1993 Legislative Session: 2nd Session, 35th Parliament HANSARD
The following electronic version is for informational purposes only. The printed version remains the official version.
(Hansard)
TUESDAY, JUNE 8, 1993
Morning Sitting
Volume 10, Number 22
[ Page 6915 ]
The House met at 10:04 a.m.
Prayers.
Hon. D. Miller presented a message from His Honour the Lieutenant-Governor: a bill intituled Foresters Amendment Act, 1993.
Hon. D. Miller: It's with a great deal of pleasure that I rise this morning to introduce Bill 34. It's a bill that, in my view, is overdue in this province. The bill amends the Foresters Act to improve accountability for forest management decisions, and enables sound stewardship of the province's forest resource. The Foresters Act defines the scope and practice of professional forestry in British Columbia and empowers the Association of B.C. Professional Foresters.
The Association of B.C. Professional Foresters was established in 1947 and currently has approximately 3,000 members. Government establishes self-regulating associations such as foresters when the public interest is served by regulating the admission to and conduct of a recognized occupation. The Foresters Act has not been updated for many years. These amendments are intended to increase public confidence in forest management and are complementary to other initiatives recently introduced by the association, such as the new code of ethics.
Bill 34 broadens the scope of practice of professional forestry to ensure that all activities foresters routinely perform in the forest are included in their scope of practice. At the same time, the bill provides for increased recognition of and provision for the work of other professionals and skilled persons in the forest. The bill strengthens the association's ability to regulate conduct of its members by providing it with powers to better discipline its members and requiring continuing competence and conduct practice reviews.
The bill also contains a provision which clarifies how a member of the public can lodge a complaint about the conduct of a forester. Bill 34 will provide for greater public involvement in the association's decisions by allowing appointment of lay members to the association council. As a result of this bill, the association will be able to help improve forest management and ensure greater accountability from professional foresters.
The bill, essentially, will confer on....
The Speaker: I regret, hon. member, that your time has expired.
Hon. D. Miller: What a pity. I move that the bill be read a first time now.
Bill 34 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.
Hon. M. Sihota: Committee on Bill 30, hon. Speaker. I also wish to advise hon. members that Committee of Supply A is meeting in the Douglas Fir Room to deal with the estimates for the Ministry of Transportation and Highways.
The House in committee on Bill 30; E. Barnes in the chair.
FOREST AMENDMENT ACT, 1993
On section 1.
W. Hurd: Just a general question to the minister on section 1. Given the amount of reporting and control that the ministry already has with respect to approving activities on tree farm licences, perhaps the minister could offer the committee an explanation of the reduction in the rollover term that would provide a compelling reason for this particular amendment to the Forest Act.
Hon. D. Miller: Currently the anniversary is on the tenth year. As I explained previously, the common term is an evergreen licence. In other words, if the licensee or the holder of the licence complies with all of the provisions of the licence, they can request renewal, and that renewal period is described currently in the legislation as on the tenth anniversary. We are changing it to the fifth anniversary.
I think there are a lot of compelling reasons. We probably live in an age when.... In fact, I would say that we're behind in terms of trying to adjust current practices to today's values. It's part of a general problem, in my view, in our province's forests. Changing the anniversary date to the fifth year will give us greater opportunity to discuss changes with the licensee and to include those kinds of changes in the licence document. Given the rate of change, which one suspects won't change over time -- in other words, we always need to have the opportunity to be current with respect to practices -- changing it to the fifth anniversary is, I think, quite supportable. It does nothing to detract from the security that the licence offers the holder; the rest of the provisions still exist within the legislation. We're simply moving the period when the licensee and the Crown can sit down together and work out the terms of renewal.
W. Hurd: Given the shorter rollover provision, can the minister tell us exactly what types of abilities his ministry will have to renegotiate the terms of a licence, above and beyond the powers that the ministry already possesses to scrutinize and to ask for changes in the way a licence is being managed by the holder. The minister has indicated in his comments that with the shorter rollover period, changes could be introduced to
[ Page 6916 ]
the way the licence is being managed. Are there any powers available to the minister that aren't available during the normal course of filing reports and management plans on the tree farm over the old ten-year period? Perhaps the minister could advise the committee exactly what the powers of the ministry are during the rollover period to enforce changes in the way the tree farm is being managed.
[10:15]
Hon. D. Miller: Again, I was fairly general in my first remarks, but let's just take one issue: public consultation and public involvement in the planning. Currently, members should be aware, the holder of the licence is responsible and in fact is the "lead agency" for the plans for tree farm licences. Under the act, they're required to hold open houses, consult the public and incorporate that public consultation into their five-year plan. In fact, it may be significant to note that the plans the licensees are obligated to provide are five-year plans. One of the difficulties we have had -- again, this is a personal view -- is with the whole area of public consultation, the form and the method by which the public is consulted by licensees. We may wish to make changes in those kinds of areas. We may wish to make changes in the requirements for the management plan.
[M. Lord in the chair.]
I submit to you that five years is not a long time horizon with respect to forest land use planning. All of us are aware that we live in an age when there has been fairly rapid change and when government is trying to get ahead of the game by assuring the public that we do have guidelines to manage issues of concern to the public, whether they be wildlife or fisheries issues or the like. This simply gives us more frequent opportunities. Rather than every decade, we now have a five-year period in which we can introduce these kinds of changes and have agreement with the licence holder.
J. Weisgerber: My understanding of the system, as it works now, is that at or near the end of the ten-year period the ministry comes to a new agreement with the licensee and extends the licence for a 25-year period beyond the date. It would seem to follow -- the minister is nodding his head -- that with this change, essentially every five years the licence would be renewed for a further 25-year period, given that you could come to an agreement. Perhaps I'll let the minister answer that.
Hon. D. Miller: Although we have changed the renewal period from ten years to five years, the member is correct that the renewal issued on the fifth anniversary would be for.... In the language of the act, the licence is replaced.
J. Weisgerber: I understand that this change only applies to licences issued after January 1993. Does that mean licences that are renewed, or does it only apply to new tree farm licences issued after that date?
Hon. D. Miller: A number of licences are renewable in July of this year. If passed, this legislation would apply to those licences. With respect to the licences that are not renewable at this particular time, when we come to that tenth year in the licence period -- the time when we would normally offer renewal -- the legislation will then kick in for those other licences. I don't have a number in front of me, but there are some that are renewable very quickly and others that are on staggered dates. For the ones that are renewable now -- 12 of them are renewable on July 1 of this year -- this legislation will apply. For the remaining ones, it will kick in on that tenth anniversary.
J. Weisgerber: Just to be sure I'm clear on that, a licence that today is seven years away from its ten-year renewal period would in fact go that seven years before its anniversary date kicks in, at which time the licence would be renewed for a further five years.
Hon. D. Miller: Perhaps to clarify it, there are 35 tree farm licences in the province. Twelve of them are renewable at the end of this month, seven in 1994, four in 1995, three in 1996 and nine in the period 1997 to the year 2000. As I indicated, as that tenth anniversary date appears for those other tree farm licences, this legislation would then kick in.
D. Mitchell: The minister indicated there won't be different classes of TFLs, in response to questions from the Leader of the Third Party. For an interim period there will be different classes of TFLs, but I think he's saying that at the end of a ten-year period they will all be standardized because of this amendment.
The minister made some interesting comments when he closed debate on second reading of Bill 30. He indicated that there have already been changes made to tree farm licences. When TFLs come up for renewal, quite regularly administrative changes are made to the tree farm licence document, and new conditions are sometimes placed on licensees. The minister referred to the fact that this actually happens in an administrative manner, whereby the minster will place specific conditions on licensees when their tree farm licence is renewed. If the ministry already has the ability to impose conditions on holders of TFLs, why would this amendment be necessary in the first place?
Hon. D. Miller: In fact, we may not have as much authority as the member suggests. The tree farm licence arrangement is a contract between the Crown and the licence holder. There are all kinds of other situations in our society where contracts spell out the terms and conditions. The simplest would be a lease document between a tenant and landlord which stipulates a variety of conditions, such as you've got to leave the place clean and other things like that. The contract is the legal document that governs the relationship between, in this case, the Crown and the tree farm licence holder, a forest company. It should properly contain those provisions which the Crown would want utilized on the land that is being managed. We've in fact turned
[ Page 6917 ]
over the management of the land to a private company, and we stipulate our requirements in that document.
We've just gone through an exercise with forest licensees in the interior, where we have a five-year renewal period. We had some pretty tough negotiations with those licensees. We said that there are areas that we want to see improvements on. Without spelling out any of those specifically, the results of those tough negotiations produced, in the words of at least one of the licensees, a better document.
Whether it's environmental standards, forest management practices, roadbuilding standards or specifically stipulating that the fish-forestry guidelines, for example, will apply, we must effectively include that range of things in the licence document. Our job is to ensure that the public interest is considered in forest management. The licence document gives us the vehicle to ensure that if it is contained in the licence, it is enforceable. I think the member would agree that we should expect no less in this province.
D. Mitchell: I will just go back to some comments the minister made during closing of second reading. The minister was responding to some comments made during the debate on the principle of this bill, with respect to tree farm licences and where the Ministry of Forests is really heading with area-based tenure in the province. I think it's appropriate to ask that question in committee under section 1 of this bill, which is changing the renewal period for TFLs. There was a time, not too long ago, when the Crown seemed to be interested in rolling over volume-based tenure to area-based tenure. That seemed to be the bias of the Ministry of Forests. That appears to have changed now, and I'm wondering if this bill and this section of it indicates a new bias. Is the minister and the ministry heading away from area-based tenure, and is the commitment now to tree farm licences, where licensees can actually put their arms around a certain area of timber and try to manage that timber on behalf of the Crown? Are we moving away from that, and is this amendment to the Forest Act one step in that direction?
Hon. D. Miller: Certainly the bill does not indicate any bias whatsoever. But the member raised an interesting point in second reading with respect to a policy issue. I was very candid then and I'll be candid now. I would say that there currently is, in my view, an unresolved policy issue. What form of licence, what structure, do we want in this province that will produce the very best kind of forest industrial sector that we can possibly have? Leaving aside the issue of land management, which clearly has occupied -- I would say virtually monopolized -- the public debate around forestry, the member is aware of all the steps that we have taken as government to try to deal with the issues of management of the land and ensure that we have world-class forestry in this province that we the Crown, the owners of the resource, can police. We will be taking further steps with the introduction next year of the forest practices act to further strengthen our position with respect to that.
But the whole issue of the industrial structure and what kind of relationship we have with the private companies, bearing in mind that the land is owned by the Crown, is unresolved. I've been very candid with industry in saying that it is an issue that must be addressed at some point. I don't think that point is right now. In dealing with change, one must be very careful not to try to have too busy an agenda; we should deal with issues in a very serious and steady way. Right now we're preoccupied with land use issues. The member is quoted in the press and has raised issues with respect to the spotted owl in an area that he represents. It's a very serious and difficult issue and one that will occupy a lot of our time in trying to come to a resolution that recognizes the environmental aspects of that issue and at the same time recognizes the economic issues that exist. We faced that most recently in Clayoquot Sound, where we are trying to balance the interests of the environment, do the right thing on the land base, preserve sufficient areas of our land base for a variety of reasons and at the same time recognize that the economy must continue to function. It's not desirable to radically reduce or eliminate that part of our economy. After all, as legislators, all of us are aware that there seems to be a great deal of distress among the public with regard to budget and taxation issues. I clearly hear members opposite constantly harping at the government: "You're spending too much money. You've got to cut taxes; you're overtaxing the people." In a somewhat contradictory way, I also hear members on the opposite side and members of the public saying: "Take more areas away from the working forests. Make more decisions." Those effectively cost the government millions and millions of dollars. I don't think there is always an appreciation of the true cost of some of these decisions or of the consequences for the budget and the taxpayers.
[10:30]
Maybe we need to isolate some of these issues. Maybe we need to have taxes that are directly linked to issues. Perhaps in your region we should look at the number of owls and present some options to the public. For example, we could say: "Here are three or four options. If you want X number of owls maintained, here is the price tag. If you want more than that, here's another price tag." Maybe we should present a series of options to the public and see if we can't test them. Maybe there should be some taxation if we have to take extraordinary measures. I'm serious when I say these things. We should not try to fool ourselves, nor should we try to fool the public. When we make decisions that cost money, in my view we should always present the bill. We should be very candid with people. We are making this decision, and here is the price.
An Hon. Member: Are you talking about compensation?
Hon. D. Miller: Compensation, or whatever you want. If you remove areas from the forest, clearly there is a cost. All I'm saying is that we should be very honest about what the cost is and what the consequences are for budgeting. Let's stop fooling ourselves.
[ Page 6918 ]
Last year when I debated some of the measures we took, we had fairly extensive debate on amendments we made to the Forest Act, which for the first time gave the chief forester the power to reduce the harvest rate when areas were removed from the working forest. We didn't have that before. We kidded and fooled ourselves. We took areas out of the working forest but never reduced the harvest rate, and we pretended that it didn't really happen and that life would continue forever. We were not honest with ourselves by doing that. I don't wish to be dishonest; I wish to be very candid about these kinds of issues, to present the consequences up front and to somehow try to gain from the public what their view is.
At some appropriate stage we'll be proceeding to look at our structures, and it's very appropriate to do that. Do the structures we have in this province -- whether they be tree farm licences, forest licences or whatever -- serve our interest and the public's interest in fostering the best forest industry we could possible develop?
As I said, I've been very candid with the licensees. I intend to raise this issue in forums with companies and ultimately with the public. I don't have all the answers. I don't think there is a magic answer, quite frankly. Those who dream up theories that they've devised the perfect system perhaps get too carried away with themselves. I don't think there is a perfect system. But we surely should examine our systems to see if they are serving the public need. There is a long history in this province of us doing that. We have traditionally done it through the royal commission route. After all, although the tree farm licences are not the dominant force they once used to be -- they're only about one-third of the licences.... That was the recommendation of a royal commission. That was their attempt to introduce a system of management that would lead to what I have described. Surely it's reasonable that we review those things on a regular basis to ensure that they're timely and that they work. But we don't have any current plans to do that. There is no direct link other than that one could conclude that if changes were to be proposed, there would be more frequent opportunities to introduce those changes. If the member wants to see that as a link, I suppose in some indirect way it may be, but there's nothing in this bill that leads directly to the issue he has raised.
D. Mitchell: My compliments to the minister; he's in fine form this morning. He's waxing very philosophic. That was a great answer to my question. I only hope that his candour this morning in committee is shared with his colleague the Minister of Environment when he deals with important issues like the northern spotted owl, which is a serious issue.
To go back to section 1 of Bill 30, the minister is indicating that the government is not now contemplating any major change in forest tenure in the province, although the minister has indicated that his own mind is certainly not made up on this issue and that there are some questions out there that need to be decided. Hopefully they will be decided with consultation with all affected parties. Before we pass this specific amendment to the method by which tree farm licences are replaced or renewed, I'm still not sure that I understand why the amendment is coming through at this time.
The minister has indicated that tough negotiations take place with licensees from time to time on a number of issues. Certainly that was the case in the past, and I'm aware of that. At the time licences are renewed, the ministry has the power to impose conditions of various kinds on licensees. If it is the case that the ministry has that power and authority now, I'm not sure why we're being asked to pass this amendment in committee today. Why is section 1 of Bill 30 really required? Could the minister focus specifically on that? Is there an example he could use as to why the Ministry of Forests requires this amendment to the Forest Act?
Hon. D. Miller: I think I said -- in fact, I know I said -- that we do not have all of the powers that the member seems to think we have. The licence is in fact a contract, and the renewal time is when we can put new conditions into the contract. The licensees have the opportunity to say that they're prepared to accept the new conditions and want to renew the licence document for a further 25 years, or they can say that they're not prepared to accept them, in which case they could run it out for 20 years.
I referred to the forest licence documents, because essentially we're talking about the same process. There's a period of renewal; it's five years in forest licences, which are the dominant licence in this province. They're volume-based, as the member knows. We specifically included in those forest licences new conditions that were not there before. That was the result of negotiation, yes -- and I indicated of some tough negotiation -- but the new licences are different than the old ones. We put in new conditions relative to consultation with the public and aboriginal people and relative to roadbuilding, which is a serious issue in this province. When the renewal period that is stipulated in the legislation occurred, we used the opportunity to sit down with the holders of the licence and say that we wanted to put in some new conditions. As a result, those new conditions are in that licence. It's the same thing with the tree farm licence document. It gives us the opportunity to sit down with the licensees who hold these very valuable rights to the Crown's timber and to put the public's view into those licence documents.
What kind of changes, for example? I've talked about consultation as one of the areas. It could be areas related to forest management. But it's our opportunity, and the change simply provides us with the ability to do it every five years as opposed to every decade. I think that's a positive change.
W. Hurd: I can understand what the minister is saying. But surely he must understand the trepidation that greets the kind of fundamental change in licence rollovers when it's tied to the issue of expropriation or compensation for licences which the government attempted to introduce in the first session, and may still introduce in this one. We can certainly expect changes in the way licences are dealt with in the event that they have to be expropriated, for whatever reason. People
[ Page 6919 ]
involved in tree farm licences would have reason to believe that the shorter rollover period would make it easier for the Crown to engage in expropriation, if that was the choice they were to make.
The Chair: The minister rises on a point of order.
Hon. D. Miller: Hon. Chair, I was accused of being philosophical this morning, but I don't think it's a disease we should all catch. Clearly the member is out of order in hypothesizing about expropriation, which has absolutely zero to do with this section. This section changes the renewal period of licence from ten years to five years. It has nothing to do with the issues of expropriation or compensation. They are very valid issues. I would like to talk about these issues, because they are current issues, but this is not the place.
The Chair: The minister makes a valuable point; this is clause-by-clause debate. I would remind all members of the committee to confine their remarks to the section we are debating.
W. Hurd: The section stipulates that the tree farm licence may or may not be offered for a replacement period. My reading of the section indicates that the minister would have a wide discretion as to whether the tree farm licence were even renewed. In the event that there were competing interests in the land base -- whether that be Aboriginal Affairs or protected-areas concerns -- certainly it could be construed that this provision might in some way tie in with a decision by the Crown to pursue another use for that Crown land. I am certain that the minister can see, because we had this debate during Forests estimates....
What is a tree farm licence worth in British Columbia? The rollover period, which is half again the old one.... If the Crown were pursuing a policy that stipulated that a tree farm licence or a forest licence isn't worth a heck of a lot as compensation, this rollover provision would be part of a pattern. I think there is reason to be concerned about the motives or the interests that the ministry might have for this particular section, given the fact that there is a great deal of control the ministry can exercise over tree farm licence holders. They are required to submit five-year working and management plans. They are required to consult with the public. The chief forester is free to accept those plans if he so chooses, and order changes to them. The tree farm licence holders the opposition has talked to don't have a great deal of problem with the amendment, but they question why -- given the reporting schedule and the kind of accountability that is there now -- this rollover provision would be necessary.
Perhaps I could just ask one specific question relating to licences that are transferred from one licensee to another during the rollover period. Can the minister advise the committee how that would affect the rollover period when there has been a licence transfer -- there has been a 5 percent reduction and a new licensee is involved in managing the area-based tenure. Does that change the rollover period, or does it remain under the terms of the existing licence?
Hon. D. Miller: It seems to me there is a deep-rooted paranoia of the Liberal Forest critic, about.... I pick this up every time I debate a bill. Somehow there is a suggestion that there is some hidden, nefarious....
Interjection.
Hon. D. Miller: And here I stand before you. Unlike what the member just said, the bill dealing with that issue of change says: "The minister shall offer...a replacement." It's compulsory. We're just changing the time period; we're not changing the contents of the section of the bill. I'm obligated to offer a replacement. Unlike myself, the licensee is free to say, "Yes, I want to replace," or "No, I don't want to." The legislation is very clear in obligating the Crown to offer a replacement. We're not changing that. That's the answer to that question.
[10:45]
The other subdivided TFLs are dealt with in a subsequent section of the bill -- section 22. We're trying to get things in sync, because -- as you will note as we come to that section -- some of the subdivided TFLs, because of the nature of the subdivision and the wording of the current legislation, are in an awkward position in terms of the renewal date. We're proposing amendments to deal with those subdivided tree farm licences that have been created in the last short while.
Section 1 approved.
On section 2.
R. Neufeld: If I remember correctly, there are only ten or 15 societies that hold woodlot licences. Could the minister tell us what trouble the Ministry of Forest is experiencing with those societies because of this change, knowing full well that some of those societies use those woodlots as an educational tool? I'm sure that probably some of them may not be managed exactly the way they should be, but there must be something fairly serious that has happened for the minister to change this. Maybe he could just explain briefly to us so we can understand.
Hon. D. Miller: There are 15 societies that currently hold licences. I will very quickly run through this list to illustrate the variety of organizations that hold these licences: North Peace Rod and Gun Club, Willow River Demonstration Forest Society, Nechako Woodlot Society, Mackenzie Forestry Education Society, BCIT Forest Technicians' Club, Kootenay Woodlot Education Society, Golden District Rod and Gun Club, Cariboo Woodlot Education Society, Burns Lake Minor Hockey Association, Omineca Ski Club, John Howard Society, Telemark Cross-Country Ski Club, Kamloops Woodlot Education Society, Kelowna Economic Recovery and Employment Development Association and Lofstedt Farm Forestry Society. I want to be very clear that I don't read these to suggest that there is anything wrong with these societies and the woodlots that they are operating -- not at all -- but it is our view
[ Page 6920 ]
that in the competition for woodlots, the ability of the applicant to manage a woodlot is a very strong part of the assessment process.
It's been our experience that societies may start with a very strong group of people who have all of the credentials, but the membership in societies can change over time. We can't really do anything about that. We can't go back and say: "We don't think the makeup of your society is sufficient. You don't have enough capable people in that society, and therefore we're going to change the terms." We don't have that capability.
It's our view that it would be preferable to remove societies from the list of eligible applicants that can bid on a woodlot licence. We will not impact on the current holders of these licences in any way. Those societies that hold licences will continue to hold those licences; we have no intention of doing anything to interfere with their licences. But when it comes to issuing new licences, the amendment deletes societies from the list of eligible groups that can apply. I hope the member sees the reasoning for this. Given that management ability is such a strong feature in the awarding of woodlot licences, it's preferable to have societies deleted. I'll leave it at that.
R. Neufeld: Basically, the minister is telling us that there is no real problem with any of the societies that hold woodlot licences now or with how they're managing their woodlot licences. But with the reduction in the annual allowable cut and the competition that's coming for timber in British Columbia, it would be wiser not to give them out to societies anymore for educational purposes, or for that type of thing. I would assume that's what most of it is about, or maybe it's for fundraising a few dollars. But it is more economic-driven in order for the province to get a better return on investment.
Hon. D. Miller: Not at all, hon. Chair. Our concern is really with the proper management of the land. Current societies that may be interested in applying....
Moving off the topic just a bit, we know the position we're in in this ministry: we do not currently have the resources to offer any significant expansion of the woodlot program. I know it's an issue, and I know it's desirable, but we simply are not in a position to do that.
Those societies that wish to apply for any available woodlots can form a corporation. The advantage that gives to the Crown is that when and if there is any change in the directors of the corporation, they require my approval. We don't have any mechanism now to deal with a society that may have had a change in its membership. But societies can form corporations and have a board of directors. If there is sufficient change in those corporations, they require my approval. That gives us the opportunity to review their ability to manage. We're not talking about a revenue-driven or an economic issue. We're talking about an administrative issue related to the best possible management of the land contained in woodlot licences.
L. Fox: I have a couple of questions around this issue, because I was involved in one of these society woodlots. It is filling a substantial educational need in the community of Vanderhoof.
The minister suggests that a society could form a corporation. I'm not sure that's possible in every situation. For instance, the school district in Nechako, through a society, is actually the holder of the woodlot. I'm not sure that the school district has the opportunity to form a corporation, yet there's quite a benefit to the educational program in that particular area. That's one issue.
I think the minister is on the right track with respect to the society issue. Obviously there is a need to have better control of those particular licensees. But I'm also concerned. The minister will know about the thrust of late where municipalities, in competition with the private sector, are looking at applying for woodlots. I'm wondering if this particular action would limit that initiative.
Hon. D. Miller: The first part of the question dealt with school districts. I'm not aware of a prohibition against the members of a society forming a corporation -- assuming that there's a separate society, or maybe one comprised of all the members of a school board. My only experience is on the municipal side, and clearly municipal governments can and do form corporations. Years ago as an alderman I recall being a member of a corporation formed by the municipality. So the opportunity is there for that to take place. As I indicated previously, if the corporation wishes subsequently to change its membership or directors, then I must approve the change. So that gives me a measure of control, but that control is really strictly limited to ensuring that we have good management of the licence.
More and more municipalities are looking at forest land to see whether or not there are opportunities. Members may be aware that on Saturday I took part in signing ceremonies in three communities: Golden, Revelstoke and Sicamous. It was the first time ever, in my understanding, that a licence transfer document had been signed outside of the minister's office. Part of that deal was to create only the second municipal tree farm licence in the history of our province. The first one -- around 1958, I believe -- was held by Mission. So for only the second time in our province, a municipality -- the municipality of Revelstoke -- is now the owner, through a corporation that they have established, of a tree farm licence. I think that's probably where the municipal interest might lie. That wasn't necessarily a shift in policy; it simply reflected that the opportunity arose during this transfer to allow the municipality to come in and form a partnership with some private companies. So there is interest at the local government level, and they are free to form corporations and, where the opportunity exists, as Revelstoke has done, to actually acquire ownership of a licence. And there were no politics.
Section 2 approved.
[ Page 6921 ]
On section 3.
W. Hurd: Just a quick question about section 3. The idea of changing the area-based security for the woodlot program is a laudable one. In light of the previous comments by the minister about the difficulty the ministry faces in administering, auditing and monitoring these particular woodlots, I wonder if he could advise the committee if any reciprocal resources are going to be available to the ministry to deal with the increased sizes of the woodlots, in general and particularly outside the Vancouver forest region. Is it going to place any additional strain on the ministry to accept these changes in the woodlot program?
Hon. D. Miller: No, I don't believe it will. The amendment simply recognizes that we have a very large province with vast differences between areas on the coast, which tend to be faster growing, and the interior, which tend to be slower growing. For that reason we are making a change that allows an increase in the woodlot size in the interior from the current 400 that's prescribed in the act up to 600 hectares. I think it's a change that is quite supportable and has been supported by those woodlots, both on the coast and in the interior. I don't anticipate that an increase in size of 200 hectares in an interior woodlot will necessitate a great increase in the workload of my ministry staff. Part of the problem in dealing with woodlots -- and it's more for the owners -- has been that despite their small size they are still required to go through all of the planning processes that we apply to larger licences. There has been a general complaint about the administrative burden that's fallen on woodlot holders in complying with the legislation.
R. Neufeld: Just quickly on section 3. Our caucus doesn't have any trouble with increasing the woodlot size. We had representation made to our committee supporting that. The president of the woodlot society supports it too. For the record, we support that change.
Section 3 approved.
On section 4.
R. Neufeld: I have a quick question on this. The district manager or regional manager can, with agreement, change the boundary of a woodlot licence. Just taking that a little bit further, would this mean that it can be changed by the regional manager or the district manager as long as the woodlot...? What I'm wondering about is: if he wanted to take a certain portion that represents maybe 100 hectares out of a woodlot licence, would they add some other area so that the woodlot licence stays the same size? Does this give the authority to the district manager to almost arbitrarily, or through pressure, reduce woodlot sizes?
[11:00]
Hon. D. Miller: To the contrary, I would suggest that this allows an increase. As a management unit, I think they have some difficulty with some of the early woodlots that were created. If you go back to the previous section, where we allow the increase of an additional 200 hectares in interior woodlots, this also allows some revision of boundaries where it makes sense from a management point of view. Clearly it's not something that we impose; it's with the consent of the holder. I would suggest that, if anything, we're talking about an increase in the area.
Sections 4 to 7 inclusive approved.
On section 8.
W. Hurd: I would welcome an explanation from the minister on section 8. Obviously our interpretation of the section is that in certain circumstances it actually relaxes timber-scaling requirements at the discretion of ministry staff. Is it the intention of this section to, at least partly, give more discretion to field staff to deal with scaling requirements?
Hon. D. Miller: Currently the authority to require scale site authorization is in the regulations. This amendment places that authority in the act, not in regulations, and strengthens its legality. That's the fundamental basis for the change.
Sections 8 to 16 inclusive approved.
On section 17.
L. Fox: Perhaps the minister could give us some explanation of the rationale behind this particular clause before we get into the question.
Hon. D. Miller: This is a return to the good old days. Those members who read the Forest Service newsletter might be interested in an interview with district manager John Hall, who has been around for a long time and who was reminiscing about some of the old days.
This device is essentially a removal permit that gives us the ability to control. It was used fairly extensively in the past, probably in the fifties and sixties. Simply stated, it requires a removal permit before someone can take timber away. If we have concerns about debt or the ability to collect, it gives us a mechanism to control the only asset that exists.
I hope my explanation is clear to the member: that by requiring a removal permit, we can address the issue of situations where companies may owe the Crown quite a bit of money. If we have any concerns about our ability to collect it, then we have the ability to exercise more control by regulating the removal of the product.
L. Fox: The only concern I have, if that AAC of that quota has been used as collateral by a bank, is whether this particular clause allows the government to deal with that outside of a bankruptcy, for instance. Does it allow the government to deal with that quota and the debt owed by that quota owner outside of a proposed bankruptcy?
[ Page 6922 ]
Hon. D. Miller: No. In fact, it provides more flexibility. Where a company is in default -- as happens, primarily in a stumpage account -- this will allow us to negotiate with that company for a repayment schedule. In other words, we would grant the removal permit in exchange for a satisfactory repayment schedule. Should there be further default on a negotiated repayment schedule, we can exercise our control by refusing to issue the removal permit.
It probably provides more flexibility for firms that are in trouble by allowing them to continue to operate and sell their product -- and we are talking about manufactured wood products. It guarantees that we will get a certain part of the income generated by that sale. It's always a tough call for us, of course. When companies get into difficulty, it's not our wish to be the organization that pulls the plug and sends them down. Quite often we'll work with forest companies to see if we can't assist them to keep operating, and most of that work has been done through the Job Protection Commission. We don't want to see companies go down. Where they have encountered difficulties and are in default of their obligations to the Crown, we can enter into this kind of arrangement with them. In exchange for a removal permit, a certain portion of the sale value of whatever it is that's being shipped comes back to the Crown. We get our payment, and the company can continue to operate. I think you'll find that companies will approve of this change.
W. Hurd: Just a clarification under subsection (1). Is the 10 percent figure strictly a market-based figure, or is it related in any way to the outstanding value of the stumpage?
Hon. D. Miller: Not a bad question. I can't really tell you why 10 percent is used, other than that it may appear to be a reasonable amount. I suppose one could argue that it should be 5 percent or 20 percent or whatever, but we've chosen the figure of 10 percent. It probably reflects the practice over time and the ability of people who clearly are in difficulty to take a certain percentage of the revenue and pay down their obligations to the Crown. Stumpage is usually 7.5 percent of the value of the product, so strictly speaking the figure doesn't relate to stumpage. It's a figure that has been used or put together by staff, and I can't really give you a detailed explanation as to why it's 10 percent.
Section 17 approved.
On section 18.
R. Neufeld: Section 18 is actually quite a change. Maybe the minister could briefly explain the rationale behind those changes and the effect that he perceives they will have on the industry.
Hon. D. Miller: In many instances we require companies to provide us with information on pricing. That information is used in developing our appraisal manuals and the regulations that guide the pricing or the valuation of public timber. By the way, this is not an additional burden; these are records that companies do maintain. In certain situations we may be unable to obtain accurate prices from the records of a timber processor because the processor transfers its product to an affiliated company and the transfer prices might not reflect market value. This amendment will allow the Forest Service to inspect the records of companies that sell products into the market -- in other words, those affiliated companies that I talked about -- so that we continue to receive accurate information when it comes to pricing and valuing the public's timber.
R. Neufeld: I'm still not clear on what the minister explained. In the explanatory section it says: selling products manufactured from timber and sales information related to timber -- the two new requirements this section puts into effect. That tells me that a lot more paperwork is going to be required of companies to keep this information for government or to supply it to government. It also covers a tremendous array of manufactured products in the wood industry. Just how encompassing is this section? Does it just have to do with logs? Is it just logs from one company to another, or is it all products?
Hon. D. Miller: It's essentially lumber and chips. But the point is that much of what we do in terms of valuing our public resource.... Certainly it has been the subject of many reports. I think the last two or three auditor general's reports dealt with issues of revenue collection. Anyone familiar with the industry has heard stories about some of the difficulties with respect to revenue collection and getting accurate information to price and value the timber.
As I indicated, there may be some situations where we don't feel we are getting accurate information. Timber processors transfer their product to an affiliated company, and the transfer price might not reflect market value. So we want to be able to obtain that kind of information in those circumstances, because it's important in terms of going back to the work we do on timber pricing and valuation. I don't think there should be limits on our ability to obtain that information.
[11:15]
The amendment also requires companies to keep and submit for inspection, when requested, timber sales information. That relates to the fact that under the Forest Act, companies that purchase or deal in timber may acquire liability for stumpage. Other sections of the act deal with that. This will allow the Forest Service to determine who buys timber, and it will thereby aid in the collection of royalty and stumpage from log purchasers and dealers. So it really goes to the issue of revenue collection and proper valuation, getting accurate records from companies as to prices paid. I hope you agree that that's absolutely necessary in order for the Crown to do its job. After all, the timber does, in the initial instance, belong to the people of the province.
R. Neufeld: I understand where the minister is coming from with respect to the transfer of logs and chips between affiliated companies. But taking it a bit
[ Page 6923 ]
further, to someone who sells exclusively to the value-added industry, is the idea there that that person has to keep, for the government, a record of what is sold to the value-added industry and what is made out of the wood sold to that industry? How far down the chain does this requirement apply?
Hon. D. Miller: Yes, it's conceivable, although I don't think probable, that that would happen, at least in the example you cite about a value-added manufacturer. But let's say it was information we wanted to have. That information would be retained by companies. If a company is selling lumber to a value-added manufacturer, there's an invoice, and paperwork is done by both companies in that transaction. We want to have the ability to look at that, if we so desire, to see what the selling price was.
As I said, we can't foresee that we would pursue the value-added manufacturer in that fashion, because most of the value-added manufacturers are having difficulty buying their raw material requirements. Those members on the parliamentary committee will know more about that. But if company A is selling lumber at a non-market price to company B, an affiliate, then we want to know about it. We want to be able to track that kind of information. All of this stuff is not an additional paper burden on the companies. This is material that is retained currently by companies, and we want to have the right to be able to inspect those kinds of records.
W. Hurd: I want to follow up on the point made by the hon. member for Peace River North. In the event that a situation occurs with the value-added industry where the holder of a small business licence is actually trading logs to an integrated producer in exchange for lumber, would it be the responsibility of the value-added manufacturer to determine the ratio of logs for lumber and the exact pricing arrangement? Under the 16.1 program, for example, the committee heard numerous representations that the total value of the sale was being transferred to a major licensee in exchange for a reciprocal or defined volume of lumber. Perhaps the minister could explain to the committee exactly what kind of pricing records the small manufacturer would be required to keep in a specialized circumstance like that.
Hon. D. Miller: If a small business logger sells logs to a company, then we have to know -- or should have the right to know -- what price they sell at. I'd be delighted to hear from the member from the Okanagan as to why the Crown should not have that right. But we'll leave that....
Interjection.
Hon. D. Miller: We do have many of those rights under the existing section 149. It has been around for a long time, and it's fundamental to the operation of our system. The additions that we are putting on here simply give us more opportunity to get that kind of information. So if it's a small business logger selling to someone, then we have the right to inspect those records and see what the selling prices were for volume and grade. The same goes on all the way down the chain. It's fundamental to our system. I would be delighted if the member for Okanagan West is now going to stand up and argue that we abandon section 149, which has been part of the Forest Act in this province for many years. I'm curious to know why.
L. Fox: I can sense the excitement in the Forests minister's voice.
I want to know if the revenues turned out to be significantly more than anticipated during the setting of the stumpage rate for that particular area. Would the increased revenues that this corporation has attained through the inter-sale of whatever product lead to a re-evaluation of the stumpage rate and an adjustment that would reflect those revenues?
Hon. D. Miller: No, hon. Chair.
C. Serwa: It's a pleasure to rise and enter into debate on section 18, which I guess is the BCGEU section of this bill. Perhaps the minister can advise me of what increase in staff would be required to get this type of specific information. There are a variety of sources of industry information with respect to markets and selling prices -- a number of consolidated sources of the type of information that the minister is asking to seek under this. It seems preposterous that they would go from one manufacturing operation to another, going through their books to see what were the specific sales of logs -- of solid wood, I suppose -- from a primary breakdown plant. Perhaps the minister can advise me of just how many more employees it will take and what type of additional cost burden it would impose on the manufacturers. The minister knows full well that there are a variety of international values, which are readily available to the Ministry of Forests through the industry as a whole, as well as prices within the province of British Columbia. Does the minister believe that this type of intervention into the private sector is going to give him additional information that will change -- in any way, shape or form, other than a very minute fraction of a percentage point -- the realization of the values of products?
Hon. D. Miller: Earlier I accused the Liberal Forests critic of having deep-rooted paranoia, and I see the disease has spread to the member for Okanagan West. I think that's a bunch of gobbledegook. There is no additional staff here. Read section 149, hon. member; you've been around here long enough. The member fails to appreciate that the Crown's ability to get this kind of information is fundamental to our timber pricing and valuation. I'm surprised and shocked at the foolish diatribe I just heard that this is some nefarious scheme. It's only Tuesday morning, hon. member. I'd suggest you relax a little bit and actually read the legislation, instead of standing up and doing this knee-jerk right-wing reaction that we come to expect all too often. Having sat on the Forests standing committee for a number of years with that member, and having
[ Page 6924 ]
examined a number of these complex issues, I know the member knows more about these issues than he has displayed by that foolish question. So I think the member should just settle down. There is nothing nefarious here. There is no additional staff. Read the section. It gives us the right, at my request, to get more information. That information is fundamental to pricing and valuing the resource that is owned by all British Columbians. If the member wants to oppose that, then be my guest.
C. Serwa: That little dissertation by the Minister of Forests is always welcome. It shows that when one is getting close to a controversial issue, a little bit of theatre is good for putting the issue back down. The question was very specific: there are a number of sources....
Interjection.
C. Serwa: Perhaps the minister will listen up a little bit.
A large number of national and international sources have a great deal to do with the market prices of products. How does the minister believe that a breakdown of transactions, manufacturer by manufacturer, is going to change in any appreciable form...? Surely the minister has a responsibility to be cost-effective in his operation of the Ministry of Forests. Is he going to gain anything by this type of Orwellian intervention? Involving a greater number of individuals in evaluation and assessment is a dream come true for the BCGEU. I don't believe for one instant that the minister is going to get more detailed and accurate information on the broad spectrum of market prices. The minister knows full well that in that equation there are a number of variables that have a direct relationship to market prices, but it has no relationship to the cost of logging. Perhaps the minister can tell me what he is going to gain, and perhaps give me an example of where he sees that there will be a variation in the amount of stumpage.
There is no argument that Crown forests are a Crown asset and that we are looking for the best return for that asset. But we have an industry that requires survival and more and more government imposition. Believe you me, in spite of the minister's ignorance on the cost of providing information to government, the reality is that those burdens are becoming heavier and heavier. The reality is that small manufacturers have difficulty, and large manufacturers keep quite a segment of staff just to provide that type of information, which is readily available from a wide variety of consolidated sources.
Hon. D. Miller: Let me try again. We're spending a lot of time here; believe me, it's needless.
We have a very complicated pricing system. I'll use the interior, because I think it's the best example. The member comes from Kelowna, and I would think he should be right up on this stuff. He should know all about it. We have three regions, essentially, in the interior: the northern section, the Cariboo and the southern interior. They are all represented by different industry associations.
[11:30]
One issue that I am constantly faced with -- in fact, my predecessor, the former minister and former member for Kamloops, was also faced with it -- are claims from each sector that their stumpage is too high and the stumpage in the other sectors is too low. I get that constantly. As a result of that kind of pressure, the former minister created an organization, the Interior Appraisal Advisory Committee. What he said was: "I'm not going to have everybody run to me and say they are not being treated fairly. I'm going to put all the organizations together, and if there are issues of unfairness, they should resolve it and advise me. Then I'm prepared to take some action." I've maintained that position; I think it's a good one.
In looking at these issues -- appropriate pricing of timber, the costs of timber extraction and those kinds of questions -- we rely and have always relied on section 149. It's at the heart of this issue. We are simply proposing that we be able to obtain more information. I don't think that there's any objection; I have not heard of any objection. In fact, there are probably lots of people, and maybe people in your community, who would support this -- because they think it might improve their opportunity to advance the argument that they are paying too high a stumpage and somebody else is paying too low a stumpage. Before the member leaps feet first into his ideological dissertation on free enterprise and all of that gobbledegook, perhaps he should consult with the industry in the region that he represents.
Never mind that there are lots of international prices around. I don't know what the heck that means. Read the section, hon. member. See what is required, and what authority the Forest Service and the minister have to obtain information:
"A person who harvests timber, who buys or sells timber or products manufactured from timber or who operates a timber processing facility shall keep accurate records and, if required by the minister, shall submit to the regional manager, in the manner and at the times required by the minister, reports of (a) the volume of timber harvested" -- do you object to that? -- "(b) the volumes and prices of timber, or products manufactured from timber, that are bought or sold" -- do you object to that? -- "(c) the quantities of products manufactured in the facility and the prices obtained for them, (d) the cost of harvesting timber and manufacturing timber products in the facility and the cost of selling products that are manufactured from timber, (e) the nature and extent of basic silviculture carried out and the expenditures incurred in doing that, and (f) sales information of a kind that is usually contained in an invoice related to timber."
What in the world does this member find objectionable about the Crown being able to obtain the kind of information that it requires, both in terms of its fairness in dealing with different forest regions in establishing those stumpage rates and in ensuring that we know what those values are, so that at the end of the day we're appropriately pricing the Crown's resource? Why would the member argue that you should fetter the Crown -- the owner of the resource -- in obtaining
[ Page 6925 ]
the best and most up-to-date information in order to manage that resource for the benefit of the owners, the people?
I'm a bit bewildered. We can continue to go around in circles on this, I suppose, but I think we're wasting our time. I think we've canvassed this section, I think it's clear, and I think the member is off on some little trip.
C. Serwa: It's really clear that the Minister of Forests is, in fact, as bewildered as he has stated. There is no doubt in my mind that he is bemused, bewildered, and perhaps a few other B's.
The reality is that the minister continues to refuse to answer a very straightforward question. What additional advantage over section 149, that the minister is well aware of, is this extra intervention going to gain the Ministry of Forests or the people of the province in getting more revenue from the forestry resource of the province? The minister refuses to indicate that there is any additional advantage for the type of employment that is going to be required to monitor or to look at the books and records to get this type of information. It looks like a make-work scheme. In the last ten or 15 minutes the minister has not stated one solid reason for this increased intervention. It has nothing to do with the type of return. The minister knows full well that there are industry figures with respect to prices and that he has opportunities under section 149. This increased latitude is nothing but an increased burden on the manufacturer. Certainly the solid-wood area -- although they're running a bit better now -- is already under a great deal of pressure. Perhaps the minister can respond to that.
Obviously the minister is unable to respond to the question, and that's fair enough.
Is this only with respect to solid wood, or is it with respect to chips as a product of forestry?
Hon. D. Miller: Yes, chips too.
C. Serwa: That's going to be very interesting. In the vertically integrated firms, with respect to chips.... I think the minister is well aware that there are other jurisdictions in the world where the price of chips is perhaps two and a half times to three times the domestic price.... The reality of this particular situation is that it places the burden of cost on the solid-wood manufacturer -- the burden of stumpage, the responsibility....
The Chair: The minister rises on a point of order.
Hon. D. Miller: Hon. Chair, I think the member tests the patience of this House. He is not on topic. The price of chips in the international marketplace has absolutely nothing to do with section 149, which has been a cornerstone of the Forest Act for many years. Perhaps we could get on with the business of this House, as opposed to this frivolous debate.
The Chair: The minister makes a good point. If members could confine their remarks to the sections we are debating and try to avoid a second-reading-type debate, I think it would expedite the business of this committee.
C. Serwa: I appreciate the minister's remarks. It's clearly out of a bit of frustration. The point I was trying to make is that we have an anomaly in the province, and a substantial burden has been placed on the solid-wood manufacturing end. With reference to this section, I was wondering how this additional intervention will resolve or illuminate the magnitude of that particular challenge.
Hon. D. Miller: This section simply allows the Crown to get the most up-to-date, accurate information relative to the selling price of manufactured wood, including logs, in this province, which is fundamental to the operation of our system.
Section 18 approved.
On section 19.
W. Hurd: I would welcome an explanation from the minister of the appeal process change under section 19. It's certainly our interpretation that it's a relatively benign clarification of the act. Would there be any change to the ability of a TFL-holder to appeal a determination of the chief forester, or is it just outlining a change in the definitions of what constitutes an appeal?
Hon. D. Miller: The changes brought in in 1992 on the AAC determination for TFLs are now under section 7, and there was some concern on the part of the industry that the change could jeopardize the right to appeal. This very minor amendment simply confirms that industry does have the right to appeal the determination of an annual allowable harvest rate.
F. Gingell: Hon. Chair, I seek leave to make an introduction.
Leave granted.
F. Gingell: I would like to introduce some grade 7 students from English Bluff in beautiful, sunny Tsawwassen and their teacher Mr. Ondrik. I ask this House to please make them welcome.
Sections 19 to 22 inclusive approved.
On section 23.
R. Neufeld: Just a quick question about section 23. I appreciate that the minister has to get going. Section 23 repeals sections 142 and 142.1, according to the explanatory notes, but section 14 amends the existing section 142. There seems to be a bit of confusion here.
Hon. D. Miller: It is fairly complicated. The Forest Amendment Act, 1989, introduced a new section 142 and a section 142.1. They were intended to replace the existing section 142 in the Forest Act. Those sections in 1989 were never proclaimed, so the existing section
[ Page 6926 ]
142 is still a section of the Forest Act. So it simply repeals those sections that were passed and authorized by the Legislature in 1989 but never proclaimed, and therefore the existing section 142 remains in force.
Sections 23 and 24 approved.
Title approved.
Hon. G. Clark: Hon. Chair, I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 30, Forest Amendment Act, 1993, reported complete without amendment, read a third time and passed.
Committee of Supply A, having reported progress, was granted leave to sit again.
[11:45]
Hon. G. Clark: Hon. Speaker, I call second reading of Bill 29.
PROPERTY TAXATION STATUTES AMENDMENT ACT (No. 2), 1993
Hon. G. Clark: Hon. Speaker, I move the bill be now read a second time.
Motion approved.
Bill 29, Property Taxation Statutes Amendment Act (No. 2), 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. G. Clark: I move the House do now adjourn.
Motion approved.
The House adjourned at 11:46 p.m.
The House in Committee of Supply A; D. Streifel in the chair.
The Committee met at 10:15 a.m.
ESTIMATES: MINISTRY OF TRANSPORTATION AND HIGHWAYS
(continued)
On vote 58: minister's office, $410,000 (continued).
D. Symons: I would gather this morning, seeing Mr. Rhodes here, that we're going to be dealing with B.C. Ferries. I guess I have lived on the west coast for 50 years, and have had long experience with the coastal ferries, having taken many trips on the old Union Steamships that served many of the communities along the west coast, remembering company picnics going to Bowen Island, and also the same sort of thing going up Indian Arm to Belcarra Park on the old harbour ferries. The Black Ball ferry took over from CP Steamships, running some of the lines to Vancouver Island.
Eventually, it seems that the B.C. government took over many of these routes and formed the B.C. Ferry Corporation. I suppose that most current routes are simply a continuation of these historical services. As more people look for more and more remote areas for solitude or recreation -- or, indeed, for their permanent home -- what policy does B.C. Ferries have for inaugurating service to new areas?
Hon. A. Charbonneau: The matter of providing and operating ferries is extremely expensive, and hence we approach new services cautiously. We would like, of course, to be able to afford service wherever it might be required, but we have some general financial constraints. We maintain a variety of services that on their own are not profitable. We subsidize those services at the expense of the general taxpayer first, and at the expense of some of the more profitable runs second. But in instances around the province where there are pressing needs for a public transportation service, we would receive the requests for such a service, investigate the costs and benefit of that service and, if at all possible, we would look to provide that service.
D. Symons: I thank the minister for that answer. In the very quick sketch that I gave of some historical background of ferries in the province, which of the current services that have been inaugurated since the B.C. Ferry Corporation was formed were not taken over from some previous ferry company? If you could give us some background, so I can get a feel for which ones were already in place when the B.C. Ferry Corporation was begun, and which ones they have added -- a bit of history.
Hon. A. Charbonneau: I'm having a list quickly drawn up that will give you the main substance of the answer. In the meantime, I should correct an oversight on my part and introduce my deputy minister, Vince Collins; Frank Rhodes, of course, the president of B.C. Ferries; Glen Brown, assistant general manager of finance; and Rod Morrison, the general manager of B.C. Ferries. I will rise again shortly to answer the other half of the question.
There was a variety of coastal ferry services to some of the smaller islands that were historically operated by Highways. Highways was divided into a freshwater
[ Page 6927 ]
fleet and a saltwater fleet. The saltwater portion, which covers the services to many of the smaller islands, was transferred to B.C. Ferries. Some private ferries that operated to a few islands were taken over. Then a number of services were initiated by B.C. Ferries near the outset. The main run, of course, was Tsawwassen to Swartz Bay, which did not exist before the Ferry Corporation built the terminals and commenced the run. As well, the Tsawwassen-Nanaimo service -- the so-called Mid-Island Express -- is a recent addition to that. The Port Hardy to Prince Rupert coastal run was initiated by B.C. Ferries, and the Prince Rupert to the Charlottes was initiated by B.C. Ferries.
D. Symons: Maybe I wasn't specific in my question, because the service provided by the runs you mentioned was basically there, which might have been from a different terminal and a different facility. The Swartz Bay-Tsawwassen one basically replaced the CP run that used to go from Vancouver harbour to Victoria harbour, so that service was there. The mid-island service wasn't there, but Nanaimo was serviced from the mainland side. So I was more interested in areas that had no service at all, rather than the reallocation of existing services. Apparently all the existing runs had been in existence before -- albeit maybe not with car ferries.
I can remember going to Bowen Island on -- something maybe you people are old enough to remember -- the Sannie ferry that used to run there, which wasn't any bigger than the width of this room. You sat like you were on a bus, and I can remember that my mother always used to take her shoes off while going across from Horseshoe Bay, because she felt that the ferry would be swamped. The only thing that bothered me in that process was that my mother couldn't swim, but she took her shoes off so she could swim better if she had to. The type of service we give has changed greatly, but what we have here is the fact that the service hasn't expanded to new areas. That's what I was after there.
I note that the subsidy to B.C. Ferries was reduced. Could the minister tell us what percentage of the operating costs that subsidy was for the past ten years? This is something, I suspect, you'll give me later on, but could we look at the amount of subsidy that has gone into it as a percentage of the operating costs over the last ten years. I wouldn't mind if we could, at the same time, have a breakdown of the subsidy in the operating and capital expenditures, or capital subsidies, for that same time period. I realize that will take some time to come up with. Could the committee also learn -- I'll get these money ones out of the way -- what percentage operating revenue is of operating costs for the same period, 1982 to 1992? This has been typed up as 1892 -- I don't think you were running too many ferry services then. I'll leave those questions with you.
I assume that the corporation is moving toward making the operation self-supporting. In today's dollars, what fare increases would be needed to achieve that goal?
Hon. A. Charbonneau: The subsidy at the present time is in the $37 million range. As a 1 percent fare increase generates about $2 million, one would have to increase fares about 20 percent. But you have to keep in mind that in increasing the fares to that degree, utilization would drop, and one would have to chase one's tail a bit. So it might well require increases of 25 to 30 percent.
D. Symons: Which routes are self-supporting? That is, where are the revenues neutral or equal to or greater than the costs? I might as well add here: which routes are the greatest money-losers? Maybe you could give us the ratio of the cost to revenue for those losing routes -- just the really expensive ones.
Hon. A. Charbonneau: I'll provide you with an overview of it now. We can provide you with the details subsequently. Basically the major runs are money-making runs and the minor ones are losing money. The Tsawwassen to Swartz Bay, Horseshoe Bay to Departure Bay and Horseshoe Bay to Langdale runs make money. The Mid-Island Express between Tsawwassen and Departure Bay is about a break-even. The routes that require the largest subsidization are the Sunshine Coast, southern Gulf Islands and Queen Charlotte routes and then, to some degree, the northern Gulf Islands and Prince Rupert-Queen Charlotte runs.
D. Symons: Is there going to be further information coming on that?
Hon. A. Charbonneau: I'll provide it to you in written form.
D. Symons: Sure, great. Could the minister share with the committee his philosophy of the purpose of B.C. Ferries? Are the ferries an extension of the highway system and therefore there to serve the public needs -- and because of that, possibly at some level of subsidy? Or is the ferry system an enterprise that should be self-supporting or making a profit for the coffers of the province?
The Chair: Hon. minister -- with a caution on the nature of a philosophical answer.
Hon. A. Charbonneau: Generally speaking, the system should be viewed as part of the public transportation system of British Columbia, and subsidies are quite in order on many of the runs.
D. Symons: I would have accepted a philosophical answer to my philosophical question, but I note the Chair's caution.
The corporation experienced a wildcat strike on November 16 and 17 of last year. What would be the net revenue lost due to that job action?
Hon. A. Charbonneau: I'll have to take the question on advisement and provide you with a written answer to that.
[10:30]
[ Page 6928 ]
D. Symons: What steps have been taken to protect the travelling public against such unexpected service dislocations?
Hon. A. Charbonneau: We have a collective agreement with the staff of the corporation. The incident that took place was not countenanced by either the corporation or the union. It was an unusual event -- very regrettable -- and not at all in keeping with the general operation of the corporation.
D. Symons: I realize that the corporation did not initiate that, and the union did -- or at least, the workers did. I have a quote from the hon. member for Nanaimo, who said at the time, as he was quoted in the Nanaimo Daily Free Press: "The B.C. Ferry workers' wildcat strike Tuesday was `intolerable' and `deplorable'." He went on to say later: "It's unlikely the ferries could be considered essential services under the existing legislation, which only refers to public health and safety. It's not in the cards, nor should it be."
I have some concern about what seems to be a bit of a contradiction here, because he uses the words intolerable and deplorable. If something's intolerable, I would gather it means that it shouldn't be allowed. Then he turns around later on and says that it's not an essential service, which means we can really allow it to happen. So I wonder if the minister might respond to his colleague's comments, because there does seem to be some contradiction there. I wonder if he might clear that up and tell us where B.C. Ferries stands in relation to that type of work dislocation.
The Chair: Again, before the Chair recognizes the hon. minister, comments from another MLA are not under the administrative capacity of the minister's office, nor are decisions from the Labour Relations Board. Hon. minister, if you will bear that in mind as you attempt to answer this question. Thank you.
Hon. A. Charbonneau: If the member would like to rewind his tape he could possibly put that question to the minister responsible -- the Minister of Labour.
D. Symons: I thought it was a strike against B.C. Ferries, so I thought the minister might want to respond as to whether he felt that B.C. Ferries was an essential service. If you think that's strictly a labour and not a ferries situation, I am surprised, but I will accept your answer.
Interjection.
D. Symons: I'm being prompted from the back benches here.
There was quite a fuss, particularly from truckers who were economically disadvantaged -- I guess that's now a politically correct term for the fact that they lost money on the deal -- because of that wildcat strike. At the time, the Minister of Finance -- B.C. Ferries was part of his portfolio at that time -- threatened to sue on behalf of the truckers who were hit by the cost of that strike. Later the IRC ruled that they couldn't do that. I realize that the ruling came from them and that the minister isn't responsible for it, but this did leave the truckers holding the bag. I wonder if the minister can tell us what steps the Ferry Corporation has taken to avoid this economic dislocation in the future for ferry users.
If I can expand on that idea: from information I have from people in the tourist industry, I gather that if a strike of that sort was to take place in the summer months particularly, but also to a lesser degree in the winter months, the economic dislocation -- the number of people who will avoid coming to the Island or using the ferries -- takes about two years to work out of the system. People become unsure whether they are going to be able to make the trip. There is a lasting effect on the usage of the ferries because of that uncertainty in peoples' minds when they come to B.C. I wonder if the minister might respond to that.
Hon. A. Charbonneau: The corporation has a collective agreement with its staff. We have good working relations with the staff, and we anticipate that we will maintain the system in full operation.
D. Symons: I am sure that the minister would have given me the same answer prior to that wildcat strike. Maybe that's the reason I'm asking the question. I gather that at that time the reason given by the strikers related to issues of safety; they seemed to say that there were some safety issues. They would not go out on the run that morning because certain concerns they had seemed not to have been addressed.
I am pleased to note that I recently read that the union and management have a joint safety committee working. I wonder if the minister might fill me in on how often this joint committee meets and how the problems brought up by members on that committee are addressed.
Hon. A. Charbonneau: There are three levels of committees -- local, regional and headquarters -- that meet on safety issues on a monthly basis. In addition, a further initiative on safety was negotiated and put in the collective agreement.
D. Symons: What percentage of supposed safety concerns -- and why I use that word you'll see in a moment -- are really related to staffing levels? I mean, the issue comes up because somebody's saying: "Well, we need more workers on this deck, or more people doing this than are currently allocated." So can you give me a ballpark figure on how many relate that way?
Hon. A. Charbonneau: The corporation operates under the standards set for levels of staff by the Coast Guard. Any concerns that staff may have with respect to these issues would be brought up at the monthly meetings and resolved through that process.
D. Symons: Yes. I'm not quite sure if I heard the answer to my question, though, because I'm after a sort of percentage or a ratio figure. Of all the problems that
[ Page 6929 ]
arise, what number might revolve around staffing levels: a half, a quarter -- something of that sort?
Hon. A. Charbonneau: I'll take the question on advisement. Staff will look at the records of the committees and see if it is possible to extract, out of all the issues, some sense of whether it's a quarter or a half or a third.
D. Symons: I thank the minister if he'd do that, because that's precisely what I'm after -- that sense of proportion.
The next question may clarify the direction I was heading in. I'm concerned whether maybe some of these problems that are brought up -- and possibly that wildcat strike might fall in this category -- are more an attempt at featherbedding on the part of the workers of the union than they are actually a safety-related issue. I'm just wondering if the minister might care to get into that particular issue.
Hon. A. Charbonneau: No, I would have no such suspicions.
D. Symons: Thank you. There have been some suggestions that part of the problem relating to the unfortunate rash of serious accidents that occurred last year is the size of the bureaucracy within B.C. Ferries. That is, there are too many levels between the workers on the deck and the CEO -- too many filters and hoops to go through. This may not have been part of the terms of reference for the many safety-related studies, but I believe it should be considered as a possible contributing factor. I'm just wondering what the minister's thoughts along those lines might be.
Hon. A. Charbonneau: No, that would not be the cause of the most unfortunate and regrettable incidents that occur. I think the member should keep in mind that B.C. Ferries moves up to 22 million passengers and eight million vehicles annually. Unfortunately, the reality is that when you're moving that many people on this many ships with this many services, there are bound to be accidents. Every one of them is regrettable, but it is virtually impossible in an organization of this size not to have the occasional incident. What is truly remarkable is the extreme safety with which this operation has been carried out over the last many years in British Columbia.
D. Symons: Well, I can't say I can wholly agree with the minister's answer on that question. Indeed, it would seem that in some of the investigations it came out that there had been a great deal of laxity in part of the procedures taken in loading and unloading cars, in some of the other procedures of docking, and all the rest. So, in spite of what you've said, I would think that these accidents were avoidable accidents, and that maybe is of great concern. Your answer didn't seem to build into it that particular side of the thing. You seemed to say they inevitably happen. Well, they're inevitable if the situations that led up to them were allowed to develop, and that may be part of the problem there. Has the issue been addressed of whether the human errors that led to these accidents were caused in part by the very tight schedules -- one could say almost impossible schedules -- and the pressure put on everyone to meet those schedules? This, again, I think might be a cause of these accidents. I'm not too sure if, in the inquiries that took place, that particular aspect of the cause.... You downplayed my other one somewhat, and I wonder if this aspect has been looked into in enough depth.
Hon. A. Charbonneau: I don't mean to downplay any incident that occurs, but in any accident at any time there can be tragic consequences, which I would lament along with the member opposite. In any large systems -- be it airlines, railways, bus systems, ferry systems.... This ferry system is working in areas where there is tremendous marine traffic and many ship movements. For every accident that one hears of, it usually turns out in the investigation that the accident could have been avoided. The airplane crash could have been avoided under ideal conditions or if this or that had not happened. I'm just pointing out that when you have an enormous operation, with the best of intentions and the best of training, there is still a probability -- albeit very small -- that circumstances will combine to create an accident. Any one of them could have been avoided; that is correct. When you have millions of operations, there is always the probability of unfortunate occurrences. We wish to avoid every one of them.
In the instance of the last one, a new safety and standards division of the corporation was created partly as a result of the investigation by Admiral Martin of the incident at Nanaimo. All aspects have been looked into in that process. The scheduling has been assessed; we've joined with the union, with the Coast Guard and with UBC to review elements of the service and the schedule. We've established a council of masters and several other elements.
[10:45]
I misspoke myself earlier; it was Admiral Nemetz who did the investigation at Nanaimo.
We take each and every incident seriously, and we try to set up procedures and systems so that they won't happen again.
D. Symons: In the Nanaimo accident an internal disciplinary review led to the dismissal of two employees and the demotion of six others. At that time the minister responsible indicated that there could possibly be other disciplinary actions taken. Grievances were filed. I wonder what you could tell us about the outcome of those particular grievances, and whether any other disciplinary actions have been taken.
Hon. A. Charbonneau: Let me make a correction. I said Admiral Nemetz; of course, he is a former Chief Justice of the province. For the record, it's Admiral Martin and Chief Justice Nemetz.
No further disciplinary actions have been taken with respect to the incident at Nanaimo, but there are arbitration procedures underway which I think are best not commented on in this forum.
[ Page 6930 ]
D. Symons: You essentially answered the question. If they are still underway, they haven't been settled. So I gather those particular grievances are still pending.
Considering the numerous accidents, I feel that the fault doesn't lie just with the eight individuals on that one ferry. It is obvious that the whole system had become lax and that the responsibility for allowing that laxity to develop should rest higher up in the organization. I feel that these people on that particular ship are scapegoats, because accidents weren't limited to just the one ferry; there have been many others. They fortunately didn't happen to result in deaths that got the same coverage that that particular accident did. But it became apparent, with the rash of accidents at the time, that there were some real procedural problems, which former Chief Justice Nemetz addressed in his report.
What also has to be dealt with is: why did the laxity develop? Why did it get to the stage where those accidents took place? Why did somebody in authority somewhere along the line not say that we were not having the proper procedures taking place on these decks, that people were not at the place they should be and that the telephone connections that should be taking place weren't taking place in a proper way? All those things that former Chief Justice Nemetz addressed were part of the procedures and were indeed in the procedure book. So you have this set of procedures meant to take place, and they didn't seem to be carried forth. Somewhere along the line, somebody had to be responsible for seeing that those things were being done. Obviously that responsibility was not being carried out in a responsible manner.
Hon. A. Charbonneau: I wish to emphasize again the size of the corporation and the number of vehicle movements, passenger movements and ship movements that are made -- 22 million passengers, 8 million vehicles. Having reminded you of that -- yes, there were some incidents, and management accepted some responsibilities in a public way. We have carried out a comprehensive review of operations, and various policies and issues have been tightened up.
But put it in the perspective of the size of the system. It comes back again to the fact that we all wish we had a system where there were no unfortunate incidents on an ongoing basis, and we strive for that. But, number one, when they occur we do not wish to blame staff, because quite often staff are working in a system and with a set of policies such that people above them in the hierarchy are the actual responsible parties. If things do loosen up a bit, indeed the responsibility lies further up, or it rests with the minister, and those responsibilities ought to be publicly acknowledged. If fault is found, fault should be placed at the appropriate level. I don't believe in scapegoating in any way, shape or form and wouldn't countenance it.
D. Symons: I do feel strongly that there was possibly some laxity on the part of people other than those who were disciplined or demoted on that particular ferry. I would hope, as you say, that those things have been addressed, and that the proper lines of authority and the proper procedures will be checked on constantly by people in authority to see that things are going by the book, so that the situation will not build up again to where it gets so lax that we have accidents.
Part of the problem in taking disciplinary action seems to be the union's insistence on protecting the job tenure of its employees, often in an apparent disregard for any blatant shortcomings on the part of that employee. Considering its responsibility for the welfare and safety of the public, how has the corporation handled this problem of disciplinary action in relationship to the union? I might just ask at this time about the general tone of relationships between the union and B.C. Ferries. Would it be described as good or as confrontational? I know you've just settled a contract not too long ago, but I think the general feeling of cooperation between the workers and the management is of prior importance in the smooth operation of a corporation as large as B.C. Ferries. So I wonder if you might get into that realm of labour relations between the corporation and its workers.
Hon. A. Charbonneau: Relations between the union and the corporation are quite good. There's no indication of any unusual number of disciplinary actions at the present time, but there was a spate of them related to the incidents that have occurred. I think, most importantly, the union and the corporation have a common vision: that the first duty of both is to the safety of the travelling public. I'm sure the union is every bit as interested in that as the corporation. Any problems that are perceived by any staff, of course, are identified through the monthly consultation on safety, and resolved in cooperation.
F. Gingell: Could you please advise me as to the amount of money that you will be paying to the Crown corporations secretariat in this current year, and the amount that you paid last year?
Hon. A. Charbonneau: I'll take the question under advisement. We don't have the exact numbers here, but it would be about $200,000 last year and a very comparable number this year.
F. Gingell: Can you please tell us what projects the Crown corporations secretariat did for you last year? If you're writing them down, perhaps you could also include what's in progress now, and if there's anything that you know is planned for the balance of this year.
Hon. A. Charbonneau: I've asked for half a dozen examples, but I can provide you with a more comprehensive list....
F. Gingell: No, half a dozen will be fine.
Hon. A. Charbonneau: One of the larger projects that is underway at the present time has to do with creating a mathematical model to allow optimization of the system in capacity, in scheduling and in fuel consumption. The model, then, has the ability to drop or reshape routes. Strictly as an example,
[ Page 6931 ]
one could look at the range of possibilities in servicing the Gulf Islands. The model will allow us -- almost on a spreadsheet basis -- to put in these assumptions and see what the bottom line would be for that operation. We have some initial indications that we're going to be able to generate some very substantial savings for the corporation when we complete the model. Much of that work is being done by the secretariat or on contract through the secretariat. I have had a first look at the results, and I might say I found them very interesting. The possibilities are quite astounding: generating some real savings and ending up with a better system in terms of delivery of service at the same time.
We have some of the other studies that are going on. Some of these are joint studies involving other Crown corporations or the ministry. We have a mid-Island terminal project, trying to determine if we're going to relocate the Departure Bay terminal. Where should it go or should it go? The southern Gulf Islands service -- I have alluded to that already -- is a major money-loser right now. We're trying to see how we can maintain services, but maybe do it in a different way. Pricing policy reviews: should we use market policies or not and different elements of the service. Computerizing the financial system to evaluate operational costs is part of the math modelling work. Technology options: we're looking around the world to purchase some fast ferry and new construction technology that we might want to transfer to B.C. to build the ships here. Then there is the overall strategic planning of the B.C. Ferry Corporation, also being done partly through services of the secretariat.
F. Gingell: That gives one a feeling that the right thing is being done and that you're looking at things in the right way. Was any of this type of work being done before the creation of the Crown corporations secretariat?
[11:00]
Hon. A. Charbonneau: Studies and analyses of the nature of the examples that I gave were being done on an ongoing basis by the corporation, but through the creation of and cooperation with the Crown secretariat, we brought a higher level of effort and in some areas a higher level of sophistication to the task. Importantly, we brought to the forefront a level of cooperation between Crowns that had not been there before.
F. Gingell: As you know, Mr. Chairman, I haven't been here while the discussion has been going on so please, if there is any question I ask.... Just advise me to look it up in Hansard.
In that response, you mentioned the question of the profitability or the costs of the southern Gulf Islands routes. You advised us last year of a rough breakdown of your income from the profitable Vancouver Island-mainland routes and the other routes, which seem to all fall into the category of the unprofitable ones. Could you give me the current numbers for that?
Hon. A. Charbonneau: The question has been pursued. I've given some general answers and I am undertaking to provide detailed answers in writing.
F. Gingell: On the question of construction of new vessels, I understand you are currently in the process of the construction of superferry No. 1, which became No. 2. Are there any plans for further new construction?
Hon. A. Charbonneau: The corporation is preparing a schedule of vessel replacement or augmentation, which they will be presenting to me in the fall. Generally speaking, we have a fleet that's getting a little on the aged side. A lot of vessels out there range up to 30 years in age, so we have to start a significant replacement program, the details of which I can provide in the fall. At the present time, only the second superferry is under construction.
F. Gingell: Can you tell us if there is consideration being given to very different types of ferries: faster ferries, non-vehicle-carrying ferries and those kinds of things?
Hon. A. Charbonneau: Yes, consideration is being given to both vehicle-carrying and non-vehicle-carrying ferries, and to the possibility of vessels of different sizes to fit particular markets.
F. Gingell: The superferry No. 1/No. 2 has now been in operation for about two or three months. Do you have any indication yet of its profitability -- in relation to the standard type of ferry that it replaced -- because of labour savings, fuel efficiency and larger loads?
Hon. A. Charbonneau: Some information was just given to me on a nice problem that we have that I'll share with you. The superferry's per-hour operating cost on size and on capacity is the lowest in the fleet. Its on-board sales -- the gift shop and the restaurant are very popular -- exceed anything that had been anticipated. The nice problem is that the superferry is so popular -- and if you have been on it you probably share my view as to why -- that our customers are queuing up to take the superferry and bypassing some of our other vessels. So we're getting quite efficient use of the superferry, but it's a little cannibalistic on some of the rest of the system. I can provide you with details of the earnings, in writing.
F. Gingell: Thank you.
In the operation of the superferry... This may sound like a foolish question. I really don't mean it to sound foolish, but to get it into the right words. I came across on the 9 o'clock superferry last night. I sat the whole time in the cafeteria. There was virtually no one in the cafeteria -- a group of truckers and a couple of others. A staff member came around and wiped down tables that had not been used three times during that trip. Are the work assignments done in such a way that they say to clean the tables whether they need it or not? When they came the third time it became a little joke among us, because we were the only people there. Can you
[ Page 6932 ]
give me some idea of the way work assignments are handled, and what kind of flexibility you have in those conditions?
Hon. A. Charbonneau: I hope that nothing about your daily caloric intake limits was being violated while you were in this extended visit to the cafeteria.
You have raised a nice clean problem. The staffing levels on the ferry as a whole are set by certain emergency procedures that might need to be brought into effect at any time. Certain Coast Guard regulations indicate the staff stations that must have personnel at them under certain circumstances. So on a ferry ride such as you happened to have, where the customers are not taking full advantage of the cafeteria service, the staff are still on board. For my part, I would be pleased that they were active and doing things that appeared to be useful. If one of them was cleaning up, I guess I'd compliment them for it.
F. Gingell: Do I take it from that, then, Mr. Minister, that the staffing level on the ferry is the minimum required by the Coast Guard for safety purposes?
Hon. A. Charbonneau: Generally speaking, we will maintain staffing levels that are a bit above the Coast Guard minimums. In terms of when casual staff can be laid off for the day, there is also a four-hour problem. We need to leave them on the side where they live. Even if they are busy in the first half of their schedule because it is at suppertime, when they're being taken back home, it might not be as busy. So this is bound to occur from time to time. Generally, staffing levels are set so that the crowded periods of near morning, near noon and near supper are met, and then perhaps you'll have some excess of staff -- again, a bit above Coast Guard standards but not excessively -- due to the four-hour-return problem.
F. Gingell: Are you able to take on part-time staff that does the return trip and are paid for only the four hours that the return trip takes?
Hon. A. Charbonneau: Yes, there are casual employees who are employed for that four-hour period.
F. Gingell: I'd like to move to the causeway issue in Tsawwassen. First of all, perhaps you can tell me if the corporation has access to both sides of the ferry causeway at the point that it attaches to the land.
Hon. A. Charbonneau: Yes, within our right-of-way we have access to both sides.
F. Gingell: The causeway, as you know, has become a very popular place, particularly on the south side. I'm not sure that anyone ever has any access to the north side of the causeway -- I have never seen any campers there.
Are there any plans on the part of the Ferry Corporation to upgrade the facility, to put in some washrooms, and maybe even to charge an overnight camping fee for the numerous vans and trailers that get down there during the four months...?
[11:15]
Hon. A. Charbonneau: There are no plans to add amenities or to actively encourage -- even at a fee -- additional usage. On the other hand, knowing that it is a popular place and that people from the lower mainland either do not have the time or cannot afford to go to parks further away, we are not being aggressive in trying to decrease it. We're trying to walk a line. We're also conscious of the general congestion problem in encouraging a facility along a four-lane expressway; and as well, there is the issue of access through the aboriginal land on both sides. So it's a complex problem. We're not taking any action to either encourage or to discourage usage.
F. Gingell: I started the access question because I wasn't sure what the situation was with the Tsawwassen Indian band. Do I take it, then, that the access to the south side is in fact through Tsawwassen Indian band land?
Hon. A. Charbonneau: The area to the south can be reached either strictly through public land or through band land. It's apparently about fifty-fifty with respect to that. To develop what one might term proper public access would aggravate the congestion problem along the causeway.
F. Gingell: I wasn't under the impression, Mr. Minister, that the parking on the causeway was really related to holiday weekenders on the south bank. I thought it was caused by the exorbitant rates you charge for parking in your parking lot. Is it true that you're going to move the concrete things to stop any parking on the causeway?
Hon. A. Charbonneau: The parking is indeed related to people who are parking and using the ferry service primarily. We have been progressively moving the barrier to try to decrease that. It is desirable to continue to decrease it, because of the safety issue of having a mix of pedestrians, cyclists, parkers, cars -- and car doors opening -- all along a fairly tight causeway. So it is the intention of the corporation to continue the process, with the idea of eliminating the parking but expanding our own parking capability, and constructing a cycling path along the causeway for more secure access by cyclists.
F. Gingell: I think that's going about it in the right way. Recognizing that vehicle owners and recreational vehicle owners park there on the weekends, that you hold title to all that land, and that they may be doing it without your permission, but you haven't done anything to stop them, are you concerned about liability at all?
Hon. A. Charbonneau: There is a concern for liability, but the Crown, broadly speaking, has that problem in hundreds and hundreds of locations around
[ Page 6933 ]
the province. Nonetheless, the corporation does have a concern related to the use of that land. It is mainly related to traffic safety and the issue of having it right along what at times is an extremely busy expressway. It is more a concern for the safety of the public in accessing and working around it, but there is also a general concern for liability.
F. Gingell: In 1991-92 the subsidies paid through various ministries to the B.C. Ferry Corporation -- the operating capital.... Let me start again. In 1990-91, rather than the latest date, it was $48.5 million. It went up in '91-92 to $51 million; in '92-93 it came down to $49 million; in '93-94, this current year, it is anticipated to be in the region of $41.5 million. In the financial statements that we do have for the Ferry Corporation, for the first two of those years, in both years the corporation lost roughly $4 million after the operating subsidies -- but not, of course, the capital one. Obviously, since we're in the middle of June, the 1992-93 financial statements will be long finished by now. Can you advise us what the 1992-93 results were, roughly?
Hon. A. Charbonneau: There is some discussion as to the question of the loss that you made reference to, from an earlier year. I think you mentioned a $4.5 million loss. If the operating grant was not sufficient at the end of that year, and hence a loss occurred, it would be reflected in a decrease in shareholders' equity in the corporation. That would be the adjusting figure. Is that sufficient?
F. Gingell: Yes. Oh, I'm sorry, can you tell me what the figure is for 1992-93 after interest charges, after depreciation and after the operating subsidy?
Hon. A. Charbonneau: The decrease in the shareholders' equity between 1991-92 and 1992-93 was $15.8 million.
F. Gingell: That's a shock -- $10.8 million more than the previous year. Can you tell me the amount of the total subsidy paid by the government to B.C. Ferries that was assigned to or allocated to operating subsidy in the year l992-93?
Hon. A. Charbonneau: It will be $41.3 million.
F. Gingell: To make sure there aren't any miscommunications, I wonder if I could get a copy of the numbers the minister is looking at. It would not get me off on a tangent.
Hon. A. Charbonneau: The numbers I'm working off now are the preliminary numbers for 1992-93. They will be finalized and published in the annual report toward the end of this month, and then I'll be tabling that report.
F. Gingell: From the numbers that have been given to me and before the report comes out, it would seem that the results in 1992-93 are some $24 million worse than the previous year.
[11:30]
Hon. A. Charbonneau: Preliminary figures from budget '92-93 to budget '93-94 are: for total anticipated revenues we're looking at an increase of about $12 million, and that will be related mainly to the tariff structure change that was announced a couple of months ago; on the expenditures side we're anticipating an increase of about $10 million; we're looking at $302 million for total revenues for this coming year; and total expenditures are $302 million -- a finely run organization, I'm sure you would agree.
F. Gingell: I see the time is 25 before the hour, and I'm confused by that last answer, so perhaps this is an appropriate time to move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The Committee rose at 11:35 a.m.
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