1993 Legislative Session: 2nd Session, 35th Parliament HANSARD
The following electronic version is for informational purposes only. The printed version remains the official version.
(Hansard)
TUESDAY, JUNE 1, 1993
Morning Sitting
Volume 10, Number 15
[ Page 6723 ]
The House met at 10:06 a.m.
Prayers.
P. Dueck: On behalf of my colleague the hon. member for West Vancouver-Garibaldi, it is my pleasure to introduce 35 grade 7 students from Hillside Middle School in West Vancouver. They are accompanied today by Mr. T. Williams and Mr. R. Paterson. Would the House please make them welcome.
The Speaker: Before we proceed with other routine business, on Thursday last the hon. member for West Vancouver-Garibaldi rose on a matter of privilege: namely, that a ministerial statement by the hon. Premier made reference to a subject matter previously referred to and currently under consideration by a select standing committee of the House and thereby committed a breach of privilege.
The Chair has examined the terms of reference of the Select Standing Committee on Economic Development, Science, Labour, Training and Technology, which empower the committee to "examine the implications for the economies of British Columbia and Canada of the North American free trade agreement." The Chair has also closely examined the content and scope of the ministerial statement and has considered the various submissions on the matter raised.
An examination of authorities on parliamentary practice -- namely, Sir Erskine May, Beauchesne and others -- has not disclosed any precedent or comment of direct assistance to the Chair in the consideration of the specific circumstances of the matter raised by the hon. member for West Vancouver-Garibaldi. It is, of course, a breach of privilege to privately solicit members of a committee when acting in a quasi-judicial capacity or to threaten members of a committee in an attempt to influence them in the discharge of their duties.
In addition, it is the acknowledged practice of this House to preclude any reference in detail to specific issues before a committee prior to the report of a committee, or discussions of evidence being presented to a committee, but to allow general references to a subject matter, even though that matter may have been previously referred to a select standing or other committee. The rationale of this practice is to avoid any direct intrusion into the functioning of the committees that might pre-empt the committee's activities. At the same time, the House itself is not totally precluded from alluding to a particular subject matter which it has referred to one of its committees.
The Chair's examination of the scope and content of the ministerial statement at issue reveals that the core of the statement relates to the concern about duties imposed by the United States on imported Canadian lumber, the dispute-resolving mechanisms contained in the free trade agreement with the United States and the effect of the proposed North American free trade agreement in relation to the subsidy side of the countervail issue. Reference was also made to the "government's oppostition to NAFTA." That statement appears to the Chair to go to the root of the hon. member's concern by reason of its linkage to the work of the Select Standing Committee on Economic Development, Science, Labour, Training and Technology. However, it is the recollection of the Chair that opposition to this agreement has been previously expressed by the government on several occasions in the House. Insofar as the ministerial statement makes reference to duties imposed by the United States on imported lumber, it must be common ground that opposition to that duty has also been repeatedly expressed in the House and elsewhere. Therefore it is difficult to see how a committee's work could be impeded by an allusion to facts already known to the members of the committee.
Furthermore, it seems to the Chair that the mandate of the committee to examine the implications of a proposed agreement is one of very wide scope, going beyond -- and not necessarily governed by -- either approval of or opposition to the North American free trade agreement. While appreciating the concern of the hon. member for West Vancouver-Garibaldi, the Chair is not persuaded prima facie that the ministerial statement itself -- which was within the ambit of allowable ministerial statements -- could correctly be construed, in the light of the practices of this House, as breaching the established privileges of this parliament.
Hon. M. Sihota tabled the annual report of the Ministry of Labour and Consumer Services for the year 1991-92.
Hon. M. Sihota: Hon. Speaker, I call Committee of Supply, and advise hon. members that Committee A will not be sitting this morning.
I want to take this opportunity to welcome back the Liberal Economic Development critic.
The House in Committee of Supply B; E. Barnes in the chair.
ESTIMATES: MINISTRY OF ECONOMIC DEVELOPMENT, SMALL BUSINESS AND TRADE
(continued)
On vote 23: minister's office, $347,800 (continued).
Hon. D. Zirnhelt: I want to advise the opposition that I have some further details on a number of things -- for instance, loans and loan guarantees. There were some questions by the House Leader about the Pavilion Corporation, the Transportation Museum and the major project review process. I am happy to respond to you, but it would take five to ten minutes. If you would rather not use the time, I will table it; but if you would like to hear the response on the commitments, I would like to do that. I have offered this information in the past, and I would like to get it on the record.
[ Page 6724 ]
With respect to loans and loan guarantees, on May 18 I was asked whether or not over the past 12 months there had been any pay-outs on loan guarantees. At the time my response was no, but that I would double-check. The correct answer is as follows. During '92-93, guaranteed pay-outs totalled about $1.6 million. An additional $873,000 was paid out at the beginning of this fiscal year. The $1.6 million pay-out was largely composed of the small loan guarantees provided by the former government under various business assistance programs: regional seed capital program, $128,000; small business assistance program, $66,000; and business start-up program, $639,000. There was also a $740,000 pay-out on a $5 million guarantee made to the Cassiar Mining Corp. This guarantee had been recommended by the Job Protection Commission. Sufficient funds had been set aside to cover pay-outs.
[10:15]
Some questions were asked about the B.C. Pavilion Corporation on May 20, and I undertook to return to the House and elaborate on the Pavco corporate office spending of $2 million. Pavco has a centralized management team that operates from its corporate offices. Functions performed by the team include finance administration, data processing and marketing, including guest relations. One of the purposes of the team is to ensure that the tasks are not duplicated and cost savings are realized wherever possible. Over the past year there has been some downsizing of this office due to reorganization within Pavco. Some office space has been sublet. Pavco is also continuing to seek new ways to reduce costs -- for example, joint marketing efforts with the tourism industry to promote its facilities and services.
On the B.C. Transportation Museum, during the estimates there was considerable discussion about the lease and cleanup arrangements for the museum. I asked the ministry to check and ensure that the information I was provided with was correct. It was. However, I thought it would be useful to provide the House with a brief summary of the lease arrangements in order to deal with any outstanding confusion.
For the period of April 1, 1992, to June 30, 1992, of the last fiscal year, the Ministry of Economic Development was responsible for the museum. Pavco signed the lease as agent for the Cloverdale Historic Transportation Society of B.C. This lease arrangement changed on July 1, 1992. As of that date, the Minister of Tourism was responsible for the signed lease for the July 1, 1992, to March 31, 1993, period and took over the responsibility for the site. The Ministry of Tourism also ensured that the premises were surrendered to the satisfaction of the landlord, Federated Co-operatives Ltd. As of April 1, 1993, Federated Co-op resumed its responsibility as landlord for the site.
I have asked my ministry to draft a letter from me and the Hon. Darlene Marzari, Minister of Tourism and Minister Responsible for Culture, to the MLA for Surrey-Cloverdale, Mr. Ken Jones, confirming these arrangements.
There were several questions on the major project review process. I have further information on the MPRP that may be of interest, in particular to the opposition critic. Let me begin by recalling, as background information for members, that the MPRP was introduced in February 1990 to provide a mechanism for a coordinated review of proposed major industrial projects. It is administered jointly by my ministry and the Ministry of Environment, Lands and Parks through an interagency steering committee of senior officials. This steering committee basically deals with two types of reviews: preliminary reviews and formal reviews of project proposals. As I mentioned earlier, the 1992-93 staff have been focusing on the follow-up from two formal reviews, the Orenda and Celgar pulp and paper projects.
In addition to the reviews of projects that have formally entered the MPRP by submitting a prospectus, the steering committee has also dealt with eight preliminary reviews of projects to determine whether these require formal review. Members should recognize that some of these preliminary review inquiries are sensitive from a business perspective and are of a confidential nature. Therefore it is not possible to give to the House a full list of all projects that come before the MPRP for this preliminary review. However, I can tell you that in 1992-93, of the eight inquiries, only one project was determined to be subject to the formal review. This project is confidential at this time, but it is expected to enter the MPRP in '93-94.
Examples of projects received for a preliminary review during 1992-93 that I can make public include the Vancouver Port Corporation's proposed container terminal facility at Roberts Bank, Towers Phytochemicals' proposed taxol plant, Skookumchuck's proposed modernization, the Jumbo Creek ski development and Mercury International, the proposed grain terminal facility at Roberts Bank.
Staff expect one or possibly two projects to go to the formal review under MPRP in 1993-94. Staff are also conducting preliminary reviews of two new project inquiries received since April '93. If members want further information on these projects, I would be pleased to make the necessary arrangements to have staff who oversee MPRP provide those details.
L. Stephens: Thank you, minister, for providing that information that we had asked for. Thanks also to other members, particularly the opposition members that were so helpful yesterday in carrying on the estimates in my absence. I want to thank all of you.
Before we move on, there are a few things I'd like to touch on that came out of yesterday's discussion. I know the Leader of the Opposition went through the loans and loan guarantees, the various funds and special accounts, and the concessionary loan expenditures and so on of the ministry, so there isn't too much there. During estimates last year there was some discussion about reinstating the small business program, and I would like to ask whether or not that particular program was worthwhile. It seemed to serve a purpose for all of the people involved. The bankers liked it, I know. Small business people liked it. Is there any possibility that the ministry is considering reinstating the small business program?
[ Page 6725 ]
Hon. D. Zirnhelt: Yes, we did discuss it last year, and we did look at the possibility, but we have expanded to look at methods of delivery. It always becomes the problem of one more agency involved in the loan business. We are now actively looking at the possibility of using the credit unions that want to expand into commercial lending as a vehicle for provincial activity in this field. Rather than getting directly into the loan itself, we are looking at delivery. The advice we have had from an assortment of agencies and business organizations is that there really doesn't need to be another delivery vehicle here. Since then, as well, the federal government has substantively increased their small business loan portfolio. As a result, they are occupying a lot of the field that normally we would be into. We are watching this very carefully. We will be looking at aspects of our small business strategy and continuing to dialogue with the Canadian Federation of Independent Business, the chamber of commerce and the banks.
We have actually identified another problem in the field, and that's major commercial funding for large projects where the banks have moved out of the resource sector and out of a lot of regional projects. Having studied it, we find that it's not just a matter of reinstituting a program that was there before. We have to look at the delivery mechanism, which we are doing, and at the broader needs for capital other than for small business. As you know, a lot of small business depends on growth of some of the large and medium-sized businesses. It's an area of lending that continues to concern us. We are a little closer, but I can't say that we will reinstitute that particular program. My feedback from business is split about fifty-fifty; some think we should be in there and some think we shouldn't. The banks, of course, like it, because they welcome anything that reduces their risk. Any government intervention in this area has to be done very carefully. We were not prepared to rush back and put this program on the table at this point.
L. Stephens: I know that the minister understands and appreciates the importance of small business to the province. I believe that in this province we depend more on small business than other provinces in Canada do. There are others programs that were questionable, but that particular program was extremely successful for small business. It's an extremely important part of the economy of British Columbia. I know that the minister knows that, so it's a little disappointing to me and the opposition that small business isn't getting more help than they are from the ministry.
One of the main objectives of the industry investment portion of ministry operations is to enhance the availability of risk capital. I know that the minister is aware of the economic situation in British Columbia. There are an awful lot of businesses out there that are very pressed, and they are struggling. The western economic diversification fund has been doing a lot of lending in British Columbia, primarily, I think, to take up the slack the provincial government just isn't interested in pursuing.
Again, on behalf of small and medium-sized businesses in British Columbia, I have to say that they need that help to provide jobs that this province depends on. It has been a year of looking at programming for small business, and we really need to come forward with something to help these businesses. Simply looking at it isn't going to be satisfactory in the long term.
I wonder if you could comment on the funding for some of the long-term trade development initiatives, such as the International Financial Centre, the International Maritime Centre, the Commercial Arbitration Centre and the Asia Pacific Foundation -- what kind of funding increase or decrease, and what criteria. What kinds of benefits are we looking for from those trade development initiatives as far as your funding is concerned?
Hon. D. Zirnhelt: There are two parts to your question. The federal government was already in the field, and they expanded their programs substantially and modified them a bit. I don't think they were there to help us out. I think they saw an opportunity to reach out to the small business community in the run-up to an election. I guess our concern is that they thought they had the resources to get involved in that; and if they do, then we should look very carefully at being involved in the same field. The delivery mechanism is something that we don't want to duplicate. We are looking at the development of regional pools of risk capital and how it might be delivered. We are actively pursuing that, and we will try to get the support of the small business community when we've finished our analysis -- we will share that with them.
With respect to these other agencies, we are providing a total of $780,000 to the International Financial Centre, International Commercial Arbitration Centre, Asia Pacific Foundation and International Maritime Centre. That total is slightly down from last year. I'll try to get the total figure that we're down. We are trying in most of these to determine through assessments whether or not they are providing the service that they were originally set out to provide.
[10:30]
We're down a total of $70,000 from last year. We try to look at each of them in terms of the cost-effectiveness. As you know, most of these have independent boards, and they just require core funding from the government. But, as with all expenditures, we're having a good look at everything and trying to find ways of reducing the dependence. Most of these were intended to be up and running on their own without continued government support. Therefore we feel justified in the reductions we have made. We've reduced the funding for two of them, the International Financial Centre and the International Commercial Arbitration Centre. We are actively reviewing at least the International Commercial Arbitration Centre, trying to look at its ongoing function. It has been providing domestic arbitration services and it was not set up to do that. So we're examining its future, and we've begun discussions with their board about that.
[ Page 6726 ]
L. Stephens: Could the minister tell us if there is a time line to wean these organizations from government funding?
Hon. D. Zirnhelt: The simple answer is that they all are on different programs; and they will all say that they aren't achieving the objectives, so therefore they need a little more time. But each year at budget time we review it, and hopefully, each one will get a review during the year. I would have to get back to you with some specifics of what the original business plans were, but I'd be happy to provide that for you if it's available.
L. Stephens: We'll look forward to receiving that information.
I want to talk a little bit about the WOF fund and sort of get up to date on what is happening there. Perhaps the minister would provide us with the information. How much money was brought in this RRSP term? How many investments were made, and what was the amount of the investments?
Hon. D. Zirnhelt: I'm just pulling out the figures. The Working Opportunity Fund has made one investment at this point. It's in an oil filter recycling firm in Kelowna. That's their first investment.
The Working Opportunity Fund raised $7.4 million in its first phase of operation from January 1 to February 20, 1992. During the second phase, from March 1 to December 12, 1992 -- following that first two-month period -- they raised an additional $300,000. From January 1 to February 28, 1993, the second year of main operations, they raised $12.7 million. So the total fund sits at $20.4 million.
Its first investment was made on March 6. That was a $400,000 loan, which can be converted to equity shares, to the Canadian Oil Filter Recovery Corp.
L. Stephens: This company is the one that's in Kelowna? What were the details of the loan? Is it an equity loan? What kind of a loan arrangement was it?
Hon. D. Zirnhelt: It is an investment by the fund in the project and in the company. So it's an equity investment.
L. Stephens: I understand that the job protection commissioner was discussed at some length. I would like to ask about the Gold River-Tahsis areas. What is the role of the job protection commissioner there? How are negotiations proceeding there?
Hon. D. Zirnhelt: I take it that you're referring to the timber supply situation. To my knowledge, at this point in time there has not been a request for the job protection commissioner. So, to my knowledge, he's not involved. Sometimes, somebody independent of government asks for him to be involved. It may be a period of time before he lets us know. As of his last monthly report he wasn't involved, and he hasn't asked me for advice or background information. We don't always get involved, unless there's a party that asks. But it is conceivable that he would be involved anywhere where a downsizing is possible.
W. Hurd: Further on the job protection commissioner's report, I have a few questions about the report on the Cominco smelter in Trail. One of the difficulties being experienced by the smelter are the fees for pollution permits and water licences from the Ministry of Environment, Lands and Parks. Can the minister advise the committee of what role his ministry takes in determining the impact of these particular water licence fees? Do you make any recommendations to the Ministry of Environment, Lands and Parks prior to the implementation of these policies, which in the case of the Cominco smelter in Trail were clearly a major hurdle for the company as it tried to restructure?
Hon. D. Zirnhelt: Well, that is something that the company has zeroed in on. As you know, they are a major user of water, and there are some major contamination problems in the area. The fees are designed to pay for the costs of policing those particular resources. The special commissioner made some recommendations about what the provincial government ought to do. Some of the changes to the fee structure that he asked for are not possible according to our advisers; they would be countervailable. The point that has to be remembered is that they wanted a substantive contribution from all of the parties. We have taken the amount of the contribution and tried to find a way, on a commercial basis, to provide that. Therefore we entered into a discussion about the purchase of future power at its present value, which would have a beneficial effect on the company's operating costs. How you arrive at the amounts that are required is not the job of the special commissioner. He makes suggestions and then you have to negotiate. We're saying we're not in a position to give a particular advantage to one company or the other.
With respect to the role of our ministry, yes, we do look, to the extent that the methodology is available, at the cumulative effect and make that information available to those parts of the government that need to know. In this case, the cabinet has been advised of some of the effects on the Cominco operation. We do that as we report periodically.
W. Hurd: In the case of the Trail smelter, clearly the water licence fees and waste permit management fees were identified by the company as a serious source of concern. They had gone up; in some cases, they had almost doubled from the previous amounts charged by the ministry. Can the minister advise the committee of the recommendations made by Mr. Kerley with respect to these fees? Can he advise us if they were dealt with in the report that he put forward? If they were, I guess my next question would be fairly logical: why would he include those items if the government is in no position to do anything about them?
Hon. D. Zirnhelt: First of all, it was Mr. Sleeman, a special commissioner, who made a recommendation. Mr. Kerley qualified the recommendations and
[ Page 6727 ]
discussed the report with the government. We are in the position, upon receiving it, to comment on whether some of these things can or can't be dealt with. Once a report comes down, there are negotiations with the various parties. The provincial government was one of the parties, and we said that we were not prepared to make a special arrangement, because it may be countervailed, and in the end, that does not do any good to that particular industry.
W. Hurd: I must confess I am somewhat confused, because that is not the answer I received during the estimates of the Minister of Environment, Lands and Parks. He acknowledged to Committee A that the matter was still under discussion. At no time did the minister indicate that it wasn't possible to change the fee schedule or the schedule for implementation of these new water resource licence fees. I find the answer somewhat confusing. The Minister of Environment, Lands and Parks seems to be taking a more reasonable approach to Cominco's problems than the Minister of Economic Development.
Further to the report on the Cominco smelter, can the minister advise the committee whether property tax relief is part of a consideration that his ministry would look at? The whole idea of tax relief is another important component of not only the Cominco situation but also other recommendations by the job protection commissioner when it comes to restructuring businesses in the province.
Hon. D. Zirnhelt: Yes, property tax is part of it. Mr. Kerley has been negotiating with the local governments involved, and they can make some concessions with respect to those particular amounts. He is currently negotiating those with the parties. He's working actively on an economic plan. I can't tell you the details of the negotiations, but he is continuing to work with all the levels of government that are involved. I don't think I can say any more than that.
W. Hurd: The minister is aware that the company recently announced layoffs for July. Can the minister advise the committee whether those layoffs were the result of the speed at which this plan is being implemented, or are the layoffs in any way related to the restructuring plan?
Hon. D. Zirnhelt: Cominco has said very clearly that the layoffs are a result of world market conditions.
W. Hurd: I wouldn't want the minister to get into a discussion about future policy, but clearly the company has indicated -- and I think the union in Trail has indicated as well -- that some sort of resolution to this restructuring package is going to be required to avoid the possibility of a closure of this facility, because of the market conditions that the minister has identified. Is he prepared today to indicate what the time frame might be for dealing with some of the major issues that the company has identified, which will enable it to invest in the technology that it needs to become competitive in the world market and avoid being affected by the kind of market conditions which are now threatening its existence in Trail?
Hon. D. Zirnhelt: The market conditions came upon us fairly recently. I think they are worse than the projections on which we were basing the early recommendations. As a result of this renewed hardship, we are advancing.... We have committed senior resources to the negotiations with the company. We are trying to come to some resolution as early as possible. I can't give you a date. I would prefer it was yesterday, but we are meeting daily with the company. We expect that it will done just as soon as possible. We are not in a position to recapitulate any particular aspect of the negotiations. It looks like we have got it wrapped up. We are committing senior resources to this, and as I say, we are meeting daily. We're trying to get a resolution, because it is in our interest to see the future of Trail secured.
[10:45]
W. Hurd: With respect to the property tax issue, the minister will be aware that that is another significant cost factor identified in the job protection commissioner's review of the Trail smelter. Can the minister advise the committee what role his ministry takes in determining the equity and the impact of property taxes on various industrial activities around the province? The increase in property taxes has had a major impact on industrial concerns and large businesses in the province. Can he advise the committee what role his ministry takes in measuring the impact of these property tax increases on the competitive ability of companies in the province?
Hon. D. Zirnhelt: We don't have unlimited funds, but when we look at competitiveness of industries, we do take that into account. If there is an identified problem, we try to look at it. Municipal Affairs has the responsibility for equity issues around the taxation system generally; it's their legislation. Where we have studied the effect of taxes on business, we find that B.C. is competitive in the cumulative effect with respect to advanced manufacturing and small business generally. There are some problems in some of the worldwide industries, but we are not in a position to tell municipalities what they should or shouldn't do with their tax systems.
W. Hurd: I think this leads into an important discussion regarding this ministry. The range of increases in fees, licences and taxes that have been undertaken by other ministries of government impacts directly on the people who look to the Ministry of Economic Development, Small Business and Trade for some measure of advocacy on their behalf. We're dealing with major increases in property tax in the province and huge increases in water licence fees and grazing fees in the cattle industry, for example. In the case of automobile dealerships, we're looking at target taxes that seem to bear no relation to the financial performance of these industries. Can the minister at least assure the committee that in the coming fiscal year
[ Page 6728 ]
his ministry will take an advocacy role in trying to point out to the Ministers of Finance, Municipal Affairs and Education the erosion of competitive ability caused by these taxes and the fact that these ministries are raising this revenue without any reference to competitive ability in the province. Clearly, there appears to be a role here for the Ministry of Economic Development, which is simply not being exercised at the present time.
Hon. D. Zirnhelt: What the member says is absolutely false. I have said in previous days of the estimates -- and perhaps you don't remember -- that we do provide advice to cabinet when the information is available. It's advice to cabinet, and it is usually confidential. The government speaks with one voice on these matters.
We have made considerable progress in looking at the cumulative effect in some sectors. We have already engaged some industries in looking at their general operating environment and their general operating costs, with respect to tourism and some sectors of agriculture, and we will do more work on this.
A fee and licence subcommittee of Treasury Board exists, which examines the impact. It's a busy committee, and we're a full member. We do whatever analysis is available. There is a shortage of information, as I've said before. We try to assemble that information as it is available. But this is nothing new. Any increase in operating costs may have a negative effect. But in the case of some that we've examined, fees, licences and taxes are a minor part of the increase in the cost structure.
The argument is that the government, therefore, should drop their costs. All those things also help to drive the deficit. It raises the issue of who should pay for services to certain industries. Fees and licences should be targeted to serving, guaranteeing or protecting a right to that industry. Who should pay? If everybody pays, it's a subsidy to that industry. Therefore the attempt -- and quite rightly so -- is to apportion the costs to those who benefit from the service.
W. Hurd: There are clear examples of taxes and fee and licence increases which are regressive, and because of the reduction in business activity, the province actually collects less revenue than they would if they hadn't adjusted them. I fundamentally believe that this minister would be doing the other government ministries a favour if he were to provide information that would clearly indicate that a regressive increase in taxation would actually result in a lower rate of business activity and therefore less revenue for the Crown.
The specific example that could be used is the automobile industry. Can the minister tell us exactly what his ministry has done, first of all, in the way of making recommendations to the Minister of Finance about the impact of the surtax on $30,000 vehicles and the imposition of the 7 percent sales tax on trade-ins, along with the corporate capital tax which was introduced in the previous budget? Can he tell us exactly what his ministry has done, or is doing, to measure the impact of those three government measures on that industry? The industry isn't just owners; it's the thousands of employees who work in the body shops, the repair businesses, the car lots and the secretarial pools. What specifically has the ministry done, or what is it doing, to measure the impact of these three government measures on the competitive ability of that industry?
Hon. D. Zirnhelt: We have worked hard to develop a general framework for the analysis of the impact, and we have made that available for the use of line ministries. These particular measures fall within the purview of the Minister of Finance, and he has the primary responsibility to look at forecasting. I said before in this House that where there is a line ministry, they have the people who can do the analysis. We do not have the capacity. We'd be running around.... I think you yourself probably suggested in a negative tone that we were the ministry of studies. If we did nothing but studies all the time and weren't out doing developmental work, you would probably be the first to criticize. So the general impacts of these things are measured. The Ministry of Finance forecasts them, and they have a general assessment of what the impacts are. As I said, we have worked with many sectors and have developed a framework so that the analysis can take place.
W. Hurd: Surely the minister has heard the same complaints or concerns as has the opposition. The rationale for some of these major increases in government fees, licences and taxes is not often available from the ministry that has imposed them. It's amazing how many of these businesses are totally shocked to learn of a major increase in cost based on a fee, licence or tax increase from government.
We're talking about the automobile dealership industry. We're talking about a major player in small-town economic development in the province of British Columbia. We're talking about a large employer in a place like Williams Lake, for example, or Quesnel. The role and function of automobile dealerships in small-town British Columbia cannot be understated. Not only do they employ people and provide much-needed business activity, they're also active in sponsoring community ventures. I think that's a very important industry in small-town British Columbia, and I'm certainly not comforted by the suggestion of the Minister of Economic Development that he isn't at all prepared to take an advocacy position on a set of tax increases by the Ministry of Finance that the opposition understands has resulted in reductions in total business activity in the neighbourhood of 40 to 50 percent over a two- or three-month period.
I'd even settle for a commitment by the minister that he would take an active role in working with the automobile dealerships in the province to try to get some of these issues addressed. They're not convinced that the Ministry of Finance has their best interests at heart at all, and they would look to this minister to provide that kind of direction.
[ Page 6729 ]
Hon. D. Zirnhelt: I was just checking to see what letters I have. I said in this House that I'm prepared to assist wherever necessary. In this case, the Minister of Finance has met with them and established a process to review it. If the automobile industry takes some comfort from us being there, I said we will be there. As for saying that we are the sole advocate for the industry, we are collectively responsible as government for ensuring the economic health of the province. We will be there to make sure that the view of the industry is made available to cabinet; I'm committed to that. The industry has not come to me independently of the Ministry of Finance. There is going to be one process. I can point to the review of the corporation capital tax -- changes were made. I understand that 100 percent of the recommendations of the group that was set up were implemented.
With respect to this particular industry, yes, we do care about small-town development and employment. I have had discussions with a number of car dealers in small towns. I have asked them to keep me informed, to provide me with a copy of the information they send to the Minister of Finance, and I will raise their concerns with the minister. I have undertaken to do that; I'm on the record as doing that, and I will.
W. Hurd: I appreciate that answer. I am somewhat troubled that a set of tax and fee increases that would have such a devastating impact on an industry over such a short span of time would not have been the subject of more input from the Ministry of Economic Development, which, after all, is the ministry responsible for not only new business activity in the province, but also securing a future for the industries and businesses that are already there.
I will ask a brief question about the $25,000 grant that the ministry has provided to the Economic Development Association of British Columbia for a study of economic conditions in the province. Can the minister advise the committee how this study will dovetail with the activities of the ministry? One would assume that a study of economic conditions would be something that the ministry itself would be undertaking.
Hon. D. Zirnhelt: I am not sure what economic study you're talking about. I saw you reading from a clipping. Maybe you could quote it a little more carefully so I know specifically what you're talking about
W. Hurd: To the best of my knowledge, the announcement was made at a meeting of that association in Penticton shortly before May 18. With the indulgence of the Chair, I quote: "Economic development got a $25,000 boost from the province on Monday. The provincial Economic Development minister gave the money to the Economic Development Association of B.C. during a stop in Penticton. `This organization shares many of the same goals and objectives with my ministry....'" This particular association is identified as a professional society for economic and employment development workers in the province.
Hon. D. Zirnhelt: That clarifies it. Like a number of community economic development organizations, the Economic Development Association applies, and we provide what amounts to core funding to them. Out of that they do a number of things. One in particular that I discussed with them is a study they were doing about economic and social conditions in small towns in B.C. They have done a survey looking at the concerns that people working in the field and community leaders have, and they try to focus their activities as a professional development organization on some of those activities. So it is funding to that organization for its ongoing activities. We provide approximately half of the funding for that organization. It's a professional association, as you have noted, of people working in that field.
[11:00]
G. Farrell-Collins: I ask leave of the House to make an introduction.
Leave granted.
G. Farrell-Collins: I notice in the gallery a group of about 37 grade 6 and 7 students from The King's School in my constituency, along with their teacher. I would ask the House to make them welcome.
W. Hurd: I have a further question about the study. The same article indicates that it will be presented to the Union of B.C. Municipalities convention to be held in the interior this fall. Is the minister aware of exactly what study is being funded here; exactly what they are presenting? Is it entirely within the purview of this particular association, as to the content or the nature of their study?
Hon. D. Zirnhelt: I would be happy to provide you details, but I don't have that with me. We don't tell them what to do with the money we provide to them. We feel that having this organization funded and operating as a tool that we can use for consulting with people working in the field is worth the contribution. They share with us on a preliminary basis, and when they have finished, they provide us with the results of their studies. It is my understanding that the study is of social and economic conditions in small towns.
I can tell you a couple of things that they have noted, on a preliminary basis, with a few of the samples in. For example, youth violence is a growing concern of people. You might ask how that relates to our ministry's responsibility. It doesn't directly, except that the quality of life and social conditions in small towns are something that people who are working in the economic development field have to be aware of. They're hearing from community leaders that there is general concern about it.
So they'll be reporting out to the UBCM. We won't be interfering with that. We're interested, of course, in the results, but most of the economic development commissions work for municipalities or are appointed by municipalities, and that's one group they would like to report out to. To my knowledge, they're not spending
[ Page 6730 ]
all of the money on that particular study. They're doing other things with it, including paying for some of their operating costs.
W. Hurd: Just a few other questions about that particular meeting in Penticton. I found the comments of the minister somewhat interesting. In his speech to the delegates he suggested that the ministry was taking bureaucrats out of Victoria and putting them throughout the province. Is the minister referring to the change with the government agents? Maybe he could clarify that remark with respect to this set of estimates. Are we dealing with a situation where bureaucrats from the Ministry of Economic Development are being put out into the field, and in what capacity?
Hon. D. Zirnhelt: That's a pretty general statement that was quoted. What we're doing is reassigning a number of Victoria positions, and they're being competed for. In some cases, people in Victoria apply for the jobs. In other cases, we'll be hiring locally. The best person for the job will be hired. We allocated approximately 17 Victoria positions -- person-years, if you will -- and assigned them to the regions. We took a number of positions from deputy government agents, for example, and reassigned them into the regional units. In that way we have increased the number of officials working in the regions. It's been a net shift of personnel in the regional and economic development unit from Victoria into the regions.
W. Hurd: In reviewing the budget for this ministry, we're obviously not dealing with new hirings in Victoria. These are existing positions that are being relocated. Can the minister give us an idea of how many people within his ministry might have been relocated from Victoria during the last year and how many might be relocated during the coming fiscal year?
Hon. D. Zirnhelt: I reiterate my earlier point that 17 person-years have been reallocated. Upon competition, eight of those 17 were filled by people who were previously employed in Victoria and are now working in the regions.
W. Hurd: I have a few more questions about the tariff situation with softwood lumber and the activities of the free trade dispute resolution panel, and the activities of the ministry in supporting the work on the countervail. Can the minister indicate, just from a general philosophical standpoint, whether he feels that the dispute resolution mechanism that exists under the free trade agreement represents the best way to resolve this dispute?
Hon. D. Zirnhelt: Generally speaking, we are not happy with the dispute resolution mechanism. It drags on and on and has not been an effective way of resolving disputes. In our view, the countervailing duty investigation demonstrates just how the lumber industry has not been protected. Had the Canadian government negotiated clearer rules on countervailing duty laws -- which they promised to do -- our industry would not be subject to this continued harassment. It continues to this day. The Minister of Forests just came back from Washington, where our legal advisers are telling us that we're not out of the woods on this one yet -- far from it. Statements have been made by the Premier. We are deeply concerned about it.
W. Hurd: As the Ministers of Forests and Economic Development well know, this issue goes all the way back to the early 1980s, prior to the free trade agreement. When the first attempt was made to slap a countervailing duty on softwood lumber from Canada, considerable effort was made to pursue the case through the U.S. court system as it related to international trade and tariffs. Does the minister feel that a return to those days of battling through the U.S. court system is preferable to a free trade dispute resolution panel comprised of trade representatives from both levels of government? Would the legal method, which was the only redress available at the time, represent an improvement in pressing Canada's and B.C.'s interests in trade disputes with the United States that involve such an important commodity product as softwood lumber?
Hon. D. Miller: Maybe I could ask a couple of questions of the minister with respect to this very critical issue. First of all, could the minister advise as to what the wording of section 1203 of the free trade agreement means -- or what the minister feels that the wording means -- with respect to the issue of log exports? Secondly, could the minister explain why, in light of section 1203, the United States has added log exports to the countervailing duty issue and why this government is taking such a vigorous stand in opposition to the ruling of the free trade panel? Finally -- perhaps there never will be an answer to this particular question, Mr. Minister -- why, in light of this threat to our log export controls, do we have absolutely no support from either one of the opposition parties? Quite frankly, I'm absolutely astonished and dismayed that two political parties in this province will not stand up and defend log exports....
The Chair: The hon. member for Surrey-White Rock on a point of order.
W. Hurd: I appreciate that the Minister of Forests and the Minister of Economic Development rarely talk to each other about anything meaningful, but I find it troubling that the Minister of Economic Development would be capable of answering a question involving the role of the opposition in the softwood lumber case. I think he would appreciate some direction from the Chair.
The Chair: Hon. member, we are in committee, and all members may participate in debate. That is not a valid point of order.
Hon. D. Miller: As I was saying, in conclusion, perhaps the minister might offer some opinion, at least,
[ Page 6731 ]
on why two political parties in this province refuse to stand up and fight for British Columbians and fight to maintain those log export restrictions that are so important to this province and have been a part of this province since the turn of the century.
Hon. D. Zirnhelt: I found that a very interesting question. In fact, I don't know why the opposition parties aren't supporting us, but I could speculate. It's deeply troubling that we are not protected by the free trade agreement against harassment by the United States -- we're supposed to be protected -- and in particular by the finding that log export restrictions constitute a reason for a countervailing subsidy. In my view, the log export question is fundamental to the sovereignty of this province, and I think the opposition parties -- I'm speculating here -- by supporting NAFTA early on are finding themselves boxed in when we see a failure of the Big Brother agreement, the free trade agreement, to protect our sovereignty and our exporters in this absolutely essential industry.
W. Hurd: It's amazing to me that both ministers have a very flimsy grasp of history in the province, but then that can always be restated to support whatever view one happens to hold. The fact is there are logs leaving this province even as we speak. They have continued to do so despite the campaign promises of the government about a ban on log exports. So I'm sure the minister would welcome the opportunity to explain at some future date why upwards of 600,000 or 700,000 cubic metres of logs are leaving this province every year. If that's an example of log export restrictions, I'm sure it would amaze the International Woodworkers of America, who have long sought a total ban on log exports from the province and thought they would achieve it with the change of government -- but it hasn't happened.
Returning to this debate, the issue of softwood lumber tariffs goes back to 1983, prior to the signing of the free trade agreement. Clearly, the absence of the agreement failed to protect the interests of Canadian lumber producers as well. I guess what I'm trying to solicit from the minister is some sort of commitment from him, or some sort of understanding from him, that the free trade dispute resolution panel, while it may not be perfect, does represent an improvement over what we had prior to 1987, when the free trade agreement was signed, where Canadian softwood producers -- and indeed, pulp and paper producers -- had absolutely no protection from trade harassment. There was no dispute mechanism; there was no ability on the part of Canadian industries, in this case the forest industry, to do anything more than go through the U.S. court system to try and have a tariff or a determination of trade injury addressed. Would he at least accept the principle that the dispute resolution panel is an improvement over what we had in those days?
Hon. D. Zirnhelt: There's no evidence that it's an improvement -- witness the last decision on the most important trade issue facing us. This is a longer, more expensive, and drawn-out process. We've spent millions of dollars in each fiscal year that we've been government fighting this. It's a drain on our resources. The economy of the United States is dragging us through this, and we have had no satisfaction that there's been any improvement whatsoever. If you have evidence to the contrary, you ought to provide it.
[11:15]
On the log export issue, you know perfectly well that when we are under the harassment that we are by the Americans and their lumber industry lobby, we are not in a position to change any of our forest industry regulations that might be countervailable. We will review log exports as necessary. But you also know that there's a very strong test of domestic need, that these logs have to be surplused to the domestic need, that there's no local purchaser for those logs, and that as result, the system that is in place has remained.
W. Hurd: I find it rather fascinating to listen to that acknowledgement from the hon. minister. When it comes to log exports the government feels that it has absolutely no choice, no ability to change the policy. The impression gained from the Minister of Forests was that we're being held up to ransom and that the province's log export restrictions were in some way conveying a subsidy. The fact is there's a minimal amount of export log restrictions, and the opposition has continued to call for a total ban on log exports. We've asked for it in this House, we've asked for it in question period and we've suggested it to the minister during the debate on estimates. Thus far, we've had that minister and this minister blame the free trade agreement for constraining their ability to address that fundamental trade issue. Mr. Chairman, it didn't make any sense then; it makes even less sense now. But just on a financial note, perhaps the minister could advise us of the dollars that his ministry has committed during this fiscal year to continue monitoring and dealing with this trade issue, as it's still before the trade panel.
Hon. D. Miller: While the minister is looking for that, perhaps I could pose several other questions related to the export issue, since it is a fundamental issue in this province. It appears to me that there's an absolute and abject failure on the opposite side of the House, which was just revealed by the Forests critic in his last question, to understand the implications of the free trade panel ruling. Mr. Chairman, in leading to the question, perhaps I might give some brief background to the trade dispute and the current situation we find ourselves in with respect to the ruling of a binational panel that was established under the free trade agreement.
First of all, briefly, some history. The United States has historically, over time, harassed Canada -- and when I say Canada, let's say British Columbia -- over the issue of the export of softwood lumber into the United States. That has been a feature of our relationship going back many years. The most recent history, in the last decade, started in 1983, with a challenge by the United States that we were subsidizing lumber production. That challenge failed within the United States. According to their rules under the
[ Page 6732 ]
International Trade Commission and the Department of Commerce, it failed. The United States, not to leave it at that point, led by a group called the Coalition for Fair Lumber Imports, resurrected that trade issue in 1986. They lost in 1983, but they're like the tide: they just keep coming at you. In 1986 they resurrected it, again alleging that British Columbia and Canadian lumber-producing provinces subsidized the production of softwood lumber that flowed into the United States.
In 1986, because we had inept government at both the federal and provincial levels, we ended up -- look, members of the Social Credit government in the past have told me that they agree with my assessment -- with the Minister of Forests in British Columbia traipsing south across the border into territory he knew nothing about. Undermining Canada's case at the time, we ended up with an inept federal minister at that level.
The ultimate result was a so-called memorandum of understanding, which imposed a 15 percent tariff -- collected in Canada. That was the deal: rather than the U.S. collecting that tariff at the border, it became an additional cost to Canadian producers in each province. In British Columbia, as the members should know -- maybe they do and maybe they don't -- the 15 percent tariff was converted to increased stumpage charges and additional charges to industry -- in other words, the obligation to reforest, which had previously been held by the Crown. That 15 percent cost was tacked onto our stumpage, and it saw an increase in 1987 in the stumpage charges collected by the Crown of some $500 million.
The Chair: The member for Langley on a point of order.
L. Stephens: This is the Ministry of Economic Development estimates; this is not Forests estimates. If the Minister of Forests has a question of the Minister of Economic Development, I would like him to please ask it and judge himself accordingly.
The Chair: The Chair appreciates the member's wishes and request with regard to the situation as it was before the Minister of Forests entered the debate, but under our standing orders, there are no prohibitive clauses with respect to who may participate or at what point. The Chair is at the will of the committee with respect to how members participate.
Hon. D. Miller: I'll conclude by simply summing up and saying that the result of the disastrous relationship and the ineptness of the government of the day, both federally and provincially, resulted in that 15 percent tariff.
We come now to the current dispute. Despite the fact that we increased our charges by between $500 million and $600 million per year, we were faced with yet another countervailing duty action by the U.S. In this case, they failed to recognize that we converted that 15 percent to stumpage. They determined that there was another 14.48 percent that should have been levied as a tariff at the border. That was subsequently reduced to 6.5 percent. That 6.5 percent duty, which our producers currently pay for lumber going across the border, is based on an analysis stating that about 3.5 percent of that is due to the fact that we maintain log export restrictions. In other words, because of the log export restrictions we have legislated in this province, they are making our producers pay a 3.5 percent tariff at the border.
That ruling was appealed to a binational panel under the free trade agreement, which the members seem to think is the be-all and end-all of agreements to protect our industry. For the first time in international trade relations between the United States and Canada, the free trade panel ruled that a border measure -- a measure that to some degree restricts imports or exports -- is a countervailable measure.
You don't seem to understand that they are saying that the log export restrictions we maintain allows the United States to impose a tariff on our lumber producers. Even worse than that, under U.S. law they can have a yearly administrative review and retroactively increase that tariff to whatever they like. Do the members not understand the importance of this ruling? Thank goodness a minority report by two Canadian members -- one of them being Paul Weiler -- objected to that. That free trade panel, which the members seem to hold so dearly, has ruled that the U.S. can indeed impose a tariff on a border measure, despite the fact that the United States has border measures. In Washington and Oregon they restrict log exports. They have border measures in terms of a whole range of other goods, particularly in the petroleum area, where there are import quotas and export restrictions. The members don't seem to understand the importance of a free trade panel essentially ruling against British Columbia's log export restrictions legislation. That is the issue. That is why the Premier got up and made a statement last week; that is why British Columbia will continue to say it makes no sense to proceed into NAFTA if the current free trade agreement, which contains article 1203, which specifically exempted log export restrictions as being a countervailable issue, has been completely flaunted and ignored by the United States. Our producers are now paying about 3.5 percent at the border.
To cap it all off, to illustrate their lack of understanding, the member complains about the limited amount of exports that we do allow under our surplus test system and says we should close that. Do you not understand that if we were to make any change -- if we were to close even the limited amount that we allow -- it would result in an increased tariff at the border? Don't you understand the implications of this? Really, my question to the minister is to reassure this House that this government will take every step and fight on every front to strike down this ruling and insist that Canada does not enter into NAFTA while we are being beaten up and abused so terribly by the United States, which is party to the free trade agreement and is completely ignoring it.
I wish the members opposite would understand this and support this government in its efforts. Clearly, all British Columbians want to maintain those export restrictions. To have the Social Credit and Liberal
[ Page 6733 ]
parties not support this government on such a fundamental issue is appalling. Perhaps they need to explain themselves. Perhaps the minister would confirm that we continue to fight on this issue.
Hon. D. Zirnhelt: It's important to have it on the record again, because obviously the critic opposite was not listening to the lucid explanations from the minister in the Forests estimates.
L. Fox: The Forests minister has come to this minister's rescue.
Hon. D. Zirnhelt: Well, I've answered the same things that the minister has. Clearly we have a joint responsibility. The lead on anything that is substantive to a ministry like this is taken by that ministry -- and appropriately so. We share the responsibility for the expertise on log exports. We are the experts on the agreement. The Minister of Forests is absolutely correct when he says that in effect the free trade agreement says under article 1203 that we can restrict log exports. Then we get a panel that says we can't, and we consider that to be continued harassment.
[11:30]
To assure the House that we are taking up this fight, and have taken it up, and to answer the question posed, we are going to spend probably another $500,000 this year on legal costs associated with this. So far $30 million will likely have been spent on U.S. lawyers by the federal government and the provinces combined. So this is a major fight, and we do not intend to give up. We feel that as opposition members you have an obligation to support the government's efforts to the extent of opposing the implementation of NAFTA until the bugs are worked out in the trade system we have. I know we can't count on your support, but I think the record has to stand that it's there. You still have an opportunity to go before the legislative committee and come out with very strong statements.
Interjection.
Hon. D. Zirnhelt: Get on the record and support it. Members opposite should be on the record supporting British Columbia in its efforts to fight the continual harassment by the United States.
L. Stephens: Before we go on to the estimates of the Ministry of Economic Development, I'd like to make a few comments about NAFTA, specifically to the Minister of Forests. I don't know why the minister should have such difficulty recognizing that this is a trade agreement which will hopefully assist us in coming to some resolution on the countervail issue. The U.S. does harass. As the member for Surrey-White Rock pointed out, our own recourse, previous to the FTA, was through the courts, which is expensive and not desirable. The North American free trade agreement strengthens the dispute resolution mechanism of the FTA, and I think everyone will agree that that is a good thing.
Interjection.
L. Stephens: The current ruling agreed that the laws, as applied, were not adequate. If the Minister of Forests would go back and look at the record of the dispute resolution mechanism, he would see that the vast majority of cases in dispute were won by Canada. The dispute mechanism does work. It is not perfect, but it is better than what we had. Any recommendation that assists us to move forward in resolving these issues, in my view, is desirable.
Now I would like to talk about the Ministry of Economic Development estimates and about duplication of services. In the industry and investment division, we were talking about professional services in the other two areas: one is administration and support; the other is policy and planning. In the industry and investment section, we have an amount of almost $2 million under professional services. I wonder if the minister could explain to us where these expenditures are, whether or not services are duplicated, and what the minister has done to eliminate any duplication or overlap that exists between his ministry and other ministries. I have another question on that, but I will let the minister answer that one.
Hon. D. Zirnhelt: I've got too many details here. On eliminating overlap with other ministries: if, for example, we're talking about professional services in the primary and forest products area, we consult with the Ministry of Forests to ensure that our work is complementary to theirs. We have a long history of working on industrial development policy and analysis, and I can assure you that we don't duplicate studies. If there's a line ministry area, a sectoral area, we consult with the ministry involved. We do that on mining, forestry and agriculture.
L. Stephens: With a ministry of over 600 employees and an expenditure of almost $2 million for professional services in that one division alone, I really would like to know how that money is spent and for what purposes. I'm having difficulty trying to understand why the ministry should require $2 million extra for professional services. Could you tell me what they're doing, what you're getting from these professional services that isn't happening within the ministry itself?
Hon. D. Zirnhelt: It's a small ministry with 600 people, of which the vast majority are in government agents' offices throughout the province, so when you start narrowing down, you have 60, 70 people in one of these divisions, and they don't have all the expertise on an area.
I could give you an example of the breakdown of the $2 million: the job protection, alone, to run his office, is approximately a third of that. For example, $711,000 is the budget for him and a third of that is for the JPC funding. We spend another half a million dollars in the resource industry's branch to do, for example, value-added wood studies about value-added wood, natural gas, utilizing mineral processing and flat glass.
[ Page 6734 ]
So we do a strategic plan each year to see where the money should be spent. I'm sorry, that is $326,000 we spend approximately on that. We spend a half a million on financial evaluation and equity division looking at such things as a major fisheries co-op, or ski resorts, and that sort of thing. For example, we pay Royal Trust $100,000 to deliver the employee investment program, issuing tax credits, escrow services to companies, marketing, and so on. So there's a long list of projects that are funded under this $2 million.
Clearly, you could try to hire that expertise, but generally it would be very expensive. People with that expertise are usually working for a consulting company, or a major accounting company.
L. Stephens: Let's talk a little bit about something that may have been brought forward or studied through the professional services. You mentioned the Georgia basin in your opening statements. That was an issue that was on the order paper last session and it could have come up for discussion. Those of us in the lower mainland, the GVRD, Washington State and the Island discuss this from time to time. You mentioned that that would be working to reduce uncertainty about land use issues by assisting the CORE processes, land claims and protected-areas strategies. If we can confine ourselves to the Georgia basin, what kinds of studies have been done with Washington State or any other interested parties to that?
Hon. D. Zirnhelt: As the member pointed out, there was a conference bringing together a number of experts on the Georgia basin. The round table provided the funding for that through their budget. They are working on a report which will be sent to government, I understand, some time early this summer. So we are working in a supportive capacity to those efforts, but we don't have a primary or a lead role. Our people working in this region do assist, but it is primarily the responsibility of the round table to provide an advisory structure. The Premier's office is also working through the Trade Development Corporation and with Intergovernmental Relations on some aspects that affect cross-border issues.
Hon. D. Marzari: I seek leave to make an introduction.
Leave granted.
Hon. D. Marzari: This is definitely a day for school kids to be coming to the Legislature, and it's a beautiful day for a trip across the water for the grade 5 students from Our Lady of Perpetual Help on 10th Avenue in Point Grey. I would also like to welcome their teacher, Ms. Flynn, and Father David Weir, who are accompanying them today. Welcome to the Legislature, and I would ask the House to welcome them.
L. Stephens: With respect to the Round Table on the Environment and the Economy, is it correct that some of the administrative responsibilities fall under the Ministry of Economic Development and the financial responsibilities fall under the Ministry of Environment, Lands and Parks? If so, could the minister inform us how much the organization spent during the last fiscal year?
Hon. D. Zirnhelt: Yes, I'm just confirming that the funding comes from the sustainable environment fund, which is the responsibility of the Minister of Environment. I can tell you that the funding has been reduced, as part of the general restraint we have to show on some of these things. But the sustainable environment fund provides for that. We don't provide any administrative support to the round table other than advice on the selection of members. As we do with a lot of other economic reports, we read their reports and use them generally. The Minister of Environment is responsible for those funds.
L. Stephens: Sustainable growth is something we're all concerned about and have firmly in mind when we talk about economic development. I wonder if the minister could tell the committee about some of the programs in place in the communities through the community and regional development division of the ministry. Again, perhaps focus on the aboriginal issue and whether or not the ministry has some particular programs to assist aboriginal people in outlying communities in promoting their sustainable economic development?
Hon. D. Zirnhelt: First of all, we did spend quite a bit of time on aboriginal economic development yesterday, and I'm sure that a review of the record would give some detail there.
I can say that we are working on a strategy of looking at the appropriate place for the provincial government to provide services. In the meantime, until a strategy is in place that may have a particular focus on aboriginal people, as we staff up in the regions, we are making our services available to all people, particularly to those who have not had access to our services in the past. We're working with the Ministry of Aboriginal Affairs. We have some consultants engaged, who are working right now with the aboriginal people, so that when we do have a strategy, it will be complementary to the efforts which are already out there on the part of the federal government and aboriginal communities themselves.
With respect to sustainable growth issues, there are programs in place. We are doing a number of things out there that will highlight some of the approaches. For example, we have the Mayors' Institute pilot project, which brings a number of mayors together to look at ways they can enhance the growth and development of their communities on a sustainable basis. It's modelled on a particular structure in the U.S. We are sharing information with people in the U.S. so that we can learn from other communities and, hopefully, the knowledge will be more general.
We conducted Imagine Nanaimo with the city of Nanaimo, one of a number of projects with massive public involvement looking at a long-range plan for the
[ Page 6735 ]
city of Nanaimo that tried to engage people in looking for local-based solutions. We're working with Mount Allison University in New Brunswick, which seems to have considerable information in their rural communities program. We have a two-year pilot project in Kimberley and Creston looking at ways of linking social, environmental and economic interests to assist the communities in determining what would be a sustainable future for them.
[11:45]
We have, as you know, continued funding the economic development commissions and business information centres. We have looked at the complementarity of programs that are offered at the local, provincial and federal level. That was a study that we undertook with the Economic Development Association just to ensure that our programs fit in. But I reiterate, we see our people as the provincial partner for economic development taking a leading role to bring together the provincial arms of government that are affecting economic development.
L. Stephens: I would just like to say that we had intended to wrap up the Economic Development estimates this morning. However, the Minister of Forests took up a great deal of time, and there were some questions that we want to ask. The member for Prince George-Omineca also has some questions to ask. I would like to say that it looks like we will be going to go into the afternoon for a short period of time. We're not going to be able to finish this morning.
With that, I will let member for Prince George-Omineca begin his questioning.
L. Fox: It's nice to enter back into these estimates. I want to ask some questions about the regional development offices and their budgets. But perhaps while the minister is tied up, I'll just pause.
A little earlier the minister spoke on the 17 positions, some of which, as I understand it, were deputy government agents put into the role of regional development officers and so on. Can the minister tell me: (a) how many regional development officers we will have in the province, and (b) how their budgets are structured for their respective regions?
Hon. D. Zirnhelt: I'm not exactly sure what the member wants in terms of how their budgets are structured. They have access to the programs of the ministry and we will be responsible. The budgets will be apportioned generally to the regions, and they will have to make arguments in terms of how they ought to be spent. There are 24 regional economic development officers; we mentioned that 17 were transfer positions. There are 24 of them in 22 communities, so some communities -- Prince Rupert and Cranbrook -- have more than one. They are employees of the ministry, so they are paid out of here. They do report to regional managers in the five regional management units, so they will administer the funds within the spending authorities of government, but the regional directors and the financial officers will have the major financial responsibility.
L. Fox: In part, will the success of one particular region in its initiative depend on the concerns in that region? Let me point to where I'm coming from. In 1992, 26,000 new jobs were created in the lower mainland region and 4,000 in the Okanagan region, but the rest of British Columbia had a decrease of 9,000 jobs. My concern in asking these questions is: where is the emphasis of this ministry? Are we going to be focusing on those regions that are in a job-loss situation? Are they going to be of a higher priority in terms of budgets available to the local regional development officers, or are they competing evenly with those growing districts?
Hon. D. Zirnhelt: I can assure the member that just as the organization putting more people into the regions indicates the priority, we have substantially reduced the resources in Victoria and Vancouver and have placed people to work in the periphery of the lower mainland, for example. With respect to the regions which are having a decrease in population, I think that is stemmed for now; historically that has happened. But if there is a decrease in population in a sub-region, that will get a disproportionate amount of the service of the RDO, generally speaking. Each one will have to come up with a business plan looking at activities. But you can't ignore the growth areas, because they're providing wealth to the province as well. But generally the growth areas have more resources to put into local economic development, so our employees are there to fill in the gaps. For example, in the Thompson-Okanagan region, I expect that they will work in those areas where there is a severe economic problem, more on the periphery of the region. But to the extent that one area has a lot of growth in and of itself, you want to facilitate that growth. But the need is greater in those areas that are having trouble stabilizing their populations and economies, because those will get an inordinate amount of our resources.
L. Fox: Just to clarify it, I was concerned that the minister perhaps wasn't listening at the time I was speaking. I wasn't talking about population growth; I was talking about job growth and job reduction, which doesn't necessarily correspond. The job growth doesn't necessarily correspond to the same percentage of population growth. However, I guess my concern is as we see so many times in government: population centres get the priorities in terms of spending, but in fact the real need is in the regions other than the lower mainland and the Okanagan region, in terms of economic development and diversifying the economy. When we look at this natural resource community fund that this government put in place last year.... In fact, at one point I even supported it, thinking that it would be a proactive fund. I know that the community of Granisle, just outside of my riding, has been waiting for a year for the minister to give them some advice as to whether or not they have a successful application to this fund. I spoke just recently to one of the aldermen there. They are extremely disappointed with the red tape and lengthy application process. The last time he heard,
[ Page 6736 ]
they were still thirteenth on the list. Given those kinds of situations, there's a need for a lot quicker action in terms of economic development in the non-growing parts of the province. That was the point that I was trying to get to.
Hon. D. Zirnhelt: I've said that in our regional operations, we've been in the process of restructuring. We've budgeted a whole increase of $4.5 million. We went up from $17 million to $21 million, with a net decrease in our budget. We've diverted resources out there for precisely that reason. If you look at the location of our field staff, they aren't all in place -- you know that. When they are in place, they'll be in a position to help those people get through whatever red tape there is. But with respect to that particular community you're talking about, there was no red tape. It took us the better part of a year to carefully develop the guidelines, because it isn't just an unending pot. We have provided considerable assistance to that community. It may not be everything that they want, but we have provided considerable assistance.
We will be in a position in the year to come to provide more assistance. Our staffing and final competitions are underway now. Hopefully, with somebody located in Vanderhoof or Burns Lake, we will be in a position to assist communities such as you're speaking of.
With the lateness of the hour, Mr. Chairman, I'd like to move the committee 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.
Hon. D. Marzari moved adjournment of the House.
Motion approved.
The House adjourned at 11:55 a.m.
[ Return to: Legislative Assembly Home Page ]