the province, and we supported it. We moved an amendment because we wanted in on it; we wanted to be part of it. That's not what's happening here. Members of the opposition are opposed to this initiative. They're opposed to this initiative to promote diversification and to get people off welfare and into work. They're moving amendments to try to obstruct the purpose and the objectives of this special account. That, my friends, is the distinction between what the member for Nanaimo was saying about the special account a few years ago and what the members are saying today.

D. Symons: I thank the member very much, hon. Chair, for that answer. I think it's a revision of history, however, in the way he's giving it. Indeed, what happened back then was that the government accepted some of the recommendations you made in amendments and therefore it became acceptable to you. Up to that point, as I read Hansard, the opposition at that time was apparently very much against the bill because it had some pitfalls in it. In their wisdom, the government of that day changed the bill to cover over those problems. We are not against, as you say, creating jobs in this province; we're for it. We're not against the initiative that this bill enables; we're for it. But we're also for having due legislative process and accountability. Those are the very things that are missing in this bill, and they're the very things your members, when in opposition, were criticizing the previous government about. But that government, in its wisdom, made the appropriate changes, and it became acceptable.

I will throw the same challenge out to you. If that is the only problem and if I'm wrong about what you were saying to us a moment ago, then I'm assuming you will make the appropriate changes here so that it will be acceptable. Then we will come on board and support it. If you don't believe that, all you have to do is test us.

You're saying that we have a problem with this because we're against it; I'm telling you that we're for it. In order for us to be for it, you have to make it responsible to the Legislative Assembly, in the same way that you were asking for changes to be made in the Freedom to Move legislation. Make the parallel changes to this, which were made for that program, and we will jump on board with you. I give that to you. Could you respond to that?

Hon. G. Clark: This is typical of the Liberal Party: process over substance every time. Let's have a big, arcane debate about some technical changes, and then they will support the bill. They got up and filibustered second reading. They all opposed the substance of the bill. Now the member says if we make this technical change to give the Legislative Assembly what he says is more accountability -- but which will, in fact, frustrate the intent of the bill and make it inoperable -- then they will support it. The reason they won't be elected is that they spend all of their time dealing with process, not substance.

People want to get on with the job. They want to get people off welfare and into work, they want diversification in the regions, they want highway construction and capital spending, and they want governments to spend in a smarter way. Getting involved in hours of debate on minor technical changes, I submit, is what the public doesn't want. They want us to get on with the job.

D. Symons: I would like to draw it to the member's attention that if he cares to refer back to Hansard, he will see that what we were objecting to in second reading was simply the procedures. You will find that we were 

[ Page 5949 ]

not objecting to job creation, as he is saying. We were objecting to the secrecy and non-conformance in bringing things before the House. We were objecting to the very things you objected to in legislation brought in by the previous administration with regard to the Freedom to Move program, and nothing more.

L. Hanson: I suspect that because the minister made the remark about the next election, this bill might be a millstone around their neck in that election. Talking about section 8, which I guess is what we're still on, maybe the minister could give us some indication of what sorts of things he's thinking about when he talks about community-level capital projects and infra-structure initiatives.

Hon. G. Clark: The expenditures are not limited to the examples given. Those are given largely for illustrative purposes. Community capital projects would be things like sewer and water lines. I think that those would qualify. Small capital projects, such as community centres and the like, would possibly qualify. That would be something we would have to review, but that's just to give you a sense of what we're talking about.

In terms of infrastructure construction, again, as you know, we are providing for highway construction in a different section of the act. But it may be that some spending around some of the highway infrastructure would be worthwhile if it met the purposes of the bill.

[3:30]

L. Hanson: Obviously there is a fairly in-depth program already in place. The next question that comes from that is: would infrastructure initiatives such as sewer and water, or even community projects, be done through the Ministry of Municipal Affairs, but funds would be allocated out of this fund to assist with that? Does that mean there is some relationship to the municipal revenue-sharing program?

Hon. G. Clark: The municipal revenue-sharing program continues apace. The municipal revenue-sharing fund allocations are in the budget, and they are up for debate and discussion in the estimates. But what we want this bill to do is to allow incremental funding in those areas that fit some of the other priorities we're trying to accomplish with respect to some project.

It's fair to say that sewer and water programs have their own funding source. It's like all ministries of government: the list of demands is much longer than the funding that's allocated. I wouldn't see this as a major supplement to that, but there may be some cases where you could in fact enhance some of the funding from the municipal revenue-sharing fund, if it met some other criteria of the government.

L. Hanson: This is the final question I have. There was a program in British Columbia called GO B.C., which helped some of the capital projects in communities, as well as other things. Would the minister suggest that this might be similar to that? Or will it, in effect, take part of the place of that cancelled program?

Hon. G. Clark: I would say that's not precluded from this bill.

R. Neufeld: I want to continue that questioning a little bit further. I find it interesting that the Minister of Finance talks about water and sewer lines, and little increments here and there, and it's going to help more. Obviously this bill is more far-reaching than a lot of us understood at the start. I guess that's probably why we argued against it so much in second reading.

Could you just explain for me a little more, other than just water and sewer lines, what projects at the community level would be eligible for this?

Hon. G. Clark: We tried to put forward some broad categories, and we'll review submissions from the ministries to see whether they meet those. We didn't want to limit it, but we wanted to give it some sense. I think small capital community facilities, for example, would be most likely to meet that, as long as they met some of the other parts of the purposes. Those would be likely areas we might look to.

We want to make sure we're getting levered dollars, if we can, and matched funding with communities and the private sector, particularly when we look at some of the regional problems like structural unemployment and the like. There may be a good case from time to time for not only schools and hospitals but also other community facilities that the municipal government might be pursuing. That's not well developed, but this bill is permissive in that regard.

R. Neufeld: That's interesting. I think about the GO B.C. program that was in place through lotteries and how a lot of those little programs took place in communities. I was in some communities where they helped very much. I wonder if the minister thinks that getting a Crown corporation in place -- which is not cost-effective but actually is going to cost a lot of money to initiate these types of things -- is more cost-effective than going through the lottery, as we did with GO B.C.

Hon. G. Clark: All members of the Social Credit Party seem to be under some misapprehension. With the greatest of respect, you should read the bill. I hate to repeat again that this has nothing to do with the Crown corporation. There's $100 million in a special account. There was a Lottery Fund special account -- you're correct. Now there's a committee which can adjudicate some spending out of that account. That has nothing to do with the Crown corporation.

R. Neufeld: Excuse me, you're right, it's later in the bill.

Can you explain what type of resource enhancement initiatives you have in mind?

Hon. G. Clark: The one we've already mentioned is a major silviculture initiative that is targeted towards social assistance recipients, as an example.

[ Page 5950 ]

R. Neufeld: If it's only silviculture, can the minister tell me why you wouldn't do that specifically out of the Ministry of Forests? Their revenues are up dramatically.

Interjection.

R. Neufeld: Well, you're going to get more questions on it.

H. De Jong: I know the minister has indicated that it may apply to some similar programs as provided by the Ministry of Municipal Affairs in various communities in terms of the sharing, but he hasn't really said whether the same type of sharing will be required under these capital projects versus those that are already in place under the Municipal Affairs department. Perhaps the minister will elaborate on that in terms of water and sewer lines, and also road sharing. The Ministry of Municipal Affairs has, over the last number of years, shared in certain local road projects with municipalities, particularly those of high growth.

Hon. G. Clark: I want to be very careful here not to raise expectations. There is a municipal sharing fund that the ministry deals with. They have lots of requests, which they prioritize, and a lot of money is spent by senior governments.

This small section of the bill is permissive, to allow the Building B.C.'s Future committee, if they wish, to perhaps augment some funding in certain communities if they met other criteria that we wanted to pursue. If we tried to accommodate all of the sewer and water requests of every municipality in the government, it would be in the billions of dollars -- not that a lot of it isn't required in the long run, but they are big, big numbers.

This is one part of a bill. We wanted to give an example, for illustrative purposes, of things we would be looking at. We want to give the option to the ministry to apply for augmenting funds if they have some innovative ways to create jobs. It should not be confused in any way as a sewer and water program or a major initiative in this regard. It simply gives more flexibility to try to augment.... Again, when we're looking for a better bang for the buck and for matching dollars, I think municipalities may have ideas in their community, and we want to make sure that the bill allows us to match funding in some areas if it meets the kinds of criteria in section 2 of the bill.

H. De Jong: I think the statement on community level capital projects is somewhat misleading. Having listened to the answer very closely, it seems to me that it's more a job creation type of project. Am I correct in assuming that?

Hon. G. Clark: Obviously, training and employment initiatives are important, but it's also important that we build the capital infrastructure of the province. That's why most of the funding is in the capital area. But we do that anyway as government, and we're trying to do it smarter by using the money, even if it's community facilities and the like, to lever more training opportunities and more opportunities for social assistance recipients to get work, training and the like. That's the whole purpose of this initiative.

H. De Jong: On these capital projects, then, is the level of required local participation in terms of dollars on any given project going to be similar for every community, or is it going to be different from one community to another?

Hon. G. Clark: That's a reasonable question. In other words, we wouldn't want to set something up here that would be a better percentage of provincial funding to disadvantage other communities. It will not happen, and it's not intended. The revenue-sharing fund will be the major source. If there's any augmentation of that for a particular purpose, then we'll look through it. The criteria have not been established yet, but we'll look very carefully to make sure there's equity across the board. That's a legitimate concern for members, and I'll take that on advisement and try to give you some assurance that that won't happen.

G. Wilson: Specifically with respect to the question just raised, one of the points I would like to have clarified is whether or not, in terms of infrastructure initiatives.... If we're talking about community level capital projects, there are some projects that are relatively small in scope and are often contracted by local contractors, or often available for short-term employment opportunities. Some of those are currently financed under MFA through local government financing. Does the minister envisage the same kinds of employment criteria applied to municipalities? Is it likely to have an application to municipalities under MFA, if there's to be a matching dollar from the provincial government?

Hon. G. Clark: I don't think so. The focus of this is not municipal spending, but rather provincial. As you can see by my remarks, at this time we have not contemplated saying that matching dollars from the province -- or 25-cent dollars from the province or whatever -- are going to impose all kinds of training restrictions on them, if that's what you're saying. It's fair to say, as we work through it over the next few years, that we'll try to build on some success and see if we can work with municipal governments on that. It's not really contemplated at this time, and I don't think we're planning on it, but it would be consistent with the thrust of what we're doing. If we are doing it, we would want to make sure municipal government was supportive of it.

We want to be careful that in some remote communities, for example, where there is a contract that's been worked there all the time.... It's not applicable to have a Victoria fiat that's going to apply across the province. That would not be likely. We want to work with municipal governments -- tailor them. It may be that there are things we can do better, but 

[ Page 5951 ]

they're not going to all be perfect projects that meet all of our criteria. We are not intending at this time to look at municipal spending and try to impose those restrictions on them.

G. Wilson: By the same token, one of the larger areas of capital expenditure that is going to be imposed at the municipal level -- although much of it will presumably be provincial in source -- is in waste management projects and in management of certain projects that are underway to try to alleviate things like landfills. Those projects that are capitally financed principally out of provincial revenue could be subjected through this special account for that kind of training. If that's so, given that there is a fairly competitive market out there for people who want to get into that field -- because it's potentially a very lucrative field, as anyone who has studied it would know -- was that one of the projects that was envisaged in this particular special account? I know there are a number of applications underway by many groups who would probably fall within the categories outlined under the purposes of this act.

Hon. G. Clark: Not in the special account. We're talking about the special account here, and I don't see that as a source of funding for landfill sites or those kinds of capital projects. I suppose you're right. The bill would permit that, I suppose, if they were to meet some criteria. But I think that's more properly handled by municipalities and by the municipal revenue-sharing fund through the Ministry of Municipal Affairs. I don't think that's contemplated. We have the special account and other capital projects, and I think it's fair to say that we may be looking at other criteria for government spending.

[3:45]

We want to be working with the stakeholders, and in this case the municipal governments. It would be key to see whether it made any sense or not. If you look at the description of what we've got in this bill, we've got lots to do, and I think we'd want to build on that later on.

G. Wilson: On (e), "...costs associated with the administration of the special account and committee," is there any kind of figure on what we're looking at, given that "without limitation" is in the preamble to (e), under section 8(1)?

Hon. G. Clark: I've just checked. We don't have a formal budget for that yet, because we're just getting the program up and running, but it will be a modest -- very modest -- initiative. In fact, as you can see, staff in the House today are all seconded from existing organizations. Although Ms. Doyle will be full-time on the project, she is already assistant deputy minister in Housing, and the staff here are from the Ministry of Finance. There will not be a huge administrative burden attached to this kind of coordinated activity, but we don't have the absolute numbers. Next year I could commit to give you some detailed breakdown.

G. Wilson: My last question on this is with respect to those administrative costs. Is there a ballpark figure or percentage base of dollars that have been seconded into this account, given that a silviculture initiative has to be administered, reviewed and overseen somehow, either by Ministry of Forests staff or somebody somewhere, and that we are also talking about potentially complex capital community projects that are going to have to be accounted for? We know what happened to GO B.C. money when there wasn't adequate administration, accounting and scrutiny. Where is the cost going to be borne in terms of assessment, review and audit? Will that money come out of here, or will it come out of the Ministry of Finance?

Hon. G. Clark: I guess maybe there's some advantage to being the chair of Treasury Board as well as the chair of this. The Ministry of Forests will be administering the incremental spending. We will not be duplicating Ministry of Forests' staff. The program delivery is in the ministries. For the monitoring of it, we'll be using largely existing resources. To give you an example, the Crown corporations secretariat -- as we said yesterday -- will be monitoring the Crown's capital spending based on the criteria set by this committee. Similarly, if the Ministry of Forests is successful in convincing the Building B.C.'s Future committee to spend, then they'll be required to administer it, again. So there would be some modest -- you're right -- monitoring, but it will largely, if not totally, be absorbed by the ministries or by other central agencies like Treasury Board, Crown Corporations Committee of cabinet, secretariat, etc. So we don't anticipate a huge amount of that. We in Treasury Board -- just for members' interest -- have a new position for reviewing capital spending, for example. That's in our budget and we're trying to do that very diligently. So this is essentially a screen or another criterion with which you'll be reviewing capital spending.

Section 8 approved on division.

On section 9.

G. Wilson: I guess of all the weird and wonderful components of this bill, which reads a little bit like a Lewis Carroll novel, where you don't know exactly what strange event you're about to....

Interjection.

G. Wilson: The minister suggests that's the Liberal Party. I would suggest it's this legislation. Clearly we're now looking at a B.C. Transportation Financing Authority, and we can see that under section 9 it creates a board, a director, a minister and, effectively, a new Crown agency, which I think the minister would agree by any other definition is a Crown corporation. Would the minister, under section 9 -- because there is really not much to debate or discuss in terms of the definition of who's going to be on this -- tell us why he feels that under section 9 the creation of a financing authority is 

[ Page 5952 ]

necessary given that the Minister of Transportation and Highways will effectively be able to hand appoint or handpick a board -- which we on this side of the House would call patronage -- so that a group of five, if we can put it that way, can now start to direct financing and capital funding? Why is it that the minister doesn't have adequate staff from within the Ministry of Transportation and Highways, many of whom have years of service and a great deal of knowledge under different administrations as to what works and what doesn't? Why is it that we have to have a Transportation Financing Authority that gives the minister these new powers under this new Crown corporation? What's the purpose of that?

Hon. G. Clark: The purpose is largely technical. When the decision is made to capitalize highway spending -- the same way we do schools and hospitals -- it requires the creation of an agency to hold the property for the purposes of borrowing money against that property and paying it off over time, in this case with dedicated revenue. The creation of a financing authority or Crown corporation is required for accounting and other purposes. What we've done here, however, is not to create a new Crown corporation without any strings attached. You'll see through the act we put lots of control mechanisms on it, so it's not necessarily a Crown corporation like other Crown corporations. It's more like a financing authority, although for the purposes of holding property, etc. it has to have a board of directors and essentially many boiler-plate provisions. That's the main purpose of it.

It may have some staff attached to it -- likely seconded from the Ministry of Transportation and Highways -- for the purpose of pursuing that financing vehicle. That's not uncommon when we do hospitals and schools or for strategic planning purposes and the like. But I want to assure the members that this is largely a vehicle -- excuse the pun -- to capitalize highways, which is a source of legitimate public policy debate. We don't want to get off on the tangent that this is somehow a super Crown corporation that's going to be like B.C. Hydro.

This is largely a transportation financing authority similar to that for schools and hospitals, with all board appointments required, and it will have the opportunity for some strategic planning focus if the Minister of Transportation and Highways chooses. The fact that the minister is the chair should, I think, give some comfort that it's really an arm of the Ministry of Highways, as opposed to anything broader than that.

G. Wilson: I think this business of capitalizing highway construction is indeed a valid point for debate. It is something I have not spoken in opposition to. I think there are some capital projects that are properly financed over long term, that do have built into them a certain amortization period to finance the project from start to completion, which currently doesn't happen. I think anybody that's meandered along the goat trail from Gibsons to Powell River will know that there are sections of unfinished highway that have been sitting there for years because of this problem of being able to finance from start to finish.

Having said that, however, I don't think the minister has clearly told us why he has to do it through this particular model. In terms of what this authority will be able to do in the acquisition and holding of property, the Crown can do that now. I would argue the Crown has the capacity to borrow on behalf of the taxpayers through a financing authority under the Ministry of Finance to develop long-term capital financing.

We would argue -- and I've put this forward many times before -- that what's needed is a single spending authority created on an exchequer model which would allow all of that to be under the Ministry of Finance, subject to the full scrutiny and audit of this House, rather than putting it into a Crown agency that's separate from government, or at least at arm's length from government in terms of the proposition of this bill. That's where I have some real philosophical problems with what's being proposed here. I know that we've debated this at second reading, and we don't want to do that philosophical debate.... I think it's an important discussion, because we're going to be saddled with this. I can say with great sincerity that when the Liberals take over government, we're going to have to deal with this thing, and we want to know why we're putting it in place under this model. Why wouldn't you incorporate it through the Ministry of Finance under an exchequer model, which is an agency with the same kind of powers to acquire, hold and borrow against that for long-term financing? It's two quite different ways of going about it.

The Chair: Before I recognize the minister, I think your point about not wanting to stray too far from the rules by which we're bound in committee is well taken. Section 9 is really a very limited section with respect to the matters that you've just spoken of. There is a section that deals with the borrowing of the authority, which can be dealt with at a later point. I would ask that we try to stick strictly with the sections as we go through.

Section 9 approved.

On section 10.

G. Wilson: I had hoped that the bait I threw out would have been titillating enough to get the minister on his feet to discuss it, because it doesn't matter whether we discuss it under section 9, 10 or 11, or under section 12, which is the borrowing capacity.

I know that the minister is anxious to get out and play ball, and we're going to play ball. We're going to try to get this bill looked after, but I think it's important that we're thorough and that we get a full hearing on this.

Hon. G. Clark: The chancellor of the exchequer idea is, in fact, very close to what we have in B.C., as opposed to other provinces that have revenue -- maybe, you could argue, increasingly so, given that I'm now the chair of Treasury Board, the Crown 

[ Page 5953 ]

corporations secretariat and this committee. I can assure you that in the Transportation Financing Authority all borrowing has to be approved by Treasury Board, which is a central agency, and the spending from it has to be approved by a central agency and now reviewed as well by the B.C. 21 committee. So there is very tight scrutiny.

There are two reasons for the financing authority model. One is because it allows us to capitalize spending. The second reason that it's superior to the exchequer model is because we have dedicated revenue to it. This Transportation Financing Authority cannot spend or borrow more money than it has resources available to it for financing. One of the problems in government is that if I, as Minister of Finance, raise the gasoline tax, right now it goes into general revenue, and every year the ministries compete for access to the revenue that's generated from it. What Treasury Board does all the time is weigh whether we should fund this program or that program, and thousands of very worthwhile initiatives don't get funded.

When I went around the province, people said: "We want more user pay. We don't mind capitalizing highways, and we don't mind paying more in gas tax if it goes to the highways." By putting it at arm's length in a financing authority and dedicating revenue to it, it is no longer possible to subvert it and take the money in-house for other purposes. You can now capitalize over 20 years -- or over the life of the project, as the member opposite said -- and you have revenue that goes to pay for it. You smooth out the booms and busts of highway construction that we've seen in this province, largely following the electoral cycle, and you now have a financing vehicle with dedicated revenue. It cannot spend unless it's approved by Treasury Board; it cannot borrow unless it's approved by Treasury Board; and by legislation it cannot do either unless it has resources dedicated to it and available to pay for it.

[4:00]

I think that gives a much better measure of control. Members of the Social Credit Party made the point that capitalizing can be seductive because you can go faster. You have to be very careful. In this bill, we've tried to build in all kinds of safeguards to make sure that that doesn't happen. I think the public can take some comfort from that. I think it's good public policy. It's amortized over the time period. You have to pay back the debt, not just the interest costs. It's dedicated revenue from user pay -- in other words, from gasoline taxes. All the scrutiny doesn't necessarily apply to all other Crowns, where it's really tight in terms of their borrowing authority and spending authority, which is controlled by Treasury Board.

G. Wilson: When he suggests there is a very tight limit to what can be borrowed, because it is tied to your capacity to cover or essentially to secure that money, what the minister fails to elaborate is that there is an open-ended portion in terms of revenue collection through taxation which is a functioning part of this bill. We've got a 1-cent-per-litre tax coming into this. We've got other ways under this bill to amend the social services act, the tax act on rental cars and all that kind of stuff.

It's like in a speech from last night, or maybe it was yesterday morning, where somebody said: "I always balanced the budget." Well, I know some municipal authorities have to balance the budget because the law requires them to. How do they do it? They do it by having the highest increase in taxation in the province. That's the way they do it. We've seen that, and it gives me certain fears because we're likely to see that kind of a proposition here.

The comment made by, I think, the Leader of the Third Party was right on target. He suggested that when you get into capital financing the tendency is to want to do more than you can in fact afford. As a result, you tend to project revenues that don't materialize, locking you into a need to increase taxes. That's the big problem here. I think that would be alleviated under the exchequer model because you couldn't spend it until you had a reasonable assurance of having it in the bag. That's a difference we don't want to get into here. Because it's a philosophical question, I will be ruled out of order. I see that the Chair is getting impatient.

So let me come back specifically to 10(1) and ask: why four members? Why is it modeled with only four hand-picked members to have the authority to involve themselves in the kinds of things we'll deal with under 12? Why not have a board? If you simply want to have an arm of the Ministry of Transportation and Highways, why not establish a small board of directors that might also be a link or a tie to the elected members of this assembly?

Hon. G. Clark: Nothing precludes the Lieutenant-Governor-in-Council from appointing four Members of the Legislative Assembly as board members. Currently the hospital financing authority has, I believe, on its board the Minister of Health, the Minister of Finance, and, I think, the Deputy Ministry of Health and the Deputy Minister of Finance. There are four board members for that financing authority. That may or may not be the decision made on this authority. That option is available to the government.

So I wouldn't say there isn't a connection to members of the Legislature. There certainly is. Unlike any other Crown -- there is no other Crown that a minister sits on, right now -- this Crown financing authority has the Minister of Transportation as the chair of the board.

G. Wilson: I take the minister's point. Not only does it have the Minister of Transportation as the chair of the board, my understanding from earlier comments is that it has the Minister of Finance sitting on it.

Interjection.

G. Wilson: Oh, it's not decided yet. Earlier comments, I think it was some kind of sign language, made me think that he was going to be on this board. Given that, can the minister give us some kind of assurance that it isn't simply a vehicle for patronage appointments, or the appointment of individuals who 

[ Page 5954 ]

may have been in one Crown corporation but find themselves unemployed and looking a job in another Crown corporation?

Hon. G. Clark: Certainly I can do that. This is a permissive section which allows four people to be appointed in addition to the Minister of Highways. There may be a case for a qualified private sector person who has some expertise in transportation planning or something; I'm not sure. It would give members a lot of comfort to know that they will not be patronage vehicles to simply hire people on the basis of their politics. This is a legitimate exercise, and you'll find out in due course who the board members are. I'm sure that members opposite will be more than pleased with the quality of the appointments.

I understand that Mr. Gordon Gibson has given his resignation to the board of B.C. Trade Corporation, which I'm disappointed with. Maybe we can see if he's interested in sitting on this corporation.

G. Wilson: I'm not going to touch that one with a corporate seal.

I have one very simple last question on this. In terms of the interaction of this particular board with the previous committee, is it intended that these committees are going to work in tandem with respect to the allocation and development of the projects that are put in place? I think we need to be very clear on that in this section.

Hon. G. Clark: I think it's too much to say "in tandem." This board will largely be making transportation decisions, and the committee will be reviewing those decisions to see if there are ways in which they can meet the other criteria we've talked about -- regional economic development, training, and the like. Yes, they complement each other; yes, it's part of the same initiative. But they really have very distinctive roles.

L. Hanson: I suppose there's a certain amount of latitude, because the minister's responses haven't really dealt narrowly in the different sections of the bill.

Interjection.

L. Hanson: Who knows?

I know this was raised a number of times in second reading debate, but now we have the minister here to actually answer the question. Nothing in section 10 that creates the board under this Crown corporation -- and also none of the funding designation, or at least the capturing of that funding under a certain account -- could not have been done under legislation, if that was the desire. I haven't heard a good reason why we need to create this board under a Crown corporation.

Hon. G. Clark: I thought I had explained that in great detail. I'll try not to do it too much again.

In order to capitalize highway spending, it requires the creation of a financing authority or Crown corporation, because it has to hold real property in order to borrow money against it, to pay it off over time.

Secondly, in order to dedicate revenue directly to the servicing of the debt, including paying back principal, it requires a separate arm's-length relationship. So we couldn't capitalize. If you wanted to have general revenue go to this, that could be done. But people have told me over and over again -- and I believe it to be true -- that they want to see the link between paying taxes on gasoline to road construction. This linkage can only be possible with a Crown-corporation-type vehicle, at least if you're coupling it with capitalizing highways, so that's the vehicle for doing it. It's not a super Crown corporation; it's a vehicle for dedicating the revenue and for capitalizing the cost of it.

L. Hanson: If I understand the minister correctly, he is suggesting that other than dedicated revenue such as gasoline tax or highway tolls and so on, there will not be a contribution out of general revenue to this Crown corporation for the repayment of financing of highways.

Hon. G. Clark: The member is absolutely correct. General revenue is not going to pay debt servicing attached to this. It cannot borrow money. It cannot spend more than the revenue it has at its disposal to pay for the cost of it. That's important for members to know. We did it deliberately to constrain the ability, because I, too, as Minister of Finance, am concerned about this question. I want to make sure that there is pressure and accountability and that it requires them to go through a lot more hoops before they can spend money: Treasury Board approval for their business plan, and for any borrowing or spending; approval, or at least a review, by the Committee on Building British Columbia's Future, for spending initiatives; they can't borrow more money than they have in revenue sources; and they have revenue sources dedicated in the act directly to the financing authority. So we've tied this up very tightly in order to escape any of the possible problems with respect to capitalization.

L. Hanson: I haven't really seen it here, but maybe the minister could give us some indication as to where in this act there is a restraint on the specific revenues that could be dedicated to it. You talk about a gasoline tax and tolls on highways. Why not 50 percent of the social services tax? Why not some other tax?

Hon. G. Clark: That's true. We'd have to change the act to do that. The act we're passing today has specific revenues attached to it. But at some future date, if we're running a surplus budget, for example, we may want to take some of the tax sources that are there rather than.... One might want to cut taxes, and that would be my preference. But if you didn't want to do that, you might dedicate revenue to this financing authority. I think it is true that at some point the financing authority for building roads and the like may require more revenue. That's legitimate, once this source of funding is used up. Obviously we don't have 

[ Page 5955 ]

to do that. They can pay down debt, and eventually they'll have more revenue to build more roads.

A future government may want to either take existing tax revenue, amend the act to flow it in and again increase the spending, or it may want to raise another tax and dedicate it towards that. That's a prerogative of a future government. It's not contemplated. It's not going to be required, in my view. This act is very clear about what revenue we're dedicating to it. But a future government could clearly amend the act to add sources of revenue.

L. Hanson: I think I understand all of that. If I were to take a literal interpretation of just about every clause in the bill.... They are always followed by something such as we see section 11 -- and I'm not asking a question on this; I'm just using it as an example -- "...and to do such other things as the Lieutenant Governor in Council may authorize." Is the minister telling me then that the only funds that could be dedicated to this now, according to this act -- without any flexibility or change in the act -- are the gas taxes and tolls from highways?

Hon. G. Clark: Yes, that's correct, except I'm advised that a government could, by a vote of the House, dedicate further revenue to the Transportation Financing Authority. That's clearly not contemplated. It isn't in the act, and it isn't what we want. But technically a government could, for example, raise a tax and, by way of a statute, dedicate further revenue to this vehicle -- essentially amending this act by bringing in another act to amend it. That's not uncommon. But that's not contemplated, and it's not in this bill.

L. Hanson: I would just point out to the minister that Treasury Board and the other boards that he suggested are totally under the control of the government. I'm not sure that the same opportunity is there to scrutinize those various issues, as it would be with all of us who have been elected. I think there's a huge difference there.

[4:15]

As I understand this act and the way it's written.... I think we've taken a little leniency -- and I appreciate that -- in the broad terms that we've started to discuss in the various sections. The minister tells us that gas taxes and tolls are the only dedicated funds in the act.

Interjection

L. Hanson: Oh, yes. I'm considering that to be minor. I'm referring to the ones that are specific in here. But it also gives the authority the responsibility of setting what those may be. The act gives the authority, as I understand it, to set tolls, but it doesn't say what those tolls should be. So even though this act dedicates any money raised from those tolls to the repayment of whatever the loan may be, by the same token this authority also has the authority to set what those rates may be.

Hon. G. Clark: That's correct, although any rates set are subject to Lieutenant-Governor-in-Council approval. The corporation requires the government's approval for the toll rates, but I'm sure the member would agree that governments set fees and licence costs all the time. It's exactly the same here today.

L. Hanson: ...the borrowing authority. The authority is established. The question is, of course: what limits the term of the amortization? As the minister has mentioned a number of times in the House, I was an automobile dealer. If you buy an automobile and amortize the cost over 50 years when you expect its life to be ten, somewhere your thinking is a little off course. I wonder what protections there are against doing that, because the people of British Columbia may be saddled with a burden far after the asset is of any value.

Hon. G. Clark: Actually, generally accepted accounting principles don't allow that to happen. We follow those very rigorously, and I'm sure the auditor general and members of the House would do that. Essentially, the auditor general requires the government to ensure.... I mean, we couldn't do it over 100 years or something; it would be ludicrous, and that's not contemplated.

In addition to that, of course, the borrowing plan must be approved by Treasury Board. Again, we apply the same accounting principles that we do to all Crown corporations. I hope that gives the member some comfort that there can't be any shenanigans in terms of length of time over which you amortize an asset.

D. Mitchell: Just following up on a question by the previous member with respect to the tolls that will be collected by the authority. The minister knows that I have some interest in this topic. Would the toll revenue that would be collected by the authority be specifically earmarked for projects, or would that simply be collected, combined within the authority and used for any purposes? What would that revenue be used for?

Hon. G. Clark: It would be project by project. Why else would you do it? I guess the member is asking whether we would put a toll on the Second Narrows Bridge to pay for a new Lions Gate Bridge. The answer is no -- not because the member opposite has made a compelling case for his constituents in West Vancouver but simply because it would not be equitable. The tolls would be designated to pay for the road.

The one toll we do have is the Coquihalla Highway toll. As I recall, it raises $35 million a year. The cost of the highway is over $1 billion, so it is not sufficient to pay for the cost of the road. There's no draining of revenue from the Coquihalla to any other project. It simply doesn't cover the cost of amortizing $1 billion over any period of time. That's not a criticism. In fact, it may be that the tolls on a bridge, say, may not fully self-finance the bridge; that's not required. If there is a toll, it's not required that that happen. It may be that the gas tax or another source of revenue for the corporation could be applied.

[ Page 5956 ]

Tolls have not been decided by the government. There is only one toll highway in British Columbia. This bill allows that eventuality should the government so choose. If we did choose to proceed with tolls -- and I know the member who spoke is somewhat supportive of the concept, anyway -- it would have to be done with great care, not just for good economic reasons but for political reasons as well, because one of the biggest concerns that I would have is what might be called equity. Why would one region have to pay tolls when another region didn't? Those kinds of considerations are important. The Coquihalla has a toll and the implicit policy, if not explicit, is that there is an alternative route to the same destinations that is free. If we apply that test, how does that play out? Those kinds of things have not been developed yet, and no decision has been made. I'm sure there will be lots of public consultation before that takes place.

D. Mitchell: The minister indicated that the Lieutenant-Governor-in-Council would be the authority to decide on any toll, should the government wish to implement tolls on a bridge or a highway. The minister has now indicated that tolls, if they are going to be implemented, would not be designed to fund projects other than the specific bridge or highway that they're being applied to. Does that mean that the Lieutenant-Governor-in-Council, when setting the rate for any prospective tolls, would be looking at setting a toll rate that would not be higher than necessary to fund a specific project? In other words, citizens in one part of the province, if they have to pay a toll, would not be funding projects funded under this authority in other portions of the province. Can the minister give that assurance to this committee?

Hon. G. Clark: That's a good question. I hesitate to give that assurance, because a decision hasn't been made to proceed with tolls at all. That's a policy debate which we can have at the time, if we choose to do so. I think it's important that criteria be developed to deal largely with equity considerations -- I think someone was pointing out that before we proceed, if we were to proceed. I don't want to preclude that discussion. The chair of this is, of course, the Minister of Highways. I'm not trying to pass it off, but I think that's where the work is being done to see what would be practical and desirable, and that would come forward for discussion. The minister's estimates haven't come up yet. You might want to discuss that with him at that time.

D. Mitchell: I have one final point on this, just so I can understand exactly what the minister said. This section of the legislation anticipates toll revenue being collected by the government on highway construction or bridge projects, which implies a kind of pay-as-you-go philosophy, so there is a point of principle here. Is the minister able to assure us today in this committee that if a toll is implemented on a specific project, citizens paying that toll will not only be paying as they go but they won't be paying for other projects as well? In other words, will the combined toll revenue be used to finance all projects? Will they be combined? Will they be intermingled? Or will they be project-specific -- earmarked specifically to fund only a specific bridge rebuild or a highway construction project? Can you assure us that residents in one community aren't going to be paying a toll so high that they're actually funding not only that specific project, on a pay-as-you-go basis, but they're funding projects elsewhere in the province as well? Is there going to be some principle of equity applied under this authority?

Hon. G. Clark: I think the technical answer is that all toll revenues go to the Transportation Financing Authority. It is dedicated to transportation financing, not to the specific project. I think it's unlikely that you'll find too many projects which would generate more revenue from tolls than the cost of the capital project. The Coquihalla toll is not $1; it's more significant than that, and it doesn't come close to paying for the capital cost.

Some of the projects on the Lions Gate Bridge would be $250 million. I'm not saying the work has been done, but I'm not sure what the toll would be required to pay for that. For equity purposes, for political -- not big P, but political -- public policy equity purposes, I don't think you want to have a huge toll on the Lions Gate Bridge to subsidize roads all over the place. At the same time, I think it's possible to say -- certainly in the lower mainland -- that toll revenue is dedicated to improving highway construction in the lower mainland; it's still user-pay.

I'm just saying that criteria haven't been developed yet, and I'm sympathetic to the position that the member is putting, which is to make sure there isn't some cross-subsidy. But at the same time it's all one lower mainland road network, for example, and the revenue does flow to a fund within the corporation to pay for these projects. It will be a revolving fund. So I just don't want to preclude any creative look at that. But I think we'd be subject to a lot of scrutiny on this question, largely for equity considerations.

The Chair: Before I recognize the hon. member for West Vancouver-Garibaldi, I would remind the committee that the Chair has allowed fair latitude in committee. However, it is very clear now that we have moved far away from the principles that we should be following in committee. We're getting into second reading debate. So with that in mind, I would ask the members to try and address the sections as they are.

D. Mitchell: Thank you, Mr. Chairman. I appreciate we're dealing with section 10 under part 4 of the act. This section deals with the authority and the powers within the authority, and since we've been asking a few questions on tolls -- and I know that comes a little bit later in this part of the act -- I have just one final question then.

We're being asked to approve this bill in committee that gives this authority the power to establish tolls, so conceivably, as members of this committee we have to assume that the government is contemplating putting tolls on. That must be one of the intentions. In the fiscal year ahead covered by his budget, is there is any 

[ Page 5957 ]

intention to establish any new tolls on bridges or highways in the province?

Hon. G. Clark: No decision has been made at this time.

J. Weisgerber: Just to continue this and not reopen the issue next time around.... For the minister's information with regard to the Coquihalla, the toll was put on to cover the accelerated costs of bringing the Coquihalla on stream for Expo and, in fact, the accelerated costs as they were calculated have now been more than covered by the tolls collected.

The question I have follows along that line: does the minister anticipate that the $35 million a year or thereabouts collected on the Coquihalla tolls would now flow into this Crown corporation?

Hon. G. Clark: No, the legislation doesn't allow it.

G. Wilson: In light of your ruling, I was a little concerned that we were going to be dealing with all matters of financing of this agency under section 10, pass it and then be told we couldn't revisit it. But given that that's not so, maybe I'll deal with the matters of finances later.

I just had one last question. With respect to the corporate seal, section 10(3) provides the Crown corporate status. Presumably it will also be governed under legislation governing Crown corporations. I wonder what the connection is with respect to the legal status of this authority, given the assignment of this jurisdiction.

Hon. G. Clark: I'll just give the member a formal response. The subsection is a standard clause. The corporate seal provides a means for the authority to execute formal legal documents such as contracts. While there are other ways for corporations to execute documents, a seal is the industry standard -- for example, in real estate transactions.

G. Wilson: In fact that was my next question. The corporate seal is essentially here so that this agency can involve itself in land transaction through either the purchasing -- I think we've already seen they will be able to expropriate -- and holding of land. It is against that asset, presumably, that borrowing will be able to take place. That's the reason, the purpose for this corporate seal. Is that correct?

Hon. G. Clark: Yes.

G. Wilson: Just to be very clear, as a result of the capital that it is holding, that will be the determinant of the amount it will be empowered to borrow? Is that correct? What the minister has said is that it can't borrow any more than it can essentially secure, so that the more capital asset it has, the greater its borrowing capacity. Is that right?

[4:30]

Hon. G. Clark: No, it's not the asset. It's the revenue stream that limits the ability to borrow. You're not borrowing on the physical asset that you hold title to. I guess that's one way of looking at it, but we're required by law to make sure there's a revenue stream to support it.

G. Wilson: I don't want to jump into that other debate, except that while it's on my mind, I do want to come back to the point by the member for Vernon that if you're amortizing over a longer period of time, the revenue stream, as the minister puts it.... Everybody else calls it taxes or tolls or levies or fees. Revenue stream is an almost Wordsworthian way of telling people that they're going to ding them for more money. Having looked at this pastoral view of taxes with his revenue stream, how does the minister reconcile the revenue stream with long-term capital financing, which surely has to be secured by the capital asset of the corporation? There's no other way that you're going to get enough money to build the projects.

Hon. G. Clark: Section 18(8) says that everything must be prepared in accordance with generally accepted accounting principles. We will get to this, Mr. Chair.

Section 10 approved.

On section 11.

G. Wilson: With respect to the conversation we were just having on the purpose of this authority, the statement here as to purpose is: "to plan, acquire, construct, improve or cause to be constructed or improved transportation infrastructure...." There are three principal purposes. If this authority is going to engage in planning, to what extent will that planning start to impose the kind of capitalization that will be needed?

Once again, the reason for my question is that the Ministry of Highways already has a very competent planning staff that have involved themselves in blueprint after blueprint, revision after revision, as they run into various problems. Surely it's not the intention of this minister to duplicate that planning process. If it isn't, and as this is now a Crown corporation with the ability to acquire and expropriate land, could the minister define what exactly it is that they're going to be planning with respect to that development?

Hon. G. Clark: You're absolutely correct that there would be no duplication of effort. It would be largely one and the same people: the Transportation Financing Authority and the Ministry of Highways.

If you're borrowing money to build a bridge, you must back it up with a plan -- engineering drawings, etc.; the full gamut of a Crown corporation. While the planning may be executed in the Ministry of Highways, the plan will have to accompany the project and the ability to actually construct the project. This is essentially the purpose of the authority, in keeping with what I said earlier and the fact that the Minister of 

[ Page 5958 ]

Highways is chairing the authority and we won't be duplicating effort. It's just an attempt to make the case, when we're borrowing money, that this authority is a Crown entity that is undertaking highway construction in the province.

G. Wilson: Moving to the second purpose, which is to acquire, can the minister tell us whether or not one of the purposes of this authority is to acquire assets currently held by other Crown corporations?

Hon. G. Clark: Absolutely not, although if one Crown is building a road through B.C. Ferry property or something, it may require the purchase of property from that other Crown. But it's certainly not the purpose of this to do that.

G. Wilson: So if this is going to act as a Crown agency that is able to acquire and hold property, the minister is telling us that there is no plan to set aside a bank of capital assets upon which they can borrow. There is no plan to go out and acquire already constructed assets -- and there are many in this province that would be eligible under this -- to build that base of holdings through which they can then finance capital projects. Is there no attempt to bring them into this and borrow against it?

Hon. G. Clark: I was trying to understand that. Is the member asking whether we are trying to hide debt by buying it from ourselves or something, by moving it over?

G. Wilson: That did cross my mind.

Hon. G. Clark: No, absolutely not. I give him complete and categorical assurance that acquisition from other Crowns or agencies is not the intention. This is purely construction of highways in the province.

L. Hanson: "The purpose of the authority is to plan, acquire, construct, improve...transportation infrastructure...." What relationship would the minister see this borrowing authority have with other Crown corporations that provide transportation infrastructure around the province -- B.C. Ferries, B.C. Transit, B.C. Rail, the airport authority?

Hon. G. Clark: Good question. As the member knows and as I've reported in the House, when we took office and I was given responsibility for B.C. Transit and B.C. Ferries, I was shocked to find that the Minister of Transportation and Highways had not a single policy person reviewing the transit and ferry corporations' plans. So in the Ministry of Transportation and Highways -- I might as well call it the Ministry of Highways in those days -- there was no transportation planning that was coordinating all the activities. I'll say this: there was the beginnings of a CEO committee of all the Crowns that was looking at coordinating the Crowns. Now, of course, we have the Crown Corporations Committee of cabinet to try to coordinate them.

Transportation planning, intermodal transportation planning, has been done by the Ministry of Highways, but it is not.... You can ask the minister, but I can safely say that we need to do more of it, at the very least -- more coordination and more planning. When you get to the Ministry of Highways estimates, you may want to talk to him about it. I'm sure you'll get a long dissertation, because the Minister of Highways is working very hard on precisely this project. The CEOs of B.C. Transit, B.C. Ferries and B.C. Rail and the Ministry of Highways and Transportation have been meeting to look at ways and models with which we can try to coordinate better than it has been done in the past. Either the minister responsible, the same person, will be pursuing it, or, if there is a staff person attached to this corporation, that person will, I assure you, be involved in any strategic planning regarding the other elements of transportation planning in the province of British Columbia.

As I say, the member is absolutely correct that this is a key problem in British Columbia: making sure that we're doing a better job of government spending, a smarter job in the tradeoffs that take place between transit and roads and ferries and the like. We're determined to do that, and we're reviewing it. This bill won't have any impact on that because, again, it's the same minister, and we'll make sure that it takes place.

G. Wilson: Following up on the question -- and I agree it is an excellent one, because I suspect there's a lot more to this than meets the eye. I would think that as the minister sees the vehicle he's provided for himself and for the Minister of Transportation, there will be a tremendous tendency to want to move toward this proposition of Crown corporation interrelationships.

Again coming back to the question on acquisition, can the minister tell us with respect to the purpose of this authority whether or not there has been any discussion around the purposes of this authority to be a functioning part of the integration between B.C. Ferries, B.C. Transit and B.C. Highways, in particular, and the planning of the new fast-ferry systems and the new transportation systems in terms of terminal developments and parking facilities. I know there has been discussion in the past of having an agency or an authority of government outside of the B.C. Ferry Corporation to look after the capital construction costs of the terminals themselves. I wonder if this is the vehicle that that is going to be used for.

Hon. G. Clark: No, that's not correct.

I was reminded by the Minister of Forests a minute ago that the previous administration -- the Vander Zalm government -- abolished the planning department in the Ministry of Transportation and Highways. So, there you go.

G. Wilson: My last question with respect to section 11 has to do primarily with the question of improvement of transportation infrastructure. This comes back to a very serious concern that I expressed earlier in this debate. It's one that is shared widely around the province because of the nature of this 

[ Page 5959 ]

authority. Under the authority of this new B.C. Transportation Financing Authority, is it the purpose of this bill to effect the dollars that are going to go into the improvement of highway infrastructure because of the new employment or job...? What was it?

Interjections.

G. Wilson: Job stimulus -- or whatever it is that the minister wants to call this idea of getting people to work who aren't currently at work, but only if they meet certain criteria.

If we're going to look at highway improvement under this -- if we're looking at this as a principal note of financing -- how does that impact on current dollars that are allocated under the Ministry of Finance? I know we can get back to this when we start to look at the amount of dollars that are actually budgeted under the Transportation and Highways budget this year for highway maintenance and operation.

The people who are involved in day-labour contracting want to know whether they are going to be contracting through the Ministry of Highways under the established rules for the application for and tender bidding on those contracts; whether the roster systems that existed in the past are going to continue to apply; or whether they are going to be facing a new agency that is going to be looking at highway improvement and putting in place a new employment standards portion of those tenders. They want to know that, because a very substantial part of their livelihood is dependent on highway contracts.

Hon. G. Clark: At this point it will be the existing Ministry of Transportation and Highways. That's likely to be the case at any point, but we will be reviewing to see whether there are day-labour contractors.... We have no intention of putting them out of business or the like. Many of them, as you know, have apprentices and are training people and the like and qualify, so we'll be reviewing that. But certainly at this time there's no intention of changing that.

Section 11 approved on division.

On section 12.

G. Wilson: I wonder if this is not the appropriate place to get the minister to tell us a little bit more about the actual dollars committed to this, because the powers and capacity obviously require a certain amount of money. Looking through this bill, it's very hard to know exactly where we want to bring that up, except under the borrowing portions.

If one looks at the Finance budget -- as it's been approved -- there is $33 million, I understand, going into this.

Interjection.

G. Wilson: Is it $37 million? I'm talking about revenue that's coming in from the fuel tax and the rental car tax. I understand it's $33 million projected. Is that correct?

Interjection.

G. Wilson: The minister said that there's roughly $80 million that he expected to come in through this as financing through Transportation and Highways. Is that right?

Interjection.

G. Wilson: So $33 million is expected to come in from an increased tax on motor fuel and rental cars. Is that right? The minister was also suggesting that there was going to be an additional $80 million revenue coming in to this authority from Transportation and Highways. Is that correct?

[4:45]

Hon. G. Clark: The revenue to the Transportation Financing Authority is $33 million; the borrowing authorized is $80 million.

G. Wilson: If we're looking at the total number of dollars in terms of projected revenues of $30 million, and we've got $80 million in terms of borrowing, and if the two main areas of revenue make up the spending, where is the shortfall between the $33 million projected out of the two sources of funding going to come from to make up the difference between the $33 million and the $80 million?

Hon. G. Clark: The $80 million is capitalized. To borrow $80 million, you require roughly $8 million a year to pay the interest and pay down the debt. In fact, we have $33 million worth of revenue, and only $80 million, at the moment, authorized for borrowing. We would likely have a surplus of some money in the Transportation Financing Authority. That's precisely the point here. The annual revenue of $33 million.... It's more than that; the half year revenue is $33 million. And this year we are borrowing $80 million to pay that off.

G. Wilson: That's a little alarming. If that's the case, surely the capacity to be able to borrow is potentially going to be well in excess of the $80 million, and we're talking about the $600 million. If we're looking at $600 million of borrowed capital, can we expect there will be some other means of revenue generation in order to take care of any shortfalls that may come in from the projections that the ministry has made?

Secondly, if you're talking about planning, acquiring and constructing, we know that highway construction costs escalate over the year; they don't diminish. We know that those escalations are often brought about by a whole variety of unpredictable events. Where, in the powers and capacity section of this, is the flexibility provided to be able to deal on an annual basis with revenue shortfalls, in terms of financing the capital projects that may be approved under this authority?

[ Page 5960 ]

Hon. G. Clark: No. In fact, that's the discipline that the bill contemplates. You have to have a revenue stream in place before you can borrow the appropriate money. Right now, in order to finance the $80 million, you require about $8 million. But in fact there's $33 million going into the Transportation Financing Authority. So there's more than enough revenue to offset that borrowing.

C. Tanner: If that's the case -- following my friend's questioning -- why is the minister setting a limit of $80 million in the first place?

Hon. G. Clark: Because we're being very disciplined about our approach to this. We want to make sure the projects make sense. If you want to gear up spending on highway construction, you would have to do that over time and make sure the engineering and planning work is done. At this time, given our fiscal constraints, we wanted to make sure that we gear up over the course of the next few years.

C. Tanner: That's quite unlike anything the government has done up to now. You haven't been that cautious. I don't believe you. Maybe you've made a mistake. If you need $8 million to carry $80 million, and you've got a stream right now projected at $30 million, it seems to me, knowing the minister's habit of having a spending spree when he gets the opportunity, he should be looking at the $600 million. He also knows that $80 million is a drop in the bucket for most highway projects. You're not going to go very far with $80 million.

Hon. G. Clark: Well, I take exception to that. Eighty million dollars is a significant amount of money to be spent on highway construction at a time of difficult financial circumstances. We want to take a planned and prudent approach to this. The revenue stream does not start for some time -- half a year. We will be reviewing it over the course of the next few years, as we get some of these major projects underway.

G. Wilson: Just so I am clear on this -- then I will yield, because I think there are questions from the member from Vernon -- what we're really talking about here is the fact that you will show a surplus in this authority, given that you're borrowing $80 million against which you are going to bring in $33 million worth of revenue. But only $8 million is likely to be paid out in the first year. Therefore the difference between the $33 million and the $80 million.... Even though you've now got a debt, which has a debt-servicing cost and long-term financing implications, you are now in fact going to show that as a surplus. Is that what you just said?

Hon. G. Clark: No. But what may be confusing members is that.... One of the advantages of this is multi-year funding and capitalizing over time, as you know. We talked about that -- smoothing out the booms and busts. If we approve a $300 million project this year, we won't borrow $300 million this year; we will only borrow maybe $50 million, because it's the first year of a $300 million project.

Interjection.

Hon. G. Clark: Yes. But on the books, we have approved the borrowing of $80 million this year. But you're quite correct in that we have revenue sources that can carry more than that over the term of a project. Just because we approved the $80 million this year, it does not mean that we have not begun projects which exceed that. It means that we can't exceed the amount that is going into a source of annual revenue in order to pay the debt-servicing costs and the sinking fund.

G. Wilson: This is a huge disappointment. I don't think this is the way to do it in the first place. But even if you were going to do it that way, that seems to me to be a disappointing proposition to put forward, unless the minister is prepared to commit to the completion of projects. Hopefully you are, and the reason you're doing capital financing in the first place is so you can amortize costs over the long term. Philosophically, I don't have a big problem with that as long as you're very careful about what you're approving and what projects you put in place; and as long as you make sure that you keep the debt at a manageable level and try to reduce government debt. The number one concern is the reduction of the debt.

We recognize that we have to build highways. But you still have to recognize that once you've made a commitment to the completion of a project, that debt is incurred, whether you borrow it over one year, two years, five years or 20 years. Otherwise you end up with what we've got with the Gibsons' bypass. They blew $3 million in one year, got a quarter of it finished and left it sitting there; it has eroded and has been washed away with the winter rains, and it's going to cost them twice as much to rebuild it. That doesn't make any sense at all.

I think it's a little misleading -- to put it politely -- to say that we're incurring a short-term $80 million debt over a long term, when your approval of projects may be committing the people of the province to hundreds of millions of dollars in long-term debt, which at some point is going to have to be financed through borrowing. Who knows what the cost of borrowing is going to be next year, the year after or the year after that? So those costs have to be built into this. It's by no means a fait accompli that the revenue source and the amount of annual borrowing is necessarily going to be dovetailed to allow you a surplus in each year. That's not a guarantee.

Hon. G. Clark: Yes, it is.

G. Wilson: Then I'd like the minister to explain how it's a guarantee.

Hon. G. Clark: Yes, it is a guarantee. They have to have enough revenue in the stream to pay for the cost of borrowing. If the government of British Columbia borrows $100 million over a 20-year term at fixed rates, 

[ Page 5961 ]

they know the borrowing costs attached to that. There has to be an income stream here that fully pays for that, as well as sinking funds to pay down the debt.

In accounting practices, we're required by the auditor general to put into our budget document how much we're borrowing this fiscal year. If we approve a $200 million project and we only require the borrowing of $50 million this year, that $50 million goes into this year's borrowing authorization by the auditor general. Next year, if the remaining $150 million is required to be borrowed, it will show up next year. It's appropriate that the taxpayers see how much is borrowed this year.

Are there commitments made for next year? Yes. They show up next year when you borrow the money. By law now you will have to have enough money to pay for all the commitments, over time, for all of the projects that are funded by the financing authority, including repayment of the debt by way of a sinking fund.

G. Wilson: All right. I don't take exception to what the minister said. I understand that logic and that argument. The only thing he hasn't said -- and the other thing that is clearly under the powers and capacity of this agency -- is that where the revenues are less than anticipated, the cost of the project escalates. At that point, the government has to get the money from somewhere, because by law it has to, and that spells higher taxes. He has to go back and dip his pail into the revenue stream one more time to take out additional dollars. I think the minister has to make clear that it isn't just a question of having revenue balanced against long-term financing. This locks us into long-term borrowing costs that ultimately have to be picked up by the taxpayer, especially if the revenues diminish because of a downturn in the economy and increased costs on projects approved. Is that not right?

Hon. G. Clark: I give the member complete comfort that we will ensure, when we do long-term borrowing, that there will be revenue stream attached that will pay for it. The member is correct. At the end of the day, if we've exhausted the borrowing authority because the revenue is only carrying now the debt, the interest payments on the debt and the payment of the debt, and that's it, then to do more capital spending some years hence, any future government would have the option of either raising taxes to pay for more capital spending or not doing any more highway spending. But we will ensure there is sufficient flexibility that all borrowing and long-term borrowing costs are paid by the income generated by these taxes.

C. Tanner: Can we try it the other way now? You haven't got the authority to raise the tax one cent on the gasoline yet. Neither have you got the authority to raise the tax on the highway tolls because we don't have any there. And you haven't got the peanut amount you're going to raise on the car rentals. The money is not there. So is the minister giving this House the assurance that none of these projects will start, and none of this lending will take place, until the cash flow to support at least $8 million worth of lending starts?

Hon. G. Clark: Actually, the member is correct. The gasoline tax doesn't come in, I think, until the fall, so we can't do anything until we have that income stream in place. But there is, in the estimates book, some recovery from the Ministry of Transportation and Highways. As we get this up and running and decide on some projects to build before the income comes in, some money is paid out of the Ministry of Transportation and Highways budget in their appropriation, which you can quite appropriately question them on. So there's some sort of funding from the Ministry of Transportation and Highways, but none of the projects go forward until there is revenue to pay for them.

C. Tanner: It's interesting how this conversation goes round in a circle. We've been asking the minister now for three days to tell us why he can't keep it in the department. So now we're borrowing money out of the department to start the project in a separate organization because you've just made a commitment that you wouldn't start until you raised the funds. What is it you're going to do this year, other than drag in some money from a department that was doing the very work you were doing before anyway?

Hon. G. Clark: It's efficient government not to duplicate effort. The Ministry of Transportation and Highways is building highways. Not all highways in British Columbia are capitalized by this. There is a budget in the Ministry of Highways. They are building highways; they are maintaining highways. It's a large and professional organization. It does an excellent job for government -- I think everybody agrees with that -- and they're continuing. I went around this about a hundred times: to designate revenue, by statute, to roadbuilding requires the formation of the Transportation Financing Authority, and to capitalize major highway construction requires the creation of the Transportation Financing Authority. That's what is different. The same expertise is brought to bear. They're the same people. We're not duplicating service. The same excellent staff that exists in the Ministry of Transportation and Highways will still be undertaking the projects. Before we get up and running, we will be relying on that expertise and the ministry's line budgets to make sure the engineering work and all that gets done so we can get on with the job of building roads and transportation facilities in British Columbia.

C. Tanner: If that's the case, why isn't this just a capital corporation? Why do you need all these other powers? Tell me what other Crown corporations have the power to expropriate?

Hon. G. Clark: I went around this a long time today and I don't intend to repeat myself, but other Crown corporations have that facility. If you're going to have a Crown, you have to have a legal entity. These are boilerplate provisions. You can look at the B.C. Rail or the B.C. Hydro and Power Authority acts and see the same clauses. It requires setting up a legal entity in 

[ Page 5962 ]

order to do the things that I've said for the last couple of days.

[5:00]

L. Hanson: I guess by the minister's calculation, the $80 million that they're going to borrow this year -- or at least are authorized to borrow this year -- could be $320 million. That would commit $33 million of revenue to be raised by future generations for 20 years.

Interjection.

L. Hanson: Well, at my age; I said future generations.

In any case, I think the fact is that once it's committed, the $33 million is gone, committed for the next 20 years. I think the minister's statement that the Ministry of Highways now builds and will continue to build roads, is a statement I have to look at with a little bit of prejudice because I suspect that when you do finally get this bill passed -- and I suspect you're going to get it passed because of your majority -- that there may be a temptation to look at financing some of those capital projects even though they may not be of the size of the Coquihalla and the new bridge contemplated for the North Shore.

The question I have for the minister relating to section 12 is that it seems to me you're totally replacing the Ministry of Highways -- other than the responsibility for highway maintenance -- with this new Crown corporation. They can plan, they can construct, they can improve transportation infrastructure and they can acquire property by expropriation. I agree that that is boilerplate. I think the minister would have to admit that with those powers this is far more than a financing authority. Why would you put them in there if you are simply borrowing money to enable Highways -- which already has the authority -- to build highways? Why would you need it in this Crown corporation?

An Hon. Member: Excellent point.

Hon. G. Clark: In order to capitalize, road construction requires a real corporation with boards of directors and real powers to hold physical assets. It will be the same people, of course, but it would be contracted back to the Minister of Transportation and Highways to construct the project. That may well be the case, or vice versa. We require these types of powers in order to satisfy the legal entity to acquire and hold property, to borrow money and to have an income stream. That is not possible in a ministry operation under the current accounting principles.

J. Tyabji: Since the minister has been saying that there won't be any money spent until it's raised, and since we're looking at -- later on in the bill, anyway -- a maximum of one cent per litre, and previously in this discussion we talked about regionalization and regional projects and that kind of thing.... I have two questions really. One is if we have an across-the-province raising of the gasoline tax, for example, to say half a cent, we will obviously have varying levels of revenue generation coming into the Crown corporation from around the province and overwhelmingly from the lower mainland. Is it collected into one pot, and whatever is going on, it comes out of one pot? Will it be dispersed by any kind of weighting by regions? Will the revenue raised in that region.... Is there any kind of accounting in that way? That's the first one.

Hon. G. Clark: No, there won't be. The revenue goes in and is spent on the basis of transportation and other priorities. I want to assure the member that if we're putting a 1-cent-per-litre gas tax on the entire province, then the projects have to be spread throughout the entire province. I think that's very clearly the case. We simply cannot say that in the Kelowna area this much money was generated and therefore exactly that much will be spent on highways We couldn't do it; it would be technically impossible. At the same time, we are cognizant that we can't take all of the revenue from Kelowna and put it into Vancouver, for example. We're going to take great care not to have that happen.

J. Tyabji: Secondly, as Environment critic, many of us would hope that in the future we're going to see a move from one person driving in a car over a bridge to some form of mass transit. If you follow that through and people start car-pooling and using mass transit, you will have a reduction in the purchase and consumption of gasoline. If it turns out that amortization of these capital projects has been based on some kind of formula for rates of consumption, and rates of consumption drop dramatically, would we then move, for example, to tolls on highways that didn't have them before? One would hope that we're going to move away from fossil fuels, recognizing that it's environmentally harmful. If that trend takes over, and we all know that things can change quite dramatically, would existing highways or things that need improvements end up being financed by tolls placed on an existing highway? How would that work out?

Hon. G. Clark: At this point we have no intention of putting a toll on an existing highway. If any of those things come about, then we or a future government will have to review it in years to come. It's important to remember that because this authority cannot spend more money, cannot borrow money, unless it has an income stream attached to it, then, even under any circumstances that you could envision in the future, it will not be a drain to the general taxpayer because it already has a source of revenue that pays for that long-term borrowing.

J. Tyabji: I think it's kind of amusing to say it won't be a drain to the general taxpayer. The general taxpayer is the one consuming the gas and paying the tax. It's one pocket or the other. It's not as if the person who pays income taxes doesn't pay gasoline taxes. The other part, and maybe the Minister of Finance can walk me through this, is that in the Okanagan -- in Kelowna for example -- there's a lot of talk about another bridge 

[ Page 5963 ]

being built. I hope the Minister of Finance is listening....

Hon. G. Clark: I'm always listening....

J. Tyabji: Okay. There's talk of a second bridge being built over Okanagan Lake. How would the Minister of Finance envision the capital being raised for that? I assume it would automatically come under as a toll highway. We know under the line ministry there's no chance of the bridge coming on, even in the planning stage, I think, for another five years. So if it were fast-tracked through Build B.C. and became a toll bridge, where would the initial capital come from?

Hon. G. Clark: I'm sorry, it's just too hypothetical to answer. If you want answers on transportation questions, you should ask the Minister of Transportation. Any capital spending comes out of the financing authority -- it's borrowed, a bridge is built, and if there's a toll attached to it, that goes back into the financing authority to pay the costs of the borrowed capital.

J. Tyabji: I thought the minister said that there would be no projects contemplated unless the money was there or.... Okay, that's correct. Let's say, for example, that on Monday the government wants to make a big announcement about a megaproject. Let's say it was going to be a bridge to the North Shore -- something like that -- and that bridge was going to be a toll bridge. If that were going to happen, where would the initial capital come from to allow for that? For example, does the Minister of Finance wave his magic wand, or is the $100 million that's been put into the kitty so far going to go as seed capital for that toll bridge to the North Shore?

Hon. G. Clark: No. The $100 million is completely separate. The Minister of Finance will do as he does for every Crown agency. We would borrow money on the domestic or international marketplace, apply it to that, and borrow it on the strength of revenue projections from tolls, if that were decided.

C. Tanner: I must apologize to the minister. He is correct -- there is a right of expropriation in the Railway Act. But also in the Railway Act -- and I noticed in one other -- there are guarantees by the government of the loans. Are there any loans taken out here that are guaranteed by the government? If so, where does it say so?

Hon. G. Clark: Yes, any borrowing, as we do for any Crown agency or hospitals or schools, is guaranteed by the government.

C. Tanner: In that case, it's a direct debt of the government.

Hon. G. Clark: I'm just advised that because we've set it up in this manner with dedicated revenues, it may well be possible to borrow money without the government guarantee, because there is a guaranteed income stream attached to it. So we'll explore that, obviously. If we can reduce government-guaranteed debt because of that, I'm sure we will. But in any event, it's obviously guaranteed by the government, because the income stream comes from the government. But because we've structured it in this way, it does make it easier to borrow money. It's almost better than borrowing money for the government, because it actually has, by statute, dedicated sources of revenue.

G. Wilson: That last point is a very important point that needs to be underscored for British Columbians who may be interested in how this is going to further affect them and especially future generations of British Columbians. No matter how the minister likes to paint this -- and I'm not saying this to be critical, but I think we have to be honest with the public -- this is a mechanism to incur long-term debt. That's what it does. It provides long-term debt for capitalization of highway projects deemed necessary.

The so-called income stream that's talked about is effectively coming from the taxpayer. My background in economic geography and resource management would tell me that it doesn't matter where in the model you build the source of income. There's only one source of income to the government to pay for it -- the people of British Columbia -- whether you pick it up at the point at which you have income and therefore are taxed or taxed on sale, or whether you pick it up by way of levy or toll or however else you do it. So let's not say that we're not going to impose a greater burden on the taxpayer, because it is a burden to the taxpayer. Hopefully they're going to get some revenue out of it.

I'd like to move my question down, with respect to this "Powers and capacity," because I'd like to ask the minister whether or not subsection (e).... I don't want to confuse us, because I'd like to canvass each of these individually, but it says here that, subject to the approval of the Minister of Finance and Corporate Relations, financial assistance may be provided "by way of grant, loan or guarantee." That would tell me this is a Crown agency that now can provide financial assistance to somebody. I notice that when you look at section 12(g), it says that this can create subsidiary corporations to carry out the purposes of this act. Are those two interrelated, or are we talking now about a.... Once, I think in second reading debate, I talkd about this as a sort of mugwa, that turned into the gremlins. When you put water on it, it multiplies in large numbers. If this is creating subsidiary corporations, I wonder if that isn't the same as the taxpayer being that source of water.

Hon. G. Clark: I would argue the alternative. This section allows the authority to develop projects jointly with the private sector or other levels of government. As a control measure, obviously the Minister of Finance is required for approval.

Under this authority we could entertain something which is not currently the case, which is to have a private party or a consortium build a bridge, for example. That would be an option that's available, and we could have a joint project. More innovative 

[ Page 5964 ]

approaches to financing arrangements for infrastucture projects could be undertaken. These options allow us to work with municipalities or private sector partners for construction projects a little better than in the past, and that opportunity exists with this.

[5:15]

G. Wilson: I can understand that -- by way of the powers that are granted through (a) through (d) -- because those are powers that normally exist under the Ministry of Highways and under a number of other agencies, although I would argue that the disposal of property is something that we need to look at by way of sale or lease. That obviously is a source of revenue, and we wouldn't want to see the assets that are acquired by this corporation sold without some kind of public process. And we'll come back to that.

Why is this agency set up to grant, loan or provide guarantees to other agencies of government, or to private sector companies? What is the purpose of the government becoming a lending agency?

Hon. G. Clark: Under this agreement, if we have to borrow money for a bridge, and if a private company come along and says, "We'll borrow the money and build the bridge," then an option for the government would be to simply give them a guarantee in order to allow the private sector to participate in the construction. That would be allowed under this, for example, and I would think that many people -- especially members on the opposite side -- would see this as a positive development to harness some of the capital that exists in the private sector.

Similarly, some of these sections allow governments to enter into joint projects with the federal government, which requires an exchange of guarantees and the like. Those options would be available now, because we have income attached to this. If the government chose to put tolls in and attach income to a project -- a pay-as-you-go kind of approach -- then it's possible for private companies to work with government to construct things, and to pay the costs of that over time with a toll.

G. Wilson: I don't have any problem with government providing guarantees; the government provides guarantees now. There are existing facilities for government to provide guarantees in certain circumstances for capital projects that are approved. It says here that it can loan money, and that's the word I want to focus on. If it says, "to provide loan guarantees," that would be one thing. You could say that if a company contracts to build a bridge, needs to get some capital financing through private sector financial institutions and needs some basic guarantees from government in order to qualify for the money from a private lending institution, fair enough. But why would the government enter into the business of lending? There are private sector lending institutions. Why does the government get into this business?

Hon. G. Clark: There is no practical difference between a loan guarantee and a loan.

Interjection.

Hon. G. Clark: They are exactly the same. I assure you, we are not going to go into the lending business. This allows the government to work with the private sector in the construction of projects or allows us to work with other agencies. Obviously if it were a Transportation Financing Authority project -- a major capital project -- and you were going into partnership with the private sector, then the government would be required to guarantee its portion, or lend its portion of the funding. All of those options are available to government. None of them have been decided upon, but we have the ability here because of the user-pay aspect of this, to possibly enhance public construction of needed infrastructure using private sector or other organizations.

C. Tanner: I notice the minister is showing a little tiredness; it's obviously been a long day for him. I've got a solution to all his problems: if he looks at section 12(h) and takes out the word "other," that solves all his problems. He doesn't need anything else: "do such things as the Lieutenant Governor in Council may authorize." It will solve all your problems. Really, that section does everything that you want to do -- anything you want to do.

But did I just hear the minister suggest that if a contractor came along to build a bridge for this government, and the contractor said, "I'll finance it for you; I'll carry the funding for you," as a consequence they would get the contract? In fact, we could get inferior contracting here because the government is more inclined to take the borrowing of a contractor or the borrowing of friends of the contractor, instead of getting quality workmanship.

Hon. G. Clark: That's an astonishing remark, Mr. Chairman -- that a private sector corporation would be somehow always inferior to a government operation. I would think that private sector contractors who make such an offer to government are not necessarily.... No decision has been made to do that, but obviously that option might be available under this section.

I want to just make one point about what the member said about section 12(h) -- "do such other things as the Lieutenant Governor in Council may authorize." It's important for members to know that this in fact is a protection, because it means that for this financing authority to do anything other than what is precisely prescribed in the act, it essentially requires Lieutenant-Governor-in-Council approval. So in fact it's a limiting rather than an expansion of the powers of the legislation. It requires a certain procedure. Generally, of course, it's consistent with all other legislation. It's essential that legislative counsel would require that, in order to put some checks on the ability of this corporation to do anything it wanted that might go beyond the scope of the legislation.

C. Tanner: In fact, that's not exactly true. It also allows the Lieutenant-Governor-in-Council to make regulations and all that sort of thing.

[ Page 5965 ]

The minister misunderstood me, either intentionally or, I'm sure, by accident. The case I was making was: if three companies were bidding on a project and all things were equal, except that one of them said, "We can carry the financing," the minister is then making a decision on whether they can carry the financing, not on the quality of the work that might ensue.

Hon. G. Clark: It's a hypothetical question, but obviously the government weighs all factors in making decisions. Reducing the province's borrowing requirements may have some financial attraction to the province. It's hypothetical and it's certainly not contemplated. But all of those things are considered by the government all the time.

C. Tanner: Could the Ministry of Highways make the same sort of arrangement?

Hon. G. Clark: No, absolutely not. This bill is only possible because it now has the capability for a user-pay approach.

C. Tanner: Is that the nub of the bill? You've identified a number of things that this bill can do. It can raise funds, and various ministries can apply to it to get some of the funds. But is there another authority here that has suddenly appeared, in that this bill allows the Minister of Finance to do things he couldn't do through the other ministries?

Hon. G. Clark: In this case it's the Minister of Transportation and Highways who is the chair of the board. But it is true that it makes private construction and financing of a bridge easier, because, unlike in the past, there could be a toll attached to it that would pay that off if government chose to do so. In that respect, that is an option that would be available to government that is not readily available under the current situation.

G. Wilson: I wonder if I could come back for a moment, because I'm really stuck on this thing. I apologize if it appears that I'm belabouring the point, but I think it's important. I hear the minister say that there is no difference between a loan and a guarantee. We have a corporation that is able to acquire capital assets that could be used as security. Through the use of that security, those assets could essentially act as a guarantee against moneys that are being borrowed by a private sector company through private sector lending institutions. That is substantially different than the government lending money -- quite different.

Hon. G. Clark: Not in the liability of the province.

G. Wilson: Perhaps not. But in terms of the operating capital of a Crown authority that is supposedly not going to be borrowing any more money than it has in its flow-stream and that is using taxpayers' money as a lending agency, that is substantially different. Using the assets of the Crown -- i.e., the assets of the people -- as a guarantee against private sector lending for construction is different than going to a company and saying: "We'll lend you the first $100 million on the project if the company can find a way to get the money back." If you can explain that, my second question is: where is the process for recovery? Under the Financial Administration Act, which I think is amended here, there is nothing to say that this authority has any opportunity to go after those debtors, if you want, who may not come up with the bucks.

Hon. G. Clark: If it's guaranteed by the province, we have all the power we need under the Financial Administration Act to collect. It's the same if it's loaned. It's still a liability for the province whether it's a loan guarantee or a loan directly.

I want to give assurance here that the government is not going into the lending business. This is a minor section in a much broader bill that allows the government options for some innovative financing with the private sector, municipal governments and the like. The borrowing is so tightly constructed that we're not going to be rushing out and borrowing money. If we did borrow money and off-lend it, it would still require income from the tax revenue dedicated to it to pay for it. And we're not going to rush out and lend money through this vehicle.

Legislative counsel drafted this legislation, looking at making sure that innovative financing arrangements are allowed, and looking at working with municipal governments or the private sector. It's not my draft. I'm not trying to hide behind technical questions. It's essentially a technical wording to give those options to the government to try to pursue a variety of different approaches that open up as a result of the dedicated revenue and the pay-as-you-go approach that may be contemplated by the bill.

G. Wilson: Maybe I do have a somewhat suspicious mind in looking at that.

Section 12(f) says: "...subject to the approval of the Lieutenant Governor in Council, enter into agreements with the government of Canada...." That could be joint federal-provincial arrangements, which seems reasonable. It also says: "...the government of a province...." We can see that there may be a joint relationship with Alberta on projects. It's unlikely that we're going to be doing it with Saskatchewan or any other points east, but maybe we're talking about the Territories and the Yukon. And then it says: "...or the government of a jurisdiction outside Canada, or with an official or agency...of those governments." We're not only going to be dealing with that but also with a much broader base. Can the minister tell us precisely what, under the authorities of this agency, is contemplated by having this Crown agency empowered to enter into agreements with governments outside this country?

Hon. G. Clark: I hate to disappoint the member, but we have agreements now with the state of Washington on a variety of issues. Everybody knows the Georgia basin question. The Premier has talked about it. People know about some interesting concepts to facilitate commerce with Washington State, some of them started by the previous administration. If for 

[ Page 5966 ]

highway purposes there was a joint agreement between Washington State and the Province of B.C. to pursue an undertaking in our mutual interests, then why would that not be allowed?

G. Wilson: I don't have any problem if the two governments come together and the executive council of government says that it's going to enter into these agreements. What we see here, though, is a Crown agency that has the power and the capacity, with the minister and four hand-appointed people under corporate seal, to borrow money outside of the normal borrowing powers of government and now is able to enter into agreements with jurisdictions outside Canada.

I'm not arguing that we shouldn't have these kinds of agreements if they're in our mutual interests. The Georgia basin concept is a very interesting one. I know it's dear to the heart of many members of this government. I wonder whether or not that specific language was contemplated because there is an attempt to enter into such an agreement with respect to the Georgia basin initiative. We are now looking at resource enhancement opportunities. Are we actually talking about the potential to enter into agreements with other Crown corporations, like allowing B.C Hydro to enter into construction projects that would facilitate integrated water power management and downstream management opportunities? Is that contemplated here?

[5:30]

Hon. G. Clark: No, this is a transportation initiative. I won't clarify the member's remarks that I disagree with. I will say, at this point in time, that I have absolutely no knowledge whatsoever of any joint highway agreement with the state of Washington. You can ask the Minister of Highways if there is such an agreement being contemplated. This was not constructed specifically to deal with a specific issue. It simply allows an opportunity, that exists all the time now with the Ministry of Transportation and Highways, to enter into joint agreements for transportation initiatives with other jurisdictions. This continues that with the Transportation Financing Authority. Lastly, read the first part: "...subject to the approval of the Lieutenant Governor in Council." It still requires the government to approve any agreement between governments.

G. Wilson: I understand that; nevertheless, it gives powers to this Crown agency that I think the people of the province may want to know exist. The purpose of this debate is to let the people know what this government is up to, particularly in relation to that clause. Is there is a proposition under section 12, with respect to the creation of subsidiary corporations...? What is intended by that? Why are we looking at something that is able to breed?

Hon. G. Clark: The ability to create subsidiary corporations may be used to enter into innovative financing arrangements for transportation infrastructure projects.

G. Wilson: I understand that the minister has some briefing notes there. I suspect that that's maybe an indication that.... Actually, it's the second time he's used them. But that really doesn't tell us very much. We understand that this subsidiary corporation is supposed to enter into innovative financing projects for highways. Well, we're told that the whole purpose of this new highway financing authority is to do that very thing. So why is it that we're creating an authority within a Crown corpration to be able to create another authority within a Crown corporation to do what it is that this corporation is supposed to do, which can already be done within the Ministry of Highways?

Hon. G. Clark: If the government wanted to enter into a joint venture with a private corporation, it may be required to set up a subsidiary corporation for the purposes of financing arrangements. This simply allows it; there's nothing nefarious in it at all. This again, as a result of having a dedicated revenue source, simply opens up some opportunities for the government, that can then fund projects. This whole section allows the flexibility on the part of the transportation authority to enter into an agreement to create subsidiaries to enter into joint ventures with governments and with private companies and the like.

G. Wilson: I guess what we're hearing -- and what I'm reacting to at this point -- is a fundamental philosophical difference between the direction that I'd like to see government go and the direction this government obviously wants to take. This government feels that it should be creating bigger and more intrusive government and government that's involving itself more directly in the private sector than I would like to see. Clearly, if that section is there to create subsidiary corporations to enter into agreements with private sector enterprise -- and going back to the idea that it's also empowered to provide loans and guarantees, and assistance by way of grants to corporations -- it seems that we have created something that really is in need of much greater review and greater debate. It strikes me that we have created an agency of government that is able to start to involve itself much more directly in what has traditionally been private sector enterprise in British Columbia. If that isn't so, I'd like the minister to tell me how that could be read in any other way.

Hon. G. Clark: Talk about old, outdated thinking! This member can't get beyond what government has traditionally done. This is the opposite to what the member suggests. First of all, this gives the government creativity. It allows innovation. It means joint ventures with the private sector; it means we can have privately financed bridge construction for the first time in the province; it means we can have user-pay for the first time in this province, which would finance private sector construction. All of those options are available to government.

This is creative government. This is innovative government. This legislation allows those innovations. That member keeps coming back, first to something 

[ Page 5967 ]

about the chancellor of the exchequer, which took place 100 years ago; secondly, he can't seem to get beyond the fact that this is new, it is innovative, it allows for that kind of flexibility, it likely will mean much more involvement from the private sector than in the past, and much less involvement from the government, because we now have the ability to finance those vehicles with dedicated income streams. That means the private sector is much more interested in it. And I can tell you, hon. members, that I am besieged by private sector construction companies who look at this and say: "My goodness, we have a businesslike government -- a progressive government that's looking at innovative ways of doing business. We'll build that bridge for you. We'll even finance it for you because now if we decide to put a toll on it, it means it's pay-as-you-go."

I would think that members opposite would be delighted with this kind of new approach to governing, rather than be stuck 100 years ago in saying that only government can do it, that only the old way can do it. New ways and new approaches is what this government is trying to do, and what this bill is all about.

G. Wilson: Maybe somebody came home from work and turned on the TV, to get that kind of reaction. I'm not quite sure what motivated that performance, but clearly what I was trying to get at is not something that lacks innovation. I wasn't talking about something that lacked foresight or vision. I wasn't trying to suggest that we should go back to some kind of archaic mode of operation. But I can tell you, Mr. Chairman, in response to the minister's discussion, that I have canvassed many private contractors and private sector people all over the province, and they haven't even heard of Bill 3, let alone have they been consulted on it. They haven't any idea what it is.

Interjection.

G. Wilson: The minister said: "Well, how did they vote?" I grant you that I wasn't canvassing people who vote NDP. I guess they've all heard of Bill 3, because they're lining up for loans and patronage appointments that they're going to get, and they're eligible for guarantees.

Interjections.

The Chair: Order, hon. members.

G. Wilson: Mr. Chairman, we certainly are digressing in this debate. I for one would like to try and bring it back to the substance of the debate and see if we can keep the minister on track.

My difficulty with the creation of subsidiary corporations is not because I'm against the government entering into some agreement with private sector construction. I don't oppose that. However, I do oppose much greater degrees of government control, and that's what this bill is going to give. Any way one reads it, I think you would see that that's true.

My last comment on section 12, the powers and capacity under this authority, comes back to the question of holding and maintaining property and the proposition of being able to dispose of property. I did caution the minister that I wanted to come back to subsection (d) with regard to the disposal of property acquired under paragraph (b). Once this Crown agency has this property and, as it is its asset, decides it's going to dispose of it, what public input is there going to be with regard to the disposal of Crown assets, which essentially are owned by the public? Where is the public process going to be maintained by this Crown corporation?

Hon. G. Clark: It's the same public process that exists in government now. We receive about $70 million, at my last count, from the Crown lands account. The government sells Crown land every day of the week, and you have the same scrutiny. B.C. Transit, B.C. Ferries and others sell assets as part of their ongoing source of revenue. There's no contemplation that this corporation will sell assets. But if it did, it would do it the same way they do it in every other agency, Crown corporation or ministry of government.

G. Wilson: I think the Minister of Finance would certainly agree that if we're talking about land as an asset, it's substantially different if it is managed and handled under Environment, Lands and Parks, under the authorities and policies of Lands in terms of acquisition and disposal of Crown land, than it is if you're talking about lands that are under expropriation by the Ministry of Highways. They are two entirely different processes. So let's not just say that we do it now and it's all the same, because it isn't all the same. Under the Crown Lands Statutes Amendment Act there is a very clear process by which land can be acquired and sold. When land is sold, it should be sold through public tender.

My concern is that we're starting to see project developments in which this government has a hand where land is being disposed of without public input and involvement. If this corporation is allowed to acquire Crown assets such as land and to expropriate and then dispose of that, there should be some public process, unless we're going to get into what we've seen in the past, such as in the Expo lands deal, in Kamloops right now with the Tod Mountain development, and in what's rumoured to be happening now with foreshore leases all up and down the coast of British Columbia, where leases are being sold privately without any public knowledge at all. I think the minister needs to address that, because that's a very important point.

Hon. G. Clark: The purpose of the section is to.... If land is acquired for highway construction, and at the end of the highway construction there is surplus land, it is then sold. That is the same with B.C. Rail and anybody else with the same authority. They have the same expropriation authority to build a railway; and if there is some land in excess of their needs, they sell it. I can assure the member -- I will give him this undertaking -- that we will try to derive the maximum 

[ Page 5968 ]

price for the taxpayers for any land sold, and that usually means it will go to competitive bid.

R. Neufeld: Back to 12(g) "...create subsidiary corporations." Maybe the minister could clarify that a bit more. I understand it when he's talking about the private sector helping to build bridges. But this would also allow the government to create a construction firm to go out and build highways itself, would it not? If you could do that, it could go along with getting more members into the unions and into the BCGEU. All of a sudden it's something like ICBC, where we're going to start running our own shops. We'll all of a sudden have our own companies to build highways. Would that be possible?

Hon. G. Clark: I guess that technically that would be possible. I can tell you categorically that we're not intending to build that kind of structure. We have excellent private sector development companies in this province. We've been talking to them because they can see some opportunities here for more private sector involvement. We'll be using them. I guarantee it. We don't anticipate some proliferation to compete with the private sector in this regard. It may be that for some purposes some joint venture, or some aspects of that, are better suited to a subsidiary for technical reasons. That's what we're advised, and that's why this clause exists.

Section 12 approved.

On section 13.

C. Tanner: It seems, to this member anyway, that the minister is going to solve all his problems with this bill. You've got to start to wonder why we didn't have two or three separate bills for doing separate things. Maybe this omnibus bill is part of the confusion.

[5:45]

There is just a matter of clarification on 13. I understand that it says in 13(2) that a quorum of the directors will be a majority of them. It also says that subject to 14(3).... I've got to jump ahead to make my point, Mr. Chairman, if you'd allow me this one change in the procedure. Section 14(3) talks about how you operate if you're going to communicate by telex, telegraph or fax. I don't think it's absolutely clear, if there's less than a quorum, whether you can use both -- whether you can use 14(3) to proceed with less than a quorum.... Or is 14(3) designed only for when you want to communicate with members when they're spread around the country and not actually having a meeting?

Hon. G. Clark: Yes.

C. Tanner: I'm sorry -- is it yes to the fact that you haven't got a regular meeting with a quorum, or is it yes to the fact that you can have a combination of both less than a quorum and a fax or telephone?

Hon. G. Clark: Board members do not have to meet in the same physical location. However, all board resolutions not passed in a meeting in the same physical location must be confirmed in writing.

Section 13 approved.

On section 14.

G. Wilson: With respect to the powers of the board, I wonder whether we could look at two or three things in here that I think need some clarification. This is a rather strange idea that you're going to have this meeting without a meeting, with everybody connected to a phone or a fax, and they just fax stuff back and forth. Maybe they can even hook up by some kind of mental telepathy and deal with it later on paper. It says that the board may: "...delegate the exercise or performance of any power or duty conferred or imposed on them to the chief executive officer of the authority...." Can the minister explain what that means? Obviously we're going to have the appointment of a chief executive officer. That appointment is presumably made by the Premier, if I understand the way it's going to work.

Interjection.

G. Wilson: All right, the board is going to make the appointment. We've got a chief executive officer appointed. I think there's a couple who are unemployed and are probably looking for somewhere to go. The board can then delegate the exercise or performance of any power or duty conferred or imposed on them to this chief executive officer. Is that right?

Hon. G. Clark: Yes. This is standard material. It ensures that the day-to-day management of the authority is carried out by its officers and employees rather than by the board.

G. Wilson: If that's true, and I understand that's what they want to do.... Section 14(2) says: "The directors may pass the resolutions they consider necessary or advisable for the management and conduct of the affairs of the authority and for the exercise of their powers or performance of their duties including, without limiting the generality of the foregoing, resolutions respecting the procedure to be followed at the meetings." We're saying that the board doesn't have to be physically present. The board can actually transfer any of its powers to the chief executive officer, and they can essentially make a decision that will be ratified later by some form of telecommunications strategy. When you're looking at the powers of this particularly unusual Crown corporation.... The reason I say it's unusual is that it has the minister as its chair. No other Crown corporation does. It seems to me what we've really got here is an agency of government that is able, through patronage appointment, to appoint a chief executive officer who doesn't have to functionally meet, outside of the original meetings around Treasury Board allocations of moneys, and to let that officer run.... Look at the powers this agency has over the 

[ Page 5969 ]

construction of highways in the province of British Columbia. This is an amazing thing for this government to do. It's a centralization in the hands of a Crown corporation. I'd like to hear an answer to that. Maybe there's somebody who can do that.

D. Schreck: Hon. Chair, the lengths to which the Leader of the Liberal Party is going to explore this legislation is almost unheard of in this chamber. However, I would like to draw his attention to the fact that when legislation is drafted, the drafters commonly put in what are called boilerplate clauses in order to empower boards to fulfil their function, to allow legislation to be proclaimed and to do all the standard things that are done in almost any piece of legislation. Boilerplates are put in without any intent to create anything different or out of the ordinary. It's quite run of the mill and routine, we might say. The powers given to the authority in section 14 of this act are nothing other than what we might describe as boilerplate for a tightly controlled Crown that will allow this province to build for the future. It's very sad that the Leader of the Liberal Party is frustrating this debate and is trying to stop that.

G. Wilson: I guess that's what happens when somebody comes into the debate late and hasn't been following it. We know from the Minister of Finance that this is a brand-new, innovative and unusual piece of legislation that is going to take this government into the twenty-first century and make it unlike any other government in Canada. It is going to be the most outstanding piece of legislation, because it's going to essentially entrench the powers that they desire in the hands of the Minister of Labour through the Minister of Transportation and the Minister of Finance. Yet now we need to have that communicated to the member for North Vancouver-Lonsdale so that he understands how innovative it is.

I have one other question under section 14 that has to do essentially with the powers of this board in terms of its function on borrowing and its relationship to Treasury Board -- because it isn't clear in here -- outside of "...exercise the powers of the authority on behalf of...." You have to go back to take a look at what the powers and capacities are.

Interjection.

G. Wilson: I'm hearing the minister say that he doesn't want to talk about that until we get down to section 18, and I think that is a big section that we certainly want to canvass. Could the minister simply give us some comment on the relationship between this authority and Treasury Board in terms of setting borrowing priorities?

Hon. G. Clark: This section allows the directors to make resolutions which guide the authority's conduct, reinforcing that the board is responsible for the overall direction of the authority and setting the framework for day-to-day operations. Any borrowing question is Treasury Board's, and that is dealt with in section 18.

Section 14 approved on division.

On section 15.

G. Wilson: Just a simple question, for clarification, going back to the earlier comments of the minister. I assume that this is a standard clause that simply allows for reimbursement of out-of-pocket expenses but would not apply as a line budgetary item. We're not looking at any substantive administrative costs that would be set up as a result of director remuneration or director travel allowance. In other words, when we're making these agreements with foreign countries, we're not going to have these directors flying to China perhaps to set up a new project for B.C. Hydro or something like that.

Hon. G. Clark: That's correct -- it's just standard.

Section 15 approved.

On section 16.

G. Wilson: I come back to one of the more offensive sides of this, because those of us looking for a more open and more responsible government notice that the position of chief executive officer of the authority is once more a simple patronage appointment. We notice that the chief executive officer who carries out the functions of the authority has the powers to further appoint "officers and employees of the authority necessary to carry on the business and operations of the authority and may define their duties and determine their remuneration" -- their pay. So I guess my question is on this: the minister had told us that this was not going to be an authority that would have any substantive staff, administration or additional new costs attached, but we see under section 16 that there is certainly the possibility there. Given that under section 16 you have a patronage appointment as chief executive officer, and you've got that officer then able to appoint further people to establish a staff, define their duties and then essentially pay them as they would be paid if they were under the Public Service Labour Relations Act.... Can the minister tell us the expected number of people in this staff? Are they all going to come from line ministries, or is there going to be some kind of additional cost that we should be aware of as this legislation passes?

Hon. G. Clark: I have canvassed this at length. We don't anticipate a large staff for this, if at all. These are standard forms which do allow government to do that, if it so chooses, and the government is held accountable in the chamber for any of these actions. We don't anticipate a large staff attached to this financing authority.

Sections 16 and 17 approved.

[ Page 5970 ]

Hon. G. Clark: I move the committee rise, report progress, and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

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

Committee of Supply A, having reported progress, was granted leave to sit again.

The House recessed at 5:57 p.m

The House resumed at 6:04 p.m.

Hon. G. Clark: I call committee on Bill 3.

BUILD BC ACT
(continued)

The House in committee on Bill 3; H. Giesbrecht in the chair.

On section 18.

G. Wilson: We're on section 18, as I recall. It has been so long since we've been on this bill. If we're going to keep this up, we should amend the rules of the House to allow us to at least bring in a coffee. We've got water here.

Interjection.

G. Wilson: The minister says they do that in Manitoba. If this government wants to be progressive, being able to bring in a cup of coffee would be one way to make it more progressive.

Under financial administration, I have about four specific items that I'd like to have answered with respect to the accounting of this particular agency. I notice it says that the minister will be able to have the books opened for inspection. The Minister of Finance and Corporate Relations and the comptroller general may examine the reports of Treasury Board, and an audit is provided, paid for by the authority. I think on all of those counts, this is internal.

Where do we have any kind of proposition provided for us? I recognize that under one of the consequential amendments, there is a proposition to provide the Minister of Finance and executive council some opportunity to review business plans and what have you. But where do we have some public accounting of this, especially on an operational point of view, throughout the year? As I see it now, this is all very much internal. Treasury Board has some rules that govern it, but that gives me no confidence that there's any public accounting available for the expenditure of public moneys.

Hon. G. Clark: Mr. Chairman, let me first introduce the assistant deputy minister responsible for the provincial treasury, Brenda Eaton, who is sitting behind me. This is a high-powered organization here in the House today.

Section 18(10) says: "The report and financial statement referred to in subsection (7) must be laid before the Legislative Assembly by the minister as soon as practicable." I think that gives the member some comfort. The audit is done, the information is done, and it is laid before the House as soon as practicable.

G. Wilson: One of the difficulties we have within government that the public is becoming much more concerned about -- and so they should be -- is that there seems to be a general lack of reporting and auditing by an independent agency such as the auditor general. Given the nature of this particular Crown agency, and given the fact that it is chaired by a minister of the Crown and obviously very definitely interwoven with the government's priority on spending, can the minister tell us whether or not it will be subject to review by the auditor general?

Hon. G. Clark: It's audited the way other organizations are, which means that the auditor general or a private sector auditor could be asked to perform the audit. All members of the House know that the auditing profession is governed by a self-regulatory body and that they have standards and practices. So any audit performed by the private sector is a similar audit to the auditor general's. It's the same standard format that the auditor general pursues.

I also want to bring section 31 to members' attention. It states that schedule 2 of the Financial Information Act "is amended by adding the following: BC Transportation Financing Authority." This means all of the information is available to all members of the public and members of the House. We've ensured that the Transportation Financing Authority is available to them by way of the Financial Information Act.

G. Wilson: That doesn't give us any comfort at all. If we're going to jump that far ahead to section 31 -- and I suggest we don't -- all that schedule 2 is is a long list of Crown corporations. If you ask any member of the public what their last financial report of B.C. Rail was and how it looked, I'm sure they couldn't tell you. They won't be able to tell you on this. So that doesn't give me any comfort at all.

This is an agency that has unusual powers. The minister would say it has innovative powers; we say unusual powers It seems to those of us on this side of the House that the committees -- and especially this new authority set up -- do not include any members of the opposition. It really has no reporting authority to the legislative authority, except possibly in terms of looking at the overall aggregate amount to be spent in this agency, which we might get during estimates. It seems to us that there should be greater consideration given to a public audit that is done by the auditor general and provided for scrutiny of the House in a manner similar to the auditor general's report, which would be included along with other government 

[ Page 5971 ]

expenditures. I wonder if the minister could tell us why that wasn't put in place here.

The Chair: In view of the slight digression in the discussion that's just passed, the Chair would remind members to be strictly relevant to section 18.

Hon. G. Clark: The auditor general under his act, his statute, has the power to investigate and scrutinize Crown corporations, and he has the power with respect to this as well. But the routine auditing of the financial statements can also be done by the auditor general or a private auditor. There is no difference, and it will take place and be tabled in the House. The auditor general then has an opportunity to review those documents, if he chooses to do so. If a member of the opposition chose to ask him to do so, I am sure he might take that under advisement.

G. Wilson: I wonder, then, if it is the proposal or the intention of the minister under 18(6) -- where a plan is submitted to Treasury Board under subsection (5), which contains expenditure proposals -- that that plan for revenue proposals would come before this House for review. What we're saying here is that we're going to have a chance to debate the aggregate amount of money going into this authority during estimates -- having looked at the aggregate amount that goes in -- but beyond that we're really not going to have any accounting of it. We're not going to have any input into how things are spent. Neither are we going to have any kind of review, save and except for a private audit that may be done and tabled at the minister's convenience, which will be whatever subsection (10) says -- "as soon as practicable," which could be months into the next sitting.

Hon. G. Clark: Members of the opposition have the opportunity to question members of the government every day the House sits. The minister responsible is in the House. Members of the opposition can question, and do question, every day. The annual appropriation is subject to debate in this House. It's a vote of the House. Every year it is scrutinized -- I'm sure diligently -- by members of the opposition. I'm positive of that, Mr. Chairman, and I know that there'll be full accountability, that the government will have their feet to the fire, and that we'll be forced to go through line by line all the expenditures of this organization. I'm sure that when the reports are tabled in the House, they will be scrutinized. The auditor general has the authority to go in and review in order to ensure that this makes sense and that we get value for our money. All of those checks and balances exist. I submit to the member opposite that there is more than adequate scrutiny of this organization and this initiative -- in fact, more scrutiny than exists in many other agencies and Crown corporations of government.

G. Wilson: There's absolutely nothing in section 18 that gives me any confidence that there's more scrutiny. I would suggest that that simply isn't so. The difficulty we have here when looking at the financial administration accountability of the authority that is being created is that it once again reinforces the notion that the only time the opposition -- i.e., the public -- has an opportunity to review a new agency is some months after the fiscal year-end, when it tables an audited report and we get to take a look at where the taxpayers' money has been spent, for good or for bad. Often those reports, if one looks at and reads through them.... I'm not being critical of the agencies that do them, but let's face it: read the annual report of the B.C. Ferry Corporation and it doesn't tell you a lot about the B.C. Ferry Corporation. It provides you a bit of financial information, but it certainly doesn't give you the kind of detailed information you'd want.

The minister is saying: "Look, wait until the year-end. Wait until afterwards, and then you can scrutinize after the fact what's taken place in terms of the expenditures through...." It isn't enough. If this minister really wants to have an innovative change in government, he would accept what we on this side of the House have been advocating for the last three or four years: that there be a quarterly audit review done on this agency.

Interjection.

G. Wilson: The minister says that we've only been in this particular domicile for a year; but we've certainly been working at it for longer than that.

Interjection.

G. Wilson: This is true -- and it's unfortunate that Hansard didn't pick up that comment.

Nevertheless, wouldn't it make sense to have a quarterly audit process so that we can have some kind of review of how the expenditure is going, given that this is a rather unusual Crown agency that is going to be able to borrow...? We're told that it's $80 million this year, but it's potentially $600 million over long-term capital financing. That's a lot of taxpayers' money, and the taxpayers want to know how it's being spent. They don't want to know after it's been spent. There's an old adage -- if I could get the minister to see this. As someone who in my other life once raised hogs, you check the electric fence before you walk away and they get out, not after they're long gone down the road. What we're saying here is we want to have exactly the same kind of opportunity to make sure that this authority is not going to financially burden British Columbians for future generations without us having some authority to be able to say how and where it's gone.

[6:15]

Hon. G. Clark: I was interested in the pig farmer's adaptation of the old horse and gate story. Last year in this House the leader of the Liberal Party -- I checked today; he's still the leader of the Liberal Party for a little while yet -- spent two hours questioning me as minister responsible for B.C. Ferries. They were excellent, delightful, thoughtful questions, covering all range of activities of the Ferry Corporation. I was delighted to answer those questions. We had staff here. 

[ Page 5972 ]

It was exactly the way this place should work and does work when we get thoughtful opposition -- which we don't get too often. But the leader of the Liberal Party did last year, with respect to the Ferry Corporation, and I'm positive, as long as he's still in this chamber, that we will receive hours of debate and discussion over this Crown entity -- the B.C. Transportation Financing Authority -- in this chamber, where it belongs.

G. Wilson: I can't help but say that that really adds some colour to the old adage about the sow's ear into the silk purse kind of thing. This is just amazing banter.

Interjections.

G. Wilson: Use the Hansard in my campaign material to sign him up.

My last question on section 18 has to do with the fiscal year-ends. Does the fiscal year of this authority begin and end with that of government? Is it contemplated that moneys that are not committed within that year can be carried forward, or are those moneys going to be essentially recouped by government -- if indeed there are dollars there?

Hon. G. Clark: It is contemplated that it will be carried over because it's a corporation, unless the government chose to ask for a dividend or something from the corporation to claw it back.

Section 18 approved.

On section 19.

G. Wilson: I've only got a couple of small questions on this most regrettable section, where we're once again putting a tax on motor fuel. I don't want to jump ahead to other bills, but I notice that in Bill 4, which comes after Bill 3, there's a subsequent amendment to gas. Is it envisioned that the tax being assessed against motor fuel is also going to apply to auto propane? There's a different rate structure, and under Bill 4, which is about to follow this one, we notice that the increase on propane is greater than that on petroleum.

Hon. G. Clark: My understanding is that it's gasoline and diesel fuel, not propane.

G. Wilson: I want the minister to talk again about the prescribed area of B.C., because there was some confusion. I know this was canvassed by both the member for West Vancouver-Garibaldi and the member for Okanagan East with respect to whether this was a specified-area tax in areas where construction is underway. I think I heard the minister say that this is not going to be a specified area tax of 1 cent a litre. If that's the case, what's the purpose of the prescribed area? Why is it in there if it isn't a specified area? I'm confused by that language.

Hon. G. Clark: That's not our intent at this time, but the bill gives a future government the option to put a local levy on gasoline for the purposes of this bill. The section is essentially copied from the British Columbia Transit Act, which allowed the transit commission area to be applied.

G. Wilson: I'm aware of that. In fact, I read the transit act to see whether or not that is so, and indeed it is. That means, then, that in the Island Highway project, for example, if this government were to opt not to go to tolls, they might implement a specified area tax of 1 cent a litre specifically on a project-by-project basis. This allows for that option. Is that correct?

I take it that the minister's nod means yes, and I'd like that yes to be recorded. Not hearing him refute the yes, I'll assume that it's yes.

C. Tanner: Does the lifting of this clause from the B.C. Transportation Financing Authority apply for specific purposes or to specific areas?

Hon. G. Clark: The purposes of the act are defined in section 2, so this is for specific areas for the purposes as defined in part 4 of the act.

G. Wilson: It's my understanding that the revenue from this is anticipated to be $33 million. Was that estimate for $33 million calculated on a provincewide levy or on a regional levy?

Hon. G. Clark: Provincewide and also part-year funding. Full-year funding is, I think, $46 million.

G. Wilson: My last question is on something the minister said prior to the break, and I'd like some clarification on it. The minister said that this gasoline tax was not going to come into effect until the fall, yet section 38 says the commencement of the act is retroactive to April 1, 1993. Have I missed something in here that says that this doesn't apply until the fall? And if so, where is it?

Hon. G. Clark: The gas tax does not come into force until a resolution of the corporation, and we've indicated in advance that that will not take place until September 1.

G. Wilson: Okay, so the levy that's in here commences provincewide upon the resolution of the corporation on September 1. Is that correct? And it is a provincewide levy. So the people of British Columbia can expect to pay 1 cent a litre more for gas on September 1 and to once again head south to shop.

H. De Jong: Since the minister said that some areas could be taxed more than others, is it the intent that the revenue from those additional taxes would go back to that particular region of the province?

Hon. G. Clark: I discussed that question earlier. Obviously, if it's a provincewide tax, we want to make sure that there's some equity in regional distribution. We won't be saying that Chilliwack generates this much revenue, therefore we have to spend precisely that 

[ Page 5973 ]

amount in the Chilliwack area. But we will have to make sure that there's some equity applied to any projects funded by the Transportation Financing Authority.

Section 19 approved.

On section 20.

G. Wilson: Mr. Chairman, I have a very short question on this. In terms of the amendment to the Social Service Tax Act, which regulates the rental of automobiles, the section that is being amended -- section 2.5 -- talks about exemptions for vehicles rented for over 28 days. Does that apply here too? Are we talking about short-term rentals or long-term rentals?

Hon. G. Clark: It's precisely the same definition. The $1.50 per day does not apply beyond 28 days.

G. Wilson: Could the minister tell us what the rationale is? Is it simply to get away from people who are involved in long-term leasing? There's a grey line between a rental and a lease, as the minister probably knows -- although not as grey a line as the one between a loan and a security. However, there is a grey line. I know there are many people who lease vehicles, and there are many who rent them on a long-term basis. They can be assured that this levy is not going to be against rentals of over 28 days. I wonder what the rationale is for not just saying that there's going to be an equitable percentage -- not that I'm in favour of it. In fact, I'm quite opposed to this increased revenue being raised this way. It's a levy against people who find themselves in need of renting, and many of those people are tourists, as we've already pointed out in second reading. What was the rationale for not having that amendment so that it's equitably applied to all renters?

Hon. G. Clark: The rationale is precisely to do car rentals, and not car leases, and the definition of that is in the Social Service Tax Act. In addition, for the sake of eliminating costly duplication of administrative systems, we wanted to apply the same definition for collecting and remitting this tax as for the social service tax.

Section 20 approved.

On section 21.

G. Wilson: This is probably one of the more contentious items because it does talk about the opportunity for this government to move into an entirely new way of financing highways -- through the implementation of tolls. We're hearing the minister saying that there hasn't been any agreement to put in tolls, and yet we've heard frequently from the Minister of Highways that we can expect tolls, and on some bridges, tolls and trolls, I'm told. I'm not sure what he meant by that, but we will assume that as long as this government's in power, there's likely to be....

Interjection.

G. Wilson: Ah, now we understand. Thank you very much. It's been clarified by the member for Nanaimo that if they are indeed cousins to the Smurfs, then we're in real trouble.

But under this proposition, what concerns me is that it seems there is discretion given to this authority to determine which projects will be tolled and which will not. I know we can't get into too much on the philosophy, but in terms of the technical application of tolls, what is going to be the rationale used that would be punitive against one area because a bridge is constructed with toll, as against another area where a bridge may be constructed without toll? I raise this because there is a mounting cynicism that what's really at work here is a mechanism to start to favour some areas or ridings over others. So what is the rationale going to be for this? Quite clearly the authority rests with this agency, and there is no accounting for it anywhere.

Hon. G. Clark: No decision has been made by the government to implement tolls. This bill allows for that opportunity. I said at the outset that if we did announce we were to provide for tolls, then we would ensure that it was done fairly, that there was some equity -- criteria we're reviewing right now. But I'm puzzled that the member opposite would be opposed to a user-pay approach and would constantly come back to this notion that government has to do everything: government has to build all the highways; we can't have tolls. We can't have private companies financing the building and constructing of bridges and roads in this province; and there can't be tolls attached to those.

[6:30]

I can't understand that member opposite. But maybe during his leadership debate, he can make that point clear with other members because I'm puzzled by this schizophrenia when it comes to the politics of members opposite. Clearly, this bill allows a user-pay approach -- it's a modern approach. Other governments are promoting it. We have this option now and we'll make sure it's done fairly; we'll make sure equity is applied across the regions. If we decide to proceed with tolls, it will be a matter for great public debate -- we're sure of that -- and we have every confidence that if we decide to do it, it will be done with equity in mind.

G. Wilson: I'm sure that the people of British Columbia will be delighted to learn that this government is itching to put tolls on new construction. People who have a residence, a business, or a need to transport themselves on the highways of British Columbia are going to be told that now we need a user-pay system. We're not a user-pay system with a reduction in the taxes they already pay toward this authority. No, they're going to be taxed additionally in the same way that this government, with impunity, increases the rates on ferries, impacting on everybody on Vancouver Island where the ferries are natural extensions of the highways.

[ Page 5974 ]

This government talks about innovative ways to build highways -- and that is part of this section, lest the Chair think I'm digressing; I'm still talking about tolls and charges under section 21. This government fails to recognize that the people of this province already pay their fair share of taxes toward the very kinds of things that should be constructed: namely, infrastructure and highways. They already pay an enormous tax on gasoline that comes to this government, which is already the recipient of a huge sum of money.

So for this minister to stand up and say that he can't understand why we would be against user-pay.... The user already pays. Every time they put a litre of gas into their tank they pay a huge tax to this government for the use of the road. So let's not get into that philosophical debate.

What I want to know is: where is the accountability within this section for those areas, given that there can be regional variation on which areas have tolls and which do not? Where is it accounted for in this act -- as to the criteria by which tolls would be assessed?

Hon. G. Clark: The accountability is with the people. I'm sure that if the government decides to put a toll on a bridge, everybody in British Columbia will know about it. And I'm sure that when we get into this chamber, members of the opposition will question the government about it, and we'll have to have a detailed policy statement with clear criteria for establishing tolls. I'm sure that it will be a matter of great public debate in the House, and with the public at large if we chose to do so.

I might also say that it's required to have Treasury Board approval for any tolls, if we decided to proceed with tolls. Then it would come by way of this Transportation Financing Authority, and then it and the amount would have to be approved by Treasury Board the same way other fees and licences are. And they're debated in this House.

I think that the previous government had 3,000 fees and licences by the time we took office. Those are adjusted somewhat regularly, and they're debated in this House. But there isn't a mechanism for adjusting how much drivers' licences are, or how much the other licences are, except that there's an attempted policy of user-pay. That approach is exactly the same for this. If there was a toll it would be the same as any other fee and licence levied by the government. That decision would be made by the government as a policy matter, by the Treasury Board as a financial matter, and then it would be subject to the scrutiny -- the grilling -- which we're under in the House by some members of the opposition every day over the months that the Legislature sits.

G. Wilson: You can always tell when this minister is on thin ice, because he really starts to skate pretty fast. I'll tell you he's on thin ice on these tolls, because most people who look at.... When this minister is able to tell the people of North Island, in the areas north of Nanaimo.... I think it's interesting that the member for Nanaimo was applauding tolls here tonight. When this Island Highway is built with tolls in place, and people realize that through no fault of their own, but because they happen to have resided in the area for many years, this authority is now going to punish them by putting an increased levy against their use of the highway, by virtue of the fact that they have to travel down this long-promised -- not just by this administration, but by previous administrations -- new Island Highway....

The only thing in this section 21 that would give us hope is the fact that it might promote a greater use of the bicycle, because that's one of the forms of transportation that's exempted from the tolls. So I would say to the people of British Columbia that under this government we may all have.... I think the horse and carriage is exempt also, which might take us back a decade or so. I think that the people of British Columbia will want to know that this new agency opens the door to toll highways in British Columbia as a means of financing capital construction, and I believe that most people in the province will oppose it because they already pay their fair share in taxes and in levies against gasoline.

Hon. G. Clark: I wonder whether the leader of the Liberal Party would abolish the toll on the Coquihalla Highway. That would increase the deficit by $35 million. I'd be anxious to see how that member would propose to finance infrastructure development, because ideologically they're not consistent in this regard. They either believe in user-pay, or they don't. Repeatedly we've heard "more spending, more spending, more spending" from the Liberal leader over there. Yet when it comes to a reasonable approach, an option for user-pay which would be available to government, should it choose to do so, he stands up here and opposes it. I think that's probably why he may not be the Liberal leader very much longer.

G. Wilson: When they skate faster, they try to get personal, and that gets unfortunate. In case this minister is so poor in his geography, the Coquihalla Highway, you have to know, has at least two alternate routes that people can take to get from point A to point C without necessarily paying a toll. If you are constructing a new bridge across a river for which there are limited or no travel alternatives, people, by necessity, are going to have to cross it, and therefore they will be subjected to tolls. It's not unlike people who have to pay the onerous and increased ferry fares from coastal communities because they have no other way of getting where they have to go. That's the point this minister seems to have missed.

It seems to me that this particular bill opens the door for this government to once again levy a punitive tax against the people of British Columbia. If you're going to do that, then do it but reduce the cost to the taxpayer by some other measure. Give them some kind of equity for the dollars they are paying now. But this increases taxation. It increases the levy by 1 cent a litre on gasoline and on top of that says they have to pay a toll on their new highway. I think it's not defensible by this minister in any way.

[ Page 5975 ]

Hon. G. Clark: As he does so often, the member opposite sets up a straw man and then argues against that false premise. His argument was that the Coquihalla is okay because there is an alternate free route. Well, the government has not taken a policy decision to put toll highways on where there is no alternate route. We have not taken that policy decision. If we do, the member can then criticize us for that if he chooses to do so. We're reviewing the toll option and reviewing equity considerations because -- the member is correct -- you don't want a toll in one section of the community and not in another section, penalizing one against the other. We have to review these options for fairness, for regional equity, for all of those considerations. If we decide further, I'm sure there will be criteria established that will be up for public debate.

So the member is incorrect. The decision has not been made, and we certainly have not decided to take one single, solitary route, with no alternatives, and penalize those communities with a toll. The decision has not been made, and therefore the member should support this legislation if he's agreeing with the Coquihalla Highway. If the government takes a policy decision later on in terms of implementing tolls that he doesn't agree with, then he can quite correctly stand up in the House and question the government. But if he is in favour of the Coquihalla Highway toll, then he should not stand here and oppose the concept. This bill allows the government to implement the concept of tolls to finance construction of public infrastructure facilities.

C. Serwa: It was certainly interesting to listen to the minister in full flight a few minutes ago. It stirred my heart with immense passion. Listening to his talk about fairness and equity was something like listening to the "Battle Hymn of the Republic." It was really stimulating. Fairness and equity -- I would actually like to see some of that put into practice.

My question to the minister: do you perceive tolls being placed on new projects that are initiated through this authority, or do you see tolls being imposed on existing structures as revenue generators? Let's say, for example, the Second Narrows Bridge, the Alex Fraser Bridge or perhaps the Cassiar connector.

Hon. G. Clark: The authority can only put a toll on something that it owns. By definition then, unless it purchases an old bridge and retrofits it, the option will only be available where the Transportation Financing Authority is constructing a new bridge.

C. Serwa: It doesn't seem to me that the authority is going to own the structure. The structure will be a publicly owned facility. It's a Crown corporation. The structure, the highway or bridge, will be publicly owned. So it is not that it will be owned; it will be built and financed, perhaps, by your Crown corporation, but it will not be owned. It will be owned by the Crown. So that doesn't quite fit in.

I am particularly concerned because we have a situation on the Coquihalla, the only toll in the province of British Columbia, which should be abandoned at the present time. It was only imposed to cover the acceleration costs. That, plus the interest, has been amply covered. On the basis of your fairness, equity and a fresh start, if it's going to be user-pay and consistent, fair and balanced throughout the province, I would suggest that you start by removing the toll on the Coquihalla and then look at your tolls in the new structure. Perhaps the minister would respond.

Hon. G. Clark: The Coquihalla Highway cost $1.2 billion to construct, and the toll revenue is about $35 million a year. So it is not likely that the toll would ever cover the cost of building a $1.2 billion highway.

C. Serwa: I hate to dwell on this, but the only reason the toll was put on was to cover the acceleration costs, which were estimated to be $45 million. Those, in fact, were more than adequately covered, and that toll should be removed.

I must tell you, hon. Chair, that a major structure here in the lower mainland, the Alex Fraser Bridge, cost $0.5 billion, and that amount is still climbing. The largest single contract ever let by the Ministry of Transportation and Highways, the Cassiar connector, is, I believe, in that member's constituency. That would be a wondrous place to impose a toll.

If we go back to the level of fairness, balance and equity, which raises such passion in the hearts of all of us, is the minister going to put his money where his mouth is and give us a clean, fresh slate and an equal opportunity? Will he or will he not see that the tolls are removed on the Coquihalla?

Certainly one of the adventures -- and it will in fact be an adventure that this new authority is embarking on with public funds and with the accrual of deficit and debt to taxpayers -- is the proposed Island Highway, which is near and dear to the member for Nanaimo and certainly a very important initiative to especially those people on the northern part of Vancouver Island. But the minister has to be well aware that this particular highway would be impossible to impose tolls on because of the nature of the communities and the access roads. For example, it's not a major system with very sparse communities along it. Every few miles there are communities that will want access. There's not going to be the possibility to collect tolls at any one significant point in a fair and equitable way. I don't think the concept put forward by the minister is fair, equitable or balanced, because it will be impossible to initiate a toll system on the Island Highway.

[6:45]

Well, the "Battle Hymn of the Republic" in that stirring discourse seems to have taken some of the steam out of the minister. Perhaps the minister can respond to this question regarding imposed tolls. He keeps talking about user-pay. The beneficiary of our transportation system is the entire populace and the economy of British Columbia. We all benefit -- not just the people or vehicles that happen to use the roads. Our entire economy benefits.

One of the strong factors in our economy is tourism. What will happen to the tourism industry in the 

[ Page 5976 ]

province? We're increasing the level of the fuel tax, which will certainly inhibit tourists. We're increasing tolls and imposing higher costs on systems in the province. What is that going to do to the economy? I have to relate that the state of California is in a serious economic slump simply because they thought they could accelerate tax rates and increase costs in order to get their way out of the financial box that they're trapped in. I think that the minister is in a sort of fool's paradise with this particular adventure, because what you're going to do is reduce the level of economic activity. But specifically, what impact do you feel your toll system will have on tourism?

Hon. G. Clark: First of all, no decision has been made on tolls. Secondly, one of the main reasons we're contemplating tolls is that the previous government left behind a financial basket case -- a $2.4 billion deficit that we inherited from the administration that member was part of. So now we have to look at ways of financing and getting out from under the mess they left behind. We're trying to move forward and deal in a progressive way with funding major infrastructure developments in spite of the financial mess they left behind.

C. Serwa: That's certainly another interesting little discourse, recognizing full well that the priority of this government has never been to build anything -- neither in the 1972 to 1975 period, nor in this current year. What did they do in their first year of government? They spent over $2 billion on higher public sector wages, which cost the taxpayers. In the second year it's the same thing: they hired more individuals and wasted money that could have been well utilized, money that was raised for the construction of capital facilities and structures such as bridges, highways, schools, public health centres and courthouses. That's what we've always done. You've wasted the money, hon. Minister of Finance; that's clearly evident. And you're out to rip the taxpayer off again in every way, shape and form possible.

The Chair: The Chair would remind members that we are debating section 21.

H. De Jong: The minister wasn't quite clear in his answers on the aspect of being able to charge tolls on existing facilities or on those built new by the corporation. In one sentence he said they can only be charged on facilities built by the corporation; but then he also added "owned by the corporation." Is it possible, in order to collect those tolls -- whatever they might be -- that the government would transfer some of the current facilities into the Crown corporation?

Hon. G. Clark: No. But one obvious possibility, if the government were to choose to look at tolls, would be the Lions Gate Bridge. That's an existing facility which requires, depending on what option you choose, some $250 million worth of capital applied to it. In the sense of whether we would be likely to put tolls on existing highways, the answer is no. Absolutely not; that's not contemplated. If we were to put a toll on, it would clearly have to be on a highway that was receiving significant public money, upgrading, expansion of service, or the like. So generally speaking, we have not made that decision. But if you're looking at the criteria for tolls, it's obvious that you wouldn't simply put toll booths all over the place to generate revenue; it would have to have a specific action attached to it.

H. De Jong: To give the minister an example -- because I don't quite feel confident with the answers I'm getting so far -- suppose that a new bridge, another river crossing, were contemplated somewhere between the Port Mann Bridge and the Mission Bridge. Is it possible that the minister would transfer the Port Mann Bridge as well as the Mission Bridge into the Crown corporation for the purpose of gaining revenue so that the bridge between those two bridges could be built?

Hon. G. Clark: Is that technically possible? Yes. Is that likely? No.

H. De Jong: Okay then, a further question: seeing that that option to transfer facilities into the Crown corporation is still available to the government, would a community or communities affected by such a move be consulted and listened to if that was to take place?

Hon. G. Clark: This government always listens to the people of British Columbia when we go out and look at these kinds of policy considerations. I can give the members opposite complete assurance that we will listen to the people of British Columbia before we make any of these decisions.

C. Serwa: I listened a few minutes ago to the Minister of Finance talk about the paradoxical type of policies that the official opposition seems to put forward. Perhaps nothing is more paradoxical than this particular initiative with tolls, especially when it comes to the interior. The reality is that virtually all of the economic advantages are in the lower Fraser Valley and the Greater Vancouver Regional District or in the southern part of Vancouver Island.

We need the transportation systems. We especially need truck transport to make certain that our industries strive, survive and increase in the interior of the province. Your government is talking about original considerations and initiatives to create business opportunities in the interior. On the other hand, with your toll initiative, you are precluding that potential by making it more and more difficult for industry to be cost-effective by locating in the interior, because our advantages are exceedingly limited.

Hon. G. Clark: First of all, no decision has been made to impose tolls on any highway, let alone the interior. I want members to know that in my discussions with the business community, they are very strongly supportive of this kind of concept -- and even of paying tolls -- provided it results in significant public investment in infrastructure.

[ Page 5977 ]

I mentioned in the House earlier that the Report on Business magazine in the Globe just last week showed that over 70 percent of businesses in Canada said that the single biggest problem with government was not spending enough money on infrastructure -- the basic underpinnings of roads, highways and construction projects, which lay the foundation for future economic growth. Tolls are supported by the business community, by in large, as long as there is that caveat. We have not made the decision, but I can assure you we will be very careful to make sure that if there are tolls applied, they're applied in such a way as to promote business expansion, not to diminish it.

C. Serwa: I heartily agree with the minister's comments that more has to be spent on infrastructure throughout the province. But the reality is that the revenue is coming into the provincial government, and that money could be spent on infrastructure. The government has made a conscious choice, however, not to get value for money, simply to satisfy political election debts and increase the deficit and the debt of the province by doubling it in two years. We have a real problem. The economy generates a cash flow to the government. The government has decided not to reinvest it in infrastructures that will create the climate of opportunity to the province, and is escalating the problems confronted by small business in British Columbia by increasing all sorts of costs -- whether it's an additional increase in fuel tax or with the tolls.

Believe you me, hon. minister, if you had no intention of imposing tolls, this particular section wouldn't be in the bill. It's either put up or shut up. You can withdraw this section. You can delete this section if you have no intention. That option is not necessary, but if you leave it in, clearly your initiative is to impose tolls throughout all sorts of roads, mindful that the area that could generate the greatest strength, has the greatest pressure on automotive traffic and has the greatest cost associated with addressing those concerns, is the Greater Vancouver Regional District, which will be getting off scot-free with this particular initiative.

Hon. G. Clark: There's no free lunch. I think I heard that before. We were left a deficit of $2.4 billion by that administration. We have to pay for that by cutting spending and by taxes. That administration is responsible for the mess we're in, and that's why we have to look at these kinds of innovative ways of putting money into infrastructure investment.

I want to make it absolutely clear that we have not made any decision on this question. I want to make the point that the previous government is the first government in years to impose a toll -- on the Coquihalla Highway. They left the province with a $2.4 billion deficit, which we're still digging out from under. They imposed tolls, and now the member stands up in here and says that he is opposed to this section, which allows a user-pay approach to financing construction in the province.

C. Serwa: We're expanding just slightly, but I'll address a few of the minister's comments.

The minister knows full well that he doesn't have to address the existing debt with more than about 4 cents for every new dollar coming into the government coffers. He knows full well that they've increased the cost of borrowing by an additional 2 cents out of every revenue dollar, and he's doubled the deficit. Anyone believing the Minister of Finance's statement should come and see me; I've got a bridge that I might sell them. The minister's statement is inaccurate, inappropriate and certainly misleading.

But there is a reality, and I ask the question once more: if the minister has no intention of imposing tolls, then will the minister delete this section from the bill?

Hon. G. Clark: No. Tolls are under active consideration. That's why the bill is here.

Section 21 approved on the following division:

[7:00]

On section 22.

J. Beattie: Hon. Chair, I ask leave to make an acknowledgment.

Leave granted.

J. Beattie: Given that the House has broken into two committees and we're working overtime, I think it's appropriate for the House to recognize the good work of the members of Hansard who are recording these debates.

K. Jones: Following the presentation that was just made, I think recognition should also be given to all of the other staff who were not mentioned and are still working here: the people in the dining room and others such as the Sergeant-at-Arms staff. Let's cover everybody if we're going to make a presentation like that.

C. Serwa: Point of order. Perhaps the Clerk would read out his recorded vote for me once more, because the members who were named did not, in fact, stand.

[ Page 5978 ]

The Chair: That's not a point of order, hon. member. The vote was taken, and we're now on section 22.

C. Serwa: The vote was not taken appropriately. The members have to stand to be counted.

The Chair: The Chair's ruling is that I called for the yeas and the members stood, and I called for the nays and those members stood. The count was taken, and the section carries.

C. Serwa: That evidence is not supported by actual fact. I was here, and the members on the government side failed to stand when the yea count was taken. Hon. Chair, you know that is an absolute fact.

The Chair: The Chair observes that when I called for the yeas, there was some delay in the members standing. The Chair got a clear indication of the vote, and we are proceeding to section 22.

C. Serwa: Just on the last point of order. The hon. Chair has compromised its authority and has caused the loss of the integrity of this chamber.

The Chair: The member is now arguing with the Chair and is using unparliamentary language. I would ask the member to withdraw.

C. Serwa: I will not withdraw.

The Chair: The debate has been proceeding rather amicably this evening. I would again ask the member to please withdraw.

C. Serwa: I will not withdraw.

The Chair: The Chair's authority in these matters is clear. I would ask the member to please withdraw. Otherwise I would ask the member to withdraw from the chamber for the evening.

C. Serwa: Thank you very much, hon. Chair. I will not withdraw my comments. I saw what occurred in this chamber. There was a misdirection on the cue, and, in fact, the hon. members on the government side did not stand. There was no delay in standing. I will not withdraw, but I will withdraw from the room.

V. Anderson: On a point of order. I was also here, hon. Chair, and the members on the other side did not stand for the vote as they were counted by the Clerk. I would say that the vote was not properly registered, because I also saw that those who were not standing were counted.

The Chair: The point of order has been dealt with, hon. member. We are on section 22. Is anyone rising to speak on section 22?

R. Neufeld: Point of order, hon. Chair. I too was here and witnessed what took place. Of the names that were called, not all those people were standing. There was much confusion on the government side. In fact, from the Government House Leader's position, he was motioning these people and those people to stay seated, which they did. But then they were called as though they voted in favour. That's exactly the way it happened; it's fact. I can't understand why we don't deal with it correctly.

Hon. G. Clark: This is a frivolous action on the part of members of the opposition. The members know that all members of the chamber were in the House. There was some delay or mix-up, which I apologize for to members of the House. That should be sufficient. All members of the government side are clearly supportive of this motion, and it passes. To engage in silly tactics like this just demeans the House. Everybody knows that the government side has more members here the opposition side. The intent of the government side is clear by the bill. Clearly the House is in charge of its own destiny. Members on the government side, despite some delay, clearly passed the motion. Every member knows that, and I think it's just frivolous to engage in this kind of discussion. I think hon. members will know that all members of the House were here at that time.

The Chair: The Chair will consult the Blues, review the matter and report at a later date. Please continue with debate on section 22.

D. Jarvis: On a point of order, I have to concur with the other gentleman who was speaking. When do you make a decision as to what a vote is? Just because the House Leader got up and said that all the members in the House were going to vote in his favour.... That takes away the fact that you ever call a vote, because only one man has to come into this assembly at that time, then, and say: "All my members who are down in the restaurant will vote." You have not acted responsibly in your position...

The Chair: Order, order, please!

D. Jarvis: ...because you have betrayed this....

The Chair: Order, please, hon. member. Please take your seat. The Chair has stated it will consult the Blues, review the matter and report at a later date. We've considered all the information, and we're on section 22.

[7:15]

[E. Barnes in the chair.]

K. Jones: I'd like you to review the statement just made by the former Chairman of the committee, who said that he was going to review the item that has been brought before us as a point of order. He says that he's going to refer to the Blues to find out what was done. The Blues do not record whether people are standing or sitting, so I don't know how they would be of any value to him. This matter concerns what we observed here -- what the actions of the members were -- and I believe 

[ Page 5979 ]

that the vote needs to be confirmed as to exactly what happened, not presuming that people stood when they did not stand.

The Chair: Hon. members, the Chair will take a few more submissions. However, I think the recommendation by the previous Chairperson is a valid one. In the interests of proceeding.... I hope members can appreciate that we cannot resolve the matter by debating without the substantive information that we require. And I would suggest that after a few more....

Interjection.

The Chair: Just a moment, hon. member. The Chair will take further submissions when my remarks are completed, if members will please take their seats.

The situation, obviously, is unfortunate. I think all members recognize that, but it's a matter that cannot be resolved by continuing debate. So I think the recommendation made by the former Chairperson is well taken, and we will undertake to review all available records with respect to the incident, and try to resolve it to the satisfaction of the committee.

The hon. member for Okanagan East, on a point of order.

J. Tyabji: The standing orders are very clear. Anyone who's in the House is automatically ascribed a vote. We can't debate the standing orders. Perhaps we could ask the Speaker's office to give a ruling on how the standing orders are interpreted in light of some of the members not standing up. That might be more useful, because we all know what took place. I think we're better off with an interpretation of the standing orders rather than debating what happened.

The Chair: Thank you, hon. member. The hon. Minister of Forests, on a point of order.

Hon. D. Miller: With respect to the points of order being raised, I would simply say that there is a practical aspect. The chamber belongs to all members and the Chair simply tries to maintain order for all members. It was very clear, hon. Chair, despite a false start or call it what you will, that all of the members stood and expressed their view on the issue at hand.

D. Jarvis: Are you interpreting for your members then?

Hon. D. Miller: I would suggest, hon. Chair, that it does not serve the interests of this chamber or the members on either side to pursue or prolong the issue we've seen tonight. It's clear that there was an overwhelming number of members on the government side who voted in favour of the section and that was recorded by the Clerk. I would ask some members to consider that with respect to the ongoing operation of this House.

H. De Jong: On the point of order and on the ruling made by the Chair, I think there was a certain amount of confusion. There's no doubt about it. In addition to what the Chair has ruled, that it would be researched, I think it should be done in conjunction with the visual tapes that have been taken in the House.

The Chair: That's a fair statement, hon. member. That has been agreed by this Chair.

V. Anderson: It seems to me that there needs to be real clarity. As well as the tapes, which are useful but don't cover all of the auditorium, I would be satisfied if there was a sworn statement from each member who did stand, a sworn statement that they actually did stand for the vote and did not remain seated. I would be happy with that undertaking.

The Chair: Thank you for your submission, hon. member.

U. Dosanjh: I have some real difficulty with anyone standing here challenging the Clerk, who as a servant of the House tabulates the votes in a non-partisan fashion.

The Chair: The Chair thanks the members for their submissions, and the recommendation which was made by the previous Chair will be undertaken.

We're now back to Bill 3 on section 22.

Hon. D. Miller: Perhaps the minister might wish to outline the types of investments or loans that are contemplated under section 22.

Hon. G. Clark: To ensure government control, investing or loaning excess funds requires the approval of the Minister of Finance and Corporate Relations. The authority is also restricted to investments or loans authorized by the Lieutenant-Governor-in-Council. For example, section 36 of the Financial Administration Act sets out a number of authorized investments such as securities guaranteed by a national government. If the authority wishes to invest in an instrument not presently authorized, it would require approval of the Minister of Finance and authorization by the Lieutenant-Governor-in-Council.

Section 22 approved.

On section 23.

G. Wilson: I think that section 23 is perhaps one of the more important sections of this bill, because it outlines borrowing powers. We've heard a good deal from the Minister of Finance about the kind of borrowing authority this agency is going to have. We know that $80 million will go into this authority this year. We know that there is going to be an opportunity for that to be expanded. From our calculations, we can, in fact, have borrowing in the hundreds of millions of dollars up to plus or minus $600 million.

The line in section 23(1) that we need to have some clarification and discussion on is where it suggests that this new authority "may borrow the sums of money it 

[ Page 5980 ]

considers necessary or advisable and may issue securities in the form and on terms and conditions determined by the Minister of Finance." I know that some limitations are provided in section 25 in terms of limits of outstanding debt. At first reading, that certainly seems to provide this authority with a pretty wide scope of borrowing. It would cause some concern to those who might read this without knowing exactly what that authority will entail and what kind of limits there may be. "Money it considers necessary or advisable" seems to be a pretty open-ended statement.

[M. Lord in the chair.]

Hon. G. Clark: This is a standard borrowing authority for all Crown corporations -- no more, no less. The 1993-94 budget includes $80 million in borrowing requirements for the authority. We're upfront about that. The authority is expected to spend about $76 million of that amount this year. There are many checks and balances with respect to borrowing by Crowns. First there needs to be the approval of the board and the approval of the Minister of Finance, and then an order-in-council is passed to that effect.

G. Wilson: I understand that there is the approval of the Minister of Finance and of the Lieutenant-Governor-in-Council. I understand that those two checks are there. If we look at the debt that has been incurred through borrowing by Crown corporations, let's face it, if these regulations are the same as other Crowns, it doesn't give us a lot of comfort. One can, perhaps unwittingly, move into a borrowing pattern that can be compounded by a loss of revenue and difficult to amortize over time because of increased costs of projects undertaken or whatever reasons there may be. It seems that there would have to be some kind of annual cap or review. If that is not in the borrowing powers section, is it in some other area? Is there some confidence that it might be carried into section 25? I realize we can't be jumping around from section to section. To simply say that that provides the same borrowing authority as other Crown corporations have doesn't give much comfort, because there is enormous debt incurred by other Crowns.

Hon. G. Clark: Unlike other Crowns, this Crown can borrow only what it has the revenue to carry in terms of borrowing interest costs and debt repayment. As a result of that, it has the ultimate test, and that's the ability to finance it. Unlike some other organizations, which have to borrow out of the general revenue or consolidated revenue fund -- when we borrow money for schools or hospitals, it's in the budget -- this Crown can borrow only an amount of money that has revenue attached to it.

That should provide complete comfort to the members of the opposition and to the public that there cannot be profligate borrowing of any amount it wants for some future generation or government to pay. It requires an income stream already in place to finance borrowing.

G. Wilson: That's true of every Crown corporation. No Crown corporation has unrestricted or unlimited borrowing powers. They all have to have some kind of security and some income stream in place to service and manage the debt. That's absolutely true of all Crowns, no matter what kind of lending or borrowing schedule they may be on; there has to be some kind of provision for servicing the debt.

The difficulty I have with this is that the income stream, if we can use this line, is the taxpayer. If this debt starts to get out of hand, there's only one way it can be serviced. There are two ways, I guess. One way is to service it with increased revenue, which means increased taxes or levies on fuel or whatever we're levying them on to get more money in. The second way is to stop the projects that we commenced. We're going to stop spending the money, because we're running into debt. My guess is that you're not going to stop the projects, because once those projects are underway and there is expectation for completion, there would be a higher social, political and economic cost to not completing it. Therefore we're likely to complete them at higher costs. The Coquihalla is a good example of where costs escalated, partly because of the speed with which they were trying to complete the project.

I think it's simply wrong to suggest that there is going to be some kind of restriction that doesn't exist elsewhere. The only difference here is that the revenue stream is directly tied to the taxpayer. So how can we take comfort from the fact that there is no limit on the borrowing of sums of money?

Hon. G. Clark: The difference here is that the debt can't get out of hand. A capital plan has to be approved and reviewed by the Building B.C.'s Future committee. All borrowing has to be approved by the Minister of Finance. A business plan has to be approved by Treasury Board. This is much tighter than any other organization that I can think of in government. On top of that, there is dedicated revenue in the bill, and they cannot borrow any more money than they have revenue to finance it. That's different from having to go into general revenue to deal with the problem. We will ensure that we are very tight in terms of borrowing to make sure that all of the income required to finance the debt is contained in this legislation.

G. Wilson: Because I don't want to belabour it, can the minister point to where in this bill it says that those limits apply? If there's a section in here that says it's limited to its capacity to pay, then why does it say that it can borrow the sums it considers necessary and advisable? Where does it say what the minister is assuring us is in the bill? I've read this bill extremely carefully. Could you show me which section it is?

[7:30]

Hon. G. Clark: At the moment we're dealing with section 23, which is simply the borrowing authority, but you can see by the entire bill that there is income attached to it and that it borrows money. I haven't got the exact section, but I can give you complete confidence that we cannot and will not borrow money 

[ Page 5981 ]

that does not have the income generated to sustain it. That's the whole purpose of this. This agency has to borrow money -- albeit it's the government that does it on its behalf -- and when it goes to borrow or finance money, the borrowing authorities will look at the revenue stream that's attached to it. It's all laid out in the bill.

L. Hanson: The minister keeps assuring us that the borrowing will be restricted by the corporation's ability to repay, whether it be in anticipated revenues or in actually dedicated revenues for a particular loan. I would really like the minister to tell me where it says so in the act. I recognize that it does say in the act that the Lieutenant-Governor-in-Council requires their approval; I do recognize that the Treasury Board and the minister himself are involved in the approval process. But nowhere in the act can I find that it's restricted to the amount of money that the corporation has to service the debt. As the minister said, it does talk about different sources of dedicated revenue. But unless there's some magic the minister has that I'm not able to recognize, I can't see where that limitation is, other than at the discretion of the Lieutenant-Governor-in-Council, Treasury Board or the minister himself. Nowhere in the act can I see where it has that definition that would cause borrowing to be limited by the ability to repay. I recognize that good business practice would be not to borrow more money than you can repay. But the minister keeps saying it's in the bill, and I can't find it, and I'd like him to help me with that.

Hon. G. Clark: The whole purpose of setting up a Crown corporation with a revenue source to capitalize the highways in itself demonstrates that there's a revenue source to pay for it. If there's no revenue source, they can't go and borrow money. It's like any other Crown corporation. B.C. Ferries has a subsidy from the government which is fixed. They cannot borrow money unless they can pay for it out of their own sources of revenue and the income from the government.

This has dedicated sources of revenue attached to it. They cannot borrow money beyond what they have in revenue. It's a Crown corporation. If at the end of the day the government of the day wants to give more tax revenue to this corporation -- to assign increased taxes and apply it -- yes, they can do that to finance more capital investment. That can be done in the future. That isn't being contemplated at this time. It's not required. There are significant resources attached to this. They will not be borrowing beyond the ability to finance.

L. Hanson: Just one more question. I can respect what the Finance minister is saying. I can respect that the cabinet, the executive council, the Minister of Finance and Treasury Board may ask some serious questions if a request for authorization for borrowing is in excess of the ability to repay. I can understand that. But I think the minister would admit that if it did get those approvals from those bodies, it could borrow money in excess of what it could repay in anticipation of some change in revenue, because nowhere in the act does it say that that has to be a prime rule of the corporation.

Hon. G. Clark: No, I simply won't agree with that, because the whole thrust of the act is to ensure that there is revenue generated by certain facilities, and that goes to pay for the capitalization. There is no way that the authority could be granted by the board, or by Treasury Board, or by the Ministry of Finance, which are three hurdles to go through, or by order-in-council, which is the fourth one to go through for borrowing authority, without having income attached to it. That's what this does. There will not be borrowing beyond the ability to fund it from these sources of revenue. If there was to be a requirement to borrow beyond the ability of this source of revenue to finance it, then other sources of revenue would be required. That would likely require an amendment to the act to do that.

L. Hanson: Again I respect what the minister is saying. But the simple fact is that nowhere in the act is there a requirement to limit the borrowing to the ability to repay. I recognize those checks and balances that are in place, and they're good business practice. But the fact is that nowhere in the act does it say there's a limitation on the ability of the authority to borrow relative to its ability to repay. I respect what the minister is saying in terms of the checks and balances, but it doesn't say that in this act.

Hon. G. Clark: I know it's not in this section, but note sections 18(5) and (6). Section 18(6) says: "If a business plan submitted to Treasury Board under subsection (5) contains expenditure proposals, the plan must" -- not may; must -- "also include revenue proposals indicating how the expenditures will be funded." Clearly, that gives you an indication that there's a requirement for how those expenditures will be funded.

G. Wilson: I was passed a note saying that this is such a stimulating debate that it's pulled viewers away from the hockey game despite a 3-3 overtime game. So it just shows you the public are really with us on this debate, and I think it's important that they are.

Coming back to that, I think the point made by my colleague from Vernon is right on target. Section 18 doesn't say anything about there being restrictions or limits, and that's my concern about section 23(1). Every Crown corporation has to have income, and every Crown corporation must have a business plan of sorts. Every Crown corporation must have an expectation that they're going to have revenue over expenditure, or if they don't, they're going to have to have amortized long-term debt and a plan to service the debt. That's sensible business practice, and there's nothing unusual about any of that.

What we're saying is that this won't operate any differently, and I think the minister has acknowledged that's true. The problem is that this authority has the right to be able to borrow with the payout tag hooked to the taxpayer directly. There's the concern. So if you're saying that we're not going to be approving these kinds 

[ Page 5982 ]

of projects, I'll acknowledge that this may be the stated policy of the government: that they will not approve those expenditures. But there's nothing in law that prohibits them from doing so. I believe that they are likely to accrue that debt, because in every highway construction project that's built there is a very difficult, unknown factor to calculate, which often increases expenditures and has cost overruns and so on.

If they do that, the people who are going to be directly responsible for financing that additional debt are going to be the taxpayers; and it's going to be done by levy either against motor fuel or rentals, or it's going to be done through some kind of general revenue or borrowing. In this bill it would appear that the principal source of that revenue is going to be borrowing, and that causes a great deal of concern to British Columbians, who see this as a means to be able to keep or defer deficit spending and shunt it into long-term capital debt. That's a philosophical debate, I recognize, but I think the minister must acknowledge that this is going to be the consequence of section 23(1).

Hon. G. Clark: No, I won't acknowledge that. Why would we put in the act that the authority requires that the financing authority submit to Treasury Board for review and approval a business plan with respect to revenue expenditure and borrowing/lending proposals; and that if the business plan requires expenditure proposals, it must include revenue proposals indicating how they'd be funded? Why would we have that in here if it wasn't to ensure that this is a self-financing authority, which spends to the ability it has in terms of revenue? Why would we put that in here? Why would we have Treasury Board approval, the board of directors' approval, business plans' approval which requires financing, and revenue proposals to go along with expenditure proposals? We put that in there. The whole thrust of the act is to ensure that borrowing is limited to the revenue that's available to it.

G. Wilson: Just to clear this up so that we can move on to section 24 and beyond, and get through this debate, if that's the stated intention, maybe the minister would acknowledge that perhaps an amendment should be introduced in section 23(1). If this would be acceptable, I'd certainly have it drafted and tabled immediately. It would say that under this or any other act "...may borrow the sums of money not exceeding that which can be covered by revenue in any one year." If that's the case, then it does say that in fact you're going to have borrowing tailored on an annual basis to revenue expectation, and that puts the cap on. If the minister is prepared to acknowledge that, then let's amend it and let's get on.

Hon. G. Clark: No, because effectively that's what this does, and there's no need to put in verbiage. We just let the legislative counsel then review these bills, and there's no need to put in extra verbiage to accomplish the same thing.

C. Tanner: Could the Minister of Finance tell us, in 23(1), what is the capacity referred to in the second line? What I want to know is, in what capacity is the Minister of Finance and Corporate Relations acting in that paragraph?

Hon. G. Clark: Minister of Finance and Corporate Relations.

C. Tanner: I don't think you're right, Mr. Minister. "Subject to the approval of the Lieutenant-Governor-in-Council" means the Lieutenant-Governor acting by and with the advice and consent of or in conjunction with the executive council. Well, the Minister of Finance is a member of the executive council.

Hon. G. Clark: No. This is exactly the same as every other borrowing. All borrowing by government, any Crown corporation or any agency of government requires the Minister of Finance's approval. This is exactly the same.

C. Tanner: Forgive me, Mr. Minister, but I believe that's not correct, because under section 18(11), the Minister of Finance and Corporate Relations is the fiscal agent of the authority.

The Chair: Mr. Member, can you clarify your question, please.

C. Tanner: Section 18(11) in Part 3 of this bill states: "The Minister of Finance and Corporate Relations is the fiscal agent of the authority."

Hon. G. Clark: I'm the fiscal agent of every Crown corporation.

V. Anderson: I've been listening with interest. If I hear the minister correctly -- and I want to clarify -- when he's in the business plan and is estimating the amount of income to go against the money that is to be borrowed, that's the proposed income.

Let me use an example. They borrow the money to build a bridge. The bridge burns down, so the income they had proposed is no longer available from that structure. But the bills are still there to be paid. There is no guarantee of the income; it's simply a proposed income. If the minister wants to clarify that and be honest about it and say "proposed income," that may not be debt. There's a whole variety of reasons that their tolls will not match -- loss of traffic, a change of route, weather conditions and a host of reasons that the income proposed in the initial budget will not match. Therefore the debt, because the income was not there, remains.

[7:45]

Further to that, when you move down to section 23(2), the authority to borrow that money may be invested in one person by the board. So one person can borrow whatever money is available on the speculation that the income might meet the expense. That's a very large speculation with the kind of money we're talking about.

[ Page 5983 ]

Hon. G. Clark: Subsection (2) means that one person can be authorized to sign all the documents associated with a borrowing transaction. Again, that's a normal approach in government to dealing with these questions.

I want to assure the member that this is essentially a revolving fund. It has income coming into it, and we're paying off debt over time. We will be prudent to ensure that we're not borrowing money beyond the ability of the revenue to pay for it across the board.

V. Anderson: I'm glad the minister has put on record that the only thing we have to rely on is the prudence of the minister. Even if we were to grant that the present minister has the kind of prudence we can trust, successors to that minister, as we have seen before many times in this government, are not necessarily as prudent as him or her, as the case may be. There's nothing in the act to protect the government or us except the prudence of the minister, and I think that's very shallow ground for this to go forward on.

Hon. G. Clark: Just for the record and so the member knows, the board of directors has to approve it, not just the Minister of Finance. Treasury Board and the Minister of Finance have to approve it, not just the Minister of Finance. There's an order-in-council every year authorizing borrowing, which is scrutinized as well. It's not simply up to one person; there are lots of checks and balances in this approach.

G. Wilson: Under the same section -- now for something completely different. It has to do with the ability of this agency to dispose of securities. Section 23(5) states: "...the authority, on terms it considers necessary or advisable, may dispose of securities of the authority, either at a par value or at less or more than par value, and may charge, pledge...." I wonder if the minister might just outline a bit about how that is likely to work. I noticed that in the act there is the opportunity to invest, and there is an opportunity for that investment to be in various kinds of securities. What's the check on the disposal of those securities? Who has the authority on it? How is that going to be administered? What's the subsequent revenue of that? Where does it go?

Hon. G. Clark: As fiscal agent, the Minister of Finance makes the determination in terms of selling, the same as in every other organization. The question of a lower par value is a technical one. It just means that when securities go up for sale, there is sometimes a discount attached.

G. Wilson: I wonder if the minister might want to comment on the fact that in subsection (4) the authority can essentially be an issuing agency for securities as well. In effect, that is provided under subsection (1), for the purpose of the authority. Under subsection (5) it essentially becomes the agency for disposing of those. Is the intention here to float a bond issue, to be able to act as a financing mechanism for this Crown agency? Is it likely to put out some kind of Build B.C. bond? Can we see that floating down the way?

Hon. G. Clark: It could borrow under its own name, or it could borrow in the regular way, which is that the government borrows in its name and then off-lends to the agencies.

G. Wilson: One of the reasons subsections (4) and (5) have been written -- I don't know if it's the exclusive reason -- is to allow this agency to initiate a bond issue to use that as a means for borrowing and, therefore, to be able to amortize capital through that process. Is that right?

Hon. G. Clark: It's unlikely, but it's technically possible that the authority would go and borrow in its own name. It could do that, again partly because of the income stream. The normal course of events would be that the government would borrow and then off-lend, as required, to the various agencies.

G. Wilson: If this should occur -- unlikely as it may be -- does the authority get that approval in the same manner that it gets authority to approve to borrow, which is essentially through the approval of the board and upon recommendation of Treasury Board? In the way that this is written, it's really not clear that it even requires any authority, outside the authority of the board, to float a bond issue. It would appear by reading this that the board can simply do that. The same caveat, with respect to the subject clause in the other sections on borrowing, does not apply to these two. I wonder if, on the declaration of that resolution of authority, that can be done simply by an order of the board. If you look at the next one, it says "subject to the approval of." That same subject clause is not in subsection 4.

Hon. G. Clark: Any of these actions are still subject to approval by the Minister of Finance and the board. B.C. Hydro used to borrow under its own name, as I understand it; it doesn't any longer. The province of British Columbia borrows and then off-lends to B.C. Hydro. In some respects it's not a hostile thing; it's negotiated and discussed. When the province borrows, say, a 20-year issue, some Crowns may be interested in that for their purposes; some would not.

This would be similar. The borrowing program would be managed by the Ministry of Finance. If for some reason it was decided that we would borrow on behalf of this agency under their own name -- I can't at the moment think of a reason for doing that -- I'm sure it would be because we could, for whatever reason, get a better deal for the taxpayer in the cost of the financing.

C. Tanner: I'm still not satisfied that we're going to be well protected here, because the minister's name appears all over this bill under various guises. He's the chairman of committees; he's the chairman of the authority that grants the money; he's the chairman of finance; he sits on the executive council. All the way through we're talking about the same person: the Minister of Finance. It all comes to bear right here. He's 

[ Page 5984 ]

the fiscal agent for the authority. I mean, why go through this exercise if the person we're talking about all the time is him? What protection does the government have from this member? All the way through, under various guises and with different titles, we're talking about the same person. By his own admission, he said a couple of days ago that the reason he wants to get his hands on this corporation is that he doesn't like the way the government works; he doesn't like the way the ministries handle their money. He doesn't think they can do anything, so now he's got total authority under this bill.

It's bad enough that there's a fellow sitting over in the museum who's behaving like a monster and running all the Crown corporations. Now we've got this monster in the House. What protection do we have against this member, against this Minister of Finance, under whatever name or title he's using today? I think the minister owes us more of an explanation as to what he's doing here. We still haven't found out what he's up to, but we suspect that his delicate hand is all over the piece of legislation. I think we should be protected from him.

Section 23 approved on division.

On section 24.

G. Wilson: I have just one question on this. It relates to what I was asking about in sections 4 and 5 with respect to the issuing of securities.

This sinking fund, which I understand is going to be tied into debt repayment.... Do you envisage that to be linked to both short-term and long-term financing of the corporation? Or is it something that is going to be tied to long-term debt financing only?

Hon. G. Clark: It's typically long-term debt financing. But sometimes sinking funds aren't appropriate for certain debt instruments, such as lines of credit and short-term paper. So typically there will be a sinking fund attached to a long-term debt.

C. Tanner: In the actual functioning of the sinking fund, does the minister or the government put the money aside?

Hon. G. Clark: Yes. Not all provinces do that, nor is it always required in a modern way. Most provinces don't. But we do attach sinking funds to most of our long-term debt, and they actually have cash attached to them.

C. Tanner: Is there any inhibition for the government to then take that money and use it for a second purpose, even though it's set aside to retire a debt?

Hon. G. Clark: It's all in segregated assets attached to the long-term debt, but I think it's fair to say that we probably could.... I think the government could do anything it wants with any of the assets it holds. But, you know, when we go down to the rating agencies and the like, part of what they look at is the sinking funds and debt attached to them. That's why I said that I think most provinces have done away with sinking funds: it's all from the same taxpayer, essentially. But we in this province have chosen historically to have a sinking fund actually attached to it, and to have assets in it managed to correspond to the debt repayment.

C. Tanner: Just for this poor benighted small businessman, explain this to me. You've got a debt of $100 million. You set aside $10 million a year for ten years, interest and so forth. The $10 million you're setting aside is accumulating every year. Can you then use that money to start another bunch of loans somewhere else, or is that money set aside specifically for that one loan?

Hon. G. Clark: It is set aside specifically for that one loan, and I have just been advised we have $5 billion in assets and sinking funds. They are invested solely in money markets and bonds, and they are attached specifically to that.

C. Tanner: I assume they are earning interest at a greater rate than the interest that you are paying on the loans you've got out that you have set them aside against.

Hon. G. Clark: It depends on the borrowing. Some of the borrowing in the eighties was at a very high interest rate, and we're paying that off. It means, then, that the sinking fund attached to that simply flows through in terms of our costs of government. When you look at the financial statements of the province, it's important that you look at net debt. That obviously nets off any assets that are accumulated in the sinking funds.

Section 24 approved.

On section 25.

G. Wilson: I have a couple of questions on section 25(2) with respect to the calculation of the outstanding debt. It may be that I am not reading this correctly, so I wonder if the minister might tell us. He talks about the calculation of the aggregate of the principal value of the outstanding debt, and then under (a), (b) and (c) it suggests that we are looking at both the amortized and unamortized amounts that have been borrowed on behalf of this agency. If that's the case, where will that reporting of debt be, and will it be broken out into both the amortized and unamortized portions so we can see what the long-term debt is and what's accrued on an annual basis?

Hon. G. Clark: I was going to suggest to the member that if he wants a technical briefing on this I'd be delighted to have my staff give it to him, rather than me. For the purposes of clarification, let me give you my notes on this question. It might help to explain this section.

[ Page 5985 ]

The purpose of this section is to provide rules for determining the authority's outstanding domestic and foreign debt as it relates to authorizations to borrow by the Lieutenant-Governor-in-Council. The calculations in this section should not be confused with the accounting calculation of net debt, which makes regular adjustments to this account's premiums, sinking funds and foreign exchange valuations.

The outstanding debt is calculated by taking the principal value of the outstanding debt, adding in the unamortized premiums related to the debt, subtracting any discounts on the debt and any sinking fund payments, and finally any other adjustments that may be ordered by the Lieutenant-Governor-in-Council to take into account those unamortized portions.

The calculation of foreign borrowing will remain constant with the conversion into Canadian funds, using the Bank of Canada noon spot rate on the day of borrowing. The advantage here is that once the rate is set it will never change, and the government will have certainty that it has not exceeded its borrowing limit.

[8:00]

G. Wilson: It's on the latter point that I want to place my second question. In terms of the reporting of that debt, in terms of how this....

Hon. G. Clark: The question is, I guess: does the total amount of borrowing show? The answer is yes. There is a gross debt; that shows a total amount. Then there are some adjustments -- either subtractions or additions because of unamortized portions -- the things I mentioned. And then there's a net debt number. All of that shows.

G. Wilson: In that accounting, presumably any change or adjustments that may be made as a result of partial retirement or sinking fund application, or any of those kinds of moneys that have been applied would also be shown on an annual basis, so we would be able to see what the long-term accrual is as well as what the annual debt load is going to be.

Hon. G. Clark: Yes, that's correct.

Section 25 approved on division.

On section 26.

V. Anderson: Would the minister be kind enough to explain a little bit why the Company Act and the Company Clauses Act do not apply in (1) under section 26, and yet in (2) parts of that can be applied by the Lieutenant-Governor-in-Council. It seems to be a contradiction and we'd like some explanation of those two parts.

Hon. G. Clark: This subsection stipulates that the Company Act and the Company Clauses Act don't apply to this authority. These two acts deal with private corporations and are not applicable to a Crown agency. The Company Act sets out how companies in British Columbia are formed, operated and dissolved. Obviously we're doing that here in this act, so it's not required to have the Company Act apply. The Company Clauses Act deals with the same topics but applies to joint-stock companies to which the Companies Clauses Consolidation Act, 1845, applied on May 8, 1897, or which were created by an act of the Legislature after May 9, 1897. There may be instances, however, where it is desirable to apply specific provisions of the Company Act, and therefore there's that option available by the Lieutenant-Governor-in-Council. For example, if the authority were to be dissolved, the winding-up provisions of the Company Act could be applied to the authority.

Section 26 approved.

On section 27.

G. Wilson: I have a question that is not intended to be mischievous. I had an interesting briefing on the new Freedom of Information Act by some legal authorities in Vancouver who suggest that the act, as it's being written now in terms of the employees of government, may not necessarily apply to elected members of government. I see that, in fact, the officers here are elected members, and it's just a simple technical question. Does that mean, then, that there will be greater protection to the officers of this authority by virtue of the fact that they are elected members of government?

Hon. G. Clark: I don't know the answer to that question. I don't believe that's the case. The Freedom of Information Act does apply with respect to its employees; they must comply with it. This section is designed to ensure that directors, officers and employees can't take advantage of information acquired in the course of their duties for the purposes of insider trading or the like. I don't believe it should be of concern to members opposite. We fully intend to comply, where appropriate, as we have done with the Freedom of Information Act. This simply requires that they can't disclose insider information for the purposes of trading.

Sections 27 to 29 inclusive approved.

On section 30.

G. Wilson: I think that because the consequential amendments have been thoroughly canvassed as we've gone through this bill -- and I notice that the member for Vancouver-Langara is rising to his feet -- it would have been my recommendation that sections 30 through 37 be approved as a unit.

V. Anderson: On the new 2.1, am I to understand that this is a new portion that applies now to all corporations in a way that it did not apply before? So this is a new area that simply brings all corporations into an accounting system they did not have before.

[ Page 5986 ]

Hon. G. Clark: It puts every corporation as defined in the Financial Information Act -- so every Crown corporation, essentially, yes. It doesn't say that we would approve business plans, capital and operating budgets, but it would be to review how they're achieving other criteria that we've established under the committee, namely training and other initiatives.

Sections 30 to 32 inclusive approved.

On section 33.

R. Neufeld: I have a couple of quick, technical questions. I was gone for a while, so I don't know whether you talked about the tax. Is the tax just on clear gasoline and diesel, or is it also on marked fuels?

Hon. G. Clark: It's not on marked fuel.

R. Neufeld: When I read it, the second line down says "retail dealer." To me, a retail dealer is a service station. But you can purchase clear fuel from a bulk plant. There's a little bit of confusion here. Are you saying that only retail dealers charge the 1 cent a litre, or do those who go to the bulk plant and buy clear fuel pay the same thing?

Hon. G. Clark: My staff advised me that we can rest assured that no one will slip through this. But I will have my staff review it, because clearly the intent is not to discriminate one way or the other. It's a 1-cent-a-litre fuel tax. I'd assume someone who's purchasing it is purchasing it from a retail dealer, but I will make sure that's the case.

Section 33 approved.

On section 34.

V. Anderson: I just wanted to check the terminology in the added section 2.5. Does leasing cover rentals for the day, like from Budget and Avis and all those kinds of things? Is that all covered in that term "lease"? The minister nodded yes, it does.

The other thing I would say in preparation for section 37 is that 37 gives possible exemptions under those that are covered under 2.5 and refers back to that. I'm wondering what the implication of that exemption is in relationship to 2.5. That comes under 37 -- answer it now or then.

Hon. G. Clark: Members of diplomatic and consular corps will be exempted, in keeping with international agreements on diplomatic privileges and immunities. And that's essentially the purpose of that amendment.

Sections 34 to 37 inclusive approved.

Section 38 approved on the following division:

[8:15]

Preamble approved.

Title approved on the following division:

Hon. G. Clark: I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; E. Barnes in the chair.

Deputy Speaker: The question is that Bill 3 be now read a third time. Will all those in favour please rise. Thank you. Please be seated.

All those opposed, please rise. The hon. member for North Vancouver-Seymour will please rise.

D. Jarvis: Do I have to rise to vote?

Deputy Speaker: Under the standing orders you do, sir.

[ Page 5987 ]

Motion approved.

Bill 3, Build BC Act, read a third time and passed.

D. Schreck: Hon. Speaker, I believe I understood the Chair to say that all members must vote. Was that the ruling of the Chair?

Deputy Speaker: That was the ruling, and I believe that all members did vote, hon. member.

On a point of order, the hon. member for North Vancouver-Seymour.

D. Jarvis: Mr. Speaker, you stated to me that I had to rise in order to vote. Is that right?

Deputy Speaker: That is the procedure for voting, hon. member.

Hon. G. Clark: It's been an entertaining day, and it's nice to have some accomplishments in the House. With that, I move this House do now adjourn.

Motion approved.

The House adjourned at 8:30 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The House in Committee of Supply A; D. Streifel in the chair.

The Committee met at 2:51 p.m.

ESTIMATES: MINISTRY OF ATTORNEY GENERAL
(continued)

On vote 19: minister's office, $419,486 (continued).

L. Stephens: I just have a couple of questions that I want to clear up today. The first one is in the area of family law. I would certainly like to know the minister's views on the difficulties in the family court system, particularly in regard to the costs of the services and lawyers and so forth, and his views on whether or not family law may be taken out of the court system and set into a format of a mediator and some form of conflict resolution.

Hon. C. Gabelmann: There have been a number of reports and reviews of family law issues, as the member knows. We're still in the process of evaluating the various recommendations and proposals, so I'm not able to give much substance at this stage in terms of what may occur. The recommendations go so far -- certainly in one report -- as to suggest moving much of what happens in family court entirely out of the court process; and that, along with other recommendations and suggestions, is an issue we're looking at quite closely.

I think all of us want to try to find ways of reducing the adversarial nature of family disputes. If there are productive ways that we can do this, we certainly will do so. But one of the things I've learned in the last little while is to be very careful, when you start making changes of this kind of consequence, not to have something else happen that produces a worse situation than you have currently. So we're taking our time about it; and we're doing it very carefully. I can assure you that for me personally, it's one of the very highest priorities for our activities in the ministry.

L. Stephens: I'm glad to hear that, Mr. Minister, because it's a high priority of mine too. If there is some way to move the family law out of the court system, that's something that I could personally support whole-heartedly. I encourage the minister to do whatever he can to make that happen, understanding that maybe there are some things down the line that may be affected. But if it could be worked out that it is advantageous to all, that would be a huge benefit, particularly to the women and the families of British Columbia.

Reading through Hansard of yesterday, I see that you discussed a little bit about building courtrooms. I know that in Surrey they have about 13 courtrooms, and at any one time about six of them are vacant. Is that the small claims system that was discussed and that you've added five new judges to, or is that simply the provincial court criminal proceedings and so on? Do we need more provincial court judges to service these courtrooms?

Hon. C. Gabelmann: Just going back to the family law issue for a moment, I neglected to advise members that we now have a project director. I would 

[ Page 5988 ]

encourage the member -- and any other member as well -- to contact our director on this project, to convey to him the member's views. We are certainly very keen to hear from members of the House about their thoughts in respect to family law issues -- or anything else, for that matter. Mr. Ted Harrison is directing that particular project and I would encourage members to talk directly to him. He's in the ministry over on 910 Government Street.

On the question of the courtrooms in Surrey, yes, there are 13. It is the first that I have heard -- and I think it's the first anyone's heard -- that the vacancy rate at any one time would be as high as that. I will certainly have a look at that question. I'm surprised to hear that, given the demands in Surrey; given the real pressures there in terms of scheduling. There are always situations where cases collapse and for one reason or another a particular trial may not proceed -- trial scheduling is difficult at the best of times. But I am surprised to hear a number of that consequence. On the small claims side of it there is now one additional provincial court judge in Surrey who will be dealing with small claims. That appointment was effective, I think, in late April.

L. Stephens: On the issue of judges again, I believe five additional ones have been hired -- six. Are they all going to be handling the small claims, or are they going to be doing other work as well?

Hon. C. Gabelmann: Of the six who were appointed, five will be handling small claims, and one will be primarily on criminal cases. One judge who is now in the system will go over to small claims, which will give us six additional full-time provincial court judges doing small claims. In addition to that, five retired provincial court judges will be assigned to particular communities to deal with backlog issues on an as-needed basis.

K. Jones: It's a pleasure, once again, to return to the area of gaming with the minister. It seems like it's such a favorite area of his.

Hon. C. Gabelmann: You're my favorite member.

K. Jones: Thank you very much, Attorney General.

Just to go a little into specifics now, since we've gone fairly well through the philosophical approach that the ministry has towards gaming, has the minister been asked to take any legal action against another Crown corporation or Crown corporation head in the past year?

Hon. C. Gabelmann: I'm going to have to ask the member to be more specific.

K. Jones: I think the question is fairly specific. Has the minister or the ministry been asked to take legal action against a Crown corporation or the head of a Crown corporation?

[3:00]

Hon. C. Gabelmann: I'm not sure what kind of legal action the member is referring to. If it's a matter of criminal charges, it wouldn't be the ministry per se; it would be the criminal justice branch through its independent function. If that's what the member is driving at, please advise me and I'll check. I don't know offhand.

K. Jones: The person who made the request has made the request directly of you as the Attorney General, and the person has.... I presume that you would have replied to the person as you'd indicated, although it takes a little less than a couple of months now to get a reply. Would the person be expecting to get a reply to a letter written in November? Would you have addressed a reply to that person, who would have requested of you to take action against a Crown corporation or the head of a Crown corporation?

Hon. C. Gabelmann: Without knowing the name of the author and the subject matter of the letter, it's really difficult to know. In the ordinary course of events, a letter of that date would have been replied to. It's not something that I have any ability to answer further than that at this point.

K. Jones: I have in front of me a letter written on February 26 of this year. It states: "Subsequent to our detailed and lengthy letter of November 18, 1992, we have not had the pleasure of a reply." Would you have replied to that by now?

Hon. C. Gabelmann: We probably could save everyone a lot of time and effort if you'd just give us a copy of the letter, and we'll track it down, and I'll get back to the member, either through this forum or, if it's more appropriate, privately.

K. Jones: I will give further information to the minister if that's necessary. Basically, it wasn't the specific letter. The factor we were checking was whether action would be taken when a person requests action of the minister, whether the minister would respond to requests such as this, and how long it would take to have that type of consideration when a person does make a formal request of concern that affects other Crown corporations or heads of other Crown corporations.

The Chair: This line of questioning is somewhat peculiar without a clear identification of the issue, and it's difficult for the Chair to assist in this matter, whether or not we are within the realm of relevancy. So, hon. Attorney General, if you would....

Hon. C. Gabelmann: It's important for me to say, Mr. Chair, that if we get suggestions by way of letter, or through whatever route, about matters that require looking into, we look into them. Not only am I sure we would have done that if such a letter was received in our ministry, but I will undertake to look into the matter that's been raised just now too.

K. Jones: Thank you, hon. Chair, and I appreciate the willingness of the Attorney General to look further 

[ Page 5989 ]

into this issue. Attorney General, I'd like you to give us some idea -- with regard to the gaming area and particularly, as you describe it, gambling -- what you consider to be the responsibility of the government to deal with problems that result from gaming.

I'd like to give just a bit of background to that. This is in part of a report from a consultant who is quite outstanding in the world in the area of gaming, and she is very often called upon to make reports. This person, Rachel Volberg, PhD, of Gemini Research in Albany, New York, has done a lot of work in trying to help governments recognize their responsibilities in dealing with those persons who are basically injured or come into difficulties as a result of gaming and gambling. I just want to read a little from the report to give you an idea of its scope. This is referring to the United States, but it's considered to be similar here in Canada: "Gamblers Anonymous has grown almost as rapidly as legalized gambling in the United States. The number of chapters grew from 16 in 1960 to 130 by 1970 and to 600 in 1988." Also: "Problem gambling is a greater problem in those states where legal wagering has been available for some time." Pathological gamblers are significantly more likely to be men under the age of 30 and non-white, with a limited education. The problem is international.

In the report, which she did for the province of New Brunswick, she says that little money is available in the United States and Canada to examine this situation. She makes some recommendations to the province of New Brunswick.

First of all, the key findings she noted were that pathological gamblers show the same profile as those in other countries such as Australia, New Zealand and the United States. Second, significant rates of mental illness including suicide attempts have resulted from problems related to gambling. Revenues generated from the provinces are substantial and beneficial to the populace, but there is a price, and it is the increasing negative impact on its citizens and the cost in social services. Is the minister aware of this, and what actions has this government taken to address this?

Hon. C. Gabelmann: Yes, the government -- me included -- is aware of Rachel Volberg's report. The whole issue of compulsive gambling addiction is a concern. I think it's a reality that there are some addictive personalities and that people become addicted to different things. Some people unquestionably become addicted to gambling. If government is going to take revenue from gambling, then it has a responsibility to look at what it can do to deal with the downside of it -- a very significant and serious downside.

The fact-finding mission conducted by the two MLAs who I referred to this morning actually had dealt with that issue in their report to the Minister of Government Services and me. What we'll do and how we'll do it is yet to be determined, but it's an issue that I'm as concerned about as the member is.

K. Jones: Recognizing that this is not a new phenomenon -- that there are problems related to gaming -- what did the minister find in place to address this when he took over the ministry, and what changes has he made since he has taken over?

Hon. C. Gabelmann: In terms of dealing with compulsive gambling in any real way, nothing was in place, and not much has happened since then. We are in the process of reviewing policy in respect of gambling and gaming, and the whole thing is being dealt with in a unified way. I'll leave it at that.

K. Jones: Does the minister know how many people in our population are affected, to one degree or another, and how seriously the disease or injury is within our society?

Hon. C. Gabelmann: The Volberg report that the member refers to suggests that some 2 percent of the population -- I think that is the whole population as opposed to the gambling population, so it would be higher among gamblers -- has some addiction to the sport, or the activity. There are now two, and nearly a third, Gamblers Anonymous organizations established here in B.C., and those are important institutions that can help in the same way that Alcoholics Anonymous does with that addiction. What we will do in respect of developing policies around that, again, as I keep saying, has yet to be determined.

K. Jones: Volberg and others in the area have previously made some recommendations that could be taken. Their recommendations relate to the establishment of funding for the education of problem and pathological gamblers. North Dakota and Washington State have used fines paid by gaming licence violators to fund state councils on problem gambling, as well as research and treatment initiatives. In Iowa, Massachusetts and Texas, funding for education, treatment and research is part of the enabling legislation for new types of gambling established in recent years.

In New Zealand applicants for gaming licences have been asked to contribute to the cost of providing services to problem gamblers and their families. There have been regulatory provisions with regard to the availability and accessibility of gambling, which are critical in efforts to minimize the negative impacts of legalized gambling. Location of gambling venues, hours of operation, responsibilities of retailers, operators' responsibility to prevent underage gambling and limits on the size of bets and pay-outs as well as credits are some of areas in which recommendations have been put forward.

There is also an organizational responsibility, such as the establishment of services for problem and pathological gamblers. The recommendations are that they should be given -- in this case, in New Brunswick -- to the mental health commission, which is an operating vehicle to provide services to get people back on their feet. Have any of these proposals been implemented by this government or even by the previous government?

[3:15]

[ Page 5990 ]

Hon. C. Gabelmann: I'll just finish this comment before we proceed, if I may, Mr. Chair. The member didn't refer to something else she recommends, and that is that you do a full assessment in the province of the nature of the problem before you start developing programs. I think that's an important thing to do as well. The previous government clearly has done some of those things. They've limited, as we have, the amount of money you could make in particular legalized gambling situations. If you can't make a lot of money in gambling, then you're less likely to have addictive personalities involved in it. The addiction really requires that you be involved in a compulsive way. So if you keep the prizes and the stakes low, you're going to minimize all that. That's one of the conclusions reached in that report.

So all those issues are there, and they are all being factored in. I referred this morning to the fact that we were doing a lot of work internally on these issues. That report has formed a part of the work we are doing.

The Chair: The Chair will advise the committee that there is a division vote in the House, and we will be under the direction of the House until the conclusion of the division vote. And as such, to accommodate the division, we are recessed.

The Committee recessed at 3:16 p.m.

The Committee resumed at 3:25 p.m.

The Chair: The committee will come to order.

K. Jones: Going back to the area of people with difficulties with gaming and gambling, the minister had indicated that it was necessary to assess the size of the problem within this province. What action this year is planned within your budget to address that?

Hon. C. Gabelmann: We haven't actually conducted any surveys or done any research of that kind. We'd certainly talked to Rachel Volberg, the author of the report you're looking at. The members who did their travelling also did some general kind of surveying of the issue, but beyond that, unless the member wants to come and help us defend a bigger deficit, we don't have money for a lot of very worthwhile things that we should be doing.

K. Jones: I would be only too happy to defend this particular one. I'm sure that with the large amount of money that you've got to spend this year, surely a small assessment to determine the degree of serious problems faced by British Columbians as a result of actions taken by the government should be paramount among the priorities on which the government, particularly the Attorney General, would be spending their money. What priority are you placing on this issue?

Hon. C. Gabelmann: If the government were contemplating a major change in policy, a Las Vegas-style gambling situation here in British Columbia, then I think it would be incumbent upon us to do the kind of serious research work that the member's talking about, because then the problem may really be one that could get out of hand. I made it clear -- at least I thought I made it clear -- earlier this morning that the government is not contemplating any change in direction in respect of gambling. We are talking about trying to get a coordinated policy in respect of it, we're trying to clean up some problem areas but we are not talking about going to a Nevada or other style of massive gambling -- which could then lead to the kinds of addiction problems the member is concerned about and that we're all concerned about.

Having said that, however, we are concerned. We talked to people who are experts in the subject. We listened to people who have this concern, and all of that information will be factored into the decisions we make.

K. Jones: Just taking from further information that Dr. Volberg has provided in regard to the province of New Brunswick, which is a study that's just been done this past year, based on 1991 census figures, it is estimated that at a minimum 3,000 New Brunswick adults are currently probable pathological gamblers and an additional 10,000 New Brunswick adults are currently problem gamblers. This is a small province in Canada, very small compared to British Columbia. Do you not consider this to be a serious problem that should be addressed and should have been addressed last year, not waited till...? Would working with the existing problems...? New Brunswick doesn't have Las Vegas-type facilities there either, but they are recognizing that there's a serious problem there. We must have a similar problem without going to the additional problems that would come with a Las Vegas-type facility.

[3:30]

Hon. C. Gabelmann: New Brunswick does in fact have serious problems in respect of having video lottery terminals in a wide variety of locations, including, until recently I think, in grocery stores. That was a serious concern of citizens of New Brunswick, and it became a concern of the government. They invited Dr. Volberg in to have a look at that situation. We don't have that situation here in B.C., and I hope we never get to the point where we have the kinds of problems that can occur as a result of too easy access to gambling, in particular, to gambling styles that are more likely to produce addiction. Some are more likely than others to do that in terms of how you get your reward. So I think they had a very serious problem to deal with; they brought in an expert; and they're dealing with it. We've talked to her; we're alert to all the issues involved. One of the reasons we're taking as much time as we have on this issue is that we're doing our homework before we proceed.

K. Jones: If the Attorney General is doing his homework, he should know when the VLTs came into New Brunswick. Could you tell us the date that they brought in VLTs in New Brunswick?

[ Page 5991 ]

The Chair: With all due respect, hon. Attorney General and hon. member, we restrict ourselves to questions specifically within the administrative capacity of the Attorney General's office, and dates surrounding applications of VLTs in New Brunswick are the other end of the country in respect to the Attorney General's administrative capacity. So if we could come closer to the order of standing order 61, please, we would all be better served.

K. Jones: Bear with me, Mr. Chairman. Don't jump so quickly. I'm going to give you the basis for the reason that I'm going in that direction.

The Chair: Order, hon. member. The Chair offers, as you know, a large amount of freedom and liberty in the debates in this committee, and it becomes appropriate, in fact, for the hon. members to respect the standing orders and the orders gently applied from this chair. The committee will be better served by that.

K. Jones: I meant no disrespect whatsoever. I have utmost respect for you. I just wanted to have an opportunity to finish what I was relating, and the question was very relevant. I was trying to explain the scope of the problem, and the Attorney General came back and said that the problem in New Brunswick was based on the fact that they had VLTs. Well, the fact is the VLTs didn't come in until this past year. The figures that I was quoting, showing the seriousness of the problem in New Brunswick, were based on the census figures of 1991, which was before the advent of the VLTs. Therefore these figures have nothing whatsoever to do with the VLT issue but are showing serious problems with the same type of gambling and gaming that we have in the province of British Columbia

I'm asking the minister to recognize that there is a serious problem. There appears to have been very little action over the past year. I'm surprised that we haven't seen something in the budget. Or is there something in this present budget that would indicate that there is some action being taken by the minister? Could the minister tell us where in this budget there is actual money being allocated to alleviate the problem that problem gamblers are faced with on a daily basis?

Hon. C. Gabelmann: There is no line item in the budget.

A. Warnke: Just following up on this particular subject, I'll make my comments very brief, and perhaps ask a very brief question, because I would like some sort of clarification.

I believe it was October 27 of last year I had the opportunity to attend a function, where a number of displays by a number of companies and private firms associated with the Neighbourhood Pub Owners' Association. As I wandered around looking at the various displays, I did come across the one British Columbia Lottery Corporation booth. They were very kind enough to explain to me in detail not only the existing lotteries but some of the coming lotteries as well. I was actually quite impressed with the presentation that was made.

I did discover, however, the one subject matter brought up by my colleague concerning video lottery terminals -- or VLTs; we'll just use the acronym for short. VLTs of course have been used in other states and provinces, and we're talking about the province of New Brunswick. I believe in South Dakota there was an elaborate program quite some time ago, going through not only the financial and economic implications, but some of the social implications, of employing such things as VLTs and that sort of thing. Indeed, as pointed out by my colleague, the implications have been pretty profound in terms of having an effect on families -- family disruptions, and obviously the financial impact it can have on families. Even individuals have found themselves in all sorts of financial difficulty. As the Attorney General has pointed out, there is that proportion of the population that is somewhat addictive -- and I think that is a proper term -- to this.

Nonetheless, when I was at this particular convention, and as I visited the B.C. Lotteries booth, I was not aware -- but it was displayed to me -- that in fact B.C. Lotteries does have the software all ready to go ahead were there some sort of action taken to have VLTs distributed in the province. I would say the nature of the software was that in fact it was attuned to British Columbia. It was already bought by British Columbia Lotteries.

Now here is where my colleague, of course, in his estimates -- perhaps too the Minister of Government Services -- will perhaps pursue this line of questioning. But I think as well it's relevant to the Attorney General, to give just a brief outline whether this has been explored by the ministry, and whether in fact a decision hasn't already been made. If not a decision -- we don't want to get into the area of prospective legislation, and I'm not sure exactly what legislation would be contemplated anyway.... But it's a question of commitment, whether -- since the software has already been purchased -- there is a commitment by this ministry and by the government to perhaps move in the area of employing VLTs.

I am very encouraged by the answer just provided by the Attorney General, and I'm sure my colleague is as well: that VLTs are certainly not something favoured by this government. But I guess what we're really searching for is whether the Attorney General has explored this -- perhaps in connection with some of the other ministries, I don't know -- and whether this is being contemplated, given the fact that the software is already in existence.

Hon. C. Gabelmann: I didn't want to interrupt the member, but the question really should be directed to the Minister of Government Services in whose jurisdiction the Lottery Corporation is. Just so there's no misunderstanding about this issue, the government has made no decisions in respect of VLTs, or any other changes in gambling in this province. I think I should also say -- although members will perhaps hear this more from the Minister of Government Services -- that there are a variety of things you can do with VLTs, some 

[ Page 5992 ]

of which are more difficult and alarming than others, so there is a range of options as well. I really think we've exhausted this topic, and I will conclude by saying that there will be opportunities as time goes on to discuss and debate policies in and around these subjects.

K. Jones: I would like to briefly touch back on the area of video lottery terminals with regard to the responsibilities of the Attorney General to provide protection and administration. Does the minister have regulatory staffing available within this year's budget to implement regulations if such a decision is made?

The Chair: Hon. Attorney General, with respect. It's future policy, hon. member, and as such it is not examinable within the administrative capacity of the Attorney General's ministry. Could we restrict our questions to those areas within the administrative capacity of the Attorney General's office?

K. Jones: Right now we're facing a fairly concerted move in the gaming area by people from outside and some people from within this province to utilize aboriginal lands to establish large-scale gaming facilities. I've had the pleasure of visiting not a large-scale one but certainly a very active one: the Lummi Island band's gaming facilities just outside of Bellingham in Washington State.

Their justification for it is that it's providing substantial employment: in the range of 65 percent of their employees are actually working in the casino. It's providing substantial income also to the band. We've heard that the Beecher Bay band here in the Sooke area and the Nanaimo bands have been approached, and they are talking about some multimillion-dollar projects regarding a casino and resort facilities.

[3:45]

Presently, British Columbians do go down to Lummi Island -- in fact, I understand that we're a fairly large part of their business -- and a large number of people leave this province daily on bus tours to Reno and Las Vegas in Nevada.

What direction is the ministry going in regard to this large-scale type of facility? Who is going to have authority in regard to those items that are within the aboriginal lands or the aboriginal claimed lands? Because even those areas that aren't absolutely within the reserve, but may be claimed, may become a question of jurisdiction.

Hon. C. Gabelmann: The first thing the member should know is that tomorrow and Saturday there is a conference on this very topic. The aboriginal first nations committee that was established by aboriginal peoples to deal with the gambling issue will be making a report to that conference, and there will be several representatives of the ministry there. In fact, I think one of our staff will be making a presentation to the conference in the next two days.

I think members should know -- and I've said this before in question period -- that gambling activities in this province must be, and will be, either run by the province or licensed by the province. That's the position of the government. Aboriginal peoples, through their committee, know what our policy is. I think we have developed a very good working relationship with aboriginal peoples, who, like everybody else in this province, are trying to find ways of gaining some economic independence and self-sufficiency and are looking at a variety of options that might be available to them.

We want to make sure, within the laws of the province and the Criminal Code provisions, that we can, if possible, assist aboriginal communities in the same ways that we have assisted other communities. We spent some time this morning talking about the 3,300 communities that are already taking advantage of charitable gaming. So this is something we're working on in coordination with aboriginal peoples, but we have some bottom line issues that are a must.

C. Serwa: I had some questions along the same lines with respect to aboriginal gaming. For my information, does the province actually have authority to require that gaming comply with provincial regulations and legislation? Because it is federal private land at the present time, is it a protocol type of arrangement, or do we have something stronger than that?

Hon. C. Gabelmann: It's under the Criminal Code, which applies on all land in Canada, including aboriginal reserve land.

C. Serwa: Then I take it that we would develop a policy that is equitable and fair and treats all British Columbians equally throughout the province once the recommendations come forward. Is that the objective of your ministry?

Hon. C. Gabelmann: Given that we've had 100-and-some years of not treating all British Columbians equally, we have a long way to go to get to that. I hope that in my lifetime we will achieve some kind of equitability in all of its meaning in this province. How we develop and proceed with this issue in respect of aboriginal gaming will be as a result of careful discussion and consultation and will, in the final analysis, be in the best interests of all British Columbians.

C. Serwa: That's a very interesting comment from the Attorney General on the lack of equality of treatment. I've grown up here with the understanding and the impression that we were all treated equally, and that we had equal opportunity. So it's an interesting statement, because inherent in it is a substantial amount of bias. I want that clarified by the Attorney General. It seems to me that the rule of law and order has to apply equitably, just as equality of opportunity has to be available to all British Columbians. I hear a strong inherent bias in the minister's statement which I'm uncomfortable with. Perhaps the minister would expand on this.

[ Page 5993 ]

Hon. C. Gabelmann: If I didn't exhibit a bias and was, in fact, unbiased, I would be the only living creature on the face of the planet who didn't have a bias. Every one of us has a bias of one kind or another on every issue that exists. That's clear; all of us have biases.

One of my biases is that I don't think we've had a society that has treated people equally and equitably. You just have to look around the Legislature to see the number of us who are white males -- just to prove the point. You don't have to go any further. A society that was equitable and equal would produce some kind of equal and equitable representation in its elected offices, and ours doesn't do that.

A society that was equal and equitable wouldn't have communities in our province in which 80 to 90 percent of the people have been sexually abused. We wouldn't have situations in which unemployment rates in some communities of this province are as high as 90 percent. If the member wants to talk about fair and equal treatment and an unbiased approach in our society in the last while, come with me to northern Vancouver Island and I'll show you the results of a lot of inequitableness and unequal treatment that's occurred.

As far as the particular issue at hand goes, we have to move carefully, we have to move slowly, we have to move with the support of all people in this province -- and we think we can do that. We're going to do it within the rules. We're going to do it within the rules of the Criminal Code, and the Criminal Code is applied equitably, or it should be, and it's our intention that it is. We have the responsibility for enforcing it, and we will make sure it is. There will be no opportunities to get around the provisions of the Criminal Code by the development of aboriginal gaming; we can't do that. That's the law of the land, and we'll enforce it.

In respect of who gets licences, and who has the opportunity to develop bingo halls or other charitable gaming facilities, so far one side of our society has had that opportunity in a very real way. Maybe it's time for some other people in our society also to have that opportunity, and we're working to see if we can develop policies to achieve just that.

K. Jones: The minister was referring to an event where his staff were going to be attending. Was that the first nations gaming trades show, referred to as Gamex '93?

Hon. C. Gabelmann: There are a couple of events going on at the same time, I think, in the same place at the SFU downtown campus tomorrow and Saturday. We're talking about parallel but I think separate events, even though they're in conjunction one with the other. If that's incorrect, I'll get back to you later on that.

K. Jones: I'd like to extend an invitation to the ministry to take in the Gamex '93, which is scheduled Monday and Tuesday, May 10 and 11, at the Hotel Vancouver Convention Centre, which I will be attending. I think perhaps this is going to be a very important one. It's sponsored by the Native Investment and Trade Association and the First Nations National Gaming Council, and it's going to have as guest speaker Ovide Mercredi, the grand chief of the Assembly of First Nations. It's certainly a high-profile program of speakers. Perhaps you could give me some information about this other event, but I think this one here seems to be the big event of the weekend.

Hon. C. Gabelmann: There are two big events, and we'll be at both of them.

K. Jones: I just wanted to ask the minister if he's been in discussions with the federal government with regard to establishing a protocol or a process by which there can be jurisdictional determination in the area of aboriginal gaming by the province, similar to what transpired in 1988 in the United States. The United States Congress legalized Indian-run casinos in cooperation with the states and gave the states the authority to provide the regulatory guidance so that there was some standardization both on and off reserve lands.

Hon. C. Gabelmann: The deputy justice ministers met in Toronto a week or so ago, and the issue was raised. Because there were so many items on the agenda as well, it was raised and briefly discussed.

K. Jones: What issue was actually raised? Have there been no previous discussions in regard to addressing the need for having provincial involvement in the regulation of gaming on lands under the jurisdiction of the federal government? Over the past ten or 20 years, when everybody's been knowing there is the potential and there actually have been some problem areas, have there been no discussions in this regard? What specific questions were being addressed in this meeting last week?

Hon. C. Gabelmann: Given the Criminal Code provisions, this is a matter of provincial responsibility. There is no need in any great way to develop protocols or agreements with the federal government or other provinces on the matter. This is our turf. We make the decisions and the rules under the provisions of the code and we can do that. Nonetheless, on all kinds of issues discussions occur between various governments, and they have occurred in a preliminary way. But I'm not sure where the member is going. This is our responsibility, and we'll undertake to exercise it.

K. Jones: If the Attorney General believes it is his responsibility, and therefore has made a clear definition to all parties that he is responsible for regulating gaming both on and off aboriginal lands -- which I believe is the position the minister's taken -- how does the minister expect to enforce this, when he has no right of access on aboriginal lands because they are not under his jurisdiction?

Hon. C. Gabelmann: We do this by analogy. If a criminal act is alleged to have occurred on Indian land, 

[ Page 5994 ]

on a reserve land -- for example if there's a murder -- the RCMP are not barred from going on to the reserve to investigate the murder.

A Voice: That's federal jurisdiction.

Hon. C. Gabelmann: The police force in British Columbia will drive onto the reserve and will investigate the circumstances they see in front of them. The Criminal Code is enforced in this province through our agencies, and it applies on all land in British Columbia -- including Indian land.

K. Jones: Perhaps the minister hasn't heard of the situation in Oka, and also in Ontario and Quebec, where they have certainly taken objection to the provincial jurisdiction stepping into their territories. I think it has been upheld, within the processes that resulted, that they can only be in there on the basis of the aboriginals' or the federal authority's permission. Has any agreement been made with the federal government to get that authority?

[4:00]

Hon. C. Gabelmann: I don't know how many reserve land bands actually are in the member's riding, but perhaps he would have a better understanding of the issue if he would see the kind of activity that our provincial police force in most parts of this province, the RCMP, conduct and have take place on any reserve. It's a daily event in this province. In fact, some RCMP substations are actually located within reserves. So the suggestion from the member that somehow the RCMP would be unable to enforce the Criminal Code on reserve land is absurd -- in the least.

One of the reasons we have avoided the kind of situation that has occurred in other parts of the country is that we do things like this conference. I know I'm not supposed to have props in here, but I'll just show the member the brochure, "Policy Options for First Nations Gaming in British Columbia." The reason we don't have the kind of problems that they might have elsewhere is that we have sponsorship for a conference of this kind by a diverse group -- SFU Criminology, the B.C. First Nations Gaming Commission, the B.C. Gaming Commission, the public gaming branch and the Ministry of Attorney General -- all working together to try to develop policies in respect of this.

One of the reasons why we have to date avoided -- and I'm sure will continue to avoid -- the kinds of problems that may have occurred elsewhere is because we are working jointly and cooperatively with the people involved.

K. Jones: I will be passing it on to the other hon. member from the third party, and I will be leaving for a few minutes. I will return later.

C. Serwa: I heard a low rumble of applause there. I am surprised at the committee.

I'll pursue my line of questioning with the Attorney General, because he continues to make some interesting statements. I recognize his commitment and his strong belief in the situation; that's not up for debate at the present time. I could spend a long evening philosophically discussing some of the alternatives: whether the crutch is the opportunity, or creating a more fertile field of opportunity other than crutches, and making people more dependent on society. I think that's where the problem is.

The minister knows full well that there is no such thing as a homogeneous aboriginal population in the province of British Columbia -- simply by culture, by location, or by almost anything else. They are a virtually unique people spread throughout the province of British Columbia. One of the problems with the planned policy of the Attorney General is that the type of development that is being proposed is being proposed by aboriginal peoples who are near well-defined transportation routes, large population centres, and generally -- whether they're the Musqueam people with Celtic Shipyards, with lands that are developed and leased -- there are many other opportunities. So my concern is: how will the Attorney General look at the North Island situation even if the facility is located there? Going back to the concept of consistency of treatment of native and non-native people in the province of British Columbia, how can you develop an inconsistent process that will be balanced and fair and accomplish what you're striving to accomplish?

Hon. C. Gabelmann: By way of such events as the conference that's occurring in the next two days, by the continued discussions that we have with the aboriginal gaming committee, I hope we will be able to develop a policy framework which will be seen by everyone in this province as fair and appropriate. Then I hope we will establish, by legislation, as indicated this morning, a gaming act so that there is some statutory authority for a commission which will make determinations about licences. I don't think that the minister or the cabinet or any part of the political process should be involved in determining who gets a licence. I think our responsibility is to do the statute, set the policy and establish an independent licensing body, because one of the things that occasionally gets government in trouble is political interference in licensing.

So the key here is a fair policy framework, and clearly.... Just one thing. I know the member is anxious to jump up. The spectre of Beecher Bay and the spectre of Nanaimo keep raising their heads. I've talked to the chief of the Nanaimo band and I've talked to others who have had suggestions about possible developments such as those. Quite a lot of the initiative for this is offshore and outside the country. There are grandiose schemes that some "entrepreneurs" have and they're trying often to take advantage of particular situations.

Just because somebody says that they want to build a $250 million, gambling resort centre in a particular location in this province doesn't mean it's going to happen. We don't have a policy in place which allows for massive, centralized gambling facilities. We've rejected the notion that Whistler should have such a 

[ Page 5995 ]

facility. If it's not going to occur at Whistler, because it's against the rules, it won't occur anywhere else.

C. Serwa: This may be in the area of future policy, but it would help me if the minister would indicate whether he would consider through his ministry the equalization of at least the profit side of, let's say, aboriginal gambling, which will take place in only a few select areas in the province. If that occurs, would the minister consider some sort of a distribution of profits to all of the native people, be they in the North Island, northern B.C. or remote coastal areas? Would he consider some way to spread the benefits of this particular package, rather than isolate them to a few, select populated areas?

Hon. C. Gabelmann: Not only is this future policy, it's also quite hypothetical, and so I think we'll leave that question for another day.

L. Reid: I might start by commending a young woman, Wendy Taylor, who works with the Ministry of Attorney General on gang and youth violence. She and I recently worked together on a forum in my riding, and she's an outstanding professional. I would certainly encourage all my colleagues to take advantage of her expertise in that area. Also, I would again applaud the minister on the gang youth contact line, which I understand is working extremely well, particularly in my riding, and in other areas around the province.

My comments today will pertain to the report Is Anyone Listening? by the British Columbia Task Force on Family Violence. In my role as Women's Equality critic, I've had many discussions with the Minister of Women's Equality in terms of mandatory prosecution around the issues of violence against women. I would be very interested in your comments, because certainly I can commend the minister on the rape assault policy that has come forward. But I'm interested to know what implementation plans are in place for that, and what possible time lines we can expect from yourself as minister?

Hon. C. Gabelmann: I want to be clear that we're talking about the same thing when we do this. Before I ask that question, I just want to comment as well about the gang youth contact line. It's working exceedingly well; in fact, the use of it has exceeded all of our projections and predictions.

Your comments about one of our staff members are very well taken; you're absolutely right about her. Your comments can be applied to literally thousands of other people who work in this ministry, and who do just outstanding work on behalf of the people of this province -- work that is far beyond what they get paid for and that extends far beyond quitting time. The public of this province should be really pleased about the quality of service it gets from its public servants. It's simply outstanding work. You've had one particular example of that in this case, and I know other members have had other examples. I'm delighted you took the opportunity to say that about Wendy.

I think the member was -- and I want to make sure about this -- referring to the violence against women in relationships policy, and the question was when it will come into effect. I think the member knows that I spoke to a conference on this topic -- it must be three or four weeks ago now -- and indicated to several hundred prosecutors and police officers from around the province that I saw this as an important policy, a major initiative of the government; and that despite our limited resources, one that I wanted to pursue in a vigorous way, and have them pursue in a vigorous way.

I'll just give members a sense of what we're doing at the present time. There's a police training video being developed called "It's a Crime," which will in the first instance make it clear to police officers in the province that it is a crime we view seriously when -- as it usually is -- husbands beat their wives. Whether they're legally married or not, if they're living together in a relationship, that's to be treated as if the victim were on the street assaulted by a stranger. The crime is no less serious, and we're dealing with that.

Incidentally, may I say in parentheses that not just heterosexual relationships are included in this, but homosexual relationships as well. We're developing training modules for the police, for Crown counsel, for probation staff and for victim assistance workers. Training sessions for the trainers are being held this spring. We're developing public information materials. Of course, we've got the policy booklet, which members have seen. We're doing a database on case law to assist the Crown in prosecutions so that that is currently and readily available to prosecutors. We're doing a case-flagging system to identify priority cases, and we're doing a discussion paper on protocols to assist communities in organizing response networks.

The case-flagging system -- it's not on this sheet, but from memory -- is also going to enable us to follow the pace. How long does it take from beginning to end to prosecute cases under this general policy? I don't know if that answers the question, but I'll do more if I can.

L. Reid: I certainly appreciate the background in terms of how we're going to flesh this out. My interests are directed more toward mandatory prosecution. A number of individuals in this province, women particularly, who have come to my office believe that they're put in a very vulnerable position once they have been abused in a partner relationship of any description. They are simply not yet clear -- this is an issue of tremendous uncertainty -- if they will be asked whether or not they'll press charges in a situation of violence or if this government is going to follow the model currently underway in the state of Illinois, where mandatory prosecution is in place. I would be very interested in your comments, because I think that's the crux of the issue in terms of the uncertainty about the process and whether women believe they have an impact on the process.

Hon. C. Gabelmann: The member raises what I think is the key element of the new policy, and that is that we carry the prosecution. We don't rely on the victim to carry the prosecution. That, in effect, was 

[ Page 5996 ]

what happened before. What happens now is that the woman reports to the police, and the police do an investigation and refer charges. Charges will be approved by Crown prosecutors, and the prosecutors carry the conduct of the case.

The victim is not obliged, as used to be the case, to say "yes, I will lay charges," because that's often the problem. How does a victim in that situation actually say: "Well, I'm going to prosecute the old man; but if I do, he'll just beat me up again"? That responsibility is taken away from the victim, and it's our responsibility.

[4:15]

L. Reid: For my own clarification, did I understand the minister to say that in a situation where the police are called to a premise to investigate an issue of family violence, upon identifying that that has indeed transpired, they will remove the offending spouse from the premise?

Hon. C. Gabelmann: Yes, the police can. If in the judgment of the police there's a risk involved in not removing the alleged offender, then the arrest can be made and the police can put the alleged offender in jail, pending any charges.

L. Reid: It warms my heart to hear you say that, because the individuals who still come to my office.... I'm not sure if your policy is currently in place. If it is and that is the new approach for violence against women, violence against anyone in our society, I would applaud that. My concern is that there are still women in my office who believe, and suggest to me, that they are still put in the position of being asked: "Do you wish to press charges?" What they are looking for, and what I am looking for as the critic in this area, is mandatory prosecution -- that when they have been abused, when they're at their most vulnerable, they would not be put in a position of having to ask for that service. That is the issue for me today.

Hon. C. Gabelmann: I just want to read from the policy: "Police officers, when there are grounds to believe an offence has occurred, should always arrest when it is in the public interest, including when an officer" -- when an officer -- "believes an offence may be repeated." This is not the call of the victim; this is the call of the officer. The police use their judgment in this respect.

Now if the member suggests that may not be happening in some situations, that's entirely possible. One of the reasons we are developing the training manuals, training videos and training programs is simply to bring everybody up to speed on the policy. We need to remember that prior to 1986 there was no policy in place at all on this general topic. Then in 1985-86, a policy was developed which was similar to this -- not quite as strong as this but similar to the policy we're talking about -- but there wasn't a lot of attention paid following that to making sure that the justice system, including police officers, actually followed the policy.

What we've done is to strengthen the policy, after a lot of consultation, but recognize that what we need now to do is to make sure that the people who implement it understand what it is and are able to actually implement the policy in a full and proper way. That's not going to happen overnight, clearly; it's going to take us some time to get everybody in the system to understand fully how it works. But we are determined to do that. The program of education around this policy is beginning in earnest this spring.

L. Reid: Speaking as an educator, I completely understand your points about needing to ensure that everybody understands the process. The policy you read into the record, what was its date of coming into effect?

Hon. C. Gabelmann: It's in effect now. It came into effect in February of this year.

L. Reid: There are a number of recommendations from the report of the British Columbia Task Force on Family Violence, Is Anyone Listening?. I would hope that we can maybe today just touch on one or two of the recommendations in terms of the consultation process. There are a number of groups, and certainly the recommendation makes mention of groups that needed to be consulted, particularly the front-line workers, in terms of how best to involve individuals in the education process. But how best to ensure that the folks who deliver the service of remediation, of counselling, etc., have been involved in how the policy was formatted? Can you give me some background as to how that consultation process was enacted?

Hon. C. Gabelmann: I think the best thing I can do is just read a paragraph from a briefing note prepared in our ministry. It's not very long.

"A wife assault policy revision committee was established in the summer of 1990 with representatives from the RCMP, Vancouver Police, Ministry of Attorney General, corrections branch and several other branches of the ministry, chaired by the criminal justice branch of our ministry. The chair of the Wife Assault Policy Revision Committee" -- the revision of this policy we've just been talking about -- "was also a member of the British Columbia Task Force on Family Violence and therefore information from the task force submissions was incorporated into the policy."

That was the linkage between the two.

"In addition, input was received from the wife assault coordinators who have developed local coordinating committees in seven sites in British Columbia."

L. Reid: I appreciate the minister's comments, because what I'm hearing is that there is some consultation in place, and certainly that is the process that the aboriginal women in this province have said they want to be part of. If that's happening, I applaud it. I think that's absolutely outstanding.

A particular issue that I want to touch on is the services to victims of violence, particularly children. Apparently resources are not always in place to shield the child victim from the accused. It seems to me that 

[ Page 5997 ]

that was an issue that was taken forward very strongly on behalf of rights of children in the justice system. I'm wondering if you could comment on the status of that. I know we have had one or two cases where that has happened -- and again, I applaud that -- but what happens to the other children in the system who may or may not be getting the best deal from the justice system?

Hon. C. Gabelmann: We're in two areas here; two issues. One is the well-being of the child, and that's the mandate of the superintendent of family and child service in the Ministry of Social Services, who acts independently. In our programs we have fairly well-developing -- if I can put it that way -- victims' assistance programs that apply to or are available to children as well as to adults.

Often when questions like this are asked in estimates, it's because there's been a particular incident that is discomforting or is a problem that someone's been aware of or has had drawn to their attention. I certainly would encourage members to draw to my attention -- not in this forum, but privately -- any areas that are of concern in terms of how the criminal justice system acts, dealing with victims in particular. I think one of the failings of the system historically is that victims have never been -- until recently -- recognized as needing much more attention from the system. They're now getting that properly, and I think they should get more attention from the system. Otherwise they're victims twice, as I said yesterday: they're victims in the first instance, and then we victimize them again. That's changing; there are lots of good things happening. If there are illustrations or examples that come to members' attention where what's happening doesn't seem appropriate, I'd sure like to hear about it.

L. Reid: My concern does not spring from a particular case. I'm referring specifically to activities within a courtroom setting where the victim -- the child victim, the young woman victim, if you will -- is not shielded from the accused. There's been tremendous discussion about that, and certainly it seemed to be a policy that this government was looking upon favourably in terms of implementation. Perhaps we could have the status report on where that policy discussion sits today -- if indeed it is formal policy.

Hon. C. Gabelmann: It would take me 100 years in this job before I would be able to do everything off the top of my head. The issues are complex, and I apologize to members for not simply being able to roll it off the top of my head.

First of all, in terms of protecting children in a courtroom situation, there are screens available; there are physical protections, if I can use that word, available. The Crown can make an application to the court to have that occur in situations where it's deemed to be appropriate. I gather that the federal government is also looking at some other changes to the Criminal Code which will assist in dealing with the issue that the member is talking about. How far those discussions have gone.... They have introduced a bill in the House of Commons. That doesn't mean it's going to pass, given this being an election year, but nonetheless, they have introduced legislation to enhance the protection issue the member is talking about.

L. Reid: I appreciate your response, in that it is possible to request the screen, etc. My issue is: how do people know to ask for that? How does the system make the public more aware that those facilities exist? If I can tie that to the earlier policy you indicated -- that as of February of this year certainly mandatory prosecution was a possibility -- again, how does the public know that? Will your ministry be engaging in a public information session? Will there be an opportunity for both of these issues to be brought to the attention of the public so they indeed know they have those resources at their disposal but simply must ask for them through the process?

Hon. C. Gabelmann: The link in the system is the victim-assistance worker, who will work with the family and the Crown to determine whether or not an application should be made in a particular instance. That's the linkage. It doesn't work in all instances; that may be the case. But it should, and it's certainly our desire.

L. Reid: Perhaps I could just reframe the earlier question, in terms of a public information program of some description, to illustrate the points you raised earlier about mandatory prosecution. If the policy takes effect in February, l993, is a program coming forth from your ministry that indicates to the public that that program is now in place, that policy is now intact?

Hon. C. Gabelmann: We've done a lot of communications on the issue, and we've distributed the booklet widely. One of the problems I think members would agree we would have is trying to educate the public about this issue. Most of us members of the public wouldn't listen, because we're never going to be in that situation, so we won't pay any attention until we need to. I think the best time to draw people's attention to the policy is in fact when they run up against a situation in which it applies.

Having said that -- I hate to sound like a broken record -- but again, given limited resources, we are doing the best we can to advise the public of the policy. I speak for myself, rather than blame this on anybody in the ministry. I think at this point the most important thing we can do is make sure that all the elements in the justice system who implement the policy are actually well informed about and implementing the policy before we advise the public too widely that it's available. Let's make sure it's in place and working properly before we tell people it is.

L. Reid: In terms of your comment on training Crown counsel on different issues, is there a plan in place on behalf of your ministry to instruct provincial court judges on cultural issues surrounding women, children, violence?

[ Page 5998 ]

Hon. C. Gabelmann: This isn't a criticism of the member; we did talk about this in the estimates earlier. With the bifurcated House here, we have....

L. Reid: I will accept "Yes."

Hon. C. Gabelmann: Yes, but I want to qualify it. One provincial court judge, Judge Doug Campbell, is involved in judicial education. He provides a service to the other three western provinces as well. There are a variety of educational activities that he is involved in. I don't mind saying that some judges are more receptive to this than others, and we're continuing because we believe it's important that the bench be current on all of these issues.

L. Reid: I appreciate the minister's patience in that. Indeed it is difficult to follow the debate in two Houses. In terms of the report Is Anyone Listening? has your ministry prepared an official response to that document?

[4:30]

Hon. C. Gabelmann: There isn't an official response per se. Most of what came out of that report is included in this Violence Against Women and Children policy. Some other elements of that report are being considered now as we do our family-law review project, which I also talked about earlier.

L. Reid: In terms of the date of the report, February 1992.... Is Anyone Listening? is the report of the British Columbia Task Force on Family Violence. In it are a number of recommendations that refer to year one funding priorities, in terms of prevention and intervention and the like. Could I ask the minister to comment on the status of some of these funding priorities? Are they reflected in your ministry this year? I would find that particularly useful, and I will certainly stand down if the minister has already covered that material.

One of the most significant recommendations flowing from this is for community agencies to directly provide services and funding, and I understand that some of those issues are being covered by the Ministry of Women's Equality. In my discussions with the Minister of Women's Equality, she talked about the interdisciplinary nature of this enterprise. I take no issue with that. I would be interested to know which particular aspects fall under the Ministry of Attorney General.

Hon. C. Gabelmann: It might be best to simply talk about what we are doing in violence programs with money that we expend; this is not cost-shared with Women's Equality. For community based victim assistance, last year we spent about $1.8 million, and we're adding another $200,000 for the community specialized victim assistance. We spend about $1.5 million on police-based victim assistance. We spend about $1.1 million on Crown-based witness preparation. We spend about $120,000 on native victim assistance programs. We spend about $360,000 on sexual assault programs. Last year we spent $442,000 on assaultive-men programs; we're tentatively adding $1 million to that program. If we can get at that problem, we can get at the overall problem in a large measure, so there's a significant effort there.

We have been spending $255,000 on the wife assault program, which is part of what we're talking about; we're adding another $200,000. Aboriginal family violence: this is new money -- $250,000; there was no money in the previous year. We're proposing to spend about $500,000 on the known abuser program; again, it's new money. Other family violence programs are all lumped together at $550,000. So that's about $2.7 million, much of which has to go to Treasury Board for formal approval in terms of actual.... No, that's not right, I don't think. What we're talking about here is money that we have assigned, some of which has not yet been precisely allocated to specific programs. These are our intentions to develop programs in these areas with this additional money.

What it reflects is our commitment to put additional money into family violence -- more accurately called wife assault -- programs. So we're looking at an additional $2.7 million here. This is not new money in terms of the overall government budget. What we have done is reallocate internally and draw down other programs in order to enhance this particular program, because it's a priority of this ministry and of the government.

L. Reid: If I might make reference to a number of recommendations, a very small number, in terms of services available to victims with disabilities and women of colour, are there programs in place in your ministry to respond to those specific issues? That is certainly the theme that runs through Is Anyone Listening? The invisible minorities, if you will, have tremendous import when they speak of some of the inefficiencies they see in the system. Is your ministry looking to correct issues for disabled women and women of colour?

Hon. C. Gabelmann: I share the member's concern about those issues and fully recognize the need to develop programs. We have no programs in place yet. We have moneys available for programs around this general topic. We have not yet made determinations about how best to spend it. And so the answer to the question, in short, is not yet.

L. Reid: I would like the minister to expand on the issue of rehabilitation for sex offenders, because that seems to be a huge concern for the public. Are there sufficient programs in place? Are there effective programs in place in the province of British Columbia? Is it possible to rehabilitate a known sex offender? Can the public have trust in existing programs that involve the offender in some rehabilitative process?

Hon. C. Gabelmann: I wonder if you would recast that again, as I was listening to three people at once.

[ Page 5999 ]

L. Reid: You're so lucky to have staff, hon. minister.

In terms of the question, there is tremendous uncertainty on behalf of the public about the fact that when someone is incarcerated for a sex offence, there is not effective rehabilitation in place. Is that an area that your ministry is looking at? And can the public trust that the rehabilitation programs that the ministry puts in place are indeed effective for the offenders who will be returned to their communities?

Hon. C. Gabelmann: Just to give a bit of background, approximately 1,700 sex offenders are supervised by the corrections branch on any given day. This is a surprisingly large number -- well, it certainly was to me. Almost 1,500 are under community supervision, and approximately 200 are in custody. It is interesting to note that this population has doubled in the last six years, and whether that is the result of increased reporting or increased activity is a good question, perhaps.

In terms of the specific question the member asks, we, together with the forensic psychiatric services in the Ministry of Health, provide intervention strategies to reduce the risk of reoffending. The conclusion is that the best way of preventing reoccurrence is a combination of therapeutic intervention together with supervision. If the member is asking whether it is it always successful, occasionally it isn't, but I think it is fair to say there has been good success -- which has not, strangely enough, been reported on the front page of the Province.

L. Reid: I will revisit that topic with you at a later date. The issue I want to address now is actually recommendation 16, which says "encourage and support hospitals to establish specialized services to respond to women, children and elderly people who are victims of family or sexual violence." That's a tremendous concern today, because there is only one sexual assault team in place for the city of Vancouver, and it deals with the surrounding area in the province. Now the future of that particular service is in question today; and I am sure it will be in question for any number of weeks. It certainly seems that for the service to be the most effective, it must be maintained close to police officers, that aspect of the system. There is discussion today that the program that is currently in place at Shaughnessy Hospital will not be housed at either St. Paul's or Vancouver General.

Given the recommendation of this report and the significance of judicial involvement in that process, if indeed there are going to be charges laid and actual justice seen to be done in some of these issues, it seems to me that we have to ensure that we follow the recommendation of this report; that there are opportunities for sexual service centres to be maintained within large population areas so we ensure that women have access to those centres. Does your ministry have a position on the sexual service centre in terms of its necessary proximity to the courts -- necessary proximity to police stations?

Hon. C. Gabelmann: Next week the Minister of Health is going to have her estimates before the House in the other place, and I think that the questions really are best dealt with there. If you're asking if we feel the need to have some proximity with other components of the system, then I think the answer would be yes. I can't speak to decisions that may have been made or may still be in the process of being made in respect of the relocation of that particular service, if, in fact, it's going to be relocated. I just don't know that. But if you're asking me if we think there needs to be proximity with other elements of the justice system, then I would say yes, we do -- you have to have that.

L. Reid: I appreciate the candour of your answers, and I shall return again.

A. Warnke: Following up a little bit from my colleague from Richmond East, in February the ministry released the "Policy on the Criminal Justice System Response to Violence Against Women and Children, Part 1." From what I could see, the report is quite commendable. It's fairly comprehensive and addresses many of the issues of violence, especially violence against partners, and so forth. We all have the problem of budgeting, and certainly we appreciate that on this side, but I wonder if the minister will address whether priorities have been established by the ministry from the report. What course of action is the ministry considering in implementing all or any of the recommendations?

Hon. C. Gabelmann: I'm going to ask the member to note the time and check the Blues when they come out tomorrow. The precise answer to that question occurred about half an hour ago. I will do it again, but I really did answer that question thoroughly, and it will be in Hansard.

A. Warnke: I'll take that; that's fine for me.

Perhaps one other question, and maybe this has been touched on as well -- I would appreciate that if that is so. Is there any consideration being given to establish protocols to ensure that a victim is informed of, let's say, court orders -- their contents, their implications, changes to the order, and particularly the release of the offender -- that may affect the victim's safety?

[4:45]

Hon. C. Gabelmann: It has been the policy -- it is the policy -- that the victim assistance workers in fact do provide that information, and we now have an amended policy which includes providing that information in respect of appeals as well.

A. Warnke: Perhaps another aspect here -- I just want to follow up from my colleague's comments earlier. It has to do with dangerous sex offenders, and that sort of thing, and particularly those individuals who have served time, or certainly have met the conditions upon which they've been charged and convicted. As I'm sure we're all aware, and the minister is as well, there has been a lot of controversy about the 

[ Page 6000 ]

publication of names of convicted sexual offenders in neighbourhoods. There has been some public reaction to that. I wonder if the Attorney General could respond in regard to any direction that may be taking place and how the ministry is going to respond to that in the next year.

Hon. C. Gabelmann: This whole question of known abusers has been one of the more difficult issues I've had to handle in the time that I've been in this job. It is exceedingly complex and difficult, and it includes federal responsibility in significant ways. There are issues that we can deal with directly, perhaps, and there are issues where federal involvement is required.

There have been discussions. We have established within the ministry a group that has been working on a policy in respect of known abusers. We have not yet been able to make public any policy changes, because they are very difficult to develop. I need to say that. It's not because we're afraid to tackle the issue or don't want to tackle the issue; it's just that the issue raises more difficulties than one thinks at first glance.

The federal government has just found out the same thing. Doug Lewis, in particular, following an incident in Ontario a few months ago, responded about how the federal government was going to immediately do this, that and the other. They began to figure out what they could do and realized that they wouldn't be able to do this, that and the other very quickly, because it was not a simple matter.

We are developing policies guided by my notion that we need to develop a balance between rights in this issue. The paramount issue above all is the safety of children. That is the absolute and unqualified paramount right that must be protected. That doesn't mean that the publication of the name of every known abuser should occur, because that in and of itself isn't necessarily the response to protecting the rights of children. It may very well be that certain known abusers who are not in custody should have their whereabouts provided to some part of the local community -- whether it's the school or the neighbourhood. The police are usually in the best position to do that. It's a very complex issue; it's not a black-and-white matter. There are going to be mistakes made on both sides of this. There are going to be mistakes made in too much identification and in not enough. We're developing that. A lot of those issues have to do with the federal government. We're certainly talking to them about it.

As I mentioned yesterday, I'm going to a justice ministers' meeting at the end of May, and this item is on the agenda for discussion there as well, because it's a concern across the country.

There are some things in terms of issues around pre-employment screening and what not that we are looking very carefully at. Some elements of that exist in some parts of government hiring already. So we're going through a process of developing policy in respect of that.

[D. Schreck in the chair.]

A. Warnke: I probed this question because I too have been grappling with it. As the Attorney General well knows, I'm extremely sensitive about the protection of individual rights, and I certainly appreciate the problem. Actually, I believe he's on the right track insofar as I understand the difficulty in balancing the rights of individuals, as the Attorney General has put it. The safety of children does come first; it's paramount. I could not agree more with the Attorney General on that point. An individual child is an individual whose rights can in fact be infringed on, and this must be uppermost in our minds.

I actually want to express my concern but also support for the Attorney General. I recognize that it is a difficult and complex issue, and as long as the priorities are arranged correctly, then I would like to encourage the Attorney General on the way he has articulated the problem. It is a difficult and complex issue. The safety of children, I do believe as well, is paramount, and I guess at this point it's kind of the plan and strategy of how we go about this, recognizing that it is a complex issue. Nonetheless, I want to be reassured that there is some sort of plan and strategy that the government is moving towards.

Hon. C. Gabelmann: Let me just be a little bit more specific about some of the things we're working on. We're dealing with trying to develop policy around notification, and I mentioned that. We have to ensure that the policy meets the standards of not only the Charter of Rights but also the federal privacy legislation, which creates a number of problems. In addition, we need to make sure we're consistent with our own freedom of information and protection of privacy legislation.

I mentioned pre-employment screening, or mandatory criminal record checks; that's part of what we're looking at. The question of a registry is one that comes up frequently from the media, particularly in the hallway. I'm accosted frequently with the demand to know where the registry is. In fact, if there's going to be an effective registry, it has to be done at the federal level. The police information -- the records, in fact -- is in a federal system called CPIC, and without access to that you don't have access to the records, plus you have the mobility issues that occur in the country. So we have also been developing an approach around this issue which we will take to the federal government and to the other ministers across the country.

[D. Streifel in the chair.]

H. De Jong: It's indeed an interesting discussion, even though I've been in here only for a very short time. I was interested in the discussion I came in on, and that was regarding youngsters who may have a forensic problem. From the discussion, as I understand it, when these problems do occur, they are a matter that is under this minister's jurisdiction, particularly if problems occur with these youngsters within the community at large.

Once these youngsters have been referred to the institution, be it a care home or whatever the case may 

[ Page 6001 ]

be, and a problem arises between these youngsters -- let's say that there are three or four in some sort of a government-approved group home -- does the Ministry of Attorney General then have any jurisdiction over these children while they're in a group home, even though the group home may be under the Ministry of Social Services?

Hon. C. Gabelmann: As I understand the distinction here, if the children we're talking about are involved in the mental health system, they will be under the responsibility of the Minister of Health. If they are wards or in care of the superintendent, then they are the responsibility of the Ministry of Social Services. Group homes are under the responsibility of Social Services.

Our responsibility kicks in -- we're the cleanup crew -- when somebody breaks the law. We don't get to do very much preventive work. We just fix up everybody's problems at the end of the trail. It's something that we spend a lot of time thinking about and trying to determine, in terms of prevention programs in the communities. But the reality is, if I heard correctly what the member was saying, that the children we're talking about will come into our responsibility only if they have been in trouble with the law.

H. De Jong: I want to put a scenario before you, and I am not criticizing any other ministry or minister. I want to make that abundantly clear. A problem arises between a couple of forensic children within a small institution -- a group home. With the regulations and policies that are in place for running these group homes, if it appears that it was simply a problem between two of those patients, if I may call them that, and it's beyond the ability of the person who runs the group home to do anything about it, it creates an unsavoury problem, you might say. If it came to the point of closing down a group home because one of these situations occurred, would it not be the proper procedure to have the situation reviewed by your ministry?

Hon. C. Gabelmann: I don't see why it would come under our jurisdiction if the kids are acting up or doing something short of a criminal activity that requires police intervention. If it is short of that, then we have no involvement. It needs to be resolved within the ministry that sponsors the particular home.

[5:00]

H. De Jong: I appreciate the answer, because this is always a bit of an unclear area -- whether there is an appeal system beyond another ministry. I wanted to get that clear in my mind.

On another subject, Mr. Chairman, for quite some time there has been the desire to have a new racetrack. I was at the presentation last fall in one of the rooms up here regarding a renewed racetrack at the PNE grounds. Being basically without knowledge about racetracks, the multiple use that was proposed for the site seemed to be a fairly good proposal to me, being a very practical person. However, the people in the racing business are not very pleased with that proposal, mainly because the curve at one end of the track is too narrow for those kinds of activities. There has been another proposal, even though it would cost much more money. But I understand that the PNE proposal was to be about $34 million of public funding, while the other was a private undertaking. I have difficulty understanding why the government, because of the private initiation, would turn that one down so quickly, against a public expenditure of the magnitude of $34 million -- and still not have a track that is satisfactory to the racing industry.

Hon. C. Gabelmann: This is the first time there's a suggestion, that I've heard, that we moved quickly. I took a lot of heat last year, because we took a whole year after being sworn in to make an actual announcement in respect of the track -- frankly, an announcement that should have been made about seven or eight years ago at least, to help us avoid the problems we've got today.

I need to make it clear that there is no suggestion of public money from consolidated revenue going to rehabilitate the Exhibition Park site. The only government involvement in respect of the money will be to guarantee a loan, so the track can be redeveloped quickly between seasons and allowed to operate in the proper way. The surface is totally inadequate for thoroughbreds now, and there's a whole series of other problems.

The revenue to pay back the loan will come from the portion of the handle, as they call it, the 5.5 percent that is now allocated for the operation of the facility. We have done the cost analysis very carefully. There is sufficient revenue within that portion of the betting dollar to enable us not only to pay the interest on the $30 million loan, but also to pay it back in an appropriate period of time. I just want to make it really clear that there won't be any consolidated revenue money being directed toward this initiative.

The whole issue of the track is a fascinating one, one that I've spent a lot of time on in the last year. I'm not going to comment on the PNE issues; the Minister of Finance can do that at the appropriate time. My responsibility is solely the track side of it. We have worked with the community; we've certainly worked with the racing industry. I indicated our commitment to the industry. We want it to succeed. We want it to be enhanced, in fact. We think it's a very important part of the economy of the province, and we want it to succeed.

It's very likely necessary for cabinet to give its approval to teletheatre to make all of this work, some limited form of teletheatre betting in B.C. We haven't made that decision yet, but for all of this to work I think it's going to require that kind of decision.

Why didn't we go to Burns Bog when it was apparently free? Nothing is ever free. That's the first thing we need to know. There were a lot of other issues involved in that particular site. There were environmental concerns. There were concerns about what would happen if it didn't succeed, because the province would be left holding the bag with no thoroughbred racing industry alive in the province if that track didn't succeed.

[ Page 6002 ]

There are suggestions that what we need is a one-mile track, a Santa Anita north. We don't have the population base here to sustain that kind of activity.

I have consulted widely in the industry. I've talked to a great many people, including R.J. Bennett, who is a major player on the breeders' side, and many others of all political persuasions -- not many of them of New Democrat political persuasion, interestingly, but nonetheless some. We have reached a conclusion which the HBPA, the Horsemen's Benevolent and Protective Association, has agreed with. I've been to a meeting of their executive, which included other people, and I got a very strong letter of support back from them saying they were happy with the decisions we had reached about what we were going to do for the industry.

The suggestion from the overwhelming majority of the 2,400 people who are involved in racing in a direct way -- not all of them, but an overwhelming majority of them -- is that a refurbished Exhibition Park is the right way to go for this industry, in this province at this time. In addition, as part of this whole exercise, we are attempting to develop a training track in the Fraser Valley that will provide the kind of proper training facility that the industry so desperately needs.

H. De Jong: I hear what the minister is saying: he's talking about a refurbished track. Is the minister saying that perhaps the design of the track is going to be looked at once more, so this sharp bend can be modified so the track can be satisfactory to the racing industry?

Hon. C. Gabelmann: A great deal has happened since the meeting in the room upstairs that the member attended along with several other members. The shape of the track that was proposed in that conceptual drawing and schematic is not what's now being proposed. We have been consulting and continue to consult with experts in track design, and we're also talking to the industry as well about track design. I think we're looking at a track that is slightly longer than the one we have now, that includes a chute in order to give it a little additional length, and that has a more traditional shape, rather than the egg shape that we had all seen. I think that particular proposal is not going to fly.

A. Warnke: I appreciate the questions from the member for Abbotsford, because there were some that I was prepared to pursue as well. That saves a lot of time, except I'm compelled to say that I'm one of those who do not think that the minister moved too quickly on the subject. I think a year ago we pursued this particular subject, and if anything, the Attorney General took quite a bit of heat because they were moving too slowly on it. I believe that the proposals were put forward quite some time ago -- even as early as 1988. There was already pressure placed on the government then to address the problem.

I don't want to belabour the point, because there were some good questions put forward by the member for Abbotsford, but I just want a qualification on two comments that the Attorney General raised on this particular issue. The decision to still go ahead with Exhibition Park, with the chute and the seven-eighths track, is still not the mile track that the industry was looking for. Perhaps the minister knows something that I do not. I believe my friend from Abbotsford had met with the Horsemen's Benevolent and Protective Association fairly recently -- about a couple of months ago. I received a strong impression from them specifically that the government's proposal to refurbish the PNE grounds was unacceptable. Yet I hear now that the Horsemen's Benevolent and Protective Association essentially are giving their approval. I want some qualification on that, because I got a different signal altogether. Maybe there has been some correspondence recently.

Hon. C. Gabelmann: I think the member probably attended meetings in late February -- the other member is nodding. My meeting with them was on March 10, I believe. It was a Wednesday night at the Burnaby Villa. That meeting was attended by, I believe, every single member of the executive of the association with the possible exception -- my memory here -- of one. It also included representatives of varying viewpoints within the industry. We had a three-hour meeting, and we talked through the issues. At the end of the meeting there was an indication very clearly expressed that the members there -- not every single one of them, but an overwhelming majority -- were very supportive of what we are doing. There were two or three people who would have liked Delta to go ahead. They had a particular investment -- if I can use that word -- in that particular initiative, and they very much wanted it to proceed. But that viewpoint was not widely accepted. A larger number of people would have liked to have seen a larger track than the one we are able to do at Exhibition Park. But there was also an acknowledgement that the cost involved in a Santa Anita-style track was such that it could never be justified in this province. Many members of the association made the point then and since that if we go for too expensive a solution, it may not succeed; and we may lose the whole industry. So there was support for our determination to preserve and enhance the industry, and to do it in a way that we could ensure that it wouldn't go belly up someday because we tried to do too much.

Following the meeting on March 10, the discussions continued as they always do, and the association felt comforted enough by the subsequent discussions to be able to write me a letter, which indicated very strong support for the government's initiatives. It wouldn't be fair to say that everybody is 100 percent supportive. Everybody can find something wrong with what we've done. But, given the alternatives, there is overwhelming support for the initiative. I've gone to the track a couple of times, just to sort of taste the ambiance and to talk to people who are there. Many people -- trainers, owners and people who are just regulars at the track -- came up to me to say thank you very much for finally making a decision and providing some certainty, and for the commitment to rehabilitate the track, in particular, the running surface, which is in such atrocious shape that 

[ Page 6003 ]

some owners actually won't race there because of the damage to the horses.

A. Warnke: I really want to thank the Attorney General for that outline and the elaborate statement. I don't know whether he has the prerogative of doing this, but I would like to ask the Attorney General about the letter of support. I recognize, hon. Chair, that if the majority of members of the executive do favour the government's position, then unanimity is not required. I wonder if the Attorney General can possibly table that letter. I understand if he can't, but I wonder if there is any possibility he could table or provide me with a copy.

[5:15]

The Chair: For clarification, it's not possible to table the letter within committee. But the Attorney General is able to pass it on through channels to the member, if it's acceptable.

A. Warnke: I thought of that action, and if the Attorney General could provide a copy, not table it, I sure would appreciate it.

Hon. C. Gabelmann: I'd be happy to share a copy with the member and other members, and it may actually arrive shortly.

A. Warnke: I didn't know that we were going into horses; that is one of my interests -- especially these days, I feel like one myself.

I want to turn to the more difficult subject of violence. We were talking about violence against women, and later on, violence as it affects young children. Since we were on the subject of violence and the whole question of gang and youth violence, I think this is extremely important for us to pursue. We did discuss it last year in estimates, and I thought it was a very good discussion, one of the real progressive features of last year's estimates. Since then -- I'm sure the Attorney General is aware of this as well -- many differences and some new directions have taken place with regard to gang violence compared to some of the discussions we had last year.

If I may generalize, the nature of gang violence and youth violence has changed. Perhaps realistically they haven't changed, but the perception has certainly changed. Once in last year's estimates, somehow we did get onto discussion relating to gang violence, and associating that with certain ethnic groups, and I think we pursued in estimates that perhaps there was something wrong with this perception out there, that certain ethnic groups were primarily responsible for gang violence. Both the Attorney General and I pursued the idea that perhaps there are other factors, that it's not exclusive to one or two ethnic groups and so forth, but is more diverse.

Interestingly enough, since then I think the public has developed a view that youth violence, gang violence, is far more diverse than just isolating it to one or two factors, or perhaps incorrectly now, as it's so obviously evident, that just a few ethnic groups are primarily responsible for it. That's been a change.

Secondly, there's been a change as well in thinking that while gang violence and youth violence are primarily associated with the poorer parts of Vancouver, that somehow there's a direct linkage between poverty on one hand, and the environment of poverty, and the rate of violence that has occurred in those areas. What we've experienced, and this is especially the case in my own city of Richmond, where I reside, is that Richmond is not exactly an impoverished area. Some would argue that certain policies of the government -- maybe it's unfair -- have held back the economy, but I rather look at the economy of Richmond as pretty dynamic. It is very fair to say, by most standards anyone wants to employ, that Richmond is a pretty affluent community, and certainly in a comparative perspective I would say it is fairly affluent. Yet we have seen the rise of gang violence, youth violence, as well as other factors such as breaking and entering, and so forth.

Interestingly, even there, of those who have been charged and convicted of B and Es in Richmond, we cannot necessarily now stereotype them and say that these are people who are coming from an impoverished background or they're part of a particular ethnic community, and so forth. Rather, it's quite diverse. So maybe the reality has not changed. I suspect it has, but certainly the public impression of what constitutes youth violence and gang violence has changed, because the nature of gang and youth violence has changed.

I'm wondering on a more general plane, first of all, before I get into some specific questions, whether the Attorney General has some reflections as to what has changed or what direction gang and youth violence has taken in the past year and how, essentially, we are to respond, and what we are doing to respond in this area.

Hon. C. Gabelmann: Before I move to the area that the member has just canvassed.... Before handing out the letters, I want to read them so that all members of the House, reading Hansard as they do every night before bed, will have an opportunity to know what the Horsemen's Benevolent and Protective Association of British Columbia actually said following the meeting on March 10. This letter is dated March 24, and it's to me. It's signed for the HBPA of B.C. by its secretary-treasurer, Bryant McAfee.

"Kindly allow me this opportunity to express the appreciation of the board of directors of the HBPA of B.C. for your attendance and comments at its meeting on March 10, 1993.

"The decisiveness in your opening remarks coupled with your unhurried approach in dealing effectively with all of the questions and comments from those who were in attendance left no doubt in the minds of the majority that your decision to have thoroughbred racing conducted in the future at Exhibition Park had been thoroughly researched and, all things considered, is in the best interests of the several facets of the industry.

"Those of us who have had a long association with the HBPA of B.C. cannot recall ever having received from any of the predecessor Attorneys General the personal attention that you exhibited on March 10 -- 

[ Page 6004 ]

just short of three hours in total out of what we are certain must have been a very busy schedule.

"You can be certain that your concept has the unanimous support of the board of directors and that the members of the HBPA of B.C. will be kept apprised on a timely basis of the pertinent developments as they unfold over the next few months."

One of those letters should go to the opposition critic and two to the other party, given the member for Okanagan West's interest in this topic.

The member raised the question of youth violence and criminal gang activity and whether there is an increase or just perceptions heightened by media attention or whatever. I should say by way of background that in my meetings with many local government officials over the past year and a bit, this issue almost always gets raised first. It's characterized as concern about the Young Offenders Act, which is usually how it first gets presented: concern that the Young Offenders Act isn't tough enough. In almost every instance, I have been involved -- following that opening shot -- in really productive discussions about what the problem really is and where the solutions may lie. The reality is that the Young Offenders Act in British Columbia has meant that twice as many young people are in jail as were in jail before under the Juvenile Delinquents Act. People don't know, for example, that if you're given a sentence under the Young Offenders Act there is no earned remission; you serve your full sentence, unlike the adult system where earned remission is available and early release is often the case. That does not occur under the Young Offenders Act.

It has been changed recently to allow for stiffer penalties in some charges. The ability to raise to adult court is now more readily available than it was before, and the conclusion of all of that is that while the act isn't perfect, and we continue to make representations to the federal government for further changes, my conclusion -- and I think in these discussions, most local communities come to agree -- is that the fault or the problem isn't necessarily with the Young Offenders Act by itself. The problem is that we are living in a society that has an increasing number of dysfunctional families. People are getting older at a younger age, very rapidly -- things that I did as a 16-year-old, kids are now doing as 12-year-olds -- and we're living in a very different world than we did even 30 years ago.

There aren't the kinds of old, traditional institutional supports that used to exist. People don't have the extended family; there isn't a grandparent to provide the advice, the counselling, the guidance. There aren't the community institutions that used to exist, whether they were churches, or the extended family as I mentioned, or other institutions. So we have an alienated society in large numbers; we have increasing alienation among young people. Anyone who's read or looked at Generation X, which I haven't read yet -- it's sitting at home waiting for me to have a few minutes to read -- will understand, I think, that we're living in very different times than we've lived in before.

So what do we do about it? In general terms, again, the solutions aren't cops on every corner. The solutions aren't more jails. The solutions aren't enhanced punishment. The solutions are earlier than all of that. They will be achieved only by communities working together to get at the problem in a preventive way, so the kid who does the odd B and E doesn't go from there to something that is much more significant in degree, as often happens.

Our ministry, to be more specific, has been involved with other agencies, with communities and with the police in a number of things. The Vancouver police, with our assistance, have established a storefront office to deal with the Asian community more effectively in downtown Vancouver and to get at some of the issues in that community. We talked earlier today about the youth gang contact line. The member for Richmond East made reference to Wendy Taylor's involvement in that. That's a program we are offering, but it is delivered by the lower mainland police forces.

We are developing a package for providing orientation about our justice system to newly arrived immigrants -- particularly non-English-speaking immigrants who may find our system of justice and our ways very different and very alien. We are trying to develop informational packages for them. There is a gang prevention resource centre for teachers and school administrators that's located in the Burnaby School District. Again, we have been involved with the education community in developing that. And, not least, we've created the special prosecution unit comprised of 11 Crown counsel to deal with the issue of criminal gangs.

The solution isn't found entirely in these remedial initiatives, although they are important and hopefully can be expanded. The answer, if there is one, is more at the front end. It is more in trying to find ways to get kids reconnected with their communities and their families and intervening in a more effective and productive way at an earlier stage. If you let it go too long, you are going to end up with hardened criminals. It's not very productive for our society in the long term if the generation we are now producing is engaged in the next level of criminal activities when they are ten years old. So we think it's important. We are putting a lot of effort into it -- again, with limited resources. What we really depend on is having communities involved.

[5:30]

One of the things that often comes out of my discussions with municipal councils is the establishment of local groups to deal with these issues in the communities. There are various institutional arrangements out there now, and we're not in the business of designing centrally here in Victoria a program for each community. What we want to do is respond to what the community thinks they can best use in their community, and we want to provide assistance to them, whether it's through the police, the prosecutors or probation officers.

A. Warnke: I am cognizant of the time that's before us, so I'll just try to pursue this very quickly. A number of people have pointed out that perhaps one area that contributes to youth crime is the fact that there's a connection to an adult who's behind the whole business of encouraging and soliciting youth for the purposes of 

[ Page 6005 ]

not only B and E but also some very severe crimes. I'm wondering if the Attorney General could give us some indication if there is a trend, a pattern; maybe the statistics bear this out.

Hon. C. Gabelmann: There doesn't appear to be much of a pattern, or if there is, we haven't detected it. It does occur, no question. But if it does occur, then the adult involved can certainly be charged as a party to the offence. I think what happens is that it becomes part of the folklore that's developing out there around youth crime. I hear the same stories in every community I've gone to, and I'm not so sure that these anecdotes aren't.... They're not apocryphal, but they're not always illustrative of what's actually happening in the community; they are just the kind of summation that people provide to an issue that's bothering them.

Yes, there are clearly instances where adults use youngsters to commit crimes for them. That's an offence; and if we catch them, they'll be charged. But it's probably always been so, even before the advent of the Young Offenders Act.

A. Warnke: Just another short question. The Attorney General did touch on the whole question of limited resources. I certainly appreciate that.

About three weeks ago in the city of greater Los Angeles a number of initiatives were put forward. One initiative I found interesting -- that was turned down, but only because it didn't meet the two-thirds requirement -- was extra pay for policemen. But in fact there was 60 percent support for extra pay for policemen. The second initiative -- which did pass by a tremendous amount, 72 percent I believe -- was that the public was quite prepared to pay for retired officers to come back on the beat; and not only pay for them, but while they were collecting their pension, pay for that as well. That is some sort of an indication down there that people are quite prepared to put forward or support any proposal for increased resources to police.

I'm wondering if the Attorney General has found the same kind of phenomenon here. As a result of just informal contact with the public, and I meet a lot of members of the public, it seems that the public here is saying: "If governments have a responsibility, surely it is in the area of policing. That's what you guys" -- namely us politicians -- "are in there for, for public safety and so on." Actually, the public has a point. Public safety has to be uppermost of course, and especially in this ministry. I'm wondering as well if the Attorney General has found some increased public support for increased resources to be extended to police officers, and whether in fact the ministry can embark on some sort of direction to make that a strong argument for increased funds to the ministry.

Hon. C. Gabelmann: There is an immense amount of support for additional police officers in communities of under 5,000, where the province pays the whole shot. As soon as you get above that number the support for additional police officers in the community comes down a little bit, because people have to ante up themselves. Clearly, the public wants sufficient policing and sufficient numbers of police officers, and is concerned sometimes that they feel they may not be. We do fairly well in this province trying to create a balance among all of the resources. We make impossible decisions every day in budgeting: do we put more money into police, or into probation, or into whatever element of the system? I would like to be able to ensure that we can provide the appropriate resource that really does work to deal with problems. Often, the seemingly simple solution -- more police officers -- may not be the best expenditure of the money.

One of the things that the Premier has entrusted me to do is to try to help government make those decisions. We make them, and we do the best we can in creating the balance. I would like us to be able to do more in prevention. I'd like us to be able to do more in community service, and in a whole variety of initiatives in corrections to ensure that we don't have repeat offenders, and to make sure that we don't spend unnecessary dollars incarcerating people, and those kinds of initiatives.

In terms of making communities safer -- I think the police would agree with this too -- there aren't enough dollars. There will never be enough dollars or enough police officers to make the communities completely safe, because you can't -- as I've said before -- have a cop on every corner. Communities have to help make themselves safer. People have to lock their cars. They have to lock their houses. They have to do Neighbourhood Watch programs. They have to do a whole variety of community activities, and work together with the police. As the police get more and more involved in community activities, I think we'll find that that partnership will develop more effectively. It will be cheaper, and I think it will be more effective in the long run.

With that, I move the committee rise, report progress and ask leave to sit again. May I just say in parentheses that "again" will probably be on Wednesday afternoon for this particular vote.

Motion approved.

The Committee rose at 5:39 p.m..

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