1993 Legislative Session: 2nd Session, 35th Parliament HANSARD
The following electronic version is for informational purposes only. The printed version remains the official version.
(Hansard)
THURSDAY, JUNE 3, 1993
Afternoon Sitting
Volume 10, Number 19
[ Page 6833 ]
The House met at 2:03 p.m.
G. Wilson: Hon. Speaker, it's my pleasure today to announce in the precinct the mayor of Vancouver, Mr. Gordon Campbell, who is with us here today. Mr. Campbell, I understand, is seeking public office in the provincial Legislature, and I'm sure he will make an excellent cabinet minister in a government under my leadership.
Hon. M. Harcourt: I too would like to welcome a constituent of mine who works at 12th and Cambie. He lives on 14th Avenue in the great constituency of Vancouver-Point Grey. I would like to welcome -- not to a cabinet, but to the gallery of the Legislature -- the mayor of Vancouver, Gordon Campbell.
As well, hon. Speaker, it's quite a historic day. This is the anniversary of the first CCF-New Democrat government in this country, in Saskatchewan. I would like to give a very warm welcome to Peggy Brewin, one of the great pioneers of the CCF-New Democratic Party, whose husband, Andy Brewin, was one of the early MPs in Ottawa and whose son John is now an MP in the House of Commons.
F. Garden: In the gallery today I have two constituents from Cariboo North, from Quesnel. One of them is Mr. Les White. He's the general manager of Quesnel River Pulp, but he's also here in his capacity as chairman of the board of G.R. Baker Memorial Hospital. Accompanying him is the administrator of the hospital, Mr. Ken Last. Will you please make them welcome.
N. Lortie: I'm pleased that for the first time since I entered this House I am able to introduce my most trusted adviser and life partner -- and, as usual, she's right behind me -- my wife Janet. Would the House please make her welcome.
Hon. A. Hagen: At times we have visitors from abroad -- at least, visitors who are our good neighbours to the south. I'd like the House to join me in welcoming Mr. David Priest, a medical student who is visiting here today for the first time, from the United States.
J. Doyle: In the gallery today is a constituent of mine, Bob Mackie, from Revelstoke. Bob is the president of the Columbia River-Revelstoke NDP constituency association. I'm very proud to have Bob here today. I'd ask you to make him welcome.
Hon. E. Cull: I have four guests in the gallery today. These are volunteers who work very hard in my riding: Lois Sutherland, Barbara West and Joanne Buck. My executive assistant, Charley Beresford, is accompanying them. I'd like the House to make them most welcome.
J. MacPhail: I know that we have in the gallery the potential father of the new liberalism and the mother of social democracy. It is only my mother who is in the gallery today. I'd like the House to please make my mother, Mary MacPhail, welcome from Hamilton, Ontario.
F. Gingell: In the gallery today is a group of visitors from Japan. I had the pleasure of meeting with them earlier. Members of this group are legislators from a prefecture -- which I can't pronounce -- centred around Yokohama. I would ask this House to please make them welcome.
Hon. D. Zirnhelt: My partner is here on a rare visit to Victoria. I would like the House to make Susan Zirnhelt welcome.
J. Tyabji: I see in the gallery a concerned resident from the Bamberton area, who is working very hard on a local issue. I'd like the Legislature to welcome Anne Bomford.
HOME OWNER GRANT AMENDMENT ACT, 1993
Hon. R. Blencoe presented a message from His Honour the Lieutenant-Governor: a bill intituled Homeowner Grant Amendment Act, 1993.
Hon. R. Blencoe: This legislation contains several provisions relating to British Columbia's homeowner grant program. Most of the amendments are to the Home Owner Grant Act; two are consequential amendments to the School Act. In total, the amendments will tighten loopholes, ensure the grant goes only to deserving homeowners and save the taxpayers of this province at least $5 million per year. The amendments represent a major reform of the program, which is so important to hundreds of thousands of British Columbians.
Let me be clear, however, that the proposed amendments do not change who is entitled to receive the grant. The purpose of the homeowner grant program is to help homeowners meet school taxes on their principal residence. British Columbia taxpayers cannot afford to subsidize out-of-province property owners and others who do not qualify but who have claimed the grant in the past, particularly when the savings gained help reduce the provincial deficit.
This new legislation will ensure fairness in the way grants are delivered, enhance compliance with the eligibility requirements for the grants and improve the overall efficiency of program administration.
The grants are currently administered independently by 150 local governments, which has impeded the cross-referencing of applications. This bill will establish an office within my ministry to furnish this cross-referencing capacity, provide improved information on the program rules, standardize grant criteria in all jurisdictions and establish an appeal system.
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Bill 23 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
The Speaker: I recognize the member for Powell River-Sunshine Coast. [Applause.]
G. Wilson: I trust the enthusiasm will be demonstrated on my supplementary question after the first one.
BAMBERTON DEVELOPMENT AND CONFLICT OF INTEREST
My question to the Minister of Municipal Affairs has to do with the ongoing quest of the opposition to try and sort out what constitutes conflict of interest on the government side. Does the minister not feel that there is at least a perception of conflict of interest in the controversial billion-dollar, union-funded Bamberton development, given that the minister is going to have to give final approval to this project and that the lawyer for the South Island Development project is none other than Robert Milne, who was the official agent for the minister in the last election.
Hon. R. Blencoe: There is no conflict. If it is carried out, the project will be administered and delivered by local government, the Cowichan Valley Regional District. This minister does not drive the project. All dealings are with local government. They control the process and the public hearing. All my dealings as minister are with local government, as they should be.
The Speaker: In recognizing the supplemental, I would urge the hon. member to ensure that the question addresses the administrative responsibilities of the minister.
G. Wilson: Indeed it does, because in a letter to the regional district this Minister of Municipal Affairs said that substantial sums of provincial money may have to go into this project. If there was no perceived conflict of interest with respect to Mr. Milne, does the minister not feel that the involvement of Mr. J.D. Tait -- self-acknowledged fundraiser for this minister in the last campaign -- would at least signify some kind of conflict, given that this minister will have to approve the infrastructure financing?
Hon. R. Blencoe: My dealings are not with Mr. Tait; they are with local government. I will not approve the infrastructure funding. I have already said it's through the Cowichan Valley Regional District. Through consultation with the public, they must approve the land use decision in principle. If they approve that, other ministers will have to go through statutory requirements, in terms of environmental assessment.... I will not drive the agenda of those statutory requirements. If required, those reviews will go ahead to protect the interests of all British Columbians. That is clear. I have said my dealings are with local government, and that is all.
[2:15]
The Speaker: Final supplemental, hon. member.
G. Wilson: Once again with respect to the conflict of interest, given that this project requires a substantial rezoning and runs counter to the community plan, which is administered under the Municipal Act, can the minister tell us who the citizens in that area should appeal to if they feel aggrieved? Normally they would appeal to the ombudsman, but we find that the ombudsman is in fact the wife of the lawyer for the project developers. So who does the minister feel these people could appeal to?
Hon. R. Blencoe: In this province we have a longstanding tradition of autonomous local government and elected officials. If you feel aggrieved about a land use decision -- unless the Liberals want to change the tradition in our province -- you appeal to the officials who are elected to make the decision. My advice to that member is to counsel those people who want to have their views heard to talk to local government; they are the ones who control the process. That is the tradition in British Columbia, and we uphold that tradition on this side of the House.
CONSIDERATION FOR GRADE 12 STUDENTS AFFECTED BY LABOUR DISRUPTIONS
C. Serwa: My question is to the Minister of Education. Sunday's back-to-work legislation didn't address the effect of the strikes on students' performance in provincial exams. Has the minister finally decided to offer these students some form of special consideration so as to allow them to compete on a fair and equal basis?
Hon. A. Hagen: Students in the province are all back in school diligently preparing for their exams. I know that teachers and students will be working in preparation for the exams and will be as prepared for them as is their need. I have not changed our position on the exam process, which is a fair process; and the post-secondary institution process, which is a fair one, will be in place for those students.
C. Serwa: Despite the minister's unfortunate choice of words, students didn't enjoy a special advantage by being out of school for that period of time. If the affected students show some marked difference in their provincial exam results, will the minister not consider an adjustment process? There is precedent for this in the Ministry of Education; it has been done in the cases of Abbotsford, Princeton and Peace River North. It seems reasonable and fair that an adjustment be made.
The Speaker: Unfortunately, as the hon. member knows, the guidelines of question period do not allow hypothetical questions.
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HIGHWAY TRAFFIC DISRUPTIONS
D. Symons: My question is to the Minister of Transportation and Highways. Considering some threats to disrupt traffic at the Okanagan floating bridge, the Minister of Aboriginal Affairs stated recently that highway blockades by aboriginal groups will not be tolerated, but at the same time he added that a slowdown of traffic might be a legitimate form of protest. Does the Minister of Transportation and Highways condone slowdowns of traffic by leafletting or whatever -- and is this Block B.C.?
Hon. A. Charbonneau: All citizens of British Columbia have a right to make their views known on issues, and if they are not causing any disproportionate disturbance to traffic, then I think it ought to be acceptable. These kinds of things happen throughout the province on an ongoing basis. Perhaps the hon. member opposite would like me to stop high schools, for example, from advertising car washes.
COMPENSATION FOR HEMOPHILIACS
L. Reid: My question is to the Premier. The role of good government is to set standards. This did not happen for British Columbians who required safe blood supplies. Other provinces are prepared to compensate their citizens. Your Minister of Health, hon. Premier, regrets that other provinces are moving ahead. Are you prepared to make a decision today?
Hon. E. Cull: As the member knows full well, the issue of compensation for hemophiliacs who are HIV-positive was reviewed by the conference of provincial health ministers as recently as September 1992. At that point all provinces reached an agreement that the federal compensation that was provided was adequate, and the allowance that had been made by the provinces to not consider it income when other provincial programs are put in place was reaffirmed. Since that time, Nova Scotia and Quebec have changed their opinion. I have now met with the B.C. hemophiliac society and received their submission again, and I have undertaken to reconsider this matter and get back to them as soon as possible.
The Speaker: A supplemental, hon. member?
L. Reid: Thank you, hon. Speaker, and I will pose the question to the Minister of Health.
The answer is unacceptable. We have individuals in this province who will not survive the length of your report, quite frankly. During the estimates process we had the Kilshaw report, which looked at diagnostic services. We have people in this province who don't know whether or not they have contracted the AIDS virus. You have been called to action by the federal governments and other provincial governments; are you prepared to take some action?
Hon. E. Cull: I met with the B.C. hemophiliac society just over one month ago. I committed to get back to them as soon as possible. I don't think that four weeks is too long for a thoughtful review of a policy decision which requires that there be some consistency across this country, so that it doesn't matter where you live, you get equitable compensation. The review will be coming forward in due course.
WELFARE FRAUD INVESTIGATION ERROR
V. Anderson: My question is to the Premier. Last week, in the aftermath of the concern about fraud in Social Services, one of the persons who was unjustly affected by this was a man by the name of Mr. John Paul Jones, whose identity was used in trying to prove that there was fraudulent use.... Would the Premier, on our behalf, send Mr. John Paul Jones a letter of apology for this unfortunate occurrence which took place in his life?
Hon. M. Harcourt: I will take that question on notice, and get back to the member.
CAMPBELL RIVER SCHOOLS LABOUR DISPUTE
G. Farrell-Collins: My question is to the Minister of Labour. Given the dithering we've seen over the last two months on the labor relations issue as it relates to education in the province, and the action that this government finally took on Sunday, and then again on Monday as it relates to Surrey, will the Minister of Labour now intervene with Bill 31 in the Campbell River dispute, and get the students in Campbell River back to school before they have to write their exams?
Hon. M. Sihota: If the hon. member had done his homework he'd know that the parties have agreed to a process that will see a resolution to the Campbell River dispute.
The Speaker: Supplemental, hon. member.
G. Farrell-Collins: Quite clearly the minister once again is showing to us, and to the people in this province, and the students of this province, that he's more concerned with the labour relations process than he is with the students of British Columbia. When will the minister finally stand up for the students of B.C., and get them back into school where they belong, despite the objections of his friends in the labour movement?
Hon. M. Sihota: Perhaps the hon. member didn't hear me, or perhaps he didn't want to hear me because he's been rehearsing his questions all afternoon, and didn't want to hear the news out of Campbell River. The fact is, hon. member -- and please listen to me carefully here -- the parties have agreed to a process by which they will go back to work, and schools will reopen in Campbell River.
The Speaker: Final supplemental, hon. member.
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G. Farrell-Collins: The parties in Vancouver agreed to a process, the parties in North Island agreed to a process, the parties in Surrey agreed to a process, and the students still stayed out of school. When will the students in Campbell River be back, and when will the minister take some concrete action on this issue? If he won't, when will the Premier?
Hon. M. Sihota: The schools in North Island are back in operation; the schools in Surrey and Vancouver are in operation; the schools in Campbell River are to be in operation imminently.
FINANCE MINISTER'S ROLE IN DEALING WITH LABOUR DISRUPTIONS IN SCHOOLS
W. Hurd: I have a question for the Minister of Finance. The people of the province were intrigued to learn that the Minister of Finance joined the Premier in heading for the hills, rather than attend cabinet meetings to discuss the end of the Vancouver teachers' strike. Can the Minister of Finance tell us whether he saw a separate ruling from the conflict-of-interest commissioner on his involvement in cabinet discussions leading to a settlement of this strike?
REQUEST FOR CABINET SHUFFLE
W. Hurd: Perhaps I can ask a supplemental question of the Premier. I ask this question on behalf of a long-suffering public and government members of this House. When will the Premier undertake a cabinet shuffle?
Interjections.
The Speaker: Order, please. Yesterday the Chair reminded members that matters to do with cabinet are not appropriate for question period. I ask the Premier, in rising, to keep that in mind when he answers.
Hon. M. Harcourt: I think the issue was about cabinet, and around the issue of conflict. I think British Columbians would want to see the Premier and cabinet ministers exercise an abundance of caution when it comes to matters of conflict. Given the previous government's experience with that Premier and 11 ministers having to resign because of conflicts and other inappropriate behaviour, I would think that the member would say: "Good on you for being cautious about conflict situations." Hon. Speaker, I would think the member would say that, with the tough new conflict laws we have and with the abundance of caution exercised by myself and other ministers over the last 18 months. Mr. Hughes made it very clear in his written submission, tabled in this Legislature, that if I were to sit on a decision in regard to Vancouver instead of dealing with the broad principle of the public interest in getting students back into the classroom, it could be perceived as a conflict. I would hope the member would be cognizant of that.
Hon. M. Sihota: I call second reading of the Vancouver Foundation Amendment Act.
VANCOUVER FOUNDATION AMENDMENT ACT, 1993
J. Macphail: It gives me great pleasure to bring forth second reading of private member's Bill 402, the Vancouver Foundation Amendment Act. If I can have the forbearance of the House, I will explain this technical amendment. It is an amendment to section 16 of this piece of legislation. The Vancouver Foundation has grown to be, by far, the largest community foundation in Canada. As a community foundation, it is a fund that has been built by individual people. It is not a corporate- or government-funded institution. It is really a matter of small donations through people's wills and estates. The Vancouver Foundation does fund throughout the whole province in areas of youth, education, child welfare, the performing arts, health and welfare, the environment, and medical research.
[2:30]
With the growth of the Vancouver Foundation, it was felt that United Way of the Lower Mainland -- at that time it was called the Vancouver Welfare Federation -- should have a fund that would sustain the operating costs and offset some of the campaign costs of the United Way appeal. So the general fund was established. The general fund was really set up to provide for the United Way and to allow the foundation board to use it for that purpose -- or other purposes. That has become a bit of problem for the United Way because of the uncertainty of the funding of that foundation. The Vancouver Foundation relies on public donations, and some of the donations carry very specific directions, while others do not. Those that do not carry specific directions are the ones that cause the problem. They go into what the act calls the general fund, and the income from that general fund would, by default, be paid to the United Way. However, the United Way has absolutely no certainty, because the income from that fund may be diverted by the board of Vancouver Foundation to other charities. The Vancouver United Way fund has no guarantee of how much revenue it will receive. Sometimes those unspecified donations are actually directed to the geographic location from which they came, so the United Way is sometimes competing for those same funds.
This amendment attempts to give the United Way some certainty in its funding. The concept is to crystallize the present fund as it exists, so that the United Way will receive the income from the present fund on a mandatory, not a discretionary, basis. This is how that will occur by amendment. For the next four years, the United Way and the Vancouver Foundation will share any additional donations to the fund that have no specific reference on a basis beginning at 40 percent to the community fund and decreasing to 10 percent four years from now. Once the fund is established, there will be absolutely no question that
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the United Way is entitled to these proceeds. There will be certainty for both the United Way and the Vancouver Foundation. I might add that the United Way is very supportive of this amendment, because they see an absolute certainty in the proceeds and the fund will be substantial.
Let me just reiterate the way the fund will work. It is a general fund of approximately $10 million. It generates slightly in excess of $1.1. million a year. That fund will be capped or at least solidified at that amount under the name of the United Way of the Lower Mainland endowment fund. People who want to support the United Way fund will make donations specifically to that fund or perhaps even to the general fund, because that's what some people have always known it to be. Moneys that are directed to the general fund will continue to flow into that fund as well for a period of time, until the fund is well established. Again, I reiterate that the United Way has indicated they are in favour of this treatment.
A. Cowie: The official opposition is pleased to support this bill. Both the United Way and the Vancouver Foundation have done excellent work and continue to do excellent work. I personally have worked through the Vancouver Parks Board on a number of projects that were funded by the foundation. They've always done excellent work. So without going on in great detail, we can only say that we support the intent of this. We think it's an advantage to have the two agencies working well together, so that donations and funding strategies can be coordinated.
C. Serwa: Certainly I rise to speak in support of the philosophy and principles of this particular bill. The Vancouver Foundation has deservedly earned a very special reputation in British Columbia, not only in the Vancouver area but also for the bequests and funding support through all areas of the province. Given the opportunity, both the United Way and the Vancouver Foundation made clear that they had agreed on the amendments.
What I wanted to talk about specifically was the opportunity of the select standing committee to look at a bill, listen to presentations in a different forum than the Legislature and ask a variety of questions that were fundamentally apolitical. It was a very interesting process. It's actually the first time that I was involved in this specific process, and I liked it very much indeed. It might be considered for future bills that pass through this Legislature. The hon. member has canvassed it very well and explained it thoroughly. We are solidly in support of passing the amendments to the Vancouver Foundation Act.
Bill Pr402, Vancouver Foundation Amendment Act, 1993, read a second time and referred to a Committee of the Whole House for consideration forthwith.
Hon. M. Sihota: Hon. Speaker, two things. First, I wish to call Committee of Supply A in the Douglas Fir Room to deal with the estimates of the Ministry of Transportation and Highways; and secondly, I call committee stage of Bill Pr402.
VANCOUVER FOUNDATION AMENDMENT ACT, 1993
The House in committee on Bill Pr402; E. Barnes in the chair.
Section 1 approved.
Title approved.
J. MacPhail: I move that the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the Chair.
Bill Pr402, Vancouver Foundation Amendment Act, 1993, reported complete without amendment, read a third time and passed.
Hon. M. Sihota: Hon. Speaker, I'm sure we can make as substantial progress in the next bill as well.
Interjection.
Hon. M. Sihota: The hon. House Leader for the opposition says I may be amazed.
I call second reading of Bill 30.
FOREST AMENDMENT ACT, 1993
Hon. D. Miller: Bill 30 introduces a number of amendments to allow the Forest Service to more effectively manage provincial forests. First, Bill 30 will help meet changing forest management demands by providing more frequent opportunity to update the terms and conditions in tree farm licence agreements. Tree farm licence agreements are a form of forest tenure with a 25-year term. Currently, those TFL agreements are replaceable on the tenth anniversary of the licence. The amendment will make them replaceable on their fifth anniversary. This will provide more frequent opportunity for the province to ensure that the terms and conditions of the agreements reflect the social, economic and environmental needs of British Columbians. It will also allow licence holders to avoid uncertainty by being able to replace their licences well before the expiration date. The change to a five-year replacement period will be introduced gradually as existing licences come forward for replacement after July 1, 1993.
Secondly, Bill 30 introduces amendments to improve the management and administration of woodlot licences. An amendment will allow sizes and boundaries of woodlot licences to be changed, with the consent of the licence holder, if the changes will improve forest management. Another amendment will increase the maximum area of Crown land permitted in a woodlot licence in the interior of the province from its
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current 400 hectares to 600 hectares. This will allow for greater equality of harvest volume between coastal and interior woodlot licences. A further amendment will ensure that new woodlot licences are awarded in a fairer manner.
Thirdly, Bill 30 will help the Forest Service protect the financial interests of the Crown in its forest resource. The bill strengthens controls over the scaling of timber. It also improves the ability of the Forest Service to collect moneys owed to the government.
Finally, Bill 30 includes miscellaneous amendments to clarify the intent of several sections of the Forest Act. Hon. Speaker, this government is committed to improving the management of provincial forests and protecting the financial interests of the Crown in its forest resource. I therefore move Bill 30 be read for the second time.
W. Hurd: I am pleased to rise today to speak on Bill 30 which, as the minister has indicated, contains provisions that will allow the ministry to more closely scrutinize the activities on and the performance of tree farm licences in the province. The opposition is also pleased to see the new directions for the provincial woodlot program. As a member of the Select Standing Committee on Forests, I can say that the need to strengthen and enhance the woodlot program was certainly identified to that committee when we toured the province. Interestingly enough, both the tree farm licence agreements and the woodlot programs are area-based tenures. In the past, the minister and I have discussed the importance of area-based tenure as a vehicle for improving forest management.
When we discuss tree farm licences, it's important to mention that there are still many checks and balances in place in the five-year development plans that licence holders must present to the Minister of Forests, such as the need to provide preharvest silvicultural plans and to conduct wildlife management studies. The ministry has a great deal of control over what happens on tree farm licences. I'm told that, since we're rolling the licences over at a shorter interval, the new provisions will probably add to the paperwork of licensees. This is not a huge burden and it is one which will theoretically provide the people of the province and the ministry with more scrutiny of these kinds of tenures. The opposition would like to see some substantial legislative initiatives come forward with respect to TFLs, to identify the kind of enhanced forest stewardship opportunities that exist. We would like to have seen some provision made for those types of enhancements in this bill, rather than just the requirement that licensees do more in the way of paperwork for the Ministry of Forests.
The opposition appreciates the housekeeping nature of the bill, and the fact that it tightens up the scaling requirements and enhances revenue collection for the Crown. Having had a chance to review the bill and discuss its contents with other stakeholder groups, the opposition is satisfied that it represents a constructive change to the Forest Act, and therefore we support the intent and the principle of these changes.
[2:45]
R. Neufeld: I also rise to speak to second reading of Bill 30. We have a few reservations about changing the tree farm licences -- the requirement now from ten years to five years. We will probably deal with that a bit further in committee, and the minister will be able to make us aware of why those changes are required.
In general terms our caucus supports Bill 30 as a change to the Forest Act, which in some places needs changing. But in a number of areas, such as in societies, they can no longer get woodlot licences, because -- as we understand it -- they can change their directors fairly quickly. But companies can also change their directors fairly quickly. We wonder why we're going to exclude that part of society from having woodlot licences. I understand there are in the neighbourhood of ten or 15 of them in the province, and I'm sure they serve a good purpose. There may be some issues that I don't understand, and the minister will make us aware of those.
As with the Liberal critic who spoke, I too was a member of the select standing committee. We had quite a few submissions made to us on woodlot licences and the size of woodlots. We can support that; it certainly makes a lot of sense. The tightening up of scaling and collections and being able to apply interest rates are things we can also support. I think we all know how tight things are, and we can appreciate that. Probably the biggest fear in that area is the increase in the paper flow, the increase in the permits required or anything that has to happen within the forests to take care of that. But I'm sure the minister has researched it clearly and will be able to tell us a bit more in committee about the reasons for those.
A couple of sections and the explanatory notes confused me a little bit, when we went through it. Section 14 in Bill 30, as we understand it, amends section 142, and when we get to the end of the bill, section 23 repeals sections 142 and 142.1. There is a bit of confusion on the part of our caucus as to what we're doing. We're amending one section, and then at the end of the bill we're repealing the whole thing. We wonder what has happened there or if that's just a typographical error.
Other than that, our caucus can support this bill, and we look forward to it going into committee.
D. Mitchell: I too would like to say a few words on second reading of Bill 30, the Forest Amendment Act, 1993. The minister has summed it up very well in his comments, although I note that the minister's comments on second reading of this bill were virtually identical to the comments he made on first reading when the bill was introduced a few days ago in the House. He hasn't really added any information that's useful; he has basically read the same briefing note his staff prepared for him, I suspect.
Hon. D. Miller: I strive for consistency.
D. Mitchell: He's very consistent, if anything, but he hasn't added much value to the principles contained in this bill.
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If in fact the changes brought in with Bill 30, the amendments to the Forest Act, improve the forest management on woodlot licences, that can certainly be supported. And if in fact the controls over scaling that are referred to in this bill bring about greater security for the financial interests of the Crown, that obviously can be supported as well.
However, I think the changes to tree farm licences and area-based tenure need to be further elaborated on by this minister in terms of what is actually going on. Is there a philosophical change in the form of tenure that our forest industry has been built upon -- tree farm licences and area-based tenure? The security of tree farm licences has always been regarded as the highest security the forest industry could enjoy, in terms of having security of timber supply on which to base capital investment for forest operations, whether they be sawmills, pulp mills, paper mills, what have you. On the reduction of the period of renewal from ten years to five years, it is important to ask the minister whether or not there is a change -- a philosophical shift going towards less security of tenure in the forest industry. If we are going to see less secure timber tenure, I think the minister might want to elaborate on that. Perhaps when he closes debate on second reading he might want to address that; otherwise we could do that in the committee stage. I think the issue is that historically the industry has required security of timber supply in order to justify investment that has created jobs in the forest industry in British Columbia -- our most important industry. There seems to be a change here. I wonder if it's the start of a process that will go towards less security over the long run. Are we going to see shorter renewal periods? Are we going to see an end to area-based tenure in the form of tree farm licences? I hope the minister will be able to address some of these concerns.
It appears to be more than an administrative change. As in administrative change, there is going to be a greater paper burden; the member for Surrey-White Rock referred to that. The forest industry is already burdened to some extent by paperwork and red tape. I don't know if this is going to be streamlined, but my reading of the bill tells me that that administrative burden will be increased as a result of these changes and amendments to the Forest Act.
With those few comments I look forward to the minister's closing remarks on this bill and look forward to discussing it further in committee.
P. Ramsey: I wish to say a few words about this bill in second reading, particularly that portion of it which refers to amendments to provisions regarding woodlot licences. I want to applaud the minister and the ministry for bringing these amendments forward. These amendments are a result of a long consultative process with woodlot owners around the province and with their association, the Federation of B.C. Woodlot Associations. I think these amendments will be welcomed, both by the association and by woodlot licensees in my part of the province -- and in other parts as well.
I want to say a few words about those provisions. One of the members asked why there was provision for the deletion of the provision that a society could hold a woodlot licence. I think we have to go back and look at the principles that underlie the issuing of woodlot licences in the first place, and there are several.
First, we want to bring private land under a forest management regime. Woodlot licences allow a private landowner to combine his land with Crown land in one management unit. We want to involve small landowners in management of land adjacent to their own, and people in communities in management of land adjacent to their communities. We want that done over a long period of time. Therefore it is probably inappropriate to have licences held by societies. The membership in a society and its directorship may change relatively rapidly. While an individual will have a commitment to the land and to the licence, the directors of a society could change, virtually every year. Therefore the continuity of management for a licence held by a society is of concern to those involved in woodlot associations.
The second provision was to increase the amount of Crown land that could be attached to a woodlot licence to 600 hectares in the interior of the province, outside the Vancouver forest region or the north coast timber supply area. This move has long been sought by woodlot licensees in my part of the province, and will be welcomed by them. It recognizes the difference in rate of growth of timber on Crown lands in the interior and on the coast. The coast growing sites are much more fertile, and the same area of land can produce timber far more rapidly. Therefore in order to have the same amount of timber produced every year, a larger area is required in the interior than on the coast. These amendments to the act will allow the Ministry of Forests to recognize the difference in various bioclimatic zones of the province in the issuing of woodlot licences.
Finally, section 43 of the act is an amendment to give district managers in the Forest Service the authority to vary the boundaries of woodlots, with the permission of the licensee. The woodlot licences initially set up have proved at times to have boundaries that are not totally defensible. This provides the flexibility to make sure that what is included in a woodlot really can be managed as a unit, meets the needs of the forest district and meets the needs of the individual woodlot licensee.
In conclusion, hon. Speaker, I wanted to point out that these amendments are going to be welcomed by woodlot licensees throughout the province, and to urge their adoption by the House.
The Speaker: The minister closes debate on second reading.
Hon. D. Miller: Given the substantial -- not absolute, but substantial -- agreement, we may be proceeding further, following second reading. I would hope that would be the case, but nonetheless, I will respond to a couple of the issues that were raised.
I note a number of comments about what the bill doesn't contain. Although I'd be happy to debate that, I
[ Page 6840 ]
fear I might offend the rules if I were to get into all of those things that members feel should be in the bill but are not. Perhaps we can accommodate them by introducing further legislation along the lines that some of the members have raised. But just to touch on some of the points....
First of all, there is certainly no intention to increase the bureaucratic paperwork that is required. With any complex licence document, there clearly is a great deal of paperwork required. On the woodlot side, we have tried to relieve some of that burden. As the Liberal Forests critic pointed out, they are an area-based tenure and, in a sense, a mini-TFL. They obviously have some of the same requirements with respect to filing and plans and the rest, although they are substantially different. We in the ministry try to recognize that and to relieve that burden where possible. Certainly the intent here is not to increase the paper burden. There is no benefit to either the ministry or the licensees in doing that. We don't realize any benefit, nor do we consciously try to do that.
My colleague the member for Prince George North has spoken eloquently about the changes with respect to the woodlot licence. I note the particular concern of the member for Peace River North with respect to the deletion of societies. That concern was raised by members on this side as well -- and perhaps we can have a broader discussion in committee -- but we do feel that there is a substantial difference between a corporate entity, which may from time to time change management, and a society, which is really quite dependent upon key people being part of that society. There is no way, of course, to bind people.
One of the factors we consider in the awarding of woodlot licences is the capability of people to effectively manage. The capability of the individuals is a very strong consideration in the awarding of woodlot licences. In the past, some of those societies which currently have woodlot licences had very capable people, but there is simply no way to ensure -- as with most societies -- that those people are maintained in the society or on the board of directors. Therefore my staff feel that the deletion is in fact in order.
I didn't count the number of societies, but there are a number. It's interesting to note that among the array of societies that currently hold woodlot licences there is a minor hockey association. That might strike some as odd, but despite that fact, the bill clearly establishes -- and I will confirm -- that we have no intention of acting against societies that currently hold woodlot licences. They are fully protected, but in the future we don't feel that we want to retain that form of management.
[3:00]
Finally -- and I think the most interesting question asked by the independent member for West Vancouver-Garibaldi with respect to security -- there's no intention here to undermine the security offered by a TFL. For those members who are not aware, that licence is for a term of 25 years, but it is essentially an evergreen licence. In other words, if you comply with the provisions that we stipulate in the licence, if you manage the licence properly, you have the security of knowing that you can renew. The historical reason why the renewal took place on the tenth anniversary was that in the case where any new conditions offered by the Crown -- or indeed, imposed by the Crown on the licence itself -- were unacceptable to the licensee, and the licensee then made the determination that they would not renew, they would then have 15 years' security; they would know that they would have the following 15 years to run the licence out. Changing the renewal date to the fifth anniversary really does provide that same kind of security, and one could argue -- I'm really not trying to make a point of it -- that you could offer 20 years instead of 15 years. However, I don't want to suggest that changing the term really has anything to do with that. We do change the terms of licences. Throughout the history of tree farm licences, different policies have been adopted by governments and then subsequently put into the licence documents themselves. We are in the process -- in fact, it may be completed by now -- of renewing a number of forest licences. In doing that, we have put in new conditions. We've gone through some negotiations and some discussion with licencees. I'm not suggesting that they were completely happy with everything that the Crown proposed; nonetheless, as the owners of the resource, we do have that obligation to ensure that we insert conditions in those licence documents that are to the benefit of the public. Some conditions relate to tying licences to mills -- commonly known as the "appurtenance clause," which was substantially weakened a number of years ago -- while other conditions relate to, for example, compliance with existing guidelines. The members are aware that the fish forestry guidelines -- which, indeed, are very good guidelines, when they work -- were in some cases violated. So putting conditions in that licencees are obligated to follow these kinds of guidelines is the normal kind of business and the normal kinds of things that we take up with the licence holders at renewal time.
But the member is correct in bringing the issue of tenure to the fore. I don't want to get into a long history, but since 1987 there has been renewed debate on the fundamental issue of tenure as it relates to resource policy. There still exists a body of thought with respect to what kind of tenure system we want to maintain in this province.
Although tree farm licences were at one time the dominant licence, members will be aware that the 35 tree farm licences really take up about one-third of the current operable forest land base. The operable forest land base is in the 22 million to 24 million hectare range, and currently those 35 tree farm licences occupy about 6.8 million to 7 million hectares of that total base. So the real dominant form of licence in fact has become the forest licence. That really happened as a result of opening up the interior. Notwithstanding that there are two dominant forms of tenure -- and one volume-based, the forest licence; and one-area based, the tree farm licence -- there is still an outstanding debate with respect to tenure. What form of tenure do we want? The members are aware of the report from the Forest Resources Commission which made a number of suggestions about reform. I've taken the position with
[ Page 6841 ]
industry and with the public generally that this is unresolved; it's a piece of unfinished business. We currently don't plan to make any changes to tenure. I've said to industry that I want to talk, not just to the tenure holders but to the range of industry that's represented in this province, about the tenure system and about things that flow from it -- for example, our pricing system and other issues like that. We have an obligation as government to continue to look at our systems to ensure that they produce the best result for the public -- that our forest resources are manufactured to their highest degree, and that they produce the most employment we can possibly obtain.
Earlier today members mentioned the fact that those of you who are on the select standing committee looking at the issue of the wood supply to remanufacturers have made a number of observations about who controls how much tenure and what should be done about that. So I've taken the position that this is an unresolved debate. We do not intend to proceed in a hasty manner to look at the issue. We intend to do it carefully and in consultation, first of all, with the industry generally -- not just, I repeat, with the tenure holders -- and ultimately we intend to engage the public in that dialogue once again. This five-year renewal gives us ample opportunity to do that.
There were some complications caused by a freeze imposed by the previous administration. That freeze followed the failure of the major policy enunciated in 1987, which was to expand the TFL system to encompass the remaining lands, to allow forest licence holders the opportunity to roll over their forest licence under section 27(1) of the Forest Act into tree farm licences. It met with tremendous resistance around the province. It was determined -- and I think quite correctly -- that the policy was not acceptable to the public. As a result of that, the previous administration imposed a freeze on the issuance of any new tree farm licences. Some of those previous actions have impacted on the renewals; the freeze has essentially delayed some of the renewals.
So we think this an appropriate way to provide security to the licence holders. As I indicated earlier, the five-year renewal -- and there's a number of licences up on July 1 of this year -- gives them that kind of security and at the same time allows the basic policy issues to be examined. It allows the government to formulate some new policy finally or maintain existing policy with respect to tenures. We'll be going through that exercise, and we think we've allowed ourselves sufficient time to do that. At the same time, we have provided the security that the licence holders require to make their capital investment plans: some length of time that they know they can operate with security of supply.
Having provided those brief explanations, I think we can deal at committee stage with the few other issues that were raised with respect to section 142. I've not been advised by my House Leader that there's agreement.... In fact, there may be.
An Hon. Member: No committee, if that's what you're....
Hon. D. Miller: No? Okay. I'm judging from the various nods and shrugs that I'm receiving here that although there was some suggestion we might seek leave to proceed immediately into committee stage, that doesn't exist. So I would move, hon. Speaker, that Bill....
The Speaker: Actually, hon. minister, if we can vote on second reading first, we will then invite you to move the next motion.
Motion approved.
Bill 30, Forest Amendment Act, 1993, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. A. Hagen: I call committee on Bill 20.
INDEPENDENT SCHOOL AMENDMENT ACT, 1993
The House in committee on Bill 20; F. Garden in the chair.
On section 1.
H. De Jong: Section 1 doesn't seem to worry me much, but I would like to ask a couple of questions on it. I'm just wondering why the preamble has been changed. There used to be a lot of emphasis on "individual potential...to contribute to a healthy society," but those words have been taken out and replaced by "personally fulfilled and publicly useful." Could the minister explain why this change has taken place?
Hon. A. Hagen: The preamble to the Independent School Act is in common with the preamble to the School Act. As we noted in the debate of the amendments to the School Act, there has been an additional "whereas," which outlines a goal of society to support the education of children. There have been some changes to the old preamble, such as adding a couple of new words to emphasize education for all learners and to emphasize that we're educating children to live in a democratic and pluralistic society. But the concept of individual potential is very strongly emphasized in both of those clauses.
[3:15]
H. De Jong: We all know, of course, that the BCTF does not really appreciate competition. That's kind of the overall attitude of the current government as well: they don't necessarily believe in competition. Is de-emphasizing the words "individual potential" perhaps a subtle attempt -- and I wouldn't think it would be, but I just want to clarify this -- to insert the ideological ideas of the current government, which are going to be imposed on the independent schools, beyond what they have normally been required to comply with. I have a bit of concern with that. I believe
[ Page 6842 ]
that many people who support independent schools do so for a specific reason. I'm somewhat concerned that by making these things the same as in the public school act, there may be that underlying thought of trying to upset the ideological ideas, real meaning and intent of why people want to send their kids to an independent school.
Hon. A. Hagen: Hon. Chair, this is a broad statement of goals. It is not our intent to upset the independent schools but rather to speak of broad goals of education that I believe all people support and would endorse.
H. De Jong: One more question on this section, Mr. Chairman. I suppose, from time to time, that children in British Columbia who have mental problems -- and one worse than another.... I'm just a bit concerned about whether the word "all" -- meaning all students, all learners -- is used so that the schools have no jurisdiction in terms of a person who may be quite severely mentally handicapped. The school would have no right to say that it could not accept the student. Perhaps such students would better fit into another category, perhaps one more closely related to the British Columbia health system.
I just want to have the point clarified that the school, or a school board of an independent school, cannot be pushed into having to accept such a student for which, first of all, they have no qualified teachers to teach and furthermore, it is far beyond their financial capabilities to do so.
Hon. A. Hagen: We should note, hon. Chair, that this is a preamble statement and a statement of goals.
K. Jones: I'd like to pose some questions to the minister about her thinking in bringing forward this revision of the preamble. It seems to indicate that there is real need for a change to further clarify the definition, or to change the philosophy from the existing description in the act. Could the minister tell us the specific reason for the change that would require this preamble in place of the previous one?
Hon. A. Hagen: Hon. Chair, the preambles for the Independent School Act and the School Act have been the same. We have debated the preamble for the School Act fairly extensively. We can return to that debate if the member wishes, but we have had a fairly extensive discussion around that preamble.
I might note too, as we go through this legislation in committee, that this is the first time that there have been some changes in the School Act and the Independent School Act since they were first brought forward in 1989. Many of these amendments are a strengthening of the legislation, which was landmark legislation when it was introduced in 1989.
K. Jones: Yes, I'm sure that it's appropriate to review the legislation from time to time and bring forward modifications to update the legislation that we have.
I was wondering if the minister could explain to us, though, whether it is the intention of the minister to make the preamble the same as it is in the preamble to the School Act?
Hon. A. Hagen: They are identical, as they have been since both acts were first introduced.
K. Jones: So the change was based on the fact that because the School Act was changed, this act needed to be changed from what it was to what it is today?
Why, in the case of independent schools, would there not be a different preamble to the act? Independent schools provide an alternative form of education and a choice for the people of B.C. The arrangements by which they operate are somewhat different from the actual School Act and therefore could probably have a different preamble. Could you explain why that wouldn't occur?
Hon. A. Hagen: The broad goals for our education system have been and are consonant across the whole K to 12 system. There's nothing in the preamble that is inconsistent with choice, whether in the public school or the independent school system.
K. Jones: This is a separate act from the public school act for the very purpose of defining the operations of a separate type of school system within the whole milieu of our educational process. It would seem appropriate, therefore, that you would put a defining explanation as to the purposes of this act in the preamble and that it would be different from that of the public school system because it is, in effect, providing legislation for a school system that is different from the public school system. I think the minister has stated previously that she identifies that the public school system is a different form from that of the independent school system.
Hon. A. Hagen: It may help the member if he thinks of us as having one school system in B.C. in which the public and the independent schools operate. Many schools have a statement of philosophy, mission and goals consistent with their acts that reflect the particular communities they represent. We find that individual schools within both the public and the independent school system develop, with their parent communities and often with their students, those statements of mission and purpose consonant with the broad goals of our school system in the province.
K. Jones: I'm beginning to understand the minister with regard to this. Don't let me put words in your mouth, but are you saying that the public and independent school systems are basically working with the same philosophical approach and with the same intention to provide services on an equal basis to students, no matter which system they're operating in?
Hon. A. Hagen: No. What I'm saying is that we, as a society, have a commitment to the education of our children. Within B.C. we have two systems: a public and
[ Page 6843 ]
an independent school system, each of which serves a different clientele. But the broad purpose of education, to enhance the individual potential of students and to ensure that students grow up to have an opportunity to live and be productive in society, I believe, is shared by both of our school systems.
K. Jones: That means the public school and independent school systems, as you say, have the equal desire to provide a proper educational program. I believe that for that reason you have identified that group 1 and 2 schools are required to have the public school standard curriculum to qualify for those categories. Is that correct?
Hon. A. Hagen: I don't believe that the member's question is related to what we are discussing at this time.
The Chair: Member, continue and ask your questions based on the subject before us.
K. Jones: Actually, we are discussing the subject before us. We are trying to determine the reasoning for this specific wording that the minister has put in the bill, versus alternative wording which would be more specifically descriptive about what she plans with regard to the independent schools. If she intends that it shall be the same as with the public school system, I can go along with that. I got the impression as I asked her the questions that she wasn't prepared to say that it was same, but she wants to have the preamble the same. Therefore I'm having a great deal of difficulty in understanding the minister's intention, because she talks out of one side of her mouth in one direction, and out of the other side in relation to the other acts.
The Chair: Order. The member is coming close to using some very unparliamentary language. I'd ask him to be cognizant of that.
K. Jones: I was just relating to the sides of the mouth. I don't know what that has to do with unparliamentary language.
The Chair: Hon. member, please refrain from this procedure. You know what we mean when we ask you to be cognizant of the kind of language you should be using. Please recognize that.
K. Jones: I guess that was just a figure of speech I was using. There was no intent to make any aspersions about the minister or anybody else in this House, hon. Chair. It was strictly a matter of trying to illustrate the problem that I was having here in trying to understand why, where we have two separate bills and intentions, we have the desire of the minister to put the same philosophy or direction of purpose into the two bills. Perhaps it would be desirable for all of us to hear from the minister whether it was her intention that they both be identical, that we have a uniform education and opportunity for education. These bills are quite different; they obviously don't show a uniformity. The preamble should reflect the reasons for them not being uniform. Could the minister explain that difference?
Hon. A. Hagen: The preamble reflects the broad goals of society for the education of our children.
[3:30]
K. Jones: The desire of society is that the people have choice and the opportunity to choose the educational systems and teaching that their students receive. In order to do that, there is this act, called the Independent School Act, which Bill 20 amends. There is, obviously and very rightly, a separate indication of some special requirements for these independent schools. If this is the intention of the ministry, then the ministry should state that in the preamble. Why wouldn't the minister be prepared to make a statement of the philosophy or the different approach that is taken that generates this bill? Or why not include within the School Act all of the schools on an equal basis, with the same type of funding?
Hon. A. Hagen: I'm having difficulty responding to the persistent view of the member. We have repeatedly noted that these are broad goals of education. I've noted that choice exists within our education system, both within the public and the independent school system. I've noted that individual schools within these broad goals develop their statements of philosophy and purpose on goals and outcomes. I've noted that this is a preamble which has a very special characteristic in respect to legislation. It deals with a broad interpretive clause. So I think we have explored the issues that the member has been bringing forward. If he is intending to suggest that the preamble should meet all of the diverse characteristics of our school system within this province, we would need a 300-page bill to deal with that. You're talking about very broad goals here. This is enabling and, indeed, interpretive.
The Chair: The member continues, keeping in mind that the minister has answered the member's question on that issue, I think, three times now.
K. Jones: I have one final question for the minister. Does this preamble indicate the minister's philosophical view on independent schools?
Hon. A. Hagen: When we deal with the preamble, we are stating the goals of society, both for individual learners -- as is stated in the preamble -- and our commitment to support learners in the school system. We are debating the Independent School Act and amendments to it. Therefore, with this preamble, we are supporting those goals for learners who are in independent schools across the province.
D. Mitchell: The Minister of Education likely didn't anticipate that the preamble would have caused this much discussion. I've been listening with interest to the description of the preamble and its purpose, and I think I understand what the minister is saying. The
[ Page 6844 ]
minister has stated that the preamble describes the broad goals of society with respect to education, and that these broad goals would apply, I presume, to both independent schools and the public school system. The minister also stated in one of her earlier responses to an inquiry on the preamble that the preamble is designed to address the particular clientele of independent schools, who are different than the clientele of the public school system. I'm wondering if she might clarify that, because my understanding is that there is a tremendous overlap in the clientele between both the independent school system and the public school system. In particular, statistics that her ministry provides indicate that there is increasing enrolment in independent schools, which suggests that there is some ongoing transfer from the public school system to the independent school system. So if there is a crossover, the clientele aren't clearly distinct; they're similar clientele. In that case, is this preamble an attempt to harmonize education in the province, with respect to the broad goals of society being descriptive and imposed upon both the independent and the public school systems?
Hon. A. Hagen: I repeat to the member that when we look at the preamble, which is the same in both the School Act and the Independent School Act, we are in fact stating our aspirations for learners and the commitment of society to support the education of children so that they may grow up to be, as we note, good lifelong learners who, with their potential realized, are contributing to society and finding satisfaction in their learning. I believe that parents and society would want to ensure that those broad and encompassing goals were evidenced in whatever schools our children attended, with all the diversity that exists within both of the systems we are talking about.
Section 1 approved.
On section 2.
J. Dalton: I have one question with regard to the redefinition of "certificate of group classification." There's reference to an interim certificate. Can the minister advise the committee how long such an interim certificate would last?
Hon. A. Hagen: A very short time. This is a housekeeping amendment to deal with an amendment that we'll be talking about later in the bill. It simply makes reference to a short-term certificate. If the member agrees, I think it would be more useful to discuss it when we come to that section.
W. Hurd: Just a request for clarification. Under section 2(d), the new definition of an independent school would not include "a school that solely offers religious instruction." Could the minister clarify for the committee the nature of the checks and balances that might exist to identify a school which in the view of the ministry offered a level of religious instruction that rendered it incapable of being designated as an independent school under the act.
Hon. A. Hagen: First, because I know that everybody finds it really difficult when we're debating amendments, perhaps it would be useful for me to note that the only new parts of this particular section are items (b) and (e), and they relate to matters that we'll be dealing with substantively later in the bill. Item (e) comes from the old act. Perhaps the easiest way to define (e)(i) is that a Sunday school, for example, would not qualify for funding as an independent school because its sole purpose is to offer religious instruction. The four or five categories that the section says are not to be included as independent schools are from the old act. It simply says that a school that has a very specific purpose, rather than offering the broad educational programs that we normally associate with any K to 12 school system, is not included in our definition of an independent school. There's an abundance of caution that such bodies would not qualify for instruction, but it's part of the 1989 act and is not new.
Sections 2 and 3 approved.
On section 4.
H. De Jong: This section basically deals with educational resource materials. Certainly that's one of the basic criteria as to why we have schools and why we have independent schools.
It would appear on the face of it that this section gives the minister greater powers -- perhaps I should use the words discretionary powers -- as to the kinds of materials that independent schools will be allowed to access. Further to that, I may as well put two questions into one and ask the minister to comment on whether the independent schools would have access to materials that are normally provided for the public schools and whether they would be available to the independent schools at the same price. It's not clear in the legislation.
Hon. A. Hagen: A good question. This really is a technical amendment to current practices for resources to be available, and we would normally debate those through the budget process. As I said earlier, this is the first look at the legislation since it was introduced. We are advised that in some areas there has not been legislative authority, so this is really to provide legislative authority for what we do. It's also consistent with the School Act and the authority within the School Act.
I hope this helps you to see it in the context in which it is introduced.
H. De Jong: A further question. Proposed section 8(2) mentions the district in which the school is located. I don't think the Federation of Independent School Associations has any problem with this concept, but I believe they do wonder why the region in which a school is located should or could have a bearing on its access to materials.
[ Page 6845 ]
Hon. A. Hagen: As is often the case when we're developing legislation, we entered into consultations with FISA around these changes, so they have an understanding of their purpose. When we look at the various differentiations that may be there, they are consistent with the School Act. Where a school is located may be a factor in terms of the resources that might be available, and that's again consistent with the discretionary power to be able to deal with these issues with the legislative authority that comes under this section.
J. Dalton: With regard to what I'll call section 8(1), the amended section of the Independent School Act coming out of section 4 of the bill, the minister has the power to determine both the educational resource materials and the services that may be received by an authority. Are these consistent with the services and resources that would be available to public schools?
Hon. A. Hagen: There are various classifications of schools within the act. In some instances resources are available as part of the funding system. Group 4 schools, for example, which are schools that offer programs for non-resident students, would have the option to purchase materials.
K. Jones: I'd like to ask the minister whether curriculum can be controlled by determining the materials and services provided to a school.
[3:45]
Hon. A. Hagen: Although this doesn't come within the ambit of this section, there are a wide range of educational resource materials available, as the member might imagine. In a world that's exploding with knowledge and with technology, resources are books, videos and a whole range of things. In every school, in both the public and the independent school systems, teachers make decisions within the framework of the standard curriculum that is required if schools are to be funded. They make decisions about those resources, and there are quite a wide range of choices available to teachers in order to have the tools that they need to teach the curriculum.
K. Jones: If it were desirable to determine the direction of a program or to determine that a program not be presented at an independent school, would the minister, through this section of the act, be able to prevent that program from proceeding by eliminating the textbook or other resource material -- such as a computer if it were a computer course -- from being used?
Hon. A. Hagen: No.
K. Jones: Could the minister explain why she says no?
Hon. A. Hagen: Perhaps the member could be more specific. We have various classifications of independent schools. Some of them teach the curriculum of the B.C. school system; others do not.
K. Jones: In the explanation of the clause, this section states that the minister may determine the materials and services an authority is entitled to receive. My question was very specific. With this clause, would the minister, by controlling the materials and services provided, be able to determine whether a certain program or course was provided within that school?
[E. Barnes in the chair.]
Hon. A. Hagen: If the school is offering the B.C. curriculum, then the resources available for that curriculum are available to those schools. If the school is not offering the curriculum, then I have no means of controlling the curriculum, provided that school lives within the general regulations. Those regulations are very broad in terms of the curriculum that may be offered.
K. Jones: The clause appears to be very clear. What is the reasoning behind the minister bringing forward a clause that really does give her the power to determine what materials and services an authority -- and I presume that's an independent school authority -- is entitled to purchase and receive. If the minister can control those very things that determine how a program can be presented -- other than by a verbal presentation of it -- she is basically controlling in every way the choices of programming that schools can offer. Is that the intention of the minister?
Hon. A. Hagen: If we could go back to square one, I said at the start that this simply puts current practice into legislation. It entitles schools to either receive or purchase resources from the ministry. Schools have options to purchase from other sources as well. The estimates process provides us with an opportunity to examine those resources in greater detail. This is simply legislative authority for current practice, with the final budgeting authority coming through the estimates process and review in this Legislature.
K. Jones: The minister states that current practice is that the minister is able to determine what books and course materials are provided by the school system. But the wording here doesn't say that it is made available or provided by the school system; it says that the minister may determine it and may also differentiate between various independent schools with regard to the services and materials made available to them. Surely that gives the minister an overriding power.
Perhaps the minister doesn't realize the intent of the information provided in this legislation or doesn't follow the legislation's potential. Is that what's happening? Or does the minister really know what's there but doesn't want to admit to the fact that she knows for the simple reason that there may be some ulterior motive of controlling the independent schools process because of her own philosophical viewpoint
[ Page 6846 ]
that independent schools really shouldn't exist and only the public school system should have the support that comes from the taxpayers.
Hon. A. Hagen: Let me assure the member that there is no ulterior motive. This puts into legislation current practice with regard to resources for the independent schools, and through the budget process, those will be debated at greater length during the estimates process.
K. Jones: With that assurance, I will carry on to the next section.
Section 4 approved.
On section 5.
J. Dalton: I suspect that this section, if any, is certainly going to cause some controversy, or a definite line of questioning. This section eliminates the group 3 funding. I would like the minister, if she would care to, to advise the committee as to the rationale behind the elimination of the 10 percent funding.
Hon. A. Hagen: There are different classifications within the Independent School Act. The classifications we know as group 1 and 2 are schools that follow certain criteria around curriculum, certification of their students and evaluation, through our grade 12 examination system to the Dogwood Certificate. The group 3 schools are identical to a classification in this act noted as group 5 schools. They do not follow those criteria. Therefore the policy decision has been made that those schools will not receive public funding because they are not following criteria that relate to the broad curriculum, certification and examination standards set for the public schools and group 1 and 2 schools.
J. Dalton: Just to follow up on this, was there any opportunity accorded to the group 3 classification schools to be held accountable or to in some way have an opportunity to address the elimination of the 10 percent funding? I can understand the minister's rationale for being concerned that they don't follow prescribed criteria around curriculum. But perhaps that particular issue could have been addressed if these group 3 schools had the opportunity, if they so wished, to become accountable.
Hon. A. Hagen: The group 3 schools do have the opportunity, if they wish, to qualify for funding under the criteria set for groups 1 and 2. That opportunity and option, of course, has always existed for them.
H. De Jong: I suppose this is the section in the bill where we would normally say the rubber hits the road. This is probably the most controversial section in this bill. Understanding the minister's comments on the previous question, I would like to follow that up. Even though these particular schools have not followed the curriculum laid out by the School Act, has it been proven at the time of exams that these students were not properly taught and therefore should not receive the grant for educational purposes?
Hon. A. Hagen: Two comments to the member: all schools have the opportunity to apply for funding as group 1 or 2 schools, and all of these schools are inspected by our independent schools division in order to ensure that they meet the qualifications for what has consisted of group 3 and group 5 schools. So the broad answer to the question is yes. These schools have been inspected; and if they wish to qualify in terms of the criteria -- the curriculum, the certification of teachers and examinability under our grade 12 examination system -- they certainly are welcome to do that and therefore to qualify for funding in a different category.
H. De Jong: I'm not totally clear -- there was a little noise here, and I couldn't hear -- as to whether the minister has said these schools do not accept being under the program of inspection by the independent schools division of the ministry or whether these students do not in fact meet the requirements at the time of exams. I'll put my question again, Mr. Chairman, since there's a bit of noise here in the chamber.
The Chair: Yes. Would the hon. members keep their voices down, please.
H. De Jong: It's one of these clauses that a person can't really get excited about and holler at the top of his voice. So I would rather do it in a quiet way. I will again ask my question of the minister, as I didn't quite hear what the minister said.
Do these schools not wish to be under the inspection provided by the government for independent schools, or do these students not meet the requirements when they go to the exams, as normal students all do?
Hon. A. Hagen: Group 3 schools do not choose to apply for inspection in relation to their curriculum; in fact, it's not part of the requirements for those schools. If they were to apply to become, let's say, group 1 schools, there would be inspection -- is that the appropriate word? -- or an evaluation of whether they meet the criteria that I have spoken about. But they are classified in a different way because they have not chosen to be evaluated as meeting those criteria.
[4:00]
H. De Jong: Can the minister elaborate on why certain schools would not apply for that particular kind of inspection?
Hon. A. Hagen: It is entirely the choice of the school whether they wish to apply for an evaluation to meet the criteria, let's say to be funded as a group 1 school.
K. Jones: With respect to this section, does the minister believe that there is only one way of educating all students?
[ Page 6847 ]
Hon. A. Hagen: Earlier on we had quite a discussion about our school system and the diversity that exists within that system. I believe I have answered that question quite expansively.
K. Jones: Unfortunately, hon. Chair, I wasn't able to hear the minister. Her voice was very soft and tended to drift off. Could you have her repeat it, please?
Hon. A. Hagen: Hon. Chair, I shall use my louder voice. In the earlier debate we spoke about the diversity of our school system within the public and independent school systems, so I think I have clearly indicated to the member that there is a wide range of schools and school choices within the broad school system of the province. I clearly recognize and celebrate that diversity.
K. Jones: In that you do agree that there is a diversity and a need for diversity among the various forms of education for our children, could you tell us why -- if they don't fit the curriculum as defined by one segment of society -- people who pay taxes equally are, in some cases, discriminated against in that they are not able to get any funding for their particular type of schooling separate from the others. Specifically, we are talking about the removal of the group 3 schools from that funding. They get a very small amount of funding as it is; it is only 10 percent of their entire operating costs, and no capital costs are provided to these people, even though their parents are contributing the full 100 percent of the education tax contribution that every other taxpayer in British Columbia pays. Why is there that discrimination?
Hon. A. Hagen: We have a very significant number of public and independent schools in the province. We set societal standards for education through our curriculum, as well as the standards for teachers and the examinability. The majority of schools follow those societal standards, and funding that flows from that. As I have noted, the choice of meeting that criteria is certainly available to the schools that we are discussing here. It is my understanding that some of them are seeking to meet those criteria and could then well be funded under the group 1 classification.
K. Jones: So the minister is saying that if they jump into line with the group 1 classification, they can get funding. Therefore she is agreeing with the concept that there is only one method by which students can get an education in this province, and that is if they fall in line with the public school curriculum and process. If they don't, they are not going to get any funding. That's the fear of many independent schools, including those presently getting funding of 35 percent under group 2, and 50 percent under group 1. They are very fearful that the NDP government, as has already been indicated by bringing this bill forward, is refusing to keep the promise that the Premier made at the time of the last election: that no independent school funding would be eliminated. We have a broken promise coming right now in this particular clause of Bill 20. It totally goes to the heart of whether there is a capability to have confidence in the government's election campaign promises, because they continue to break them. How can the people who are in group 2 and group 1 schools feel assured that they won't be the next ones in line? Is this just the foot in the door? Is this the vehicle for another clause to come forward later on that will eliminate their funding next, until we have what the minister really wants: only one public school system, with all the independents kicked out?
Hon. A. Hagen: Among the 300 or so independent schools, there is a wide diversity of schools in terms of the programs that they offer, philosophies and local programs that are a part of those schools. Yet those schools meet the broad goals of the education system and at the same time are able to meet the particular needs and aspirations of their parent community. That's consistent with the discussion we had at the start of our debate on these amendments. There are broad goals that we all agree are ones that bind us in our support of teaching our children while recognizing the diversity that is there and providing support in funding and in resources for those schools that meet the criteria that I've spoken about. As I note again, these schools may indeed choose to meet that criteria. In fact, some of them meet the criteria for some of their school programs but not for all of them, and those choices are available to the school community and parents of that school community.
K. Jones: In the election, the Premier didn't make any conditions under which independent schools would get funding; he categorically stated that independent school funding would not be affected by this government. Did you talk to the Premier about his promise to the people of British Columbia before you brought this legislation forward?
Hon. A. Hagen: We are moving more broadly at this time. Through the estimates process and this bill, we have looked at one part of our education system to support the learning of children within criteria where there is an accountability for the curriculum, standards of teachers and the examination of those students. Within that broad framework we continue to provide the support that's consistent with our commitments.
K. Jones: The minister talks about accountability. Who has the accountability to the people of British Columbia -- the Minister of Education or the Premier? Which one is telling the truth?
The Chair: Hon. member, we are on section 5. If the member can relate the specifics of the question he's asking to this section, it would be most helpful to the Chair.
K. Jones: The relation, hon. Chair, is that this section specifically eliminates the funding to group 3 schools, and the Premier has stated that there would be no elimination of funding to any independent schools. I'm asking: who's telling the truth?
[ Page 6848 ]
H. De Jong: I know that this section is worrisome. Certainly in my community I have a number of independent schools that belong to the Federation of Independent School Associations and some that do not. The answers that we have received so far this afternoon have given me some comfort, but at the same time there is a certain amount of fear within me -- as well as, I'm sure, in others who have supported the independent schools -- particularly over statements that have been made in the past by members of what is now the government when the independent schools were considered by some of the members. I'm referring to a statement here made by the member for Nanaimo, who called the independent schools "bastions of privilege." I believe that that is a totally incorrect statement because the independent schools are no more a privilege for the people wanting that education for their children than the public schools are for those who send their children to the public schools. There are choices, and choices have been made. Some prefer the independent schools and others prefer the public schools. But the point is that that was such a wrong connotation to put on independent schools, because those people who send their children to independent schools pay the same school taxes within the district on their properties as well as through the general taxation of the province, as any other person.
I'm quite happy that there is a certain amount of criteria put forth to the independent schools, but I'm also happy and I hope -- and I think the minister earlier explained that in previous answers this afternoon -- that the schools will continue to be allowed to have things taught to the children during the school hours in addition to the curriculum that is provided by the government. I believe that that is precisely the reason why we have independent schools. The general curriculum is provided and taught, but it may be taught in some schools from a different perspective. I believe that that freedom is there, and I would also hope that that freedom, in terms of teaching the curriculum from a different perspective than what may be done in the public schools, will always remain to be done in the independent schools. From the minister's answers that I have had this afternoon, I have no worry about that, but if there should be a different thought about it by the minister, then I would like to hear that.
[4:15]
I can also appreciate, even though the promise was made by the Premier that there would be no cut to independent schools, that these independent schools that we're talking about also have the choice to gather in with the other independent schools that have that freedom that I just talked about and will continue, I hope, to have that freedom. Therefore some of the fears and the anxiety that I did have on this particular section have been somewhat, if not altogether, eliminated. Would the minister comment that the curriculum would be allowed to be taught in the independent schools from various perspectives?
Hon. A. Hagen: The B.C. curriculum provides that a portion of the curriculum is.... We use the words "locally-developed curriculum," and I think the member understands that term in a broad sense. That provides for independent schools as well as public schools to meet the needs of a community, whether it is a geographic community or a community that has a particular cultural interest; for instance the aboriginal community, or in the case of the independent schools, if there is a homogeneity of parents around certain interests and aspirations. I come back to the comments I made earlier about the diversity within the broad goals that I believe we all support for our children. Perhaps that may add to the member's comfort.
D. Mitchell: I ask leave to introduce some guests in the galleries.
Leave granted.
D. Mitchell: We have some very special guests in the public galleries this afternoon. A group of grade 5 students from Signal Hill Elementary School have come all the way from the Pemberton Valley. They are here with their teachers to observe debate in the House today, and I would like to ask all members to make them feel welcome here in the committee.
Section 5 approved on the following division:
|
YEAS -- 33 | ||
|
Marzari |
Edwards |
Barlee |
|
Charbonneau |
Jackson |
Pement |
|
Beattie |
Hammell |
Lali |
|
Giesbrecht |
Miller |
Hagen |
|
Sihota |
Clark |
Cull |
|
Zirnhelt |
Blencoe |
MacPhail |
|
B. Jones |
Copping |
Lovick |
|
Ramsey |
Pullinger |
Farnworth |
|
Evans |
O'Neill |
Doyle |
|
Janssen |
Brewin |
Kasper |
|
Garden |
Randall |
Krog |
|
NAYS -- 15 | ||
|
Chisholm |
Reid |
Gingell |
|
Dalton |
Farrell-Collins |
Stephens |
|
Hanson |
Serwa |
Mitchell |
|
DDe Jong |
Neufeld |
Hurd |
|
Warnke |
Jarvis |
K. Jones |
On section 6.
D. Mitchell: My reading of section 6 is that it deals with B.C. graduation certificates issuable by group 4 schools, if all teachers are certified. I understand that right now the status quo is if 80 percent are certified. I wonder if the minister might comment on whether this might create some potential issues for independent schools in terms of nonacademic teachers and short-term contract positions for this group of independent schools. Would there be some issues here that would be very difficult for independent schools to address in terms of the certification of teachers for their schools?
[ Page 6849 ]
Hon. A. Hagen: These schools may apply through the independent schools branch for certification for other teachers. It's similar to a system that we have with other independent schools, where there may be a need for certain teachers within the group 4 schools who meet some particular needs of that school and who may not be certified under the college. There is a process through the independent schools branch of the ministry for certification to be available to the other 20 percent. It could be for language reasons or because the group 4 schools provide a B.C. education for students who come from other countries to study our curriculum and write the exams under our grade 12 examination program. They would be eligible. It's quite consistent with the requirements for the group 1 and group 2 schools as far as the qualifying characteristics are concerned.
If the 20 percent of teachers who are not certified by the college wish to seek certification, they may do so through the independent schools branch of the ministry. That's consistent with what may happen with the independent schools, where 80 percent are certified through the college, but other teachers are certified through the independent schools branch.
D. Mitchell: Just so I understand the minister on this, section 6 of this act provides that permits for an independent school would be issued only if all teachers are certified teachers in independent schools. Is that correct? If the minister would just clarify that.
[4:30]
Hon. A. Hagen: In this amendment, we're talking about giving the group 4 schools the right to issue a certificate, provided a certificate based on grade 12 examination and year-of-study qualifications meet criteria. The criteria includes, of course, the curriculum, successful passing of the exams and certification requirements. If the member were to have a copy of the full act, a certified teacher means a teacher who holds a certificate of qualification under the Teaching Profession Act or a certificate of qualification issued by the inspector under this act or the former act. That's what I was just referring to -- the inspector of independent schools. There is a letter of permission clause, which always exists as a means by which a person can be certified as well.
Section 6 approved.
On section 7.
K. Jones: I'd like to ask the minister what the minister's purpose was in wanting this very powerful addition to the act. It gives the minister the ability to make special purpose grants. I can understand one purpose: to fund students who have special needs. That would be appropriate, but this amendment is quite broad in its scope and allows the minister to pay a special purpose grant without defining what that is, and also to vary grants to determine how much one school could get over another. In other words, you could discriminate very easily through this clause with the amount of funding that would go to individual schools. If they happen to be in an NDP riding, they could get a whole lot more money than they would if they were in a Liberal riding. That's within the scope of this particular amendment to the act, and I'd like to have the minister clearly define why she needs these sections 11.1 and 11.2 in the act.
Hon. A. Hagen: It would be helpful if the member recognized that this legislation provides broad legislative authority to government. That is what this act is doing. Let me say that this is exactly the same question that we debated under section 4. Under both the School Act and the Independent School Act, the minister has the ability to provide special purpose grants. In the case of the Independent School Act, prior to this amendment, we were only able to deal with that through the estimates process. We will, of course, continue to deal with it through the estimates process. Fundamentally, this is a good housekeeping amendment that provides the legislative authority for what has been there in practice. As with any power that the legislation provides, the government is accountable for that funding through its budget. In practice -- and once this bill is passed, through the authority of this act -- we have provided special purpose grants for special needs children in the independent schools. Perhaps the members will recall this from the estimates debate, which I don't want to go into again. We have targeted those grants to where those special needs children are. It's that kind of good government, good authority and good budgeting that assists us to ensure that we provide those opportunities for the special needs students within the independent schools. I think we had quite a good discussion of that. Here we are providing a clause in the Independent School Act that is entirely consistent with the School Act. I am accountable on behalf of my government for those grants through the budget and the estimates process, as is anyone else who is administering this act.
K. Jones: We all agree that special needs funding was a proper thing to bring forward. It recognized that there were special needs students in the independent schools, and that up until now they weren't getting funding. Now that has been addressed to some extent.
What we're concerned about is that this amendment, this addition to the present act, is really much wider than just offering funding for special needs students. In fact, it could have been restricted to providing special needs funding, but the minister decided to bring forward a typical, all-controlling piece of NDP legislation. She calls it "broad legislative authority to government." Well, by golly, it sure is. It gives them complete authority to do just about anything they want to, because when you control the purse strings you control everything. I don't consider this a good housekeeping amendment, as she has indicated. This type of amendment is literally a government grabbing control. The people of B.C. are calling upon their governments at all levels to start giving them more say in what they do in their lives and less government control. In typical fashion as a socialist government, this government feels that the socialist leaders have the best
[ Page 6850 ]
idea of how everything should be handled, that they have the answers for society and that therefore they should impose their way of living upon everybody else. Hon. Chair, I really have to state my view that no government has the answers to society's needs; it's up to the society to decide that. The government should be in the way as little as possible in providing the direction of that society. It should be leaving the greatest opportunity for the public to make their choices, not taking a controlling role like this piece of legislation gives to government or to a minister who.... I can only assume that the reason is that there is a great need for power. Perhaps the minister would like to give us alternative reasons for this legislation, because it looks like it is intended strictly for the purposes of ministerial and government control of the school systems.
Hon. A. Hagen: I would remind the member -- who has waxed far beyond the scope of the particular section we are debating -- that legislation provides authority and accountability for ministers of government for the expenditures of taxpayers' dollars. We have special purpose grant sections in both the School Act and the Independent School Act. I noted earlier one of the purposes for which those special grants have been provided in this year's budget, something that has ensured that we target funding in the independent schools to special needs children, just as we do in the public school system. There are a number of other areas that I am sure the member would support.
I am accountable -- through this legislation and through the budget process -- for any grants that go to the schools under the Independent School Act and to the public schools. I am happy to exercise that accountability now that we have legislative authority; I now have the same authority under the Independent School Act that I have under the School Act. I have been exercising that authority without there being legislative accountability. That is why I note that this is a part of improving the legislation and the accountability, and ensuring that that member -- when he wishes to deal with the specifics rather than the broader perspective that he may have politically -- can ask questions of government about the uses to which public dollars are put.
K. Jones: As the minister is well aware, the real concern here is in 11.2, which is "Minister's discretion," not -- as we have already acknowledged -- section 11.1, which calls for the special purpose grants. I think we are both in agreement that that is an appropriate use of this legislation. This section 11.2(1) gives the minister the power to determine the amount of grants to be paid for an independent school and "determine that the authority is, for the independent school, to be paid grants that differ in amount or in one or more other respects from the grants to be paid to that authority...." It's not a very easy one to follow, mind you. It would have been better if it was put in plain language.
I think the intent is quite clear, as explained in the explanation section. It permits the minister to differentiate between the independent schools and the grants that may be paid to them. Therefore it means that the minister can cut off the funding to a school or can give more money to another school, depending on which are her favourites and which she has dislikes for. That doesn't seem like an appropriate clause in any legislation, and it wasn't necessary in the previous operation of this act. Governments in the past have been able to operate very effectively without this clause in the Independent School Act. I think it would be appropriate for the minister to withdraw this clause in order to show that she really isn't out for a power grab.
Hon. A. Hagen: Hon. Chair, it gets stranger and stranger. That Liberal member says that he would like the government to be less accountable rather than more accountable. That's exactly what he just said. I have, as have previous administrations, exercised these powers with no accountability, except through the estimates process. Now we have some criteria, and we have legislation which indicates that that authority exists and that accountability is there. We have extra protection, if you like, in terms of this member or any other member of this Legislature being able to raise questions about the work of government. So we have put into legislation something that has been accountable only through the estimates process up until now. Rather than asking me to withdraw this legislation, I would think that member would say: "Good, we now have legislative authority. We have the extra check and balance of being able to discuss these issues." I noted that we had that with the grants that went to special needs children, through the budget, the estimates process and the Supply Act. This is an extra accountability clause. I certainly would not think that this member would want us to have less accountability; I'm sure he would be eagerly seeking government to be more accountable. That's exactly what this does. Again, I would note that these powers exist in both the School Act and the Independent School Act.
H. De Jong: Last year I was rather disappointed to hear that the funding for special needs children in independent schools had been cut back. I applaud the minister for having worked toward the goal of providing that again for those special needs children, because whether they're in the independent schools or public schools, they do have special needs. I also applaud the various school boards -- public as well as independent -- that take the initiative in trying to provide as much education as possible for special needs children. This is the week we recognize children and people with special needs and disabilities, and I think it's very appropriate that we have a little discussion on this.
[4:45]
There is, of course, always a bit of a concern when a special fund is created. I doubt that any minister dealing with a special fund as sensitive as this one would abuse or misuse it. There are, of course, two components to providing funding for special needs children, and those are the number of children who may be in an independent school and how many classes they are in. Are they in grade 1 or grade 4, or are they spread throughout the school system? I believe that if
[ Page 6851 ]
you want to look after the education of special needs children in a good way and in the most effective way, there has to be teachers who are able to provide that for a number of grades. I assume that in a school of 300 or 400 children, you might have ten or 15 special needs children, or perhaps even more. But again, there is a greater need for teachers, because you couldn't expect to have as many special needs children in a class as you would in a normal class of children.
My question to the minister: on what basis is the fund going to be made available to schools -- particularly, because we're dealing with the Independent School Act, to the independent schools as well as to the public schools? Is it on the basis of the number of students, the situation they find themselves in -- as I indicated, whether they're spread throughout the school system -- and the number of teachers, or a combination of those?
Hon. A. Hagen: I believe the member is back into the estimates debate with these questions. Fundamentally, we are dealing with the legislative authority for those decisions. We take them through policy and then through the funding. I would note, too, just in a general way, that all schools receive funding and then decide how they are going to organize their schools for the delivery of the programs for which the funds are, in a block amount, provided.
K. Jones: I'd like to follow up on where our conversation with the minister was a few minutes ago. She was saying that this program provided accountability and extra protection, and that we in the opposition were asking for less accountability. I must emphasize to her that that is absolute rubbish; it's not the case at all.
In fact, I'd like to ask her to tell us how she proposes that this particular change in the act would make her more accountable. Again, there is only one place where accountability comes in regard to the minister, and that's in her estimates. This doesn't bring to the public the information as to what changes she's making. She can make these variances between independent schools totally without public knowledge. Only the schools would know that they didn't get the same amount they got last year or that they got more than last year. There's no way that this requires you to tell anybody where the spending is. So where is the accountability, minister?
Hon. A. Hagen: As we all know, the accountability is through legislation and then through the estimates process.
K. Jones: The minister gives a glib response -- one without substance. She should be taking the debate on this bill much more seriously. She made a statement of accountability, but she could not substantiate where the accountability was coming from.
Sections 7 to 15 inclusive approved.
Title approved.
Hon. R. Blencoe: I move the committee rise and report the bill complete without amendment.
Motion approved on the following division:
|
YEAS -- 36 | ||
|
Edwards |
Charbonneau |
Jackson |
|
Pement |
Beattie |
Hammell |
|
Lali |
Giesbrecht |
Miller |
|
Hagen |
Sihota |
Clark |
|
Cull |
Zirnhelt |
Blencoe |
|
MacPhail |
Copping |
Lovick |
|
Ramsey |
Pullinger |
Farnworth |
|
Evans |
O'Neill |
Doyle |
|
Krog |
Randall |
Garden |
|
Kasper |
Brewin |
Janssen |
|
Chisholm |
Cowie |
Dalton |
|
Symons |
Hurd |
Warnke |
|
NAYS -- 6 | ||
|
K. Jones |
Stephens |
Hanson |
|
Serwa |
De Jong |
Neufeld |
The House resumed; E. Barnes in the chair.
[5:00]
Bill 20, Independent School Amendment Act, 1993, reported complete without amendment, read a third time and passed on division.
Hon. R. Blencoe: Hon. Speaker, I call committee on Bill 11.
FIRE SERVICES AMENDMENT ACT, 1993
The House in committee on Bill 11; E. Barnes in the chair.
Sections 1 to 4 inclusive approved.
On the title.
Hon. R. Blencoe: Just as a matter of courtesy, hon. Chair, I would like to introduce the staff who have worked on these bills -- it's clear there's not going to be any discussion: Rick Dumala, who is the fire commissioner for the province; Nicola Marotz, who works as a policy analyst in my ministry; and of course everybody knows Mr. Ken MacLeod, who is the deputy minister.
Title approved.
Hon. R. Blencoe: Hon. Chair, I move the committee rise and report the bill complete without amendment.
Motion approved.
[M. Farnworth in the chair.]
The House resumed; E. Barnes in the chair.
[ Page 6852 ]
Bill 11, Fire Services Amendment Act, 1993, reported complete without amendment, read a third time and passed.
Hon. R. Blencoe: I call committee on Bill 12.
MUNICIPALITIES ENABLING AND VALIDATING (NO. 2) AMENDMENT ACT, 1993
The House in committee on Bill 12; M. Farnworth in the chair.
On section 1.
C. Serwa: We seem to see this on an annual basis, and I'm wondering why the Ministry of Municipal Affairs seems to want to ratify acts by municipal councils which are clearly outside the legitimate bounds and parameters within their control. Virtually all municipal councils have the opportunity of legal counsel. They certainly work closely and under the framework of the Municipal Act. Here, for example, with the town of Sidney....
The Chair: A point of order has been raised.
A. Cowie: I just want to point out that we are in third reading and should be sticking to the sections and not debating it in general. We have already done that; we have already heard from the speaker....
The Chair: Hon. member, I hope that you will bear the remarks in mind and stick to the sections of the bill, as we are in committee stage and second reading has had a wide canvass.
C. Serwa: Thank you very much, hon. Chair -- and it's certainly nice to see a new minister of defence sitting in there in the official opposition. I wasn't able to be present, I suppose.
But specifically on section 1, the town of Sidney did not meet notice requirements. Here we're validating something that clearly contravenes the Municipal Act, and I'm at a loss to understand why something so straightforward as this requires ratification by the minister, in this process, under the enabling and validating amendment act.
Hon. R. Blencoe: Hon. Chair, it's a natural question and it's a good question. I should remind the member, though, that his government.... When I was on that side, I asked the same legitimate question. As you know, since 1958 the province has had this kind of legislation. Going back and validating local governments' actions is not necessarily a process we particularly endorse, conceptually or in terms of philosophy. But from time to time a particular local government, for whatever reason, may have made a mistake, or not dotted an "i" or crossed a "t,"and therefore has been subjected to a legal challeng or may be subject to a legal challenge. For instance, when I took a look at this issue of the Sidney port development, the town of Sidney brought to my attention that former administration hadn't done their job properly, the taxpayer was exposed considerably and they had to go back and make the arrangement -- the deal, if you will -- so that the development of the port would be legitimate. It's a difficult position that the government finds itself in, because in a way you're damned if you do and damned if you don't. What we're doing, of course, is correcting something and protecting the taxpayer. But you're right -- we are driven by local government mistakes, if you will.
But we don't do it easily. Many times -- and staff can correct me -- we go back to local government and say: "That's not an appropriate mechanism. Let's not use the Legislature." We have people like the staff here today, who have legal capabilities, and we give them advice on how to do it in a different way.
The validating part is one part of it. The enabling part, which is a useful tool.... Local government is saying to us every single day that the circumstances are changing at the local level and they have to adjust to the economies or circumstances of the time. They want the abilities and powers to move ahead. Sometimes it requires legislation -- a small change to the act rather than a massive change to the act. I should tell the member that we will be bringing in changes in the enabling section, because my impression is that we shouldn't have to go to the Legislature for every single enabling for local government. It's a long process -- months -- and the circumstance that arose that gave an opportunity to do something creative or innovative may have passed before we can get it into the Legislature.
The bottom line is that we don't necessarily like to do it, but in many respects we're covering local government and the local taxpayer.
C. Serwa: May I thank the hon. minister for his kind, courteous and expansive response on section 1.
Section 1 approved.
Title approved.
Hon. R. Blencoe: I've introduced the other two members of the staff. Before I move the appropriate amendment, I want to mention that I also have Brenda Gibson, who is from municipal financial services, another important part of my ministry.
I move that the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; E. Barnes in the chair.
Bill 12, Municipalities Enabling and Validating (No. 2) Amendment Act, 1993, reported complete without amendment, read a third time and passed.
Hon. R. Blencoe: Hon. Speaker, I call second reading of Bill 14.
[ Page 6853 ]
RAILWAY AMENDMENT ACT, 1993
Hon. R. Blencoe: This bill contains amendments to several sections of the Railway Act. The Railway Act is the responsibility of two ministries, mine and the Ministry of Transportation and Highways. Since the significant amendments to the Railway Act in this legislation deal with safety provisions, the legislation has been put forward by my ministry. Some of the amendments remove specific technical language and other requirements. This will clear the way for the writing of a safety code to govern railway operation. Specific requirements, including stands for railway crossings and tunnels, belong in a code that can be updated more quickly and legislation amended. A safety code is also more understandable for all who use it.
As well, the specific nature of a number of sections of the existing act puts ministry staff in the position of approving things that have become, quite frankly, irrelevant or obsolete. For example, the existing requirement for packing material on railway switches rules out the use of modern design and technology. Another example is that the act presently requires every locomotive to be equipped with a 30-pound bell and a steam whistle. As hon. members can tell, this legislation hasn't been revised in many years. They are requirements that may be romantic to a train enthusiast but which long ago were replaced by technological improvements. To eliminate such anomalies, a number of these amendments will accommodate technological advances in railroading.
Improper use of the word "prescribed" is being removed throughout the Railway Act to modernize the language of the safety sections. In general, these amendments will allow the rules for railway system equipment, construction, maintenance and operation to be made by the enactment of a set of standards comparable to the Building Code. This will permit more flexibility and efficiency when we deal with safety on our railways. The number of incidents that must be reported, such as accidents involving dangerous goods, will be expanded, and the maximum penalty for anyone not complying with the act will be raised to $10,000.
[5:15]
I stress that the code will be developed in consultation with all affected parties, especially the two intraprovincial railway companies and the seven railway unions. A work plan and a schedule for the code's development will be discussed with the affected parties following enactment of the Railway Amendment Act, 1993. In all, these amendments will make for greater safety in railway operations for both the public and railway employees in British Columbia.
I move second reading of Bill 14.
A. Cowie: From the official opposition's point of view, I would like to say that we have no problem with Bill 14, Railway Amendment Act, 1993. We have one comment that the minister might wish to deal with now or at some future date with regard to section 175 of the original act. The Liberal caucus feels that it should really be repealed. We believe that the labour markets and the existence of unions, combined with the minimum wage laws that we now have in the province, are sufficient to deal with fair wages, and this section could, in fact, be repealed. The minister might wish to look at it either now or at a future date. In any event, we will not bring in an amending motion on this, as it's not that full of thunder, but I would like to pass that information on to the minister.
Motion approved.
Bill 14, Railway Amendment Act, 1993, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. D. Miller: Hon. Speaker, we're slightly ahead of time, but there was an agreement that at 5:30 the Select Standing Committee on Forests, Energy, Mines and Petroleum Resources would introduce their report into the House, and that would, I believe, allow some limited comment or debate from members of the committee. So even though the report itself, I understand, has not been distributed, perhaps we could still have the Chair of the committee proceed, and the report subsequently distributed.
Deputy Speaker: Is the Government House Leader requesting a brief recess?
Hon. D. Miller: Perhaps a five-minute recess while we get the report would be in order.
Deputy Speaker: I think that's agreeable with the House. A five-minute recess is declared.
The House recessed at 5:17 p.m.
The House resumed at 5:26 p.m.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. M. Sihota: It is my understanding that the Select Standing Committee on Forests, Energy, Mines and Petroleum Resources is ready to present its report.
C. Evans: Hon. Speaker, I have the honour to present the first report of the Select Standing Committee on Forests, Energy, Mines and Petroleum Resources. I move that the report be read and received.
Motion approved.
C. Evans: Hon. Speaker, I ask leave of the House to permit the moving of a motion to adopt the report.
Leave granted.
C. Evans: I move that the report be adopted.
[ Page 6854 ]
I would like to first describe the mandate of the committee when we started out. On June 10, 1992, we were asked "to examine, inquire and make recommendations with respect to the availability of lumber to remanufacturers, and in particular, without limiting the generality of the foregoing, to consider: (1) the lumber supply requirements of the remanufacturing sector; and (2) barriers or impediments to increasing the supply of lumber to the remanufacturing sector."
The members of the committee were myself, Paul Ramsey, Fred Jackson, Harry Lali, Jan Pullinger, Jim Doyle, Ed Conroy, Wilf Hurd, Lynn Stephens, Ken Jones, Richard Neufeld and, most recently, Helmut Giesbrecht -- thanks for not reminding me that I should refer to them by their constituencies.
The consultant was Mr. Dennis Mawhinney, and committee researchers and the Clerk of Committees assisted us where we went. I would like to say thank you to the Clerks, to Hansard -- who, I think, did the hardest job of all -- and to 137 individuals, companies, groups of companies and groups of individuals who took our committee seriously and wrote and gave verbal reports to us.
During the process we met several times here in Victoria. Then we set out on a tour of British Columbia, which one of the Clerks informed us was the most extensive and the most well-attended by the members that the Clerk had ever experienced. We had about a dozen meetings in Victoria, then we visited Richmond, Ladysmith, Courtenay, New Westminster, Kamloops, Revelstoke, Castlegar, Penticton, Williams Lake, Smithers, Prince George, and then a group of communities in the state of Washington: Ferndale, Everett, Bellingham, Arlington, Everson, Tacoma, McCleary and Centralia.
[5:30]
The first tour was to see, smell and learn how sawmills and remanufacturing plants worked. The second tour was to ask British Columbians in the industry to tell us what they felt were the impediments to the growth of the industry. The third tour was to visit our competitors in the United States.
Following the third tour, we had seven meetings here in Victoria going over six different drafts of our report, leading to a consensus document. I think I'm as proud of the committee for the consensus as I am for the work that they put in.
Many people out on the street in B.C. think that all we do is come here and beat each other up, like in question period. I would like to say that in the last year I had an experience of MLAs from various parties working together to come up with something they agreed upon, an experience which I found incredibly valuable and one that I hope makes the committee process more respected and understood in B.C.
I want to talk a bit about the rationale of why we were given the mandate we were. Why does it matter whether the remanufacturing sector has access to lumber? In the last decade we have experienced massive layoffs in the forest industry, which has employed me for most of my adult life. At the present time we have an annual allowable cut recalculation resulting in a decreasing harvest in various parts of the province. Everywhere we went, we heard predictions of new-tech changes and automation in the industry which will result in a new round of layoffs in the next decade. Obviously, everybody working in this building or outside, as well as everybody in the industry, knows that the only way to get more out of less is to process it further. Everybody knows that the only way to make technology our friend instead of our enemy is to use it to increase our options in manufacturing.
Basically this is the deal, hon. Speaker. It's an incredibly complicated subject, and I tried to reduce it to an image that we can all grasp. The trees in B.C. belong to the people. People sell, say, a logging truckload of wood -- everybody knows what they look like -- that carries 35 cubic metres of wood. That truckload can be cut into the commodity lumber we are all used to -- 2-by-6s, 2-by-8s or 2-by-12s -- and in the process, it will create 30 person-hours of work. Or you could take the same truckload of wood and turn it into furniture, doors, windows or desks and create 160 person-hours of work. It seems to me that the mark of our intelligence as leaders and our political will as elected representatives in B.C., in the management of timber at least, is how close we can get to that second number, with as many truckloads as possible.
I used to work here 20 years ago. In those days I loaded cants -- a cant is big; it's about 12-by-12 and 30 or 40 feet long -- and logs on ships. I loaded 3-by-9 lumber, loosely stowed, onto the bottom of ships. We didn't really process anything. I came back to this committee believing that the industry probably hadn't changed much. To my surprise and the surprise, I think, of other committee members, we found a very sophisticated industry out there, which went through massive changes in the 1980s. We saw a highly technological and innovative industry, a very risk-oriented industry -- a whole lot of small and medium-sized businesses and even very large corporations that are taking wood they used to whack into cants and making it into as close as they can get to the end product. I think it's fair to say that we were really impressed with the nature of the industry that's sprung up in the last decade.
But on the other hand, the industry is young and small. Last year they were sent a questionnaire that asked: "What is the greatest impediment to the expansion of your business?" Some might have thought that they would say wages were too high, land prices were too high, or markets were too difficult. But the number one impediment to expansion that they named was access to lumber. Here in British Columbia, where the wood is all around us, where the timber on our front lawn is two and a half feet across, it boggles the mind that the biggest impediment to businesses would be that they can't get access to wood. It was to address that access issue that we made the majority of our recommendations.
When you receive your copies of the report and read it, you'll observe that some of our recommendations deal with the question of tenure or quota -- the control of timber, basically. I want to turn your attention to a couple of paragraphs that you'll find on page 15 of the report, which explain how that came to pass:
[ Page 6855 ]
"During the committee's tours of sawmills and remanufacturing plants, and again in public hearings, witnesses" -- those people who came to us -- "consistently asked the committee to look beyond its specific terms of reference to the issues underlying the availability of lumber in the remanufacturing sector.
"This is not because these witnesses did not understand the limits of the committee's investigation. On the contrary, it is precisely because they did understand what members wanted to learn that they challenged them to understand the root causes of the problem rather than just the symptoms of an ongoing supply crisis.
"The committee came to see that solutions to this shortage of supply will inevitably require further change in the control of timber. The committee also found that the forest industry is experiencing, concurrently" -at the same time "a period of very high prices for its products and a rapid restructuring of investment capital, as can be seen from the shift in focus of Fletcher Challenge, Westar and Noranda" -- for example -- "from the solid wood sector to the pulp and paper sector."
The timing of this report coincides with what we believe is a window of opportunity, which should be used to effect a transition toward a more mature and complex forest industry.
Having explained the job that we were given and the way we came to look at it, I'm going to run quickly through just a few of the recommendations. There are, I think, 14 recommendations, and I'll describe a half-dozen that will be of interest to the general public.
Firstly, we decided that we needed to send a message. We're always hearing this word "message." It would appear that it's difficult for government and business to speak the same language, so we need these things we call messages to speak to the larger community. We decided that the message we should send is that the government of British Columbia, by consensus if possible, should set a goal of doubling the number of remanufacturing jobs in B.C. by the end of this century and a similar expansion by the year 2010. To do that, we suggested the government establish a mission statement that says what it is we would like to see industry do here in B.C.
Here are a few of the steps that we might take to get there. As we travelled around B.C., we felt that the people in Terrace, in Ladysmith and in Castlegar explained to us very different forest types and very different social fabrics. We felt that, historically, the government maybe hadn't recognized the differences in our communities and the differences in our forest types. And we felt that the small business program and the 16.1 program, which I'll explain a little later, and the woodlot program should be managed in part by committees of people in the regions, and not necessarily just here in Victoria.
I'll describe the 16.1 program. It is a program that exists now, as a small amount of wood.... It is aimed at enhancing the remanufacturing sector. Essentially, here's the way it works. You take some trees that belong to the province and you say: these are up for bid, everybody can bid on them. But instead of the highest bidder in terms of dollars buying the timber, the highest bid in terms of jobs will buy that truckload of logs. If you want to cut it into a 12-by-12 and pay $1,000 for that truckload, you won't automatically be able to buy it over a person who wants to make it into a door and offers $500. So the 16.1 program allows the government -- it's called bid proposal sales -- to put up wood and see what kind of proposal we get back.
These sales have been operated in B.C. for some time. We talked to people in every part of the province about whether or not they work. We decided that they do work. They have problems in terms of economy of scale. There's not enough wood in the program. We are recommending that the 5 percent takeback that happens when wood is transferred from one company to another around the province be made available to the 16.1 program in future, and that 1 percent of the rest of quota per year for the next five years be shifted away from the present licensees and into the 16.1 program.
The committee is also recommending that logs that have been designated as pulp logs -- in other words, "junk" to much of the industry -- not necessarily be chipped automatically but be offered to the sawmill, the remanufacturing and the shake and shingle sector before they are pulped. This is because we found many little companies who said: "We can make a really high-value product out of that 3- or 4- or 5- or 6-inch shell because it's clear wood." We felt that it ought to go to the highest and best use in terms of jobs, rather than automatically being pulped as it has sometimes been in the past.
Another recommendation we struggled with -- and one that I'm sure this government and any government would struggle with -- suggests that in order to raise the annual allowable cut, we must have investment. We are saying: put more wood into the small business program. The small business program raises the highest dollar. It's called bonus bids. You get four people bidding on one truckload and they drive up the price. We're suggesting that the bonus bid component of the wood industry -- the amount of money that government gets as revenue -- should be spent right back into the forests and in silviculture, rather than being put into general revenue to be spent elsewhere.
The next recommendation I want to draw your attention to is the woodlot recommendation. First of all, I'll tell you what it is we have suggested. We suggest that the woodlot program be increased by the year 2000 from 1 percent to 5 percent of the provincial harvest. I'll explain how we got the woodlots from value-added. The remanufacturing community kept coming to us and saying: "We don't want to be given a subsidy. We don't want to be given a gift. We would like to be able to compete. In order to compete there has to be a bit of a market." All of the systems -- the 16.1 program, the small business program, and tree farm licences -- essentially make wood appurtenant to somebody's mill. The woodlot people came to us and said: "We offer you some things that other people don't offer. Number one, our level of silviculture is so precise and our investment in the land is so great, that we'll drive up the harvest level and the allowable cut. Number two, the wood we put on the market is free market wood, so a remanner could buy that truckload and then trade it for the wood that he needs from a major licensee." One other thing
[ Page 6856 ]
the woodlot people said was: "We can log those lands in watersheds, on the side of the highway or visual lands that might be contentious." We thought it was a credible argument, and we recommend quite an expansion of the woodlot program.
There are a few other relatively technical recommendations. I want to leave time for other people to speak, so I'll pass them by and skip to the last recommendation. I'm going to read it out, because it's somewhat complicated:
"The committee recommends that the government explore all means of restricting the export of lumber from B.C. without contravening GATT, FTA" -- the free trade agreement -- "and potentially, the NAFTA. This assessment should include low-grade -- i.e., economy -- lumber, clear, shop grade lumber, and lumber with an end section of greater than 24 inches...or large cants and flitches. The government should also assess the possibility of instituting a `right of first refusal' for remanufacturers, or a fee in lieu of manufacturing, as exists now for log exports."
What it means basically is that we're saying that we ought to make it as difficult as possible -- without getting ourselves into a countervail situation -- to ship out a big piece of wood that could be made smaller, or a low-grade piece of wood that could be made higher-grade.
Other really good suggestions were made, hon. Speaker. We took them into account and sometimes we put them in our preliminary documents, but we cut our recommendations down to those that had consensus. So we feel that the 14 recommendations that we did make don't necessarily reflect all the good suggestions we heard, but they are ones that the three parties felt comfortable with.
[5:45]
I want to talk a little about the issue of jobs. When this paper hits the street, we don't want people debating it in terms of winners and losers. We don't want people saying we took wood out of plant A and put it into plant B. That's not how the remanufacturing sector works. B.C. already has overcapacity in sawmills. In other words, we've got more sawmills than we've got wood. We don't want any of our recommendations to create any new sawmills. We tried to structure our recommendations so the timber would come down off the mountain to the road, go into an existing sawmill with an existing workforce, come out and go into a new or existing remanufacturing facility. We tried to change the control of the wood going through the major licensees, but not the volume.
The only other issue I'd like to raise is the one of old growth. The timber that our society is fighting over in the Carmanah, Clayoquot, Blue Lead and Kianuko is old trees. The old trees are clear, knot-free, close growth and tremendously valuable wood. That wood has a dollar value which is far greater than any kind of second growth that we might eventually replace it with. This Legislature's committee is saying it's possible to bring capital to British Columbia so quickly that we can double the employment in ten years. Where is that capital going to come from? It is your committee's feeling that it's growing on the mountain. We need to take that old-growth, clear wood, which we may never see again, and make it available in a very careful way so that it becomes guitar tops, rather than flitches or cants, for example. We need to see to it that it's manufactured on this side of the border, and the industry will develop naturally.
The last thing I want to say is thank you to the consultant and all the 137 people who came and talked to us; thank you to Bill Howard; all the people who tried to teach us, as amateurs, what we needed to know to do this report; and thank you to the minister for trusting us to go out and do this investigation. I guess I think it was the most fascinating and important job anybody ever gave me, and I thank you for the trust that you placed in our committee. I think that the next step is for British Columbians to tell us what they think about it. We're tabling it here; you members make it available to your constituents, and they'll let us know whether they think we got it right or got it wrong.
W. Hurd: As a member of the committee, and the opposition critic for Forests, Lands and Parks, I'm pleased to stand today and respond to what I consider to be a worthwhile and an excellent report on behalf of and for the people of the province of British Columbia.
I must say that the tour of the province was at times a grind for members of the committee, for the consultants, I'm sure, and for the Clerk's office, but I think it was one of the more worthwhile experiences that I've been involved in since becoming a member of this assembly. I think the meeting we had in Castlegar probably underscores the importance the people of the province ascribed to this committee's work as we toured the province. I can recall the tour occurring in the middle of January, during the time when snowstorms are known to occur -- somewhere east of Kamloops -- and the committee was forced to shed its mode of travel and use a bus to get into Castlegar. Of course, that resulted in us being quite a bit late for our 1 o'clock formal public hearing. But I can recall that the people there were still in their seats when we arrived, still anxious to speak to the committee. I think it really underscored the active interest that the people of the province have in seeing the evolution of a different type of forest industry and manufacturing industry in B.C.
Wherever we went, people in forest-dependent communities realized that the industry is in transition. We need to find ways of adding more value to basic wood products, and we need to shift a small portion of our attention away from a commodity-based industry to an industry that looks at adding value to what is, in worldwide terms, a resource that is precious to British Columbians and somewhat unique to the province. It is an excellent committee report. I think committee members soon found that there are issues out there that are non-partisan in nature, the answers to which benefit all British Columbians, regardless of what party affiliation or philosophy we might bring to addressing the problems.
I would also like to express my appreciation for the work done by the hon. member for Nelson-Creston, who at times was able to bring the rather verbose and obtuse members of our committee under control, a daunting task at times as we got into this issue. I'd like
[ Page 6857 ]
to thank that hon. member for his work as committee Chairman and the Minister of Forests who gave us a mandate to look at lumber supply. We saw that mandate mushroom into looking at wood supply, tenure, woodlots and a whole range of issues that we found affected the remanufacturing sector in the province.
With those remarks, I think it's a worthwhile report. I hope that the public is able to get back to us over the next few weeks. I feel it a privilege to have served on the committee.
R. Neufeld: I too rise to speak to the work that the committee took on and the report that we brought forward. It was difficult at times for us to agree on some of the items, but as the Liberal critic so rightly stated, the member for Nelson-Creston, along with the consultant, did a remarkable job of keeping us on track. I have to thank the consultant very much for his hard work and diligence in keeping us on the rails at times.
I have spoken many times in this House about jobs, and that is what is on most people's minds. I think people in British Columbia know that the forest industry is very important to our economy, and that we are slowly losing jobs, even though we seem to be increasing the cut at times. An important consideration for us to look at was how we could increase jobs in this province so that we can continue to enjoy what we enjoy today. That's not always easy to do.
In our recommendation No. 2, we recommend that the government has to have a mission statement. It has to come from the government; it has to come from the Ministry of Forests. This is only a report to that minister of what we think should or could happen, but now the government has to settle down and decide just what they're going to do with a policy statement and a mission statement. I'm sure that the Minister of Forests will do that.
We looked at timber supply and heard about the nervousness out there of everyone in British Columbia, not just the major firms but also people in the small business program and in secondary manufacturing of all kinds. People are really frightened about the reduction in the annual allowable cut and about what's going to happen with land claims, parks and the mission the government is on today. That has to be looked at very carefully by the Minister of Forests in order for him and his government to decide what they're going to do.
I was particularly pleased that when we studied the small business program and went around the province and listened to people who had experienced it, although there were some glitches in it in different places and it didn't always work perfectly, in a general sense it was a good program. It was initiated by the Social Credit government a number of years ago. It has worked well, and we hope that some recommendations we made within the program itself will help it to work better and more efficiently for the province. I'm certainly pleased that the committee of all parties agreed to expand and continue with that program, because it was and is a good program.
We dealt with whole-log chipping, with woodlots, timber supply, salvage and training. Training is a very important thing. I believe the member for Nelson-Creston didn't touch on it because we're running out of time, but it seems as though in the fine field of remanufacturing, with all the new equipment and machinery that's required, it takes a tremendous amount of training. We're seeing people go from here to Austria, if you can believe it, to get trained on that kind of equipment, when we live in a province with such a large amount of wood and we produce so many wood products. So we hope that those things will be taken into account.
The recommendation that I was really pleased with was recommendation 6: the excess revenue raised from the small business program should begin to go back into a silviculture program. We all know -- we've all spoken about it, and we've heard from many people -- that silviculture in British Columbia, although it is to be commended for where it is today, must be expanded, and we must look at it in a different way. We must do different things in silviculture to enhance the growth in our forests and thus enhance what we enjoy in British Columbia.
I was really pleased to see that members of the government recommended that something around $200 million, or maybe a little less -- it's millions of dollars, hon. Speaker -- be committed to silviculture practices. I've just looked in my estimates book. I see that last year we took all the excess and put it towards the deficit in general revenue, and then brought in $17 million more from the Build B.C. account. I hope that this will change and that we'll now start using the revenue from the small business program to do silviculture.
I'd also like to thank the other members. I enjoyed working with all of them. I can tell you, travelling around the whole province either by bus or by plane was a pleasure for me. I enjoyed working with all of them, and it's always good that by working with them you get to know them better as people, as individuals. Even though we have different political views at times, we still have at heart the best for British Columbia.
The staff were very good. I want to commend all the staff -- the Hansard staff, the Clerk's staff, the Ministry of Forests staff. I really enjoyed all their input and appreciate it very much. I would like to say also that I wait now to find out what kind of response our recommendations get from the public and what kind of response we are going to get from the Minister of Forests.
Hon. D. Miller: It's always a treat to listen to some comments about the forest industry, which we all value so much in this province, and about ways in which we can achieve greater employment.
We've had a very productive day, hon. Speaker, and I would move that we adjourn the debate.
Motion approved.
Hon. D. Miller moved adjournment of the House.
Motion approved.
The House adjourned at 5:59 p.m.
[ Page 6858 ]
The House in Committee of Supply A; H. Giesbrecht in the chair.
The Committee met at 2:41 p.m.
ESTIMATES: MINISTRY OF TRANSPORTATION AND HIGHWAYS
(continued)
On vote 58: minister's office, $410,000 (continued).
D. Symons: I would like to welcome the people from ICBC who have come to assist with these estimate debates today. I will admit at the beginning that ICBC has not been part of my critic's role until extremely recently, when the minister also gained that in his portfolio. Another member from our caucus, who had been working with it before, will be carrying the main load in this discussion.
I do have a few questions, however, about things that interest me in a personal way. The first one deals with the fact that in the first 18 months of the NDP's reign, the premiums of the corporation have risen quite dramatically, especially for drivers in the lower mainland -- people like myself. By how much have the corporation's revenues risen in that same 18-month period?
Hon. A. Charbonneau: The revenues have risen approximately 20 percent -- in the order of $250 million.
D. Symons: So the revenues have risen roughly proportionately to the premiums. The cost of claims is rising also, which is the reason premiums have increased -- and seem to be rising almost daily. Could the minister tell the committee what the total claims estimate for this 1993 fiscal year will be? If possible, could we compare that figure with the 1992 fiscal year?
[2:45]
Hon. A. Charbonneau: As the member is probably aware -- and maybe I'll have the opportunity to repeat this when a representative of the Third Party enters the room -- the corporation received poor instruction for a period of time and were limited in the rate increases they were permitted. Claims were rising rapidly in l989, l990 and l991, and premium increases were held down as a political decision. In so doing, they stripped the reserves of the corporation.
We had no choice but to be responsible and bring premiums up to the level where the viability of the corporation could be assured. At the same time, however, we have been attacking the problem on the claims side. Contrary to what the member has just said -- that claims are rising constantly -- the estimate for claims in l992 is about $1.678 billion, and the anticipated claims for the coming year are $1.619 billion -- a decrease, actually. That has come about by new policies and management brought there by this government.
D. Symons: I'm finding some difficulty, I guess, with the answer. I'm curious how this government is claiming credit, I suppose, for decreasing the number of accidents. So exactly what has ICBC done to bring about this miraculous change in the habits of drivers within the province? Or is it possible that you've changed deductibles and other things of that sort that would affect the amount of claims?
Hon. A. Charbonneau: The main thing that has occurred is a decrease in claims, and they have come about through certain claims initiatives. We have adopted a policy of no crash, no cash, for example, to try to reduce -- and successfully I might say -- claims of soft-tissue injuries. We have also instituted a tips line, which discourages people from making any fraudulent claims, and we've been able to make some modest gains in that area as well.
D. Symons: I thank the minister, because from his previous answer I was thinking somehow the number of accidents had actually reduced. So I would gather from the answer you've just given that it's possible the accidents are still happening at the same rate but that you're eliminating certain fraudulent claims and also certain injuries through certain types of accidents simply not getting claims going through. I don't know whether the difference in the figures is significant. In terms of dollars raised and spent, for each $100 raised by the corporation, what percentage of that is spent in claims?
Hon. A. Charbonneau: Very close to 100 percent is claims -- approximately 99.9 percent.
D. Symons: I hope that ICBC will share its information on operations with many of the other ministries, because if that much money goes directly to their purpose, and they don't have the overhead expenses that ICBC obviously has, this province would be in great financial shape. This means only 0.1 percent of the money that is raised through premiums is going to the operations of ICBC, and the other 99.9 percent is all being spent on accident claims. That's fantastic!
Hon. A. Charbonneau: I agree, it is fantastic. Of course, this province is in great financial shape, so you're on the right track on a couple of items here.
Unfortunately, you're on the wrong track on another fairly major item, because in addition to premium income, we have investment income in the corporation. There's some $3.2 billion in investment that gives another stream of revenue that can be utilized to offset other costs.
D. Symons: I'll be revisiting that topic in a moment.
The inability to match claims expenses with revenues is having an effect on the financial position of the corporation. According to the 1991 annual report, the reserves accumulated by the corporation took a
[ Page 6859 ]
dramatic decrease during that particular fiscal year. One could surmise -- and this is what the minister was referring to earlier -- that the administration of the day didn't wish to increase insurance premiums during the election year, choosing instead to drain the financial reserves in a moment of fleeting political opportunism.
Since the 1992 annual report has not yet been issued, I wonder if the minister may be able to provide the House with at least the preliminary financial position of the reserve account for that fiscal year.
Hon. A. Charbonneau: I'm pleasantly surprised that the member sitting adjacent to the member does not have red ears at this point, because indeed it was the political opportunism of the previous administration that resulted in the reserves being stripped down. Of course, we are in the process of reversing that in a fiscally responsible manner.
With respect to your question about the 1992 books for ICBC, they are available and I'll be pleased to give you copies.
D. Symons: The minister didn't give me the number. Do you have an estimate of the reserve account, and what you're budgeting for it for the '93 year? Could you supply that figure as well as the '92 one?
Hon. A. Charbonneau: At the end of the 1992 fiscal year, the reserves had been drained down to about $5 million. To show the level of mischief done in previous years: they had stood at one time at over $300 million. In this fiscal period, through claims initiatives we have taken and simply through tighter application of everything -- more responsible management of the corporation -- we hope to see a substantial portion of the claims reserve rebuilt in the coming year. I cannot give a precise number at this time.
D. Symons: I'm just curious. "A substantial proportion" is a rather vague amount, but I will take the minister's word that it's going to be something more than the $5 million when we hear the report for the '93 fiscal year. What's the philosophy of the corporation at this time regarding the rate stabilization and other surplus revenues of the corporation? Are these viewed as essential to the long-range financial health of the corporation or are they being viewed more as a piggy bank which could and should be emptied every so often?
Hon. A. Charbonneau: Good corporate behaviour and fiscal responsibility would call for the establishment of a reserve that from time to time is drawn down to some degree to help prevent rate and premium shock. It is not, however, acceptable from a financial point of view to drain the reserves entirely. They should always be kept at some level as a hedge against any kind of catastrophic occurrence.
D. Symons: One thing concerns me greatly. We had a bill passed in the House fairly recently that puts a social service tax, the PST, on repairs to automobiles and various other things. That would have an effect on the claims paid out by ICBC, because these are going to be paid for when the repairs are done. That money, therefore, is really going to come eventually in the form of premiums from the customers. How much is ICBC expecting to pay out, above and beyond what they might have in past years, because of the fact that we're now having to pay the provincial sales tax on repairs?
Hon. A. Charbonneau: I answered a question in the House on this a month or so ago. The impact this year on the books of the corporation would be something on the order of $6.5 million. On an annualized basis it will be closer to $20 million. Incidentally, that would represent something in the order of less than 1 percent on a premium.
D. Symons: What determination and regulations are in place to ensure that the reserves are used only when necessary? I suppose you must have some guidelines. Are there any determining factors, such as capping the increase of premiums at a certain level, which were enforced to protect the insurers who have built up these reserves? You mentioned before that it is sometimes used to prevent a shock amount of increase. Are there some guidelines as to where that is, or is this a flexible thing year by year -- a political decision?
Hon. A. Charbonneau: We would like to head for a target of about 8 percent of assets as a reserve; there are no fixed and firm guidelines. There are financial policies. Although the reserves are not the government's direct responsibility, certainly the management of the corporation would draw to the government's attention what their intentions are for reserves in any given year.
L. Hanson: It's nice to hear the minister make his few political Brownie points by blaming the past government for everything that he's doing. I suspect that at some point in time he is going to have to stand up and say that he is doing these things rather than those guys in the past. I also note that the minister likes to play games with figures. As an answer to my colleague's question, he suggested that 99.1 percent or so of the premiums go out to pay for claims. Maybe the minister would tell us what percentage of the total income of ICBC is dedicated to administrative costs.
Hon. A. Charbonneau: I think it is fair comment to point out that the financial history and premium history of the corporation, and political opportunism on behalf of the then government, led to this circumstance. For example, we know that in 1989 when claims incurred increased about 20 percent, the premium rate set by cabinet was allowed to increase only 4.8 percent. A lot was sucked out of reserves then. In l990 we had another near 20 percent increase. Inasmuch as the call had been missed on the election year, now we were in the soup. They raised it only 4.5 percent, and that drained virtually the rest of the reserves. Those are the facts.
[3:00]
[ Page 6860 ]
Now the corporation is doing very well. I am pleased to take credit for that. It is all this government's fault that it is doing so well.
With regard to costs as a percentage of total revenues, the administrative costs run about 6 percent and the brokers' costs on selling run around 6.6 percent -- so between 12 percent and 13 percent. That is to be compared to an administrative burden that can run to about 30 percent in the private sector.
L. Hanson: The minister is very accurate and very helpful in pointing out what happened in the past. Maybe he would like to comment on what percentage of the total income has gone to administration this year, compared to the past three or four years?
Hon. A. Charbonneau: I can give you the precise figures if you like, but it might satisfy you to know that the percentage has declined over the last couple of years by a little over 1 percent.
L. Hanson: Maybe the minister could comment on how much the claims and income have been over the last few years. A decline in the percentage of those totals doesn't necessarily mean efficiency; it simply means that the totals got much larger.
Hon. A. Charbonneau: By and large that is correct. In any corporation or organization doing a larger volume of business, one would anticipate a larger administrative cost in absolute terms. But the key is to consider the administrative cost as a percentage of business, and we're improving on that score.
L. Hanson: I would allow the minister's opinion. I certainly disagree with him. The studies I was privileged to look at during some other times -- better times, I might admit, for British Columbia -- showed that when an insurance company's volume and claims increased, the administrative cost went down considerably as a percentage of those totals. I'm sure the minister would agree that that is very likely in this circumstance.
I have some other questions on ICBC, but I'm not going to pursue them here. I know that the minister knows there will be great examination of this government's process in the cost of ICBC premiums. I suppose the minister would acknowledge that, at times, a request from a Crown corporation for fee increases may not necessarily be granted by government -- in the interests of efficiency. Sometimes when you send people back to the drawing board, they come back with some other things.
But one issue I think we have to deal with in ICBC is whether ICBC is being run efficiently. It has a monopoly. The word I hear from the public in British Columbia is great concern that there is very little measurement. It was during another time too; I'm not suggesting that is a phenomenon of these times. The question of ICBC having the monopoly of providing mandatory insurance to British Columbia motorists, and the difficulty of measuring the efficiency of that provision of coverage, is really the question government as a whole has to answer. And it's a very difficult one; I don't disagree with that. With that, I think I'd leave that for a minute and let my colleague continue with his line of questioning.
Hon. A. Charbonneau: I appreciate that you will let your case rest, and I will let it rest too, after my comments. First of all, I would point out again that your comment -- with increasing volume one can realize efficiencies -- is correct. That is why, in relative terms, the drop in the administrative burden has been dramatic. Just keep in mind that when you're already down to something around 12 or 13 percent, and that has come down by 1.9 percent, that's a pretty dramatic percentage decrease in the administrative burden. So the corporation is doing very well on that.
As for the rationale that perhaps the premium increases were kept down to trigger efficiency gains, I think not. I don't think that one looks on the one hand -- on the debit side of the ledger -- and sees these dramatic 20 percent increases, and then holds the premium increase to 4 or 5 percent, to try to drive efficiency. I think it was trying to drive the electoral process.
Of course, because ICBC has the monopoly, we're able to be very efficient. Indeed, if you look into other jurisdictions where competition is rife, where many players are vying for the business, you find that their administrative burden, their overhead, is 30 percent -- far, far worse. This corporation -- not striving for a profit but just striving to break even and keep a moderate level of reserves -- is able to deliver to the drivers of British Columbia the absolute best product. Of course the previous government recognized that explicitly, because although they were in power for some 16 years, ICBC was one thing they dared not touch.
G. Farrell-Collins: Given that we have a new minister and a new head of ICBC, I'll perhaps be more lenient than I had planned to be a few months ago, to give people a chance to....
Hon. A. Charbonneau: Quelle presumption.
G. Farrell-Collins: In line with some of the questions that were addressed earlier, perhaps the minister can tell us what sort of an impact the quite dramatic drop in global interest rates has had on the investment portfolio, and therefore the revenues of ICBC, over the last period. What is that projection for this upcoming fiscal year?
Hon. A. Charbonneau: Before I answer the question, I should correct an oversight on my part and introduce the staff of ICBC. Bill McCourt is the new president of ICBC, Bev Penhall is vice-president of public affairs, and Bill Heese is vice-president of finance. I believe that you know Gerry Scott, who is one of my aides.
You were looking for the answer. The interest rates have indeed dropped dramatically over the past year or so. We are now deriving something in the order of 12
[ Page 6861 ]
percent of revenues from investment, versus 15 or 16 percent a few years ago. Our long-term revenues right now are running about 7.3 percent.
G. Farrell-Collins: Perhaps the minister can give us a dollar figure for the projection for this year, as opposed to just a percent.
Hon. A. Charbonneau: Over a three-year period, it has dropped from about $330 million -- that would be about 1990 -- to $220 million this year.
G. Farrell-Collins: That last figure is for 1993 projected fiscal year, is that correct? Perhaps the minister can give us some guidance on what sort of an impact that has had on the cost of the average premium purchased by the consumer of his product in British Columbia.
Hon. A. Charbonneau: A drop in revenue from investments of $20 million would translate to an increase in premium of about 1 percent.
G. Farrell-Collins: I'm doing the math as I stand here. We're looking at about a 5 percent increase in costs of claims over that period of time -- at least; that's a ballpark figure. I suppose I could do the math on my own, but I'll ask the question because it is easier. A 1 percent increase in premium would bring in approximately how much?
Hon. A. Charbonneau: Twenty million dollars, and that change -- a drop of roughly $110 million over the past three years -- translates to the need, just from the viewpoint of falling investment income, to increase premiums 5.5 percent just for that factor -- over three years.
G. Farrell-Collins: I assume that all the minister is telling us and all the other increases would be due to an increase in the administrative costs and, primarily, an increase in the cost of claims. Can we get a breakdown on that percentage as to which is which?
Hon. A. Charbonneau: Other than the 5.5 percent, the other increase in premiums would be entirely related to claims. Through efficiencies introduced, the administrative costs have actually been reducing -- as a percentage, as we were discussing before.
[3:15]
G. Farrell-Collins: I've been led to believe that in fact there is an internal audit report -- I can't remember the name of it -- that was done on ICBC. It was particularly a commentary on the estimates for revenues and cost projections for the upcoming years. Those figures were released to the media some time ago, and there had, in fact, been a review of those figures done by an auditing firm. Is there a report in existence? If so, can we have access to that report?
Hon. A. Charbonneau: I can answer your question on whether you can have a copy of it. I'm trying to sort out whether it was a cabinet document or not, and it appears that a determination has not been made on which parts of it were deemed cabinet advice. Those parts of it that were not cabinet advice, I don't have a problem with.
G. Farrell-Collins: I understand the need for cabinet secrecy to a certain extent. I can call into my office and receive a bit more information on it, if it would help clarify the issue in any way. My understanding of this report was that it was a report on the estimation ICBC had made for future years -- for this year, I believe, if I'm correct -- of what ICBC's expenses and revenues were likely to be, and that in fact this auditor had some concerns over those projections in that they may have perhaps been a little more optimistic than what would have been required. If it was for cabinet's perusal, I assume the minister would have seen it by now. I don't believe that the audit report would have been prepared for cabinet; rather, it was a critique of the estimates that had been made by the corporation. While it would be helpful to have the original document, I think, more importantly, that it would be helpful to look at the auditor's report of what those estimates and projections were as far as the realistic nature of them.
Hon. A. Charbonneau: I believe I know the report you're making reference to, and I've seen the report. What I still don't know as I stand here is whether it has been declared as advice to cabinet and whether or not portions of it can be severed. When I find that out, I'll be pleased to advise you. Yes, the report exists; yes, I have seen it; and when we determine its status, I'll let you know.
G. Farrell-Collins: Perhaps the minister could give us some idea of what the time frame would be on that, given that we're currently in the estimates process. I'd hate to have to wait another 12 months to go through this again, so perhaps we could have some idea of the time line. My understanding is that this report has been in existence for several months or more. What time frame does it take to make that determination, and when can we expect to receive either all or a substantial portion of that report?
Hon. A. Charbonneau: I anticipate that I could have the determination made, or make the determination, within a month.
L. Hanson: It was interesting to hear some of the answers the minister gave us, so maybe we can pursue that income from investments. If I understood the minister correctly, he said that from 1990 to 1993 it had dropped by $110 million. I believe he said that there was an income of $330 million in 1990 and that there was $220 million....
Hon. A. Charbonneau: Anticipated this year.
[ Page 6862 ]
L. Hanson: Well, that says to me that there was a lot more than $110 million. Is the $110 million drop on an annual basis? What was the income in 1991? What was the income in 1992? And what do you forecast the income will be in 1993?
Hon. A. Charbonneau: In 1990 it was $330 million; in 1991 it was $315 million; in 1992 it was $245 million; and $220 million is anticipated this year, 1993. So there was a decrease in the annual amount of income from investment of approximately $110 million over that period. I'm not sure if you're asking what the cumulative drop was. From 1990 to 1991 there was a $15 million drop. In 1992, from the previous year, there was another $70 million drop, and this year another $25 million drop.
L. Hanson: Another $25 million -- so last year it was $255 million.
Hon. A. Charbonneau: It was $245 million.
L. Hanson: Oh, $245 million. Okay, $230 million; that's $15 million. So from 1990 at $330 million to your forecast for this year, there's a difference of $110 million. It was $330 million, and it's down to $220 million -- that's $110 million.
I think the minister said that could be attributed to a 1 percent premium increase, and it seemed to me that he mentioned somewhere along the line that 1 percent was $20 million.
Hon. A. Charbonneau: Yes. The numbers, if you want to look at them again, were: $330 million in revenue in 1990; dropping to $315 million in 1991; $245 million in 1992; then dropping to $220 million anticipated this year. That fundamentally reflects declining interest rates. The equivalent of that $110 million drop would be about a 5.5 percent increase in premiums to offset the revenue income from investments.
G. Farrell-Collins: What was the cost per claim, the average dollar figure of that decrease in revenue from investments? In 1991, I believe the figure was about $150 or $152 per claim -- or something in that neighbourhood. What effect has that had?
Hon. A. Charbonneau: Could I seek a clarification of the question? Is this an amount per claim, an amount per policy, an amount per property claim, an amount per soft-tissue claim -- I'm not certain -- or per personal injury claim?
G. Farrell-Collins: Sorry, I shouldn't even have used the word "claim." I meant to say policy per vehicle, so to speak. What change in the average dollar figure would that have made?
Hon. A. Charbonneau: In 1992 the investment income contributed $107 per policy.
G. Farrell-Collins: I believe that number is down from about $152 in 1990. Is that correct? That number seems to stick in my mind, so I just wanted to check it.
I'm wondering what sorts of plans there are with relation to this investment portfolio. There must be some strategic planning to try and increase the revenue generated by it, although it needs to be balanced with risk. I'm wondering if the portfolio has been diversified more internationally. Is it already substantially diversified? What types of changes or plans are being made to try and improve that performance, keeping in mind the level of rates internationally?
Hon. A. Charbonneau: First, all of the funds are invested in Canada -- that's one condition. Second, the bulk of them -- 95 percent -- is invested in short-, medium- and long-term paper, including T-bills. A relatively small position, about $150 million, has been placed into equities, but on a cautious and prudent basis.
G. Farrell-Collins: Is there a statute requirement that all of these investments be in Canada? It would seem to me appropriate -- especially with a portfolio of the size ICBC holds -- that that fund would be diversified outside of one national economy. To hold $3 billion, give or take a bit, within one national economy as an investment strategy seems to me to be perhaps a little too many eggs in one basket, so to speak. I'm wondering why there is that centralization of those funds.
Hon. A. Charbonneau: I think the fundamental answer is that it is highly desirable to invest in Canada as much as possible. There are upsides of course, but a major downside in moving offshore is that you're into currency speculation. If the Canadian dollar moved with respect to those other currencies and ICBC took a hit because of it, I don't think anybody would be very pleased.
[3:30]
So I would applaud the strategy, the policy -- although it is not by statute -- of investing in Canadian equity, in Canadian paper. I would urge the corporation to in fact continue on that route. I guess I style myself a bit of an economic nationalist, anyhow. I would certainly not want the corporation or any of the corporation's personnel to start thinking that by getting into go-go banking or currency speculation, or even offshore speculation in other markets, that they could somehow do better. There have been too many examples in recent financial history of doing considerably worse.
G. Farrell-Collins: Given the minister's voting record on NAFTA, I'm well aware of his economic nationalism. But we'll leave that for another day.
I assume that these decisions are made for reasons, by people far more qualified than myself to make those decisions. But people I've talked to -- some of them certainly not uninformed on the issue of international investment -- would state that in fact, while risk is involved in trading and investing internationally, there also can be some great benefits. Is it sheerly for reason
[ Page 6863 ]
of caution -- not being willing to get into the sometimes volatile swings of money markets -- that that decision has been made? Or is it merely that in the past the corporation and the people who do these investments have chosen to invest those funds in Canada because of a lack of expertise in the area of international financing? Or is it strictly just a policy consideration to avoid that type of risk?
Hon. A. Charbonneau: The corporation looks to the Pension Act for what is suitable in the way of investment. The corporation has substantial expertise in investment. Again I would urge the corporation to maintain that investment in Canada, because I fully expect that anybody contributing a premium to ICBC -- indirectly to the government of British Columbia -- would want to see their funds invested in Canada.
G. Farrell-Collins: I guess we have to sort of divorce ourselves for a minute -- or maybe we're unable to do that. But I think that the mandate of a Crown corporation -- I guess it depends on what the mandate is -- is to produce the best rate of return for the owners of that corporation. Ultimately, the whole idea behind ICBC is to return that investment to the policyholders and try to offset some of those costs with proper investment. It would seem to me that one is balancing the risks and the potential benefits of international investment with the risks and benefits of sheer domestic investment.
I guess the government could set a policy and restrict all of those funds to Canada or to British Columbia in the hope that that some $3 billion in investment funds would be used to generate economic growth on an ongoing basis. I suppose that is a legitimate policy decision for a government to make. I am just trying to determine if that's the real reason: if it's because of choosing to invest those funds in Canada for economic, policy and philosophical reasons, as opposed to choosing to avoid international investment because of perhaps a lack of expertise in that specific area. It is a specialized area of investment. I'm not saying that the people who manage these funds are not experienced; I'm sure there are probably some pretty brilliant people there. Is it perhaps a decision within the corporation, or just a historical trend that they haven't invested outside of Canada and intend to continue that, or is it because of the risk?
Hon. A. Charbonneau: First and foremost, I expect caution on the part of the staff of ICBC who are making investments, because the pool of money essentially belongs to future claimants. That's who it belongs to. If any investment was done looking for a higher return as opposed to a safe and prudent investment, then the losers would be the premium payers -- the drivers of the province -- and the taxpayers of the province. I'm sure that at some future point, which will never occur, should a government ever have to stand up and admit that ICBC just lost $140 million in the Japanese stock market, the opposition members would on that day -- if on no other days -- have a field day. I applaud them again. Keep the investments secure, keep them prudent, and keep them in Canada.
G. Farrell-Collins: I hate to bring it to the minister's attention, but ICBC lost $110 million of potential investment over three years in the Canadian equity market -- that's just one way of putting it -- because of the decrease in interest rates. It's essentially about a 36 point something percent drop in revenues because of a fluctuation in interest rates and return on equity within this country. Thirty-six percent is a pretty substantial drop in revenue. Investing in Canadian equities is not without risk, either, just as investing in any other foreign equities or papers is not without risk.
I understand. I just want to get it clear from the government what the rationale is for that decision. I'm not going to tell the minister one way or the other. I'm just trying to find out what the reasoning is for that. I guess the minister is saying that it is to minimize risk, in the opinion of the corporation. One of the things the minister seems to be comfortable with -- personally, anyway -- is keeping those investment funds within Canada in order to create economic activity. That is the one main and probably the one secondary reason for this -- is that correct?
Hon. A. Charbonneau: That is fundamentally correct. I would have to correct your statement, to some degree at least, in that the drop in revenue from the investments was not a loss; it was simply a drop in the return. There has been a worldwide drop in interest rates. The drop in American interest rates is more dramatic than the drop in Canadian interest rates. We would have seen a graver decline if we had had more money in the American commercial paper or American government paper markets. There is no statutory requirement. It is not because of a lack of expertise; it is a prudent policy following the investment act and a desire to invest in Canada.
G. Farrell-Collins: The American interest rates have dropped over the last year, but there are other nations in the world that have not dropped as far as Canada. We certainly aren't cruising at the highest rates. It's an argument. Perhaps the minister and I view this issue differently philosophically; that's fine.
I know that the member for Okanagan-Vernon also has a couple of follow-up questions.
Hon. A. Charbonneau: I could look into the possibility of establishing the Farrell-Collins account, putting $1,000 into Chilean, Indonesian or perhaps Malaysian funds and reporting a year hence on how the fund has done.
G. Farrell-Collins: I have a quick rebuttal. Perhaps that's exactly the type of thing that some of the more developed nations in the world should be doing -- putting funds into some of these less developed nations so that we don't have the minister and his colleagues standing up and screaming about the free trade agreement and the poor salaries and benefits
[ Page 6864 ]
given to the workers in those nations. I would be glad to throw in $1,000 if the minister would, too.
L. Hanson: In fairness to ICBC, over the years their investment portfolio has performed very well compared to those of the Ministry of Finance and the other public body, WCB. The people at ICBC have done a good job in the return on that investment. I think that's been recognized. As a matter of fact, I can remember a time when the Ministry of Finance had great interest in appropriating some of that money for their investment policies; I don't suppose that has changed. Maybe the minister could answer that when I give him an opportunity.
The funds that are there for investment are really reserved for payment of future claims. What I'm interested in are the amounts. We know that $330 million was earned in l990, $315 million in l991 and $245 million in 1992; you estimate $230 million for this year. What dollar figure is attached to those figures? What sort of growth was there in that account over that period of time?
Hon. A. Charbonneau: If the member opposite doesn't mind rounding things off to a mere $100 million, the amount in l990 was $2.6 billion, then $2.7 billion, $3 billion, and $3.2 billion for 1993.
L. Hanson: Has there been any change in the process of evaluating the amount needed for the reserve? I know it is done on an actuarially accepted basis. Has there been any change in that process over the last couple of years, or any change in the philosophy or policy that generates that reserve?
Hon. A. Charbonneau: There has been no change in the policy.
L. Hanson: Do you still use the same actuarial consultants, and so on, that you did in the past?
Hon. A. Charbonneau: Two actuarial consultants are used from time to time, but it's the same policy and, in that sense, the same actuarial consultants.
G. Farrell-Collins: If the member for Okanagan-Vernon has completed the discussion of the investment portfolio, I will come back to it, perhaps in a different context, a little later on. But I'd like to move on to the substance of what I was referring to -- the audit report on the estimates for the corporation for the next year.
[3:45]
I remember that this document was released this spring, when things were getting a little hot at ICBC. It showed the revenues of ICBC just catapulting through the roof after a couple of years of reduction. Whenever I see that I'm always a little curious. The explanation given was that it was because of savings initiatives in the claims department. They were trying to reduce the number of claims. Perhaps the minister can tell us the projections for the upcoming year and how those are rationalized.
Hon. A. Charbonneau: First of all, I'd like to update the member on the F-C international account: it is now $996. [Laughter.]
With respect to your question on the graph included in the annual report -- the so-called hockey stick -- the projections are still holding. The claims initiatives, mainly the no-crash, no-cash approach, are digging in and having their effect. The benefits are flowing at a substantial rate, and we will see something conceivably approaching $100 million in benefits due to that initiative.
G. Farrell-Collins: Is the minister saying $100 million is projected this year due to that initiative alone?
Hon. A. Charbonneau: All claims initiatives, but the bulk of it will be in the single initiative.
G. Farrell-collins: I know that there's been some discussion among the public and certainly among the legal community of the survivability of that initiative -- if I can put it that way -- and whether or not it's going to be able to remain in force, or whether it's likely to be challenged. Can you be certain those returns are going to be there and that that initiative is going to continue throughout this year, next year and others to follow? I'm hearing that there's a likely possibility that that policy will be challenged in the courts. I know the minister can't speculate on the particulars of this case, but how confident is he in those projections?
Hon. A. Charbonneau: Of course, I'm not going to indulge in pure speculation, but I can say that up to the present time -- this is nine months into the initiative -- there is no increase in pending claims.
G. Farrell-Collins: I heard that the first time. I guess what I'm asking about, more specifically, is risk -- that's what ICBC does; it manages risk. Is ICBC looking to manage that risk? If you brought in that type of initiative, with the substantial savings of $100 million, and if there was some unease as to whether or not that policy was going to be able to be enforced in the courts, I would think there would be some plan of action so that we don't spend those savings before we're certain they're going to be there a year from now.
Hon. A. Charbonneau: I've questioned the corporation quite closely on several occasions about this issue -- about whether or not the benefits that we're seeing are real -- and I am convinced that they are. I would point out to the hon. member, however, that we're not spending the money. This would be money, then, that would be brought into the corporation and held in order to start to rebuild reserves, which is a very key mission over the next several years.
[D. Lovick in the chair.]
[ Page 6865 ]
G. Farrell-Collins: To say that the money's not being spent is an explanation -- that's correct. But clearly the $100 million is being factored in as a revenue, and it's taking the place of the other revenue source, which is primarily from increased rates. So if ICBC is planning on that $100 million and if they're confident in it, then they're going to include that in the rate-setting scheme for each subsequent year -- certainly this year and next year, anyway. Quite clearly, as a figure of speech, you are spending the money. You're allocating it as a portion of the money needed to build up the reserves, as opposed to increasing rates. So quite clearly ICBC is planning on those funds coming in, and the minister's saying that the corporation is confident that those funds -- the savings made by those plans -- are there, that they're going to be there, and that there are no allocations or contingencies being made in the event that the policy proves to be unenforcable.
Hon. A. Charbonneau: The whole process is being monitored very closely, and should there be any indication at any time that things are not developing as we think they will that of course will be taken into consideration. But in the larger sense, we have alternatives. We can take the initiative by establishing new policy and new claims initiatives that we think will save money, and then we can look at the anticipated reduction in claims and hence allow a reduction in premium. Or we can do nothing on the claims initiative side, out of concern that it may not work out quite the way we think. But it's a zero-sum game. We would then have to increase the premiums 5 percent just this year if we were not counting on that $100 million. Perhaps the member opposite is suggesting that we should have increased the premiums an additional 5 percent, but I don't think so. I think it's far better business to initiate these new procedures and to tighten up as much as we can on every aspect of the corporation -- administrative efficiencies, claims initiatives -- in order to accomplish the overall mission of the corporation, which is to deliver a secure, top-notch product to the drivers of British Columbia at the absolute lowest premium cost possible.
G. Farrell-Collins: It's certainly not my duty to set the rates for ICBC. I don't intend to do that, nor do I intend to give the minister advice on what that rate should be. That's certainly his decision.
My question merely deals with the risk and with two points, actually: whether or not the public was given the straight goods in that timely release of the document, and if those benefits are going to continue; and whether or not the public is likely to be hit with that surprise 5 percent somewhere down the line, which they weren't expecting some months ago. The minister has made it clear that he is assured that those estimates are both realistic and prudent, and that they will be realized in full. There is no perceived or great risk in his mind that those results aren't going to be achieved. Time will tell, I guess. We'll see in a year from now. If we're back here in the same position, we'll find out what that performance level was and how it worked out. That's a fair comment.
One of the other things I wanted to look at, if I can just take a moment here.... The minister said that the main initiative of that $100 million was "no damage, no claim." He had a better phrase for it. No crash, no cash -- I think it was. Is that 90 percent of that $100 million? Is it 60 percent or 98 percent? What other initiatives is the corporation taking?
Hon. A. Charbonneau: While the answer is being developed -- it requires a bit of digging -- perhaps we could go on to another question and come back to that answer.
G. Farrell-Collins: That's fine; I have no problem with that.
The minister commented that the administrative costs as a percentage of expenditure -- or a percentage of revenue -- was decreasing, or something pretty close. My understanding is that operating expenses and administration expenses for the corporation have been increasing at a rate of about 13 percent for the last couple of years. The projections that I saw in the document that was put out some time ago under the previous head of the corporation indicated an increase this year of about 4 percent. Can the minister justify that drop in increase in operating and administrative expenses?
Hon. A. Charbonneau: In the report about three or four months ago that claimed these very large increases, they were one-time-only costs that impacted on one quarter quite heavily. In the general sense, if you look at the inflationary increase and the vehicle population increase, the administrative costs have been about flat with respect to that. I don't know if I can give you the exact figure you're looking for. If I haven't answered it, perhaps you could ask for the specific figure and I'll find it.
G. Farrell-Collins: I was dealing also with the operating expenses, not just the administrative expenses. Perhaps that's where the difference lies.
Hon. A. Charbonneau: Expenses for claims operations and administrative in 1992 totalled about $270 million, and in 1993 they look to be about $279 million, which is a year-over-year increase of something around 4 or 4.5 percent. That compares favourably with a combination of inflation plus vehicle population growth. The total staff of the corporation has in fact held about level.
[4:00]
G. Farrell-Collins: I was aware of the 4 percent figure. What I was curious about was the fact that according to the annual report, administrative expenses for 1991 were roughly $90.5 million and in 1992 were $102.9 million -- so, roughly $103 million -- which is an increase substantially greater than 4 percent. The claims operation expenses were roughly $150 million in 1991 and $163.5 million in 1992, which again is larger
[ Page 6866 ]
than 4 percent. I'm wondering how we go from those large increases between 1991 and '92 -- I'm looking at increases of at least 9 percent, compiled together, and perhaps slightly higher than that -- to 4 percent for this year. I'm wondering: why the savings, Why the reduction?
Hon. A. Charbonneau: From 1991 to 1992, versus 1992 to what is anticipated this year, we are seeing a decrease for a couple of reasons. There were some onetime costs in the previous year, and we have turned off the tap, so to speak, on a lot of claims. We've tightened things down on claims, and so we're not seeing any additional administrative costs due to that -- or we're not seeing a rise. Hence we're at about the 4 percent level this year. Last year was somewhat higher because of the onetime costs.
[H. Giesbrecht in the chair.]
The onetime costs included compensation issues, which included a year retroactive because of when the contract expired, and through the motor vehicle safety branch initiative on traffic safety, which was a fund the corporation paid, and some increases with respect to the activities of the Crown corporations secretariat -- not very large but a minor increase there. Those were all onetime increases. Hence you see a rather large increase, relatively speaking, from '91 to '92, and then a much lesser increase from '92 to '93. Again, it is because of the one-time costs.
G. Farrell-Collins: Perhaps the minister can tell us about the one-time cost -- I believe you said that was a one-time cost also, but maybe not -- of the Crown corporation secretariat, the funds involved in expenses to the ICBC due to that.
Hon. A. Charbonneau: I should clarify the rate of increase from year to year. The Crown corporation secretariat expense is about $445,000. That increase occurred once. It will be about the same this year. There will not be an increase in that item from year to year now, but there was between the two previous years. That's why I was referring to it as a one-time cost increment.
G. Farrell-Collins: I assume that's all salary. Is that correct? Or is that part salary, part.... I am just wondering what the $445,000 is. Why is that transfer from ICBC to the Crown corporation secretariat occurring?
Hon. A. Charbonneau: The activities of the Crown corporation are, of course, under the Minister of Finance. But in addition to salary, or space charges -- other BCBC rent, for example -- there would be consultants' fees in that as well. So it would not be all salary. But if you need any detail on it, you would have to obtain it through the Finance estimates.
G. Farrell-Collins: I understand what the minister is saying. I believe Finance is going on as we speak, and it's difficult to be in two places at the same time. But I can certainly make the critic for Finance aware of that. However, I would think that a half a million dollar transfer out of ICBC's administrative fund would be allocated in some capacity; the minister said rents for BCBC, equipment, those types of things. Is there an office at the Crown corporation secretariat with somebody in it who's being paid, and whose office space and equipment is being paid for, by the Insurance Corporation of British Columbia?
Hon. A. Charbonneau: Again, the details are available from the Minister of Finance. This amount represents this corporation's share of the Crown corporation secretariat's overall budget; there's a portion, I believe, by gross revenue or something like that. The $445,000 represents this corporation's contribution to that.
G. Farrell-Collins: What does ICBC get for $445,000, as far as a benefit that they didn't get the year before?
Hon. A. Charbonneau: A tremendous amount of top quality advice.
G. Farrell-Collins: That's what we're afraid of. Thank you, hon. Chair. Knowing that this minister's estimates will continue for some time yet, and knowing that Finance is ongoing, I will take that issue to the Finance minister and find out what his answer is. If it's as satisfactory as this one, then I'll be back for further clarification to find out exactly what's happening there. But I can almost guarantee that the Finance minister will tell me that in fact that's an expenditure of ICBC, and that we should be asking that question of the minister responsible for ICBC. Luckily, they're occurring at approximately the same time, so we can ping-pong that back and forth and hopefully find an answer. So I'll let that sit for now and come back to it a little later. We did get off track a little bit.
As for these one-time costs, I see an administrative cost increase of $445,000 from ICBC. It doesn't seem to me that there were people or duties or responsibilities transferred from ICBC to the Crown corporations secretariat, but rather that it was an increase that was added on top of the people who were already in ICBC. Therefore my question is: what is ICBC getting now for $445,000 that it wasn't getting before? I assumed that there was an excellent bank of advisers in ICBC all along, and that ICBC didn't need to go out and hire others and put them under other jurisdictions in order to achieve that. As I say, we'll try to sort that one out with the Finance minister.
I guess I just need some sort of comment from the minister that he is confident that those estimates of a 4 percent growth in the operating and claims operations expenses and the administration expenses are pretty on target as far as he's concerned. That's a substantial amount of money, and if they're not on target, it's going to have an impact on the premiums of the drivers. I'm just trying to get a confident assurance from the minister that he is -- as he was with the other numbers
[ Page 6867 ]
that we've bantered around before -- comfortable that those numbers are on target, will maintain on target and are accurate, and that we won't be surprised somewhere down the line.
Hon. A. Charbonneau: I have the highest level of confidence in management, and I fully expect that the targets will be met.
Just a brief update: the F-C fund is now under $980.
G. Farrell-Collins: I guess my F-C fund is depreciating at about the same rate the support for the government has been over the last two months. If $1,000 is all it costs me for re-election, it is $1,000 well spent.
When we look at some of the other items here, I notice in the annual report -- and I intend to get into this to some extent a little later.... I'm sure the minister has a group of people he talks to about ICBC, who give him advice and who correspond with him both verbally and in written form about ICBC and its future. I do too, and the people I talk to are drawn from a wide range of stakeholders who deal with ICBC and have some ongoing communications with them. I know that the minister is new to this particular Crown corporation, and I know that the president is also. I'd just like to know what the status is of the dialogue with those parties. Is it ongoing? Is it increasing or decreasing? I know there has been some concern among those parties that it's very difficult to get above a certain level in ICBC with concerns or with negotiations. I'm just wondering if the minister or the president has changed that policy in the corporation in the last little while.
Hon. A. Charbonneau: The level of contact has been extraordinarily high, and it has occurred right from the top of the corporation. Mr. McCourt has spent a couple of Saturdays working in brokers' offices, and he went to their annual convention. In fact, the headline has been pointed out to me in the Thompson World Insurance News report of May 3: "They're Pals Again: B.C. Brokers Bury the Hatchet with ICBC's New Boss."
G. Farrell-Collins: We're not allowed to break out into applause, but I would if I could. I'm glad to see that, because I know there were some pretty hard feelings not just from the brokers, but from the salvage industry, the repair industry -- you name it; there have been a lot of concerns there. I'm very glad to see that what we had hoped was going to happen has started to happen. I hope that those types of administrative exercises and initiatives continue. I think it's in the best interests of all those involved as consumers with ICBC. In the interest of fairness and in the interest of access to the people who are actually making these decisions in the corporation, that's a positive initiative. As I say, I hope it continues. I hope it proves to be fruitful. I assume that that discussion is not just taking place with the brokers but with some of the independent insurers and certainly with the repair industry also.
Hon. A. Charbonneau: Yes, those other dialogues are going on. I would hasten to add that in this period of getting on top of the expenses -- on the expense side of the ledger at ICBC -- it's necessary that everybody bear a bit of pain. We cannot just turn to the drivers of British Columbia, to the premium payers, and lay it all on them. We expect the brokers to tighten up their shop and maybe lower their expectations a bit. The same with the autobody shops. The same with the legal profession. We expect everybody who is involved to contribute what they can to solving the problem and to keep premiums at the lowest possible level.
[4:15]
G. Farrell-Collins: I think everyone is aware of those initiatives -- the sharing of the burden, so to speak. I know that those people in that industry are cognizant of that and are making every effort to do that, because their profits and their survivability hinge on it. My concern has been and continues to be -- but hopefully it's being addressed -- that sometimes a small company dealing with a very large corporation such as ICBC can be trampled without ICBC even knowing it. My concern was that those concerns weren't finding their way up the ladder far enough to the decision-making process, so that the person making the decision was not actually having contact on a regular basis with those people. These various parties did not feel that their concerns were getting up the ladder enough to the people who were making the decisions. The minister gives me his assurance -- I see the president nodding -- that those concerns are recognized and that there are initiatives underway to try to rectify that. I hope that that is the case. I hope that that sorts itself out somewhere in the long run, because I do know that there were grave concerns. I assume they still exist but are being addressed -- to some extent anyway -- in the initial stages of all those parties trying to rectify those positions.
It does lead me into another question. But before I move off into specifics, I would hope that if those problems continue -- if those concerns that I've heard continue and are not addressed over the long term -- I can seek the minister's indulgence to bring them to his attention directly. I hope that the minister would arrange to meet with those parties to discuss that, to ensure that when this process wraps up there is some further recourse for those people if they need it.
Hon. A. Charbonneau: I would look to the president of the corporation to resolve those problems. To the best of my knowledge -- and I have been following these issues fairly closely -- they're all in hand. The dialogues are very positive. We have been heard right to the top of the corporation; the president has heard the complaints. He has dealt with them. He has passed on a message that shows that there is some willingness to be flexible in some areas, to take a second look at some things. But also the message is there that we need to be a bit tough too, we need to share the burden. I am satisfied that the relationships with all of the other parties are in hand.
G. Farrell-Collins: I'm sure that the new president is making those efforts, but as far as my job goes, I don't go directly to the president -- although I
[ Page 6868 ]
can pick up the phone, I assume, and tell him what I'm hearing as a person.
As far as an accountability level goes, that accountability exchange is directly between the minister and myself. I'm seeking an assurance from the minister that if there is a problem, and if the problem for some reason -- despite the efforts of the new administration -- is not being rectified, I will have recourse directly to the minister and that those people can be sure they will also get a hearing from the minister.
Hon. A. Charbonneau: Any citizen in the province of British Columbia has the right to write a letter and to be heard. If I became aware of a situation that was not being dealt with at the corporation, I would inquire into why it was not and, if I did not receive satisfaction that way, I would entertain listening to and hearing from anybody on any issue.
G. Farrell-Collins: I thank the minister for that assurance. That's good enough for now, and we'll leave it at that.
I do have some questions, though, relating to some specific issues. One deals primarily with the policy ICBC had on salvage.
The Chair: There appears to be a division on Bill 20. We'll recess until the division has been done in the House.
The Committee recessed at 4:20 p.m.
The Committee resumed at 4:30 p.m.
G. Farrell-Collins: I was just getting to a specific question, and it dealt with the annual report and some of the projections for this coming fiscal year. ICBC has taken a new policy on salvage. My understanding, from the indications I've had, is that the view is to reduce the serial numbers that are floating around out there, to try to have some positive impact on the issue of stolen vehicles. Perhaps the minister can tell us how that policy is intended to work, how it has been working, if it's started yet and what impact that's going to have on the salvage sales of vehicles.
Hon. A. Charbonneau: There were two prime reasons. One the hon. member gave, which was to freeze or get hold of the vehicle identification numbers. The second reason, however -- and a good, defendable purpose -- is to prevent cars that have been seriously damaged from being repaired and put back on the market -- cars that were damaged to the point where they ought not to be repaired for long-term safety reasons. The action has been supported by the police, the Attorney General's ministry, the motor vehicle branch and the Automotive Retailers' Association. Even with this policy in place, it is estimated that approximately 60 percent of salvage vehicles will be available for rebuilding.
G. Farrell-Collins: I am sure the automotive retailers are in favour of it -- I wouldn't doubt that for a minute. I am not saying the policy is a bad one; I am not saying that at all. I am just curious as to what the financial impact is going to be for ICBC at the end.
Hon. A. Charbonneau: I am sorry I don't have an exact number for you. It's a very small number in terms of the overall expenses and revenues of the corporation. It's a socially desirable policy. Furthermore, there is the aspect of avoided future claims, of putting cars that are either structurally impaired or safety-impaired back on the road. If you would like to obtain an accurate figure on what it costs the corporation, I could have a number worked out for you.
G. Farrell-Collins: I wouldn't mind getting that number, if it's not too much work. I look at the figures in your annual report and it's $26.5 million in '91 and $29.5 million -- almost $30 million -- in '92. I'm just wondering if there's going to be a substantial change to that 20 or 30 percent. But that's fine, I can wait for that number. There is no real need for it.
The minister spoke earlier about his claims reduction initiative, the no crash, no cash one. What sort of allotment is there from ICBC as far as educational programs go to try and reduce...? I know a certain amount of advertising is done, but what other education programs or plans in the works are there to try and mitigate some of those figures?
Hon. A. Charbonneau: The budget for initiatives related to that has about doubled -- up to about $11 million or $12 million. We will be announcing a significant initiative with respect to road safety in the near future.
G. Farrell-Collins: Is that an educational or advertising initiative? Or is that a boost-the-points initiative to try and deter them from...?
Hon. A. Charbonneau: It would be the former -- education towards safe driving.
G. Farrell-Collins: I don't know if I should be going to the Attorney General with this. If I should, feel free to direct me that way. I know Ontario is taking some action with young drivers coming on stream in a step-by-step process, instead of receiving the full privileges of a driver's licence all at once. Is that proposal being considered here? Is that one of the things we are looking at? Is it a problem in British Columbia? I assume it is. Are there plans to head in that direction as a way of mitigating some of these costs also?
Hon. A. Charbonneau: As I have said, there will be a whole set of initiatives that deal with driving habits, increased levels of police enforcement, improved road design, improved commercial vehicle safety, safe vehicle design and additional loss-prevention programs. The one you had in mind was graduated licensing. That is indeed an issue of the Attorney General.
[ Page 6869 ]
G. Farrell-Collins: I believe the minister said increased enforcement was one of them. Does that relate to traffic offences? Is that where the increased cost of points, drivers' licences, etc., comes in? Because that seems to have been the method we've taken so far. It's been a retroactive process of deterrents, or an attempt at deterrents, which is basically saying: "Sin now and you're going to pay later." That is one way of approaching it; of course, there's also the positive way of approaching it. Perhaps the minister can explain those a little more, if he feels free to do that. I would appreciate some explanation of what those initiatives will be and what types of programs we're looking at.
Hon. A. Charbonneau: In the broadest sense, I think it requires a combination of increased communication with police, increased enforcement and increased education. As I said a few minutes ago, we will be announcing a significant initiative on the education side. Of course, the enforcement side is primarily a matter for the Attorney General.
R. Neufeld: I have just a few short questions for the minister. Number one deals with windshields. In the part of the country I come from, we all see quite a few windshields of course. I'm always told by people who talk about their insurance going up so high that ICBC is paying far too much for the replacement of windshields. I can never seem to get information about exactly what it costs. People tell me they go and check the price, if they pay for it themselves, and it's usually much less than what ICBC pays. Can the minister tell me how I could find those numbers, so that when people come in I actually have some invoices or something to show them exactly how ICBC handles those windshield claims?
Hon. A. Charbonneau: I certainly recognize the concern that has been expressed to the member. As Minister of Transportation, I receive a lot of correspondence on this issue and, aside from your specific question, I'll inform you that we've had this concern on the ministry side and on the road maintenance side. We have been carrying out a study over the past winter into windshield breakage, particularly the relationship between aggregate size and windshields. We're getting cooperation from ICBC and from the police; we're pursuing that as a significant issue. Provincewide it is a very large issue in terms of money. We can obtain specifics on windshield replacement costs for you. I would be pleased to do so. It's in the $200 to $250 range, which is very broad. I'm aware that some windshields can range up to well over $1,000. It is $55 million in total.
One other bit of personal anecdotal information. I once replaced a windshield myself, choosing not to go through ICBC. I just went and paid for it directly and didn't bother with a claim, and it was cheaper. But it was also a substandard windshield; it was substantially thinner glass than the original equipment on the car. One must be careful of that in hearing anecdotal evidence.
R. Neufeld: I was interested in your response. I guess it's in Highways, but maybe you could expand a bit more on your study in the aggregate. I assume you're talking about sanding and those type of procedures during the winter, and the effect those procedures have on windshields.
Hon. A. Charbonneau: I will be receiving the results of the study within a few weeks. I'll be sharing it with the public as soon as I am able to.
R. Neufeld: I don't know whether you've canvassed this already: living so close to the Alberta border. There is quite a difference between the rates of insurance in B.C. and Alberta. You are as well aware of it as I am. We see it more in the trucking industry. Those companies that can prorate through B.C. are fairly fortunate. Those who just operate in British Columbia cannot prorate and pay a much higher price for insurance than they do in Alberta. Yet they usually have to compete for the same contracts.
The other part is the cost of general insurance for ordinary passenger vehicles. I have completed some study of my own vehicle. It's in the neighbourhood of $300 or $400 more for one vehicle in Fort St. John than it would be Grand Prairie. Those two places are about 180 miles apart.
[4:45]
Many in the farm industry who are located both in Alberta and British Columbia, who straddle the border or are even close to it, come to me with issues regarding their usage of farm vehicles and the cost of licensing and insuring those vehicles. I wonder if you have any recent comparative figures that you could give me.
The other thing I find with comparative figures is that they don't always apply to what is actual. I'm not trying to dispute anyone's arithmetic. About a year and a half ago ICBC sent out a chart and told us that our rates were much the same as Alberta. But when I sent my registration and insurance right to Reed Stenhouse in Grand Prairie and asked them to quote what it would cost for the same insurance in Alberta, I found the rate in British Columbia to be quite a bit higher. Do you have anything that you could give me on that, Mr. Minister?
Hon. A. Charbonneau: Quite often what appears on the surface is not what's really there. I cannot speak with respect to the truck or farm vehicle rates. We might be able to chase down some information for you.
Taking automobile rates as a broad indicator, I too have often heard and people have written to me over the last several months about how much lower auto insurance rates are in Saskatchewan. When you actually look, it's comparing apples and oranges. For example, first-party coverage in Alberta is limited to $5,000 in one instance, whereas we have $150,000. So the benefits are very different. I have a table in front of me that was produced by Runzheimer Canada Inc. It's a management consulting company that researches living costs. The research into transportation costs involved monitoring vehicle insurance premiums across North
[ Page 6870 ]
America for the last 60 years. I would say that they probably know what they're doing.
In the comparison of Vancouver to Edmonton for a set coverage -- $1 million third-party liability, collision with $250 deductible, comprehensive with $50 deductible, used to commute to and from work less than 15 kilometres with a four-year claim-free record in vehicle rate group 10 -- to make sure we're comparing apples with apples, the premium in Vancouver was $1,061 and in Edmonton it was $1,244. A lot of the talk about Alberta having substantially lower rates is a myth.
On the other hand, there are some factors that enter here, which do make a difference. In Alberta, in the private industry, they can discriminate. A firm can take only the best of drivers and decrease their exposure that way. They will show for some clients a rate that is lower than ours. For every person like that, there is someone else -- perhaps a young male with no accidents whatsoever -- paying an exorbitantly high premium. We do not have that discrimination in mind. If it makes you feel any better -- when I look at the numbers, they make me feel better -- for some annual premiums in the States from top-rated insurers for the same car and conditions: $300,000 liability, $50,000 limit on medical, $250 on collision, $50 on comprehensive.... Keep in mind that the Vancouver figure is about $1,060. In New York it's $5,222; in Ohio it's $1,976; in Michigan it's $2,788; in California it's $3,624. So don't ever believe the stories you hear that somehow someplace else under a different system does a lot better than we do. They don't. We've got top-notch insurance rates and a top-notch insurance corporation here -- home-grown.
R. Neufeld: I appreciate that, and I know what you mean by comparing apples to oranges. Like you do, I hear everything from $300 in Alberta to $1,500 in British Columbia. I can distinguish between those. I did use my own vehicle for a test to find out what would happen. For my information -- and possibly for other MLAs; I don't know -- maybe the information you have there could be sent out to us so that we could hand it out to people. It would make it easier to explain, because I get an awful lot of complaints about ICBC. I'd also like that same comparison on passenger cars. Maybe we could have that same comparison in the farm trade. Those people say that there is a tremendous difference. I've seen some quotes that are quite different. Maybe the corporation could supply that information to me, so that I could make those determinations.
I know that the trucking industry, for instance, could be a place where ICBC could pick up a little bit of the business in British Columbia. I ran and owned a trucking firm for quite a few years. Unfortunately, after one of my trucks was written off, it didn't take me long to figure out that I should be buying my insurance through a private corporation. I bought what I had to through ICBC, and all collision was bought through a private corporation.
The Chair: There is a division call, so perhaps we should recess. We can start with you when we come back.
The Committee recessed at 4:53 p.m.
The Committee resumed at 5:06 p.m.
R. Neufeld: Thank you, Mr. Chairman. I'll continue and try to speed up a bit so that we can finish by 5:30. I don't have very many more.
I was talking about the trucking industry. I'm going to give a specific example, and maybe the ICBC people who are here can respond to it, or maybe the minster can later on: it's to do with B-trains. For collision purposes under the ICBC insurance, if you have an accident with a B-train, they assess you a penalty on all three units. In the private insurance you can purchase the same collision for 10 percent less than ICBC charges, regardless of what the rate is, and they assess only the towing vehicle a penalty, not the two tanks that you're pulling behind. I would say that with the number of B-trains and those types of units that operate in British Columbia, if you could recapture those into the system by somehow changing the way it's done, we may have more revenue and a few more happy customers.
That's just one. The other is taxis. I understand that the rates for taxis are higher than they are for an ordinary automobile. I can understand that. On the flip side, if a taxi has an accident -- I had a specific example of that in my constituency, a fairly new one, a couple of years old -- you have another system that depreciates it an awful lot more than an ordinary vehicle. I guess I can understand that, but it sure leaves the taxi owner in a difficult position, because he's paying number one up here, and when he does have an unfortunate accident, he gets this. But he does have to go out in the market and buy that vehicle at market value. It gets a little difficult there.
I have a couple more questions. Would the minister like to respond to those, or should I just carry on with a few more?
Hon. A. Charbonneau: With respect to those two points, I suggest that if you would accept that I would accept them on advisement, then proper answers will be worked up and I'll inform you.
R. Neufeld: I appreciate that. The other couple of questions that I have concern some repair-shop operators who do repairs for ICBC. They feel that there could be a move afoot to start ICBC-owned shops to compete against them, and they are a little nervous about that.
The other one has been happening for years; it's nothing new. I noticed it a long time ago and tried to bring it up and make an issue of it long before I became an MLA. It's the building of shops in different communities for ICBC staff to assess vehicle damage. I think probably in almost every small community in British Columbia we now have a shop. They're not cheap; they're costly to operate. I wonder what we used to do before ICBC came along. I think what used to
[ Page 6871 ]
happen was that the insurance adjuster would come in and adjust the vehicle at the site it was towed to, usually a body shop.
What happens in this process, in the north anyhow, I can attest to. In fact, I was one of ICBC's better customers last year. Unfortunately, I had a claim. My son rolled my van and wrote it off, so it's something like driver's points, I guess. I'm going to confess to you that I had that.
Anyhow, what happened is that they towed the vehicle to town to this tow-rental yard. Now it didn't take a rocket scientist to figure out that the thing was a write-off; it was a total wreck. There's a shop in Fort Nelson, and the ICBC adjuster came to town. This was in the middle of the summer, in August. A tow truck was hired to move that vehicle from his yard into ICBC's shop so the person could write out the form to write it off -- then it was towed from that shop back down to that person's yard again. To me, it's a total waste of money. Think about how many places that happens. You know, it's just one place. It may not be a huge amount of money -- it's not millions of dollars -- but it's a little piece of the pie that I'm sure we could look at.
Some of these shops in these communities are really extensive. I'm sure you've been through them. Really, it's just mind-boggling that we would do that. Maybe in some of the larger areas we need those shops to do the work, but I can't see that we need a shop like that to look at those vehicles in every community of anywhere from 3,000 to 10,000 people.
The other thing, and maybe the minister could let me know on this, is one specific incident. Is there a place where a person can go through the system to appeal decisions, above the regional manager?
Just another case in point. This is a vehicle that's worth $6,000. We've been into court. The person had to take ICBC to small claims court. They brought in lawyers and expert witnesses from Vancouver to Fort St. John. I would imagine that the cost of that is horrendous for a lousy $6,000 vehicle. Now they find that they have lost the case, but they only want to pay the guy $3,000.
When you're fighting a corporation this big -- and I think the Liberal member brought it up -- people finally throw their hands up. What do they do? How do you intervene in those things? Wouldn't it be better, when there was a difference of opinion between that person and the owner -- and right from the outset, that is exactly what happened -- if it could go someplace else, because in some cases the person who's running the show there is not answerable for all those things? I know it happens in other cases, too, where the cost is far greater than if we had just settled in the first place. By that I don't mean that we just give the farm away, but there is a distinction we have to make.
I'll let those questions go, and anything that the minister feels he'd like to get back to me about later on, I'd appreciate it very much.
Hon. A. Charbonneau: I'll try to be quick. First, there's no intention of establishing ICBC-owned body repair shops. With respect to the anecdote about towing the car from a wrecker's yard over and back again, it sounds to me like something that should be looked into. I think that there's always room for improvement in processes. If this is happening, we should look into why it is, perhaps with a view toward seeing that it doesn't happen. That can save the premium and the repair funds. If, at the same time, we can protect ICBC's interests, I'm all in favour of it.
[5:15]
With respect to the claim that a person wishes to appeal, there is a pamphlet that can be obtained at any ICBC or broker's office, I would imagine. On the claims-review procedure, it states that if you're dissatisfied with the adjustment of your claim and you wish a claim review, you must request it within 30 days. There's a claim-review request form. It goes through that way.
There will always be instances where there will be legitimate differences of opinion at the end of the day. We cannot on the one hand expect the corporation to be run tightly, such that we can bring down premiums, and at the same time indicate to our claim adjusters: "Well, you can be pretty soft." We have to anticipate -- and encourage, in fact. We have to be standing there pushing a bit that they retain a certain amount of toughness. The trick is to bring and blend in the fairness with the toughness. I hope we're accomplishing that. If there are instances that can be brought to our attention where this is not the case, then we'd look into it and try to correct it.
R. Neufeld: Just a quick follow-up on that -- and I appreciate that. I know exactly what you're saying, and I agree with you. I'm not trying to say that the adjusters should be lenient or anything.
But somehow there has to be something that tells the adjuster or regional manager that when you're looking at a $6,000 vehicle and thinking about bringing experts and lawyers from Vancouver to fight a $6,000 case, obviously something is wacko. It's something else. It's not the money issue; it's a personality issue or something that happened. There should be something that can take place there. Because now ICBC has written this person the letter; they have to bring in expert opinions from Vancouver again. ICBC has requested this at this person's own expense.
That's where it goes too far, and that's what I'm talking about. I appreciate that we should be tough; we don't have to be lenient. But we have to think also in the long term about what we're really talking about. If we're talking about $5,000 or $6,000 in comparison to twice that much to fight a case, it doesn't make much sense to me. That's basically what I'm trying to say.
Hon. A. Charbonneau: I have no comment on this particular case because I don't know the facts. In the broad sense, if someone with $4,000 damage to a vehicle is insisting it's $6,000, then they are the ones who are wrong. You do not solve the problem by just giving in to them, even though it may entail substantial expenses to resist it. If you give in to one on a $6,000 versus $4,000 claim, believe me, that word would be all over the province in no time at all. Suddenly, the floor
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just comes up -- the ratchet effect occurs, right. So you've got to judge them on the basis of individual merit. If there are cases where ICBC was simply unfair, we should know about that and correct it.
L. Hanson: I think the process you referred to in the brochure has been in place for a long time; sometimes it works and sometimes it doesn't work -- to be quite frank. Sometimes it's frustrating trying to find someone to prove that to. I don't think there is any doubt that we as MLAs have a responsibility -- but not necessarily to make a judgment whether a claim has been adjudicated at a fair and reasonable amount, because that difference in judgment always happens. But there is a real breakdown sometimes in the process, and it is difficult to find a method of getting that process back on track. If the process is gone through, you can't argue with a difference in judgment as to what the value is -- so be it, everybody will have that difference. But sometimes the process breaks down, and it's hard to get an answer to that. I don't have much trouble because I happen to know how the process works, but I do know that it is a difficult one.
There's a real problem out there in the public's eye. It appears that some of the ICBC adjustors, in their initial approach to an accident or a claim, feel that they have a responsibility to get the lowest settlement they possibly can, and they communicate that to the people. That should not be the case. I don't think it happens under the corporation's direction, but you really need to be very aware of that at all times so that those people that go out in the world don't give that impression of ICBC in the first place.
I have a question I want you to look into. You have a policy and a process in place where if there is a claim against an individual, you decide from the evidence in front of you that the individual is 100 percent at fault, then you place an asterisk or whatever beside his registration in your computers. He can't go and get insurance without paying a premium, when in fact he hasn't been convicted and the thing hasn't been finalized yet. You're making a decision that the individual is proven guilty before the decision has been made, and I think that's a wrong policy, quite frankly.
Hon. A. Charbonneau: Hon. member, several of your points are well taken. We would point out that of about 850,000 claims, about 95 percent indicate that they've been well treated, and that people were courteous and prompt, and 80 percent came out feeling that they got a fair deal. But out of 850,000 claimants, there are surely going to be thousands who, at the end of the day, feel that they did not get a good deal.
With respect to your question on having asterisks put on the record, this may be so, but it is hard to imagine how we could do otherwise. If it's a single-vehicle accident, that's fairly straightforward; if it's a multiple-vehicle accident -- two or more -- then two adjusters have to be consulted in order to carry out the process of assigning the 100 percent blame. If somebody didn't make that decision, then all those that went on into court for prolonged periods of time would be, in the meantime, renewing insurance at very favourable rates, and that would cause a burden on the entire system. So somebody has to make these decisions, and unfortunately that's one consequence of it.
L. Hanson: I don't disagree with what you're saying; I agree that that is a reasonable and fair process to follow. The point is that you put the asterisk beside the name before there has been a determination or an opportunity for the parties to be heard. You're making a judgment before you made a judgment; that's the point. That has happened in a number of cases. But that's all. I don't want to delay the debate.
The Chair: The Chair has been notified that the House has recessed for five minutes, and then it will table the forestry report. I would entertain a motion by the next speaker to rise, report progress and ask leave to sit again.
G. Farrell-Collins: If I can just address the Chair for a moment, on the motion if you want; however you want. I know the minister wanted to be finished by 5:30 so he wouldn't have to bring back his staff or the people from ICBC. I'm amenable to that, but I do have a number of questions that I would be glad to give the minister in written form, if he could give them back to me. If I can get his assurance, then I have no problem with that.
Hon. A. Charbonneau: Yes, I would be willing to give the commitment that we would answer those questions given in writing.
If I could just close by commenting that at an earlier point, when I was asked about the breakdown of the claims initiatives and the benefits that are going to add up to about $100 million, I stated that the no crash, no cash was the major element. I want to correct that. About a quarter of the benefits will come out of all of the soft-tissue issues initiative, which is the no crash, no cash. Other initiatives where benefits will come from include court-ordered interest. We're looking for a legislative change to recognize that interest is built into the award. That will save about 15 percent. Material-damage initiatives, and that's partly the deductibles, will yield about 30 percent of the benefit. All others -- a wide range of initiatives -- will contribute another 30 percent.
Having said that, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The Committee rose at 5:26 p.m.
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