1993 Legislative Session: 2nd Session, 35th Parliament HANSARD
The following electronic version is for informational purposes only. The printed version remains the official version.
(Hansard)
MONDAY, MAY 31, 1993
Afternoon Sitting
Volume 10, Number 14
[ Page 6677 ]
The House met at 2:06 p.m.
Prayers.
Hon. D. Miller: It's with pleasure that I introduce to the chamber the deputy chief of the Lax Kw'alaams Indian band -- some people know that area as the Port Simpson Tsimshian reserve -- Victor Kelly; council members Leonard Reece, Rufus Reece and Gerry Sampson; and the band manager, Rodney Thur. I would ask all members to make them welcome to Victoria.
Hon. T. Perry: I'd like to ask members of the House to join me in welcoming Caroline Ashby, who's the coordinator of interpreting for the Island Deaf and Hard of Hearing Centre. She will be interpreting a little later for a ministerial statement, for me and for respondents from the opposition. Would the House please make her welcome.
G. Wilson: It's a pleasure to welcome into the House today two people from North Island: Mr. Dan Cooper and Ms. Charlene Pehrsson -- and I defy Hansard to get that spelling without me giving it to them. These two people are longtime, dedicated Liberals and both elected now to the riding association up there as president and secretary. I wish the House to make them welcome.
J. Beattie: In the House today is a constituent from Summerland, British Columbia: Dr. Juergen Hansen, who is a doctor of agriculture. He spent 27 years working at the Summerland research station. He also spent three years on the B.C. Round Table on the Environment and the Economy. He's now our local coroner. He's on his way up to Lake Cowichan to draft, with the Ministry of Forests and the Ministry of Environment, the guidelines on biodiversity. I'd like the House to make him welcome today.
G. Farrell-Collins: I'd just ask the members of the House to make welcome about 50 grade 5 students from James Kennedy Elementary School in the Walnut Grove area.
P. Ramsey: Joining us in the gallery today is Mr. Harley Chingy from the McLeod Lake band in the northern part of my riding, and with him is Bill Ewing. Would the House please make them welcome.
PREMIER'S USE OF TED HUGHES LETTER
C. Serwa: My question today is to the Premier. Yesterday the Premier inappropriately invoked a passage from Ted Hughes's letter, in support of Bill 31. By doing so, the Premier either (a) unintentionally abused the independence of Ted Hughes's office and the privileges of this assembly or (b) deliberately misused the letter in contempt of this assembly. Which is it, Mr. Premier? Come clean.
Hon. M. Harcourt: The letter, with leave of the Legislature, was tabled in the Legislature. It was a public document. I quoted two passages of the letter from Mr. Hughes without giving any comment or opinion on what Mr. Hughes thought of the legislation that was before us. I did that to reinforce the importance to all MLAs in the assembly, as a matter of public interest, of being able to participate in the debate on Bill 31.
C. Serwa: This is a very serious matter, Mr. Premier. What you have just tendered is an incredibly feeble defence of an action that is indefensible. Will the Premier now apologize to Mr. Hughes and to all the members of this assembly for compromising their privileges as he has done?
The Speaker: Thank you for your patience, hon. member.
The Chair's concern is how the question falls within the responsibility of the office of the Premier. However, the Chair appreciates that members are responsible for documents tabled in the House, and I will allow an answer to the question on that basis. But I would ask the Premier to keep that distinction in mind.
Hon. M. Harcourt: I thought my explanation was very straightforward. What I find disturbing is that the member for Okanagan West didn't even hear my response; he just went on to read his written second question, which shows the interest he had in my response.
The Speaker: I will allow the final supplemental and ask the hon. member to keep the Chair's comments in mind.
C. Serwa: I think the supplementary question was that an apology was necessary. I note that the Premier has refused to tender that apology. I'm surprised that the Premier is so insensitive...
The Speaker: The question, please, hon. member.
C. Serwa: ...to the independence of the commissioner of conflict of interest that he doesn't understand that what he did was wrong. Does the Premier not understand that he has offended the House? Does the Premier want us to believe that it was just an honest mistake?
The Speaker: I'm going to declare that question out of order. I think the hon. member knows there are other means to use if he wishes to make that kind of inquiry. I do not believe I can allow that question in question period.
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CONSIDERATION FOR GRADE 12 STUDENTS AFFECTED BY LABOUR DISRUPTIONS
K. Jones: My question is to the Minister of Labour. The minister's Bill 31 does absolutely nothing to get the 44,000 students in Surrey back into school. Will the minister make a commitment today, to grade 12 students in particular, that they will be back in school before the end of this week?
[2:15]
Hon. M. Sihota: The best way for students to be back into schools before the end of this week is for the negotiations to be concluded and an agreement arrived at. The government has every interest in making sure that that occurs, and that the children are back in school before the end of this week. I should advise the hon. member that I've had the opportunity to talk to representatives of parents' associations from Surrey, this afternoon around 12:30, to discuss their concerns and their views with regard to this matter. I should also let the hon. member know that the parties have convened with the special mediator, effective at 1 o'clock today. I'll be awaiting his report.
K. Jones: This is again to the Minister of Labour. The clock is ticking for grade 12 students. Provincial exams start in 18 days. The appointment of a special mediator yesterday does not guarantee that this strike will be short-lived. Will the minister confirm that the members of this assembly will be sitting again next Sunday to deal with the strike in Surrey?
COST OF SPECIAL SITTING OF LEGISLATURE
K. Jones: This is to the Premier. If this government had its act together, the assembly could have dealt with Bill 31 any day last week or the week before. Will the Premier indicate to this House the total cost to the taxpayers of yesterday's special meeting?
Hon. M. Harcourt: Yesterday's sitting was no more costly than the overnight sitting on interim supply.
PREMIER'S ROLE IN DEALING WITH LABOUR DISRUPTIONS IN SCHOOLS
W. Hurd: Hon. Speaker, my question is for the Premier. Can the Premier explain why he waited until virtually the last moment to obtain a ruling from Ted Hughes on whether he could involve himself in cabinet discussions to end the teachers' strike in B.C.? Why do we have this leadership by paralysis?
Hon. M. Harcourt: We were hoping that the collective bargaining process would be concluded. The Minister of Labour gave every opportunity for the collective bargaining process to be concluded in Vancouver. You heard me outline yesterday all the steps the minister had taken. We had....
Interjections.
The Speaker: Please continue, hon. Premier.
Hon. M. Harcourt: We found it very difficult late Friday to see how collective bargaining was going to satisfy the Vancouver situation. It became apparent, then, that the cabinet and the government were going to have to bring in legislation because the collective bargaining process had concluded. We had asked Mr. Hughes previous to that -- as a matter of fact, I think about a week previous to that -- for a ruling in case that situation arose. We were able to obtain that verbal discussion between my deputy and Mr. Hughes....
The Speaker: Thank you, hon. Premier. I regret that I must go on to the next questioner.
W. Hurd: The remarks attributed to the Premier this morning indicated that B.C. has been functioning without a Premier when it comes to the education crisis. Can the Premier confirm that over the past two or three months, while this crisis has been unfolding, the Minister of Finance and the Premier have absented themselves from discussions to end this strike? Have we been functioning without a Premier when it comes to education strikes in the province of British Columbia?
Hon. M. Harcourt: I have two points. First of all, it's very clear that the opposition does not respect free collective bargaining; in many ways, it wants to get rid of free collective bargaining. They made that very clear in the debate yesterday, and they have made that very clear over the last three weeks. On top of that, most people in this province realize that the collective bargaining process was working and that two-thirds of the agreements were concluded through the collective bargaining process. That's the way this government wanted to proceed.
FAIR WAGE POLICY AND CAPITAL CONSTRUCTION COSTS
G. Farrell-Collins: My question is for the Minister of Labour. He has repeatedly stated inside and outside this House that the government's fixed-wage policy wasn't costing us one dime and that each project has been coming in under budget. Can the minister tell us whether it's the policy of the government to include the cost of the fair wage policy as part of the contingency funds in setting the preliminary budgets for capital construction by his government?
Hon. M. Sihota: No, it's not the way it works. The way it works is as follows: we, as a ministry, make some decisions in terms of the estimated cost of projects. In fact, in the 108 projects that were completed as of March 1993, the cost of those projects was estimated to be about $487,525,000. The actual cost of the projects was determined to be $470 million. As a consequence, general construction projects have come in about 3.4 percent less than pre-tender estimates. Inasmuch as school boards or hospital districts may make some assumptions with regard to contingency.... With
[ Page 6679 ]
regard to cost of projects, they have come in at about 3.4 percent less than pre-tender estimates.
G. Farrell-Collins: Once again this minister doesn't know what's going on in his own government. I have a document from BTY Group, the government's cost consultant for the Prince George jail. They indicate a contingency of 3 percent -- $818,000 -- in that contract for fair wages alone. Can the minister now deny that his policy and that of his government is to include the cost of these settlements to the unions in this province in the initial estimates of these projects?
Hon. M. Sihota: I can't explain to the hon. member what some group does in terms of how it....
Interjection.
Hon. M. Sihota: Just hang on. I can't explain to the hon. member what some group may want to do in terms of how it plans to calculate in the fair wage policy.
G. Farrell-Collins: It's BCBC.
Hon. M. Sihota: I'm trying to answer the question, if the hon. member would just settle down for a moment. I can tell the hon. member that when a project is tendered, it is up to any group to make any kind of estimate on whatever basis it wants to. We look at what we believe the cost of the project to be, and then we watch to see what the project comes in at. In the case of the fair wage projects that have gone out to date, they have been coming in at about 3.4 percent less than the estimated cost. When anyone puts their bid together, they can make a calculation of whatever they want in whichever way they want with regard to the fair wage component.
The Speaker: I must ask the hon. minister to conclude his reply.
Hon. M. Sihota: We monitor the difference between what we anticipate the pre-tender estimate to be and the actual cost of the project.
G. Farrell-Collins: That's very interesting, because in the Prince George jail scenario all six bidders came in exactly $1 million over budget and the Attorney General had to kick in an extra $1 million to pay for the fixed-wage policy.
Clearly the Minister of Labour does not know the impact of his policy. In this House the other day the Minister of Economic Development promised to initiate socioeconomic impact studies of policies that were clearly not working. That request has been put to the minister today by the independent contractors.
The Speaker: Your question, please.
G. Farrell-Collins: Will he commit to do a socioeconomic impact study of the fair wage policy before this minister revises it this summer?
Hon. M. Sihota: A number of studies have been done on fair wage....
G. Farrell-Collins: Where? Table them.
Hon. M. Sihota: I will tell the hon. member where they've been done. A number of studies have been done throughout North America with regard to a fair wage policy. As the hon. member may know, the policy exists in a number of jurisdictions to the south of us and here in Canada. In terms of drafting any fair wage policy, one has to take a look at the experience elsewhere in North America. A number of studies have been done. For example, a recent study out of Kentucky demonstrated that when they lowered.... They looked at eliminating their fair wage policy. They in fact outlawed their prevailing fair wage policy at that time. Hon. member, wages were cut by 47 percent as a result of the elimination of that policy, but bids were only lowered by 7 percent.
The Speaker: Thank you, hon. minister.
Hon. M. Sihota: Hon. Speaker, the evidence is clear.
The Speaker: Thank you, hon. minister.
The bell signals the end of question period.
ACCESS AWARENESS WEEK
Hon. T. Perry: I rise to make a ministerial statement relating to the proclamation of Access Awareness Week. The opposition has been given notice and will be responding. I'm making the statement today, proclaiming Access Awareness Week in British Columbia, on behalf of my colleague the hon. Minister of Government Services, who is absent today. As you know, the minister also has responsibility for the Premier's Advisory Council for Persons with Disabilities. She would have liked to have been here, but she has asked me to take her place.
As most of you know, this is National Access Awareness Week. This week we join our fellow Canadians in acknowledging our responsibility to promote access for persons with disabilities, so that we may all participate fully in every aspect of Canadian life. National Access Awareness Week grew out of the support that tens of thousands of Canadians gave to Rick Hansen's Man in Motion World Tour. After encouraging Rick's commitment to raise awareness of the abilities of persons with disabilities, Canadians wanted to continue that task at the grass-roots level.
Thanks to partnerships between public, corporate and voluntary sectors, along with national and provincial associations of and for people with disabilities, National Access Awareness Week organizers provide all Canadians with a chance to re-examine how they and their communities can develop strategies to promote a more independent lifestyle for persons with disabilities.
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Here in B.C. we are proud of the year-round commitments made by our community, labour and business leaders as well as government to assist an estimated 400,000 British Columbians to participate more fully in every aspect of the social, economic and cultural life in our province.
I am honoured, therefore, to present this proclamation -- signed by my hon. colleague, acting for the Attorney General during his absence last week -- which reads as follows:
"Whereas the Province of British Columbia is committed to the ideal of the integration of all British Columbians in all aspects of society regardless of disability, and whereas the Province wishes to join with the Government of Canada, her sister provinces..."
These days we might say our "sibling provinces."
"...and territories in recognition of the achievements that have been made and the challenges which remain, and whereas Our Lieutenant Governor, by and with the advice and consent of the Executive Council, has been pleased to direct by Order in Council in that behalf that a Proclamation be issued designating May 31 to June 6, 1993, inclusive, as `Access Awareness Week' British Columbia;
"Now know ye that We do by these presents proclaim and declare that May 31 to June 6, 1993, inclusive, shall be known as 'Access Awareness Week' in the Province of British Columbia."
The Premier earlier today commended the provincial organizing committee for National Access Awareness Week and people in communities throughout our province for their dedication in promoting access for people with disabilities. I want to draw your attention to but a few of the activities planned across B.C. to mark Access Awareness Week. Hopefully many members will be participating in their own ridings in some of these events.
[2:30]
In Castlegar, for example, there will be a series of newspaper articles profiling local citizens with disabilities, video programs on Castlegar's local cable channel and a proclamation by the city council of its newly developed non-discriminatory hiring policy. In Hudson's Hope, sign language, wheelchairs and participation in an obstacle course involving "everyday" barriers will be part of the public information displays in the community. The local access awareness committee in Merritt plans to recognize achievements that help break down physical barriers to persons with disabilities, such as recognition of handicapped parking sites and sidewalk ramping. In Port Coquitlam and in Port Moody, the municipal advisory committee on disability for the tri-city area will be sponsoring "Good-Looking Friends" presented by Theatre Terrific. This play discusses the risks and joys of developing relationships with people with disabilities. In Spillimacheen, the Columbia Society of Interdependent Living and the Secretary of State have been involved with an initiative to make four national parks accessible -- Yoho, Kootenay, Glacier and Mount Revelstoke -- through the provision of appropriate signage, camping and shower facilities and educational displays. In Squamish, a community picnic will offer challenging games, fun activities and food with local dignitaries, as well as a presentation of certificates of recognition to local businesses, individuals and organizations for their work on accessibility issues and improvements.
To these and all communities participating in Access Awareness Week activities across British Columbia, I say on behalf of my colleague, the minister responsible for the Premier's council: very good work, well done. Simply giving British Columbians a chance to see the world and its limitations from the perspective of persons with disabilities will go a long way to meeting one of the key objectives of Access Awareness Week. I know that each member of this House endorses the proclamation I have just read and hope that they will carry on with those sentiments throughout the year.
As you know, my colleague the Minister of Government Services -- as I've told you -- has responsibility for the Premier's Advisory Council for Persons with Disabilities. She recently had the opportunity to meet with the council's chair, Wolfgang Zimmermann of Port Alberni. I will quote my hon. colleague. She points out: "Mr. Zimmermann's challenge to all members is for us to lead the way in turning awareness into actions which will help integrate persons with disabilities in the workplace, in our institutions, and in all facets of life in British Columbia." Mr. Zimmermann is calling upon all of us as individual legislators to show that leadership, not only here in the House but in our own constituencies in our own communities.
We can all agree with what the Premier has said in a letter today to the organizations of National Access Awareness Week -- a letter which will be included in their wall of commitment, a collage of dedications and commitments from municipalities, labour organizations, universities, schools, businesses and governments across Canada. The Premier wrote: "With the cooperation of all levels of government, access for persons with disabilities will improve. We in British Columbia have committed ourselves to do our part in this continuing effort."
To this end, the Minister of Government Services joins me in urging every British Columbian to recognize and encourage Access Awareness Week activities that will be taking place in every one of our communities.
The Speaker: The sign language interpreter is making her way to stand alongside those who are responding to this statement. I think all members recognize that while televising our proceedings has brought them into many households, there remain people who cannot hear our debates. We are presently seeking ways to make our proceedings more accessible and available to all British Columbians.
K. Jones: On behalf of the official opposition, it is a pleasure to follow the statements of the Minister of Advanced Education in recognition of this week dedicated to access awareness for persons with disabilities.
We have to be careful about the word "disabilities." Some people mistake it and talk about disabled people. That is not the case. We are really talking about what all of us have: varying degrees of abilities. If we were to put it into that context, we would have a much better
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understanding of what this about. I think each of us can relate to a difficulty we may have had in finding access to an office, access to a job, access to hearing what's going on, access to visual factors and access to educational opportunities. There is a whole litany of areas where we have all run into difficulties in getting access.
Recognition of this will help us all to be alert and aware of the need to care about our fellow citizens in Canada and British Columbia -- as legislators and as individuals -- to make sure that we do whatever we can to eliminate any factor that limits access to any of us. According to the statistics, in Canada something like 14 percent of the population 15 years and older has been identified as having disabilities. In the lower mainland that ratio is closer to 22 percent. I would like to emphasize that this is only the visually identifiable, or those identifiable by test. A lot of people in our communities with lesser abilities are not visually identifiable.
I think it's important that everyone be sensitive that each one of us has some factor we have to take into consideration in living a full and fruitful life in our society. The physical barriers, as I say, are one of the easily overcome factors. To many, the disabilities that are the real problems we have to address are the mental disabilities of each one of us in not recognizing that everyone can lead a fulfilling and fruitful life and hold down a job, just like anybody else. It's just a matter of dealing with the particular tools or approaches that all of us can modify to make it possible for this to be a very suitable recognition of concern.
At this time, we have to recognize our need to be aware. Starting today and throughout this week we have an opportunity to put in extra effort on something that should be done on a daily basis all year long.
H. De Jong: It gives me great pleasure to respond to this ministerial statement. It's certainly one of great importance, not only to us here in the House but to all British Columbians.
The mid-seventies were, I understand, about the first time that more emphasis was placed on the needs of the disabled. Certainly when I served on a local council, there were many expenditures made in terms of physical access for the disabled, but that has expanded considerably since. We talk today not only about physical access -- which is important -- but also access to education and a number of things that help those who have an infirmity of one sort or another.
Access to education also provides access to a profession. Many of the people who have a disability of one kind or another have many abilities which have been underestimated for years and years -- not necessarily wilfully ignored, but to a degree, they haven't been recognized. I'm really pleased that over the last 20 years, much emphasis has been placed on this. When we look at what a person can do, whether he's healthy or somewhat infirm, one of the greatest satisfactions in life is the opportunity to make a contribution to society and the economy.
All the efforts so far, I believe, have achieved those desires of those special people. I know that within our own community there are some real cases of infirmities -- sometimes it's a combination of physical as well as mental. It can be a great sacrifice on the part of parents to look after them. We have some special parents within our community who either have their family grown up or haven't got children and have taken the opportunity to take those particular people into their homes a couple of days a week. They are not always children any more; they can be 20 or 30 years of age, but they still need that continued care.
I believe that we owe a debt of gratitude to those people who make those special efforts. I know that there is also within our community -- on occasion -- three, four, five or six from a group home who will go with the person who looks after them to another home for supper at night. It's a great opportunity to provide such an evening for them. The love and response shown by those who have enjoyed that supper is so great, it would want to make you do it every night if possible. So there is a lot to be learned. A lot has been learned, and I believe that we can learn a whole lot more in order to make life a little happier for those who don't have the opportunities most of us have. We have to remember -- and I believe British Columbians do -- that we are not our own maker. Therefore, these people need help, and we should give them all we can, personally as well as through government services.
S. Hammell: I have the honour to present a report from the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills. I move that the report be read and received.
Motion approved.
S. Hammell: With leave, I move that the rules be suspended and that the report be adopted.
Leave granted.
Motion approved.
Clerk of the House: The report is that the preamble to Bill Pr402, intituled Vancouver Foundation Amendment Act, 1993, has been approved, and the committee recommends that the bill proceed to second reading as amended.
The Speaker: Thank you, Mr. Clerk. I missed that reference to "being read."
[2:45]
Hon. M. Sihota: I call Committee of Supply.
I would advise hon. members that in the Douglas Fir Room, Committee of Supply A will deal with the estimates of the Ministry of Environment, Lands and Parks.
The House in Committee of Supply B; E. Barnes in the chair.
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ESTIMATES: MINISTRY OF ECONOMIC DEVELOPMENT, SMALL BUSINESS AND TRADE
(continued)
On vote 23: minister's office, $347,800 (continued).
Hon. D. Zirnhelt: We're happy to proceed with questions from members of the opposite benches.
A. Cowie: I have a number of questions for the minister. It's quite obvious that forestry is the leading industry in the province and that tourism is a very close second. I have a couple questions on forestry to start with.
I think we all agree that the value-added industries are very important in this province. It was mentioned in the papers this morning that the cut in the national forests in Washington and the west coast of the U.S. will probably be some 60 percent of what they're used to cutting in those forests. This means, I think, that there will be tremendous pressure on Canadian forests to produce raw wood products for value-added industries south of the border. Several years ago, a number of companies in areas such as door and window manufacturing went south of the border. They're doing very well. Along those lines, I wonder what the minister is doing to ensure that those industries, as much as possible anyway, will stay on this side of the border?
Hon. D. Zirnhelt: We are doing a number of things. First of all, as you know, we have a standing committee looking at timber supply for value-added industries. I understand they're prepared to argue that they need some kind of security of supply before they can do long-range business planning. What this ministry does, in partnership with the Ministry of Forests, is look at the condition of an industry in any particular region and in the province as a whole. We encourage the value-added manufacturers by working with them on studying their costs and markets and by working with B.C. Trade on promoting markets oversees. It's our general feeling, looking at this particular phenomenon, that there's considerable evidence that it is cost-effective to maintain operations on this side of the border. Some of the people expanding south of the border are doing so because of a normal expansion of their business operation. Speaking about industry generally, some people choose to operate on both sides of the border.
[M. Lord in the chair.]
A. Cowie: Over the last couple of years there's evidence to show that Canadian companies can do very well; they have in fact almost tripled their value. I was just concerned that a lot of manufacturing industries -- like doors, windows and other things to do with house building -- tend to be going south of the border, primarily because of land and labour costs. In Bellingham, for example, some industrial parks offer three-year tax-free incentives to get industries going. I wonder what the minister thinks of that.
Hon. D. Zirnhelt: The tax incentives provided by municipalities across the line is something that's outside of our jurisdiction. We feel that tax concessions are not the major obstacle to productivity and competitiveness. If, in fact, somebody can provide evidence that this unlevels the playing field between those operating across the border and those operating in British Columbia, we would be happy to look at that and work on policies that may restore the playing field.
In order to encourage manufacturing here, we are very firmly restricting the export of raw logs. The issue of semi-processed timber, for example, is a more difficult problem. We considered it a serious enough problem that we referred it to a legislative committee. When it reports, government will take some time to respond in a holistic manner. There may be some opportunity there to look at some of our policies.
Some of the companies working in this area attest to the fact that B.C. is a good place to do this kind of business. Mitsui Homes Ltd., for example, is building an $11 million lumber processing plant in Langley and creating 25 jobs. So it cuts both ways. You have to look at the reasons why companies operate in one place or another. From my travels to the Pacific northwest, I know that transportation is a factor. As a result, they don't really fear the competitiveness from Canada, because the biggest factor is transporting the goods into that same market.
It is also the considered opinion of a lot of people in the industry that as a region, the Pacific northwest is competitive with other regions. It is not so much competition within this region but the significant fields of competition between this region and other regions.
A. Cowie: About five years ago the Socred government of the day came up with the idea of establishing free industrial areas where there would be no duties. I wonder if the minister has thought about continuing that. The Socred government never did implement the legislation they had. I wonder if the minister is putting any kind of priority on that sort of thing at all.
Hon. D. Zirnhelt: If there is evidence that that is the way to go, we would be happy to look at it. I suspect the reason the previous government didn't implement it is that if you look at the enhanced taxes.... If it had been a great idea, I'm sure they would have been trying to implement it. Because you are forgoing taxes in a tax-free port, it probably doesn't balance in favour of reducing the taxes in order to get the industry there. So it is better to have no duty-free port and have the industries operate and collect the taxes.
F. Gingell: If it is convenient for you, I would like to spend a little time on the special accounts. The first one that comes under your jurisdiction is the industrial incentive fund. Just to get our bearings, perhaps we could go back to what happened in 1992-93, where you had originally anticipated disbursements in the region of $58 million and receipts in the amount of $4.88 million. The difference between the net receipts and disbursements and the amount that actually was
[ Page 6683 ]
disbursed was some $43 million. I presume that that was a reduction of the $58 million you had originally anticipated in disbursements. Could you tell me why there was such a dramatic reduction?
Hon. D. Zirnhelt: The difference between the $58 million, which is the original disbursed estimates, and $14,577,000, which was the revised estimates disbursement.... The revised estimate disbursement number was calculated in February '93 and provided to Treasury Board staff for inclusion in this year's blue book. Does that answer your question?
F. Gingell: The next part of the question -- which I'm not sure if I asked -- is: why was it reduced by some $43 million?
Hon. D. Zirnhelt: It really is a cash flow. We made the offer and booked the disbursements as probable or possible, and there was only so much uptake on them.
F. Gingell: Do you estimate that the disbursements made prior to March 31, 1993, will in fact be substantially greater than the $14.5 million?
Hon. D. Zirnhelt: We really don't know. It depends on the projects and when their financing closes and so on, and it can easily take a much longer period of time. You were asking about this year coming up.
Interjection.
Hon. D. Zirnhelt: Do you want to explain for me what you mean by starting point?
F. Gingell: For the year 1992-93, which we discussed at this time last year, you had anticipated expenditures under the industrial incentive fund of some $58 million. When you got to February of this year, for purposes of getting the new estimates done, your ministry must have advised Treasury Board that they anticipated they were only going to spend about $14.5 million last year instead of $58 million. So my first question really deals with why it was only $14.5 million when there must have been some very substantial carryovers from the previous year.
Hon. D. Zirnhelt: The simple answer is that we anticipated the possibility. We wanted to be ready in case we found a comfortable way to open up the loans and disbursements program again. So some of them would be for making new commitments. That we haven't done; and as a result, we have put the brakes on a lot of the loan disbursements.
F. Gingell: You anticipated spending $58 million; you in fact only spent $14.5 million, because, as you say, you put on the brakes. There was some $43 million or so of pent-up demand, because the $58 million didn't come out of the air. What kind of carryover do you think your putting on the brakes last year has caused in your 1993-94 estimates? Has that created a whole bunch of projects, which you would have liked to support and weren't able to at that time, being carried forward into this year?
[3:00]
Hon. D. Zirnhelt: I think the simple answer, again, would be that there was less demand than we expected. But also, we were basing it on previous years' estimates, and we just took a best guess. By not actively putting in things that might have some subvention, we reduced the demand. We said we wanted to move toward a more commercial basis for any financial participation by the government. I don't think we can say there were projects that didn't go ahead because we didn't disburse this. There weren't projects on which there had been any amount of due diligence, with their private sector funding in place, that were held up because we weren't going to make a disbursement. But the capacity was there. As you know, projects can come up. It depended a little bit on how fast we climbed out of the recession. I think we probably climbed out of the recession more slowly than was anticipated when we were making some of these estimates.
F. Gingell: So the reason for the reduction in expenditures wasn't anything to do with the Minister of Finance's proposals or pushes -- I can't think of the right word -- to reduce government expenditures? There was a lot of push; there was budget savings exercise No. 1, budget savings exercise No. 2 and budget savings exercise No. 3, where all ministers were asked to reduce the expenditures. The industrial incentive fund didn't fall victim to any of that?
Hon. D. Zirnhelt: I'm going to try to give you a non-technical answer for that, because it's.... As you know, there are new accounting principles where we have to book any bad debt provision. As a result, that has to go right on the deficit. That forces us to just book the amount. Had we been able to come to a financing arrangement with some firms, then we would have had the capacity to do that booking. But because projects that were commercially viable and needed the financing we were prepared to even consider weren't there, there wasn't the uptake. The answer as to whether it was the pressure of the Minister of Finance is a qualified no. In general terms, we were trying to be cautious.
F. Gingell: Do the industrial incentive fund loans or advances normally carry concessionary arrangements, either with interest rates or forgiveness of principal?
Hon. D. Zirnhelt: As a rule, within my term, no. Sometimes it's negotiated as part of an economic plan by the job protection commissioner. If he feels concessionary terms are necessary, he makes the argument and negotiates that with us as one of the parties to the economic plan. But as a rule, we are trying to keep as many projects as possible on a commercial basis.
I would like to say that with respect to the JPC, the Job Protection Commission also had a bit of reduced
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business last year, because we had gone through the cycle and appeared to be pulling out of it, so he didn't put as much demand on these provisions as we had anticipated. We're happy about that.
F. Gingell: Can you give me some idea of the major portions of the slightly over $14 million that your ministry did loan out in 1992-93?
Hon. D. Zirnhelt: For example, there was a disbursement for Cassiar Mining, one to Evans Forest Products, one to Newstech Recycling and one to Stork Craft. Those are on ad hoc projects of the total of $4,121,000. Under job protection, these ones have all been announced: the Cape Mudge resort; the Fibreco Export -- no, that hasn't been drawn down; industrial development agreement, $512,000; business expansion program, $4,268,000. These are all disbursements. All of those commitments were made previous to us becoming government.
F. Gingell: You mentioned the business expansion program and another industrial development program. That's not who the money went to, but is it a description of a large number of relatively small dispersements or a small number of large dispersements?
Hon. D. Zirnhelt: There's quite a number of industrial development agreement loans. The $512,000 is about 20 projects.
F. Gingell: After doing all the adjustments in the special account and the estimated dispersements that you anticipate to the end of March, you finish with a balance of $41.5 million. As I understand it -- government really does have the most complicated accounting system that the world ever devised -- it's just a notational account. It doesn't mean anything, except that you do have the ability to spend it without its coming through this Legislature and being voted. For the purposes of this discussion, I would just like you to confirm that this is true.
Hon. D. Zirnhelt: Yes, that's correct, as I understand it. They are financing transactions -- loans -- that are expected to come back. The Legislature is not approving individual loans that are administered under programs, but the line items and the provision for booking those loans -- a bad debt provision, for example, or the cash flow needs -- are things that are debated.
F. Gingell: Make sure you've got the right answer.
The Chair: If we could address our remarks through the Chair, it would be helpful for all members of the committee.
F. Gingell: Yes, I understand. We do have the opportunity for debate.
The point I was trying to make is how complicated and cumbersome the accounting system is. There are means by which Treasury Board can decide to make expenditures that we would think of as being general revenue fund expenditures -- i.e., they are not for the purpose of government but for the purpose of some private enterprise industrial development corporation, etc. -- without coming through this House.
We started with a balance of $41,490,000 in this notational account. For the beginning of 1993-94, you've decided to increase it by $10 million. Could the minister advise us why that has been done?
Hon. D. Zirnhelt: That's the amount by which we may increase the total commitments under this program. In other words, if we want to do additional business through the Job Protection Commission, we will need to raise the limit. That's why we've raised it by $10 million.
F. Gingell: Yes, I understand that, but a conscious decision was made to increase the balance that you hadn't spent last year. In fact, you underspent last year by some $43 million. That balance was still available to you, because that's the way a special account works. Even so, you decided to increase this borrowing or asset purchase total by $10 million for the start of this year. There must have been something in someone's mind to have made that decision.
Hon. D. Zirnhelt: I think I partially answered the question before. If the government decides to become more proactive in this, as we pull out of the recession there is probably going to be more demand for participation in some kinds of financing. We wanted to have the provision available so that we weren't hamstrung in being able to provide it. In other words, we are probably more optimistic than we were last year about something happening in this respect, but there is no guarantee that we will conclude that. As you know, we have some major restructuring going on. The job protection commissioner is working on any number of projects, and if even a good number of them come to maturity, in terms of agreeing on an economic plan this fiscal year, we would probably need this provision.
F. Gingell: So the $10 million additional financing availability was put in there, and that resulted in a balance of some $11.5 million yet to be carried forward to the following year. Instead of just leaving that final balance at $1,490,156, you put the extra $10 million in so that you'd be able to have funds available for the year following. Is that it?
Hon. D. Zirnhelt: The opening balance was $41 million, and we added $10 million, for a total of $51 million.
The Chair: The Chair recognizes the hon. member for Abbotsford.
The Chair recognizes the person who rose. I apologize, hon. member. Please continue.
H. De Jong: Hon. Chair, I don't want to upset the procedures here. If the member who was previously
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asking questions wishes to finish off his area of questioning, I would allow him to do so.
F. Gingell: Actually, the reason I didn't get back up was because all you did was repeat the fact I had stated. You didn't tell me why the $10 million was added in, when there still would have been a balance of $1.5 million without the $10 million being added to the opening balance. You just repeated what I had said. So I was waiting for a response.
Hon. D. Zirnhelt: The reason for the confusion is that I'm not sure where you get your $1.5 million, because I was saying that it was $41 million, not $1.5 million.
[3:15]
F. Gingell: The anticipated balance in the industrial incentive fund at the end of March 31, 1994, will be $11,490,156. The point I was making was that you didn't need to transfer in $10 million, because you would have had a balance of $1.5 million. I'm not really sure why all this is taking place. I'm interested in the answer.
Hon. D. Zirnhelt: This year we anticipate disbursements of about $20 million under the JPC and $20 million for other strategic projects. That uses the $40 million right there. As a result, we will have to fund a number of other projects under the small business incentive programs and the industrial incentive fund. So we need a provision for some of those smaller funds as well.
F. Gingell: Are you saying, Mr. Minister, that you expect to spend more than $40 million under the industrial incentive fund?
Hon. D. Zirnhelt: It could well be that we only spend $40 million, but we want sufficient provision there so that we don't have to come back for a special warrant if we have to go over that amount. The conservative side of the cash flow would be, say, $40 million, and the more liberal side would be $51 million. We are trying to do a careful job of leaving enough room so that we are not hamstrung by not having the ability. I'm admitting that we may not, as we did last year, have a full take-up here. As we come into recovery out of the recession, I think there may be considerable demand.
F. Gingell: I was very happy to hear your description of the liberal limit being the upper one. Actually, the Liberals would be much more careful with the taxpayers' money. That brings us to where this next question leads to.
In your estimates there is a $7,820,000 provision for the cost of concessions on interest, principle repayments and bad debt allowances. When we were discussing the industrial incentive fund at the beginning, you were saying that these are all made at commercial market interest rates and that in the normal course of events these types of loans tend to be reasonably well secured and a little safer than the portion of them that comes under the JPC. Can you advise me what that $7,820,000 provision covers? Does it cover just the industrial incentive fund, the Natural Resource Community Fund and the small business incentive program, or are there any other places within your ministry that give rise to this provision?
Hon. D. Zirnhelt: The three items covered under this are the industrial incentive fund, small business incentive program and strategic loan guarantees for the Job Protection Commission under the Financial Administration Act. We expect that there will be some concessionary financing in some of those loans. That's how we get the $7.8 million.
F. Gingell: When we deal with the type of work that the job protection commissioner does, if it were a case of the government putting up funds, would they come from the industrial incentive fund? If they were in the form of guarantees, would they go through the Ministry of Finance under the Financial Administration Act? There are two separate routes, is that correct?
Hon. D. Zirnhelt: Loans over $500,000 will be made under the industrial incentive fund. Loan guarantees are done under the Financial Administration Act.
F. Gingell: Perhaps we could turn to the small business incentive program, which I suspect is a similar type of program. I was wondering if you could explain to me the criteria that pops it into the industrial incentive fund or pops it into the small business incentive program.
Hon. D. Zirnhelt: Just so it's clear, the small business incentive program is for projects under $500,000. In terms of criteria, they have to be the subject of the job protection program economic plan. The smaller ones are JPC loans. Under this program that we're talking about, any loan guarantees are kicked in by the Job Protection Commission.
F. Gingell: So if they're less than $500,000, then they're in the small business incentive program; if they're more than $500,000, they're in the industrial incentive fund?
Hon. D. Zirnhelt: Yes, that's correct.
F. Gingell: Have you considered folding the two into one and not having a separate account? They're doing the same thing; it's just more accounting, more bookkeepers, more cost.
Hon. D. Zirnhelt: Yes, but the reason we haven't changed it is simply that this provision was provided for by the previous government when they did have a program other than JPC. The reason we would not roll it into the other fund is simply that we find a convenient break to be above half a million. So for simplistic reasons, rather than change all the rules and
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regulations as we are assessing -- and we continue to assess the loan program, the financial participation by the province in loans and loan guarantees -- we don't see a need to change right now. It's not an administrative inconvenience.
F. Gingell: I noted that in 1992-93 where you had originally anticipated a possible expenditure of $10 million, you in fact expended $4 million, or that's what you expected it to be by the end of March. Can you give us a very quick rundown on the particular projects that were included?
Hon. D. Zirnhelt: The amount that was disbursed is just slightly over $2 million. The components of that were $1.8 million, which was disbursed under the small business assistance program, and the job-protection-approved small business loans of $223,000. That's a total of $2,030,000.
F. Gingell: That takes us up to the end of March, basically. So you're actually only going to have spent a little over $2 million in '92-93, and you've budgeted $5 million for '93-94. Is there anything that's happened in the first two months of the year that indicates that the $500 million may be substantially not enough or substantially overbudgeted? How's it going, in effect?
Hon. D. Zirnhelt: At the present time, if we projected the past three months' experience, we'd probably come in under $5 million. But it's awfully difficult to add and we want to be on the high side, so we think this figure is safe. As you see, we came in way under last year, partly because we were being cautious and because there were no new small business programs up and running. But we want the provision to be there so we're not caught without being able to assist where necessary.
F. Gingell: Moving now, if I may, to the natural resource community fund, an even stranger special account because, like the municipal revenue-sharing fund, it isn't there. It has all these shares of certain revenue streams, but they don't actually give to it; they just write down a notation in the accounts for the future rather than paying out. But with the natural resource community fund, which gets 0.5 percent from petroleum, natural gas, minerals and forest revenues, you were in fact anticipated to be overbudgeted by $4.8 million out of a total of $4.6 million in expenditures and $5.6 million in revenues. Can you give me a rough idea how much of that $4.8 million was revenue greater than budgeted and how much of it was expenditure shortfall?
Hon. D. Zirnhelt: Basically, all of it was expenditure shortfall.
F. Gingell: I take it that actually nothing was paid out of the natural resource community fund in 1992-1993?
Hon. D. Zirnhelt: Yes, you're right. As a matter of fact, the guidelines had been finalized; it took over a year to finalize the guidelines. The reason was simply that the demand on this fund could well have exceeded, depending on how wide your criteria were.... We handled the projects for which we anticipated making expenditures by another means. We handled Cassiar, for example, in a special way. Cassiar could easily have used up everything that came into the fund, so we have given ourselves some breathing time to allow the fund to get up to its level.
F. Gingell: I note that for 1993, in this year's estimates, you anticipate revenues of almost $7 million and expenditures of $3 million. As of May 31, are there any particular communities that you're expecting to be able to help from this fund in the near future?
Hon. D. Zirnhelt: We have a number of inquiries that I'd be happy to share with you. We have about eight local governments and seven others that are requesting some kind of assistance. We're going through them now to see just who qualifies. As you know, there has to be an emergency or an impending emergency. So if the emergency is quite a few years out, we're not very close to making any disbursements here.
Just before I do that, I want to clarify that I was a bit in error. Last year there was actually a $200,000 shortfall in revenue; that's the difference between the $4.6 and $4.8 million.
[3:30]
The local governments that have applied to us are Houston, Granisle, Sparwood, Creston, Port Hardy, Stewart, Tumbler Ridge and Port Alberni. They're all ones that we've had continuing discussions with. To answer whether we expect to disburse, it's too early to say if any on this list will qualify, but we certainly expect that the Elk Valley will qualify. Again, we have to see the nature of the requirement there. This is not job replacement; it's not an infinite safety net for communities that will guarantee jobs. It's for the people who fall through the cracks, people who are not caught by the existing industrial adjustment services in the area.
F. Gingell: When you read the purposes of this fund and the types of things it's intended to accomplish, and you think about the types of things that are intended under your Build B.C. 21 fund, there are some similarities there. We talk about job training and about some job creation. Is there a relationship between the natural resources community fund and Build B.C., the type of committee that is dealing with Build B.C. project?
Hon. D. Zirnhelt: There's a little bit of difference. The natural resource community fund is intended to deal with the consequences of closures; Build B.C. will deal with moving the economy, or training, or public infrastructure, in a different direction. It might be part of the diversification efforts in the community. The natural resource community fund is designed to pick up where there are shortfalls. It's very specific and very
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targeted to program shortcomings in those communities. So they are complementary. Like any program, you could argue that there's a certain amount of overlap. But if you looked at a community that had some need to diversify economically, and there was a major reduction in employment in a primary industry, then you could actually see both programs being used, although for different purposes. They wouldn't be used for the same purpose in the same community.
F. Gingell: The direction I was heading with the question was to make sure that Build B.C. didn't get their hands on this money. It's not because I don't support the kind of things that Build B.C. wants to do. We discussed that at some length. We just argue about the way you want to do it. But this fund is for a very specific purpose, and is an important starting safety net for many communities. That was the point I was trying to make.
One last question on this particular fund. As you can see, it's titled "Special Fund," rather than "Special Account," so we think of it as a fund. There is by legislation a requirement for one half of 1 percent of three revenue streams to go into the fund plus the interest on the account. I'll bet you can guess what is coming now, because we continually hear the Minister of Finance say: "There isn't any fund. There isn't any bank account." That's the problem with the municipal revenue-sharing special account, and the municipal revenue-sharing fund: there isn't any money there.
Because of the specifics of this account, is this not a situation in which you do set up a bank account, you do transfer over the one half of 1 percent of these various revenue streams, you do have the money invested and you do have the interest and the investment earnings come into the bank account so that in the future the ability of the government to use these funds that have been set aside for this purpose is in no way jeopardized by other financial restraints that the government could be facing because of employment problems. It's those kinds of things that happen that cause a reduction in government revenues and even greater problems. Those kind of problems have resulted because these communities are in trouble to start with. This may be the one occasion when it would be appropriate to actually set up a bank account so the Ministry of Finance couldn't go around saying, "Well, we couldn't find the account. There wasn't any money there."
Do you think this is perhaps the exception, Mr. Minister?
Hon. D. Zirnhelt: I won't say it is the exception; I say it could be the exception. I think the intent of the legislation was clear. I have every confidence that this targeted revenue is there, that the interest will be paid and that the funds are available should we find qualifying projects.
As to the need to establish a separate bank account, I'm not prepared to accept that until I see that the funds are not available. I guess I would have to answer that had we seen a necessity for these funds last year, I'm sure we have seen drawing down more pressure to bring them about. We were able to accommodate most natural resource communities that required a bit of assistance under other programs. But it's there. We're learning as we go. We took a while to develop the guidelines. One of the problems is that the demand could be huge, depending on what you allow to be caught up in the guidelines. In case you hadn't had the opportunity to read the guidelines, I'd be happy to send you a copy; we've just published them.
F. Gingell: Thank you very much, Mr. Minister. I want to thank you for dealing with the special account questions.
H. De Jong: It has been a rather interesting discussion. I actually have a couple of questions leading out of the previous discussion. One area here says: "Reserves for doubtful accounts and concessionary loan expenditures." Apparently there was $10 million estimated for that in 1992-93. This year it's $7.82 million. My question really is twofold. First of all, what exactly is meant by concessionary loan expenditures? It would appear to me that those have been agreed-upon concessions. Also, the doubtful accounts.... If I'm right in my interpretation of the concessionary loan expenditures, then I have difficulty seeing why they are put into one account in this budget document.
Hon. D. Zirnhelt: Perhaps I can start by giving the member a description of the concessionary expenditures. That might help clarify things. Under the new accounting policy adopted by the province in 1992, loans are considered to be concessionary when they are provided at an interest rate that is below the government's cost of borrowing. The difference between the loan interest rate and the province's cost of borrowing over the life of the loan is viewed as an interest expense to the government. The new policy requires the ministry to calculate the net present value of the interest expense each time a concessionary loan disbursement is made and to record it as an expenditure. The doubtful account reserve is the bad debt provision; this is the cost of the concession.
H. De Jong: Yes, that is an explanation. However, I have difficulty still in lumping these two together, because, as the minister just read from his statement, these concessionary loan expenditures are th expected things. The government has made a concession on interest towards a loan. I fully realize that the government has to pay the full price for borrowing that money, but at the same time, if that was a concessionary loan expenditure, why is it included in the total figure of doubtful accounts? That's what I have the difficulty with. Why not separate the two, hon. minister?
Hon. D. Zirnhelt: I don't know where the member is going with it, but the reserve for doubtful accounts accounting policy is the one the government had when we took over, and we have added the concessionary loan expenditures to that. Conceptually they're similar -- they're a cost or a potential cost -- so we book them together.
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H. De Jong: Undoubtedly, either the minister doesn't understand or he doesn't want to admit how much of this $7 million or $8 million has been agreed upon through concessionary loans versus those of doubtful accounts, because doubtful accounts, in my opinion, are those that are considered to be doubtful in the repaying.
However, I'll get on to another area: administration and support services. This amount has dropped by about $3 million from the previous year to this year, but within brackets it says "net of recoveries." Is there less expenditure on administration, or have the costs risen in terms of recoveries -- either costs of applications or whatever it may be -- made through the minister, so that the cost of the operations is now cut by $3 million?
Hon. D. Zirnhelt: I'm having a little difficulty hearing -- partly because I'm trying to answer before I've heard the full question. Let me give you a partial answer to your question. If I don't answer your whole question, you can come back and I'd be happy to do that.
Under the doubtful accounts and concessionary loans, the reserves for doubtful accounts are estimated at $6.14 million. We've also estimated the concessionary loan interest at $1.68 million, for a total of $7.82 million. These are projections based on our knowledge of the past. So that's the breakdown.
H. De Jong: That's the answer I wanted to hear. The second part of my question deals with the administration and support services being estimated at $3 million less than last year, but it says "net of recoveries." Are the recoveries expected to increase or is the cost of administration $3 million less?
Hon. D. Zirnhelt: Where we charge, we have about $28,000 of recoveries. That's all the recoveries are -- is part of this.
H. De Jong: That would mean, then, that the cost of administration is expected to be lower than the previous year.
Another question concerns the area of the regional offices. I understand that there was a substantial change in the operation of these offices and that the people running them had to bid for the position. I'm not sure whether there is still a regional office in New Westminster. There used to be a very well run office. I understand that part of this office is now in Chilliwack. What specific functions do these regional offices now carry? Which are the predominant programs provided through these regional offices?
Hon. D. Zirnhelt: Basically there is no substantive change in the role of the government agents' offices. What we have done is to make the government agents' offices one of the programs of government that is responsible to regional operations, which include the economic development function. Whereas before, government agents reported directly to a centralized administration, now they report to regional offices.
[3:45]
You mentioned bidding. We did not bid out, change or restructure the government agents' offices in a substantive way. The exception is that we have taken 17 deputy government agent positions and converted them, roughly speaking, to regional economic development officers. We also moved a number of positions into these regional management units for ease of administration. Whereas some of the administration was done in each government agent's office by the deputy agents, some of that function was transferred to regional units. We tried to economize by regionalizing operations. The functions of the regional offices include the functions of the government agents, which you're familiar with. There's a long list of those. The regional economic development officers, some of whom are in government agents' offices for convenience, because they're the same ministry, are continuing to do the work. It's a combination of what you're familiar with, which is the former regional analysts and managers. A hybrid of those two functions is now provided by a beefed-up number of economic development officers in regional offices.
H. De Jong: I haven't heard an answer from the minister on the important part of my question. That is, of the programs that are provided through these offices, which ones are used most by the business community -- be it the small business program, or whatever?
Hon. D. Zirnhelt: Women in business, young entrepreneurs, the business information centres, the COED program -- the community economic development program -- which funds local economic development commissions. They're substantially the same programs that existed before, with the exception that when your government ceased the funding of the small business loan program it dropped off the table. While it isn't a program that's available to business people, there is advice on the regional economies. That's part of their function. They're looking at access of the business community to those services or assisting them in understanding the regulations by putting an economic development spin on the project to help it through the regulatory maze.
H. De Jong: I suppose everything has to have a start, but there was a time when many of these community economic programs were put together here in Victoria and had little or no meaning for communities in the various parts of British Columbia. During the last couple of years that the Socreds were in government, a substantial effort was made to change that and to make these programs more community-oriented by involving the local economic development commissions. If a community or a group of business people within a community anticipated an economic undertaking, the programs would be geared more towards the initiatives of the local community. The various programs provided a greater variety of options, you might say, to accommodate those communities. Is that still the case, or have we returned to a more centralized type of operation?
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Hon. D. Zirnhelt: I think we've advanced that concept by decentralizing the administration. Rather than have those programs administered in the region but controlled by the centre, we have moved the administration into regional centres where they can fine-tune the programs to meet the needs of the communities. We have done this by putting financial spending authority with our regional directors. Before, we didn't have regional directors. There are five regional management units. Some of them have more than one economic development region; nevertheless, the administrative decision-making is much closer. When we're fully staffed we have a greater capacity. Just in the last few months -- since the first of the year -- we've actually transferred the spending authority, so that if a program is administered locally the managers in the field have the ability to do the fine-tuning necessary to make it more effective.
H. De Jong: The minister spoke earlier about funds that were available for projects maybe needing funding in terms of job protection. Of course, against that is the job creation type of industry. Does the minister have any comment on job creation and whether any type of industry is excluded when job creation or, for that matter, job protection is at stake?
Hon. D. Zirnhelt: I'll give you at least a partial substantive response. The Job Protection Commission, as you know, deals with critical industries. The idea is that they are critical to the community or in a sector, so there are some limits. They have to be strategic to that community.
With respect to other job creation projects that we will assist, I would say that the emphasis is on sustainable projects, not short-term projects. With respect to the Working Opportunity Fund -- that's one program that we helped get up and running -- they're targeting not primary but secondary industry as the area of growth that the financing is necessary for. While we don't administer that program, it is a limit in that we provided the tax concessions to make the Working Opportunity Fund happen. It is targeted, but we don't administer that. But basically any commercially viable industry of a job creation project would be eligible for the services of the ministry.
H. De Jong: I'm sure the minister would agree that job creation and sustainable jobs are very much appreciated, not only by the people who are involved and have the jobs but also by the entrepreneurs who are providing the jobs. I'm sure that the minister also agrees that the best jobs are provided through the entrepreneurial system, because those are usually lasting jobs. They're not short-term jobs, as we used to know under the job creation programs that were provided by both federal and provincial governments. They were usually of a three-month or six-month nature, then the job was gone and the people were back where they started off before. But we do have the odd opportunity. That's actually why I asked if there was any specific category of business that may be excluded from those privileges.
I can appreciate the minister's answer that he has given so far, but at the same time -- and I haven't got the letter with me -- I had some correspondence from a farmer in the Columbia Valley. He wanted to expand his fruit farm. It grows a number of fruits. He's the type of entrepreneur who wishes to do as much processing of those fruits on the place as possible, and also, because it's adjacent to Cultus Lake, it's a good tourist attraction. The combination of that does provide jobs. It would appear that the entrepreneur himself is very confident that such an operation would be successful. I haven't seen any of the figures at all, but the farmer got a rather disappointing reply from your ministry that that kind of application would fall within some program that was of a federal nature, and that it was provided through the Ministries of Agriculture provincially and federally. Having heard the minister's comments earlier that there are no exclusions, I'm rather disappointed that this kind of letter would come from this ministry.
I am also convinced that what this farmer is anticipating doing does not fall within the actual Agriculture programs that are normally available. He's processing these fruits and vegetables beyond what the normal farmer would do when he picks his fruit or cuts his cabbage and puts it at the farm gate for pickup or delivery to stores. So there is an expanded opportunity there. I would like to hear the minister's comments as to whether there isn't a better way to deal with that particular situation than to send the person off. In his letter he clearly indicates that if he does not get this type of assistance.... He's not asking for anything free. He's only asking for a loan or a loan guarantee to construct those facilities; I'm not even sure which it is. But it's going to provide about a dozen jobs, and it certainly would be a benefit not only to the community but also to many visitors that will come into the Cultus Lake area. It all ties in with more economic growth through agriculture and business as well as tourism.
Hon. D. Zirnhelt: I don't have the letter here either; I'll try to get some details on it. There may be a difference of opinion as to whether he qualified, because I know that some of the federal-provincial programs actually deal with processing. If it's the establishment of a marketing activity that doesn't fall into the categories permitted under the federal-provincial agreement, then he would have assistance that we provide.
We don't have a small business loan program. I've said that if we are involved in any kind of loan guarantee, it's mostly for ad hoc projects of a strategic nature that are much larger than this. So to the extent that we have a program that that person qualifies for, we'll provide him the assistance. I'd be happy to have a look at it. As I say, I don't have the details. But if you can provide me with those details -- or we'll do the research; I think we've got enough details to check it out -- we will provide you an answer as to why we aren't providing a service. But it may be that we don't have a program that fits his need.
We know there's a need out there for commercial ventures that are related to some of the primary
[ Page 6690 ]
industries. One of the problems is that the banks are not making as many loans to commercial businesses. They've moved away from that, and that may be part of the problem as well. If there is a reason why the private sector capital markets won't provide assistance, we have to have a good look at our particular reason for being involved. As you know, this is an area where you have to very carefully fill a niche that's not filled already by the recently expanded federal business loan program.
[4:00]
H. De Jong: I appreciate the minister's answer and his willingness to look a little further into this. I would add that the processing of fruit, vegetables or anything that's produced on a farm is in fact allowed under the Agricultural Land Commission. It is a longstanding policy, which has always been supported by local municipalities and regional districts, that the produce that is grown on a farm can in fact be manufactured on the same site. So that is not a deterrent. But I certainly would hope that the Ministry of Economic Development, with its programs, is available to all sections of various industries if they make sense and provide lasting jobs, which is usually the case. Then I think we can overcome what the minister said earlier this afternoon about no new or small businesses being up and running. It was in one of the comments the minister made to the earlier question that apparently there was a surplus because not enough new businesses were up and running. I am sure that must be a concern to you, Mr. Minister, and it's a concern to me. I'm sure it's specifically a concern to those whose applications have been turned down, such as the one I've been talking about. Thank you.
Hon. D. Zirnhelt: Of course I would be concerned if there is a small business that is viable and has been turned down by any financing source. We deal with a lot of advanced manufacturing. The value-added to the primary sector is an area where we do a lot of work, although in some cases the line Ministry of Agriculture may be involved, because it is food processing and they tend to take the lead there.
If any business has failed because of a lack of financing, then that's regrettable, and would point to a need out there. I'm saying that the need is very difficult to fill when you have the commercial banking establishments moving away from commercial lending. So the government didn't create that problem. Whether the government can fix that problem is something that we're actively examining right now to see if we can use an existing delivery mechanism out there in terms of providing some kind of guarantee to financial institutions. That may pick up this particular case. But without having the details, I'm not sure where it fell through the cracks. If it has, it's regrettable.
One of the areas of large expansion right now is food processing. We're very competitive in a lot of those areas, and we will encourage them.
R. Chisholm: Along the same line as the previous member was talking about is the value-added in agriculture. I realize that a lot of this is going to be overlapping, but I guess we have this debate to find out exactly who is responsible for what and who is doing what.
There are an awful lot of value-added products that can be produced from agriculture products. Take a look at the bill I introduced on ethanol -- the grain growers. Now that one there, for instance, will decrease pollution and put all the grain growers in this province back to work. We need an ethanol plant developed.
I was just wondering if you are looking into these types of areas where we give incentives to an industry to develop a plant. Or are you going out and actively finding people who will participate in a program of this nature? Are you just strictly there for them to come to you, or are you actively promoting?
Hon. D. Zirnhelt: Well, it varies. Sometimes people come to us, and sometimes we have feasibility studies there. There is an alternative fuels task force that's operating within the government, and they haven't reported yet. But our examination of ethanol would show, on a preliminary basis, that there are other more cost-effective means of getting into alternative fuels. So you are looking at -- to this point in time -- higher fuel production. The concessions required here are considerable, and we have not decided if we will provide a subsidy for that industry. But as you know, the agriculture community in the Peace River area, in particular, where most of our grain is grown, is looking at an agriculture strategy. If, in the process, they identify this as a feasible part of their strategy, then we'll have to look at it.
R. Chisholm: Other products can also be made from agricultural products, such as ink from soybeans and that type of thing. Are we trying to get people to come in to develop an industry or markets here for these agricultural products? Can you name a few that we're actually working on at the present time?
Hon. D. Zirnhelt: I will just back up a bit, which might help you; it will certainly help me. The idea of industrial development within the agricultural sector is something the Ministry of Agriculture has been taking the lead on. So unless the minister has directed you to us, I would direct you back to the minister for the specifics on products.
Where our role comes in is that our Investment Office is looking for investors. If we know there's an area we have highlighted, such as value-added in agricultural products, the B.C. Investment Office will be actively looking for opportunities to direct investors into these kinds of projects; or conversely, if they have trouble -- they have a project but no investor -- they will then seek out an investor and shop that particular product around.
R. Chisholm: What products are we investing in now in the agriculture and fisheries areas? Are we investing in any at all?
[ Page 6691 ]
Hon. D. Zirnhelt: I am going to give you a couple of examples. We were actively pursuing an investment in the pork industry in the Fraser Valley. We are also looking at a continued development of processing hake. Again, the Ministry of Agriculture is looking at that. We get involved in these usually because of the investment or the regional impact. Those are two examples. I don't have an exclusive list. You would have to get that from the Minister of Agriculture.
R. Chisholm: I understand the hake industry. But we're still sending 35 percent of our product outside the country with the value added on. Other than hake, what are we adding value to? Are we doing anything in the salmon or herring area, or are we strictly working on hake at the present time?
Hon. D. Zirnhelt: I could take a guess, but I think I would have to refer it to the Minister of Agriculture.
Clearly, where a line ministry has a history and an interest and some resources being spent on the industrial development part of a primary industry, they will take the lead. We tend to pick up all the rest or work together with them. However, if there is a need to add value to or develop primary industry in a particular region, as is characteristic of our regional economies, then we will take that because we have a regional focus. We will say that of all the possible products to be produced, these are some in this region. We take an interest on an advocacy basis, but we will work with the line ministries. I don't mean to put you off, but I don't have the answers. We could ask to get them for you, but I would suggest that the Minister of Agriculture will have them.
R. Chisholm: Thank you, hon. minister. That clarifies where I was going. I will go to that minister for those answers.
Going on to the area of interprovincial barriers, does your ministry have any effect on that? Are you doing any negotiations with other provinces on interprovincial barriers? According to some figures, we have a 13 percent disadvantage with Alberta in agriculture, for instance. I'm trying to pinpoint exactly who is doing the negotiations on interprovincial barriers and whether people in your department would be the ones to talk to.
Hon. D. Zirnhelt: Yes, earlier in the estimates I did explain some of this, but I don't mind explaining it again. We have the lead in future negotiations on interprovincial trade barriers. There have been some sectoral negotiations, and I'll get the list of the sectors we've been negotiating with independently, one by one. The beer and wine sector is an example, and we are looking at financial institutions. There are some on agricultural products, I understand
We are proposing to have the provinces and the federal government come up with a comprehensive set of negotiations, similar to the approach taken under the free trade agreements -- in other words, to possibly allow some trade-offs and to try to get agreements to eliminate or reduce real barriers where they exist. In June -- in about three weeks' time -- the federal and provincial ministers will be sitting down to try to agree on a list of areas that we want to negotiate, and we will work with the responsible line ministries. If they are agricultural trade barriers, the Minister of Agriculture will work with us on that, and he will have somebody on the negotiating team. We have not yet agreed on the method of negotiation. We are currently discussing that with the provincial government.
With respect to your figure of about a 13 percent disadvantage in agriculture, I guess you are looking at the cost of production in B.C. compared to Alberta. If one of those constitutes a trade barrier, then presumably that could be on the table. If one of those costs exists because it is a resource management cost such as water or something like that, and the cost is there because we are managing and conserving that resource, I'm not sure that that's a trade barrier. The spirit is to take legitimate barriers, which are there for public policy reasons, and try to find a common ground with other provinces. But there are no negotiations taking place under my ministry right now in the field of agriculture.
R. Chisholm: With reference to the same question, I'll give you some information that might help you answer it. This is a comparison of the 13 percent disadvantage with Alberta -- the grain growers, for instance. We were talking about the Peace River area. He is talking about some provincially funded fuel tax rebate programs, so this would be a provincial jurisdiction. Would you have any involvement there, considering that we don't get it and Alberta does?
A 4 cent rebate on gas and a 10 cent rebate on diesel is given in Alberta. The rebates translate into roughly an $8- to $10-an-acre penalty between the two provinces. About 10 percent of the $85 per acre average it costs to produce wheat, barley or canola is due to fuels and then taxes. These are strictly provincial jurisdictions. Would this be part of this negotiation? Would this government put that on the table, or would it not be part of it?
Hon. D. Zirnhelt: It is highly unlikely that that would be part of the internal trade barriers. There is no question that internal trade barriers do have an effect on competitiveness, but things like fuel taxes, fuel tax rebates and those kinds of costs are competitiveness issues, not trade barriers to the movement of capital, people or goods. I'm not sure of the connection between these competitiveness issues and the trade barrier issues, but it is my understanding that those matters won't be on the table.
[4:15]
R. Chisholm: If these are not on the table, we are not going to defeat the problem we have with trade barriers, because some of them are self-inflicted by this province. If they aren't on the table in these negotiations, would you be approaching your government and your cabinet to try to decrease the cost to farmers? Otherwise, the barriers are still there, and they are self-imposed barriers. Maybe that is part of the problem.
[ Page 6692 ]
Hon. D. Zirnhelt: If the higher cost of production in any particular province is a result of regulations that exist for environmental or social reasons, we would be looking to levelling up. Michael Wilson, the federal trade minister, who is coordinating the federal input into this, says that they would like to see a levelling up of standards. So it's a matter of standards. If it's a matter of taxation and competitiveness, then by themselves these don't constitute a barrier to trade.
R. Chisholm: They may not constitute a barrier to trade according to the federal government and other provinces, but if we've imposed a 10-cent-per-litre increase in B.C. on top of the normal Alberta price, we've imposed our own barrier and put our agricultural people at an added disadvantage. That's why I'm asking whether this government will take that into account when they negotiate it. Otherwise, we will still have barriers after you're finished the negotiations, and the barriers will be imposed by ourselves.
Hon. D. Zirnhelt: I still don't see it as a barrier to trade. It may be a disadvantage. It's a competitiveness issue. The way we're handling competitiveness issues is to look at it sector by sector and industry by industry, trying to get all the costs of production. In the part of agriculture that I'm most familiar with, the cattle ranching industry, taxes and fees are a small portion of the change in profitability. Other input costs are rising and are a bigger problem. Those are things that the government doesn't have control over. We do of course look at competitiveness. We have an interest in the industry being competitive. If you can show me the relationship between a production cost and a trade barrier, I would be happy to take that under consideration.
R. Chisholm: If the rebate translates into $8 to $10 an acre between Alberta and British Columbia, we're obviously at a disadvantage if we're paying $85 and they're paying $75. Competitiveness is gone as far as B.C. producers are concerned. I understand what you're saying -- that the barrier itself will have to be negotiated -- but will this government take a look at its own agenda and policies as to what puts us at an added disadvantage, no matter what comes out of the negotiations with the federal government, Alberta and British Columbia?
Hon. D. Zirnhelt: As I said, we do look at competitiveness. This is an area where the Ministry of Agriculture, in looking at each sector, looks at the contribution to competitiveness of the tax structures and so on. There may be an $8 to $10 difference with respect to fuel rebate, but in the case of the pricing of our range, for example, we're significantly less than the province of Alberta. It varies with the commodity product. I understand the argument in and around grain farming. Probably the biggest thing that affects grain farmers, though, is the world price. Unless we see some change in the way Europe and the United States subsidize their exports, there's nothing we can do. We could pay them to produce, and they won't be on the same playing field.
R. Chisholm: Hon. minister, you've just justified why we should be producing ethanol. One reason to produce ethanol is that we will never win the battle with the EEC and the United States over grain. But if we produce grain and turn it into ethanol that we put in our gas tanks, we'll clean up the pollution in the Fraser Valley and B.C. and our grain growers will be back to work. Also, the effluent from that industry is used in flour for biscuits and cookies, and for fertilizer and animal feed. That justifies a system like ethanol. We should be developing an industry that will take our agricultural product to the end. We will then be viable.
I'm not going to argue anymore about interprovincial barriers. There's a problem here, and some of it is self-inflicted. I just hope the government will look at it.
Turning to the Buy B.C. program for a minute, does your ministry put any money into the Buy B.C. program, or is it completely an agricultural institution?
Hon. D. Zirnhelt: The funding is entirely within the Ministry of Agriculture. They have the lead on that program. It has a primary focus on food, as you know. What our ministry does and has done, though, is work with communities on looking at any import substitution. If somebody sees that there's a product that can be produced, we're happy to work with them to find a market or understand the requirements of producing that product.
R. Chisholm: Does this ministry work with the British Columbia marketing council to develop products or markets for the agricultural industry through the industrial base, rather than another government agency?
Hon. D. Zirnhelt: Yes. You've picked a field where the Ministry of Agriculture has the lead and does substantially all of the work in that area.
R. Chisholm: Hon. minister, I'm going to quote to you what you said about NAFTA. You were worried about the impact of NAFTA, which will see Canada, the U.S. and Mexico become a giant free trade zone. It says here that you're especially concerned about its impact on B.C. fruit and vegetable processors. With Mexico's cheap labour and production costs, it will be virtually impossible for locally produced goods to compete, he says. Seeing that you see this problem, is your ministry working on any solutions to this, considering that we've lost an awful lot of our food processors -- Royal City Foods, for instance -- and some of our fish processors in the last year? Are you developing a plan to ensure that this industry remains viable and industrious in this province?
Hon. D. Zirnhelt: We're still working on the problem. The NAFTA is not signed off yet. As you know, there are major problems. By supporting the NAFTA and voting for it, your party is helping to create the problem. We're trying to deal with the fundamental
[ Page 6693 ]
problem, but if we are stuck with it, of course we'll look at those areas and try to assist them. We will find ways in and around the trade agreements that are legitimate tools for supporting the development of industry within B.C.
But with respect to competitiveness of particular industries in the agricultural area, the Ministry of Agriculture has been working actively. There's a very successful wine industry in British Columbia; the Ministry of Agriculture worked with them there. The same thing goes for the food processing. We have examined a lot of these areas, and we've identified this as one area that will suffer under the NAFTA. We've argued that if the federal government is going to go ahead with that, there ought to be specific adjustment programs for sectors that would be negatively affected. To date, the federal government has refused, as they did under the free trade agreement, to look at specifically targeted adjustment programs. Without those, we're left trying to do what we can to assist those industries. Again, that assistance will come primarily from the Ministry of Agriculture.
R. Chisholm: The B.C. Trade Development Corporation, as you know, develops markets overseas for us. What products are you pushing overseas for British Columbia at this present time, and how successful have we been in the last year with this program?
Hon. D. Zirnhelt: I will ask you a question. Are you referring to agricultural products or products generally?
R. Chisholm: Agricultural.
Hon. D. Zirnhelt: That's what I thought. I don't have a list of the products. It's extensive. Again, with the Minister of Agriculture, we'd be happy to provide that information to you. I don't have it with me here. Generally speaking, though, the B.C. Trade Development Corporation does promote a whole range of products. If somebody provides B.C. Trade with a product, they take it and shop it around through the overseas offices; it is featured on the trade mission. I do know that there are products that we assist, in terms of the export rules and the trade rules and laws. We assist in interpreting what tariff rates can be imposed, and so on, so we provide quite a bit of assistance. On a product-by-product basis, individuals often come directly to our officials. Nothing flows through, and we don't say: "This ministry is looking at X number of products." We leave it open to the marketplace to come to us for information.
R. Chisholm: I'd like to change the subject to the corporation capital tax how involved your ministry was in the application of it. Over the past number of years governments have advised farmers to incorporate themselves, and lately we have had this corporate capital tax and what it does to farmers at this stage of the game. My first question is: was your ministry involved in advising the government whether to apply this tax?
Hon. D. Zirnhelt: The decisions to apply or not apply a tax are made exclusively within the Ministry of Finance in and around budget time. Sometimes we are asked about impacts, and we provide information, if we have it.
With respect to advising farms to incorporate, I'm not aware that we are promoting the incorporation of farms. Every business has to look at whether there is an advantage to them. In the case of a lot of farms, it depends on the nature of your production and how diverse your products are.
R. Chisholm: It wasn't just this government that promoted that; it was previous governments, too. The problem is that a lot of farms did incorporate themselves. When they did incorporate themselves, they then came under the corporation capital tax, which has a ceiling of $1.25 million. But you and I both know it doesn't add up to very much when you're getting into farming, and it is a definite disincentive for young people to get into farming. I was just wondering if you had any input into this with the government when this tax was passed.
Hon. D. Zirnhelt: While I didn't have the opportunity to address that subject in any substantive way, the Minister of Agriculture and I both attended the B.C. Cattlemen's Association last week, and we indicated that the reason for the tax is for deficit-fighting, not for any other reason. When we have substantially handled the deficit in this province, we will be in a position to examine these kinds of matters. You need to point to the fact that there were changes. The threshold was lifted by 25 percent from $1 million to $1.25 million, and that substantially assisted that industry. Some 30 more farms are now exempt from the corporation capital tax, so the move was in the right direction.
R. Chisholm: I'd like to move to cross-border shopping. As we know, it is very detrimental to the economy of British Columbia. A recent survey said that $1.6 billion worth of sales were lost to cross-border shopping, and there were roughly 15 million visits to the United States. This means that 27,000 jobs were lost. As we know, the gasoline tax is one of the reasons for this. Seeing that cross-border shopping would come under your ministry, what are you doing to try to keep the gasoline taxes down? What are you doing to ensure that the government takes the gasoline taxes down further once you do succeed? So far, we have seen an increase in gasoline taxes with the new Build B.C. program. With that, everybody is flocking south of the border, and I would like to know what your ministry is doing about it.
[4:30]
Hon. D. Zirnhelt: As a ministry, we don't have the total responsibility for all the actions and all the policy areas of government. The other side of gasoline
[ Page 6694 ]
taxes is that if you reduce the taxes, you also increase consumption, and that contributes to pollution. So there is taxation on these things not only for revenue purposes but also to assist in reducing consumption.
Cross-border shopping, as you know, is actually down. It declined by 8 percent in 1992 from 14.2 million trips in that year compared to l5.4 million in 1991. This led to stronger retail sales. What we have done in the whole cross-border shopping field is to assist retailers in promoting their products and to counter the advertising from across the line. We do recognize that gas is an issue, and we are very anxiously waiting to see what happens with the federal taxes in the state of Washington. We think the differences will be greatly diminished. For now, we don't want to prejudge what will happen in the United States. We will have a look at it, and we would advise the Minister of Finance if we saw an area to enhance the development of retail sales in B.C. by reducing taxes. But, again, the taxes are there for revenue purposes, and we feel that the general climate of business is going to be enhanced if we can deal with the deficit. That's what those taxes are doing.
R. Chisholm: That's not the same conclusion reached by some organizations. They called it a tax revolt, and I tend to agree with them. You said that cross-border shopping was down. It was, due to the fact that the monetary rates had changed, not due to gasoline at that point in time. When the gas tax went up by 1 cent per litre under the Build B.C. program, I phoned the border that same evening and found that places like Sumas were full -- I brought it up in the Legislature the next day -- of people buying gasoline. And when they go over there to buy gasoline, they are of course buying milk, cheese and whatever other products they can get cheaper down there because of the taxes here.
Whether we want to blame somebody else and talk about the Minister of Finance, this is still business, and it's money being lost to business -- $1.6 billion worth. You want to talk about 14.2 million trips south of the border. Well, 14.2 million trips is probably 25,000 jobs instead of 27,000 jobs. Either way, it is an incredible loss to this province. Somehow or another this government and this ministry has got to take it in hand to correct the fault if at all possible. I realize that it's not an easy thing to do. But we cannot keep putting taxes on gasoline. The minute we do, we send people further south, and that costs more jobs in this province.
I would like to know, hon. minister, where you see us going from here. The Build BC Act gives the right to raise those taxes again without coming to the Legislature. That just means more people going south of the border. All I'm asking is what you see in the future with the gasoline tax sending people south of the border.
[E. Barnes in the chair]
Hon. D. Zirnhelt: There is a substantial tax being proposed in the United States. Until we see what happens in the U.S., I think it would be premature to look at lowering our taxes or even rolling back any taxes that have recently been put on.
With respect to the issue of cross-border shopping generally, as I explained, the Minister of Agriculture is looking at the purchasing of agricultural products. To a large extent, it is the price of agricultural products that attracts people, and, as you have argued, gas is another part of that. We don't fully understand why three-quarters of the people who live around the border don't cross-border shop. So we want to reduce it by finding the reasons that keep them home and reinforcing those. As you also recognized, when the value of the dollar goes down, in all the studies that have been done, that's really the only factor that significantly changes cross-border shopping. So we could reduce the taxes considerably. If the Canadian dollar goes up, cross-border shopping is going to increase. The major determinant -- and I'd be happy to provide you with copies of the studies -- is the value of the dollar, not the price of gas.
R. Chisholm: I'm not going to argue about what draws the people down there, but if you can go down to the States and it costs you $18 to fill up your gas tank and it costs you $28 in Canada, and you can pick up all your milk and cheese with that extra $10, obviously there's a reason for going down to the States. It is because that $10 difference is quite a chunk in a person's budget every week.
But since we're not getting anywhere with that one, hon. Minister, let's go on to other things -- for instance, the removal of tariffs in NAFTA. The NAFTA provides for national treatment between Mexico and the U.S. on marketing standards, which will allow for bulk importation between the two countries by processors of horticultural products. However, the NAFTA provides no similar arrangement between Canada and the U.S. As a result, British Columbia processors may become less competitive, because they will continue to be constrained in their ability to import products in bulk while at the same time facing increasing competition from imports of processed horticultural products. Do you see any solutions coming out of your ministry to help offset this problem?
Hon. D. Zirnhelt: As I said before, if we had the support of the opposition in opposing it and were successful in that, we would be eliminating the problem. We protested very vigorously, and agricultural products were continuously listed throughout the consultation that the federal government held with the provinces through the negotiating process. With respect to specifically helping this sector, I have to refer you to the Minister of Agriculture who is doing the work, has the lead and is looking at the impacts. We continue to argue with the federal government that in any area where there is a displacement or dislocation by the trade agreements, there ought to be a specific transition plan or an adjustment program in place for that sector.
R. Chisholm: Increased access to Mexican markets may present new opportunities for British Columbia investors under the NAFTA. The investor state dispute
[ Page 6695 ]
settlement process affords a greater degree of protection to B.C. investors purchasing assets in Mexico. Now we may be faced with our food processors and other industries moving to Mexico, where labour and land are cheaper, causing Canada's loss of investment and employment. This is in relation to the last question I asked you about firms like Royal City Foods and this type of thing. Are you doing anything at all to stop these industries leaving this country and ending up in Mexico?
Hon. D. Zirnhelt: Yes. We are opposing the implementation of this agreement. As recently as last week, the Premier reiterated the untimeliness of approving this program. I wasn't here to witness what went on, but I understand that there was some concern that maybe we should wait longer before we took some position. We took a strong position on that, and when I introduced the resolution, you voted against it. So you helped create the problem.
With respect to dispute settlements, one of the reasons we were opposed to the FTA and to NAFTA is that there's a downhill slide with respect to dispute resolution. We have no confidence that either agreement will give us the dispute resolution mechanisms that we need to have fair trade between the countries. So with respect to specific programs, again we say that the problem is created not by this government but by the federal government. Therefore the responsibility for mitigation and adjustment measures, which the federal government failed to provide under the FTA, has to be provided under NAFTA. They consistently refuse; they say existing programs are satisfactory. So what any party can do is lean on the federal government to provide a comprehensive package of adjustment programs. But the best thing that can be done is to say to the federal government -- and I'd like to see the Liberal Party put it in writing -- that you are opposed to the implementation of NAFTA, because it does not help the agricultural industry in British Columbia.
R. Chisholm: I don't think it does us any good to debate what the federal government is doing. Personally, I know that the federal Liberal Party is not in support of the way that deal is going and the way it stands right now; they want it changed. You are against it. That's immaterial to me at this point in time. I'm asking about a provincial responsibility. If this goes through -- which it has a great possibility of doing -- what are you putting in place to ensure that our industry survives and that it stays here? If the federal government is not going to do anything about it, what are you, as Minister of Economic Development, going to do about it?
Hon. D. Zirnhelt: This government will insist, and is insisting, that the federal government cost-share any adjustment programs sector by sector. We are working with those sectors that have been negatively affected by the FTA -- and NAFTA is an extension of that. The Ministry of Agriculture is also working on that. They are taking the lead in areas they are responsible for.
I indicated to you that the wine industry was virtually decimated by the FTA, and the provincial government worked very effectively there. We're also working with a number of food processing firms and trying to enhance their ability to compete by substantially assisting them in marketing, through B.C. Trade. Again, you can get specifics on that when the Premier's estimates come up. I would suggest that you discuss specifics on NAFTA-related agricultural mitigation measures with the Minister of Agriculture.
R. Chisholm: Turning now to the aquaculture industry, how much money is this ministry investing in new businesses starting up? Considering that we have had seven new licences in the last year, I'm wondering if your ministry has invested in any of those licences or fish farms that are now developing, or if it has invested in any in the past?
Hon. D. Zirnhelt: We aren't spending any money; the Ministry of Agriculture, Fisheries and Food is doing it. We have an interest in some of the remote coastal communities. If fish processing or some kind of aquaculture program is essential to growth and development in a particular community, then we will assist in getting them to the right agencies. If there is a case where they're looking for an investor, we will do our part to ensure that there is some investment capital available to the entrepreneurs in the area.
R. Chisholm: Are you assisting any of these businesses in that category now?
Hon. D. Zirnhelt: There are no new projects that we're assisting. However, the previous government had a program called the aquaculture incentive program, and as of March 31 we have disbursed just over $4 million under that program. I have to say that that is a field where a lot of the loans went sour, and a lot of them were written off as well. We're approaching it with considerable caution. We hope we're through the worst of it.
R. Chisholm: Considering that one of the promises of this government was to have a moratorium on aquaculture before there was any further investment, why have we continued to invest in it? There's no sense in me asking you the question. There have been seven new licences, and we still have not seen a moratorium. Considering that we do not know what we're doing to our ecosystem or whether we're going in the right direction, I'm wondering why you've continued to honour these. Were you obligated under contracts to honour them?
[4:45]
Hon. D. Zirnhelt: Yes, these are programs where the contract had already been signed and there was a disbursement schedule. We have had no new approvals under this. As you acknowledged, the actual permitting should go to the minister responsible for the permits.
[ Page 6696 ]
D. Jarvis: As you're probably aware, the wharf in North Vancouver was part of the settlement in the unfortunate Cassiar mining fiasco of about a year and a half ago. Many ministries were involved in this situation. Was your department involved in it, and where is the wharf? What happened to it?
Hon. D. Zirnhelt: The disposal of assets or the treatment of anything that's put up as security is administered by the loans administration branch. I can dig into it, but once the loan is made, it's administered by the loans administration branch. They are responsible. I refer you directly to the Minister of Finance on that.
D. Jarvis: Is there an international trade division in the B.C. economic development department that would be looking specifically after the export of minerals and coal and things like that?
Hon. D. Zirnhelt: Yes, this ministry has a responsibility for trade advisory services. In other words, we try to ensure that there is specific legal advice with respect to the policy and what's possible under all trade policy areas. A ministry like Energy, Mines and Petroleum Resources may have some in-house expertise in this particular field. But we only provide trade advisory services. In other words, what is the policy? How can we enhance our trade under existing trade rules? What are some of the impediments? We do provide that. We have a shop that specializes in trade policy.
D. Jarvis: Do you provide them with leads or contacts or anything along that line?
Hon. D. Zirnhelt: B.C. Trade is the operational wing that does the export promotion. As you may remember, that was one of the changes. Part of the international division of this ministry that was operational was transferred to B.C. Trade to boost their capacity to provide those services as a Crown corporation.
D. Jarvis: I appreciate that the resource development department of Economic Development is for businesses that are going down, but do you get involved at all with, for example, a smelter that's being proposed for the Kitimat area? Are you in the development end of that?
Hon. D. Zirnhelt: Yes, industrial development is an area where we are very much involved. We are quite involved in the value-added on the mineral side. A direct reduction iron facility is something else that we're actively working on. You mentioned the copper smelter. We have done a number of feasibility studies of industries, and we shop them around. The B.C. Investment Office is very active in taking these proposals and trying to find investors.
D. Jarvis: Have any conclusions been reached on that smelter in the Kitimat area at this point? There were lengthy discussions with the Japanese for awhile.
Hon. D. Zirnhelt: We have been actively promoting this. Given the amount of copper that's available in B.C. and the world, we feel that a world-class facility like this has a place in our economy. There's room for one in the western hemisphere. To this point we don't have the private sector investors committed to being a partner in the feasibility study. We conducted the pre-feasibility study. We've shopped that around. The Premier has taken it over on two occasions, and the Minister of Energy, Mines and Petroleum Resources has also been discussing it with a number of prospective investors -- normally people who consume or trade in copper. But we are still shopping the feasibility study around. We continue to promote the opportunity to potential investors through the B.C. Investment Office.
D. Jarvis: As we all know, our copper is pretty low in quality, so we have to really shop around to get it. You were mentioning that you weren't involved too much in the interprovincial trade thing. I was wondering if you are involved, for example, in the transportation of copper and coal to the salt water. Are you involved in the setting of trade rates? Do you have input into having B.C. Rail lower the cost of moving the concentrates and coal to the salt water?
Hon. D. Zirnhelt: There are two parts to my answer. First of all, if the job protection commissioner is involved, for example, in the case of Cominco, the southeast coal problem generally or northeast coal and rates are an issue, one of the parties could contribute to the economic plan by reducing their rates. We can get involved that way, and we do assist the job protection commissioner in doing the evaluation. Usually there would be some kind of corporate team put together to try to draw in the Crown corporations if there's a Crown corporation. Obviously we would try to lean on them to see if they can come to a commercial deal that they can live with as part of their business plan but one that is also good for the industry as a whole. If we're looking at a green field project -- for example, a mine somewhere in the north -- and there is a need to have a certain threshold price for transportation to make the project feasible, the government could get involved in suggesting that maybe the provision of infrastructure to get the railhead, barging facilities or whatever.... Then we can get involved in doing some of the preliminary economic benefit studies that would justify the projects.
We're not a regulatory agency; we tend to be an advocacy ministry. We try to take the firm-specific, project-specific proposal and run it and assist the private sector investor to get the financing or regulatory approval they need. In some cases, direct infrastructure assistance is appropriate. So we are involved to that extent. We have a very broad mandate that tends to get more specific when you zero in on a project. If in the process we identify that there is a general competitiveness problem with respect to rail transportation, then of
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course we would draw that to the attention of the agency that controls that and try to make some suggestions in and around what can be done.
D. Jarvis: As you're probably aware, the cost of shipping coal back to eastern Canada through the United States is about 30 percent cheaper, ostensibly due to our interprovincial fuel rates. There is no general overall plan for the government to try to assist.... I'm specifically talking about the Elk Valley. It's up and down any moment now; hopefully it's going to remain up. But there's no overall plan for the government to try to assist them by either dropping the rates on fuel taxes to go east or dropping the rates to ship the coal to the salt water through B.C. Rail, for example?
Hon. D. Zirnhelt: In the case of the Elk Valley, there are lots of things that we're working on with respect to the restructuring. We have been more involved in the past than we are right now, but we were looking at the whole industry and competitiveness issues there. A lot of the things that we do centre around productivity. But as far as competitiveness in the fuel rates, this is a problem all across Canada, as you know. I am personally very concerned about the growing north-south linkages as a partial result of the free trade agreement, which tends to threaten the east-west connections in this country. I think that is an area we have to deal with.
The Minister of Transportation and Highways is actively working with his colleagues in western Canada to examine some of these issues at the present time. But transportation-mode-specific questions should be directed to him, because he's up on it. We recognize the problem, but we also recognize that if there's a cost to reducing the fuel rate, it may not be offset by the benefits. That's usually what happens; usually the costs of making a change are greater.
D. Jarvis: On that aspect, free trade might be a benefit. We might just throw a spur down there and ship our coal 30 percent more cheaply through the Yankee rates.
In any event, I want to go to another subject: power and cogeneration. For example, you're probably familiar with Lytton Lumber up in the interior. I was wondering if there was any allocation of funds from your ministry for them. They're having problems getting approval for a cogeneration plant to burn their waste, and they have fluctuation of power and all the rest of it.
Hon. D. Zirnhelt: We are very anxious to see that whatever co-gen projects are commercially viable get up and running. One of the problems we have with respect to the Lytton project is that at present B.C. Hydro doesn't need to purchase any more power. There is an argument, I know, about whether or not there's adequate supply to the Lytton area, but Hydro maintains they can service that area and are servicing it adequately. Lytton Lumber has had considerable assistance in making their business viable through the Job Protection Commission. We realize that if they were to add a co-gen facility, the viability would be enhanced; but what would make that possible is the underlying probability of a subsidy.
Right now the consultations we did through the Energy Council indicate that communities generally throughout B.C. don't want to see the general taxpayer, the hydro consumer, pick up the subsidy for local economic development. That's a very big policy area: providing a local benefit but transferring the cost to all of the province of B.C. If the greater premium that B.C. Hydro might pay any given project were transported across the ten or 20 other similar projects in the province, the cost would be substantial. The cost for any given co-gen would be very small on your and my hydro bills; but if you add them all up and you have a fair program, you've got a bigger problem.
[5:00]
We have said that we are open to power exports. So if Lytton Lumber can find a market for power at competitive rates, then B.C. Hydro would undertake to wheel that power down there. This is a very complicated area. Were it possible for us to get dozens of these up and running in every community, we would be more than willing to do that. In fact, we are constantly studying the economics of these projects, constantly trying to find an angle where there doesn't constitute a large subsidy on behalf of taxpayers to that specific company or that community.
D. Jarvis: You mentioned B.C. Energy. Did you make a proposal for cogeneration plants throughout the province with the Energy Council?
Hon. D. Zirnhelt: No, we didn't make a presentation to the Energy Council as such, but as an agency within government, responsible for economic development, we have constantly been studying these; in fact, some of the original feasibility studies were funded through our ministry. We have taken those and carried them within government. The obstacle was energy exports, so now that we've cracked that nut, we have the potential there for some of these projects, if they can find a market. One of the problems with a lot of these proposals is that they don't have a market. People assume that B.C. Hydro has an infinite capacity to purchase electricity, and right now we have a surplus to about the year 2000. The economics are difficult, because they would have to come in at under the avoided cost of B.C. Hydro providing that out of existing sources.
We recently provided Lytton Lumber with a $382,000 loan guarantee under the Job Protection Commission and that substantially assisted that particular firm.
D. Jarvis: There was added value in ANG and Fording in the Elk Valley, for example. The information given to me was that they had contracts with the United States and that if we had given them approval for cogeneration plants at that time, we wouldn't have had to use the gas being shipped out of our Peace River into the United States -- in Washington, where they built four electrical plants and there goes our added value.
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But they had contracts, from what I understand. Am I not correct in that?
Hon. D. Zirnhelt: Yes, it's my understanding that you're correct. I'm sure about the ANG one. As I understand it, the roadblock is out of the way for them so they now can apply.
One of the problems around natural gas though is that as a rule it remains cheaper to transport the gas in pipeline and generate the electricity across the border than to generate the electricity here and run it across the border. The economics are in favour of the cheaper transportation of gas across the line. We're not in a position to put an export tax on gas under the trade agreement, so the economics have to be in our favour. There has to be some regulatory way that it's trade defensible -- FTA-proof and now NAFTA-proof -- in terms of creating an incentive here. It's more and more difficult to do that. The economics have to be clearly in favour of the type of production you're talking about, but we agree that if it is possible to encourage the added value on this side of the border, then we will do that.
Again, I'm in a field that is both the responsibility and within the knowledge of the Minister of Energy, so you should pursue it a bit there, although I think they are finished their estimates, so...
Interjection.
Hon. D. Zirnhelt: No they're not? Okay, there you go.
D. Jarvis: Do the economic development officers that you have, for example, up in the Cariboo area -- say Quesnel and all the rest of it -- organize or assist the placer miners at all? Do they have some input into developing markets for them?
Hon. D. Zirnhelt: They certainly can. We've had two people in the Cariboo and they're going to be replaced by probably five in the Cariboo development region. They aren't all in place; there is presently one or two in place. As a rule our people deal with regional issues. To the extent that there is more than one community involved -- likely the Barkerville area and maybe some other minor areas -- we could work with them in terms of developing projects and ideas. In terms of our people sort of going to the wall and taking runs at the provincial government and suggesting they have to eliminate all the restrictions in the business, you will find our people very diplomatic.
V. Anderson: I'd like to ask some questions in the area of aboriginal relations with the economic development program. Perhaps the minister might just give me a brief summary of the involvement of the program in the area of aboriginal interests.
Hon. D. Zirnhelt: The previous government provided very little services through my ministry; it was considered essentially a federal responsibility. We are very concerned about continued off-loading by the federal government. We will share in the responsibility for the long-range solution to the economic problems of aboriginal communities. Because of the nature of treaty negotiations, and to the extent that there are substantial resources involved, we expect the federal government to pay their share of the cost of economic development.
Having said that, and having worked in this field myself in the past, there needs to be a provision of services by the province to the aboriginal communities on a equitable basis. People who need assistance should have the assistance, so we are providing for an aboriginal business advocate within the Ministry of Economic Development. To my knowledge, that position has not yet been staffed. We need to have somebody very capable of working with all the various tribal councils and individual bands. We will take a lead role in looking at each community and its economic needs to the extent that we have resources available.
We are currently working on an aboriginal economic development strategy for the province. We have contracted some consultants, and at least one of the principals is aboriginal. We are doing this together with the Ministry of Aboriginal Affairs, and we are consulting with the aboriginal economic organizations and communities as to what the best role of the province is, if any. We have said that we will make resources available. On a number of occasions we have assisted with feasibility and pre-feasibility studies and in generally trying to remove obstacles to development projects. Our work in this field is in the developmental stages.
V. Anderson: In some of our work on that committee with the First Citizens' Fund, one of the groups we met with were some of the chartered banks, who are also bringing aboriginal consultants and financial advisers on board. They are not in the business of offering help and assistance; they are in the business of managing the large amounts of funds and business that they see the aboriginal people are going to have. It seems to me that there are two aspects to this: one is thinking of people who need help in the beginning to get underway; the other is of the people who will have millions of dollars in lands and resources that they will be able to share. On that side, we are looking at the question of how the province benefits, not in the needs but in the wealth of the aboriginal. Is there a consideration on both sides of that ledger at the moment?
Hon. D. Zirnhelt: We are working in a couple of areas. One thing that government has, even if they don't have a lot of money, is information. Our people provide professional advice. For example, our industry and investment branch has people working in the primary industry area, and we have some experts in the management of loan portfolios. If an aboriginal development corporation needed some advice that they couldn't get through other sources, then we're in the position of assisting. Planning economic development is the area where our ministry would probably be involved most intensively. We also would look at gaps in the capital market. As you understand, there are a lot of inadequacies in the Indian Act and ways in which
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you can't provide security for loans. The Native Fishing Association has a proposal out for a loan guarantee program strictly on a commercial basis, but it requires some consideration of guarantees. We would have to look at any area that is designed to solve a problem.
We welcome the opportunity to assist in the planning of economic development and self-sufficiency strategies for aboriginal communities. We want to get some experience community by community. We want to work with them to the extent that a partnership is desirable and, as they see some resolution of land claims and the provision of dollars, to look for investment opportunities for them. Obviously we will work with them to find ways to do that. Of course, with the exception of the Nisga'a, it's quite a way into the future, but I think we need to be positioned in terms of what we provide and what the federal government provides. My guess is that in the case of the provision of self-government advisory services, they may want to run a program of financial advice, for example. on their own. That would be the subject of negotiations. Economic development packaging that will contribute net wealth to the communities -- aboriginal and non-aboriginal -- will, I expect, be the exciting part of the land claims negotiations.
V. Anderson: Is there any coordination in Economic Development of the different ministries? Many of the ministries are dealing with economic people, and nearly all of them have some economic aspect. There are just so many ministries out there. Does anyone have an overview of the total finances from government that are going to assist the aboriginal community? It seems to me that this body, more than any other, is likely to have that information.
Hon. D. Zirnhelt: Economic development is a broad field, so forest policy, in some cases tax policy, some of the environmental policies and so on -- areas that aren't our primary responsibility -- have a major effect. Because of the constitutional uniqueness of aboriginal people, the lead role rests with Aboriginal Affairs to oversee, broadly speaking, economic development. We are very close partners with them inside government. Our role is to provide business assistance. You could say that while we have a specific role as a general economic development ministry, business development in particular is the aspect. It tends to look very specifically and pragmatically not at the provision of resources but at what to do with the resources. The further away you get from resource management issues into the actual development of discrete businesses, the more predominant our role.
Our role is concentrated on the business development side of things, but they take the lead in all aboriginal policy. As you get down to areas where we're more the lead, we work really closely. In the case of aboriginal economic development as a strategy, that project is co-managed by the Ministry of Aboriginal Affairs and the Ministry of Economic Development.
[5:15]
V. Anderson: As I understand it, there are economic development officers throughout the province. Is there a particular role those economic development officers have in dealing with the aboriginal communities within their jurisdictions?
Hon. D. Zirnhelt: Yes, there is a particular role. We have identified groups and communities that have high unemployment as targets of some of the work programs of our staff. We are not yet staffed up, but when we do get staffed up it's our hope that some of those people will be aboriginal people. Take the case of Prince Rupert. We specifically put two people in there because of the large number of aboriginal communities in the Queen Charlottes and on the north coast. We felt that in order to service that population properly, we had to have two people in there. But we have not specifically identified individuals who are aboriginal economic development people. We do have an advocate here, as we have a businesswomen's advocate, and if we develop aboriginal programs then all our officers will administer them.
It is expected that if we have someone with expertise in women's programs, small business, aboriginal economic development, mining or forestry, they will play somewhat of a specialized role. But that's simply a matter of looking at the complement of staff that you have and assigning them appropriately. We are actually quite excited about helping in a small way -- because we don't have large amounts of dollars -- by tripling our staff in the rural and remote communities. We will be part of that team that can assist -- not by performing any miracles but by putting concrete steps in place so that there is an enhanced level of development in aboriginal communities.
V. Anderson: It would seem to me that what is very much needed -- and perhaps your staff is in one of the best positions to do that -- is an area of communication in a multiple direction. It's not necessarily always giving information or expertise to aboriginal people; it may be more important to find out and interpret on their behalf -- to government, community and other organizations -- what the aboriginal people wish to say or the cooperation they're looking for. That spokesman or mid-ground mediation point of view between the aboriginal people and the other economic communities that they need to work with may be an important role for those particular bodies.
Hon. D. Zirnhelt: Yes, you put your finger on a very important function. Unless an aboriginal community has experience in business management -- and a lot of them do now -- they need some assistance in the language and techniques of business and economic development. Clearly our people out in the field -- and that's why we have more of them -- will be in a position to facilitate that interaction. In fact, when I did my series of consultations around the restructuring of the regional division of the ministry, we pulled together aboriginal leaders with other business leaders and had some cross-fertilized discussions. In some cases, that was the only forum in which they had ever
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participated where there was this kind of discussion. We have had a problem where we have had two solitudes in economic development in the province, and we'd like to see the erosion of those two solitudes.
V. Anderson: Perhaps I could follow that up in two particular areas. As we visited with some of the bands, there was the problem that they were small in numbers and resources within the band, yet they needed to develop a basic resort for the band community, or even a store, post office or small independent business for the people of the band. Is there a particular focus in your ministry to help them with those small, what we might consider natural, businesses that happen in a small village or town where a group of people live together and need the local resources?
Hon. D. Zirnhelt: We recognize that in a lot of these communities, especially the remote ones, import substitution or self-sufficiency in the provision of services provides the greatest opportunity. You've got a captured market and knowledge of the local market.
Our business start-up assistance, the soft services to business, are available. If there's an identified need for entrepreneurship training, business opportunities, marketing -- all those kinds of things -- in a community, we try to pull together the people who have knowledge about that field. It may be the Federal Business Development Bank, the local Community Futures or somebody else who has the expertise, but our people are the generalists in terms of providing the services.
One of the areas where we've helped, and will help, is the Gwaii Trust, the economic development corporation that's proposed for the Queen Charlottes as a result of the South Moresby agreement. That already has funding. We are assisting with a structure that will provide ongoing advice to businesses that might develop in that area as a result of the funding that's available to offset the creation of Haida Gwaii.
V. Anderson: One of the areas that I've been aware of, coming out of my experiences with church work overseas, is the extensive work that's been done with small, community credit unions in developing countries. It's interesting that they came out of Canada's Maritimes originally, as you'll already know; yet I'm surprised that nothing of that appears to be happening here in B.C. I'm wondering if you've given any thought to helping these small communities begin with small, self-help credit unions. They can have basic banking privileges and build up their capital even from a small resource. That's a tried and proven way that we're exporting around the world but not using here. I'm wondering if something like that has been thought about or discussed.
Hon. D. Zirnhelt: One of the tools available, of course, is small credit unions. The answer is yes, and I'll give you two specifics that we have been involved with. We are looking at the provision of funding for commercial development through credit unions that are already existing or through the extension of the existing credit union system. We're also actively involved in consultation with some of the small, independent credit unions that have grown up, some of them in urban areas, to see if community-based, cooperative credit unions have a role to play. My guess is that we have to look at commercial lending as an essential service that's provided on a local basis.
One form of that in the business development centres is funded through Canada Employment and Immigration services, but we are very interested in this field. We don't have a program right now that says that this is how you get up and start it, but we have had discussions at the most senior level with the B.C. Central Credit Union. We are working on some ideas that will see us involved in some way, maybe by underwriting some of the risks. At this time, it is very premature to say exactly what that might look like, but we have begun the discussions.
V. Anderson: I'm glad to hear that. As we travelled, one of the topics that came up very often was that possibility, and there was a great deal of interest in it. I am sure it has a great deal of possibility if it gets developed further, and I hope that it's fairly soon so that they can take advantage of it.
I would like to ask two separate questions. One question regards the brief discussion we had about the relationship with band and on-reserve people. What about cooperation with those people who are urban Inuit or M�tis -- the people who are living off-reserve who do not have the same kind of cohesiveness and togetherness as Indian people in Victoria and Vancouver? The smaller areas such as Prince George and Prince Rupert are perhaps easier to work with than the larger urban places, but those off-reserve people need opportunities.
Hon. D. Zirnhelt: We have nothing specific now, other than our general programs. On a pilot project basis, Aboriginal Affairs has provided funding for aboriginal economic development officers in urban communities. I would use the example of Prince George, for one. There are several of them around the province. I would encourage you to discuss those programs with the Minister of Aboriginal Affairs, because it's his program, but it's directed precisely at the target population you mentioned.
V. Anderson: Taking a slightly different approach, one of the realities in the educational system is that over the years there has been a tendency to train aboriginal and other people in "Western educational ways." That has not been very successful, because it has not been very appropriate. Some are able to adapt to that, and that's fine. But I have a concern with regard to economic development. Are there opportunities of working with young aboriginal people? It is important, particularly at this point, to help them develop educational and training programs for aboriginal business undertakings, not in Western but in aboriginal styles, so that they can grow and develop in their own fields, and then share their perspectives with us.
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Hon. D. Zirnhelt: The aboriginal business advocate positions that we will staff should look at the suitability of programs. If our training programs aren't adequate, they would be in a position to advise us on modifications. Similarly, the local regional economic development staff have the power, under their regional directors, to adapt existing programs to meet local needs. So to the extent that we have training programs and soft services to small businesses, these people can adapt them to meet the local needs.
I would point to one thing in particular that we have done. Working closely with aboriginal organizations that are formed on a provincial level, we have provided capital financing and assistance for international trade activities. The Native Investment and Trade Association, in particular, is one we are working with through the Nexus promotional program. They're trying to bring investors together with potential marketers and businesses. We've assisted them, but they are driving that. We're just a vehicle of convenience to provide funding.
V. Anderson: A number of questions came up when we were looking at the First Citizens' Fund. At the moment it is administered through the Aboriginal Affairs ministry. When we were looking at that field, there were discussions as to whether it would be better administered through the Economic Development ministry and become a part of a wider package in that regard. I was wondering if the minister has any comments on that.
Hon. D. Zirnhelt: I think it's premature to say. I could muse a bit on it, but I would like to see the report. We're certainly open. If it is the advice of the legislative committee that there should be an enhanced role for our ministry, we're willing to help. But I don't have a predetermined position on that right now. I think the issue is probably how you can best get the administration as close to the communities as possible. Rather than run it through an administrative mechanism of the provincial government, can you enhance the role that's played by the aboriginal capital corporation, for example? We would be very interested in whether or not specific institutions at the regional level are more appropriate. I've had discussions that kind of parallel in a general sense some of your activities. But because you people were actively involved in that and, I think, covering the bases pretty well, I haven't personally put a lot of effort into it. We would take that advice as it comes from your legislative committee.
[5:30]
V. Anderson: I appreciate that. The final area that I'd like to ask about is whether there is a particular program within your ministry to get information out. That's one of the things I discovered in travelling, that there was no information about programs that were available. There was no information by which people could even know where to turn or who to ask or how to get help. It was that lack of information that seemed to be the first stumbling block among the aboriginal community.
Hon. D. Zirnhelt: Yes. I think you put your finger on the exact reason why we enhanced the amount of staff in the field. The regional economic development officers will provide information on existing programs, and that will be one of their key functions, in addition to facilitating projects.
The business information centres that we have funded have been primarily through the chambers of commerce. My guess is that there's an area where we could provide better information. These are open to aboriginal business people, but they are not located in aboriginal communities. I think we have some work to do on that. We have to be cautious, though, about the aboriginal economic development officers that work with the tribal councils and bands, in terms of duplicating information there. If as an MLA I get an inquiry, I refer the aboriginal businesses to the regional Economic Development people, and then they suggest a business information centre or the Community Futures, or whatever. So we are providing that role, and when we are fully staffed we will be able to provide more of that. I think it's an important area that has been overlooked. But our staff have been under instruction to provide this kind of information or advice. If we did a measure of what was provided two years ago and what was provided this year, I think, even without all the staff in place, we'd find an improvement.
V. Anderson: One of the areas of communication I found most helpful, not only in talking to the aboriginal people but in dealing with people in communities of non-aboriginal people, is the community newspapers and the aboriginal newspapers. I'm wondering if you have a program, not of advertisement per se but of information-sharing, through the regular aboriginal medium? It seems to me that the best way you're going to contact the grass-roots aboriginals, if you like, is through their aboriginal medium.
Hon. D. Zirnhelt: I think that idea is very worthwhile. I have had some experience with advertising in the grass-roots newspapers. If you want to get to the people, you go to those things that they read. I'm sure our people will be looking at every technique to get the message out to people who have different means of communication and for whom there is a cultural difference. Clearly I'm supportive of that, and I will expect our staff to do that. My guess is that they're trying to do more of that, bearing in mind that we aren't staffed in the regions yet.
As for advertising, we advertised in community newspapers, which more and more aboriginal people read, when we advertised our regional economic development officer positions, hoping we would capture some of them who might be interested in the jobs.
G. Wilson: Mr. Chairman, I'm delighted to have an opportunity to enter into this set of estimates. I wonder if I might be permitted a bit of an observation. Having
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these estimates in two Houses at once, one tends to jump around from estimates to estimates, and you get to see how different ministries are structured. There seems to be a somewhat consistent pattern in terms of the seating. This may be a bit of a frivolous comment. I notice that the women attending are consistently sitting at the back, not at the front. That may be an item that ministers might want to look at: bringing the women forward and letting them sit in the front rows. I'm sure the Minister of Women's Equality would like to come to the front row.
Having said that, let me talk a bit about specific community development projects. I wonder if the minister might tell me a bit about the process and about money that is dedicated to municipal and regional economic development proposals done through EDCs that are set up. Obviously I have a particular interest in the Hillside development project on the Sunshine Coast. I'm sure the minister is well aware of that and is very conversant on that very successful project. What we're attempting to do, now that we have the Hillside Industrial Park development underway, is find an ongoing mechanism to have dollars available for the administration of that facility and also some ongoing development assessment of how it might be as progressive a development as possible. I wonder whether the minister might want to comment on the facilities that are available within the ministry for such proposals and developments and how municipalities and regional districts that have local EDC-developed proposals underway could access additional dollars for the administration of those programs.
Hon. D. Zirnhelt: I think the member is asking what dollars are available. In the economic development program, generally $30,000 to $40,000 in core funding has been available to local commissions. This year we are attempting to work with those commissions to look at some kind of performance-based financing so that the money goes to the communities that have a business plan and the ability to develop on a business plan.
On Hillside specifically, I don't know where that is this month, but if it points to a need for ongoing capital or infrastructure funding or something like that, our ministry should be able, through its regional staff, to tap into the assistance necessary to help that community develop a business plan or assess its needs. We have specific community initiatives. A pot of money is available for small projects. There's $5,000 to $10,000 -- sometimes less -- to conduct usually a pre-feasibility study. I'm not sure of the specifics that you're getting at with respect to Hillside, but I'd be happy to try to respond.
G. Wilson: No, I'm not talking about core funding. I'm well aware of that, and I know money is available for the development of business plans. Hillside Industrial Park, that has been developed between Port Mellon and Langdale, just next to the Port Mellon mill, has been underway for a number of years. It is a very successful project, and one that's going to be a revenue-generator. I'm not looking for money per se for the Hillside project. I'm looking more for a coordinated function as that industrial site becomes a more integral part of the overall economic growth of the lower Sunshine Coast. What is obviously restraining the ability of the EDC, which is an agency of the regional district, is that there's a limited amount of money under statute that the EDC can generate for that function each year. By law -- as the minister is well aware, I'm sure -- the EDC can't simply go out and spend more than it has dedicated to it through the regional district. What would facilitate the growth and development of that area in the Hillside Industrial Park proposal, which is unique and has had the cooperation of four levels of government -- if you include the involvement of the town of Gibsons and the regional district, as well as both federal and provincial governments -- is getting the Hillside industrial authority that's been set up some kind of interchange with the Ministry of Economic Development to have ongoing assessment -- that's what I'm looking for, really -- of the economic potential that this development might bring.
To give you an example, we're looking at the potential of a deep-sea port. There is a very real need for marineways. In fact, with the removal of the marineways in the lower Fraser River and lower mainland areas, the Sunshine Coast has become a very attractive place for people to access marineways. There is only one that I'm aware of -- it's right in the heart of Gibsons. It has limited potential because of its zoning and regulation. The Hillside Industrial Park development site has a potential for a major marineways development.
The ministry might be able to help us to facilitate the regional planning that's going into the availability of marineways if there was a coordination function so that two competing municipalities don't go after the same kind of business -- if the minister can understand what I'm saying -- and compete each other out of any potential for profit. That's what I'm talking about.
Hon. D. Zirnhelt: Yes. You may not know -- but you may -- that we have had a person working half-time for the last several months on precisely some of those issues. We have a cross-ministry mandate to the extent that if something is needed for the economic development of a community, region or sub-region, and we identify it through our regional economical development staff, we enhance them with available staff. The Nanaimo office is key to bringing problems that are of a cross-ministry nature to my attention, either through the regional advisory council, if it's functioning in a way that helps, or, if it's a policy or coordination issue, it gets identified by our regional director and he brings it to my attention.
We are really happy to try to facilitate inter-governmental cooperation. That's one of our roles with respect to any economic development proposal. We will, of course, want to enhance the ability of these local economic development corporations or whatever they are, to operate on their own, but we make available the expert advice of the sectors that are available.
I don't know about marineways, whether we have in our ministry or in some other ministry the expertise to
[ Page 6703 ]
assist in that. I know that in the case of the harbour development on the Queen Charlottes we went to the federal ministries who had the harbour development ability. So, as you say, there are four levels of government involved, and we are one of the partners, the provincial partner. It's our intention that on a corporate basis our ministry personnel out there are the representatives of the provincial government and will accept corporately the responsibility to bring under that umbrella those other ministries that relate to that development. So if we have problems out there, it's our ministry's responsibility to try and get a focus on that within the provincial government.
G. Wilson: That's an interesting answer, Mr. Chairman, because that intergovernmental or interministerial work is precisely what is needed, and I am delighted to hear that this minister or the ministry is attempting to function that way, because if I were to again use the case of Hillside as a development potential, one of the areas in which there can be an integrated use of that facility is with respect to bulk fuel storage.
Within the communities that make up the Sunshine Coast there are a number of sites where bulk storage of propane, bunker fuel, petroleum and whatever else they have stored there could be centralized into that facility. What's needed is an overall coordination for the economic development of the region itself. It becomes difficult -- as the minister, I'm sure, would be aware -- when you have a competition underway at a municipal level for who gets what little bit of industry. A result is that sometimes cooperation is missing. I don't mean to point a finger necessarily at my own community, but I don't think it's any secret that in my own community there has not always been a good deal of cooperation between municipalities. I don't suppose that's much different than anywhere else in the province.
A coordinating agency can come in to do an assessment for regional economic growth that says: if we move those kinds of developments into this area, this area will benefit as a result of the opportunities that will be made available to something else. That kind of overall economic assessment of a region facilitates the local economic development commissions. I don't know what economic development corporation the minister is talking about; I'm talking about the economic development commissions that are constituted throughout the province. These commissions and the people actively working within these commissions can facilitate at a local level the kind of economic development that's suitable for those communities. At the moment, there doesn't seem to be any of that coordination and that ongoing regional assessment doesn't seem to be taking place. My questions are driven toward the establishment of that kind of assistance from this ministry. It is not money we're after; effectively, it is economic planning, for want of a better term.
[5:45]
Hon. D. Zirnhelt: I don't know whether the problem of this particular sub-regional issue of bulk fuel storage has been solved; I don't have the details.
I suggested that our ministry assisted local economic development authorities. You talked a bit about them being restricted. Development corporations that can make and spend money are not restricted. I was alluding to the fact that the independence of those corporations, with the flexibility of behaving as a regional development corporation, can undertake some of this facility development and coordination on a sub-regional basis.
We have a long history of encouraging cooperation between agencies and communities in an area in order to look at things that are in their own interest. Our ministry can stand on its record of bringing local leaders together to look at a broader regional interest and put aside narrower parochial interests. If there is a problem where there is competition where really there should be cooperation, we can provide some of that. I don't think we are up to speed on it, because we are just getting our regional units going.
As I said, the senior person in Nanaimo.... I would be happy to identify that as a potential problem -- if you would like to write to me or have the development commission write about this -- and give you the scope of some of it. I would be happy to ensure that if they aren't on top of it, they will get on top of it. Our director in Nanaimo has an economic development officer there, but there is also one in Squamish. I believe that area is handled by the person out of Squamish. He should be able to help you, or help the community organizations considerably. If there is a problem we aren't looking at in terms of facilitating local sub-regional economic planning, then we would be happy to pull together the groups necessary to do that.
G. Wilson: I appreciate that invitation, and I will follow up on it. I would like to move to an important area that has to do with education as an economic activity. I ask the minister this because I'm curious to know, within his ministry, and given that there is this interministerial development.... I notice that the Minister of Advanced Education is in the House, engaged in the debate with intense concentration, and so would be likely to hear my comments today. I wonder whether the Economic Development ministry and the Ministry of Advanced Education have looked at the potential of advanced education development in smaller and regional communities in terms of the overall growth and development of such regions.
Once again, I could use an example from my own community -- not that I want to be seen to be too much of an advocate for my community, though I don't think there's harm in doing that. A number of community-sponsored activities have had tremendous success. The Festival of the Written Arts is not generally considered by most outside observers to be an economic stimulant, and yet it brings a tremendous amount of tourist dollars and revenue into that community in the summer -- an excellent community-based program. There is a growing and very well-recognized artistic community in the Sechelt area, at Gibsons and Pender Harbour.
[ Page 6704 ]
One area of economic stimulus would be to bring a post-secondary educational institution, or some reasonable facsimile of said, into the Sunshine Coast, so as to further what is already a very active and well-developed service infrastructure that is both economically and socially beneficial. I wonder what the ministry's thinking is along that line. Let me just ask you that, and then I'll come back. I'm delighted, Mr. Chairman, that my question managed to bring one of the women present in the staff to the front benches, and I think that's a step in the right direction.
Hon. D. Zirnhelt: I'd hate to admit there was a cause-and-effect relationship. Catharine Read is our ADM of community and regional development. As your question focused on that, this chair is occupied by the executive member responsible for that program area. That's why Catharine is there now. I would assure you that if you now were to get into industry and investment, we'd have somebody else here; and if you talked about policy planning, we'd have somebody else in this chair. By the way, we have dramatically increased the number of women in management positions in the ministry, and we hope our present competitions will show a more equitable number of women in our field positions.
Just to back up a bit to your previous question on coordination, we haven't staffed the Squamish position. We are currently doing so. When the person is in place in Squamish, which will probably happen over the next month, you as an MLA should be in touch with that person and make your views known. They're free to take some direction from MLAs in terms of priorities for the region.
With respect to education as an economic activity, we recognize people's education and skills as the basis of competitive advantage in this new economic era. There's no question about that. I think we have to do a lot of work in the communities to look at the provision of infrastructure or programs and services in the field of education and cultural development generally -- set that off and look at the optimum combination of physical infrastructure, for example. In my consultation with communities I've posed the question: what is a relative weighting of education and training versus physical infrastructure? People in the communities aren't sure of the direct economic advantage. They know there's an advantage. They don't know where scarce government dollars can best be spent, and that, of course, is what local planning does.
I can give you an example of an area where we have moved on this. We have looked at the Kootenays and the provision of higher education services. The ministries of Tourism, Economic Development and Advanced Education have together funded the Fulton commission. Margaret Fulton is consulting with communities and looking at constructs, whether it's brick and mortar or the provision of services in existing facilities. We've done that because we recognize the importance of everything from an institute of art, for example, or an institute of higher education dealing with cultural programs, right down to skill development, school completion and so on. We've looked at the whole range of activities. We are interested in that; we do work with Advanced Ed. We are active in the development of the Premier's summit on skill development. That is going to be government's focus to try to give some general direction.
With respect to cultural industries, which you alluded to, the Minister of Tourism and Minister Responsible for Culture has been actively working with us. We are trying to find out whether or not the federal government is interested in funding these programs and just how much we can focus on viable businesses as opposed to the provision of cultural infrastructure. Our general take is that while there is terrific growth potential in artistic and cultural industries, there is generally a shortage of viable projects in that field -- that's not to say there aren't some. It's in an area we certainly would encourage, and we are working with the Ministry Responsible for Culture with respect to that.
Noticing the hour, I would like to move that the commitee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply B, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. P. Priddy moved adjournment of the House.
Motion approved.
The House adjourned at 5:56 p.m.
The House in Committee of Supply A; D. Streifel in the chair.
The Committee met at 2:54 p.m.
ESTIMATES: MINISTRY OF ENVIRONMENT, LANDS AND PARKS
(continued)
On vote 32: minister's office, $375,354 (continued).
[ Page 6705 ]
W. Hurd: For the benefit of the minister, this is the day, by prior agreement, that we were going to deal with issues pertinent to Lands and Parks. I will be in and out of the debate for the next half-hour. The questions pertaining to the Crown lands special account will be dealt with around 3:30 by the Leader of the Official Opposition, Fred Gingell. I would expect him to be in committee by 3:30.
The Chair: Just a reminder, hon. member: the reference to an hon. member by their given name is not appropriate in the House. I would just caution the committee that sometimes with the casual atmosphere of Committee A we tend to forget these things.
W. Hurd: Thank you, Mr. Chairman.
With respect to Lands and Parks, I wonder if the minister could explain to the committee the exact nature of the policy that governs the transfer of ownership of provincial parks into the hands of regional districts and local governments. This issue has come to the attention of the opposition in a couple of sites around the province -- particularly the impact those changes in ownership will have on the existing usage of those facilities. Perhaps the minister could amplify for the committee what demands the ministry makes. Is it specific to the individual park, or are we dealing with a general policy?
Hon. J. Cashore: With regard to the transfer of Crown lands into parks, there is specificity around each of those transfers, given that in each situation we're dealing with a unique number of factors. I would point out to the hon. member that it was our understanding that we were going to be dealing with Lands issues today. I realize there is a bit of a crossover between Lands and Parks in that question, but it sounded like it was heading in the direction of a Parks question. My understanding is that by prearrangement we would have our Lands officials, not our Parks officials, here today.
W. Hurd: Fair enough. I'll defer those questions on Parks, then, to a more appropriate time.
Perhaps I could ask the minister some specific questions about the ski hill policy as it relates to Crown lands in the province, specifically the significant change in the lease price for Crown land used for ski facilities from, I believe, a sum of $l,500 an acre up to $5,000, or somewhere in that vicinity. Could the minister offer us the rationale for such a large increase? What types of additional costs is it meant to offset for ski hill operations in the province?
Hon. J. Cashore: The basic factor here is that we seek to get market value for the land; therefore, given the site-specific circumstances, it would vary throughout the province. The fact is also that our ski-pricing policy is an issue that we are negotiating at the present time, and so some of these matters are subject to a further conclusion of the negotiating process.
[3:00]
W. Hurd: Can the minister offer the committee some advice as to the nature of the agreement at Tod Mountain? Can the minister confirm that in that instance the developer, the Nippon Cable Co. of Japan, is negotiating or has negotiated to actually purchase Crown land outright as opposed to taking a long-term lease, which I believe is the major provision in the new policy regarding Crown land for ski hill operations?
Hon. J. Cashore: With regard to Tod Mountain, the Nippon negotiations and the Nippon relationship are consistent with the existing policy -- which, as I said a few moments ago, is being updated. The land that is subject to lease is the hill, and again, that is consistent with policy. The lands which would provide the support type of services, for lodges and other structures, would be subject to outright purchase -- that again is consistent with policy. The figure of $5,000 in some of the lands involved here would be an accurate figure. That's $5,000 per acre. Some of those lands that are subject to that arrangement are $5,000.
W. Hurd: Referring specifically to the document from the Ministry of Lands and Parks on the commercial alpine skiing policy, there seems to be an implication that, from a policy standpoint, the ministry would prefer to deal with a long-term lease or tenure in terms of Crown land for use as day lodges, public parking areas, lift equipment, maintenance, buildings, etc. Can the minister advise us what rationale would be used to deal with an outright sale as opposed to a lease, which appears to be the preferred method of dealing with Crown land disposal or Crown land tenure for ski-hill operations in the province?
Hon. J. Cashore: The policy, as I understand it, is that the lands that are subject to sale are the lands that would hold the various support services, such as lodges, but the lands that are subject to lease are the actual skiing lands.
W. Hurd: With respect to Tod Mountain Development, can the minister advise us what percentage of the land was actually leased and what was sold at fair market value? I think the people in the city of Kamloops who approached us seeking clarification on this may be confused themselves as to exactly what has been the subject of a long-term lease and what has actually been sold, because they're having some difficulty reconciling the price paid for the direct sales with what appears to be the prevailing market value for lots and acreages around Tod Mountain.
Hon. J. Cashore: Nothing has been sold at this point. The existing leases and rights-of-way on the hill have been taken over by Nippon, and that amounts to approximately 99 percent of the property in question. They do have a right to purchase, subject to certain conditions that have to be met with regard to those lands that would be used -- for want of a better word -- for infrastructure.
[ Page 6706 ]
W. Hurd: Can the minister confirm whether the company has obtained an option to purchase that percentage at a fixed price? Or would it be the prevailing market value at the time the purchase would actually go through?
Hon. J. Cashore: I apologize. I missed the first part of that question, so I wonder if it could be repeated.
W. Hurd: I was inquiring whether the company had an option to purchase the land in question -- the 1 percent he alluded to -- at a fixed price, or whether the price would be the market value at the time the sale was completed.
Hon. J. Cashore: They have a right to purchase a small quantity of land at $5,000 an acre. It's based on a ten-year term. I want to emphasize that it's raw land we're referring to here. They would have to take on all costs of servicing and fulfil certain requirements with regard to on-hill development in order to qualify.
W. Hurd: So the minister is telling us that that is a fixed-price option. Is the ministry satisfied in this case that incremental development, which may occur on adjacent leased land, would not have the impact of increasing the value of the Crown land that is being sold at what appears to be a relatively modest price? Accepting the fact that it's unimproved at this point, has the Ministry of Lands examined the total development package to satisfy itself that the $5,000 price will reflect the fair market value within a period of four or five years?
Hon. J. Cashore: Yes. The ministry has satisfied itself in that regard and has tracked that kind of investment with regard to that kind of hill. In order to attract that kind of investment, it was necessary to do that kind of research.
J. Tyabji: I'd like to talk for a little while about the Beaver Lodge lands in Campbell River, as my colleague has a meeting. I think that the issue is more than just site-specific to Beaver Lodge lands. With the appearance of the letter from 1931 about the purpose that the lands were allocated for -- which I think was pretty specific -- and what it is being used for, it seems that there is a potential to allege a violation of the public trust. The question I have is: to what extent has the ministry been involved with the land allocation issue? I've seen the news releases, but to what extent has there been active participation by the ministry?
Hon. J. Cashore: Officials from the Lands part of the Ministry of Environment, Lands and Parks headed up a committee that involved various agencies of government that have an understandable interest in aspects of this. That committee involved Advanced Education; Forests; and Environment, Lands and Parks. I may have missed one or two, and if I have, I will mention them later.
That committee, along with the interested parties, has met on several occasions since the letter proving that this was a trust was discovered. That resulted in a great deal of interaction among those various agencies and in continued discussion with the people who represented various aspects of the issue in the Campbell River area. These included the Friends of the Beaver Lodge Lands, another group concerned about the environmental aspect, the school district, the people who were working on development of the college and also the council. We had indicated that we would seek to have a decision with regard to that in April. We went beyond that length of time in order to complete all the necessary consulatations.
[3:15]
Approximately four weeks ago I travelled to Campbell River to announce at a news conference there the decision of the government on this. I also indicated at that time -- and it has been publicly reported -- that government will be bringing in legislation to entrench the trust, recognizing that we have much better electronic means of making sure that such a characteristic of a parcel of land is readily available. This happened in the 1930s, and somehow the documents stating the terms and conditions of the trust were filed and forgotten. Some very diligent environmentalists found that documentation, which set forth a series of interactions that were necessary to deal with what was an extremely difficult situation. The question of whether you can trust a trust was part of what lay behind this issue as we dealt with it. Because some of the land had been alienated, we recognized that we should try as much as possible, to seek a way to make up for that in terms of the value. So to expand the size of the trust from the original 1,020 acres, we added approximately 240 acres. I recognize that the land that was added was all second-growth, and it will be quite some time before it has the amenities and the beauty of untouched land. Nevertheless, I believe the government addressed a very difficult situation and did the very best that could be accomplished.
Anticipating a question, yes, in resolving an issue such as this the cost factor does have to be taken into consideration, in terms of trying to give a balanced and appropriate decision.
J. Tyabji: Perhaps the minister could share with us why, as the minister said, it was up to the diligent environmentalists to find the letter that passed the deed over to the Ministry of Lands and Parks. I think there is a lot of anxiety in the public as to when a trust is a trust. How is it that this letter was lost? If it hadn't been for the appearance of this letter, the situation would have been handled very differently.
Hon. J. Cashore: There is no question that if government does not do everything that is reasonably possible to ensure that a trust is a trust, it could result in the public losing confidence. I believe that the decision we made, given the circumstances, would reassure the public so that they may have confidence, because we addressed that as appropriately as we possibly could.
I just want to clarify a couple of comments I made earlier. The Ministry of Transportation and Highways and the Ministry of Municipal Affairs were involved in
[ Page 6707 ]
that multi-agency process. All the Beaver Lodge land is second-growth, and all of it was second-growth land when it was deeded by the forest company and made a trust.
On the question of how a document can, in a sense, be lost or forgotten, that is perplexing for all of us. I don't propose to answer that question because I really don't know the answer. I can only make assumptions about the answer, and the assumption I would make is that it was in a filing cabinet, because there were no electronic means of attaching it to the title deed. As time went by, it was forgotten. I think we have to remember that the environmental ethic has changed greatly since the time this occurred, and I think it's very commendable of the environmental group, and one person in particular, that it was found.
The fact is also that the letter stating that this was a trust was located in Ministry of Forests files, so it really took the form of an exchange of letters. I guess it indicates that the way these matters were handled in 1931 was very casual. But I do recognize that where government has a responsibility for a trust, we're talking about the collective responsibility of governments of different political stripes over a period of time. We as government happen to be in place when this was discovered. But all governments over that period of time -- whether they were Liberal, Social Credit, coalition governments or whatever -- we have all been reminded by this event that we must be very careful about the way in which such information is recorded.
While we have officials from Lands with us in the room at this time, I've been over to examine the way in which records are kept in the surveyor general's department and in other aspects of the Crown lands branch. I would certainly encourage hon. members to avail themselves of the opportunity to be taken on a tour. I think you'd find it reassuring that, in this present day and age, such information is extremely well-kept.
J. Tyabji: How is it that an experimental forest could have been operated by the government for 62 years without the Ministry of Environment, Lands and Parks knowing the basis for that operation? Was it an assumption that it was an arbitrary designation as an experimental forest? Or was it an assumption that the government had decided to use Crown land as a forest? On what basis was the assumption made prior to the letter being discovered?
Hon. J. Cashore: I'm not clear on what assumption is being referred to.
J. Tyabji: Prior to the letter being discovered, there was some assumption with regard to the designation of the land and the use of that land for an experimental forest. What was that assumption when the decision was being made whether or not to remove a portion of the Beaver Lodge lands? The reason I'm asking this is because obviously after the letter was discovered, the assumption was that the land had been placed in that trust because somebody had donated the deed to the land for an experimental forest. What was the assumption by government prior to that, because we're talking about an experimental forest that had been in existence for 62 years?
Hon. J. Cashore: The assumption was that this was provincial forest Crown land. As I said before, the file was located in the Ministry of Forests, but it was treated as ordinary Crown land.
J. Tyabji: My understanding is that, although it was obviously Crown land in the trust, it was being used as an experimental forest for some years -- or at least historically it had been. Is that the case or not?
Hon. J. Cashore: It was logged off initially, then it was transferred to the province as a provincial forest. Some argue that there were some special species planted in the early stages of the trust. As far as I know, that has not been proven. But that's subject to opinion, and we could hear more about that. The designation as provincial forest, as I have said, was not known for a great many years until the document was found. Until the letter was found, we didn't know it was in a trust for experimental forest purposes. I don't know how many ways I can say that.
J. Tyabji: Was the Attorney General's office involved at all in the interministerial committee headed up by Lands and Parks?
Hon. J. Cashore: They provided legal advice and gave us, first of all, the interpretation based on the document when it was found.
J. Tyabji: Considering that the Attorney General's office gave the legal advice to the Lands and Parks committee in making the decision about removing some of the land, was any consideration given to the fact that the MLA for that area had already expressed his own inclination with regard to what should be done for the land -- considering that that MLA is also the Attorney General? Did Lands and Parks take that into account when they got advice from his office?
Hon. J. Cashore: The answer is yes -- very carefully.
J. Tyabji: I wonder if the minister could be a little more specific. That certainly seems to be something that the local people would like to know. To what extent was it taken into consideration that the MLA for the area had expressed his personal feelings as to what should be done with the land, and his office was also providing legal advice to the Lands and Parks committee?
Hon. J. Cashore: Hon. Chair, I want to make it very clear that my answer to the previous question was an answer to the question: was the Ministry of Environment, Lands and Parks aware that the minister is also the local MLA? That's what I meant when I said yes, we dealt with that very carefully. I am not able to comment on the reference that the hon. member makes. She would have to ask the Attorney General about that. I can tell you that we followed a very careful approach
[ Page 6708 ]
here. The neighbouring MLA -- the member from Courtenay -- was asked to undertake the MLA-representative function in this situation, given the sensitive nature of the fact that the Attorney General is also the MLA. So that was handled with a great deal of care.
J. Tyabji: The reference that I made with regard to the Attorney General's office.... The reason I think it's relevant is that the Lands and Parks committee, which is interministerial, is trying to decide what should be done with the land. It wouldn't be a problem that the Attorney General is also the MLA for that area, except for the fact that as the MLA for the area, prior to the decision as to what should be done with the land, he made very public his comments as to what should be done to it, whereas his office was providing legal advice to a committee of your office as to what should be done with it. That's where there's a bit of a problem. I wonder if the committee took into account that the office that the legal advice had been coming from had a person at the top who had already expressed an interest in what should be done. If there hadn't been an opinion expressed very strongly by the local MLA as to what should be done, there wouldn't be a problem with the fact that that MLA was also Attorney General. But when you have the local MLA expressing his opinion publicly, and his office is the one providing legal advice to the committee that's deciding what should be done with the land, I think there is a potential for conflict. I just wonder if that potential conflict came before the committee in weighing the legal advice.
Hon. J. Cashore: I really think that these questions would be best put to the Attorney General. The fact is that all of our deliberations that involved any member of cabinet were conducted very carefully and with a great deal of sensitivity to the issue that the hon. member has outlined. I am not privy to statements that the Attorney General was alleged to have made. All I am saying is that in the administration of my responsibility and in my observation of the conduct of the Attorney General in this matter, extreme caution was taken so that there would be no personal involvement whatsoever in the eventual outcome of this matter. The office of Attorney General was called upon to provide assistance in the area of its expertise. That was handled professionally and appropriately through officials in the Ministry of Attorney General, and officials in the Ministry of Environment, Lands and Parks carried out their part of it appropriately and carefully as well.
The Chair: I would caution the hon. member, before I recognize her to ask questions again, to restrict her questions to strictly within the administrative capacity of the office of the Minister of Environment, Lands and Parks. Whether or not we're in a conflict of interest on some of these issues is not within the administrative capacity of the minister. So she could bear that in mind and ask questions, as under standing order 61, that are strictly relevant to the minister's office.
J. Tyabji: Hon. Chair, the relevancy, I think, is that this minister is responsible for the interministerial committee, which falls under Lands and Parks. I won't belabour the point, because I don't think I'm going to get the answer. The question is with regard to the parameters by which the Lands and Parks committee conducted itself in receiving the information from the Attorney General's office. I don't think I'll get an answer, so I won't ask that again.
With regard to the legislation to protect future trusts, I wonder if that is to prevent the allocation of land from a trust in the future, as was done here. I know that we're on the border right now of future policy, but what I'm getting at is that we have a case where a specific parcel of land was deeded to the government for a specific purpose. Once it was placed in a trust, there was the arbitrary allocation of parcels of that land from the trust. Will there be a future prevention of that, or could any legislation prevent what happened here, considering that the letter had disappeared for some years?
[3:30]
The Chair: Again, I would caution the minister in this instance, as we're dealing specifically with the need for legislation or specifics of legislation, which is not within the capacity of the minister's office.
Hon. J. Cashore: Hon. Chair, I'll try to answer the question in general terms so that I don't get into the area of future policy. I think I can get into it by referring to the discussion of legislation that came up at the news conference when we announced the decision. Basically to clarify, we said that there would be legislation to entrench the Beaver Lodge lands in legislation.
With regard to other trusts, on the basis of my preliminary examination, the trusts in this province are managed extremely well. There is a wide variety that relates to several -- if not most -- different ministries. I have asked for a review of those trusts, so that I can at least raise the question of whether or not there are some policy considerations that need to be looked at here.
J. Tyabji: Does the minister think that there could possibly have been an example of this being prevented by legislation? Isn't the legislation that is already on the books good enough, if we'd had the letter available before the decision was made? I think that's relevant, because it seems to me that the decision was made on the assumption that this hadn't been deeded over in trust as an experimental forest. Then when it was discovered that it had, it was already past the point of being able to reverse the decision. I'll wait for the minister's response.
Hon. J. Cashore: Hon. Chair, we've canvassed this question a number of times already. Until the letter was found, we didn't know it was in a trust. The letter which is the document was in a filing cabinet in the Ministry of Forests.
As for the question about whether being entrenched in legislation would ensure that such an occurrence would not happen again, one doesn't know. One does
[ Page 6709 ]
know, however, that legislation passed in the Legislature is about as strong an assurance as you can get with regard to anything that has to do with government. In practical terms, the thing that tends to guarantee that this won't happen again is the kind of record-keeping that now obtains. Whether or not some other document is sitting in a filing cabinet somewhere, I don't know.
I also want to point out that our government is dealing with a situation that it did not create. I think we have to recognize that very clearly. This is something that goes back a long, long time, and we have tried to take a difficult situation and do the very best we could with it, which I believe we have done.
J. Tyabji: I want to go back to a question we started to canvass at the beginning of the estimates, with regard to the computerization of the mapping systems and the information network that is being set up. I know that most of that falls under Lands and Parks. I understand there's an overhaul underway, because the computer system that the Lands and Parks maps were on is different from the system that the Ministry of Forests maps were on. Could the minister just give us a brief overview of what's in place now?
Hon. J. Cashore: LandData B.C. is the repository and connector by which all geographic data -- including socioeconomic demographic data and not just corporate resources inventory initiative data -- will be made accessible to all of government and eventually to the public.
J. Tyabji: I don't know if I heard all of that. I don't want to get into the nebulous area of legislation that's before the House. But is it the intent of the Ministry of Lands and Parks to end up with some kind of comprehensive grid of the province that would have the designations of the different lands, which jurisdiction they're in and whether or not they are Crown lands?
Hon. J. Cashore: The answer is yes. That is what LandData B.C. is: a common access to all that information.
J. Tyabji: Would that be broken down by region? How would things be designated on those maps? Can the minister be a little more specific? When there is common access to that information, how would that access be derived? Would that be paper access or by computer modem through certain keywords?
Hon. J. Cashore: It would be access by computer modem. There are terminals throughout the province. So it would be a very convenient system to access the way in which the grid of the province is put in place on this.
I really would encourage this member and anybody else to avail themselves of the opportunity to go on a most interesting field trip, which I know our Lands people in the surveyor general's office would be delighted to organize. I have taken this trip. One becomes aware of the complexity of it. But also it's a really good insight into the amazing things that are happening with the new technologies, and also the process of moving from one technology to another as those technologies improve.
I'll speak off the top of my head here, and I may end up being corrected. I believe the system is about three-quarters completed, in terms of the detail of mapping that is presently underway.
J. Tyabji: Does the Ministry of Environment have any plans to integrate the computer modem mapping with the school system, so that it would be accessible through the libraries?
Hon. J. Cashore: That's a good idea; it will be in the future, though.
L. Hanson: I apologize to the minister if this has been covered before, because I haven't attended a number of the debates. Some time ago there was a policy on special user permits to dispose of most of that land, particularly lake user permits in British Columbia. I was just wondering what policy is in place now, and how we have progressed with the disposal of the user permits.
Hon. J. Cashore: If I understand the question correctly, the proper terminology is not "user permits" but "leases," and these would be shoreland leases. The program to sell those shoreland leases has resulted in 2,500 being sold to date.
L. Hanson: My apologies to the minister. In the days when I had one, they were called "special user permits," but I guess the name has changed. The main thing is that we're both referring to the same thing. You gave us a figure of 2,500. To put that in some sort of context, out of how many?
Hon. J. Cashore: Out of about 5,000.
L. Hanson: That's about halfway. You're still, as a ministry, encouraging that?
Hon. J. Cashore: Yes, to some extent, although not all of the remaining ones would be suitable for sale.
L. Hanson: Some time ago the ministry embarked -- and you can correct me if my terminology is not right -- on a program of licensing foreshore leases, such as piers and that sort of thing. It was my understanding that the ministry was going to do it on a progressive basis -- pick a part of British Columbia, complete that, move on and so on. What is the situation in the Okanagan at this time with Okanagan Lake, Shuswap Lake, Mabel Lake, Sugar Lake and the others?
Hon. J. Cashore: The program is still underway. We've tried to focus mostly on those areas where development is most intense.
L. Hanson: Yes, I'm aware it's underway. I get an awful lot of phone calls on it. The reason I'm asking the
[ Page 6710 ]
question is that I was trying to get some understanding of where we are in the progressive application of this. Most of the calls I'm getting right now, quite honestly, are on Okanagan Lake. I think you've started on a portion of Okanagan Lake and are going to progress down the lake. I'm trying to get some understanding of where we are, what sort of progress you expect to have before you have it completed and the timing.
Hon. J. Cashore: I expect it will be completed on Okanagan Lake within about two years. We have completed about 200 on Okanagan Lake, and the people from the Lands branch work with the owners in seeking to complete this work. The focus is being addressed on permanent facilities, because it's a different situation if the facility is only seasonal.
L. Hanson: Yes, I was aware of that. The ones that are drawn up on the beach in the fall, I guess, are not licensable. I am a little confused, though. Is it a flat fee for whatever the development is? Or is it based on the square feet, on the length or on how far it intrudes into the water?
Hon. J. Cashore: For recreation use, it's a flat fee of $400; for commercial use, it depends on the site's specific circumstances, the use and the impact.
L. Hanson: I think some of the questions I'm asking are more detailed than is really necessary. Maybe the minister would agree to ask his staff to mail me the policy and the surrounding parts, so that I might be able to look at it.
Hon. J. Cashore: I'd be glad to send this over right this very moment.
L. Hanson: The communications process has certainly improved -- it's almost instant -- and I thank the minister for that.
[3:45]
Hon. J. Cashore: We have more.
L. Hanson: Yes, I would imagine so.
Again, I would apologize to the minister because this may have been covered in some of the other discussions, and I know we are on the subject of Lands. But I know we're drawing near to the end of the minister's estimates, so let me, for a moment, describe what the difficulty seems to be in my particular constituency. This time of year, of course, is the time of our high runoff, and we have a lot of instances of erosion, to the degree of creating a peril to some of the private residences and that sort of thing. I think that particular circumstance can be looked after by the ministry without too huge a difficulty. But we have an awful lot of difficulty with the erosion of land.
I was just in the big city of Lumby on Saturday and was asked to look at a couple of situations. There was literally a circumstance where a bank had been eroded to a depth of 20 or 30 feet. The erosion was probably 200 or 300 feet long -- taking away chicken coops, apple trees and various things. I know that the minister had -- and I think it probably still is in place -- a program where there was assistance on a shared basis for riprap or the protection of some of these creeks. Two problems seem to be the major issues. First of all, it's very difficult to pin down the authority to give permission to do anything to it. Second, does the minister have any insight -- I'm not asking for future policy, Mr. Chairman -- as to when there might be some funding in place for some of those programs? As I understand it, the message that's coming out is that even though there is a program in place, there isn't any funding. So the program really is not effective, and it's causing some serious difficulties particularly at this time of year.
Hon. J. Cashore: The officials who are able to advise me on this are in the Environment part of the ministry. We have no information with regard to when more funding will be available, but we would be glad to arrange for some direct briefing on this to help bring the hon. member up to date.
L. Hanson: I would really appreciate that. I know that the problem comes and goes with the spring runoff, and after the runoff is gone, I probably won't hear about it again until next spring. So it would be very helpful to have a briefing to get some insight into not only the cures for it but who you can talk to for the right advice as to what you can and can't do. I know that the federal Department of Fisheries is very involved in it, as well as the fisheries branch of your ministry. Or is that under your ministry? The water rights branch of your ministry would be involved in it. The maze is so difficult to find out where you can actually talk to someone who really knows all the different things that can or cannot be done. It would be most helpful. I think there are probably a number of MLAs with that same difficulty, particularly at this time of year. With that, Mr. Chairman, I have no other questions.
F. Gingell: If I may, I'd like to deal with some issues that are close and dear to my heart in sunny Delta. Perhaps we could start with a bit of understanding of where the Boundary Bay study is -- where we're at now -- because that may save some questions later and put us in the right direction.
Hon. J. Cashore: All but one of the provincial components of the studies are complete. The one that is not complete is the transportation study. We have to work now to integrate our studies with the studies of the local people. I believe the Canadian Wildlife Service studies are completed. So the federal and provincial studies are complete, except for that one provincial study with regard to transportation.
F. Gingell: During the last couple of months it was reported -- I don't think officially by your office, but perhaps you could correct me -- that you made the decision during the course of the study to not consider non-agricultural use of the Roberts Bank backup lands. Could you confirm that?
[ Page 6711 ]
Hon. J. Cashore: The transportation study is looking at needs related to the possible needs of future port development. I think that addresses the hon. member's question, in that there could be some non-agricultural use to the extent that it would be related to future port development. I'm not saying that is what's going to happen; I'm saying that with regard to the parameters of the study that has not been made available yet.
F. Gingell: I don't mean to make this a question, but I take it that I am mistaken. No statement was made that non-agricultural use of the lands had been banned, as it were, from consideration. The original proposals by the port of Vancouver in relation to the use of land dealt only with very small parcels -- I think they talked about 20 acres -- and with what side of the railway line the road is and those kinds of issues. They would come under the transportation issue, but in those cases we're talking about ten acres, 20 acres or 30 acres. We're not talking about 4,212 acres, which is the total of the agricultural land. Do you have any information to put into context the land use that could arise from the transportation study?
Hon. J. Cashore: I think I have to be careful in answering that question, because when cabinet ministers start making statements that prejudge the outcome of a process that we've set in place, it starts to be seen as at least potentially compromising a process, which I really don't want to do. I say that, having had an extensive personal background with a number of people in the area, who are understandably impatient. They've been waiting on this issue for years and years. They've worked hard on it, and they've done outstanding work. It hasn't just been people standing up and saying: "You should do this and you should do that." They've backed up everything they've done with remarkable research. The public service of the people from both the environmental and the farming communities, who have had input into this, has been remarkable, so I do understand their frustration.
I don't want to say anything that's going to sound as though I'm prejudging it, but I think that, in the general context of the comments the hon. member made, that sounds pretty reasonable to me. I don't want to cite a figure, but I do want you to know that the backup lands are primarily lands that should be agricultural lands. That's my own personal view, and I have no hesitation in stating that at this time. I want the hon. member to know that this issue will come to a resolution that the community will be pleased with, and which recognizes the importance of the various communities and aspects of the Boundary Bay studies. There is a balance. We need to have a good balance and recognize the growing mutual respect between the agricultural and the wildlife communities in terms of addressing this entire issue.
I would also like to add, with regard to Boundary Bay, that we are progressing toward the designation of a wildlife management area this fall. Again I have stated publicly that that will be accomplished by November or possibly in November. I believe that we are progressing well toward that deadline.
F. Gingell: I don't really have many questions on the Boundary Bay wildlife management area, so maybe I'll just touch on the one question that's in my mind. There has been talk about a Ramsar designation. Would a Ramsar designation necessarily be part of that wildlife management system?
Hon. J. Cashore: The answer is: not necessarily, but quite possibly. I have to be very open and say that I know that that was one of the points we made prior to forming government. We thought that area should be designated. Again, as part of the study process, we are looking at how to go about that. I think the best answer is that when we designate the wildlife management area, the position of the government on some of those other attendant issues that have come up, such as a Ramsar area.... We haven't made this commitment, but others have raised the biosphere reserve. So I think we will hopefully be able to state a position on a number of those concepts at the time of that announcement.
F. Gingell: Do I take it, then, that the report will come out first, and that there will be some time for people to study the report and react to it before any designations are made that could have long-term implications on economic development or, more importantly, agriculture?
Hon. J. Cashore: I believe the essence of what the hon. member is looking for is happening in the process that is underway, which is extremely consultative. I don't mean that you can be too extreme in consultation -- well, maybe it's possible to be -- but in this case that's not happening. It's appropriate consultation that involves all the various players, so they are aware of the various findings going into these reports as time goes on. From time to time, reading the Delta newspapers, we see the comments of the various parties, who seem to be quite up to date on a number of the issues.
[4:00]
F. Gingell: It is all very well for people to be getting their input into the study -- and of course that's important; the study can't be done without it -- but there is usually a need to have the ability to react to the results of the study. What surprised me, I must admit, was the reaction of the Delta Farmers' Institute to the private member's bill. I remember that I asked you a question about it in the House. I didn't realize the Delta Farmers' Institute had such a strong position on the issue. Believe me, it really is strong. If you think that there's been sufficient consultation on that particular issue with them, and you haven't got the feeling of the strength of their concerns, then I do suggest that you need to talk to them some more. What I see happening, and I was hoping you would confirm this, is that the calendar would look like this: the report study will come out, and then there will be a reasonable period of time before any wildlife designation is made. The Farmers' Institute has probably been more concerned
[ Page 6712 ]
about long-term tenure on the 4,212 acres in the Roberts Bank backup lands than about biospheres and Ramsar.
Hon. J. Cashore: I respect the point that the hon. member is making. We haven't even concluded a decision-making process involving the three major governments -- local, federal and provincial -- with regard to how to manage the release of documents and the final report. There is work that is yet to be done on that at that level, but I think the essence of the point the hon. member is making -- that there needs to be an opportunity for the local community to react and respond to the general thrust of what is happening -- is a reasonable request and expectation.
F. Gingell: Thank you, Mr. Minister. So perhaps the wildlife management designation by November isn't as firm a decision as it sounded to me earlier.
Hon. J. Cashore: No, that is a commitment I have made, and it is a provincial responsibility. It's one component of a number of activities that are taking place down there. I would point out, in reference to a point the hon. member made a few moments ago when he referred to the private member's bill, that I certainly do recognize that one of the things achieved is a balance of consideration going both ways between the agricultural community and the wildlife interests. One wants to cherish that and nurture it and not do anything to destabilize it. I believe that as long as those two components are held in the kind of balance and respect that presently obtains, there is nothing that I can see on the horizon that would prevent us being able to proceed with the designation. They have input into that and an awareness of each other's position -- they have achieved that balance among themselves. I would not want to destabilize that in any way.
F. Gingell: If we may, we'll go back to the Roberts Bank lands. You were talking a moment ago about the transportation study. As the Minister of Environment, Lands and Parks and some other responsibilities, you presently hold title on behalf of the province to the 4,212 acres, and your ministry administers those lands. I presume that the transportation study coming along will deal with issues that are critically important to the value of those lands. Many of the farmers are very concerned that a throughway for truck traffic that will follow the railway line will cut off farms and cause farmers to have to go on long, roundabout routes. They are concerned that if there aren't proper overpasses, their children will be crossing level crossings in school buses -- where there are very slow trains, I must admit, but very high-speed trucks. They are concerned about the problems of the rail line and a road paralleling each other, and the problems of vision. It seems to me, when I listen to their concerns about crossings -- and as I understand it, the only crossing that has been committed to by the Vancouver Port Corporation is the Arthur Drive one -- that there are some more issues in the question of that last bit of linkage that need to be dealt with that do affect the value of the lands you hold.
Hon. J. Cashore: Again, this point is very well taken. I agree with the points the hon. member is making. The terms of reference pursuant to the study on transportation have ensured that those issues are built in. So right off the top, the design of that study is to ensure that those questions are addressed. Those are important questions. When you have a traditional agricultural or food-producing area that has a long history -- which is very precious in terms of today, but also in terms of future generations and our ability to produce food -- you have to be very aware not only of the agricultural land base, but of accessibility and infrastructure issues and the way in which some infrastructures might impact on that accessibility. That very definitely has to be addressed in those terms of reference.
F. Gingell: I guess the only hammer that we hold -- if that's the right term to use -- is that the province owns that land. The province probably owns the railway right-of-way, so perhaps we can hold the port of Vancouver hostage to doing what needs to be done. The only reason that I would use such intemperate terms is that in listening to what the port of Vancouver has to say about this development, one gets the feeling that it is perhaps about the only way that we -- you, as the minister -- will be able to get the port of Vancouver to look after their responsibilities in this regard. Do you have any comment on that?
Hon. J. Cashore: The fact is that we're very much aware of the points we have that give strength to the provincial position -- the cards that we hold, if you will. We are also aware of the cards that they hold. We think we're in an excellent position to negotiate the best possible position in the interests of the province.
F. Gingell: I take comfort from that.
That moves us on to the next question: do you have any idea of the port of Vancouver's schedule? I flew over the other day, and the two pods are there. They are going to be using the southeasterly part, but no one seems to have started any work yet. Are there issues to do with transportation infrastructure that you haven't given them clearance on yet, which are holding them back? Do you know of any other reason why they don't have shovels and caterpillars out there?
Hon. J. Cashore: I think that question should more appropriately be put to the Minister of Finance, who is responsible for the Crown corporations secretariat, which has the day-to-day dealings on that issue with the Port Corporation. The Ministry of Environment, Lands and Parks has the day-to-day dealings with the land-based aspect of it. When it gets into the timetable, the pod and all that, of course we're interested in that, and we do watch it. But I think the more direct answer on that should come from the Minister of Finance.
F. Gingell: Then perhaps we could move on to the subject of the 4,212 acres of farmland. You are aware that I and others keep talking about transferring the
[ Page 6713 ]
land to the Minister of Agriculture. I guess that isn't necessary and probably isn't possible. There is probably some part of the Financial Administration Act that requires all Crown land to be held in your name. It would be a symbol of commitment by this government that the lands will be retained for agriculture. We discussed that subject last year, and the subject has come up on two or three different occasions. I know that you have had communications from Delta farmers asking for the land to be transferred. Can you tell me if there are any plans for that to happen?
Hon. J. Cashore: I have said that I expect to be able to make some statements about the long-term tenure question before the year is out. I believe the point the hon. member makes about symbolism is valid. I would just say for the record that the agricultural land reserve preserves this land for agricultural use. There are no plans in place that would see that going in any other direction, other than with regard to a very small factor that we discussed earlier.
F. Gingell: I appreciate that statement, too. There is a great deal of discussion related to long-term leases of these lands; in fact, all the leases are long-term. They are 20-year leases, I think. They all have five-year rent renegotiations, and that's a reasonable arrangement. The thing that has stuck in everybody's craw is the cancellation clauses. The message I get very strongly from the farmers is that the quality of this agricultural land is deteriorating, simply because they don't have the certainty of tenure that would encourage them to reinvest in good soil management practices. It's not only a question of the government's ability to cancel the lease. I think it requires six months' notice; it may even be shorter. It's the fact that any improvements they've put on the property will not be paid for if the leases are cancelled that really causes them concern.
We all know -- I don't have to tell you, because of your background, interest and commitment to this particular area -- it really is important that there be no excuse or reason not to look after and nurture those lands in the best possible manner. It seems that if the ALR has made the commitment relative to the land staying in agriculture, there is no reason right now not to change the leases to take out the cancellation clauses, other than for cause, obviously -- to use the land for some other purpose -- so that we could get this issue dealt with. It really is a major item for them.
[4:15]
Hon. J. Cashore: I recognize the points the hon. member is making. We are seeking to address those issues and deal with that at one time. We're not going to do those as one-offs. We think there may be some other factors that need to be considered at that time to strengthen the agricultural viability of the land, so we want to look at all of those possible considerations.
While I realize that this is not by any means the final answer on these issues, it should be noted that the lands branch does have the soil conservation program, which has been in effect for some time. It virtually relates to almost all of the 4,212 acres the hon. member refers to.
F. Gingell: Is that a cost-shared program?
Hon. J. Cashore: The answer is yes.
F. Gingell: I really don't have any more questions on the Roberts Bank land. I'm now realizing that we just need to sit and wait for things to happen.
I would like to point out that if they had tenure, you wouldn't need to cost-share. The farmers would put the money in themselves. There would be a better rotation of crops, there would be better ditching, and there would be a whole series of good soil management and agricultural practices that would look after these issues.
Moving along, if I may, I wonder if we could go back to the wildlife issue on one specific area. It is a question of the funds that were going to be available from the third runway at the Vancouver Airport. A proposal was put forward in a fairly firm manner a year ago by the Delta Farmers' Institute, which had thoughts about the use of those funds to acquire land and habitat. That would probably take some of the pressure off some of their lands.
I notice that, different from the port, the containment terminal at Roberts Bank.... If you look at the airport in Richmond, there are shovels and cranes and all kinds of equipment there. Can you advise us what has happened with respect to wildlife habitat replacement at the Vancouver International Airport?
Hon. J. Cashore: First, I'd like to say to the hon. member that we don't have present the official who can give the most definitive answer to that question. I will arrange for a meeting or briefing so that we can get that information.
It's my understanding that we are working with the Canadian Wildlife Service on the issue of the acquisition of habitat, to compensate for the loss of habitat at the airport. I think some other locations besides Boundary Bay are under consideration, including some islands in the Fraser that have recently been designated for various types of protection. At the present I don't have any information with me that can specifically say what has been achieved on that issue of the Delta Farmers' Institute. But our wildlife people are working with the Canadian Wildlife Service on this issue. I don't think we have acquired yet the lands to compensate for the loss of habitat.
F. Gingell: I would appreciate some form of briefing or correspondence or a phone call that will bring me up to date on that.
I'm not sure if this is an appropriate question -- I'm sure if it isn't you'll tell me. I wonder if it's possible to talk about the Burns Bog landfill. They call it a landfill, but it's a smelly garbage dump in Burns Bog that's used by the greater portion of greater Vancouver. Can you advise me of any plans or programs within your ministry, or within the work your ministry does with the GVRD or the city of Vancouver, to reduce this operation, close it down or move some of the material somewhere else -- to reduce, recycle, reuse and all the other R's that will reduce the amount of material going into the landfill?
[ Page 6714 ]
Hon. J. Cashore: Ongoing work on waste reduction is done between the environmental protection branch and our regional offices. That is carried out between the regional districts and the ministry, and we work together on a waste management plan in seeking to achieve our goal of reducing the amount of waste. So it's in that context that we do the work with the GVRD. I'm sure the hon. member is also aware that, within the Surrey office of Environment, Lands and Parks, there is being coordinated a review of the studies on the Burns Bog area, which we are seeing as an adjunct of the Boundary Bay study process.
F. Gingell: I had understood before -- I don't know why -- that the Burns Bog study was actually part of the Boundary Bay study. But it isn't part of it? It's just happening at the same time and they're being integrated? Oh.
Hon. J. Cashore: It is linked, and I would stick with the word I used -- it is an adjunct of the studies that are going on. There will be work that needs to continue to be done with regard to Burns Bog; it will not be concluded at the time we are ready to report out on the other Boundary Bay area studies. In that sense, I need more time to complete the work that needs to be done in the Burns Bog area.
F. Gingell: Mr. Minister, will the Burns Bog study finally put together all the little bits of information that have been lying around? Will it give us a complete understanding of what's there and what's worth saving, what can be industrial land and what's blueberry land -- and finally bring it all into one?
Hon. J. Cashore: We are certainly attempting to do that, with limited financial resources. It's being coordinated through our Surrey office of the Environment part of the ministry, with a great deal of input from the Burnaby office of the Lands part of the Ministry of Environment, Lands and Parks, with a consultative role with the Burns Bog Conservation Society and the local officials. There are a number of streams of input into that process, and the day I went on a tour of Burns Bog I was presented with a trunk full of studies that had been done -- again, by some people who had some very sophisticated ability in the area of gathering research. So it is also partly a matter of collating information that has been done by volunteer groups. I would have to say that at the present time there are meetings happening regularly on this, but there is going to be a lot more work that needs to be done following November, when I am hoping to be able to draw things together with regard to the Boundary Bay portion.
[W. Hurd in the chair.]
F. Gingell: Thank you, Mr. Chairman, and welcome to this august role that you're playing.
Dealing with the Burns Bog area, there is a series of industrial dump sites on its northern boundary. We discussed them this time last year. There are a lot of concerns that they don't conform or don't meet your specifications; there were criticisms that they weren't being inspected and that the regulations were not being enforced. The response you gave me last year was that legislation in the House should play a major role in ensuring that the regional districts and municipalities have expanded powers to address this problem. Can you advise me what the current status is? Has the role of monitoring and regulating been moved from your ministry to the regional district or to the municipality? Perhaps you can also advise me if there is more monitoring going on now with respect to this issue?
Hon. J. Cashore: The ministry does the monitoring of the solid waste and the landfills through the Surrey office. The GVRD does the monitoring of air quality issues. I believe that we have the responsibility for issues that have to do with storage, so there is a shared kind of responsibility there.
Part of the comment made by the hon. member was that there was some reference made last year to forthcoming legislation -- again that's future policy. This is just to remind the hon. member that there is a bill on the order paper that is pursuant to that commitment, and I think I can say that another one is going to be coming. Also, Dorothy Caddell, the waste reduction commissioner specializing in hazardous waste, is going to be reviewing some of the interesting topics, such as the Enviro Desorption plant situation, and advising the ministry with regard to those issues, vis-�-vis when public hearings should click in and what process should be gone into in order to decide on that. This has been a timely current event that is a good case in point for helping us judge the best policy for the future that is cognizant of the resources we have, which is also a factor.
[D. Streifel in the chair.]
F. Gingell: You were talking about Ms. Caddell and her role in respect to these.... I was going to use the word "dumps," although that's not quite the right term. The materials that go into these things are primarily building materials and are not supposed to be hazardous, are they? You're not supposed to put in gyproc or something that might qualify as hazardous. Has her role been expanded to look into these areas? Or are you dealing with them on the basis that there are hazardous materials going into them?
[4:30]
Hon. J. Cashore: Hon. Chair, the answer is no, her role has not been expanded. I think the hon. member can appreciate, first of all, that my comment was tied into the question of the Enviro Desorption plant and, where the question has been raised, that it should fit into her area. That's kind of at the perimeter, therefore it's the type of area she would be interested in.
I would also say that anybody in the province who's working on concerns about liquid waste, solid waste, hazardous waste.... It certainly is a truism to say that they all interconnect. One impacts on the other at some
[ Page 6715 ]
point. In that sense, I think it's valid for her to comment on aspects of the way in which we apply the three Rs. A good case in point would be toxic material being put down a drain that goes into a sewer outfall.
F. Gingell: Did I also hear you say in an earlier response that she would be advising you on public hearings? I take that to mean that the Enviro Desorption proposal -- temporary or permanent, whichever it may be; temporary according to the municipality -- is going to go to public hearing now?
Hon. J. Cashore: No. What I would say to that is that when a process is underway, you still have the day-to-day, ongoing work of government and the mandate of the ministry that needs to be fulfilled. You can't bring everything to a halt. When something as high profile as that issue comes up, it provides a good case in point upon which to reference the kinds of issues that I need to be advised on. Hopefully, we're going to come out of this with a policy that is going to serve the issue of the management of hazardous wastes. That policy has to look at all aspects, including at which point public hearings should click in. I haven't made that comment to say what's going to happen with the Enviro Desorption, but I'm saying that that's a good current event to give us a point of reference for the work that's ongoing.
F. Gingell: Mr. Minister, perhaps I can use this opportunity to strongly encourage you to hold public hearings on this issue. The people of Delta really feel that it has been slipped by them. You and I know that the technicalities were met, but that isn't the way people feel about it. My phone is ringing on this issue day after day. So I really would suggest to you that you will get a lot of points if you are seen to have an open mind on that, and I wonder whether you would reconsider.
Hon. J. Cashore: As I said before, we are going to follow the steps that I have outlined. Ms. Caddell is going to be reporting in due course as a result of the consultation process that she has launched on both the household hazardous waste issue and the biomedical waste issue. She is also going to be advising me on a wide range of issues dealing with the present policies on hazardous waste disposal. Therefore that is the context in which I made those comments.
I would also like to remind the hon. member that the GVRD is the agency that issued the air permit, and the Ministry of Environment, Lands and Parks issued the storage permit. So that, I guess, is a question that you will understandably put to both of those ministries.
F. Gingell: There was an announcement the other day -- and I can't think of exactly where it came from -- that said something about the movement of questionable soils from the Expo lands. Where are they going to be moved to?
Hon. J. Cashore: There are different classifications of soils on the Expo lands. Given that the province has not had effective contaminated sites legislation that would cover concerns that municipalities have in the event of liability actions, municipalities are unwilling to accept soils that would be classified as the industrial grade of soil that moves around the lower mainland all the time. I think it's clear that those soils do have very minimal trace elements of some heavy metals in them, but they are considered to be suitable for the vast majority of landfill procedures. But, because of the political context of the Expo soils, that has become a very difficult issue. We have made significant headway on that issue, and we have succeeded in moving a few thousand tonnes out to a railway exchange construction site in Langley. There is another site in South Vancouver that was to house the new fire hall training facility.
We are still tackling this issue. There is going to be a very limited amount of soils that are categorized as hazardous. That's going to be even more difficult to deal with -- and expensive. Our waste management branch staff are working on that constantly. Then, of course, there are the soils that are deemed to be residential quality soils that don't have any incidence of heavy metals whatsoever. So there are those different categories of soils. We still have some way to go in order to remove those soils to the locations that we are seeking to secure.
The point is sometimes made that if there is nothing wrong with those soils -- or some of them, anyway -- why aren't they just left on the Expo site? The fact is that the provincial government, as a result of a contract that was made with Concord Pacific prior to this government being formed, took the responsibility of dealing with the soils. When you are building a large building and there is an excavation that sometimes goes down seven or eight storeys, there simply is not the place on the Expo site to move those soils somewhere else. The other thing is that those soils are valuable construction materials, and are useful in that sense. Again, I have to be careful on future policy, but given our intent to deal with issue of contaminated sites legislation, I believe this is going to provide the reassurance to municipalities over the liability issue and will provide the sense of security that will enable us, in a sense, to end the logjam on some of these soils.
G. Wilson: I wonder if we could jump into something completely different -- or almost completely different. I'd like to talk to the minister about the lease program, the lease of Crown land, and specifically the lease of foreshore and foreshore sales. I noticed under tab 5 in the document that was circulated with respect to the budget overview that there is a discussion on the foreshore sales program -- or at least one line about winding down shoreline sales. My initial question is: can the minister tell us, with respect to the sale of Crown lands, of what kind of revenue is expected on the sale of Crown lands this year? Secondly, can the minister tell us if there is any sale of Crown foreshore leases underway in that program of sale of Crown assets?
Hon. J. Cashore: Just so I get this right, I'm going to read a couple of definitions at the beginning of this
[ Page 6716 ]
answer. I know the hon. member will come back to the questions he's focusing on.
Foreshore is the Crown land between the high- and the low-water marks of a water body. Foreshore lands are rarely sold -- and then only by order-in-council, as required by section 14 of the Land Act. Foreshore land is recognized as a valuable public resource. Shoreland is above the high-water mark. Shoreland sales -- which is dry land -- in the past fiscal year were approximately $4 million. It is expected that that amount will decline in the present fiscal year. I know that the hon. member has asked other questions and will kindly repeat them.
G. Wilson: I appreciate the minister wanting to go through some definitions, so that we all know exactly what we're referring to when we talk about it. I'm aware of the technical definition of foreshore, but I'm also aware that the Ministry of Lands has jurisdiction and authority over leases on the surface of the water that's adjacent to foreshore and shoreline leases. That traditionally has been provided for such things as log booming. More recently aquaculture has taken up a significant number of those leases. Discharging of Crown lands commenced at the behest of the former government, and I see that this government seems to have continued that policy. My question is, in the sale of those Crown lands -- if foreshore leases that are essentially extensions onto the surface of the water have been provided on some kind of tenure, either under lease or licence of occupation or some other form of tenure -- whether or not a party buying the upland can also acquire the foreshore lease.
Let me give you a specific example. I'm not trying to entrap the minister here; rather, I'd like to get some specific answers. A number of licensed oyster growers right now have communicated with me that they wish to, and are able to, purchase the lease they currently have -- in order to privatize the surface so they can have longline culture. They are now the principal owners of the land -- previously Crown land -- which they now have as fee simple property. Is it the policy of this government to sell out those leases? If it is, what are the conditions under which those can be sold? And what kind of revenue can you expect from the sale?
[4:45]
Hon. J. Cashore: When a party owns or has purchased the upland that's fronting water, that brings with it riparian rights so they can apply to purchase that land. Or someone else could actually apply to purchase the land, but they would have to do so with the permission of the upland owner. I think part of that question was: is it the policy to continue to do so? That continues to be the policy. That has not changed, although we are reviewing Crown land policy.
G. Wilson: I want to come back, because I'm not sure the minister meant what he said. I heard the minister say that there are riparian rights that run with the water adjacent to the upland. I'm aware of that. The minister then said that it was their policy to continue to sell the land. I understand that it's the policy to sell the land. What I'm interested in is this: if there is a lease or licence of occupation on the surface of the water, is it possible to buy that for commercial enterprise? That's what I'm after.
Hon. J. Cashore: The answer is yes, under lease. If I said "sell the land," that was incorrect. It's possible, as a riparian right, to purchase the lease.
G. Wilson: Then it's the policy of the government to actually sell the surface of the water and to privatize that surface.
Hon. J. Cashore: No, to sell the lease.
G. Wilson: Well, if you're leasing something, you don't own it. Through you, Mr. Chairman.
The Chair: Thank you, hon. members. It aids debate most admirably.
G Wilson: If you lease it, essentially you're getting the use of the surface of the water for a particular stated objective: oyster farming, finfish culture or whatever it is. But a tenure is involved in that: five years, ten years, 20 years or whatever it is. Usually the lease is very specific, Mr. Chairman, in that in the lease that comes from Crown lands very specific criteria must be met for due diligence to be done; otherwise it gets revoked. At least that's the way it used to be last year -- unless it's changed this year. I haven't been as close to it this year as I have been in previous years.
What I understand from oyster growers is a concern that now these leases and oyster and finfish farms that have currently been provided licence of occupation or leases are being put up for private sale. That is a concern to a lot of people. They see that what is essentially a public resource -- i.e., the surface of the water; notwithstanding riparian right, the law provides that there has to be the ability to cross and access and so on -- has been put up for sale. I am curious to know if that's true. If it is true, then what kind of revenue out of that sale is projected?
Hon. J. Cashore: You cannot buy the foreshore, but you can transfer the lease, so that would presumably involve a financial transaction. It's the lease that is transferred, not the foreshore. We sell only filled foreshore, which is another issue, but those are the only foreshore situations where it is sold.
G. Wilson: I take it, then, that really nothing has changed. We've always been able to transfer leases, although I must confess that I, for one, have stated on many occasions some objections to doing that, especially in light of the fact that there are many operations where an operator has been able to secure a foreshore lease, has stated a projected use and then has not performed with due diligence. As a result of that, the operator uses that as a capital asset in the overall incorporation of the company and then uses that to make profit. I don't think that was the original intention of the program. So it sounds like in fact you can't now own fee simple any more than you could last year;
[ Page 6717 ]
nothing has changed. If that's true, I think we can head on with our questioning.
Hon. J. Cashore: That is true, and the due diligence does apply. If the person who owns the lease does not apply due diligence, they should be subject to monitoring and enforcement. The assignment of foreshore leases does not include the right to buy. I just want to say that one last time for the record in order to correct my earlier words, where I inadvertently said "land" when I meant "lease." All the assignments require government approval.
This is a very interesting area, and I just want to say briefly that we've seen a situation in some areas of the province where a lot of such leases are being secured. I think that has had the impact of diminishing the number of open areas where people -- say, the freelance clam-digging community -- could go and occupy land for that activity. There has been both some positive good news and some bad news about that. The good news has been that in many of these cases, the private operator has taken on a very good stewardship approach which has, I think, had the sense of properly protecting the area. But the bad news means that those non-designated areas have been subject to more intense activity by those who would seek to carry out their clamming operations, for instance. So that has been a bit of a tension as well, although I understand that the openings have been altered to try to deal with that situation.
G. Wilson: Having nailed that down now -- and it's good that we did that right off the bat -- we can move on with a line of questioning with respect to these foreshore applications. With respect to the due diligence questions -- this has come up in a number of coastal communities, especially those that are facing development of aquaculture proposals -- what kind of monitoring is being done with respect to the filed business plan and the operations on those aquaculture leases? Where a lack of due diligence has been demonstrated, what kind of enforcement is being put in place, and how does the ministry effect the removal of any capital asset that's put in there? How do they make sure that site restoration is done, if there is in fact environmental damage as a result of lack of due diligence?
Hon. J. Cashore: The Ministry of Agriculture, Fisheries and Food issues the licence, therefore they maintain the responsibility for monitoring and enforcement. The lands branch of the Ministry of Environment, Lands and Parks issues the lease, but the monitoring of finfish farms is the responsibility of the Ministry of Agriculture, Fisheries and Food.
G. Wilson: I understand that. The difficulty is that in the community of the Sunshine Coast, Sechelt Inlet, Jervis Inlet and the areas around Nelson Island and Hardy Island, the fish farmers have found out that those of us who said that it was not a suitable environment -- the water was too warm and that they were going to go broke -- knew what we were talking about. They have all shifted north to the outside of Vancouver Island. The problem is that a lot of these companies go broke. Let's face it, in the early stages of finfish aquaculture in the province, we had leases being granted extensively by the Ministry of Lands to one, two and three operators, simply so that those operators could secure suitable sites to do two things: first, to pad their portfolio if they intended to go public as a public company, and we saw some gross examples of that; and second, to limit competition from getting into suitable sites, which I guess from a business point of view is not a bad idea. The problem with it is when they go broke and disappear, they leave refuse in their lease. That refuse is often a marine hazard if it is floats and buoys that have ropes and ties, and net pens that are cut adrift and go floating down the inlet. They become unmarked hazards to marine navigation.
Who looks after that? If they go broke and leave their leases, what kind of cleanup program do you have? Is there any bond now that they have to put in place that can be secured for cleanup? What does the ministry do to make sure that if the companies go broke, the sites they have occupied are properly cleaned up to remove marine hazards?
Hon. J. Cashore: With regard to this very good question, which clearly outlines a different area of responsibility after the licence no longer obtains in that area, it is Lands that has that responsibility. My information is that in terms of the issues the hon. member has referred to -- refuse, unmarked hazards, the debris left over -- Lands has the responsibility. With regard to the question of bonding, the answer is yes, and that bonding is a blanket bonding with the association. There is bonding applied.
G. Wilson: I assume the association the minister is talking about is the aquacultural association, the B.C. Salmon Farmers' Association?
Hon. J. Cashore: That is correct.
G. Wilson: I've just been handed a note saying I am needed in two places at once here, so I may go and then come back and try and keep a thread.
If that's the case then, how does one get up to enforce this, notwithstanding the budgetary restrictions we all have? We all know that there is not a lot of money for new programs and those kinds of things. The difficulty is that we have an extremely large coastline and a lot of people who have had leases granted to them. It's difficult to patrol that coastline, to be able to go in and either invigilate a removal process, so you can make sure that it's gone, or do the site inspection and site checking. The number of Lands officers you have simply can't do it, no matter how hard they work and how many hours they put in.
I wonder if the minister is aware of the work that was done on the Sunshine Coast with respect to the Sechelt Inlet study, which was one of the first comprehensive foreshore plans done in the province of British Columbia. I am very proud to have been part of that. I know that members of the Ministry of Lands, one
[ Page 6718 ]
of whom is certainly present today and was an active advocate and participant in that process. I think it is a very positive process.
What we're essentially attempting to do in the Sunshine Coast now is establish a community marine watch program. What it does is allow people who are regular users -- tugboat operators, fishers, recreational users, divers -- to plug into a telephone line that has been set up to report hazards to navigation. The difficulty we have when we get this information is: who do we phone? The Coast Guard doesn't have a particular interest unless it's in the middle of a navigable channel. If it's in a small cove or bay, the Coast Guard isn't going to act on it. If it's in a lease area that was given by the former Minister of Crown Lands, we very quickly find out that the jurisdiction comes back to the ministry responsible for Crown lands.
What I'd like to know is whether the minister has given any thought to operating such a coastal marine watch. It could be voluntary within the community, with a relatively small budget that might be set aside to have those marine watches plugged into a 1-800 number perhaps -- or something that could activate ministry personnel to get somebody to go out to do a site inspection. If they do see that there are hazards, they could make sure they are dealt with expeditiously so that we don't have loss of property and, God forbid, loss of life.
Hon. J. Cashore: I'd like to commend the hon. member for the role that he's had in developing this community marine watch, because it is through this kind of process that we are really going to be informed at the earliest instance. With regard to the idea of developing this type of program more extensively, I think that's a good idea. Obviously we don't have the funds in this year's budget, but that's an excellent concept.
[5:00]
I'd like to point out to the hon. member that there is on-site inspection. Sometimes that is done by flying over the area in an aircraft. But I think we all know that the best line of defence is among the various users of the area -- the people who live, make their living and have recreation in the area. As to who to phone, it is the regional lands office in Burnaby: 660-5500.
G. Wilson: Monday to Friday.
Hon. J. Cashore: The question is: Monday to Friday. If the point that is being made is that we should have 24-hour monitoring, or something that's more extensive than that, I will have to agree to look into it. That's a good suggestion. Again, we have to find if we can accomplish these things with the available funds. But I certainly do commend and affirm the kind of monitoring that goes on by the public. I encourage the notification of our lands office so that we may follow up on some of the site-specific witnessing of problems that have resulted from this activity.
G. Wilson: I do know that there are some aerial investigations from time to time. I think if we're to be really honest, it's usually as a lands officer is leaving Burnaby to fly to Powell River and happens to be over the inlet and checks out the window to see what he can see. But from the air you can't see an anchor line that's drifting two feet under the surface. The time you find it is when it's wrapped around your propeller, and you've wrecked your engine.
I appreciate the minister is saying that marine watch is something that ought to be done and could be done. It doesn't have to be a very expensive proposition. There are many people who spend hours on the water who know the water very well. What is needed more than anything else is a little coordination in order to coordinate a response situation. I'd be happy, certainly....
I represent probably the largest coastal riding, with the possible exception of the Forests minister's riding. Of course, Vancouver Island has two sides to look at, so I'd better be careful about that.
Interjection.
G. Wilson: Anyway, I have many inlets.
So, Mr. Chairman, I think it is very important that we do look at that.
This brings me to the next question on these foreshore leases. We find that we are now starting to enter into a new system of lease holdings, and with the sinking of two vessels -- one off Sidney and the other in Sechelt Inlet; the Chaudier being the last one.... The Chaudi�re. Thank you. I appreciate my linguistic expert from Nanaimo correcting my French -- which is interesting, considering that he teaches English. But I do appreciate that. I understand now that there has been an application made -- and perhaps the minister can correct me if I'm wrong -- to designate a certain cordoned area above that vessel as a no-trespass zone for recreational boaters and fishing craft and so on, because of the danger that it may provide to divers in the area. They are setting up some buoys for demarcation of this and then putting some kind of a lease over it. I think that this is a new kind of a lease for British Columbia, because it isn't necessarily tied to any foreshore. The problem that is becoming evident is that if there's no policy in place for these freestanding surface leases, what kind of authority does the ministry have...? From a jurisdictional point of view, we're really dealing with navigable waters here, which is a federal jurisdiction. If you're dealing with stopping vessels -- especially fishing vessels -- from entering and leaving, I am sure you're going to be hearing from both the recreational fishing council and commercial fishing operations, who would be quite strongly opposed to having these kinds of freestanding leases -- I don't know what you call them.
Hon. J. Cashore: If this were to happen, I understand it would be called an offshore lease. There is no knowledge among the officials with me of any transaction within the lands branch relating to such an offshore lease. I have instructed staff that they are to review the policy with regard to the sinking of artificial
[ Page 6719 ]
reefs, and that there be no such sinking until this policy has been reviewed. That is where that issue stands now.
G. Wilson: It is my understanding that there is an application currently before Lands -- it perhaps hasn't gone up the hierarchy yet. I know that the Foreshore Advisory Task Force reviewed that. I continue to chair that task force, and there was significant opposition to it, because there was a lot of jurisdictional concern as to who is going to deal with it, and so on. So maybe it's stalled and it hasn't proceeded -- I don't know. But the sinking of these reefs is becoming quite a popular venture -- as we've seen off Nanaimo I think, when there was an attempt to sink the Chaudi�re, and even in the Sechelt Inlet where there was some considerable concern demonstrated by the Sechelt Indian band with respect to the referral process and the approval process. The Ministry of Lands played an integral part in the decision to have that vessel go down -- and if I may be permitted an editorial comment, unfairly so, in my judgment. While the Ministry of Lands has some jurisdiction over the surface of the water adjacent to shoreline and foreshore leases, it strikes me that when you get into the sinking of these artificial reefs offshore, you are into a whole different ball game. I wonder if the minister has some thoughts about it. I know of two additional reefs that are being contemplated, both of which will be in reasonably controversial areas, and the Ministry of Lands once again is going to be put in that kind of predicament. Can the minister tell us what policy, if any, has come forward?
Hon. J. Cashore: The lands branch administers the land on the subsurface. It does not administer the surface of the water; it administers the land on the foreshore and offshore -- the land underneath the water. But, as I said before, with regard to any future applications for the sinking of vessels, this policy review will involve a multi-agency consultation that would include input from the various federal agencies that have an interest in this.
G. Wilson: I have two other areas that I'd like to canvass, and I know that my colleague the Leader of the Opposition would like to get in on a couple of matters, but I see the hour is drawing fairly close. If my understanding is correct, this is the day that we have Crown lands officials here, so we want to try to wrap that up if we can.
The other two sections that I have -- and I'll try to be as direct and as specific as I can so we don't protract this -- have to do with the policy with respect to what appears to be a jurisdictional contradiction between Crown land sale and Crown forest sale, particularly in the role the Ministry of Lands plays in the sale of Crown forests. I'm specifically interested in areas where a local government is making application. Let me be very direct so that we cut right to the quick here. In my riding on the Sunshine Coast there's an application that has been before Crown Lands and the Ministry of Forests, and I understand it's now before the courts. In fact, it's in respect to Tetrahedron, a watershed in the Captain Creek reserve. I don't want to get into the debate that's now before the court, but I do want to talk about the role that the Ministry of Lands has with respect to the sale of that land to a municipal jurisdiction, because it would appear that municipalities all over the province are attempting to secure some kind of title to and ownership over watershed areas. At the moment, it seems that the Ministry of Forests is blocking, in part, those applications, and that the Ministry of Lands is playing an advocate's role. That seems to be contradictory. I wonder if the minister can tell us what's going on.
Hon. J. Cashore: The sale of Crown lands, both when it involves forest lands and when it doesn't involve forest lands, happens under the Land Act, and an order-in-council is required before such a sale can occur. At present the Ministry of Lands does not lease or sell land for watershed purposes.
G. Wilson: I'm aware of that, because if they did, that would have been done. We would have had a secured lease, and there would have been some kind of joint stewardship program there to protect the interests of the companies that have cutting rights and so on.
The difficulty we run into now -- and I'll come back to it briefly -- is that there is a situation where watersheds need designation, and it's hard to get a designation over a watershed that will provide local control of that watershed. We need a mechanism to do that, because if we did that, we'd eliminate a lot of conflict. I'm sure it would make life a lot easier for Ministry of Lands staff, and it would certainly make life a lot easier for public utilities people in the municipalities, because they would be able to secure tenure. I wonder if the minister wants to comment on that. It's not just the Sunshine Coast; I'm aware of at least half a dozen communities in exactly the same predicament. What's happening is that the Minister of Lands is essentially becoming on the surface an advocate but in practice a restricter.
Hon. J. Cashore: This is an enormous issue. If we were to take all the community watersheds out of provincial forest, there would be a significant economic impact. However, that's not to say that we should not be discussing these issues as we are. I just don't want to create the impression that this is something in which we see a massive policy change in the near future. It's not something that I see a ready solution for in the short term. Such a policy change would have very wide-ranging ramifications.
G. Wilson: If the minister can sort of flip back his Environment hat for a moment, it not only has wide-ranging ramifications in terms of the economy, it has devastating consequences to a municipality if their watershed is fouled. This is indeed a very big and complex issue, and it needs to be looked at.
I wonder if the minister might answer another question as we come into the last two that I wanted to put forward today. Insofar as there is some form of lease or licence through the Ministry of Environment water branch for taking water off river systems, I think the
[ Page 6720 ]
minister will agree that he does have some input into that. Obviously, if water is being taken out of a public waterway for municipal and domestic use, there has to be some licence to do that.
[5:15]
What's the role of the Ministry of Lands if, through Ministry of Forests-approved activities, steep slope logging has occurred and leaching is occurring and, as a result of that, the turbidity in the water system becomes so great that that water system is no longer usable? If it is usable, it's only with unacceptably high levels of chlorine treatment, which is both expensive to the municipality and highly undesirable. In trying to recover some of the cost to the municipalities, we're going to see, if we're not careful -- and I offer this as a suggestion -- ever-increasing suits in court by municipalities against both the Ministry of Lands and the Ministry of Forests, if activities in the watersheds make the water unusable or expensive to use. I wonder if the minister would comment on that.
Hon. J. Cashore: There's no intent whatsoever to diminish the seriousness of the issue the hon. member is raising. It is subject to a process for integrated management involving primarily the Ministry of Health, the Ministry of Environment, Lands and Parks, and the Ministry of Forests. Those integrated management issues have to be dealt with at that level, with Health obviously having a very important responsibility with regard to the health aspect of impacts on the water supply. Environment has, for obvious reasons, input into that which relates to our water branch; and the land branch establishes water reserves. So there's integrated management that has to do with harvesting approaches and a number of such aspects -- and it is a very serious problem.
G. Wilson: We can at least take comfort in the fact that the minister recognizes it as a serious problem. It is one that I think needs to be addressed with urgency, because once we have contaminated a primary water supply, it's very difficult to get it back. Witness the problems they've got in the United States as a result of that. Hopefully, we don't ever run the same risk here in Canada.
Having said that, Mr. Chairman, I wonder if I could just move to one last very small item I wanted to get to. It has to do with the sale of Crown land occupied under lease arrangement, in both marine waterfront and lakefront areas, where there is no upland access. I understand they are generally called water-access-only lots. They are being sold as fee simple properties outside of the community plan, if there is one -- and if there isn't one. In most instances there isn't, because it's rural land under regional districts and a lot of regional districts don't have comprehensive community plans. What is the policy of the Ministry of Environment, Lands and Parks with respect to the sale of these?
If they are water-access-only lots, there is -- or was -- a different standard applied to the kinds of services required on those upland lots. I think the minister can understand that once you've got a fee simple title, you put a house on it and it's not longer somewhere you spend two weeks in the summer. It may be somewhere you retire, or live full-time. All of sudden your septic capability is going to be in question. If you're on a small lake and sell all these lots off, and these lots become permanently developed, the impact on that watershed is going to be significant. It's one thing to have a two-week recreational lot with a small outdoor privy. It's something else to have a full-time residential development.
The last point I would make -- and I hope the minister will take it from my considerable experience on this as a former municipal representative -- is that it doesn't take long before a road gets put into what was a water-access-only lot. All of a sudden you've got developers coming in, buying up what at one time were lease properties for recreational use. That now becomes full-time development, with full-time development property options on it and significant profits to be made -- on land originally leased for the private recreational use of the leaseholders. This is a very significant problem from an environmental point of view, an extremely difficult problem from a regional planning point of view, and a very difficult problem with respect to the long-term maintenance of the quality of a lot of the waterfront watersheds these places are built on. If the minister could answer those questions, I think that concludes my remarks.
Hon. J. Cashore: This is a small part of Lands's program. It's not, by any stretch of the imagination, a major part of Lands's activity. There's a covenant on the title stating that access will not be provided with these lots.
G. Wilson: I thought I had concluded, but I wonder if the minister could tell us, then.... I'd be happy on a weekend -- hopefully it's a sunny one -- to drive with the minister by land to lots, originally leased as water-access-only lots, that have been sold and are now fee simple property in a major development, which has road access and which is going to be sold and marketed as a major development under one owner. Those lots were originally for recreation use only. I can assure the minister that the lake cannot withstand that kind of septic potential.
Hon. J. Cashore: We only sell these lots where they meet health requirements. But there are instances, I am advised, where a developer acquires these lots and then decides to build the road. So the road has not been put in by the government, it has been put in by the developer. I don't think that makes the scenario that the hon. member has described any more palatable, but that is the situation.
F. Gingell: My friend from Surrey-White Rock raised the issue of the special account, and I understand that the staff are here so that we can deal with the Crown lands special account. I'm not sure it's a subject I particularly want to deal with, but we might as well get some understanding of it.
Perhaps we could start off with a question on the items that are included as increasing the balance in the
[ Page 6721 ]
special account from revenues from third parties: $67 million in 1991, $53 million in 1992, $41 million in 1993, and anticipated in this year's estimates is $37 million. Could you please advise me roughly of the breakdown between regular rentals and proceeds from the sale of Crown lands?
Hon. J. Cashore: The operating transactions for the Crown lands special account for fiscal 1993-94 are: revenue from land sales, $25,600,000; from lease income, $14,070,000; from easement royalties and administrative fees, $3,400,000; from timber and miscellaneous revenues, $2,610,000; interest income, $830,000; less direct attributable costs -- you deduct this -- $9,300,000; and the total revenue, net of direct costs, $37,210,000.
F. Gingell: First you've taken off the direct attributable costs of $9 million, but you have treated the expenditures of $3.9 million differently. Can you tell me exactly what those types of expenditures are?
Hon. J. Cashore: Under non-recoverable expenditures, they're not directly attributable to the land: under audit and site cleanup costs, $0.06 million; under CLSA, IBM computer maintenance, $0.8 million; under parkland acquisition, $2 million; under habitat acquisition, $1 million; under asset devaluation and bad-debt write-off, $0.1 million; for total non-recoverable expenditures of $3.96 million.
F. Gingell: When we go back and look at the way these revenue sources have been coming down dramatically from 1991, when they totalled $67 million -- that's net -- to 1993-94, where they are anticipated to be $37 million, they are cut almost in half. Can you tell me if that has come from reduction of rentals of Crown land or the reduction of the sale of Crown land?
Hon. J. Cashore: We are forecasting a decline in revenue from major land sales, fewer shoreland sales and less income from the rent of shoreland.
Hon. Chair, if I may, I would like to beg the indulgence of the Chair for the moment to say that I need to be getting over to a meeting in Vancouver, and would normally adjourn at this time. If there are two or three more questions to finish this off, I'll try to accommodate that.
F. Gingell: Maybe we should focus in on some of these. One of the problems, when we look at the estimates, is that there were proposals to transfer very large balances from this special account to general revenue, and they didn't get transferred. So every year we follow through with different numbers. First of all, could you please advise us why they didn't get transferred as originally planned?
Hon. J. Cashore: In the documentation that our staff made available, there is a paragraph under the heading "Ministry of Environment, Lands and Parks, Crown Lands Special Account." The second paragraph from the bottom answers that question. I could read it for the record, but the hon. member has it. Perhaps he could look at that and follow up with any questions when we come back the next time.
[5:30]
While I would like to accommodate the hon. member, I am advised that standing orders require I do adjourn at this time. With that, hon. Chair, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The Committee rose at 5:31 p.m.
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