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)
WEDNESDAY, JULY 14, 1993
Afternoon Sitting
Volume 12, Number 6
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The House met at 2:04 p.m.
Prayers.
R. Neufeld: It's not too often that I have the pleasure of introducing someone in the House. With us today is the mayor of Fort St. John, Steve Thorlakson, and the city manager, Colin Griffith. Would the House please make them welcome.
L. Reid: Today I have the privilege of introducing a number of individuals from the Keep Shaughnessy Open Coalition. Russ Hunter, Tom McKenna, Sylvia Hill, Lavina Wong and Ann Massey are in the galleries. I would ask the House to please make them welcome.
Hon. J. Cashore: I would like to acknowledge the passing away of a great British Columbian and a great Canadian. Dan Culver was a renowned adventurer and outdoorsperson. A number of years ago he was one of an elite group of Canadians to have scaled Mount Everest. Prior to setting off to the China-Pakistan border to climb K-2, the world's second-highest peak, Dan dedicated the climb to the cause of protecting the Tatshenshini-Aishihik watershed. He and his two climbing partners reached the summit of K-2, but while descending on July 7, Dan tragically fell to his death.
It may be unknown to members of the Legislature that the "shen" in Tatshenshini means "spirit" in the native language. I would hope that in recognizing and appreciating his life, we would be aware of Dan exemplifying the spirit of the great outdoors. I want to inform the House that I will be seeking to identify a feature in the Tatshenshini area which will ensure that his name lives on.
A. Warnke: In the gallery today is a member from the project to review adult guardianship. Would the House please welcome Honor Hill, who is also a friend of mine.
Hon. T. Perry: I would like to add briefly to the commemoration of Dan Culver made by the Minister of Environment. I was privileged to know him slightly. He was one of the early defenders of river conservation in B.C. I believe it was in Dan's raft that dignitaries took the first B.C. Rivers Day trip on the Thompson River back in 1980 or '81, or thereabouts. He had a significant role in the conservation movement in B.C., and he's certainly going to be very sadly missed by a lot of British Columbians.
J. Weisgerber: In the House today is the administrator of the city of Dawson Creek, Harold Hanson. Harold is joined by his lovely wife Janice and their daughter Inge-Jean. Would the House please make Harold and his family welcome.
H. Lali: Visiting us here in the galleries today are four friends of mine, Mr. Bhupinder Singh and Mrs. Charan Kaur Dhillon from Vancouver, and their relatives, Avtar Singh and Gurbax Kaur Bains, who are here from England. Would you please make them welcome.
E. Conroy: It's with a great deal of pleasure that I welcome Kirk Duff, his wife Myra and their children Michael, Christine and Kyle, to Victoria. Kirk was my campaign manager, and he's also a counsellor in the city of Castlegar.
Hon. J. Cashore: Would the House join me in welcoming Graham and Diane Aiken of Victoria, who are here in the gallery along with my sister, Jessie Ann Orme of Agincourt, Ontario. Those of you who want to know some of the factors that went into my upbringing and the reason that I turned out the way I did should talk to Jessie Ann.
Hon. G. Clark: The Minister of Labour, who is not here right now, asked me to introduce on his behalf one of his constituents, Ernie Robertson. I ask all members to make him welcome.
MISCELLANEOUS STATUTES AMENDMENT ACT (No. 2), 1993
Hon. C. Gabelmann presented a message from His Honour the Administrator: a bill intituled Miscellaneous Statutes Amendment Act (No. 2), 1993.
Hon. C. Gabelmann: I'm pleased, hon. Speaker, to introduce the second miscellaneous bill. This bill contains amendments to a number of statutes. Rather than try to describe the provisions in detail, given the two-minute limit, I will simply read the names of the statutes that are amended by this bill: Blind Persons Contribution Act; Bonding Act; British Columbia Transit Act; Criminal Injury Compensation Act; Family Relations Act; Financial Administration Act; Health Act; Health Emergency Act; Hotel Room Tax Act; Inflation Control Act; Interpretation Act; Limitation Act; Lottery Corporation Act; Miscellaneous Statutes Amendment Act (No. 2), 1991; Motor Fuel Tax Act; Provincial Court Act; School Act; Sheriff Act; Social Service Tax Act; Taxation (Rural Area) Act; Tobacco Tax Act; and finally, Workplace Act.
I will elaborate on the nature of these amendments during the second reading debate. I move the bill be read a first time now.
Bill 80 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.
AUSTRALIAN ROCK BAND SERVED WITH COURT ORDER NOTICE
G. Farrell-Collins: There's a report in the media today that some guests from Australia who arrived in British Columbia yesterday were served with
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a notice of a Supreme Court order by the customs brokers. I think it's extremely unfortunate. I would ask the Premier if he will commit, on behalf of all British Columbians, to issue an apology to those visitors from Australia and to make sure that all people who come to British Columbia, whatever their political views, are welcome.
Hon. M. Harcourt: I'm not aware of this particular issue, so I will take it under advisement.
The Speaker: I will recognize a supplemental, hon. member.
G. Farrell-Collins: There is an Australian musical band called Midnight Oil, which is coming to British Columbia in order to make a political protest about logging in Clayoquot Sound. Customs officials at the border served them with a copy of the injunction. I think that was an unfortunate welcome to British Columbia.
The Speaker: Question, hon. member.
G. Farrell-Collins: I'm advising him first, hon. Speaker.
The question is: will the Premier, on behalf of all British Columbians, issue an apology to those people from Australia and let people know that when they come to British Columbia, they're all welcome, despite their political views?
Hon. M. Harcourt: Of course we welcome people who want to come here from Australia. Since I'm one-quarter Australian, I particularly welcome fellow Australians. I won't tell you how my ancestors got to Australia from England, but what I can say to our Australian visitors is: "G'day."
[2:15]
RELOCATION OF REGIONAL HEADQUARTERS OF MINISTRY OF FORESTS
W. Hurd: The B.C. Buildings Corporation has purchased two and a half acres in Nanaimo at a cost of $960,000 and intends to build a 55,000 square-foot building. Can the Ministry of Forests advise the House whether the Ministry of Forests will be occupying most of this 55,000 square feet of brand-new office space?
Hon. D. Miller: It certainly gives me pleasure to respond to that question. The people in Nanaimo are absolutely delighted that we are moving the regional headquarters of the Ministry of Forests from Burnaby to Nanaimo. We're moving it back into the region. People will be closer to the forests, and they will be there to do a better job. Certainly the mayor of Nanaimo was delighted with the prospect of 150 new, good-paying jobs in Nanaimo. We will be constructing....
Interjections.
The Speaker: Order. I would ask the minister to complete his reply.
Hon. D. Miller: The issue really rests with BCBC. There will be a new building constructed to house my ministry. I believe there are still ongoing attempts to see if we can combine the Ministry of Environment, Lands and Parks people in the same building.
W. Hurd: It's a shame that the minister doesn't recognize the value of conference calls and fax machines. I understand that this new building is going to cost between $3 million and $4 million. When you add the cost of the land acquisition, we're dealing with a significant investment of $6 million to relocate 150 employees from Burnaby. I ask the Minister of Forests: instead of providing high-priced office space for ministry personnel, how many trees would that plant in British Columbia?
Hon. D. Miller: The Forests critic seems unaware of the forest region that this office will serve. Perhaps I can enlighten him. The Vancouver forest region not only encompasses the Fraser and Soo timber supply areas but encompasses the Mid-Coast, the Queen Charlotte Islands and Vancouver Island. It's a fact that 54 percent of the work takes place on Vancouver Island, and it makes sense to have the regional headquarters here.
FLOOD PROTECTION MEASURES FOR CHILLIWACK RIVER
H. De Jong: My question is to the Minister of Environment, Lands and Parks. Recognizing how devastating floods can be -- which we see every day on television -- the Chilliwack River Valley ratepayers' environmental management committee met with the minister about a month ago and proposed a number of measures be taken for added protection. Since the minister expressed real appreciation for their proposal, has he made a decision on the request for work to be undertaken?
Hon. J. Cashore: The answer is no, I have not made a decision. We are still in consultation within our ministry following the information that we have received. Admittedly, we are dealing with an urgent issue, but in the context of fiscal restraint.... The committee that came forward representing the Chilliwack River did a very good job, and we are seeking to work with them as appropriately as we possibly can.
H. De Jong: To allay people's fears of another flood, and with only a two-month window that allows work to be done in the river, can the minister assure this House and the people of the Chilliwack River Valley that commitments will be made for at least what work can be done within that two-month window?
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Hon. J. Cashore: I will commit to continue to work diligently to seek to resolve this, but we have to be fiscally responsible at the same time.
COMMONWEALTH GAMES TRACK INSTALLATION CONTRACT
A. Cowie: My question is to the minister responsible for the Commonwealth Games. A Burnaby consortium, CDR Construction, claims they bid $202,000 less than the winner on a surfacing contract. The winner was Martin's Surfacing from Seattle, which pledged about $200,000 as a donation on a bid of $580,000. Is it this government's policy to award Commonwealth Games contracts based on a contractor's pledging donations to the Commonwealth Games?
Hon. R. Blencoe: To the member and to the House, obviously we have some concerns with the report this morning, and I have asked for a report on the issue. I would like to point out to the House and to the former government that it was this government that insisted on an umbrella agreement with the Commonwealth Games Society. As a result of our due diligence in ensuring that Canadians are protected, over 90 percent of our contracts have gone to British Columbian and Canadian companies.
I also want to inform the House that the work that was contracted was for track and international sporting events. We have to accommodate the international standards set by those bodies. The Burnaby bid was very close to the successful bid, but it was not the best in terms of athlete safety or performance or did not meet international standards. We have to meet international standards to ensure that the games are highly successful.
A. Cowie: CDR Construction surfacing product was good enough for the Los Angeles games and several other games. Also, this company uses recycled rubber from B.C. tires. With these considerations, surely this company should have been given the contract, because it had the lowest bid.
The Speaker: I regret, hon. minister, that the Chair did not hear a question in that, and I will.... Final supplemental, hon. member.
A. Cowie: Why wasn't this company given the contract under those conditions?
Hon. R. Blencoe: I have to again inform the member that an international test by independent analysis was applied to all the companies bidding, and it was reported and stated that the American company was the best in terms of safety and standards. The international bodies insisted on that, and they met all the requirements. The bids were close, and the Commonwealth Games Society satisfactorily analyzed all the bids. I have to report to that member and to the House that because of the umbrella agreement we try to ensure that B.C. bids are met first, but we have to meet good business practices and good safety standards.
KORBIN COMMISSION
D. Mitchell: I have a question for the Premier. Last year the Premier appointed Judi Korbin to head up a commission on accountability and cost-effectiveness in the public sector. At that time the Premier announced that the budget for this commission would be $1 million. It has now been revealed that the actual amount spent by the Korbin commission was $1.4 million. I don't know if this is the government's idea of accountability and cost-effectiveness in the public sector, but I wonder if the Premier could tell us if taxpayers can expect all NDP-appointed commissions to overrun their budgets by 40 percent.
Hon. G. Clark: It is important for all members to remember that any individual appointed under the Inquiry Act is independent of the Ministry of Finance and other budgetary scrutiny. That's an important principle, and I would think that this member would be particularly cognizant of the separation between the executive council and those appointed under the Inquiry Act in order to protect the independence of those commissions.
Having said that, it was announced at the time that we expected that a one-year commission would translate into about $1 million. That is exactly what it cost. In consultation with this independent inquiry commissioner we extended the time for about six more months. The actual amount is about $1.4 million, which is exactly what was anticipated in terms of the cost per month of that inquiry. There was no formal budgeting process -- nor can there be any -- which would impinge upon the independence of anybody appointed under the Inquiry Act.
D. Mitchell: A supplementary question to the Minister of Finance, who clearly understands the informality of the budget-making process in this government. Over the past year or so Commissioner Korbin has been paid $192,000 for a job that she completed on a three-day-a-week basis. That's awfully nice work if you can get it. Can the Minister of Finance tell the House if this is the model he supports for remuneration in the public service of British Columbia -- part-time work for quadruple-time pay?
Hon. G. Clark: It's disappointing that when the commission was announced, I didn't hear any criticism from the member about the budget or the per-diem expenses of the Korbin inquiry. Those have been a matter of public record in the province for over a year. Ms. Korbin's rate in her professional capacity is significantly higher than $1,200 a day. She did, of course, do other work associated with her profession. We asked someone who is a leader in the profession. In return for doing that kind of work, the per-diem costs were significantly lower than otherwise.... Obviously it is an expensive proposition. The total costs were about $1.4 million. I can assure members that we will
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save more than that as a result of the excellent work and advice she has provided to the government.
CLAYOQUOT SOUND DECISION AND CORE PROCESS
K. Jones: Yesterday the provincial ombudsman initiated her own investigation into the Clayoquot decision. This marks the second time in as many months that this government has been investigated for its role in the Clayoquot. One of her chief concerns is with the deliberate omission of the Owen commission from the process. Will the Premier now admit that excluding CORE from the Clayoquot decision was a mistake? Further, can he assure the House that this mistake will not be repeated?
Hon. M. Harcourt: The answer to the first question is no, so there's no need to answer the second question.
K. Jones: Crown prosecutors have recently applied to try Clayoquot protesters for criminal offences rather than civil offences. Had this government permitted its own CORE process to deal with the Clayoquot, this situation might never have happened. Why should the people of B.C. have to suffer because of the Premier's weak leadership and his inability to follow the government's own process?
Hon. M. Harcourt: I think the people of British Columbia are well aware that the community worked very hard for four years, in a process that was set up by the previous government, to try to reach a compromise and a consensus on the Clayoquot area. Certain parties dropped out of that process, and a consensus could not be reached. When this government appointed the CORE commission and appointed Stephen Owen as the commissioner, we made a conscious decision that Clayoquot would be excluded from the CORE process because that process was being completed at the community level. I didn't hear the members object at that time; I didn't hear them object when that committee completed it. I didn't hear the member question the goodwill that went into that process or say that this government let the community give it a good try. They couldn't reach a consensus. It was decision time, and this government had the courage to make a balanced decision on the Clayoquot.
Hon. D. Marzari: Hon. Speaker, I wish to answer a question taken on notice on Monday of this week.
The Speaker: Please proceed.
U.S. SENATE BILL ON SEATTLE AS CRUISE LINE HOME BASE
Hon. D. Marzari: The question raised by the member for Saanich North and the Islands regarded a bill introduced recently in the United States Senate that had an impact on the British Columbia cruise ship industry.
[2:30]
Last year the port of Vancouver had a record-breaking cruise season with nearly 450,000 passengers, and this year we are looking forward to 500,000 passengers coming through our facility. The industry expects that it will contribute $100 million to the B.C. economy, and it will bring in $48 million in tourist spending alone.
However, annual reports of bills being introduced in the United States Senate come forward. The revocation of the Jones Act is an annual event in the United States. Our ministry and intergovernmental relations are in constant contact with the federal government on this issue and watch these bills being put forward on an annual basis.
I want to assure the House that our two major cruise ship companies, Princess lines and Holland America Westours, have gone on record and said that Vancouver is their port of preference. Vancouver is the place they want to position themselves. Vancouver -- and therefore British Columbia -- is a friendlier port, it's closer to Alaska, and it serves their interests well. Once again, we will monitor the situation carefully, and our contacts with the federal government will continue, but I can assure this House that our cruise ship industry is the fastest-growing in the world. In British Columbia and Vancouver we are doing exactly what needs to be done to promote cruises and tourism.
L. Reid: I rise to table a petition representing 90,000 taxpayers. People from all over this province have once again voiced their concern regarding the closure of Shaughnessy Hospital: "We the undersigned urge you to keep Shaughnessy Hospital open to protect quality health care services in British Columbia."
Hon. G. Clark: Committee A in the Douglas Fir Room will deal with the estimates of the Ministry of Finance and Corporate Relations. In the House I call committee on Bill 39, the Multiculturalism Act.
MULTICULTURALISM ACT
The House in committee on Bill 39; E. Barnes in the chair.
On section 1.
K. Jones: I'd like to explain that the official opposition supports the general direction of the Multiculturalism Act. We have a few items of concern, but by and large the principle of multiculturalism per se is motherhood and very appropriate for this body to support. It would be rather unfortunate if we had to speak against the principle of it. With regard to the interpretation of "council," we have no question with that.
C. Serwa: I failed to note in second reading the other day that when the original advisory council referred to in section 1 here was named in Vancouver,
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the only one of the entire opposition caucus at that time to be present was the hon. Chair. It's really rather interesting that the hon. Minister Responsible for Multiculturalism seems to want to take sole proprietorship. I can understand that; nevertheless, she can't change the pages of history. But perhaps in section 1 the minister can advise me of the reason, other than that attempt to take sole proprietorship of the committee, why she has decided that the Advisory Council on Multiculturalism should now be known as the Multicultural Advisory Council.
Hon. A. Hagen: I would like to acknowledge, as we did during second reading, that the work of government and of the multicultural committee in respect to developing policy -- now enshrined in this act -- has gone on for a period of time. That reflects the broad-base support for the legislation that we're debating today. The name of the council is consistent with other councils that are established by government in various statutes.
J. Tyabji: I note that the emphasis has changed so that an advisory council, first, on multiculturalism.... Are there any parallel advisory councils to this one? Will this one be working in concert or at the same level as other advisory councils? If so, which ones?
Hon. A. Hagen: I wouldn't pretend to be able to name all of the advisory councils that exist by statute, but I do know, for instance, that in my ministry we have an Education Advisory Council, which is also mandated through legislation. There are others that are mandated through legislation as well.
J. Tyabji: Would this advisory council be working at the same level as an advisory council on gender quality, for example? Is that the nature of this? If not, then we see -- and I think the member for Okanagan West was getting at it -- that there's not a lot of difference between Multicultural Advisory Council and Advisory Council on Multiculturalism, except the emphasis is on advisory council. It is specified. I'm just wondering if there are parallel bodies that it will be working in concert with.
Hon. A. Hagen: The work of the Multicultural Advisory Council certainly encompasses a broad range of government ministries and Crown corporations. We will be dealing with the purpose of the legislation, the policy under government and the general work of the council. I can note, again, that there are many councils of government, and where there are overlapping interests certainly this council could, either of its own choosing or with requests from the minister responsible, deal with those overlapping issues. Again, if I could come back to education, in the work of the council this year we have discussed race relations and education policy as it relates to young people. There's a Seniors' Advisory Council. Culturally sensitive services for older people might be an issue that the Multicultural Advisory Council would wish to discuss with that council. There's a Premier's Advisory Council for Persons with Disabilities.
It only takes our imagination to know that the Multicultural Advisory Council may have interests or concerns that cross the work of other councils that advise government. I imagine there could be a cooperative, collaborative and consultative working relationship that might be established around policies or initiatives where they would want to share information and perspectives.
J. Tyabji: One last question. I know that we might be able to canvass this under section 5, but with this bill it's hard to know exactly where it would come in. To what extent will the function of the council, in terms of the interpretation of "council," be a driving force behind something like Bill 66 or some of the other policies of the government?
Hon. A. Hagen: It's important as we go through committee to look at the purposes, policies and accountability of the act. As we go through the various sections, we'll see the ways in which some of those working relationships are there. We can probably then discuss some of those specifically. The bill provides for the government to work within the framework of policy set forth in the legislation and with accountability that recognizes that multiculturalism and multicultural issues are not the purview or concern of one minister or ministry; they involve all ministries of government. In fact, I believe that they involve all of us as legislators, as well.
J. Tyabji: This is my last question under this section. Considering the rest of the bill, why would the advisory council be limited to multiculturalism? The element that's different in this, as opposed to Bill 66, is the issue of gender. Was there any initiative here whereby initially it was going to be the advisory council on hiring policy, for example, with regard to it just dealing with multiculturalism? Was that something the minister grappled with when drafting this bill? Because that is the one element that's not in here but is in Bill 66.
Hon. A. Hagen: If we look at the "Multiculturalism policy" in section 3 -- we haven't got to it yet -- we deal with the participation of people from different ethnic and national heritages in the full life of society, and we speak about the economic, social, political and cultural life of society. Broadly, we're talking about people from different places of origin, ancestries, religions or ethnicity having that right as a matter of policy. That's very strongly promoted in the policy statements in section 3.
[M. Lord in the chair.]
C. Serwa: A few minutes ago the minister indicated that the Advisory Council on Multiculturalism has been responsible for many of the recommendations that have gone into this particular act. I believe that is true, to a degree. I would like the minister to respond to this, because she made reference to the advisory council.
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Why did the minister fire all the previous members of the Advisory Council on Multiculturalism if she holds so much faith in the work they have accomplished?
Hon. A. Hagen: Hon. Chair, I don't believe that the question relates to this bill; it would perhaps be more appropriate as a question on the estimates.
Let me just refer to the Advisory Council on Multiculturalism, which presently serves as an advisory body to government. It follows on from the council appointed by the previous administration. As the minister, I have met with them and have received reports of their work. Those reports in fact became a foundation, from the developmental work of the first council, to government.
[2:45]
We then set up a new process to ensure that the council that would advise on multicultural issues would be chosen not by government in and of its own deliberations but through a process of nominations from the multicultural community. Through the good offices of the multiculturalism branch of the ministry, we set out to canvass literally hundreds of organizations across the province to provide us with names of men and women from different parts of the province whom they felt could serve in representing multicultural issues on an advisory committee. I also advised them at that time of the process by which we would renew the committee on an annual basis.
As a new government, we set up a new process of consultation and outreach to the multicultural community for their suggestions and nominations about who should sit on the multicultural advisory committee. From an excellent array of literally dozens of applications, as minister I set out with the difficult task of looking to a balance of men and women from the different regions and ethnic and national groups. As I have noted, hon. member, it is our intention to rotate the council on an annual basis so that we can have representation from communities not yet sitting on the council in a multicultural advisory way and so that different ethnic and national groups from different regions will be able to participate. I believe that that process of annual outreach nominations from the community will ensure that we have the broadest voice and representation on the council.
This also gives me an opportunity to reflect on the reports that I have received -- and I have done that on previous occasions through estimates from the first council -- and to commend the very diligent work of this council.
The hon. member for Okanagan West notes that I have commented about their participation in this legislation. During second reading I noted that they, as well as the earlier council and others, assisted us in providing the framework for this work.
I look forward to a renewed council next year that will have some new faces as well as some continuing faces -- from some new regions and from some new national groups -- to join in the productive work that that council does on behalf of our multicultural community, and on behalf of our development of good policy and programs in government.
C. Serwa: Continuing on with what I think is the only appropriate section to discuss this, and continuing on with the minister's remarks, perhaps I can have the latitude of some skepticism with regard to the choice of the ultimate appointments. I am concerned with the narrow scope of those individuals. I think it's fair enough to say -- from my observation of other councils and committees that have been set up -- that there has been an extreme of political bias. I hope that is not exhibited in this council, because it is imperative not only that they represent a good cross-section of the multicultural philosophy from a great many different ethnic communities but also that they do not simply parrot the party line. I think the minister understands that. Whether my concerns are valid or not, I suppose will come out in the fullness of time.
Picking up on a point the minister made with respect to the multicultural aspect of these individuals, was a selection made on the basis of their commitment to the concept of multiculturalism or was the selection made on the basis of ethnicism? The minister continues to refer to communities. If the multicultural council is going to be successful and work to bring more harmony to the province, it is incredibly important that the concept of multiculturalism be firmly established as a primary commitment of all of those individuals.
When I listen to the minister, there is some uncertainty in my mind as to whether that has actually transpired as part of the criteria -- and the name indicates that it must have -- yet the minister continues to refer to ethnic communities. Perhaps the minister could advise me on that.
Hon. A. Hagen: I understand and support the member's concern that people do not come from a narrow perspective. Let me again give you some details about the nomination process. It's important to state that every person who sits on the council was nominated by a community. They may have been multicultural communities or communities that know a particular group. We were looking for representation that ensured that the community was multicultural; that it wasn't all people who were Indo-Canadian, Chinese or Japanese. We wanted to have that mix there, an obvious mix, because every one of us comes from a culture. I come from a Scottish culture, as it happens. Every person who was nominated was asked to submit a r�sum� and a statement of their philosophy and perspectives on multiculturalism, and to give me, as minister, their views on how they felt they might contribute if they were selected to be a member of the council.
So we have all of those perspectives to assist us in a whole range of decisions, then, which assisted us in bringing a balance -- regionally, by gender, different communities and perspectives -- to the council. That preliminary work, which took a lot of time and effort on the part of the people whose names were put forward by their multicultural communities, was very valuable in assisting us to choose the council. With the support of those communities which found the approach very satisfying and productive, I intend to continue to work
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in that way with the rotation that will occur as the council is established for its next year's work.
Section 1 approved.
On section 2.
K. Jones: I would like to ask the minister why, in section 2(a), the word "creed" is not included among the various identifying factors of diversity.
Hon. A. Hagen: ...in the word "religion."
K. Jones: Is the minister absolutely sure that religion and creed are the same? I think they do have different meanings. This was brought to my attention by the president of the multicultural association, who thought it was one of the key words that they use regularly.
Hon. A. Hagen: When we deal with words that are broadly understood, I understand there may be some distinctions. We all know that in seeking to be inclusive we are often advised that different words could take us into very long lists in terms of meeting everyone's needs. But I do understand, and I think other people will understand, that we're talking here about people who may have differing and different beliefs.
K. Jones: Just to clarify for the minister, I believe that creed has a little broader intention than religion, and it allows for various other interests other than just the religious to be involved. That's why they use the term in describing it. The minister may want to give that some consideration and see whether she might want to stand that section down and consider it for the future.
I'd like to go on to section 2(b), which says: "to encourage respect for the multicultural heritage of British Columbia." Shouldn't that read: "respect for the multicultural heritage of British Columbians" to represent that the heritage is really of the people, not of the province?
Hon. A. Hagen: I believe we are talking about the diversity of the province, and if we live in the province of B.C. we are indeed called British Columbians.
K. Jones: I have a little difficulty in how we would encourage respect for something to do with the province, other than maybe the structure of the province. Particularly in the case of multiculturalism, you're dealing with the people, and therefore the wording should reflect that we are dealing with the people.
Hon. A. Hagen: Perhaps the member might like to consider the subsection as a whole. The first part of it speaks about "the diversity of British Columbians" and then describes some of that diversity.
K. Jones: Actually, it was in recognition of the use of "British Columbians" in the first subsection that I felt appropriate to also use it in the second subsection. Wouldn't you agree?
The Chair: Hon. member.
K. Jones: With regard to the way subsection (c) is worded -- "to promote racial harmony, cross cultural understanding and respect..." -- I would agree it should probably read "promote racial harmony and cross cultural understanding," but the rest of it is tokenism or just extra wording. It doesn't seem to have much concrete purpose. Could the minister explain why that last part of the phrase is included. I'm referring to "and respect and the development of a community that is united and at peace with itself." Does that mean something?
Hon. A. Hagen: Hon. Chair, it speaks to the goal of promoting racial harmony and cross-cultural understanding. I think all of us recognize that is very much related to the development of community. As we look at the work that goes on in multiculturalism, I note over and over again that it is in the development of community that those goals are manifest and exhibited. Much of the work that we do in our municipalities and in the regions of the province are very much rooted in community. A number of members spoke about that during second reading, when they spoke about their particular communities and work that had gone on in their ridings toward that achievement.
C. Serwa: I have a question on section 2(c) as well. Perhaps the minister explained the goal, but what is a community that is united and at peace with itself? Can the minister explain precisely what that means? To say it's a goal is fine, but can the minister give me her interpretation of what is united and at peace with itself?
Hon. A. Hagen: We've spoken a great deal about diversity, which is a fundamental characteristic of British Columbia, hon. member. Within that diversity there is the coming together and the working together in respect of that diversity.
[3:00]
I note the prayer today. I wish I could quote it, but I thought the prayer with which the member opened today's session was very apt. It spoke about recognizing the diverse ways in which we develop and work within our province. I know that she might not have known we were going to be debating this particular bill today in committee, but I thought it was a very appropriate opening for today's deliberations.
C. Serwa: Who will make the judgment? Will it be the council's responsibility to make that judgment? How will the council go about it? Will the council target a community that it feels is not at peace with itself? I don't understand who decides and how you formulate that -- whether it's you who determines that definition, whether it's the government of the day or the council. What powers will the council have to fulfil the objective of this section?
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Hon. A. Hagen: I believe that we are speaking about goals that all of us share in society and for which we all have a responsibility. I believe that communities that we live in and represent as MLAs, people who respect the diversity within these communities, people who are prepared to ensure that communities provide opportunity for full participation of all citizens -- all of us -- will assist with achieving this goal. But clearly in stating it in legislation, government is stating that we believe these are societal purposes. As I noted in second reading, it's my hope that all of us will share in both identifying with those goals and working to achieve them.
J. Tyabji: With regard to section 2(a), who will be defining diversity and who will be providing the definitions...? Here we have: "...the purposes of this Act: (a) to recognize that the diversity of British Columbians as regards race, cultural heritage, religion, ethnicity, ancestry and place of origin is a fundamental characteristic of the society...that enriches the lives...." Who will be providing the definitions for each of those characteristics, and particularly for the definition of diversity?
Hon. A. Hagen: I believe it's how we define ourselves, hon. member. I don't know how many times in meeting and talking to someone, one of the first things that you find out about.... What was it the Premier said today -- that he was a quarter Australian? All of us come from some kind of background that has a history, a country of origin, a language and a religion. So we define ourselves. But one of the ways that I often define the diversity reflected in our province is to note one of the records we have about the children who enrol in our schools. There are over 100 different birth languages spoken by children who enrol in our schools. So we are an incredibly diverse province as a result of the way in which language helps to define some of the backgrounds from which we come.
J. Tyabji: I understand the minister saying that to a large extent the diversity is a matter of perspective. My point is that this Multiculturalism Act will be the vehicle through which Bill 66 and some of the other legislation will be enacted, in order, as section 2(d) says, "to foster the creation of a society...in which there are no impediments to the full and free participation of all British Columbians in the economic, social, cultural and political life of British Columbia," which are all laudable goals. I should say that I am not taking exception to the goals stated in the purposes section. It just seems to me that in terms of legislation it is very important to have definitions for these -- particularly diversity. When we say "race, cultural heritage, religion, ethnicity, ancestry and place of origin," I don't know how place of origin is relevant. So could the minister provide some framework for these, or will there be regulations or an accompanying book so we have a better understanding of section 2(a)?
Hon. A. Hagen: Let me respond by looking at this legislation broadly. This is legislation, such as we have in many parts of Canada, that defines our fundamental characteristics and values. As subsection (d) of this section clearly states, those values are such that as citizens people have the right to fully participate in our society, with no impediments. That value is now encompassed and stated as one of the purposes of the bill we're debating.
J. Tyabji: As the minister is aware, however, it is critical to tighten up the purposes section of the act in terms of definitions, because we know that all the other ministries must report to the Multicultural Advisory Council. We'll be canvassing that in later sections of the bill. Although this multicultural body is advisory, it also has a process to take in, as we see in section 7, which we'll get to later. But section 2 must be defined, because section 7(1) says: "Every ministry and every government corporation within the meaning of the Financial Administration Act must, on or before May 31 of each year, submit an annual report to the minister setting out the initiatives that it has undertaken in the period for which the report is prepared...."
If we don't define diversity, race, culture, heritage, religion, ethnicity, ancestry and place of origin in the purposes section.... We know that every single ministry of government has to report back on the basis of those definitions. Is the minister saying, then, that it will be at the discretion of every minister of those ministries to define the limits of the perspective of that? If it is loosely defined and if we want to take the argument for a minute that every individual.... Let's say that we are in a society where the majority happens to be white, as is the case we have right now, and where traditionally we have had males dominating within the power structure. I understand that there are many initiatives of the government that are meant to address that through affirmative action. We have a situation here where the definitions are not provided. So in theory, every white male can stand up and say: "On the basis of these terms, I wish to be treated under the purposes of the act, recognizing that I have a race, cultural heritage and religion that is to be promoted under the purposes section."
If we don't define it in terms of diversity -- if the minister is saying diversity -- will there, for example, be an attempt by the government to give equal weight within the purposes section of this act? For example, if the diversity of the society is 70 percent white, 20 percent Oriental and 10 percent East Indian, will that somehow be taken into account in terms of diversity, within the meaning of this act? Or is it going to be something slightly different, and will it be at the discretion of each minister? This act will be the funnel through which all the other ministries will have to report in order to achieve the objectives set out here. That's why I think it's very important during this debate that we tighten up some understanding of at least section 2(a).
Hon. A. Hagen: I think it's very important for us to note that with this act we are noting and valuing the differences that exist within our society. We are not promoting any particular group or place of origin;
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we're recognizing diversity. Secondly, in the purposes of the act we're talking fundamentally about values which are consonant with our Charter and with generally held principles we all recognize in society.
We come to some of the issues of accountability that the member is speaking about. The Minister Responsible for Multiculturalism has a responsibility to advise government on actions that could help us achieve policies. The policies are outlined in section 3, which I imagine we'll be moving to very shortly. One of the tasks of the minister responsible is to advise government on ways to achieve those policies. There is a wide range of initiatives we might want to be looking at as government, which are government policies designed to achieve those goals. If we want to move on to policies, we might look at some of the initiatives that this government has taken to date with respect to achieving those policies -- policies which have in fact evolved from broad consultation with the community over the last four years -- and at ways that we might anticipate in the future. Those are future policy government initiatives that come under various ministries. My job now as Minister Responsible for Multiculturalism would be to advise on those. But we're talking broadly here of government initiatives rather than of something with a narrow funnel, if I could use your word, or a prescription that's associated with it. I think this would not characterize the very nature of this bill in any way accurately.
J. Tyabji: I have two lines of questioning that I want to pursue, following the minister's answers. First, does the minister believe that the differences or the diversity of our society have not been adequately valued prior to this act and were not adequately protected under the Charter of Rights and Freedoms?
Hon. A. Hagen: The multicultural community really has, I think, an understanding of the value of putting the government's commitment into statute. Having as part of the laws of the province something that has been debated in the Legislature and supported by legislators provides a statement that is stronger than policy that has existed up until this time. The multicultural community understands that the act is in fact a statement of commitment and that by virtue of debating it in the parliament of British Columbia, government is dealing with those issues. The support of legislators is there and has put its stamp on that policy and on the ways in which it will be implemented and for which government will be accountable.
J. Tyabji: So the minister is saying that the differences were valued before through policy that wasn't adequately enforced; at least, that's my interpretation of what has been said. The follow-up to that, then, is: since this government is completely in control of government policy and even the regulations, why would the minister choose to legislate policy when the minister could actually be driving policy through cabinet to achieve exactly the same goals?
Hon. A. Hagen: There are many ways in which government deals with its goals, as you well know. There are two points in responding to your question. First of all, in bringing forward the legislation we have in fact enshrined the policy in legislation, which has allowed us to review it in consultation with the community. The other part of legislation that's extremely important is accountability, and later on we'll be discussing the accountability mechanisms in the legislation. Being monitored through accountability mechanisms established in the legislation is an important attribute of the policy. I believe, too, that setting up the council by statute puts it in the same category as other councils of importance within our work with the broader community. With the passage of this act the Multicultural Advisory Council will be enshrined in statute, as are other very important councils to government. As we noted earlier in the discussion around the working relationships, the status of that council is then strengthened because the accountability is there, and the clear advisory role in relationship to government is part of the laws of the land. It's symbolic, but it's also practical and workable, and in both of those ways having the legislation is, I think, significant.
J. Tyabji: The minister gave me exactly the answer I was looking for in her first answer, and that was that the reason the policy has been brought forward in a legislative form is that now we have multicultural policy of the government enshrined in legislation. As far as I can see, that's a precedent. I don't know that I've seen such a far-reaching policy in legislative form before. Maybe the minister can expand on that, but I have yet to see that. That is a major change, and obviously we can get to that under section 3.
[3:15]
The second answer the minister gave was accountability, and that leads me to the second line of questioning, which I'll get back to in a second, and that was: accountability of what? We don't have the definitions yet.
The minister said that this act now sets up the Multicultural Advisory Council by statute. That could be done without enshrining policy. It wasn't necessary to take that unprecedented move and put policy in legislative form. I'm sure the minister can appreciate.... For example, on the opposition side, one might say: "In two years there might be a different government in place. If I were in government right now and I had a certain policy of multiculturalism, why would I put it in law except to say that this legislation, which is policy, will now be binding on anyone who comes forward?" Who would really be in a position to amend it or even free oneself up to not have it in legislation and keep it in policy? The council could have been set up by statute without putting policy into legislation.
The fourth thing is that the minister said that taking it from the policy and putting it into statute form is largely a symbolic move. I disagree very strongly with that. I don't think it's symbolic at all. I think that this is a very clear example of social engineering. Although I
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have to say very clearly that the objectives are laudable, I think that this method of social engineering by putting policy into legislation is a disquieting precedent. We'll see later on in the sections the role of the minister and the executive council, the reporting mechanism of the other ministries and the way that the other ministries now are forced by statute to report to this advisory body on multiculturalism. Although the objectives are good, I think that putting the policy into legislation is an unnecessary step. I am sure the minister can see that any future government will be bound by statute to the NDP policy on multiculturalism.
Those points are in response to the minister's points. The minister may have some responses to that, which I would welcome.
The second line of questioning goes back to her second point with regard to accountability. What are the other ministries accountable on, since we don't have a definition of race, cultural heritage, place of origin, ethnicity or ancestry? Who is going to define that? Earlier in the debate the minister said that this minister advises the other cabinet ministers on how they are to take action to meet the legislation on policy. If that's true, then this minister will be defining those words for her colleagues. So would the minister please share with the House her definitions and the advice that she will be giving with regard to the definitions within section 2(a)?
Hon. A. Hagen: I am having a little difficulty with the member's line of questioning, because it appears she doesn't support the concept of legislation in respect to multiculturalism. I just want to make that point. I also want to clarify that in speaking to the legislation, I have spoken to both its symbolism and its practical results, and I want to develop the practical aspect of this a little bit. This is enabling legislation, as is much of our legislation. I don't want to get into a long and philosophical debate, because I think that the hon. member and I should probably have a discussion over tea in respect to some of that. But any legislation does in fact have a policy base, and it's expressed in different ways. I'm responsible for the School Act, and it has a policy base. It's a much longer statute, running into the hundreds of clauses, but there's a policy base for every part of that legislation. In fact, no legislation is passed.... We're dealing with any number of pieces of legislation right now that are very important and that have come out of similar processes to this: consultation around policy that then goes into legislation.
Let me be very specific about two matters. When I speak about providing advice as the Minister Responsible for Multiculturalism, that advice is broad in the context of the policy. It's also interactive -- if I could use that overworked word -- in that ministries themselves take initiatives and clearly have tasks promoting the policy of multiculturalism, which are related to racial harmony and opportunities for people to participate fully in the cultural, economic, social and political life of our society. Beside me sits the Minister of Social Services. In her ministry is an interministry committee that is dealing with one of the policy goals; namely, that services be culturally sensitive. We spoke a little while ago about older people and the fact that the Multicultural Advisory Council and the Seniors' Advisory Council of government might very well desire to talk together about the health and social needs and needs for support services of older people, who come perhaps from different heritages and cultural backgrounds -- a very practical kind of activity relating to the policy.
In my own ministry we very actively work with the community through our multiculturalism branch, providing leadership, working in partnership, and working through legislation to ensure that the goals of our multicultural policy and our multicultural society are met. There is within this kind of work an incredible array and diversity of initiatives that various Crown corporations and government ministries take. As a result of the legislation, we'll have a formal process for that work to be received by the Legislature in annual reports. It will be debated through the estimates of my ministry, as it is now, and in other estimates as well where issues relate to the policies of other ministries. So all of those are a part of the work of government -- the guts and sweat and hard work of people in government.
This provides the framework for that, a framework out there to be seen by all and discussed, amended and improved, because legislation doesn't stay static. There may very well be changes and amendments that might take place with our government and -- heaven forbid there should be another government that replaces us -- with another government. All of those are possible with the will of the House and the wisdom of the people who sit here and do the people's business, including the diverse people who make up our province.
J. Tyabji: The minister made a number of points there: that this is enabling legislation; that she doesn't want to get into a long, philosophical discussion; that all legislation has a policy base driving it; and that the minister is obviously very proud of the initiative that she has taken. She also basically put out that there is some sign that I don't support this legislation. I have to say that although I very much support the objective, I actually personally don't support this legislation, because I have a real problem with policy coming forward in legislation. I'm sure the government side will be shocked and will no doubt quote me on that. Please, when you quote me, get it right: the objective is something I support, but I believe there's a different method to get to it. That's something I believe very strongly, and it has come out in other debates, as in the one over Bill 33.
Let me start with the minister's first point that this is enabling legislation and that many bills come forward in the form of enabling legislation. That's true, and we see it in my Ministry of Environment constantly. However, in enabling legislation you don't see things such as section 3, the multiculturalism policy, and an absence of definitions as in section 2. One thing that enabling legislation has is a proliferation of definitions that set out very clearly the parameters of the concepts involved in the legislation. Also, enabling legislation, by its very nature, necessitates regulations and policy outside of the statutes.
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That's the first thing. Second, the minister said that she's not sure whether she wants to get into a long philosophical discussion. I would encourage her to do so, because this is the forum in which to do it. The minister is obviously very proud of this legislation, and from a partisan perspective I understand that the NDP traditionally gravitates towards social engineering on things like this. I don't dispute their right to do that, considering that they have a mandate for government, just as I'm sure the government will understand that as an opposition member who has a problem with social engineering, I don't agree that that's the way to do this. I would encourage the minister to get into a long and philosophical discussion, because maybe from that discussion we can glean the definitions that we need to properly interpret section 2.
The last thing that the minister said, which I would like to come back to, is that every piece of legislation has a policy base. Clearly that's true, because every government has an ideological perspective from which they form policy, which then drives legislation. However, it is incumbent on a government to amend legislation to suit that government's own policy and the government's own legislative direction. Although all bills have a policy base, very few of them, as the minister said, enshrine the policy in legislation. That's not something that's very common. The reason it's not done is because policy is generally a partisan vehicle. Policy is something that accompanies the political partisan process. That's why it doesn't appear in legislation. It drives the legislation, it sculpts the legislation, but it doesn't usually appear in the legislation. I'm not saying that this would be the case, but if the next government doesn't have the same policy, then rather than amending this legislation they would actually have to remove the policy section, which the minister can understand would be problematic, and then either introduce it in the traditional way, which is the policy of the government of the day, or bring forward, in legislative form, that government's policy.
Interjection.
J. Tyabji: I hear some members from the back bench saying: "Oh, this is a stupid debate." I encourage the members to get up in debate. Unfortunately we often hear comments from the back bench, but they don't stand up and give an ideological basis for the legislation that's coming through.
The minister has very correctly pointed out that there is always policy driving legislation; it's very seldom in the legislation. Quite clearly, this is a form of social engineering. The objective, I think, is laudable and commendable. It's an objective that we in the opposition share in terms of equal rights and no discrimination, but by its very nature section 2 is discriminatory because it classifies people.
I would welcome the minister's comments in a philosophical dialogue to find out how we classify people on the basis of race, cultural heritage, religion, ethnicity, ancestry and place of origin. How is that relevant in terms of government policy now that this is the section the other ministries are going to be responding to?
The Chair: Before the minister answers, I would like to remind members that we are at committee stage of this bill. The purpose of committee is to examine the bill clause by clause, and although the purposes sections in these bills do get us into the difficulty of going back to a second-reading type of qebate, I would like to confine our remarks to a clause-by-clause examination of the bill.
Hon. A. Hagen: I'm speaking to the purpose part of the bill. In this legislation we are formalizing our commitment to multiculturalism and the process for us to deal with the diversity that we recognize. I want to make it very clear that we do not classify people in this bill. What we do in this bill is recognize and value that diversity.
J. Tyabji: Perhaps the minister could help me understand section 2(a), where we have this very clear reference: "to recognize that the diversity of British Columbians as regards race, cultural heritage, religion, ethnicity, ancestry and place of origin is a fundamental characteristic of the society of British Columbia that enriches the lives of all British Columbians." In section 2(d) it goes on to talk about: "to foster the creation of a society...in which there are no impediments to the full and free participation...." If we don't have an understanding of what section 2(a) refers to, I don't know how we can understand the following sections or the rest of the bill.
[3:30]
For example, is the minister going to provide some definition of "place of origin"? I don't understand what that refers to. Is that a birth place, or somewhere that somebody has come from? Does it mean from the northern part of the province or a different part of the world? What does that refer to? Can we get some understanding of why the minister thought that was important to put it in there?
In terms of diversity, I believe that it tends to differentiate on that basis; if it doesn't, maybe the minister could tell me how. It seems to me that nothing in this bill goes beyond the Charter of Rights and Freedoms. So under the federal Charter of Rights and Freedoms, we already have legislation in place that will do exactly what this bill does. On a provincial level, what we need is government action on a policy side rather than on a legislative side. I still don't understand why we went from policy to legislation, or why we have these terms without any definition -- other than the minister saying that we define ourselves, and this minister will advise us of the ministry's definition.
Hon. A. Hagen: I didn't hear a question, but I believe that it's all of the above. The words speak for themselves.
H. De Jong: It's been rather interesting listening to the comments from both sides on this particular section. I have some concern about this section and,
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actually, about the whole bill. We talk about British Columbia society in detail; we talk about communities in this bill, but we don't talk about Canadians. After all, they're all Canadians. If it were possible, I would have liked to have seen this kind of bill draped with the Canadian flag -- because that is what it's all about.
I realize that the purpose of this act is to recognize the diversity within British Columbia in particular. When we come to the area that promotes harmony, understanding and respect for communities, it doesn't say what kind of harmony we are trying to promote. I would like some comments from the minister on what kind of harmony she sees in bringing forth this bill. Is it the harmony to be truly Canadian, rather than just trying to get the multicultural groups to work together as a community? That is an important step toward Canadian citizenship; perhaps there is something more. As Canadians, we are often accused of being less than proud when we sing our Canadian national anthem and other things that pertain to being proud to be a Canadian.
Hon. A. Hagen: I am not sure if the member is suggesting that members of our diverse communities are not proud to be Canadians. If he's speaking to the rights and responsibilities of citizenship, those are addressed in the policy section.
H. De Jong: I wasn't suggesting that new Canadians are not interested in being good Canadian citizens; I'm sure most of them want to be. I also recognize that there are some differences. As I said earlier, we are not always praised for being strong in our expression of being a Canadian. People come from various backgrounds, and as new Canadians -- and I've been one myself; perhaps I am still considered a new Canadian -- there are some things that offend some people. Perhaps they don't so much offend people as they have difficulty understanding why things are done a certain way; why certain things must be one way when they have had the experience of them being quite different in their homeland. At times it may even touch on their cultural heritage or religious background.
From what I understand, this bill is trying to bring these things together in a way that we can live with each other in peace and harmony, which is a great thing, and nobody can argue against that. But during that process things may sometimes need to be conveyed to a group of people that may initially be somewhat hurtful to that group.
We have also passed Bill 33. That bill would not allow hatred in speech and so on, and I don't think we can argue with that point. I don't like hatred in speech either. At the same time, sometimes a point must be made that could be considered hateful to that particular segment of society in order that correction or proper understanding can be achieved on a certain issue. I am wondering whether the minister may want to comment on that, because I see some real difficulty.
We truly want to bring our cultural groups together and at the same time recognize that individual cultural backgrounds are also struggling to be Canadians. Whether that can be achieved without offending or going overboard in terms of the limitations of Bill 33 already passed in this House....
Hon. A. Hagen: I take it we are still dealing with purpose. This bill promotes multiculturalism. Multiculturalism is a characteristic of our province and our country. I don't think I have any doubt about the knowledge that when people come to Canada, they are valued and respected as citizens who will potentially be taking out formal citizenship. I think that the achievement of understanding and harmony with people from many different backgrounds who live and work together and form communities is a fundamental characteristic that all of us learn about in history books. I hear citizenship court judges describing that when I sit in a citizenship court. I believe that we're recognized throughout the world as a society that can live peacefully, with a multicultural understanding of people's diversities and an acceptance and recognition of those.
I have one more comment. I would never want to teach anyone a greater understanding of our society through the use of hatred. I do not believe that that strategy would be appropriate for learning to take place.
H. De Jong: I just want to confirm that I have not suggested that we can draw society together by using hatred. In my earlier comments, I said that sometimes a message may have to be conveyed that may be observed by a particular group of people as a message of hate when that's not necessarily so. But at the same time I want to clarify that point, because I have never suggested that. I have suggested that Bill 33 may in fact get in the way of achieving our goal of dealing with different cultures and religious backgrounds, in order to truly bring them under a Canadian banner.
J. Tyabji: I have a question for the minister regarding structure of the bill. I note that although section 1 talks about the definition of "council," section 2 states the purposes of the act and makes no reference to the council, and section 3 makes no reference to the council. When we look at the role of the council, it doesn't refer back to the purposes section of the bill. I'm assuming that the council will be working to enact the purposes under section 2.
Hon. A. Hagen: The purposes of the act apply to all British Columbians in terms of a statement of government policy, and they are statements of values that I believe all British Columbians share.
J. Tyabji: What is the role of the council, then, with regard to section 2?
Hon. A. Hagen: Hon. Chair, perhaps when we get to section 4, we can deal with that.
J. Tyabji: The reason I would like to know about the role of the council with regard to section 2 is because of sections 2(c) and 2(d), which we haven't spent enough time on yet. Section 2(c) reads: "...to promote racial
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harmony, cross cultural understanding and respect and the development of a community that is united and at peace with itself." I guess the implication is that we're not currently in that position. With that in mind, which body is going to be responsible for that? That's why I'm asking about the role of the council. Is the council going to be responsible for overseeing the government's actions and policies with regard to sections 2(c) and 2(d)?
Hon. A. Hagen: The council advises the government on multicultural policy and on aspects of this legislation. It is an advisory body. We should note that it's part of the definition.
J. Tyabji: I would assume that the parameters through which it will work as an advisory body will be defined by sections 2 and 3 of this act. Is that correct?
Hon. A. Hagen: The advisory council is defined in sections that we have not yet come to. Perhaps if we proceeded, we could deal with the makeup and role of the council.
J. Tyabji: Section 2(d) is the most problematic if we don't have the adequate definition of the council, or at least the structure through which it will operate. But perhaps we can answer it before we get to the later sections. The purpose of the act, under section 2(d), is: "to foster the creation of a society in British Columbia in which there are no impediments to the full and free participation of all British Columbians in the economic, social, cultural and political life of British Columbia." If that is not confined to the council, if it is something that each ministry will be responsible to do now under that act, what financial resources will be provided? What are the parameters? To what extent will that deal with the private sector?
Hon. A. Hagen: We have already dealt with those matters in this year's budget debate, and we would be dealing with them in each budget debate, in the estimates of this ministry.
[3:45]
J. Tyabji: Actually, my question is not with regard to specific dollars. For example, when the Minister of Economic Development is reviewing projects with the Minister of Agriculture and looking at financing things that fall under their ministries, will they be driven by section 2 of the act? To what extent will that affect their dealings with the private sector?
Hon. A. Hagen: We're dealing with the broad purposes of government in this legislation; we will eventually be dealing with the policy of government. The policy is translated into specific programs, which are decided upon annually by government, and for which resources are provided. The specifics of how any of this work would be done is annual work of government that is made accountable through our estimates process, where we deal with government programs in any of the ministries, including my own, where the policies might have an effect.
J. Tyabji: I'm keeping this under section (2) because I have looked through the rest of the bill, and nowhere else does it talk about development of a community or fostering the creation of a society. So in sections 2(c) and 2(d), we basically have a mission statement for political movement. It's like a peace movement or the multicultural society, who no doubt have the same thing in their mission statements. I'm dealing with this in section 2 because it doesn't appear anywhere else, after section 3, where yes, we have the policy. The rest of it is structural. But we know that all members of cabinet will now be guided by sections 2(c) and 2(d), because it says that the purpose of the act is to make sure that government does all these things.
Now, as the minister has said, even her own ministry will be dealing with this. I'm not asking for specific estimates-type answers. I'm asking to what extent, from the time that this bill is proclaimed, will it be driving negotiations with the Minister of Economic Development, for example, in the private sector. Is that the intent of this section?
Hon. A. Hagen: I'm sorry, hon. Chair, I'm not able to follow the intent of the member's questioning.
J. Tyabji: I'll try again. Every member of cabinet is responsible for this -- and not only the ones who are going to be financed directly, such as Social Services, Education and Health. The Economic Development, Forests and Agriculture ministers will now be responsible under this bill. When we see that the purpose is to foster the creation of a society in which there are no impediments to full and free participation, to what extent will that guide their negotiations with the private sector? Is that the intent of this purposes section, which will be binding on all cabinet ministers, when we know that these cabinet ministers are dealing with the private sector? In their pursuit of following the directions of section 2, will they be communicating that to the private sector? For example, if the Minister of Economic Development is reviewing a proposal that does not adequately address the objectives of the purposes of this act -- it doesn't address any of the multicultural needs of section 2 -- to what extent will that minister be bound, under section 2, to opt to foster the creation of this society and take issue with something going on in the private sector?
Hon. A. Hagen: In the legislation, hon. member, government is stating its beliefs about a society that recognizes the diversity of the population. That is the broad purpose of this legislation. In looking at that broad purpose we also recognize that we are stating a value that we believe is very broadly shared in our society. In our society people need opportunities for economic, social, cultural and political activity. I think all of us recognize that such a society thrives because people are able to participate and bring their talents and their initiative to that society.
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Whether we are working in public service or in the broader public sector, if we listen to the private sector and their recognition of our trade relationships and economic development, they recognize that full participation of all members of society is good for the economy, our cultural and political life and our international relationships. In that regard, I believe that all of us in our work in government are looking at ways to develop a society where those are the attributes, because that's a healthy and sustainable society, one that ensures that people have opportunities to participate and contribute. The purpose statement is dealing with all of those goals which help to guide us as we work to have a full, rich, productive and involving society, whether we're dealing with Prince Rupert, Cowichan, the Okanagan, the Kootenays or the burgeoning area of the lower mainland.
J. Tyabji: Since these purposes will be driving the dealings of all the ministers -- both internally and externally, as the minister has outlined -- what will be the vehicle for communication of the purposes? Under this section, what will the minister use to not only communicate internally but to disseminate information on future government dealings with regard to the purposes section?
Hon. A. Hagen: We have spent a lot of time on this section, but the rest of the bill deals with the policies of our government and with the accountability mechanisms that will be a part of our communication. I think the bill provides a good, simple and clear statement of government goals. We report in a whole variety of ways to our various communities, and as government we will want to communicate in our communities about the initiatives to take action, particularly on the policy goals of government.
J. Tyabji: The question is not on the reporting process, because I think we still have a problem with accountability. I don't think we have adequately defined the terms of reference so that we can have a proper accountability process later on in the bill. But we can get to that later.
Considering that upon the proclamation of this bill the dealings of every ministry of cabinet will now be based on the purposes section and the objectives of fostering the creation of a society without impediments, how will it be communicated to the people that the ministries are dealing with, so that they have a proper understanding of the objectives of the government through this act?
Hon. A. Hagen: Ministers have reviewed this bill in its process to the Legislature and, as with all legislation that we pass, will have the bill before them. We'll be dealing then with the policy, which is in fact how we deal with our goals. It would be good for us to be able to move to that section.
C. Serwa: Before I get to section 2(d), it was my understanding that one of the original obligations given to the advisory council on multiculturalism was to come up with a multicultural policy that could be formalized in government legislation. As I listened to the minister on section 2, it seems that this particular piece of legislation did not originate with the council at all; it appears to be the policy of the current government. Is that by accident, or was the original purpose of the advisory council somehow thwarted? Is this not related to any recommendations of the multiculturalism council but strictly government legislation? It's not clear to me. In fact, even the writing of the legislation appears to be from two different perspectives. The framework appears to be drafted by the council, while other sections appear to be drafted by the government. Perhaps the minister could clarify that before I go on to section 2(d).
Hon. A. Hagen: I think I have answered that question. The policy in this bill has indeed come out of the advice of two multicultural committees. Although you won't find that the wording is exactly the same, hon. member, let me assure you that the work of the first multicultural committee and then the review of policy by the current multicultural committee has in fact formed the backbone and the framework for this, remembering that those committees are advisory to government and that their work is sometimes distilled for economy of language and avoidance of redundancy. Both councils contributed significantly, through a great deal of excellent and very hard work, in helping to formulate the policy, which I believe they feel very strongly is strengthened by being placed in the bill that we're debating today.
C. Serwa: I appreciate those comments from the minister, because it is apparent that a number of perspectives are represented here, and the fine hand of government is also represented in section 2.
Section 2(D) says: "to foster the creation of a society in British Columbia in which there are no impediments to the full and free participation of all British Columbians in the economic, social, cultural and political life of British Columbia." Does the minister really believe that we are in fact creating a new society? As a second-generation Canadian, I thought one of the major attractions of Canada is that because of our diverse makeup, we represent the type of culture where there are opportunities and no real limitations other than those that are either self-imposed or perhaps more genetic with respect to inherent ability, intelligence and all of those other factors which are really merit factors. Every ethnic group has a diverse range of abilities; we all recognize that.
It's hard for me to understand how we're talking about the creation of a society. The fine-tuning of a society is a process that will never end, but it's my understanding that we already have that society. We are the envy and the destination for people of almost any nationality in the world. The United States and Canada are recognized and appreciated in the world for their rights, justice, political systems and freedoms, as well as for the responsibilities that we share. Perhaps the minister would enhance my awareness of the creation of a society.
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Hon. A. Hagen: All of us are creating every day we live and work in a society. Nothing is ever finished in that regard; we still have work to do. All of us recognize that the potential of people is what our society is all about. It takes work to create and achieve that full potential of people living in our society.
C. Serwa: I have difficulty with the word "create," regardless of the minister's feelings on that. We already have that type of society. We're continuing to work to make the society better and more harmonious, and there is no end. We obviously have a goal: it's the journey there, which will be a very long road. In the end, I suspect that we will never fully reach the goals that we set forward.
[4:00]
The use of the word "creation" gives an entirely wrong connotation. It seems that the knights in shining armour, so to speak, are on white horses that are charging on to the scene. All of a sudden, out of chaos we are creating a brand-new society -- again, the social agenda and social order of the government of the day. It is inappropriate and presumptuous; it gives the wrong impression. We already live in that society, and we're working to build a better and more harmonious society. I think the minister understands that full well. I don't suppose the minister would consider an amendment to the word "creation" that would be more appropriate, but the latitude that the legislation takes with it is beyond the scope of this particular bill.
Section 2 approved.
On section 3.
K. Jones: I move the amendment to section 3 tabled in my name: that section 3, subsections (b) and (d) through (g) be amended by adding "gender" after "ethnicity."
On the amendment.
K. Jones: This seems like a glaring item left out of the various factors being considered in this policy. Gender is a very important factor, if we're going to correct some concerns about the multicultural community's involvement in our society. Gender should be included along with "race, cultural heritage, religion, ethnicity, ancestry and place of origin."
There is a great deal of gender discrimination in the community. Some parts of the community have a great deal of difficulty recognizing gender equality. I think that probably holds true within government, and it should definitely be addressed in the policy direction of the government to its various ministries and Crown corporations. If this were to be left out, it would be a shocking mistake. It would definitely give a different interpretation to what multiculturalism means to this government.
We in the opposition put forward an amendment to add the word "gender," in order to more clearly recognize an area that needs to be addressed.
The Chair: The Chair finds your amendment to section 3 to be out of order. Matters of gender may be covered under any or all of the categories defined in the purposes section of the act, under section 2(a).
J. Tyabji: As I said in earlier parts of the debate, I think there's a problem when we start to legislate policy and when we take what is basically an ideological perspective and put it into a statute. Having said that, section 3(e) states: "It is the policy of the government to...reaffirm that violence, hatred and discrimination on the basis of race, cultural heritage, religion, ethnicity, ancestry or place of origin have no place in the society of British Columbia." My question to the minister is: are economic factors taken into consideration, in recognizing that the proliferation of hatred and discrimination is often tied to difficult economic times? If that is the case, would the government act under this section, from an economic perspective, to preempt section 3(e)?
Hon. A. Hagen: I am not sure I'm clear about what the member is dealing with. If we look at section 3(b), it states: "It is the policy of the government to...promote cross cultural understanding and respect and attitudes and perceptions that lead to harmony among British Columbians of every race...." There are many ways we would undertake to achieve that goal and to implement that policy. I could describe some of the work that's going on with Multiculturalism B.C., in cooperation with societies in many communities, and the work with municipalities that goes on in dealing with those issues. As we work with our immigrant settlements grants, we work around promoting cross-cultural understanding in those areas as well. There are a wide variety of means that the government initiates, undertakes and has at its disposal to achieve the goals stated in this policy.
J. Tyabji: Let's leave section 3(e) for a minute and go to sections 3(a) and 3(b). This minister is also the Minister of Education, and it is a policy of the government to "(a) recognize and promote the understanding that multiculturalism reflects the racial and cultural diversity of British Columbians" and "(b) promote cross cultural understanding and respect and attitudes and perceptions that lead to harmony...." Is there going to be an educational program that will take section 3(a) and (b) into the classrooms?
Hon. A. Hagen: There already are.
J. Tyabji: I guess that goes back to my earlier point that I'm not sure why the policy had to be put into legislation.
The minister referred to section 3(b) -- I think it's probably section 3(e), myself. Either way, basically the point is that this is the policy of the government. The minister has said that the government is willing to take whatever action is necessary to promote it, recognizing that every study that cross-references economic conditions, in terms of unemployment rates and rising levels of poverty, with racial discrimination, hatred and violence finds that there's a very strong correlation. Is the government looking to the economic factor in the
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rise of racism and, if so, are there any programs in place to deal with that aspect of racial intolerance?
Hon. A. Hagen: There are programs of government that provide opportunities for the diversity of our population: in my ministry, through the education part, the multicultural branch and immigrant settlements; and through the Ministries of Advanced Education, Women's Equality and Social Services. All of those ministries have a mandate to provide services within the scope of their activities that reflect the needs of the diverse population in our province. They're too numerous to mention, but many of them are related to training, upgrading, opportunities to learn language and settlement issues. I believe those all contribute to achieving the goals set forth in the policy.
J. Tyabji: Actually the minister isn't quite understanding my question. If the debate takes off, if the third party takes some time with the section, I might run to the library and get some information. But generally speaking, where we'll see the most violence, intolerance and hatred come up in terms of ethnic rivalry would be in a case like east Vancouver, where there are a limited number of jobs, a very high unemployment rate and a very high poverty rate -- not that it's confined to that area, but that's one example. You might have a situation where a white family is having a hard time finding employment, whether it be the head of the household or a single mother. However it works, there's some difficulty in achieving employment because of economic conditions. In that case there's often a high level of intolerance if they see people who they perceive to be of a different ethnic or racial background and who are employed.
I'm sure the minister is aware of a widespread misconception out there that immigrants are taking the jobs, and that's what I'm getting to. There's an economic factor that correlates to racial intolerance, violence and hatred that is not actually within what we would call the communities affected by the multicultural bill. It's the groups outside the multicultural society who are perceiving advantages being given to people within the multicultural society. That's where you get the resentment and intolerance building up: the perception of the economic factors by people outside the multicultural society. How is the government going to be addressing that?
Hon. A. Hagen: The member is dealing with the myth that people who are immigrants to our society take jobs from people in Canada -- and that clearly is a myth. One of the ways that we are providing leadership through Multiculturalism B.C. is working both in the public domain and with private employers to dispel that myth that immigrants take jobs. In fact, immigrants to our society add to the economy and to the diversity of economic opportunity.
J. Tyabji: Again, I think the minister has heard part of what I'm saying but not the intent. I understand that the myth is out there; in fact, it is that myth that tends to promote intolerance, violence and hatred. The problem isn't within the multicultural society but to some extent with a lack of education outside the multicultural society. Let's take it beyond the multiculturalism branch. Let's look at the Ministries of Economic Development, Agriculture, Forests, or whichever ministry we want to choose where there is economic wealth being generated or programs being fostered. Is there going to be an attempt to recognize that often economic factors outside the multicultural society drive the intolerance and misunderstandings, and that some economic remedies have to take place outside the multicultural society so that they can lower their level of anxiety?
There has to be an education process, but there's also a serious problem of lack of employment opportunities, which leads to frustration and the need to direct that at someone. Often the multicultural society ends up being the scapegoat. That comes back to the question I asked originally: will this government take economic factors into account when targeting areas where there are high levels of racial intolerance, rather than just educating the people, and will it recognize that in areas where it occurs, there is a need for economic incentives to help the people outside the multicultural society who are having problems finding jobs?
Hon. A. Hagen: The member has a tendency to try to cover every ministry in her comments. She has a point to be made, but we will, through this bill, be looking at the work of all ministries in respect to achieving the policies that are outlined here. People from every walk of life and background have an opportunity to participate fully. Education, economic development, regional development and dealing with particular perspectives, issues and myths are important. The government has roles to fill in all of those areas -- roles in which we provide leadership and work in partnership. This is a task that lies not only with government but also with the broader communities in which we live and work. That's one of the reasons why we have spoken about the importance of the development of communities, because there are various people and organizations in the public and private sectors that have important roles to play, with government providing leadership and partnership in these areas.
J. Tyabji: As a follow-up question, because the original question hasn't been answered.... The minister said I have a tendency to put all ministries under this bill. Actually, I don't; they're in this bill. This bill automatically, de facto, includes all the ministries, so it's not a tendency on my part. We have had a bit of difficulty cross-referencing this with the other ministries.
[4:15]
What I'm trying to get to is that there are economic factors, outside of the multicultural society, driving people outside the multicultural society to engage in activities that come under section 3 of the bill. Considering that this is outside of the jurisdiction of this minister, but within the jurisdiction of this act through other ministries, what is the government
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planning to do about that? Is the government actually targeting some of the programs in other ministries, under section 3 of this bill, to deal with economic factors that will specifically fall under section 3(e)?
Hon. A. Hagen: Section 3(e) states that we reaffirm that violence, hatred and discrimination have no place in society, and therefore, as a policy goal, there are initiatives that we will be or are taking to deal with that matter. I have broadly outlined those initiatives, and we will be accountable for them next year when we deal with the estimates of my ministry and other ministries. The member can explore some of those programs in more specific terms then. Many of those programs have been discussed already in estimates in my ministry and other ministries. These are statements of policy goals, and the bill states those goals and the method by which government will be accountable for working toward their achievement. Policies are goals, and we are working and will continue to work to achieve them.
I've outlined some of the means. When I spoke about canvassing all of the various ministries, it's not possible for me to outline all of those programs on behalf of all of those ministries at this time, but I have given a general sense of many of the initiatives that are in place.
G. Wilson: I truly am delighted to get into this debate. I was sorry I wasn't able to participate in the second reading stage, because what an exciting potential this bill has. I say that with full sincerity. As a member of a political party that has as its cornerstone the assistance and promotion of a multicultural society in Canada and British Columbia, we are delighted to see initiatives come forward that start to recognize that.
Under section 3, I would like to get into the meat of some of the concerns I have with some of the language so that we understand where this government is coming from. Whenever one introduces legislation with respect to multiculturalism, and when there is a direction taken by government to seek to promote participation of individuals in society, we run into a difficult philosophical question. I am sure this government has grappled with this philosophical question -- that is, how you counter the rights of the individual versus the rights of a collective entity. We have to understand how individual rights and liberties -- which, of course, is the foundation of liberalism, which is one of the reasons we are interested in it -- are weighed against the right of a collective interest, which is described in this bill. I wonder if the minister might comment, by way of general discussion under section 3.
[E. Barnes in the chair.]
I notice that section 3(c), for example, says, "promote the full and free participation of all individuals in the society of British Columbia," making no reference at that point to anything with respect to ethnicity, mother tongue or any of those issues. We're talking about individual rights.
Under subsection (d) it says: "foster the ability of each British Columbian, regardless of race, cultural heritage, religion, ethnicity, ancestry...." That tells us that this bill promotes the rights of individual British Columbians. Yet it's coming under a multicultural title, which would argue that in looking at the right of the individual there is going to be some promotion of a multicultural concept at work here.
We see in subsection (e), for example, the very positive statement that we: "reaffirm that violence, hatred and discrimination on the basis of race, cultural heritage, religion, ethnicity, ancestry or place of origin have no place in the society of British Columbia." One would argue that violence, hatred and discrimination on any basis has no place. I don't care what the basis is; it has no place in British Columbia. But we are now linking it into what I would say are the collective interests. We obviously know about racism and discrimination on the basis of race and origin, and we have been through that in other debates.
By way of that preamble, I wonder if the minister might tell us how she sees.... If this bill protects the full participation of each individual in British Columbia, how is that manifested to juxtapose the kind of interests under section 3 that are prepared for the collectives, which are determined on the basis of race, culture, cultural heritage and language? How are those two reconciled in this bill?
Hon. A. Hagen: As we look at this section -- which has seven or eight statements of policy -- I believe it is important to read them as a series, all of which help us look at the various aspects of the promotion of people, both individually and from their diverse cultures, in a full and rich array of activities that enable them to be members of our society and to enjoy the richness of being British Columbians.
When we speak of the full participation of individuals, we are dealing with the issue of the potential of each person. I think all of us understand that individual potential. But we are speaking here about the diversity of the people who make up the citizenry in our province. We know that we are dealing with issues where opportunity, racism and impediments are still in place. We spoke about those before you came into the debate, hon. member. In spite of the multicultural heritage that is so much a part of our history, there is the challenge of not yet having arrived at a society where everyone has that opportunity or the sense of respect and dignity they need to have. So the various elements of this particular section deal with aspects of that and try to encompass a variety of ways in which we can express that policy and then put it into our actions. I note particularly sections 3(g) and (e), the right of people to be treated with dignity and in a culturally sensitive way. You've commented on the issue of violence and discrimination and the need for us to be aware of mitigating against those kinds of actions and feelings in our society.
Policy statements are in fact our best expression of the goals of society. They are in many ways a direction we seek to follow -- and I know this is something that's very important to you because of the work you've done in the multicultural community -- as we look at our education, training and settlement programs and
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economic opportunities in the regions; and at the work of people in building communities and in the sharing and understanding that the richness of the cultures people bring to those communities provides opportunities for business and culture and for people to know more about the global community in which they live. We can examine all of these in infinite detail. But in this first multiculturalism bill, I believe that we have a statement of a broad range of issues that we know we want to tackle across our ministries and in our communities.
G. Wilson: I don't take issue with anything the minister has just said. I guess I do have some concern that this policy statement is going to be the law of the province, for this government and future governments. We are essentially enacting a policy statement into legislation. If this was just a goal of government, that would be one thing; but it isn't. It's going to be the law of the province, and it will govern this government and subsequent governments. So this is a bit more than just a policy statement, as it is worded. Had I been drafting this bill, multiculturalism might have been better defined in a definitions, interpretation or purposes section of the bill, rather than as a section of a statute that is going to be binding on government. But we could differ on that, and clearly we do, because the minister has decided to present it this way.
I run into some difficulty, given that these policy statements are going to be enacted into law, with where the opposition and I differ philosophically with the government. I'm not a strong advocate of affirmative action programs, quota systems in hiring or legislating integration. I don't believe that they work for any length of time.
Where I see this going, particularly with reference to section 7 -- which we'll get to later -- which binds every ministry and every government corporation to this statutory policy.... We're headed in that direction. I guess I have some concerns about whether that's the right thing to do. I understand that multiculturalism reflects the racial and cultural diversity of British Columbians. We should just get down to a simple definition of "culture" -- a difficult one at the best of times. Perhaps I should use myself as an example. My family is fifth-generation Canadian. I'm third-generation Vancouver born. What does the minister see as my racial and cultural role in this multicultural community? How am I defined?
Hon. A. Hagen: Like all of us, hon. member, you have a cultural heritage.
G. Wilson: I'm delighted to hear that, but I'm curious to know where I fit in. It hasn't been that long since the census data in Canada required me to put down if I was an Anglo-Canadian and then whether or not I was Scottish, English, Irish or Welsh. But after so many generations clearly there is no direct affiliation. My homeland is Vancouver, as was my father's and his father. Before that we were from the Maritimes for two generations. I would argue that my culture is Canadian. I am a Canadian in every sense. I happen to be a white Canadian -- because that is the physical makeup of my genetics -- with linguistic abilities in a couple of languages, but those are learned. They are not inherent and they are certainly not learned as a part of living somewhere else.
From an anthropological or a sociological definition of culture one has to start to put some definitions down. What I'm asking here, by way of this rather circular question, is at what point is a Canadian a Canadian, regardless of whatever their ethnic backgrounds may be? At what point are we going to say that every individual should be treated equally to every other individual? When are we going to say that we should no longer segregate or define people within statutes on the basis of ethnicity, so-called heritage questions or on the basis of linguistics? When will one law apply to every Canadian or British Columbian equally to every other? At what point do we stop considering ourselves as hyphenated Canadians, that is as Indo-Canadians, Chinese-Canadians or those kinds of things? At what point do we blend the multicultural fabric into the definition of a Canadian and no longer have those kinds of distinctions made? I think this kind of bill has the danger of perpetuating and not eliminating that?
Hon. A. Hagen: Hon. member, I've now discovered that you and I have a little bit of common cultural heritage. You learned some of your loquaciousness from the Maritimes five generations back and I learned mine there more recently.
[4:30]
You've defined yourself. Everyone defines himself or herself with respect to their cultural heritage. Before you came into the House, we discussed the perspective that people who are more newly arrived to Canada have about this country. It is a country where their cultural heritage is always valued. It is not something that is lost as newer residents of this land become Canadian citizens and participants in our economy and society. That is something that's fully understood by people from those broad cultural heritages, no matter when they arrived in this country or from whence they came.
G. Wilson: I think the minister has a very valid point with respect to new immigrant peoples and the learning and understanding of the evolution of the history of a nation. Certainly those who would arrive on our shores, whose language was not English in this part of the country, or French or English in other parts of the country, may need assistance in finding ways to integrate without assimilation into a society where they can protect their desire to remain connected to their cultural community. I don't take issue with any of that. The problem I have is that as this bill looks at it -- and in this section -- there seems to be some confusion as to whether we are really dealing with individual rights or with collective interests and collective rights. I'm trying to come to grips with that, and I was hoping, through the definition of what culture might mean to the minister, to get there; but I don't think we did.
At what point, then, if we deal with the question of discrimination -- and this is important.... Section 3(e)
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says: "reaffirm that violence, hatred...." If we take those two out and just put in "discrimination...." Let's deal with discrimination for the moment: "...on the basis of race, cultural heritage...ancestry...." Now, if we can look at the terms "cultural heritage" and "ancestry or place of origin...." If we talk about discrimination on those bases, I would like to ask the minister if, within the provisions of this bill, those terms would include aboriginal people.
Hon. A. Hagen: There is a recognition, as we look at the diversity of our society, that the first nations, the aboriginal people, are a part of that diversity; but also there's a recognition of a very special place for our first nations as the citizens of this land over many, many, many, many, many eons. The other citizens who have come to this land in the more recent history, since the arrival of settlers from Europe, are a part of the broader diversity that has made up the Canada that we now know.
G. Wilson: I recognize the definition that is provided under the fiduciary obligation statutes of the federal Department of Indian Affairs and the Indian Act, which in my judgment is a racist piece of legislation and one that should be taken out of the statutes of this country. Having stated that, I hear that the minister is saying that there is a special status, a special place, for aboriginal people based on many, many, many, many, many.... I think there were five manys. I'm not sure; Hansard will determine that. How many "manys" do we come to, given that I -- and I come back to myself again...? How can I be anything other than indigenous Canadian? I don't mean that in any way to belittle or to try and undermine the first nations people. But having been born here, my father born here, my grandfather born here and two generations before that, to be then considered anything other than a national Canadian and therefore having stature.... What I am concerned about is that we're defining a Canadian in here as an immigrant with seniority; seniority rights will apply. What we are attempting to do is to make seniority rights out of this, with one exception: first nations people.
Can the minister tell us, notwithstanding the definition of first nations people under the federal statutes, of which I am well aware, why, under subsection (e), "discrimination on the basis of race, cultural heritage...ancestry" would not apply to first nations people, given that there are many people, myself included, who -- granted, only five generations have been born in Canada, but that's not my fault -- have absolutely no affiliation -- nor could they have; my son is a sixth-generation Canadian -- with any nation other than Canada? At what point is the distinction on the basis of cultural heritage, ancestry or race accepted? If it's accepted in principle with respect to first nations, how can it not be accepted in principle on any other basis? It's a very important philosophical question, because the legal rights of people are going to be affected under legislation that may come forward with respect to government and government authority to first nations.
Hon. A. Hagen: I am speaking of history. The history of our land is the history of its peoples. It's a history that has diversity among its peoples, and I spoke about that a moment ago. The cultural heritage and the ancestry of people are a part of each person's identity. The member has spoken about it. I am learning about the number of generations of his family's association with this land. I've learned a little bit about where his family has lived in the country; all of those things are a part his personal history. We are speaking about the history of our land and the diversity of the peoples that make up the land.
G. Wilson: With all due respect, that doesn't answer my question. This says that it's the policy of government that there should be no discrimination in British Columbia on the basis of race, cultural heritage or ancestry. I am hearing the minister say that that applies to all except the first nations. If there is no discrimination, maybe the minister could explain. Notwithstanding the fact that statutory obligations fall under the fiduciary responsibilities assigned to the federal government within first nations' policies of this government, it would seem that distinctions are made.
Hon. A. Hagen: I want to be very clear that we are dealing with the peoples of our land. We are saying that as a society our policy is that people will have the opportunity to live and work in our communities without hatred, violence or discrimination. I could go back in my own personal history to a time when there was much more discrimination on the basis of religion than there is at the present time. We are an evolving society, and our laws and working relationships are evolving across a number of fronts. In this statute we are dealing with the diversity of the peoples of British Columbia, and we are recognizing that opportunity in our policy and goals. Full and free participation of people within our society are goals that we will be working towards in a wide variety of ways, in a wide variety of governments and communities and indeed on the broader private and public sector activities.
G. Wilson: With respect to discrimination on the basis of race, cultural heritage or ancestry, in light of a first nation acquiring self-government -- and let's use the case of the Sechelts, so that this isn't totally hypothetical; people who live on land under the jurisdiction of the Sechelt Indian government district, who will pay tax on the basis of their residency on that land -- I wonder if the minister could tell us whether in her opinion they should have the right to seek elected office within the Sechelt Indian government district. Should they have the right to cast a vote, given that there is going to be no discrimination in this act on the basis of race, cultural heritage or ancestry?
Hon. A. Hagen: Hon. Chair, the member is seeking information about other statutes, ranging very broadly in terms of the section of the bill that we are dealing with, which is a statement of government policy regarding the participation of people in society. The participation of people in society is governed by the
[ Page 8660 ]
laws of the land. I think it's beyond the purview of this bill to examine all of those laws and statutes that exist as part of the work of either this Legislature or our federal government.
G. Wilson: I was listening very carefully to that, because I am trying to tread very carefully into what is an extremely sensitive area. I am not trying to create an issue that isn't already there. There is an issue that has to do with the question of discrimination. I note that in section 3, which is the multicultural policy of this government....
As we look at this entire bill, it is interesting to note that the word "equality" doesn't exist. Nowhere in this bill is it the policy of this government to make sure that there is equality among people. What we're looking at is full and free participation. We're talking about harmony. We're talking about matters that, regardless of race, cultural heritage, ethnicity and so on, are shared in economic, social, cultural and political life. All those things are there. We're talking about being free from forms of racism, and there's going to be no discrimination based on race, cultural heritage and so on. These are all in section 3 of this bill. In subsection (g) and (h), it says: "recognize the inherent right of each British Columbian, regardless of race...to be treated with dignity, and generally, carry on government services and programs in a manner that is sensitive and responsive...."
But nowhere does it say that the policy of this government is to treat each British Columbian equally. That gives me a lot of concern. If it isn't there, it seems to me that that isn't the general policy and philosophy. It tells me that what we are looking at is a collective interest and a collective right that can be defined in a manner that will subjugate individual rights. Maybe that's the government's policy; if it is, fair enough. We can debate that, and we can disagree politically and intellectually.
I have concerns about that around the question of discrimination. With all due respect, the Sechelt Indian government.... I use this as an example not because I'm trying to take issue with them, I applaud them for what they've done. I think that they've put in place an Indian government district that's doing exceptionally well for their people for the most part, and it's working extremely well with municipal governments that neighbour it. I don't take issue with them at all. I'm dealing with this as a political and intellectual question, which I believe is critically important to future generations if we're going to deal with rising problems associated with distinctions made on the basis of race, culture and ancestry.
Under the Municipal Act that this government has statutory rights to, the Sechelt Indian government district was founded in conjunction with amendments to federal statutes. This government has authority within its jurisdiction with respect to that Indian government district. My question is: should somebody who is not considered a "Sechelt," but who lives on land under the jurisdiction of the Sechelt Indian government district and is subject to taxation from that administration, have the right to run for office and vote, in light of the policy before us described in section 3?
Hon. A. Hagen: The policy that we're dealing with, hon. member, is a broad policy of government. You are asking questions about the Municipal Affairs ministry and statutes established under that ministry. I think you're taking us into broader realms that are not within the purview of this debate.
G. Wilson: I don't want to jump ahead, but with all due respect, section 7 says:
"Every ministry and every government corporation within the meaning of the Financial Administration Act must, on or before May 31 of each year, submit an annual report to the minister setting out the initiatives that it has undertaken in the period for which the report is prepared to promote the policies referred to in section 3."
The policies in section 3 say that there must be no discrimination on the basis of race, cultural heritage or ancestry. So the Minister of Municipal Affairs is presumably going to need some detailed description as to whether or not that provision is there.
[4:45]
I would say that, historically, society's refusal to allow women to cast a ballot was wrong, and we changed it. If people were aboriginal, this society refused them the right to cast a ballot. That was wrong, and we've changed it. Under this policy, should an individual have the right to cast a vote or to run for office when that individual lives on land and is subject to taxation within a jurisdiction constituted under the laws of British Columbia in conjunction with the laws of the federal government?
Hon. A. Hagen: These policies are subject to the statutes of the land. I'm not familiar with the particular issue that the member is speaking about, which deals, I understand, with a statute. This has nothing to do with the kind of statute that relates to particular arrangements made by parties in this regard. I gather he's talking about some statute that governs the municipal status of the Sechelt Indian people. Those are issues that the member may want to raise with the Minister of Municipal Affairs, whose prerogative it is to interpret that particular statute.
G. Wilson: I can't possibly expect this minister to know all of the various statutes governing all of the jurisdictions. I'm not trying to entrap or somehow trick this minister; I'm just trying to get to the basis of what I think is a rather critical issue, philosophically and fundamentally, here in British Columbia.
The situation at the moment is that any member of the Sechelt Indian band can seek office -- and in fact, some have -- in the municipal council of Sechelt. They have sought office in the regional district. One former chief sat as an elected member of the regional district. Again, hon. Chair, I only use the example of the Sechelt band because it's one that I'm familiar with. I'm not trying to pick on them or say that this is wrong in any way, although philosophically I have serious difficulty with it. An individual who is not a member of the Sechelt Indian band does not have the same right to seek office in the municipal jurisdiction under the Sechelt Indian go
[ Page 8661 ]
vernment district. There is inherently a distinction or a difference or, some might argue -- and this is the point I'm getting at -- a discrimination based on membership that is determined by ancestry.
That question is a fundamental one, because this government, notwithstanding the last constitutional round, is currently engaged in the development of potentially a third order of government in this province whose membership will be determined on the basis of the very things that this policy says we must not discriminate on the basis of. That's my point, and I think it's a fundamental one. In this policy, the minister is saying that we mustn't discriminate on the basis of race, cultural heritage or ancestry. Yet if we move toward the concept of a third order of government with the jurisdictions assigned and applied in the matter of first nations, membership in the first nations is going to be a criterion by which that very discrimination may occur with respect to members in the society in terms of their right to hold elected office or to vote. These are issues that you say are unacceptable.
How does the minister reconcile this within this act, given that this is the law of the land -- or will be if it gets passed? Because it is the law of the land, and given its prescription under section 7 to every other ministry, how do we reconcile the clear discrepancy between what is being put out here in the framework of broad multicultural policy and what is being advocated in terms of government policy and also the direct negotiation that's underway outside the purview of this government?
Hon. A. Hagen: We are dealing with the broad policies of government. I understand the member's particular interest in the Ministry of Aboriginal Affairs and the negotiations that are going on with first nations around self-government, and his interest in the principles that will be part of those negotiations and discussions involving first nations, the two governments and third parties. It's an interesting debate, and one that obviously the member is very devoted to in his line of questioning. In bringing forward these policies, we are dealing with the broad goals of government, and as we move forward with those broad goals, I'm sure he's going to have much opportunity to debate these issues and very specific matters in reference to the Sechelt band, which have more to do with the Minister of Aboriginal Affairs and the Minister of Municipal Affairs. I would encourage him to pursue this line of questioning either in this House or in his discussions with them, but we're dealing with broad policies of government around the many initiatives that relate to people being able to fully and freely participate in society. As I'm sure this member would agree, aboriginal people have not had full and free participation up to this time, and we have a heck of a lot of work to do in that regard. If this policy helps, I would be delighted. The work of all ministers of government in their particular portfolios is guided by the broad principles that we're talking about here. As we look at the aboriginal people, as well as other people, having the opportunity to fully and freely participate.... The member is really trying to go into a detail that is part of a much broader debate. We across this floor agree, I believe, that there's much work to be done, many issues to be resolved, and that we're talking here about goals to be developed, the aspirations of people and their work in communities, particularly in this case. I'm not the Minister of Aboriginal Affairs, but we're now debating many of those initiatives that are a part of the development of the aboriginal peoples' role, their work towards self-government and treaty negotiations. I am not the minister responsible for those areas, and I really find it difficult to be able to go into the detail that the member is asking about in this debate as we deal with the broad diversity of our population and the aspirations, rights, responsibilities and opportunities that should be available to all people, regardless of their cultural heritage -- which we are now using to suggest all of the various things by which we self-identify ourselves, our roots and the means by which we cast ourselves as members of this multicultural and broadly diverse society that is Canada.
The Chair: Before I recognize the hon. member, I would just like to elaborate slightly on the minister's concerns about the purpose of the bill. The Chair appreciates the difficulty when it's a grey area. I wouldn't suggest that the member is entirely out of order, but clearly under standing orders, when a matter is canvassed to the extent that it becomes repetitious or tedious beyond a tolerable level, the Chair should remind the committee. At the same time, I wouldn't rule the member out of order. But I do want the member to realize that the matter has definitely been canvassed for some time. The minister has consistently responded in a way that suggests to the Chair that we may be at a point where members might wish to consider their line of debate.
G. Wilson: Hearing your caution, hon. Chair, let me move to section 3(c), which says it is the policy of government to "promote the full and free participation of all individuals in the society of British Columbia." I understand full participation -- where there are no barriers -- but what is meant by "free participation"?
J. Tyabji: No taxes.
G. Wilson: That's what I was hoping for.
Hon. A. Hagen: Let me try to interpret it: without barriers to that individual's participation.
G. Wilson: If we're talking about the free participation of individuals in society without barriers, presumably it's not the intention of this bill to set up any kind of regulation or authority within the ranks of government -- notwithstanding section 7, which we're going to canvass when we get there. Presumably it's not the intention to set policy that would determine a preference on the basis of such issues as race, cultural heritage, religion and so forth. If we're dealing with
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every individual, does this then underscore that it's the policy of this government to hire on merit and merit only, or does this say that merit is just one of a group of items that are the basis for hiring?
Hon. A. Hagen: I believe that the member is asking questions in regard to issues of employment equity. I believe we as a government have made it clear that we want to ensure all citizens have opportunities to access services and participate in the economy of our province without barriers. This section is a broad statement of those policies; and as I said earlier, we need to read those policies in that broad sense. Looking at subsection (c), "full and free participation" means without barriers to individuals' opportunities to participate in all aspects of our life in British Columbia.
G. Wilson: I appreciate that answer, because section 3(c) does speak to the broad policy. Once again, I say the concern I have with this section is that, while it is broad policy, it's also going to be a statute in law. Presumably this is a law that binds this government, and there's reporting to be done by ministries that have to adhere to it.
In light of the answer on section 3(c), I would drop down to section 3(f), where we're talking about work "towards building a society in British Columbia free from all forms of racism" -- and I'd like to come back and get some definitions on that in a minute -- "and from conflict" -- I think that's fairly clear -- "and discrimination...." These three items are all connected here. This isn't "forms of racism" or "from conflict" or "discrimination"; these three are connected by the conjunctive "and." So it's racism, conflict and discrimination that's "based on race, cultural heritage, religion, ethnicity, ancestry and place of origin."
[5:00]
In light of this section 3(f), given the general purposes and statements in Bill 3 with respect to hiring -- it says that hiring has to happen in a manner that reflects the cultural basis...and given the amendments that we've seen with respect to the Public Service Act, how is this minister going to reconcile the obvious problem...? If the government moves toward an affirmative action program, which I understand it is committed to doing, it then has to discriminate on the basis of its own regulation with respect to hiring in the public sector in order to bring about the balance within a particular ministry that it's hiring for. In other words, if under the new amendments to the Public Service Act we're going to have affirmative action programs that will hire to try to build balance, presumably those that you seek not to make eligible for employment would be subjected to some discrimination based on the factors listed here, because they don't fit the number of people who you want to hire in order to have that balance. How does the minister reconcile these?
Hon. A. Hagen: The policies stated here very clearly indicate our belief that every individual should have opportunities to participate in the economy of our society. In legislation passed last year we provided opportunities for employment equity matters to be referred to the human rights council. Issues of public policy that help us achieve those goals are worthy of debate and will be debated at the appropriate time.
But I come back to the framework that this policy sets for us: the fact that people should have opportunities to fully and freely participate in all aspects of our society and that our society should function in a way that does not discriminate on the basis of some of the diverse characteristics by which people define themselves in relation to their race, ancestry or cultural heritage. Those are goals that we work toward, that is what this particular section is dealing with, and we work toward them in a variety of ways as we try to achieve a better society where opportunity is available for all.
I see them as very broad goals, and I see the public policy debate from various ministries. We had some discussion a moment ago about the Aboriginal Affairs ministry -- about how we would achieve them as public policy debates that we should engage in. I would welcome those debates with the appropriate ministers or with respect to legislation we are bringing forward. I don't see a conflict -- in terms of the broad goals stated here -- with anything that government has done to date or with any policies we have promulgated. If there are future policies we are looking at, those will be subject to debate and discussion in this House as well.
G. Wilson: I understand what the minister is saying. Would the minister not recognize that the affirmative action program that is advocated in other legislation drafted this session is in itself a form of discrimination, although it might be seen by this government or agents that support affirmative action to be desirable discrimination -- if there is such a thing? Would the minister not recognize that affirmative action is in itself a form of discrimination?
Hon. A. Hagen: At this stage we are dealing with broad policy. We are looking at public policy issues that may be debated at other times and in appropriate venues in relation to legislation. I believe it's appropriate that we should deal with that.
I would note that the human rights legislation provides an opportunity for employment equity kinds of initiatives to be brought forward, and we are looking at ensuring that citizens of British Columbia have opportunities to fully participate. That's the policy goal. We are looking at opportunities for people to fully participate in the economy and social life of the province. We all know that there are a variety of ways in which we work to achieve that policy. Each of those policies and programs is worthy of examination as public policy and as the means by which we use resources. We do that in this Legislature by fully debating legislation and by debating the estimates and programs of ministers.
This bill provides us with a framework whereby the people of the province -- no matter where they come from or what their backgrounds are -- have as a statement of government commitment that their full participation within society, cognizant of rights and responsibilities, dealing with the laws and programs of
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the land, is something that we are working towards. That's what we are dealing with here.
G. Wilson: I don't take issue with the fact that under human rights legislation there can be a movement to try and remove barriers and have free access to employment where discrimination may have occurred. I don't take issue with that; that's good news.
But under section 3(h) we're told.... I come back to it, because the minister is saying over and over again that this is a broad framework, a broad statement of policy and a general goal and direction of the government. If all of that is true, surely it would be in an interpretation section of the bill, saying that it is a general statement that....
If you look at the statutes in other jurisdictions.... That's precisely what Alberta is attempting to do: to state that as a general recognition of the cultural heritage of Alberta, the following kinds of issues.... And it states what it is supposed to do. If you look at the federal statute, under multicultural policies of Canada, it sets it out as a general principle what there should be. I would say that in both instances there is a key word that isn't here, equality. The federal statute talks about equitable participation and the fact that individual rights will be treated in an equal manner. "Equal" doesn't apply anywhere in this language, notwithstanding the fact that it may be a policy of government. This is written in a manner that makes this policy the law of the province once it is passed, which is, in itself, unique and interesting.
Let's look at this language. We need to read section 3(g) and (h) together, and maybe the minister can understand where I'm coming from. Again, I'm not trying to be obstructionist; I'm trying to point out what I think are some inherent pitfalls in what's coming forward here, in what I think is a generally well-intentioned move. Section 3(g) says: "...recognize the inherent right of each British Columbian...." Those are important words. Keep in mind that we've just gone through a very lengthy legal battle regarding the inherent rights of first nations people, and we have jurisprudence on that question. Matters with respect to inherent rights in a federal statute have been tested in a court of law, and we have considerable jurisprudence on that. We need to look at "the inherent right of each British Columbian, regardless of race, cultural heritage, religion, ethnicity, ancestry or place of origin, to be treated with dignity, and (h) generally, carry on government services and programs in a manner that is sensitive" -- that's the dignity part, and I think that's important -- "and responsive to the multicultural reality...." What are we talking about when we talk about responsive? How is this government developing responsive legislation in this policy and bill? Is that what we're talking about when we talk about affirmative action? Is that the kind of responsiveness? Hon. Chair, if you rule that we should deal with this under section 7, I'll get into that in more detail then. What is the minister expecting each ministry and Crown agency of this regime to file in their reports to show that responsiveness?
Hon. A. Hagen: The member was absent when we had some of this discussion earlier on, when we spoke about some of the initiatives currently in place in the government. Let me be fairly broad in my response. The intent here is that the programs of government should be sensitive to the needs of British Columbians, whether they're social service programs, where there has been a good deal of work done to ensure that those recognize that there are sensitivities, or programs dealing with health. One of the members and I had some discussion around the needs of older people in the health care system. So the words "sensitive" and "responsive" are intended to reflect, first of all, that we're aware and secondly, from that awareness, that we will respond in ways that are appropriate to help us meet the needs of particular people, as various programs are made available to them.
G. Wilson: I'll accept that as a broad response. I think there are some other issues with respect to those kinds of programs, and we can canvass those a bit more under section 7.
If I could move on, I have just two other issues I want to bring up under section 3. I'll move quickly to them. We talk here about recognizing the inherent right of each British Columbian to be treated with dignity, and we have a government that's going to do that. Under this act we're dealing with individual rights in this province. When we talk about being treated with dignity, I'm concerned that this doesn't say, "the inherent right of each British Columbian to be treated equally," along the lines of federal statutes and the statutes of Alberta. Hopefully we can look at other provinces that have put multiculturalism bills in place, although not many have. Why did this minister not put in "equally"? Dignity is important. Equality is essential. Surely the fundamental basis of a multicultural policy is the inherent right to equal treatment. Equality doesn't appear anywhere in this policy, which concerns me greatly. Surely that's the fundamental basis upon which a society will evolve -- knowing that you and I and every other member of society has equal inherent rights, notwithstanding that we want to be treated with dignity. Why doesn't it say: "the inherent right of each British Columbian to be treated equally"? That in itself does away with a lot of the other paragraphs under section 3.
Hon. A. Hagen: The right to be treated with dignity is something that people from the multicultural community often speak about. It is, I think, a reflection of the approach that we take to one another. Inherent in treating people with dignity is a respect shown by the way in which we treat one another. We spoke earlier about the manner in which we might want to try to change people's behaviour, and one of the members spoke about the way in which that might be perceived. Dignity and respect are very important in terms of how people speak and act and relate to one another, and section 3(g), the one you've been focusing on, is a very important statement. It's one that the multicultural community felt very strongly should be in the bill.
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G. Wilson: Is there a reason why the word "equality" doesn't appear anywhere in this section on policy? Why did the government choose not to say that there will be equality among British Columbians -- that every British Columbian is equal to every other?
Hon. A. Hagen: Subsection (c) refers to "the full and free participation of all individuals," and subsection (d) says: "...foster the ability of each British Columbian...to share in the economic, social, cultural and political life of British Columbia in a manner that is consistent with the rights and responsibilities of that individual as a member of the society of British Columbia." I think all of the clauses speak to the issue of people being able to participate equally and fully, with all of the opportunities that may be available to us and with government working to ensure that those opportunities are not fettered by discrimination or means by which access would not be available.
Again, it's important to emphasize that we are talking about the goals of a society that is still not perfect. At various times we've talked about those imperfections and the ways in which we need to do better in respect to particular communities and their ability to feel fully involved and fully able to participate, whether we're talking about aboriginal people or people who are not yet full participants in British Columbia.
G. Wilson: I don't think that it's just a matter of semantics. If you're going to put anything into legislation, then certainly the full and free participation of all individuals in society as the right of every one to be seen and treated equally -- that every British Columbian is equal with respect to inherent rights -- is something that needs to be there. To be treated with dignity is, I think, a social and moral code that all British Columbians should respect. I'm not sure you have to put that into law, because you can't legislate it. I mean how do you legislate somebody being treated with dignity? You can't do it.
[5:15]
Having equal rights is a fundamental part of a society that entrenches the rights of the individual as opposed to those of a collective interest. That's what my concern is. My suspicion is that the reason equal isn't here is that we're not talking about individual rights to the same extent that we are talking about collective rights. What this section does, given the absence of equality of individuals in its wording, is subjugate individual rights to those of the collective. I am fully aware that there are members of the multicultural community in B.C. who will say: "Right on, that's exactly what we want." I've had this debate with many leaders in the multicultural community who believe that collective rights should supersede the rights of individuals. Not all groups within our community and society operate with the same individual distinctiveness as people who come from a cultural or ethnic background that does.
I understand the sensitivity and complexities of it, and I'm not trying to cast aspersions on the government for their direction. I just think that the government should be more clear if that's what their intention is. I do believe this does say that individual rights are subjugated to collective rights. Notwithstanding the full and free participation of all individuals, if you look at what is suggested by (h), where it talks about the multicultural reality of B.C., and tie that to the affirmative action programs under the Public Service Act, then it seems to me that we are talking about collective rights not individual rights at all.
Having said that, I have just one last question on 3(f). It has to do with the statement that we should be free from all forms of racism. I wonder if the minister might give us a definition of what is meant by all forms of racism? I am curious to know what constitutes racism under section 3(f).
Hon. A. Hagen: That would cover everything from subtle forms of racism to acts of violence. Racism takes many forms.
G. Wilson: I'm not sure I quite understood the answer. Did I hear the minister say that racism is equated to violence?
Hon. A. Hagen: No, I'm noting that racism takes many forms.
G. Wilson: I understand that, but what is the definition of racism? How does the minister define it for the purposes of this act? I'm not trying to be difficult here, and I hope the minister appreciates that. The reason I am asking for this definition is that it relates back to questions that I was talking about under section 3(d).
There is a growing sensitivity in the province to the fact that we have a reasonably large number of immigrant peoples coming into B.C. with different social and cultural values and backgrounds. They may have within their society a certain set of principles that run counter to the laws of Canada and B.C. -- for example, in relation to gender equality. Within that particular cultural milieu gender equality may not be considered as something that is desirable.
What I am asking here is for the definition of racism. Clearly we have to approach this from an ethnocentric base of some description. What is the ethnocentric model upon which that term is going to be defined?
Hon. A. Hagen: We go back to the interconnectedness of the various parts of the policy. Go back to section 3(d) -- fostering the ability of British Columbians to share in the economic, social, cultural, and political life of our province.
G. Wilson: So the minister is saying that it's a question of discriminatory or violent action on the basis of one's race. We're not talking about setting down a standard of moral conduct, determination of rites of passage, laws affecting rites of passage in any kind of ceremonial context, forms of dress -- all of those kinds of things that may be legislated against because they are deemed to be not in the public interest, given that those kinds of cultural standards are not generally considered
[ Page 8665 ]
to be the accepted mores of our society. There is a real distinction. We're dealing with tolerance here, tolerance of differences, yet we're dealing with the rule of government, which, by necessity, has to diminish certain individual liberties. So it is an important question. I am not being difficult. This is a very important question to see what kind of direction this government is likely to take with respect to the diminution of those individual liberties that may be racially or culturally determined.
Hon. A. Hagen: Let me go back to section 3(d). A very important part of this statement is that we deal with this in a manner consistent with the rights and responsibilities of individuals as members of the society of British Columbia. The rights and responsibilities of people are also defined in terms of our citizenship and laws.
G. Wilson: Those last two words are important -- the question of citizenship and laws. What we are hearing is that notwithstanding the above, there will presumably be equal application of the laws of British Columbia that will not necessarily take into account, in the application of those laws, culturally -- or in this case, racially -- determined distinctions that may be made on certain aspects with respect to civil statutes that may regulate rites of passage -- marriage, for example, and the conduct of marriage or various other kinds of activities that may be culturally or racially determined. Is that what we're getting at here?
Hon. A. Hagen: Fundamentally, I think the member is asking whether laws are being equitably applied. That's a matter that comes under the actual interpretation or the management of those laws.
J. Tyabji: I want to pick up a bit on what we were discussing earlier. Under section 2, we spent a lot of time talking about definitions and trying to get them for some terms central to this bill. Under section 3, we canvassed at length the fact that this is a departure from much of the other legislation before us, in that we have government policy in the form of legislation. At that point, the minister said that this was standard for multiculturalism statutes. We've done the background research....
Interjection.
J. Tyabji: Oh, the minister says she didn't say that. Perhaps she would like to clarify it. The minister made references to other legislation on multiculturalism. How is the policy, which, as the minister says is now enshrined in legislation -- basically, we've got an ideological perspective in the legislation -- similar to other legislation? She made a reference to that earlier.
Hon. A. Hagen: I'll just deal with my earlier reference. I simply noted that all legislation that comes before this Legislature is based on policy, and that policy is expressed in legislation in a variety of ways. So I was speaking of the fundamental basis of legislation coming forward.
Hon. Speaker, I would like to move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; M. Farnworth in the chair.
The committee, having reported progress, was granted leave to sit again.
Hon. A. Hagen: Hon. Speaker, I call committee on Bill 37.
TEACHING PROFESSION AMENDMENT ACT, 1993
On section 1.
J. Dalton: I just have one point. We note that section 11 indicates that section 1 will come into force on January 1 of next year. I would like the minister to clarify this, but I presume that that's because the first time the elections will take place is in the next calendar year, according to the amendments. Is that correct?
Hon. A. Hagen: Yes, that is correct.
C. Serwa: Could the minister advise as to why the date was changed from October 31 to the date in section 1, April 15?
Hon. A. Hagen: The purpose of these amendments is to move the election of council members to late spring.
Section 1 approved.
On section 2.
C. Serwa: I guess I'm not fast enough off the mark. What was the purpose in moving the date? We have moved the date again here. What was wrong with the existing one?
Hon. A. Hagen: Let me clarify. I thought we had done that in second reading in terms of the purpose of some of these amendments. If the elections take place in the late spring, they provide an opportunity for the teachers from various regions of the province who are elected to make the necessary arrangements, because council meetings require them to be absent for certain periods of time in order to carry out their duties. If the elections are held in the fall, council members may suddenly find in the midst of the school year that there is a need for them to make arrangements around their teaching duties. It's administratively much better for the children, for the district and for that teacher to know that he or she is going to have that responsibility and to make the plans at the end of the school year for the next school year. It's simply for the children with whom that
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teacher works, or it could be for an administrator as well. It's a good move, because the timing of the election should suit the arrangements that need to be made for that person to take on this important responsibility.
Sections 2 to 4 inclusive approved.
On section 5.
J. Dalton: I have a technical point to raise. I believe there may be a drafting error here, but perhaps I will be proven wrong. I note that the amendment will repeal subsections (b) and (c) of section 22, which section 5 amends, but there is no replacement or renumbering of subsections following in the section.
Interjection.
J. Dalton: I understand that it's automatic and the renumbering will take place so the following subsections will be adjusted. That's fine.
Section 5 approved.
On section 6.
C. Serwa: From the minister's response, I think I may have gotten under the minister's skin in second reading. My concern is with the highest degree of professionalism among teachers. Somehow, whether or not it was a wilful misinterpretation by the minister of my comments.... I checked my Blues and I couldn't find out where that interpretation came from.
[5:30]
My concern in section 6 is with the deletion of "professional development committee." Why is that change necessary or desirable? Why are we deleting the word "professional"? Certainly a bone of contention, in my opinion, is the trade unionism that's rearing its head. My concern is that "professional" is really required to provide, I guess, the highest objective for teachers in the system, which is full-fledged professionalism.
Hon. A. Hagen: I certainly would concur with the member. The professional specialists' associations that were originally envisaged as one of the responsibilities that would go to the council after five years have not in fact been implemented. The council has responsibility for certification of teachers both within and coming to B.C. and for matters of teacher education and discipline. Professional specialists' associations existed under the former umbrella organization before the college was created, and they have in fact continued to thrive under the B.C. Teachers' Federation. Our ministry works very closely with those professional specialists' associations, and they carry out a great deal of excellent work.
As I noted in second reading of this legislation, the amendments we are dealing with were brought forward at the initiative of the council, and they deal with the overlap that exists now in legislation for professional development activities and recognize the fact that that work, and the financial support for that work, continues to come under the B.C. Teachers' Federation. Both the college and the Teachers' Federation agree very strongly -- unanimously -- that we should now reflect in our statute the reality that continues to exist.
I think that within that we need to look at both organizations. Although I don't pretend to know all of the constitution and the bylaws of the organizations, I feel very confident in saying that both of them have common views and values around the professional attributes and aspects of teachers and teaching. So the professional specialists' associations, which did exist as a part of the B.C. Teachers' Federation before the college was formed, continue to be part of the B.C. Teachers' Federation's broad mandate to function as such, and the responsibility for certification, teacher education and discipline will remain with the college. I emphasize that the overlap has existed in legislation, not in fact. The college has taken the initiative to bring forward the proposal that we reflect that reality in our legislation. That's what some of the changes we're looking at in some of these amendments provide.
C. Serwa: The College of Teachers of B.C. was set up fundamentally to protect the public interest. As the minister knows, the BCTF has dominance in selecting the members to the college, which is fair enough. When the minister refers to an agreement between the BCTF and the College of Teachers about taking away some of the professional responsibility from the College of Teachers, I can see where that agreement would come from. But it is incumbent on the government to assure itself and to have confidence that the public interest, and certainly the welfare of students in the province, are being well attended to in spite of the recommendation coming from the college and from the BCTF. Because no matter how you cut it, it's patently obvious that there is a strong interconnect there. I have said in all honesty that I believe that the college members who are also members of the BCTF have accepted the additional professional responsibility in the best possible way. That has been reflected, as we have seen, by actions of the College of Teachers.
My concern comes from the fact that we're moving something back into the BCTF, which is widely recognized as -- and is -- a teachers' union. We're tying the requirement for professionalism to that particular union. I alluded to the nurses' situation, where they have a professional body and a union body, and there is no interconnection between them. They are charged with specifically different mandates. If they were tied together, that would be a conflict of interest. I will continue to harbour concerns, and I don't see how the public can not harbour concerns.
Since second reading debate, I have had several phone calls from teachers who have similar concerns about the matter. They are not at all confident that moving this professional aspect from the College of Teachers back into the BCTF's area of responsibility is an appropriate move. Perhaps the minister could expand on that, and indicate to me the reason for her confidence. I know it was historically that way, and
[ Page 8667 ]
that's part and parcel of the point; but we made an evolutionary move which was very positive.
Hon. A. Hagen: In some senses we're debating a number of sections here. But because we're dealing with amendments, I'm going to try to deal with the issues. I want to take the members back to the object of the college, which remains unchanged: "...to establish, having regard to the public interest, standards for the education, professional responsibility and competence of its members" -- persons who hold certificates of qualification -- "and applicants for membership and consistent with that object to encourage the professional interest of its members in those matters." The purpose or the object of the college is still very clearly there.
In section 6, which we are currently talking about, we are changing the name to more accurately reflect the committee that exists in the college. I've referred to that particular committee. So we're making amendments, remembering again that the act came in early and hasn't been amended. The intention of the amendments is to have the language of the legislation more accurately reflect how the college, having come out of a piece of legislation that literally cast its task, has then developed its committees and working relationships, and fulfilled its mandate. The broad issue that you're talking about around the college and the relationship of the college to the teaching profession -- because this is the Teaching Profession Act -- I think stands solidly in place in the amendments.
What we're dealing with here is some fine-tuning or housekeeping, recognizing that the professional specialists' associations I've been speaking of have never been developed under the college's mandate. They continue to exist. I think we need to acknowledge that the two bodies are not different. You were drawing some analogies with another profession. I don't think you can really separate them quite that neatly. If a person practises a profession, then that profession defines the person and the work of that person. That's something that I think you and I would acknowledge. The teacher in the classroom is a professional, and the work that she does in continuing to stay current in her particular profession around the specialties that he or she may have is part of the professional nature of that teacher, so I don't see the dichotomy that you have cast here. We may have some disagreement about that -- I suspect that we do -- but clearly, I see a teacher as a professional. I value the work that the professional specialists' associations have done with the support of the B.C. School Trustees' Association. The work that they do in relation to the ministry, to education changes, to communication and to in-service is extremely important. I again give credit to those teachers for the incredible amount of energy, time and commitment they put into those specialist organizations. They need to be nurtured, and we continue to see them being nurtured, where they are. At the same time, the college continues to have the broad mandate I just read when reading the object of the college in section 4 of the act, which has not been amended.
L. Fox: I've been listening very intently to the debate. I still haven't heard a justification for removing "professional development committee" and replacing it with "teacher education programs committee." The minister suggested that the purposes section of the legislation refers to teachers as professionals and to the enhancement of the professionalism of teachers. It would seem to me that if that is the theme of the bill -- which I'm sure it is, given that it's in the purposes section -- it would only enhance the purposes of the legislation if professionalism was in fact referred to in different sections of the bill.
[5:45]
I'd like to mention one more item. It seems that just a short time ago we were talking in this Legislature about professional leave days. Obviously the collective agreements of the school districts refer to these as professional; they refer to these educational days as professional leave days. So I have some difficulty understanding why we had to remove that particular terminology from the act and replace it with the "teacher education programs committee." I really have not heard adequate justification as to why the minister saw that this was a necessary amendment to this legislation.
Hon. A. Hagen: The college requested the change to more accurately reflect the work and the function of the committee.
C. Serwa: For my clarification, when we take the professional development committee away from the College of Teachers and move it back to the BCTF, does the Ministry of Education provide funding to the BCTF for teacher education programs? Is that one of the reasons for the move back?
Hon. A. Hagen: As I noted, the reason for the change is that the college requested it, and it reflects the continuing work of each organization in support of its professional activities.
C. Serwa: I caught that response a fair bit earlier. Perhaps I didn't make my question clear: does the Ministry of Education fund the BCTF to provide teacher education programs? Is that the reason...?
Hon. A. Hagen: I want to be clear about the question. I think the member asked if the ministry provides funding for teaching education programs. Teacher education is the responsibility of the universities or, in terms of work that goes on at a district level, it's the responsibility of the school boards.
C. Serwa: I thank the minister for that information. But what about the teacher development programs that will now be the responsibility of the BCTF? Do they fund or design the programs? Is that what's transpiring?
You're moving it away from the College of Teachers and the professional development committee. Is that committee only structured to provide information to the universities on the challenges that teachers will face
[ Page 8668 ]
tomorrow and on educational support programs that they will require? Or is this an ongoing professional development program that the ministry pays the BCTF to implement? That's what's not clear in my mind.
Hon. A. Hagen: I'm trying to deal very succinctly with the question. The college has never had professional specialists' associations. Since the legislation was first proclaimed, they have never been a part of the college. They've existed as part of the organization and work of the BCTF since 1987, when the bill was first passed. This change is simply to reflect the overlap in that jurisdiction and to recognize where the provincial specialist associations continue to work. We are dealing with an amendment that changes the name to more accurately reflect the teacher education programs committee, which is what exists with the college.
C. Serwa: So the minister is confirming that the Ministry of Education doesn't directly provide any funds to the BCTF for the teacher education programs committee. No funds go directly from the Ministry of Education to the BCTF.
Hon. A. Hagen: Because we are dealing with the college act, I'm not able to answer the question. The teacher education programs committee exists within the college's mandate. I certainly would want to check, but to my knowledge there is no funding for the college for that committee, which is renamed in this section that we're dealing with.
C. Serwa: If no special funding is addressed to the College of Teachers, then there would be no special funding addressed to the BCTF, who will undertake the responsibility for the teacher education programs committee.
Hon. A. Hagen: We have to be very clear that we are renaming a committee in this clause. We're dealing with clause 6, and if we could move on we will be able to deal with the.... I think we have done some moving back and forth, as I noted, around two or three clauses here, because of the question that you first raised and because it's always difficult with amending bills to stay exactly on each of the clauses. If we could just deal with section 6 at this stage of the game and agree that the committee is renamed, then we will be dealing a little bit more with the matter that the member is raising in section 8.
Sections 6 and 7 approved.
On section 8.
C. Serwa: I guess from my perspective section 8 is fairly critical. What it does is eliminate the power of the council to engage in professional development programs, to undertake programs to ensure teacher competence and to establish specialist associations to provide advice. The minister has stated, earlier today and certainly in second reading, that there was overlap between the college and the BCTF. It appears that the government is more interested in acceding to the BCTF. Again, I have specific concerns with that. Why would the BCTF be more adequately structured to handle that than the more or less independent College of Teachers, which is charged with a different mandate than the one that exists with the BCTF?
Hon. A. Hagen: As I've noted, there's an historical fact here, and the infrastructure in support of the specialists' associations has continued to reside with the B.C. Teachers' Federation. The specialists' associations have continued, in fact, to broadly represent.... I think virtually every teacher in the province in some way or another is associated with one of the specialist associations.
C. Serwa: I certainly can't dispute the historical fact that the minister has raised, nor can I diminish what has transpired over the long history of the BCTF with respect to professional development. I have no difficulty understanding and appreciating that. But something has drastically changed in the BCTF: it's now one of the strongest labour unions in the province. I'm suggesting to the minister that while she refers to historical fact, the structure of the BCTF has changed quite dramatically. It is now a big labour union with different goals, different responsibilities and a different mandate than it had historically. I'm saying that from my perspective, I believe it's inappropriate to now mix those two things that were formerly well handled by the BCTF. Their role has changed dramatically, and as part of that change, the College of Teachers has to have a significant role in maintaining the professional standards and requirements for teachers.
Hon. A. Hagen: Let me again draw the member's attention to the responsibility of the college around standards of teacher education -- those continue to be in its mandate. In the six years since it was formed, the college has never exercised its authority under the statute. Given its concern as the body that is responsible for professionalism, it is at its recommendation that the overlap in law be changed. I have a fundamental difference with the member regarding the work of the B.C. Teachers' Federation. I see both bodies -- the college and the BCTF -- strongly supportive of professionalism and professional development. What we're doing in this particular amendment is dealing with a recommendation from the college to remove that overlap so our statute does in fact reflect reality in the context of the professional goals of both organizations for their members.
C. Serwa: I can appreciate the Minister of Education's position on the matter, being a teacher and certainly closely aligned to and integral in the system. I can also understand and really appreciate the position of the current government with respect to that. In all honesty, hon. Chair, I think that the public at large will have difficulty maintaining confidence in the statements of the Minister of Education on this particular section. The public at large are well aware of the structural changes. There are many teachers in
[ Page 8669 ]
professional organizations, members of the BCTF and other teachers, that have a great stake in the professionalism of teachers. It's obviously imperative that professionalism be maintained to the highest possible standard.
What we're seeing here is a directive from the BCTF, who are going to be more aggressive. As a matter of fact, I think the next move will be the abolition of the College of Teachers, because through the current government the BCTF can make a strong claim that they can do just as effective a job, not only in setting the standards but in enforcing and disciplining teachers in the system. This section will probably be amended in the next session, and the College of Teachers will be vanquished. I think it's incumbent on the Minister of Education to recognize that in doing this we're really diminishing the opportunity for the maintenance of a somewhat separate body to set the highest possible standards, and we're letting the public down. We're certainly going to be letting the students in the province down as well.
I notice that the Minister of Education doesn't agree with me, but the final arbiters in the system will be the public.
L. Fox: Just a couple of points of information. The government suggests that there have been overlap between these activities, yet a moment ago the minister, if I understood her correctly, said that the college hasn't utilized the professional development committee. First, has there been overlap? Second, are these activities financed by the Education ministry to the BCTF or to the college?
Hon. A. Hagen: The overlap of which I speak is in the legislation, and we have removed that overlap. Within the B.C. Teachers' Federation are provincial specialists' associations. There are, within the language of the Teaching Profession Act, references to professional specialists' associations. We've now removed those references. That's what we're doing in section 8.
[H. Giesbrecht in the chair.]
C. Serwa: There always has to be a sound reason for change. The minister refers to the only overlap being in legislation. I can't see that that is a significant enough reason to change anything, if that opportunity was not being utilized by the College of Teachers. Perhaps the minister could enlighten me as to why it was necessary to bring in section 8 to eliminate that overlap. There must have been a reason.
Hon. A. Hagen: The college requested the change, and the government agreed.
C. Serwa: Did the minister ask why?
Hon. A. Hagen: The college indicated that it didn't intend to duplicate services that were available through the B.C. Teachers' Federation, and they believed that the legislation should reflect the practice, consistent with their objects as an organization under section 4, which I read earlier.
[6:00]
L. Fox: Just to follow up, I asked a two-part question. The second part of it was about the funding of the program and how that was handled within the Ministry of Education. Would the minister like to elaborate?
Hon. A. Hagen: With respect to the college, to my knowledge there hasn't been funding for professional specialist associations, or for the teacher education programs committee which I referred to a little earlier.
L. Fox: Given that we are eliminating this power in favour of the BCTF because we don't want the overlap within the legislation, is funding provided to the BCTF for this educational process?
Hon. A. Hagen: In terms of the functioning of the provincial specialist associations within the BCTF, I am not aware of specific funding. That part of their mandate existed prior to the Teaching Profession Act and exists at the present time. In terms of basic funding for those functions, I'm not aware that we provide.... I haven't been dealing specifically with all of those elements, and I don't have the support staff here to be able to provide.... It's outside the purview of this debate, but I would be happy to provide the information to you.
Sections 8 to 11 inclusive approved.
Title approved.
Hon. A. Hagen: I move the committee rise and report the bill complete without amendment.
Motion approved on the following division:
| YEAS -- 44 | ||
|
Perry |
Edwards |
Cashore |
|
Barlee |
Charbonneau |
Schreck |
|
Lortie |
Hammell |
Lali |
|
Conroy |
Evans |
Farnworth |
|
Pullinger |
Ramsey |
Lovick |
|
B. Jones |
MacPhail |
Blencoe |
|
Zirnhelt |
Clark |
Gabelmann |
|
Harcourt |
Hagen |
Miller |
|
O'Neill |
Doyle |
Hartley |
|
Streifel |
Lord |
Krog |
|
Randall |
Garden |
Simpson |
|
Brewin |
Chisholm |
Reid |
|
Dalton |
Farrell-Collins |
Wilson |
|
Symons |
Hurd |
Warnke |
|
K. Jones |
Tyabji | |
| NAYS -- 5 | ||
|
Hanson |
Serwa |
De Jong |
|
Neufeld |
Fox | |
[ Page 8670 ]
The House resumed; the Speaker in the chair.
Bill 37, Teaching Profession Amendment Act, 1993, reported complete without amendment.
The Speaker: When shall the bill be read a third time?
Hon. A. Hagen: With leave of the House now, hon. Speaker.
Leave granted.
Bill 37, Teaching Profession Amendment Act, 1993, read a third time and passed.
Committee of Supply A, having reported progress, was granted leave to sit again.
The House recessed at 6:13 p.m.
The House resumed at 6:33 p.m.
Hon. D. Miller: I call the estimates of the Minister of Finance in Committee A, and in the House, committee stage of Bill 56.
FOREST AMENDMENT ACT (No. 2), 1993
The House in committee on Bill 56; M. Farnworth in the chair.
On section 1.
W. Hurd: I just had a brief point of clarification under section 1(b), where it's now required in a regulation or a preharvest silviculture prescription.... I understand that has always been a requirement, but in land that may be deemed under section 2 to be suitable for other uses, would it be a requirement of the licensee to furnish that preharvest silviculture prescription plan in any event? Or would a discussion with the district manager about the type of land that might be exempted predate the expenditure by the licensee on that plan? To further clarify my question, does the licensee have to prepare a preharvest plan on land that may be exempted at a future date or that may be exempted by the district manager under section 2?
Hon. D. Miller: I'm not quite sure I follow the question. The intent of this section is to ensure that basic silviculture is an obligation that has to be carried out. There was some question with respect to how that obligation is defined. It is really defined in two areas: by regulation and also in the PHSP document itself. The amendment simply confirms, if you like, that the legal obligations are those that are contained in the PHSP, not just those outlined in regulations. That's the intent of the amendment.
If I haven't answered the member's question, perhaps he could clarify it further.
W. Hurd: If I understand the minister's remarks correctly, this section basically gives the preharvest silviculture prescription legal standing under the act. Or did it have that all along?
Hon. D. Miller: It simply removes any doubt as to its legal standing. As I say, it's contained both within the regulations and the PHSP. The amendment simply confirms that the obligations outlined in the PHSP are legal obligations.
Section 1 approved.
On section 2.
W. Hurd: Again, just a couple of points of clarification. First, one of logistics. I assume that the district manager, at his discretion, would have the power under this section to decide that intensive silviculture wouldn't have to take place because the land is suitable for other uses. Can the minister give us an idea of whether the licensee would be required to spend any money on a preharvest silviculture prescription before that determination is made, or is it the minister's view that this designation of the land would be made at a very early time, in that as it was harvested, it would become apparent to the district manager and to the licensee that it might be put into another use? The reason for my question on section 1 was really whether the licensee would have to spend the kind of dollars that would be necessary to produce a preharvest silviculture prescription for this land. Would those discussions about a different use for the land occur at a very early stage so that cost to the licensee could be avoided or deferred?
Hon. D. Miller: There are several parts to this. The primary thrust of the amendment is to exempt certain areas of land -- for example, roads and landings. Licensees are required to prepare PHSPs and to have them approved prior to any cutting permits being issued. Therefore there is essentially no change for licensees in terms of their requirement to go through that planning exercise to prepare a PHSP and have it approved by the ministry prior to the ministry issuing cutting permits.
Let me back up a moment. The wording of the existing act would require that areas used for roads, for example, be reforested. Clearly that's not ordinarily the case, although there are some areas in sensitive terrain where we require that roads be deactivated, put to bed and reforested. But, again, that requirement would be contained within the PHSP. Where roads become a permanent fixture, they would not be required to be reforested as a result of the amendment.
Further to that, I've used the example of the shake-block cutters, who most commonly go into a setting after it has been harvested, sometimes under arrangements with the licensee or the Crown. Again, under the existing wording of the legislation, there is a requirement for a PHSP even prior to allowing a shake cutter to go in, which clearly was not intended by the original legislation in 1987. But because of the wording,
[ Page 8671 ]
in a strict sense, it would be required. The amendment simply gives the district manager the authority to exempt the applicant, in the case of a shake-block cutter, from the requirements of a PHSP. For all intents and purposes, it really is a very practical recognition of what takes place in the forest.
There are some other areas that could be considered for exemption from a PHSP. In second reading the member mentioned the issue of rangeland. Indeed, there may be flexibility under this for a district manager to allow, most commonly, some dead timber or standing dead timber to be removed, because the land would have a superior purpose as rangeland versus strictly forest land.
Further to that, under subsection (2) the district manager may be governed by regulations made by the Lieutenant-Governor-in-Council, so there is a check on the district manager's flexibility in applying the section. I hope that responds to the member's question.
W. Hurd: I think that explains the basic thrust of the section. I just have a couple of questions about section 2, section 129.11(1)(c)(iii). I'm looking at timber that "will be treated or felled to facilitate the entrapment of pests." Are we talking about clearcutting in the interior that might result from beetle-kill wood, or is that a different prescription altogether? I would assume we're just dealing with smaller areas here. As the minister knows, significant percentages of the existing wood supply in parts of the interior are affected by pests. I welcome clarification on that.
Hon. D. Miller: No, that would not apply to the increased allocations we've put forth to try and contain beetle infestation in the Okanagan and the boundary TSAs last year, for example. It would only apply to the trap-tree program -- in other words, where a tree has been isolated as a trap to try and collect the pests. You obviously wouldn't require a PHSP to go in and take that tree out.
W. Hurd: Section 129.11(1)(c)(v) says: "...timber to be harvested as a consequence of incremental silviculture." I would assume that applies to land that the ministry could identify, which, especially in the interior, is considered an unmanaged stand. By harvesting and replanting it, a higher incremental silviculture could be met. I welcome an explanation on that section. I would assume that refers to timber in an unmanaged stand that, by clearcutting or eliminating it and replanting it with a higher-value species, for example, or subjecting it to a better standard of forest management, would be beneficial to the Crown. Is that what we're dealing with in this section?
Hon. D. Miller: No, although things have changed since the area was originally put forward as liquidation licences. The North Kalum, the member might recall, was put forward initially in 1986 as a simple liquidation. Three licences were issued. The reasoning behind that was that the timber was overmature and that the best silvicultural treatment was to harvest the timber in the shortest order and get a new crop growing. I disagreed with that at the time, and I still do, and there has been substantial change. Nonetheless, that's the premise on which that the licences were put forward. In that situation they would require a PHSP.
[6:45]
Under subsection (v) we are dealing a situation where, on a backlog site -- a site that has not been satisfactorily restocked or reforested -- it would allow the removal of merchantable wood from that site to offset the cost of rehabilitation of the site. In other words, it would accompany a plan to deal with the backlog issue and to reforest that site to our standards. So it doesn't deal with the situation that the member described.
W. Hurd: I have one further point on section 2. Could the minister advise the committee where the ministry is in terms of the inventory of these types of areas in the province? Do we have a handle on lands where the district manager might be required to undertake this sort of exemption in the next few years? Or would it be up to the licensee to identify the lands so designated and to come forward to the ministry and suggest that this area is more suitable for a gravel pit or rangeland or whatever? Who would be initiating the review by the district manager?
Hon. D. Miller: I don't have data with me on the NSR issue, although it's clearly the intention of the government -- as it was of the previous government -- to eliminate the good- and medium-site backlog lands by the year 2000. That's an achievable goal.
The issues that are addressed in the amendment, whether they deal with the shake-block issue, the tree pest or whatever, are simply ongoing issues that are dealt with by every district. There is no particular district-by-district catalogue of sites that we retain. We're really talking about the ongoing, day-to-day management of the forest lands within the timber supply area and the need for the district manager to have the flexibility to appropriately manage the forests under his or her jurisdiction.
Section 2 approved.
On section 3.
W. Hurd: I am aware of the difference in terminology between study areas and designated areas. The minister made reference in second reading to this particular section providing him with the ability to redesignate areas outside of the existing study areas, such as the spotted-owl recovery areas or the protected-areas strategy. I would welcome a brief explanation from the minister of exactly what additional ability this section provides the minister in terms of allocating a cut within the timber supply areas in the province.
Hon. D. Miller: Perhaps I will use the example of Clayoquot Sound to illustrate the intent of the section. Under the current Forest Act, we are required to issue one year's notice of deletion. For example, in the
[ Page 8672 ]
significant area that we have deleted in the Clayoquot Sound decision, we were required to give that notice of deletion and then to subsequently do the calculation and work that would result in a reduction in the annual allowable harvest rate. Similarly, in the special management areas that have been delineated in that decision, where there were existing harvest approvals, roadbuilding approvals, etc., we need the authority to be able to reduce the harvest rate in the unit sooner. Obviously, having made the decision to delete or to treat an area of land in such a manner that you would see a fairly drastic reduction in the harvest rate as a result of the special management designation, we -- and the chief forester -- need the authority to reduce the harvest rate in a timely manner, so that we do not end up overharvesting. Really, that's probably the best illustration of the impact of the change from study area to designated area.
All of the other provisions continue to apply, particularly the fact that these have to be approved by cabinet and therefore it's not something that's taken lightly. It has to go to cabinet for approval.
It really is required when we make these decisions, and we will be making a number of decisions in the future as we attempt to achieve the land use designation that we've talked about: the 12 percent setting-aside of representative areas of the province. There will be impacts from those decisions, and it's prudent, in our view, that we do not kid ourselves, if you like, by maintaining harvest levels that clearly are much too high, given the deletions or the special management designations that may occur.
So that is the intent of the section. It would also allow -- although it's a moot point, perhaps -- for areas that are currently under study with respect to the spotted owl.... Although I would remind members that those areas have been delineated as study areas already, and presumably, even if we didn't amend the section, we would still have recourse to removing them from the land base that contributes to the annual allowable cut. I know it sounds like a bit of an anomaly, but for those areas that we've already made a decision on, we don't think that the current Forest Act allows the chief forester to act in a timely manner, and we think it's important that he have that authority.
W. Hurd: That was my other question, actually: whether the chief forester would be the one who would recommend the AAC reductions with respect to study areas and designated areas. Or would the minister have the ability to address more immediate remedial action in the event of Clayoquot, for example, where, as the minister is aware, there is a difference of opinion between the company and the ministry with respect to the total cut not only in that tree farm licence but also in others on the Island? Would this section also govern the actions of the minister in reducing the available harvest, or are we just dealing with the activities of the chief forester?
Hon. D. Miller: No, the chief forester has, and will retain, and should always retain, I hope, the authority to deal with the establishment of the harvest rate for any particular management unit, whether it is a TFL or a timber supply area. The decision to delete land, for whatever purpose, is one that -- if I can use the term -- is made by the politicians, or is made in a political vein. The chief forester has the statutory obligation to consider the land that's available for harvesting and to establish what in his opinion is an appropriate level of harvest.
Sections 3 and 4 approved.
On section 5.
R. Neufeld: Maybe the minister would just like to quickly explain how this section would work. I don't quite understand what you have there: "...public interest before specifying...a designated area." Maybe you could give me a brief outline.
Hon. D. Miller: Really, it simply adds to the.... Let me try to describe it. Last year we brought in the right for cabinet to designate an area, and we've used that in the case of Strathcona. Members may recall that there are three study areas within the Strathcona timber supply area. Cabinet used the legislation to designate those areas under the act. They were subsequently removed from the land base, and the chief forester established an annual harvest rate that was 11 percent less than the original harvest rate. The amendment adds an intent, if you like, and the intent is the public interest, which was not contained in the original statute. It really adds to the onus on cabinet, in making these decisions, to make them in the public interest.
Section 5 approved.
On section 6.
W. Hurd: I understand the housekeeping nature of this bill, but I also note the retroactive clause in section 7. Are we dealing with any requirements that might be retroactive on the part of licensees, or is this just retroactively changing the regulation to a legal requirement of the act? I would welcome a clarification, because I note that the retroactive provision to 1988 shows up in both section 6 and section 7.
Hon. D. Miller: Section 6 simply validates again that the authority brought in in April 1988 is confirmed retroactively. If we can deal with them together, section 7 now allows us to go back. We've done a number of reviews. We've done a review of the PHSPs, for example, stemming from a discovery in the interior where, as a result of the transition in 1987 -- in other words, the introduction of the preharvest silviculture prescription as a requirement -- we found some deficiencies, at least in terms of the paper. We haven't completed the audit on that, but we've confirmed that the land in question has been dealt with appropriately -- in other words, it has been reforested. But from a paper point of view, there were some problems.
We will be reviewing all of the regulations that have been guiding the PHSPs to ensure that they have been
[ Page 8673 ]
appropriate. If there any changes, this amendment simply gives us additional authority to apply them in a retroactive manner.
L. Fox: Given the confusion around whether or not the opportunity licence holders were included in the tenures that the legislation was supposed to cover when it required those licensees to pay the costs of silviculture, is one of the purposes of this legislation to clarify the confusion around the l987 legislation?
[7:00]
Hon. D. Miller: No, that's a separate issue. The matter at stake there is whether or not licensees in that category are major licensees -- or whether the licensee is a major licensee. That's the issue, and it's not dealt with in this bill.
Section 6 approved.
On section 7.
W. Hurd: It may be more appropriate for me to address my question with respect to the preharvest silviculture prescription under section 7. In the event that this bill becomes law and the ministry is able to go back to 1988 and identify any problems with the previous preharvest silviculture prescriptions, is it the minister's opinion that we are dealing with paperwork here? Or are we dealing with actual deficiencies in the land base that may result in the licensee having to go back and rectify those deficiencies retroactive to 1988?
Hon. D. Miller: Perhaps the best way I can explain it is that there would be no new requirements imposed on licensees as a result of this section. So in that sense maybe your terminology is more appropriate. It's essentially paper, as opposed to going back and saying that there was something you didn't do five years ago, and we are now requiring you to do it.
W. Hurd: The opposition's reading of this section is that the Lieutenant-Governor-in-Council -- i.e., the ministry -- has the ability to make new regulations regarding silviculture reports and surveys, and to make them retroactive to April 8, 1988. What I am asking is whether any new regulations or requirements might be enacted in 1993 that would then revert back to 1988 and be a requirement for those intervening years. That was the basic thrust of the question.
Hon. D. Miller: Perhaps I should have given a more lengthy answer to the last question. There may be requirements for surveys. I'll stick with the answer I gave previously. I'm trying to think of an analogy. We would not invent a new regulation and then go back and say that it must now be applied even though it wasn't a regulation five years ago. But as the section indicates, reports and surveys may be required from licensees.
R. Neufeld: I guess I'm as confused as the official opposition is over this section. The minister says that it wouldn't be retroactive. Yet it states quite straight-forwardly in the bill that cabinet can add to the 1988 regulations validated in section 6 and can impose them retroactively. To me that means that you can change regulations and make them retroactive. Is there something that's a real anomaly that we don't know about that would create this section? Otherwise, I can't see the point in it.
Hon. D. Miller: It is fairly difficult to explain. The section really validates.... If you go back to some of the previous sections of the bill, you will see, as we pointed out, that the first section confirmed the fact that the difference between the regulations and the PHSP itself.... The change the first section brought in was to ensure that the PHSP was a legal obligation if there was some question about that versus the regulation.
Section 7 simply validates that those activities which occurred in the past were legal obligations. As section 7(1) indicates: "The Lieutenant Governor in Council may make regulations respecting silviculture, reports and surveys...." There may be a need to go back and require licensees to survey some of the areas that were reforested under the legislation or regulations at the time, to ensure that they're consistent with the PHSP requirements.
R. Neufeld: To be perfectly honest, I can't imagine why we would have to put in legislation a section that deals with regulations and imposing them retroactively, as the bill says, for survey purposes -- and why the power will be repealed July 31, 1995. It's rather hard to figure out why the ministry just couldn't request those licence holders that haven't done the survey to complete the survey. Why do we have to put into legislation something that we're going to repeal in the future in order to complete a survey?
It does say: "The Lieutenant Governor in Council may make regulations respecting silviculture, reports and surveys related to silviculture, a matter set out in the Silviculture Regulation...." So it deals not just with surveys but with reports. I can understand that being requested of licence holders if there's a need for it, but not through legislation or regulation. The silviculture regulation certainly makes one wonder why we would specifically put it in there if we're not going to enforce that regulation or even ask for it.
Hon. D. Miller: The surveys, really, would be the requirement or the retroactive requirement -- and I'll deal with the repeal section in a moment. We are always making changes to the requirements that we impose on licensees with respect to silviculture and, indeed, a whole variety of forest practices. So surveys may be required from licensees.
The section will expire on July 31, 1995, because it is anticipated that we will not need the powers of this section after that date. We are anticipating that the forest practices code that will be introduced next year -- which will take section 10, if I'm not mistaken, out of the Forest Act and put it into the forest practices act -- will give us any authority we will need to deal with these issues. That's why we've got a repeal section in
[ Page 8674 ]
the legislation. As I said, constant changes are taking place with respect to our requirements for licensees and to those requirements we impose on ourselves, particularly the definition of basic silviculture. The ministry may have to make consequential changes to the silviculture regulations. This section simply gives us the power to make those changes.
R. Neufeld: If section 7 is going to deal with surveys only, why would we not just say surveys? If the minister is adamant that silviculture and reports must stay in the legislation, could we have the minister's assurance that any reference to silviculture or reports in section 7 really means nothing -- is nonexistent -- and will not retroactively go back to a licensee and change some silviculture program and make that licensee comply with something that wasn't there before?
Hon. D. Miller: You certainly have my assurance. I have stated a couple of times in response to questions that the surveys would be the only requirement that would be applied retroactively. We may make future requirements of licensees in terms of assessing sites not only for silvicultural purposes but for a variety of purposes -- site degradation, for example. As the member is probably aware, we have brought in regulations dealing with soil disturbance on interior sites. As with any set of regulations -- whether they be the fish-forestry guidelines or any other guidelines that govern the practice of forestry -- we have to have the ability to monitor them and to audit performance. This gives us the power to require surveys for any number of requirements imposed under the act and under regulation.
I can give you the assurance -- with respect to the silviculture issue and surveys -- that the surveys would be the only requirement that would be imposed in a retroactive manner, if you can call it that. It's a current requirement, in that if we require a licensee to survey an old cutting permit, for example, it's not technically a retroactive requirement; it's a requirement we are imposing now.
R. Neufeld: I accept that explanation. The section that repeals it on July 31, 1995.... If I understand that correctly, there will be something similar to this in the forest practices code. Is that when the forest practices code is going to finally get here? I understood that we were going to have a forest practices code long before 1995. And why July 31, 1995? I can appreciate that there's a lot of work to it, so I'm not chastising anyone, but it seems.... That's a couple of years from now, and I would have thought that we would have had one a little bit sooner than that.
[7:15]
Hon. D. Miller: Yes, I would have thought the same when I started.
An Hon. Member: In fact you said so in the last election.
Hon. D. Miller: Yes. Even to me it came as a surprise to discover the amount of regulation that the Ministry of Forests has that applies to harvesting and roadbuilding and all those activities that take place on the land base. It is quite voluminous. In fact, I had a book about that thick that contained the regulations that currently apply, and it has proven to be quite an onerous task to go through all of those regulations to ensure that there's no overlap and duplication and that they're consistent with current policy. Believe me, I'll be very happy and pleased when I can actually stand up and introduce a forest practices act in the Legislature.
An Hon. Member: You may not be here.
Hon. D. Miller: Well, let's hope we'll be here. But the forest practices code legislation -- we're going to have to get a handle on whether it's the forest practices act or code -- will take those parts of the current Forest Act that deal with practices and house them under the forest practices act; and, of course, attendant to that act will be a host of regulations.
So let's assume.... I think we will finally get the act introduced in 1994. No doubt there will be a period of debate and then some period with respect to proclamation and some date with respect to implementation -- although this is a subject that hasn't been fully canvassed. For example, do you simply slap it down on the desk and say: "That's the law; everybody is obliged to live with it"? Or do you realize, given the complexity, that there needs to be some implementation period? We've yet to have that debate in a public way. We will be issuing very shortly a discussion paper on the forest practices code. It's anticipated that the code will give us the power to deal with these issues and that it's prudent to suggest that the summer of 1995 would be an appropriate time for this section to expire.
W. Hurd: I just have one further clarification under section 7 that relates to 7(2). When we're dealing with section 10 of the Forest Act in section 7(2), are we talking about part 3, section 10, which deals with the form of agreements with the Crown, or part 10.1, which in my copy of the act deals with silviculture?
Hon. D. Miller: It's the form of agreement, hon. member.
W. Hurd: I'd certainly welcome clarification, then, of section 7(2), because part 3, section 10, of the Forest Act covers every licence agreement that currently exists between the Crown and the Ministry of Forests. As I read this section, "A regulation made under subsection (1) may delegate a matter to a person, confer a discretion on a person and provide differently for different areas of British Columbia, the different types of agreements set out in section 10...." Under section 10 are the forest licence, the timber sale licence and a whole range of activities.
Given the fact that this section relates to every form of agreement with the Crown, I'd welcome clarification from the minister on what exactly this means in terms of the myriad of licence agreements, of which I note
[ Page 8675 ]
there's (a) to (j), ranging from a forest licence to a Christmas tree permit, under part 3, section 10 of the existing act.
Hon. D. Miller: It simply recognizes, as the member says, that the province is diverse in its geography and forest types. There's also diversity in the types of licences. For example, we may wish to treat a tree farm licence in a different manner than a woodlot licence. Woodlot licences are different, depending on which part of the province you are talking about. So it simply recognizes the diversity, not only in a geographic sense but also in the different forms of licences that exist.
W. Hurd: Under part 3 of the Forest Act, section 10 gives the district manager, regional manager or the minister on behalf of the Crown the ability to "enter into an agreement granting rights to harvest Crown timber" in the form of the various licences. Section 10 of the existing act appears to provide the district manager and the minister the same ability to undertake the same kinds of activities called for under section 7(2). Could the minister provide the committee with some indication of the abilities granted to the minister under section 7(2) that don't already exist under the existing language in the Forest Act?
Hon. D. Miller: Under part 10.1 of the Forest Act, silviculture, the requirements and the regulations respecting basic silviculture apply notwithstanding any agreement referred to in section 10 or in any cutting permit. The authority granted under section 7(2) gives the ministry the power to deal with the various forms of tenure in a different manner. As I said in response to the original question, the requirements that may be imposed on a tree farm licence holder -- and this is really only dealing with silviculture -- may not be the same as those that we would impose on a woodlot licence holder. It simply delineates the difference.
Section 7 approved.
On section 8.
W. Hurd: This particular section crops up quite frequently in a number of bills in this assembly, as we noted in second reading. I know we'll get the same explanation that is routine for the administrative part of any bill. But for the record, I continue to be concerned about section 8(1)(b), which indicates: "...a person must not commence or maintain proceedings (i) to claim damages or compensation of any kind from the government." I would assume that also denies the person access to the courts with regard to any effect or impact this legislation might have. That section continues to trouble us on this side of the House. I'm sure that if the minister chooses to enter into a debate, he will categorically assure us that there's nothing untoward in this section. But the opposition continues to flag it, and we will welcome the opportunity to vote against it during committee stage.
Hon. D. Miller: Perhaps I can quote from a bill that was debated in 1987, when I was the Forests critic. Bill 70, the Forest Amendment Act, introduced the requirement of basic silviculture for licensees. Section 19 of that bill states: "No compensation or damages are payable by the government and no proceedings shall be commenced or maintained to claim compensation or damages from the government...." I know that the member has expressed his concern about these no-compensation sections of legislation. I'll repeat the answer I've given every time in the past. They are a standard feature of legislation that imposes obligations on licensees. It's important, I think, that in doing that, the Crown ensures that, as a result of imposing requirements that the Legislature deems to be appropriate, the Crown is not then liable for compensating licence holders as a result of imposing those obligations. I think it's fairly basic; it's a requirement wherever the Crown imposes obligations through legislation on licence holders. Clearly the Crown cannot put itself in a position where it has to pay for it. I think that's something the member might want to consider voting for.
W. Hurd: That's the wonderful thing about a three-party system in the B.C. Legislature: the official opposition isn't accountable for those things that were added to bills before we got here. But the minister has missed the point. I don't think we're concerned about the possibility of damages or compensation; it's section 8(1)(b), which says that no person may commence a proceeding. As I say, we continue to be worried about legislation which deals the courts out of the process. We continue to express that concern, and I think it's important to get it on the record during the debate.
R. Neufeld: I just want to bring forward what I talked about in section 7. Section 8 is headed: "No compensation respecting silviculture enactments." I appreciate the explanation that the minister gave, but I am still a little baffled. If it was to do with surveys, why wouldn't we say, "No compensation respecting survey enactments," or something to that effect, rather than "silviculture"? Because it still leaves it wide open. But I understand that the minister has said more than once -- and I just want to reconfirm it in section 8, so that we're not wondering further down the road what took place -- that what we're talking about are surveys only, and that this has nothing to do with silviculture retroactively for any licensee.
Hon. D. Miller: Yes, I will reconfirm that.
I have just one final note. One of my staff has advised me that section 8, which has caused some concern, does not prevent someone from challenging a law. But it does say that where we have enacted rules and regulations governing, in this case, silviculture, there's no compensation payable by the Crown to a person or a licence holder that we impose that obligation on. Clearly, the members would appreciate that that takes place in areas other than forestry and is a necessary requirement of government.
[ Page 8676 ]
But I will confirm for the member that, in terms of that retroactive requirement, surveys are really the only things that may be required. As I said, in a very real sense, if we require somebody to do a survey, it's not retroactive; it's now.
Section 8 approved on division.
Section 9 approved.
Title approved.
Hon. D. Miller: Mr. Chairman, I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 56, Forest Amendment Act (No. 2), 1993, reported complete without amendment, read a third time and passed.
Hon. D. Miller: I call committee on Bill 69.
FOREST AMENDMENT ACT (No. 3), 1993
The House in committee on Bill 69; M. Farnworth in the chair.
On section 1.
W. Hurd: This section caused some debate in second reading. I just want to get some clarification. I assume that the section refers to the 5 percent AAC reduction or takeaway that occurs in the event of a licence transfer. Could the minister explain the 1 percent reduction from 51 percent to 50 percent? Is it because corporations with equal shareholdings were exempted in some way from the 5 percent takeaway? Is that the issue we're dealing with here? What's the rationale for a 1 percent reduction in the share capital in terms of defining control of a company engaged in harvesting in the province?
[7:30]
Hon. D. Miller: The amendment is intended to close any loophole, if I can use that term, that would allow the avoidance of the 5 percent takeback of volume on the transfer of control of the licence. To use just one example, where a corporation is held by two equal partners, control of the corporation might effectively be changed through a series of transactions, but they would avoid the 5 percent takeback. On a 50-50 basis, you can see that if each partner sold to a separate new partner, you would have a change in control that potentially would not be captured by the wording of the existing section. So it's really pre-emptive, in the sense that we felt there was a weakness in the legislation as written.
There are other issues with respect to control. We had a transfer, for example, involving a corporation that held 30 percent of a licence but in fact had control because the other 30 percent was held by a series of minority shareholders. It was our opinion that even though one would assume, in reading the section, that you would have to have 50 percent control -- or 51 percent now -- before the 5 percent takeback occurred, in that type of situation our definition is one of control, and control can be exercised, as members may be aware, by holding far less than 50 percent of a corporation. So the amendment is pre-emptive; it prevents people from avoiding the 5 percent by a series of transactions, and it deals with the definition of control.
W. Hurd: So we are referring in this section specifically to the share of capital of the corporation -- in other words, the shares that the corporation has available for purchase or transfer. When we're defining control, the 1 percent reduction refers to a 50 percent ownership of the shares of the corporation, which by the very definition of a corporation is share capital, because that's essentially what it is.
I still can't follow the reasoning of the minister on this one, because as he points out, a reduction from 51 percent to 50 percent might not make any difference in terms of what we define as control. If 70 percent of the corporation is held by a series of minority shareholder interests, and the largest shareholder represents a 30 percent control -- and indeed that describes the situation in a number of major integrated companies in the province -- I'm just not sure exactly what would be meant by this. For example, if the company sought to transfer the licence to a subsidiary company, how would the change from 51 percent to 50 percent affect that? Again, I'm not getting the explanation of why the 1 percent change is so significant in this in terms of the need to amend the Forest Act.
Hon. D. Miller: Let me try to turn the argument around. Let me put it to you that if a licence is held jointly, fifty-fifty, by two separate companies, I suppose you might be able to argue that no one has control. In fact, it may be unusual, but that's probably accurate. If each one of those companies then separately sold their interest to another company, you would wind up having that licence held by two completely different companies. Control of the licence would have passed to two different companies and we would not have been able to take the 5 percent that's required under this section.
I hope the member understands my explanation. It's important fundamentally, and I would hope that the members would agree that this section of the Forest Act, among other things, requires the approval of the Minister of Forests to transfer a licence. I know some members have participated in the panel hearings that we have struck to carry out community consultation and to advise me with respect to those transfers, and feel strongly that the 5-percent takeback is desirable and contributes to the development of the value-added industry in the province. So I'm assuming that members fundamentally support the notion of the 5-percent takeback, and hopefully will accept my explanation of
[ Page 8677 ]
why these amendments are being brought forward -- to prevent anyone from trying to avoid it.
W. Hurd: I accept the minister's explanation that there would be a circumstance where two different companies would own a 50 percent interest in a third company which held the licence. I can understand that scenario, but the section we're dealing with specifically talks about control of a corporation. That implies a situation where one corporate entity would hold the licence. The share capital of the corporation could be held in a number of different hands. It could be a publicly traded company, for example. The minister described a bit of an anomaly when he talked about somebody beating the 5 percent takeaway by virtue of owning equal shares in the company. To the knowledge of the minister, has the current 51 percent requirement been used to defeat the purpose of the 5 percent takeaway in the event of a licence transfer? Or is this just closing a loophole that has not been previously utilized to avoid the reduction in cut?
Hon. D. Miller: I'll start by reading the definition of control in the act: "...'control of a corporation' means beneficial ownership of more than 50 percent of its issued capital...." I'll leave it at that. I repeat that the 5 percent takeback, having been brought in in 1987, is something that is deemed to be of value in this province and that contributes to the development of the value-added portion of the forest sector. I'd even go beyond that and note that the report of the select standing committee recommends we take even more. So I'm assuming members agree with the fundamental principles behind that and would therefore support our efforts through the amendment to prevent corporations from avoiding that in the future.
I think the argument I've used of fifty-fifty is a valid argument. It's been my experience that if there are loopholes then people generally find them and use them. Under the current wording of the act it's possible for more than one corporation to jointly construct a corporation between them on a fifty-fifty basis to hold the licence. Because of the fifty-fifty structure, they could potentially avoid being caught by the 5 percent takeback. The amendment is pre-emptive in that it prevents that from happening. The simple change is to deem that 50 percent beneficial ownership of the voting shares will constitute control. Not being a lawyer I'll leave it for those who know how to write this stuff to do it. It's fairly straightforward, really, even though it may sound complex. I think I've offered the best explanation I can as to why we're doing this.
R. Neufeld: The question was: has it happened since the advent of the 5 percent takeback in '87 or '88? Secondly, hypothetically, if you had a company that was fifty-fifty and one partner wanted for some reason to sell out his 50 percent, there would be a 5 percent takeback. Now that's still one company. All that has happened is that Joe has changed to whoever. It's just the owners who have changed. Conceivably, shortly after that the person who owns the other 50 percent may for some reason want to sell out also. So he does. It's the same company and the same timber supply area. I'm not disputing the 5 percent takeback, but the 50 percent sold the second time could lose a further 5 percent. You could conceivably have that company lose 10 percent of its timber supply in the same way you explained it the other way around. Maybe the minister could explain that a little bit.
Hon. D. Miller: Theoretically, I'd have to agree with you. But I repeat: given the current construction of the legislation and the definition of 51 percent as the controlling interest, where we have a licence that's held jointly by two companies, each with 50 percent, would you want them to be able to avoid the capture of the 5 percent? Would you want them each to sell separately to another party and avoid the 5 percent? I would suggest not. In the scenario you describe, if that transaction resulted in the loss of 5 percent because of the change, then I think that that's perfectly legitimate. People buy and sell licences. I should qualify that somewhat. People buy the operations and, once I'm satisfied that residual value is not being transferred, the licences are transferred at my approval. They buy them because they're good investments; people make money harvesting and processing the resources of the province. If in their opinion the purchase is a good buy and they think they're going to make money at it, then they'll go ahead and do it. They'll know up front that 5 percent of the volume going back to the Crown is a requirement.
[7:45]
I must say that in those situations we've been dealing with currently -- there have been some licence transfers over the last year and a half -- it has not deterred companies in the least from acquiring licences from other companies and doing quite well. One recent transaction in the Kelowna area was with Riverside acquiring Fletcher's licences. I understand that Riverside is doing very well, having made the move to acquire that licence. The Crown got 5 percent of the volume back. We now have in place a British Columbia company that is a little closer to the people in the region. By all accounts, it is doing a good job and flourishing economically. I don't really see it as a deterrent, hon. member. If the hypothetical scenario that you describe were to take place, I'm sure.... People go into these things with their eyes open.
R. Neufeld: The minister still avoided the question of whether it has ever taken place. I guess it has not taken place. We're changing a bill based on what could maybe happen.
With the indulgence of the Chair, I have an amendment to the section. But as I understand it we can't amend this, because it would change the whole intent. The amendment I have comes under section 4, which is where we've placed it in the bill. I don't think it's right for me to bring that amendment forward here. Could the Chair or the Clerk advise what we should do?
The Chair: Has the member submitted the amendment to the Clerk? I would also advise that if it is
[ Page 8678 ]
for section 4, it would be customary to move it under section 4. I think that is where we should deal with it.
W. Hurd: One further point on this. I certainly hope that the ministry has a handle on the corporate entities that might be affected by this change. Clearly, many partnerships or business arrangements turn into corporations in which two individuals each hold 50 percent of the common stock in the company. That's not an abnormal corporate arrangement. I would hope, in the event that people enter into those corporate arrangements in good faith, that the scenario outlined by the member for Peace River North is clearly identified as a potential risk. They could be eligible for a 10 percent takeaway, unless they structure the company so that one partner has 51 percent and the other 49 percent, or something along those lines. Fifty percent of the common share capital of a corporation or a company is not an abnormal way to do business. I just point that out under section 1.
Section 1 approved.
On section 2.
W. Hurd: Under section 2, I just want to get some clarification on this particular section, which we have interpreted as allowing the minister to transfer annual allowable cut from one timber supply area to an adjacent one in the event that such situations as study areas might reduce the annual allowable cut in one timber supply area. Could the minister just clarify that that's in fact the intention of section 2, sections 18.1(1) and (2).
Hon. D. Miller: The section simply allows the transfer of harvesting rights to an adjacent TSA. There have been cases where licences have ended up straddling more than one timber supply area. For ease of administration it's normally preferable to have the licence administered by one district as opposed to two districts. This allows the transfer of the harvesting rights associated with a timber sale or forest licence from one TSA to an adjacent TSA if the boundary between the affected TSAs had been changed to accommodate the transfer -- in other words, to delineate the licence -- and if the adjacent timber supply area is enlarged sufficiently to support the licence and the licensee consents to the transfer. So it really is, in all aspects, an administrative procedure.
W. Hurd: Just one further point then. So we're not dealing with a new licence that the minister would carve out of an adjacent TSA; we're dealing with existing licences that might be straddling two TSAs in the province. Or is this in fact giving the minister the ability to recommend that a new licence be created that would cross the boundaries from one TSA into another? The reason I raise that point is that the chief forester, as the minister well knows, has currently embarked upon an inventory review of all timber supply areas in the province. Obviously the fact that a new licence might be created across the boundaries would make it much more difficult for the chief forester to undertake that orderly review. So I guess I was seeking assurance from the minister that we're dealing strictly with existing licences and not with new ones that he might create.
Hon. D. Miller: It's not my view that we are dealing with new licences, given the requirement of the consent of the licensee to the change, although I would not rule out that in the event of some change it may be that a new licence might be issued. But essentially no, we're not dealing with new licences; we're dealing with existing licences. And if you read section 2, section 18.1(1)(a), for example, it says, "direct that the right to harvest timber under a timber sale licence," and further on, under (2)(c), "the holder of the licence consents." So we are dealing with existing licences, but it may be -- and I can't think of a scenario -- that in carrying out the intent of the section a new licence may be issued. But it would simply be a reflection of the existing licence.
W. Hurd: A question under section 2, section 18.2. The opposition has noted that this adjustment of a forest licence does not require consent from the licensee. Could the minister just clarify whether or not section 18.2 requires the consent of the licensee?
Hon. D. Miller: Yes, it does. There are several requirements set out in the section: the consent of the licensee, the requirement that the TSA be large enough to accommodate the requirements of the license and that the boundaries of the timber supply area have been changed under the act.
Section 2 approved.
On section 3.
W. Hurd: I'd welcome an explanation under section 3, which broadens the scope of the existing section of the Forest Act, according to the explanation, and "empowers the minister to cancel agreements under that Act if certain types of transactions take place without the minister's prior written consent." Could the minister advise the committee what types of transactions wouldn't require the minister's consent under this section?
Hon. D. Miller: I want to clarify my last answer. I was looking at section 2, section 18.1(2), as opposed to 18.2, and I apologize to the member for that.
Under 18.2 there is not a requirement of consent; however, the terms and conditions of a new licence associated with a division must be as close as possible to those of the original licence, and the licensees affected by this section must receive an opportunity to be heard before a new licence or licences are issued, if there are changes. So while it does not require the consent, it does have a number of requirements with respect to giving the licensee the opportunity to be heard and with respect to the licence being as close as possible to the original licence. But absolutely, in the final analysis, it does not require consent.
[ Page 8679 ]
If that explanation is satisfactory, perhaps the member could restate his previous question.
W. Hurd: I was seeking clarification under section 3, and in particular the explanation provided for section 3, describing the section as broadening "the scope of section 50(1) of the Forest Act which empowers the minister to cancel agreements under that Act if certain types of transactions take place without the minister's prior...consent." I would welcome an explanation of what types of transactions might occur that wouldn't require the minister's written consent -- basically an explanation of the descriptive section of section 3 under the act.
Hon. D. Miller: Well, the section really empowers the minister to cancel agreements under the act if certain transactions take place without the minister's prior written consent. The amendments broaden the scope of the section to ensure that transfer conditions cannot be circumvented through transferring control through a series of transactions, or transferring 50 percent rather than 51 percent of the issued capital of a corporation.
W. Hurd: Obviously this amendment will have the effect of altering corporate operations again. I guess what we're dealing with here are existing loopholes with respect to corporate transfers, particularly with respect to family members or to control held by a deceased person, for example. Is that the type of transfer we're dealing with here? Or would this be a situation where control of a company might pass into another's hands without the minister being apprised of it? Is that the type of violation we're dealing with here?
Hon. D. Miller: I think the two subsections should be separated. Subsection (a) deals with broadening the scope to give power to the minister to cancel agreements under the act if certain types of transactions take place. I've described the two: the transfer of control through a series of transactions, or the transfer of 50 percent rather than 51 percent of the issued capital of the corporation. Subsection (b) deals with the issue of a beneficial transfer, where if the holder of a licence dies and that licence as part of the estate is transferred to the heir, then the 5 percent is not imposed.
Section 3 approved.
On section 4.
W. Hurd: Section 4 allows for a temporary AAC reduction with the consent of the licence holder. But I guess the relationship of this amendment to a tree farm licence would seem to the opposition to have the potential for some controversy, given the fact that under the five-year renewable term of a TFL there's a requirement for a level of harvest over the five-year period. Maybe the minister could just advise what the terms of reference might be for this type of temporary AAC reduction. Would it have the effect of allowing the tree farm licence holder, for example, to reduce the cut off the tree farm and still meet the requirements of the five-year plan that was submitted?
Hon. D. Miller: No. The requirements of cut control are maintained, regardless of anything that may happen with respect to this section. The situation that's been described to me occurred in the Prince George area in 1991, where several of the licensees in the Prince George region voluntarily offered up part of their harvesting rights for a two-year period. That timber was ultimately acquired by a native group near Fort St. James.
[8:00]
The Forest Act currently makes no provision for such voluntary reductions; consequently, in that particular case the licensees were still charged annual rent on the full harvesting rights under the licence. So really, the act has been silent with respect to the situation where, for whatever reason, the licensee voluntarily gives up the right to harvest a certain portion of their licence, which is subsequently allocated to someone else. This change will allow the exemption of the annual rent on that portion. It also allows the return of that portion to the licensee -- in the case of the Prince George situation -- when the two-year period expired.
R. Neufeld: If the reduction, with the consent of the licensee, is done because of changing the AAC, would there not have to be something to take care of...? For instance, if a license holder loses 20 percent of his tree farm licence because the province wants to create a park or whatever, then should it not go along with it that that licensee should not have to live up to the cut requirements the licensee had before? It wouldn't make sense to me -- if you are going to reduce the size of the licensee's licence -- that you would still maintain that high level of cut. I think that's probably the issue.
Hon. D. Miller: I am advised that the licensee would still retain responsibility for cut control. Let's take the unit as a whole. A tree farm licence is perhaps the best example, because it's an area with a certain approved harvest rate. Even though the licensee may voluntarily assign a portion of that harvest right to some other party, the licensee would retain the responsibility for cut control over the whole licence. One would presume that licensees entering into a voluntary arrangement would take whatever measures are necessary to ensure that they would be within their cut control provisions.
R. Neufeld: Taken further, what happens in the case of the province taking 20 percent back? You certainly don't want the licensee cutting to the level that he was authorized to before, if he hypothetically lost 20 percent of his licence. And I think that's the basic issue.
Hon. D. Miller: I want to clarify that we are not talking about a situation where an area is taken out as a study area or declared to be a park. We previously dealt
[ Page 8680 ]
with a section that authorized the chief forester -- if an area was designated by cabinet -- to move to reduce the harvest rate in recognition that areas had been deleted or assigned a special management status that resulted in a lower harvest rate. That's not the case in this section. We are talking about a situation where a licensee voluntarily may assign a portion of their harvesting rights to another party. When that does take place -- and it would, of course, be up to the licensee whether to do it or not; we're not imposing the obligation -- and the licensee agrees to do it, the section provides that we would not charge the licensee rent on that portion and that the portion would be returned to the licensee at the end of that period. So it doesn't really deal with the issues I think you're trying to get at.
R. Neufeld: I'll take those words as comfort, that it does not apply to the situation I talked about.
At this time maybe it would be prudent to introduce the amendment to section 1, which I spoke about earlier. But because it changes the intent of the bill, we'll do it under section 4.
It is hereby amended, by the addition of the following section to the Forest Act -- and we'll call it section 50.1(2): "Reductions without compensation...."
The Chair: Order, hon. member. I have to advise you that the correct time to introduce this amendment would be after we have approved section 4, and it would be done as section 4.1.
Section 4 approved.
R. Neufeld: Hon. Chair, there is much better decorum in the House tonight than the last time we tried to deal with these forestry bills. I must admit that they're actually taking a little longer than I thought they would. But can you imagine how long we would have been here if it had been the other night?
The Chair: It's the spirit of Bastille Day; we don't want to lose our heads.
R. Neufeld: I will move the amendment I spoke about before, adding section 4.1: "Reductions, without compensation, in the annual allowable cut under all forms of timber tenure and timber harvesting rights on the grounds of change in corporate control shall not exceed 5 percent in any five-year period with respect to the same corporation."
On the amendment.
R. Neufeld: In section 1 we were talking about what could hypothetically happen either way. I think the minister made some excellent points regarding how he felt about what could happen, but the opposition has proven that it could hypothetically happen in the opposite way and affect companies to a fair degree. We arbitrarily used the five-year period, because from what we could discern, not a lot of transactions took place. As a caucus, we don't have any problem with the 5 percent takeback, but we do have a problem where it could double for some licensees. I don't think the licensees are that concerned about the 5 percent, although they are concerned to a certain extent. But they certainly would be concerned if it happened to be 10 percent. That's the reason for the amendment. I hope that the minister can see his way clear to accepting it.
Hon. D. Miller: I'll speak against the amendment. I don't think we should impose this kind of restriction. If corporations willingly want to be purchased or to put themselves up for sale and try to get my approval to transfer a licence because they think it's in their interest to do that, and someone is prepared to buy the licence with the understanding that the transfer requires a 5 percent takeback by the Crown, then I don't think anything more needs to be done. The notion of putting some sort of time frame around how often the Crown can recapture the 5 percent is, I think, not required. It's not as though you're protecting corporations from anything, because they make these decisions quite willingly. Finally, I would simply point out that under the powers conferred on the minister by the act, any transfer requires my consent, and if it were not in the interest of the Crown to allow the transfer, then I simply wouldn't allow it. I'm sure that any minister standing here would say the same thing.
So you can see, hon. member, that the intent of your amendment could easily be thwarted simply by using another section of the act. In that sense it would be rendered useless and meaningless; therefore I fail to see why it should be considered.
R. Neufeld: I'm not trying to make it easy for a corporation to get out of the 5 percent takeback. I make that very clear. That's not my intent at all. My intent is to be able to look after those hypothetical situations of the fifty-fifty that I related to the minister, where you could quite easily end up arbitrarily taking 10 percent out of the licensee. Also, I don't think something like this should only happen every five years. Let's say that a company held by one shareholder wants to sell out, and they sell that company five times in five years; if they go into that knowing they're going to lose 5 percent each time they sell it, so be it. That's not what I'm trying to set up here. What I'm trying to do is maybe look after the hypothetical situation of a fifty-fifty split.
If the minister would say that he would take that into consideration when applications are made to him for those licence transfers and not take advantage of that kind of hypothetical situation, it might give some comfort to companies out there that may find themselves in this situation. Maybe the minister would like to respond to that.
Hon. D. Miller: I don't really wish to dismiss the arguments that the member has made. I do maintain that given other sections of the Forest Act, this proposal could be rendered quite meaningless. I'm also concerned, because it's my long-term view that forest land will continue to appreciate in value. Given the supply issues that we face in North America and internationally, I don't think there's any question that the value of forest land and the value of holding a forest
[ Page 8681 ]
licence and being in that business will appreciate considerably. To the extent that it might attract capital and might be attractive for current licence holders to dispose of their assets and get that kind of turnover going, it makes more and more sense for the Crown to try to recapture, through these transactions, that 5 percent.
[8:15]
Over time, I think we will find that the more wood we have available to offer competitively both for the remuneration it brings to the Crown and for the opportunities it provides for value-added manufacturing, the more it will prove to be a benefit not just for the government in terms of revenue but for the province and really for citizens in terms of employment and the like. Given some of the expressions contained in the all-party standing committee report, which seemed to indicate that there was a desire to capture more timber from the major licences and to offer that on the value-added side, it's somewhat at odds that we would see an amendment that proposes to restrict opportunities for recapturing the 5 percent.
I really must maintain my position that I'm quite prepared to consider this if events should transpire that you and others think may cause concern. But given the current situation.... I just asked my staff if they could think of a situation where a licence was transferred more than once in a five-year period, and they couldn't think of any. I really don't think that the amendment is necessary. Clearly, other sections of the act could be brought into play to simply override it.
I recognize the member's concern. I don't think it's justified. I think that people go into the marketplace with their eyes wide open, and we should retain the elements that are in the act now.
W. Hurd: Just speaking to the amendment, I'm delighted that the minister made mention of how lucrative these 5 percent takeaways are for the Crown. I well recall a debate in the estimates for the Ministry of Forests in which the Minister of Finance was a surprise visitor to our committee and expressed his appreciation for the amount of revenue generated by the small business forest enterprise program. It's interesting to note that that 5 percent takeaway finds its way into a better and higher use as far as the Minister of Finance is concerned. Indeed, it represents a major revenue generator to the Crown. But it's also interesting to speculate on how much of that 5 percent takeaway actually ends up back in the hands of the original licensee in terms of a higher-priced timber purchase. Certainly as a member of the select standing committee, we found that the 5 percent takeaway rarely represented a takeaway at all, and that while it did foster the growth of a small business, it was amazing how many times that timber did find its way back into the mills from which it was originally taken. I just throw that out because I just know that the Minister of Finance would be reluctant to see an end to the 5 percent takeaway as a revenue source in this province.
Hon. D. Miller: I will simply respond by saying that they're paying a heck of a lot more for it when they finally do get it back. I would point out, though, that there are really two parts to that. Some of that wood may go to section 16, where it's bid competitively -- and for some very high prices these days. Also, parts of it go to section 16.1, which retains administered prices but does provide opportunities for value-added manufacturers to either utilize the timber or trade for their requirements. Over the long term, that's the value that we're looking for in the province -- the jobs that can be created in the value-added sector.
Amendment negatived.
On section 5.
Hon. D. Miller: I move the amendment standing in my name on the order paper.
[SECTION 5, in the proposed section 54(2) by deleting "exempt" and substituting "exempted".]
On the amendment.
W. Hurd: Perhaps the minister would take the opportunity to explain the amendment to the committee.
Hon. D. Miller: I draw your attention to the wording of the section. If you follow this section, you will see that the term "exempted licence" is used. It means a licence described in subsection (3). Further down in subsection (2), you see that the words "exempt licences" are used. This really is for consistency and to use the same term as in the definition section.
Amendment approved.
On section 5 as amended.
W. Hurd: This is a section that the opposition had expressed some concern about in second reading. We felt that this section enabled the minister to reduce the AAC on a sort of graduated basis, and that some licences then might in fact be exempt from the effects of an AAC reduction. We certainly welcome clarification on how the AAC reductions will be dealt with across the spectrum of licences that might exist in a timber supply area; whether or not a heavier burden would fall on the major licensees in each timber supply area; and which licences, in the minister's opinion, would be exempt from any reduction.
Hon. D. Miller: The exemptions will be contained in regulation. Our current thinking is that licences below 10,000 cubic metres would be exempt, and that those above that would bear the proportionate reduction. Currently the act requires all licences, regardless of size, to be proportionately reduced. The intent of the section is to simply exempt those licences under a certain volume, which will be prescribed in regulation. As I said, our current thinking is that 10,000 cubic metres is to be exempt from the proportionate reduction -- in other words, it will remain the same. That volume would not be impacted, and the volume
[ Page 8682 ]
that needs to be reduced would be spread across all those licences that were greater than 10,000 cubic metres.
That is a fairly new concern. Up until fairly recently, the history of timber supply areas was one of expanding the annual allowable harvest rate and providing more opportunities -- if not new licences, then increased volumes under existing licences. Clearly the timber supply review, which is long overdue, has resulted in some considerable downsizing. The feeling that has been conveyed to me by many members is that those small licensees really should be exempt. To continue to reduce them means that you could reduce them to a situation where they were simply not economically viable. In other words, you don't take away their wood, but you reduce them to a size, given some of the operating constraints that they have to work under, where the economics of running a licence would simply not be there, and so you would render them incapable of operating.
I think there's general support. I don't know if the member is aware that the member for Powell River-Sunshine Coast had written to me on the situation that occurred in his constituency. A licensee on Texada Island, within the TSA that was impacted by the last reduction in that timber supply area, was saying that there should be some provision to deal with these small licence holders. I think we've really responded to what we've heard from various MLAs and from licensees around the province.
W. Hurd: Can the minister then explain the reductions which would occur for licensees with a cut beyond the 10,000 cubic metre threshold? Would we see a situation where, basically, the more cut you had, the more you would lose? Is that the way the AAC reduction is going to be dealt with?
Hon. D. Miller: No, it would be proportionate. As it is now it's proportionate, but we would simply exempt those below a certain volume level, and the proportionate reduction would apply to all those above a certain level.
W. Hurd: I can see some potential problems in this section, given that most licences call for cuts much beyond the 10,000-metre level. There might be a situation where some licensees might not be much above that level. My reading of the minister's remarks is that they would take as big a hit as the major licensees. Is that on a proportionate basis? If the AAC were reduced by 20 or 30 percent, which has been the norm in this province, are we dealing with a situation where we'd face a 20 percent across-the-board reduction for an integrated company that might hold a major licence, as well as for a smaller firm? Maybe we can get a definition of proportionate reduction.
Hon. D. Miller: Proportionate is as it suggests. I'll use the Strathcona as an example, because that's an area in which that just took place. There were a multitude of licences of various sizes in that timber supply area. We reduced the annual harvest rate in the timber supply area by 11 percent. That means that every licence holder in the timber supply area had their harvesting rights reduced by 11 percent. If we stick with that 11 percent.... I'll use 10,000 as the benchmark: if you had 11,000, you would be impacted. I don't care where you are, when you start to draw demarcation lines, people can always make a case for somebody who's got one cubic metre more and say it's unfair; they should be saved too. But unfortunately, when you draw demarcation lines, those above and those below are separated. Hypothetically, let's say we had to reduce a timber supply area that had two licences in it. One licence was 10,000 cubic metres and one licence was 100,000 cubic metres. In that particular case, the 100,000-cubic-metre licence would take an 11 percent hit; they'd lose 11,000 metres. The person with 10,000 would be exempt. So it's a percentage applied to each individual licence.
W. Hurd: Obviously the ministry would have done some research into this threshold of 10,000 cubic metres. What is the rationale for setting a 10,000-cubic-metre level? Does that represent a viable cut for a small business enterprise in the province? What is the rationale for that particular threshold?
Hon. D. Miller: I have suggested 10,000, and that's a figure that the ministry is looking at; but we have not described a threshold. We will subsequently do that, and that number will be in the regulation.
[8:30]
W. Hurd: So essentially the only change with this amendment is the ability of the ministry to exempt a small licence holder -- however that may be defined in the future -- from taking a proportionate reduction of cut in the event of an AAC reduction. Is that basically the intent of this amendment?
Hon. D. Miller: Yes, and short-term licences as well. Perhaps I could use one anecdotal description. I can't recall the licensee, but it was someone up the coast -- a pretty rugged area of operation; a pretty small volume. Their pitch -- and I accepted it because it made sense -- was: "If you squeeze me down to a certain level, given the terrain I'm operating in, given the conditions I have to work in -- extremely bad weather, my cost of transportation, all of those things -- it simply doesn't pay. It would be uneconomical to try to work the licence." I think it's reasonable to suggest that we recognize the reality of that and effectively shield those people from those reductions. We're talking about a pretty small volume. Quite frankly, I don't think we're talking about that many licensees.
L. Fox: I have a few questions with respect to section 5, section 54(4). I'm thinking, of course, of the Prince George TSA. It has three forest districts within it, three separate economies, and three separate communities. Given the concern there about the overmilling capacity to sustain even today's AAC, never mind a reduction that we might see in the Prince George TSA's AAC, obviously a reduction to those
[ Page 8683 ]
licensees would be extremely harmful to the economies of Vanderhoof and Fort St. James, when in fact the major problem is in the Prince George forest district. It's because of the complexity of that TSA that I have some real concerns with this section and how it would apply to a reduction in the AACs and affect the economies of both Fort St. James and Vanderhoof with that even reduction. Perhaps the minister would comment on that.
Hon. D. Miller: The member describes a problem that is very germane to the Strathcona situation, where one licensee argued: "Look, we do more than the others. We process wood in the region, and we contribute more to the economy of the region. Therefore we should be shielded from the reduction as well." My response was that under the act, I'm required -- and will be, with the exception we're making here today in this amendment -- to reduce proportionately.
It is an interesting question, hon. member. I'm open for discussion on that. I'd be prepared to look at legislation currently, but you must realize what that might open up: talk about a can of worms. How would one make those decisions? What criteria would be used to say to one licensee, "We will exempt you," or "We will only reduce you by a slight percentage," and to say to another licensee: "You are going to take a bigger hit"? You can understand the comfort that is afforded a Minister of Forests by just a straight proportionate reduction. Otherwise, you people would be up here asking me questions daily: "Why did you do this to one company and not the other? Did you favour this group over that group?" You can realize the administrative problems that might arise. Yet I understand what the member is saying: where a licensee operates in an area and contributes to the economy through milling, or where you find a difference in performance -- although they are all required to meet the standards that we establish -- and one licensee is clearly a superior operator and goes above and beyond the requirements of the Forest Act, under our system there is no way we can offer any reward for that. I appreciate the member's question, and the dilemma that creates. I don't have an answer to it, quite frankly. We may want to consider it over time to see what other criteria we might want to introduce with respect to this, but currently we don't have any.
L. Fox: I think the minister has admitted that the application of this legislation in the Prince George TSA is indeed not the answer.
Interjection.
L. Fox: I suppose I may have taken a little liberty with that statement. I might suggest that perhaps the minister could address the issue very easily by structuring.... I believe that there are only a couple of TSAs in the province with similar problems to that one. It doesn't reflect one economy or one particular area; in fact, it encompasses three economies and three separate areas. So if the minister would look at splitting that TSA into two or three TSAs, that would address the concerns I have on this clause.
It's been promised by this government to the communities of Vanderhoof and Fort St. James; the previous government promised the communities of Vanderhoof and Fort St. James that there was going to be a review of the Prince George TSA. We've been promised that in that region since 1988. The review year was supposed to be 1991. Here we are in 1993 and that TSA review has not been concluded, although I understand that there has been some initiative towards it. I would suggest that if the minister can conclude that review of the Prince George TSA, with the idea of splitting it into two or three TSAs, that would address the circumstance in this clause.
Hon. D. Miller: I believe that we have moved off the specific intent of the amendment. I fully appreciate what the member is saying with respect to that area, and certainly one of the considerations we can look at is the redrawing of TSA boundaries. I'd suggest that that too has its problems, in that we might descend into ever smaller timber supply areas. I think that brings problems as well with respect to administration and the like. Where it's appropriate, timber supply area boundary changes can be contemplated. The member is also aware that there is no strict prohibition against transferring wood across boundaries, and there won't be. But I understand what he is saying.
Clearly, where it's appropriate we're prepared to look at those kinds of things, recognizing that, given the current climate in this province, there are no longer any easy answers to these problems. It is very difficult, with declining harvest rates and mills that are seeing less and less wood. There's no single answer. We are all looking for ways that we can get increased value, do things in a more efficient way, make better use of the wood and generally try to work with companies and with communities. I'm always happy to work with MLAs to see if I can look at specific solutions to problems that arise around the province.
Having said that, I do think that we have strayed somewhat from the thrust of the amendment, which is really to protect the very small licensees.
L. Fox: I don't believe that we have strayed from section 54(4), because we're dealing with the reduction of an AAC within a TSA. I think one has to consider the impact on small communities like Vanderhoof and Fort St. James, and what that impact will be on the economies of those single-industry communities. When we see opportunities for some kind of protection for those industries, which basically are the bread and butter of those communities, one has to be concerned. When you apply this clause generally throughout the Prince George TSA, then the economies of both Vanderhoof and Fort St. James are going to be threatened with the reduction in cut, if it's applied evenly, because they don't have commercial or industrial sectors, as Prince George or perhaps other communities do.
In this case, when we're talking about that TSA.... It's those four, actually, because Fraser Lake is included
[ Page 8684 ]
in that as well, which is also very dependent on the sawmill located in that community. I'm extremely concerned about this section and its application and how it's going to affect the economy of those three small communities. I urge the minister to consider, prior to implementation of this act, how that is going to be applied on TSAs such as Prince George. As I understand it, it is an anomaly in the process in British Columbia. It's one of the largest TSAs. In many aspects, it has a different significance from all of the other TSAs. I ask the minister to give serious consideration before implementing any broad cuts to smaller TSAs, such as this section suggests. That would lessen the hurt on the economies of smaller communities.
Hon. D. Miller: I would point out that had we not been bringing in an amendment to the Forest Act to deal with the very small-volume licences, the current Forest Act would apply. This is really not a material change in that it retains the proportionate reduction feature that is currently in the Forest Act.
I'm aware of some of the history. I'm also aware that there are differences of feeling, particularly if you go back and view the issue of the Takla-Sustut licence and the very strong feeling emanating from those in the western portion of the north that that should have been assigned to the timber supply areas on the western side -- and in fact was in the eastern side. Believe me, I deal with these issues on a daily basis. I get out in the province; I go to the small communities. I talk to the licensees, the people in the communities and the workers, and I'm painfully aware of the very difficult problems we're facing. We are struggling to find solutions. When I'm out there, I say very candidly that there are no easy solutions. It requires people to work together to find those answers in a variety of places.
I repeat my offer, hon. member. Any time that we can arrange it, I'm prepared to sit down with you, your licensees and people in your constituency to see what those solutions may be. I appreciate your remarks. I don't think that this is the appropriate time to get into extensive debate on this subject, and I think we should move on with respect to this legislation.
L. Fox: All I wanted to do is alert the minister to those concerns. I didn't expect to solve the problems this evening, but I did want to register my concern on that particular clause.
[8:45]
I have one more point for clarification. In the Prince George TSA, we have an opportunity wood licence; the minister will be aware of it. If my memory serves me correctly, it's 200,000 cubic metres of wood per year. It's a renewable ten-year licence. What category does that fall into in terms of the small licence holder?
Hon. D. Miller: I think we are now widely off the topic. The member talks about a specific licence in a specific timber supply area. He refers to an opportunity licence that's renewable; I'm not aware that we have any opportunity licences that are renewable. I'd be happy to continue the discussion outside of debate on this bill, but I really think we've gone quite a ways off this section, Mr. Chairman.
Section 5 as amended approved.
On section 6.
W. Hurd: I just have one point for clarification on section 6. The minister talked earlier about the need for the proportionate reduction and the fact that the minister shouldn't have the right to adjust it. But I note in the explanatory section to section 6 that penalties are proposed for excess harvesting under section 55.1 of the existing act. This amendment would broaden the power of the minister or a person authorized by the minister to grant full or partial relief from the consequences of excess harvesting. Could the minister describe a scenario whereby he would want to exempt anyone from the penalty under the act?
Hon. D. Miller: Yes, I'll use this example. It tends to be fairly complicated. You should see the graphs my staff have drawn me. Because of current cut control provisions which allow a licensee to harvest plus or minus 50 percent in any one year of a five-year cut control period, but he or she must be within plus or minus 10 percent at the end of the five-year period, it's conceivable that a licensee could harvest in excess of 100 percent three years running.
Because market conditions are good, the licensee takes, say, 150 percent in each of those three years, with the full intention of coming in with a reduced cut in the remaining two years to achieve the cut control requirements. But halfway through that period, as a result of perhaps a study area or whatever, we reduce the annual allowable harvest rate, and all of a sudden that licensee ends up being in an overcut position, with no opportunity to balance the overcut over the remaining term of the licence. In those kinds of circumstances it's only natural that we exempt the licensee from the overcut penalties that are contained in the Forest Act.
W. Hurd: I won't send a copy of Hansard to Joe Foy if the minister doesn't.
I really feel I have to continue to pursue a line of questioning on that, because clearly the inventory review in the province is likely to result in AAC reductions throughout the province. I can anticipate that there might be a flood of requests for relief from licensees who are going to be seriously impacted not only on those AAC reductions by the chief forester but also in the study areas that we alluded to earlier in this debate. I just wonder whether the minister is anticipating that this amendment will result in quite an additional workload for the ministry in dealing with these kinds of requests for exemptions.
Hon. D. Miller: That may or may not be. I think it would be too difficult to try and assemble the statistics on every licence to look at where they may be with respect to the cut control or what the implications are of the current market, for example.
[ Page 8685 ]
It's interesting to note that even though the annual approved harvest rate in British Columbia has been in the 72 million cubic metre range for a considerable period of time -- really, almost a decade -- the average harvest for the last 11 or 12 years has been in the 65 to 66 million cubic metre range. That's off Crown land, so perhaps that's simply a reflection of the fact that we've not been in that buoyant a time with respect to the lumber markets. But over the last dozen years, broadly stated, we've not harvested the full amount allocated by licence, so I don't suspect it's a real problem.
Currently it's very clear, given the timber supply review and the establishment of new annual allowable harvest rates, that there is a requirement that we provide the protection afforded in section 6, which applies to various sections of the Forest Act: 56.01; 53.1; 54, which is the proportionate reduction; and 170, which is the AAC and study area issue. I sense that the members support what is being put forward here, so I'll leave it at that.
W. Hurd: I understand the rationale for the amendment of the act. But I can see our future Ministers of Forests, once the timber supply review is completed, being in a situation where they might have to deal with a flood of these kinds of exemptions from the cut control provisions and the penalties that are contained therein. I am sure there would be a bevy of questions in question period about why ministers dealt with one licensee in one way and not the other. I see the potential under this amendment for the minister and the ministry staff to receive numerous requests for some sort of relief when companies find themselves in an AAC reduction such that the amount of timber they have already harvested would, as the minister has pointed out, place them in an overcut position under the terms of their cut control.
Under those circumstances it would only be natural for the licensee to come forward and seek redress from the minister. I assume this amendment gives the minister the ability to supply that redress around the cabinet table or with the Cabinet Committee on Environment and Land Use, which we are told under the Cabinet Appeal Act was not a desirable option for the government to be in. I just point that out as being a provision of the amendment which I anticipate will be used or requested quite frequently in the next few years.
Hon. D. Miller: All I can say is I'm up to the challenge.
Sections 6 and 7 approved.
Title approved.
Hon. D. Miller: I move that the committee rise and report the bill complete with amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 69, Forest Amendment Act (No. 3), 1993, reported complete with amendment.
The Speaker: When shall the bill be read a third time?
Hon. D. Miller: With leave now, hon. Speaker.
Leave granted.
Bill 69, Forest Amendment Act (No. 3), 1993, read a third time and passed.
Hon. C. Gabelmann: I call committee on Bill 48, Representation Agreement Act.
REPRESENTATION AGREEMENT ACT
The House in committee on Bill 48; F. Garden in the chair.
Section 1 approved.
On section 2.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 2,
(a) in the proposed paragraph (a) by deleting "people" and substituting "adults" and by adding "when" after "how,", and
(b) by deleting the proposed paragraph (b) and substituting the following:
(b) to avoid the need for the court to appoint someone to help adults make decisions, or someone to make decisions for adults, when they are incapable of making decisions independently.]
Amendment approved.
Section 2 as amended approved.
On section 3.
A. Warnke: For anyone who's interested in following this at committee stage, I want to suggest at the outset that the purpose of committee is to explore and essentially flesh out the clauses wherever possible and accordingly, of course, to supply the necessary amendments to clarify and improve the bills and so forth, as the Attorney General has done. As we mentioned at second reading, we believe this is a fairly fine community-driven set of bills, but through several questions we'll perhaps explore various sections of the bills before us this evening.
Section 3 of Bill 48 states that every adult is presumed to be capable of making a representation agreement and of making decisions about their own well-being and personal affairs and so forth until, of course, some sort of contrary situation is demonstrated. I would like to ask the Attorney General who will make the determination as to whether or not an individual is
[ Page 8686 ]
capable. It's in section 3(1) that the term "capable" is used. How is "capable" to be determined?
Hon. C. Gabelmann: Before I respond in a preliminary way to the member, I think most members know the two people who are with me, but for the record I would like to introduce Myrna Hall, public trustee for the province of British Columbia, and Gerritt Clements, whom members have seen before in another bill in the House. In fact, I think they've seen both people before in another bill. These two individuals have worked very hard over a long period of time to get this legislation to the stage it's at now, and they deserve the thanks of all British Columbians. I just wanted to acknowledge that.
I think the member knows that this section does not deal with having to determine whether or not someone is capable. Everybody is capable. That's a fundamental premise of this whole initiative. We are attempting to demonstrate a really important principle, which is that everybody is capable unless there can be demonstrated an incapability sufficient to require provisions of this legislation to take effect. Obviously, in one way or another all of us have degrees of incapability, but for the most part we are all capable. This section simply deals with that issue in principle and I think states the fundamental basis on which the legislation is grounded. It doesn't get into the other questions that the member is beginning to address, which I think we'll find throughout the course of the bill.
V. Anderson: I'd just like to follow up on the minister's comment. I'm particularly appreciative of the work that has gone into this bill by the community and all of the people who have been involved in it. I want to highlight subsection (2): "An adult's way ofcommunicating with others is not grounds for deciding that he or she is incapable of understanding anything referred to in subsection (1)." If I understand correctly, the onus is on the person concerned about the communication, not on the adult himself, to find a means of communicating with them in the language or manner in which that person best communicates. I think that's a very important principle, if I'm correct in that understanding.
[9:00]
Hon. C. Gabelmann: The member demonstrated very clearly during second reading that he had a full understanding and grasp of the principles and concepts behind this legislation, and he demonstrates that again with his interpretation of subsection (2).
C. Serwa: I just came in, and I heard the minister explain that the legislation assumes that every adult is capable. The concern that has been voiced to me is with regard to adults who are suffering serious mental illnesses. We discussed this in the briefing sessions. Nevertheless, there is a considerable amount of concern with the fact that there is no real reference made here with respect to the minister's presumption. If we don't recognize it, the end result could be somewhat tragic for the individual and his family. All of this legislation is somewhat interrelated. I understand that the new Mental Health Act will also form part and parcel of alleviating this type of concern. But I wanted to raise that issue under this section.
Hon. C. Gabelmann: First of all, the same presumption is made to begin with: that someone is capable unless someone else can demonstrate otherwise. But if an individual is mentally challenged, the agreement can always be challenged in court. That's the remedy someone will have if they feel that someone -- an adult, in this instance -- has entered into an agreement without the proper ability to enter into it.
Section 3 approved.
On section 4.
C. Serwa: How is the incapability going to be determined? I recognize that it is difficult to put that in the legislation, but how will we determine that state? It's not as if it's a clear line: one day it's black, and the next day it's white. Sometimes it alternates. But what is the method of determining that? What is the test?
Hon. C. Gabelmann: The best way of responding to that is to refer the member to later sections, in particular section 8. I apologize if I do not seem to answer questions directly, but in this kind of legislation, a lot of the questions are in fact answered more effectively in later sections. I think that section 4 is simply designed to make it clear that anyone is able to enter into a representation agreement unless, as a result of other sections of the act, the incapability of doing so is demonstrated. We're saying here that unless the other parts of the act have come into play and there has been a decision or judgment that the person is incapable, then all adults are capable of entering into an agreement. That's what this section is designed to do.
A. Warnke: The way I look at it -- and this is not a criticism of section 4, because it's so simply stated, I almost thought it was a tautology -- if you can't make the representation, then obviously you are incapable of doing so.
Hon. C. Gabelmann: One learns a lot about tautology when one sits in my job.
Section 4 approved.
On section 5.
A. Warnke: This section prevents an individual being named as a representative without that individual's knowledge. Under section 5(4), each representative must complete a certificate in the prescribed form. I would like that clarified a little bit. Does this ensure that the representative is informed that he or she is named as a representative?
Hon. C. Gabelmann: I think that in the act of signing the form, you would be informed. You wouldn't
[ Page 8687 ]
be able to sign the form unless you knew you were doing it -- unless I missed the question.
An Hon. Member: Another tautology.
Hon. C. Gabelmann: Another tautology. Mr. Chairman, may we end our tautologies for the evening?
The Chair: You can, if I knew what it meant.
Sections 5 and 6 approved.
On section 7.
A. Warnke: This section defines what provisions a standard representation agreement will include. For clarification, can a representation agreement include anything that an individual might consider, or must the agreement be within the parameters of the bill? For example, could an agreement stipulate that the representative may make changes to an individual's will if the agreement stipulates such?
Hon. C. Gabelmann: There are later sections which limit what can be in the agreement. One thing that cannot happen is the amendment of a will. That cannot be done by a representative.
A. Warnke: Section 7(3) indicates that the Lieutenant-Governor-in-Council may prescribe a form of representation agreement. When might these forms be available to the public?
Hon. C. Gabelmann: Frankly, we are some distance away from implementation of these rather complex provisions, including the forms that may be available. These will be standard forms. People can use the basic form and have it done for them by way of a standard agreement, but they can also use it as a basis from which to add or subtract -- should they wish to do that -- within the confines of the legislation. I can't give members a prediction as to when we are going to have forms ready. It will be some time.
C. Serwa: Under section 7, what prohibits a representative from making risky investment decisions? Are any parameters or guidelines contemplated for the types of investments that can be made? Even with the best of intentions, lay people who are not used to handling other individuals' financial transactions can run into any problems. Are there any sort of guidelines for their protection?
Hon. C. Gabelmann: Yes, in fact there are, and if the member would make reference to section 7(1)(b)(iv), at the top -- my pages aren't numbered, but the top of...
The Chair: Page 6.
Hon. C. Gabelmann: ...page 6. It reads: "the making, in the manner provided in the Trustee Act, of any investments that a trustee is authorized to make under that Act." So the provisions that apply under the Trustee Act would apply.
C. Serwa: I came into this just a few minutes late, and I notice that looking over the Attorney General's shoulder in the public gallery is Honor Ramsey Hill, a very charming lady whom I had the pleasure of meeting earlier this afternoon. She assured me she is not only looking over the Attorney General's shoulders, because she has been involved for a number of years with the project to review adult guardianship, she's also looking at the rest of us to make sure that we do a good job on these important pieces of legislation.
V. Anderson: I have questions just to clarify how this might work. In what way is a person authorized, for instance, to do the banking and the signing of cheques as a representative? What kind of form or agreement will one have to take to a bank to indicate this kind of feasibility?
Hon. C. Gabelmann: The actual form, the representation agreement form we had discussed a minute or so ago, would be the document that would be taken to the bank. It would act as the legal authority to the bank to complete all of the documentation that's required.
Section 7 approved.
On section 8.
A. Warnke: Once it is demonstrated that an individual is incapable, and under section 8(1)(b) is incapable of managing his or her health care, personal care, legal matters, financial matters and business assets, I would like a clarification as to how this may be done. Is this section saying that an individual may make a representation agreement, although the individual may not be incapable of making other decisions?
Hon. C. Gabelmann: This is what might be described as a lower test than does occur in existing legislation, so that individuals would be able to have their affairs looked after in some areas, but not others. If you are very capable of doing almost everything but you can't do your own financial affairs, for whatever reason, then you could have a representation agreement to do that particular component of your affairs, or whatever else you chose to do. That's what that section is designed to accomplish.
V. Anderson: I'm thinking of a particular case that I have experienced, where a person was partially capable, but not able to come to the point to make a decision to make a will, even to get around to the process. Is there a way that a representative can work to help that person to do that, and to get them to the lawyer? How far can a person go in that particular case? I'm quite aware that the individuals themselves have to do that, but how far can the representative go in trying to make that possible?
[ Page 8688 ]
Hon. C. Gabelmann: The representative can support, encourage and do all of those kinds of things to help, but can't actually enter into a will on behalf of the individual.
C. Serwa: Just for my clarification again, if the adult is incapable of making a contract.... Perhaps the explanation of that for me is that I can only assume that a person is incapable of making a contract if they're mentally challenged. I just don't understand. Who would draw up the agreement if the individual is incapable of making a contract?
Hon. C. Gabelmann: The test is set out in subsection (2) of section 8. The individual needs to understand that somebody else is in fact doing that for them, and have an understanding of what is happening. That's the test there.
[9:15]
Section 8 approved.
On section 9.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 9,
(a) in the proposed subsection (1)(d) by deleting "section 34(e)" and substituting "section 34(f)", and
(b) in the proposed subsection (1)(g) by deleting "maintain" and substituting "manage".]
Amendment approved.
On section 9 as amended.
V. Anderson: We would like a little explanation under (9)(1)(f): "make arrangements for the temporary care, education and financial support of the adult's minor children and any other persons who are cared for or supported by the adult." In this case, you're not only looking after that adult but also their dependents. I'm wondering if the minister would make some comment about how far the representative can go in undertaking the care of the minor children and the other dependents under this representation agreement.
Hon. C. Gabelmann: This is designed to take care of the time prior to a court order. The intent is to not do much more than simply look after the dependents pending the court decision.
Section 9 as amended approved.
Section 10 approved.
On section 11.
A. Warnke: A little earlier the member for Okanagan West correctly pointed out the anticipation of changes in the Mental Health Act. What I want to pursue here, for clarification, is the anticipation.... We cannot talk about hypothetical situations or proposed legislation; I understand that, hon. Chair. Given the express intent of pursuing changes in the Mental Health Act, I am wondering to what extent section 11 and the proposed changes are related. I am most anxious to seek clarification.
Hon. C. Gabelmann: I think all members know that we -- by that I mean our society -- have been unable to come to any consensus over the provisions of the Mental Health Act, and I should say that it's not surprising. There are very difficult issues to be determined in coming to those conclusions. In the meantime, at least, this section is to make it very clear that representatives have no authority if an adult has been involuntarily committed under the existing Mental Health Act.
G. Wilson: It's on that point I wanted some clarification of the provisions of this bill with respect to the lack of authorization for refusal to consent, despite 7(1) and 9(1). Is the minister saying that where there has been involuntary incarceration, notwithstanding whatever provisions may have been made, at that point the involuntary action taken for incarceration overrides any further legal agreement that there may be between the individual and whomever. Is that what the minister is saying?
Hon. C. Gabelmann: Yes.
G. Wilson: To that extent, then, if there is a debilitating disease, one that is chronic and progressive, and there is an anticipation that at some point the family may require incarceration, that would not apply if it was a planned move within a general medical facility of some kind. Is that correct? In other words, if there was a progressive mental disability as a result of an illness that rendered an individual incapable, this would not apply. Is that right?
Hon. C. Gabelmann: The representation agreement is in force until the committal actually takes place under the Mental Health Act.
G. Wilson: Given that there is an inevitability with respect to the committal taking place, whoever is designated or whatever kind of representative is assigned, how is the right of the individual going to be accessed if effectively they may be deemed to be in charge of their faculties prior to committal, but after committal they are not and yet a prior agreement can no longer apply? Do you know what I'm saying? In other words, a person with a progressive illness is in possession of their faculties until a point. At what time can whoever is supposed to deal with the properties act if after they've been committed they can't act?
Hon. C. Gabelmann: Once the committal has taken place, the Mental Health Act applies. It only deals with treatment, and in order for arrangements to be made for the disposition of property or the managing of the financial affairs of the person who is being committed, at that stage the Adult Guardianship Act
[ Page 8689 ]
would actually take over. It would be under the provisions of the Adult Guardianship Act, which we'll get to shortly, not the Representation Act.
V. Anderson: Just to clarify along that line, perhaps one of the things that the public is most aware about, which is increasing in that sense, is Alzheimer's. Is that the kind of disease that comes under the Mental Health Act? That's one that would probably come to mind for most people, so I just want to clarify where it fits in this legislation.
Hon. C. Gabelmann: One is almost never committed as a result of Alzheimer's, so we are talking about something else here.
Section 11 approved.
On section 12.
A. Warnke: I just happened to notice in my notes here that there is a question that I want to ask. I'll put it in this context: the term "monitor" is being introduced here, and that raises a number of questions. At this point I would like a clarification of the nature of the term "monitor" and of the role of the monitor. That would be most helpful.
Hon. C. Gabelmann: This too comes up in a later section, but clearly this is an optional provision. In order to give greater security to himself or herself, an adult who signs a representation agreement can also appoint a monitor as laid out here. Later provisions deal more substantively with that issue.
A. Warnke: I want to explore this because I noticed that the term "monitor" is not defined in section 1. I'd like to pursue the definition. I also see that an adult may name as monitor another adult who is willing and able to perform the duties and exercise the powers of a monitor. There is the question about the powers of a monitor. I would just like to see some clarification.
Hon. C. Gabelmann: Section 20 outlines the duties and powers of a monitor, and that's the reference point. That answers that question, I think.
Section 12 approved.
On section 13.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 13,
(a) in the proposed subsection (2) by deleting everything after the end of paragraph (b), and
(b) by adding the following subsection:
(2.1) All of the persons referred to in subsection (2) must be present together when a representation agreement is executed, but, if it is impracticable for an alternate representative to be present,
(a) the others may execute the agreement in the absence of the alternate representative, and
(b) the alternate representative may execute the agreement in the presence of 2 witnesses.]
If I may just comment, this amendment came as a result of comments made by the member for Vancouver-Langara, who made what I thought was a very valid point. I think the member had some discussions with our staff respecting this, and hopefully the amendment meets the needs that the member outlined very effectively in second reading debate.
On the amendment.
V. Anderson: Yes, I'd like to thank the minister for responding. I was in touch with some of the people from the community who were working on the bill, and they told me that they had raised the same concern independently. I understand some of them would like it to have gone further than it did, but, like myself, are willing to live with this compromise. I thank the minister for responding and taking it seriously.
Amendment approved.
Section 13 as amended approved.
On section 14.
V. Anderson: Perhaps the minister might just comment on the process for registering these agreements. Will a central registry bring these registrations in from all across the province? How is that going to be handled, and through whom will it be handled in local communities and isolated communities? Normally agreements are done through a lawyer. How are these agreements going to be registered?
Hon. C. Gabelmann: There will be a central registry -- no doubt in Vancouver, as everything seems to be in this province. It will be housed in the offices of the public guardian and trustee -- if we pass that bill later this session or later tonight. There will be an ability on the part of the public guardian and trustee to delegate or name repositories in communities, such as government agents, so that people in small communities have a place to go. They wouldn't have to go to Vancouver to actually register the document. All of this will be spelled out in the regulations that get developed in the months to come.
Section 14 approved.
On section 15.
C. Serwa: The agreement comes into effect either when it is registered, or when the agreement says it comes into effect. The agreement can state a triggering event, after which the agreement comes into effect. If a triggering event is named in the agreement, who will decide when it really happened? For example, if the triggering event is a major stroke, then who will decide if a stroke that occurs is the stroke that should trigger
[ Page 8690 ]
the agreement? How is that determination going to be made?
Hon. C. Gabelmann: The person who confirms that the triggering event has actually occurred has to be spelled out in the representation agreement itself, and that's noted in subsection 15(2).
V. Anderson: Just following up on this -- and I know it's tedious in a sense -- you sign the representation agreement, you take it to the government office and they send it in; then I presume a notification comes back from the registrar's office to each of the parties, and you would know it's been registered and in effect.
[9:30]
Hon. C. Gabelmann: The original agreement is returned by mail. We haven't yet worked out the technology to return the original by fax. But the way these machines work, one of these days we probably will.
Section 15 approved.
On section 16.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 16,
(a) in the proposed subsection (2)(b) by deleting "and in the adult's best interests", and
(b) in the proposed subsection (3) by deleting "or in the adult's best interests".]
Amendment approved.
On section 16 as amended.
A. Warnke: I note that the representative or any other interested party may apply to have the monitor removed. What I would like to have clarified here as I go through the sections, and specifically section 16(9), is: is it only through the office of the public trustee that a representative can be removed?
Hon. C. Gabelmann: If an individual has concerns about an agreement, two things can happen, I understand: one, they can be relayed to the public trustee, and the public trustee can on her motion apply to the court to have removal take place; or two, the individual, on their own initiative, can go directly to the court to have that happen. Further clarification of that issue can be found in section 27.
C. Serwa: Section 16(5) says that the representative can apply to the court to be exempted from the duty to comply with the wishes of the adult as described by the adult when the adult was capable. It seems strange to me that the representative can get permission to vary the agreement; it seems to somehow go against the spirit of the bill. What circumstance does the minister envision that would necessitate section 16(5)?
Hon. C. Gabelmann: This section is really designed as a safety valve if a situation that is impossible to solve arises. Let me read some notes that were prepared for me on this, because they can express what the intent is better than I. This section authorizes the court to exempt the representative from following the wishes expressed by the adult when he or she was capable. That's the point the member makes. While the act places a duty on representatives to act according to the pre-expressed wishes of the adult, at the same time -- and this is the answer to the member -- it is recognized that in some cases, instructions set out in an agreement will be impossible or inappropriate to follow because of changes in the adult's values or in the anticipated situation. It really is designed, as I said initially, as a safety valve so that we don't get into impossible situations which cannot be resolved.
A. Warnke: I also want to pursue sections 16 (11) and (12). They revolve around this question of a conflict of interest or potential conflict of interest arising. One question that may be put is: how does one determine a potential conflict of interest in this situation in order to make a decision consistent with this act?
Hon. C. Gabelmann: Let me clear my own head on this issue and try to answer it. For example, if a representative is asked to transfer some money to the representative's immediate family -- a spouse, let's say -- that is clearly a bit of a conflict. At that point the onus is on the representative to contact the public trustee, as is set out in section 16(11), and then to consider any advice or to follow instructions that the public trustee provides in that case.
Section 16 as amended approved.
On section 17.
A. Warnke: Essentially, I just want a clarification of the phrase "the services of a qualified person to assist the representative." Does this include legal representatives? As a matter of fact, I suppose "qualified person" is quite general in scope. Who would that include?
Hon. C. Gabelmann: It could certainly include a lawyer, an accountant or other professional to assist in the management of various affairs that might need more professional advice than the representative could provide.
Section 17 approved.
On Section 18.
A. Warnke: I note as well that the "representative of an adult has a right to all the information necessary," etc. Has the ministry really thought of what constitutes "information necessary," especially in a context where information is solicited? Actually, I suppose one could be excessive in acquiring information. I suppose another way to ask the question, therefore, is: how does one determine how much is "information necessary"?
[ Page 8691 ]
Hon. C. Gabelmann: First, I think it's fair to say it's a subjective test. But let's just take an example. If a particular health care initiative were to be undertaken, then it would be appropriate for the representative to learn all that was relevant to help in making that decision in respect of the health care decision -- not any other information that wouldn't be relevant to the particular health care issue, but all that would be.
Section 18 approved.
On section 19.
C. Serwa: I'm just going to ask the minister to clarify this for my understanding. Section 19 says: "An agreement made by a representative on behalf of an adult is binding on the adult, even after the representative no longer has authority under the representation agreement." I can only conclude that the agreement was made while the representative had authority under the agreement. So that's one part of it. What type of agreement? Is it limited to a contractual type of agreement, or are there any other kinds involved in this particular situation?
Hon. C. Gabelmann: If I understand this correctly, any agreement that was made while the representative was acting for the adult would stay in effect. The example I think I understand is that if a house was purchased while the representative had the authority to do it, the house purchase would stand following the representative's termination of authority.
Sections 19 and 20 approved.
On section 21.
A. Warnke: I'm referring to section 21(1)(a). Here's a situation where perhaps the monitor is no longer acting as a monitor, and therefore the court may remove or replace that person. I guess I'm anticipating a situation where a monitor may actually believe they are suitable and acting in the best interests of the individual and so forth, and therefore would be highly inclined to resist any act by the court. May I assume that what this really involves is a court action to remove or replace after a procedure whereby it's really following an initiative by the individual affected?
Hon. C. Gabelmann: The representative, any interested person who might be a family or friend, or the public trustee would have the right under this legislation to apply to the court to remove a monitor. The courts would make the decision and would hear what the arguments were. It couldn't be done capriciously.
Section 21 approved.
On section 22.
A. Warnke: I want to pursue something in general here. There has been a question raised by some people -- and not only with regard to section 22 -- that a representative or a monitor must not disclose information. Hence there is a perception that this places a tremendous onus on the representative or the monitor. Indeed, this section, combined with other sections, seems to place a tremendous onus on such an individual. I hope I'm not pre-empting my good colleague from Okanagan West; I believe he was quoted. He can certainly counter it if that's not so. It may be tempting to ask who would want to become a representative or a monitor if in fact there is such an onus. It is a tremendous onus here in terms of information that is gathered yet difficult to disclose. I wonder if the Attorney General could comment on this whole question of the tremendous onus that is placed on such individuals as a representative or a monitor.
Hon. C. Gabelmann: I'm not sure that I share the view that this is a particularly onerous responsibility. It's an important one. There is certainly responsibility involved in the requirement that care be taken about how a monitor acts. But a requirement for confidentiality.... I know that's strange in our society when everybody gossips and talks too much, but I think this is a simple requirement that anybody who wants to take on this responsibility should have no difficulty in adhering to.
[9:45]
Section 22 approved.
On section 23.
G. Wilson: Let me just look at section 23; it locks into some questions in the balance of the bill. Notwithstanding the fact that we've gone through much of the duties, powers and responsibilities of the representatives or monitors, unfortunately, I was unable to get into debate when you went through an earlier section. I'm going to try and refer back to it by discussing section 23.
It's a question of who the determinant is. It says: "A representative who complies with section 16 is not liable...." Section 16 is fairly specific about the duties and responsibilities. Section 23(2) says: "A representative who tries to the best of his or her ability to comply with the duties in section 16(2) to (4) is not liable...if the representative acts in what the representative believes to be the adult's best interests." Who is the determinant in this instance? With somebody who may be acting in a manner that is not in the adult's best interest, to what extent can that be reviewed and dealt with? How can liability be assigned?
Hon. C. Gabelmann: I think it's fair to say that there are two remedies. One is that the public trustee can be notified and investigate. If the public trustee determines that there is a problem, then she can go on her own initiative to the court for remedy. An individual can also bypass all of that and go directly to the court to seek a remedy.
[ Page 8692 ]
G. Wilson: If the public trustee can entertain some form of complaint, then presumably she's able to act. I can understand that route. But how would an individual -- say an estranged family member, who may be witnessing what's going on and feel that due diligence is not being applied -- bypass what seems to be a legally binding agreement between the party and the representative?
Hon. C. Gabelmann: They would apply to the court to have the agreement set aside.
G. Wilson: Okay. If the agreement was set aside, then what would there be? A suit against the representative for liabilities incurred if financial losses were seen? It says here there's no liability. I'm thinking of liability specifically, not so much for death of an adult and those kinds of things, because I think that's a different issue, but with respect to the financial affairs and business assets, as it says in 23(1). Indeed, if decisions have been taken which may be deemed to be in the financial interests of the representative, for example, then presumably -- if there's an application to set it aside -- the representative must then be open to some form of litigation or suit.
Hon. C. Gabelmann: Civil remedy exists either as part of the initial application to the court or by a separate application.
Sections 23 and 24 approved.
On section 25.
A. Warnke: I noted earlier that the liabilities of representatives and of monitors are quite different. Obviously the two roles are different, and therefore the liabilities of both are quite different. But at the same time, the nature of the liability of monitors seems to be quite general -- perhaps even modest -- compared to the liability of representatives. I'd just like to see some elaboration on that.
Hon. C. Gabelmann: Let me try it this way to see if this answers the member's concerns. In law the responsibilities of the monitor are considerably less than the responsibilities of the representative. As a result, the liability is accordingly less. The responsibilities clearly are primarily with the representative and not with the monitor. The monitor is just as the name says: someone who monitors the activities of the representative.
C. Serwa: It almost seems to me as if the monitor has more liability than the representative, "if the representative acts in what the representative believes to be the adult's best interests." Whereas the monitor, for example, is only excused if he "acts honestly and in good faith, and exercises the care, diligence and skill of a reasonably prudent person." I'm concerned about it if the monitor does not exercise care and diligence; perhaps the monitor would not monitor every action of the representative. How can the monitor be responsible someone else's -- in this case the representative's -- actions?
Hon. C. Gabelmann: The monitors are not liable for any failure of the representative. They're only required to report an apparent or alleged failure.
Sections 25 and 26 approved.
On section 27.
A. Warnke: Again, what I'm seeking here is a minor clarification. When we see the agreements changed, revoked or ended, it's not altogether clear just when a new agreement becomes effective. Perhaps that could be further defined.
Hon. C. Gabelmann: The revocation would take effect at the time specified or 72 hours after written notice has been given. Then any subsequent or new representation agreements would go back to the beginning and would be entered into in the normal manner. Obviously, there may be a gap in between for whatever reason, but a subsequent agreement follows the tests that the first agreement would meet.
G. Wilson: Again the question comes back.... I'm going to try to sneak in a question I wished I had asked -- if I had been able to be here -- under section 3(b), that has to do with the question of capability. Where it says that the adult is capable of changing or revoking the agreement, who determines capability? If there was an agreement set where there was a presumed.... Let's use dementia, which can happen in progressive elements, and people can go through peaks and valleys in these kinds of things. Who determines that capability?
The other question I have is with respect to people who may have capacity if they're under treatment but, failing treatment, do not have capacity to.... And excessive or continued treatment may in fact accelerate dementia or diminish it, so it may accelerate later. In some instances, I know that people under treatment for severe schizophrenia, for example, may be quite able to make decisions under treatment, but the treatments may in fact allow for progressive acceleration at later times. There's a lot of research that hasn't been done on this. The question is: who determines capability, given that there's some trustee or, in this case, a representative who has been assigned? The person could say: "Look, now I'm under new medication. I'm now capable. I want to revoke this agreement, notwithstanding the fact that I was of sound mind when I made it in the first place." If there has been a history of incarceration, mental instability and those kinds of issues, who determines capability?
Hon. C. Gabelmann: This may not be a complete answer, but as I understand it, any individual can make application to the public trustee, who will then investigate the circumstances. The trustee would have an assessment conducted and could then make a decision to go directly to court herself, or someone else
[ Page 8693 ]
could go to court with that information on their own behalf.
G. Wilson: I don't want to ring alarms if they're not warranted, but it seems to me that once an assignment has been made.... I'm thinking specifically about progressive mental instability. In the case of people who are under treatment and have demonstrated psychiatric need, a family may then make a move, recognizing that there is some progressiveness in the disease, to have a representation agreement put in place.
Interjection.
G. Wilson: What's that? Well, maybe a trigger or not a trigger. The minister is asking -- through you, hon. Chair -- about a trigger. It may or may not be.
But once that's been agreed to, if indeed the individual signed the original document, and it's under that signature that the representation agreement has effect, and if under whatever kind of medication or treatment that individual now believes that they're of sound mind and wishes to change this agreement, given that there may be a history of incarceration or psychological treatment or whatever, who is going to make that assessment? My concern is that the trustee is going to go to court, which is going to assign a psychologist or psychiatrist to give a battery of tests to this individual, and that that person will then undergo those tests. It is quite likely, notwithstanding the person's mental state at any given time, that those tests, given a history of incarceration, will be done with that in mind.
[10:00]
I see the shaking of heads, and that's great if it's true. But a person may not have their illness properly or adequately diagnosed. They've signed an agreement because it's becoming progressively worse, and then it's adequately diagnosed. They may be subject to a court of law where a series of tests may be applied that may in fact be quite unfair. That person may not be able to regain or reclaim their estate because of the history of incarceration they have. In other words, once you're deemed to have had that problem, the courts often don't look favourably on changing an agreement once that agreement has been in effect. I wonder what right that individual has in terms of selecting those who would be assigned to determine their capability. Can the individual say, "I want this person to determine my capability," or is that left entirely to the court?
Hon. C. Gabelmann: The first question that has to be assessed is whether the individual has the capacity to revoke, and presumably that would be done or facilitated by the public trustee's office.
Interjection.
Hon. C. Gabelmann: How? One of these days the Legislature will get to the point where the people who really know the answer are able to give it, rather than those of us who....
Interjection.
Hon. C. Gabelmann: We will get to that point when we make progress in our rules in this House. Mr. Chair, if you were going to call me to order, I am going on to the answer.
It's a serious and important question. I think the safeguards are built in. The assessment is done by an independent team, which the public trustee's office would be involved in assembling. The people would be different from the ones who had made earlier assessments; there's a protection there. The court is not likely to make decisions based on a previous history, but rather on the evidence in front of them from a current assessment by an independent team. That should take care of the member's concerns.
G. Wilson: I'm not sure I have as much faith in the system as the Attorney General. I don't mean that as a slight to our court system. From my experience, however, the assignment used, in terms of the tests applied to determine capability, is likely to be determined on the basis of the medical history of the individual. For example, if a person has dementia that is progressive with age, but also has a treatable mental illness, that individual stands a pretty slim chance if their family, rightly or wrongly -- and in this case let's assume it's wrongly -- manages to get an assignment and a representation agreement in place that allows them to dispose of or do with the estate as they will. That concerns me greatly. The individual surely must have the right at any time to revoke that agreement if there is even the slightest hint that that individual is competent to do so. I don't see anything in here that spells out how that's going to work. That really gives me grave concern. I wouldn't want to leave it up to a trustee or a court, because they can only use the established tests.
Hon. C. Gabelmann: I think it's fair to say that the statute itself doesn't spell out the procedures that would protect the individual in this case. It's clear that the individual's rights must be protected, as outlined by the member. It's the intention of the people involved in putting this package together that regulations will be drafted to cover that very point. But in the final analysis, as with everything, it's the court.
V. Anderson: That also relates to a question I have. When a person signs a representation agreement, they sign it in the presence of two witnesses. If they wish to change or cancel the representation agreement, am I right in saying that under 27(1)(b), they have to consult with another person and the other person has to certify that they have so consulted before they can change it? They can't simply write a letter on the spur of the moment under their own signature, which is unwitnessed, in order to change it; there needs to be a witness and some kind of certification in order for them to do that.
[ Page 8694 ]
Hon. C. Gabelmann: In order to change the agreement, one would be required to go to a lawyer and have it done under a lawyer's signature.
V. Anderson: Section 27(1)(b) refers to section 9(2). Just to refer back to that, as I understand it, section 9(2) refers a member of the Law Society of British Columbia or anyone who belongs to a prescribed class of persons. So it would seem to me that it could be a lawyer or someone else. Am I right there?
Hon. C. Gabelmann: The member is very alert to an interesting issue. The possibility here is for notaries public to be a prescribed class of persons, if and when notaries take the training and preparation to be able to take on this kind of responsibility.
C. Serwa: A lot of this is a grey area to me; it is also groundbreaking legislation. I was listening to the questions and conversations earlier with respect to an assessment team, for example. I imagine we're not going to get into such a circumstance on very many occasions. Obviously, if we are talking about courts and assessment teams, we are talking about someone who probably has considerable assets at stake in various decisions that they wish to regain control of. Assuming that the very worst occurs, and an individual now feels that they are capable, and a dispute arises where the public trustee and the team determine that the person is not capable, is the court system the only process to endeavour to fight it out? It seems like a very expensive and complex appeal. I don't know how effective or accurate the assessment teams are. As I say, it's a rather complex area.
Hon. C. Gabelmann: The answer is that, in the final analysis, the courts are the place where the question will be determined. Hopefully, the process will solve the problem and prevent the need to go to court. But it's there, and it's the final arbiter.
G. Wilson: I have just a quick question to the AG. Given that this representation agreement has tied up all the money in the hands of the representative, how is the person appealing going to afford it? You have a situation under section 19 where the act will still apply, and you gave the answer that an agreement made by a representative on behalf of an adult is binding on the adult, even after the representative no longer has authority under the representation agreement. If the person who revokes it says, "I'm now in charge," but the other person has control of their assets, how do they afford to go to court?
Hon. C. Gabelmann: The public trustee will carry the case.
Sections 27 to 29 inclusive approved.
On section 30.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 30,
(a) by deleting the proposed subsection (3)(d) and substituting the following:
(d) apply to the court for an order under the Adult Guardianship Act appointing a decision maker or guardian;
(d.1) apply to the court for an order confirming a change to, or the revocation of, a representation agreement, or for an order cancelling all or part of a representation agreement;, and
(b) in the proposed subsection (3)(e) by adding "or (d.1)" after "paragraph (d)".]
Amendment approved.
On section 30 as amended.
G. Wilson: A number of the issues here relate back to what I was asking about just moments ago with respect to a person making an objection, and it has to do with where it says "an adult is, or was at the time, incapable of making, changing or revoking a representation agreement...." My concern is that there's nothing in here that would argue that at the time of making the original agreement, the person was not competent. That's something I would like the minister to clarify.
That's point one. Second, after talking about an adult being incapable of making, changing or revoking a representation agreement, it then suggests that "undue pressure or some other form of abuse or neglect" was used to induce the adult to make, change or revoke a representation agreement. The implication here is of pretty serious coercion. My concern is that there's nothing in here that could be argued by an absent family member who is living abroad or wherever, and finds that this agreement has been entered into, that the individual making the original agreement was not capable. The bill assumes that they are capable, and therefore the argument could be that they weren't capable in the first place and coercion has taken place. Given that that can't be argued, then it could be argued that some other form of abuse or neglect has been undertaken. Who's the determinant of that, and how is that advanced through the trustee -- I assume it's the same kind of thing -- if you can't argue in the initial instance that the original agreement was not legal, in that the bill says you're assumed to be capable?
Does the minister follow what I'm saying? Maybe I'm talking in circles here.
V. Anderson: Hon. Chair....
The Chair: We have a question to the minister at the moment. Are you rising on a point of order, hon. member?
V. Anderson: I had the same question. I wonder if it's related to section 13, in that when the original agreement is signed, there are two witnesses, the adult and the representative -- four people are involved. Are the two witnesses and the representative in effect stating that the person is capable of signing? Is that part
[ Page 8695 ]
of the responsibility the witnesses or the representative adult are undertaking in doing that?
Hon. C. Gabelmann: The answer to that question is no.
The people who are helping me with this understood the question raised by the member for Powell River-Sunshine Coast, but frankly I'm not sure that the circles didn't elude me. I'm going to just take a moment to see if I can get an answer for that.
A similar problem exists now with powers of attorney. Unless people who are involved at the initial stage are aware that there could be a possible problem later, unless they keep notes and use those later to help determine the situation at the time of the initial signing, then it's a difficult issue and one that doesn't have a magic answer. It's the same problem that exists now and, if I understand what I'm hearing, there isn't a magic answer to that particular problem.
G. Wilson: I agree, it is a very difficult question, especially when people have newly entered British Columbia, and there are considerable assets and family distributed.... And families often work in strange ways, as we know -- a little bit like political parties, actually.
Anyway, coming to subsection (1)(e), it says: "...anything improper has occurred in the making, use or revocation...." How would you define anything improper? That's a pretty loose description.
Hon. C. Gabelmann: First of all, the onus is always on the objector to bring evidence that can be used to prove a particular allegation or assertion. The words are in here primarily at the urging and insistence of the community groups that were involved in this. They wanted to have this broader provision to be able to catch something that the tighter language in the other subsections might not have caught.
[10:15]
I think that's the best I can do with this. It's impossible to define "improper." There's an obligation on the person who wants to make the complaint to demonstrate that in fact something was improper, and as I said initially, the courts will, in the final analysis, determine what it means.
G. Wilson: Under (d), I assume that what we're talking about here is a substantive error; we're not talking about the wrong birth date, the wrong middle name or something like that. When we talk about an error being made in the execution, presumably it's in reference to this act and not the subsequent acts we're about to debate. Is that correct?
Hon. C. Gabelmann: Substantive error in this act only, yes.
G. Wilson: I have just a couple more questions on this section. Under (h), it suggests a representative incapable of acting as representative. Are we dealing now with a physical incapacity, or are we dealing with mental incapacity in this instance? Presumably if there was a charge of incompetence to be brought forward -- which is all through this bill; the person has to be fair, competent and doing it to the best of their judgment, and so on -- and if one can determine incapability with respect to judgment, that can be a pretty difficult area for you to argue or dispute in any court, because it's highly subjective. So when you talk about incapability, is it assumed the incapacity is either physical or mental?
Hon. C. Gabelmann: Primarily mental is the assumption here.
G. Wilson: It was a point just for clarification, but it might be worthwhile on some subsequent amendment to make that clear, because I could see where somebody might come forward and argue in a court that incapability is much broader than that.
The last question I have with respect to this particular section is under section 30(3). It says: "On receiving notice of an objection, the Public Trustee must promptly review the objection and may do one or more of the following: (a) conduct an investigation to determine the validity of the objection and then advise the objector of the outcome; (b) provide or recommend mediation services...." Then it suggests, in your amendment section here, that the trustee "apply to the court for an order confirming a change...." Presumably the trustee, in deciding on one of those various courses of action, is going to be subject to some kind of public hearing or investigative process -- we're going to get to the Public Guardian and Trustee Act shortly. Is it the intention here that the trustee could actually investigate and make a decision, and that this decision would be binding on the parties without any form of public session which would allow the parties to have a full hearing?
Hon. C. Gabelmann: The public trustee could do the normal kind of review that takes place in these cases, which obviously isn't a public review, and could, by way of mediation or suggestion or as part of the process, encourage the parties to accept the suggestions. But no order can be made by the trustee; an order could only be made subsequently by a court.
G. Wilson: Just a final clarification on that point. So the public trustee really has no authority to enact, simply to recommend. Is that correct?
Hon. C. Gabelmann: Yes.
Section 30 as amended approved.
On section 31.
A. Warnke: This has been brought to my attention, and I suppose that once again I'd like some clarification. The way the beginning of section 31(1) reads, it sounds like it allows for an investigation by the public trustee even if an objection is not raised. Therefore I have some concerns as to what the conditions are upon which a public trustee may embark on such an investigation.
[ Page 8696 ]
Hon. C. Gabelmann: This allows for the public trustee on her own motion to initiate an investigation. Something may have come to the trustee's attention -- a bank may have called asking a question about something -- which sets some alarm bells off and prompts the trustee to launch an investigation.
A. Warnke: Is there any onus on the public trustee to get in touch -- let's say where the whistle is blown on particular individuals -- with the appropriate people whose names are raised or where the issue is raised, and so forth?
Hon. C. Gabelmann: The trustee, as part of the investigation, would in fact be in touch with those individuals.
Section 31 approved.
On section 32.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 32, by deleting the proposed section 32 and substituting the following:
Court orders
32. (1) On application under section 30(3)(d.1) or (e), the court may make an order confirming a change to, or the revocation of, a representation agreement or an order cancelling all or part of a representation agreement.
(2) When making an order under subsection (1), the court must consider, in the same order of priority as under section 16(2) to (4), the wishes, instructions, values and beliefs of the adult who made the representation agreement.
(3) The court may not make an order that overrides the adult's wishes, instructions, values or beliefs unless
(a) the adult is incapable,
(b) the order is in the adult's best interests, and
(c) the court gives reasons for making the order.]
Amendment approved.
On section 32 as amended.
G. Wilson: I have just one really quick question on this, and it has to do with 32(3). The amendment is much clearer than the original, which says: "The court may not make an order that overrides the adult's wishes, instructions, values or beliefs unless the adult is incapable...." Then: "...the order is in the adult's best interests...." We can understand that. Then: "...the court gives reasons for making the order." That's fine. But it's a bit ambiguous. If we're talking about the adult's wishes, we're presumably talking about wishes subsequent to the agreement to put the representative in place, are we not? The court isn't going to overrule a prescribed order. Or is it? I assume that the court would not overrule the prescribed wishes of an adult who has put a representative in place to look after those issues once the person becomes incapacitated. It seems a little redundant that a person who is presumably capable may have the court overrule them, but surely not a person who is incapable. Or have I misread that section? Maybe I have.
Hon. C. Gabelmann: It's possible for the court to override the wishes expressed in the agreement only if it takes into account all the provisions spelled out in subsection (3).
G. Wilson: I'm sorry, I didn't quite get that. I don't know if it's the lateness of the hour or what. Could the minister just repeat that?
Hon. C. Gabelmann: The court does have the ability to override the wishes expressed in the representation agreement if it takes into account all the provisions in section 32(3).
G. Wilson: That gives me some concern. Are we talking about prescribed, written instructions? If we are, given that the adult is now incapable, how would the order be in the adult's best interests if the written instructions have prescribed one course of events? In short, if we use a will as a case in point, are we saying that the court can then override the will of an individual if the person becomes incapacitated prior to death and it deems it's in their interests to do so?
Hon. C. Gabelmann: This provision would allow for the courts to override on these strict tests. That would possibly occur -- and I don't think it's going to be a frequent occurrence -- if significant changes have occurred between the time of making the representation agreement and the time the court is hearing a particular issue. If there are significant changes and, following evidence, the court decides the adult is incapable and that a variation ordered by the court is in the adult's best interests, the court can do that. But that would occur if there had been significant change over time and the adult's best interests had in fact changed.
G. Wilson: I'm going to try to nail this down. What we're saying here is that this must be done upon application. Presumably there is some challenge; the court isn't going to intervene unless there's some challenge. Given that challenge, notwithstanding the fact that there may be a legally constituted agreement with a representative in place, the court can review that document and can deem at some point that it is not in the adult's best interests and therefore can override their written request. Is that right?
Hon. C. Gabelmann: Perhaps by way of example I can help the member with this issue. Let's say that an individual in their representation agreement says: "If I get Alzheimer's in a really bad way, I want a particular treatment because I don't want to be kept alive." But let's say that in the period following the representation agreement and the onset of Alzheimer's, and the representation agreement isn't changed, a
[ Page 8697 ]
miracle cure occurs. Just by taking a particular drug, you could be cured of Alzheimer's, for example. A friend or relative could apply to the court to allow for the representation agreement to be varied in order to allow the particular medicine to be given to the individual so they could recover. It would be against their specified request in the representation agreement, because they didn't know they could be cured from Alzheimer's when they said: "Please don't keep me alive." But if the miracle drug occurs and they could be cured, then it's in their best interests to have the pill.
G. Wilson: I promise I'm not going to trade hypothetical situations on this all evening, but a case that is in my mind is one where, on application, a person may deny a family member custodianship of the parent for whatever reasons in the history of that relationship. The person becomes incapacitated, and the family member then says, because of the considerable assets that may be set out in a written agreement with a representative administering that agreement, that rather than have the individual be a ward of the state, they would be better looked after if the court reviewed that decision and turned the family assets over to the individual who was denied that in writing. Are you saying that if that individual can convince the court -- notwithstanding the written agreement that was in place -- it could override that and turn the assets over to an individual who was formerly denied them in a written request? Is that right?
Hon. C. Gabelmann: It says in section 32(2) that the court, prior to making an order under this section, has to consider the duties of the representative as set out in section 16(2) to (4), which then become the duties of the court in that same priority order. They have to consider all of those wishes, instructions, values and beliefs. It's a pretty onerous test on the court, and it would be a very unusual situation where the court would vary an expressed wish.
[10:30]
Section 32 as amended approved.
Sections 33 and 34 approved.
On section 35.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 35,
(a) in the proposed subsection (4) by adding "written" before "approval", and
(b) by deleting the proposed subsection (5) and substituting the following:
(5) The Public Trustee is entitled
(a) to be heard if the litigation guardian applies to the court for approval of a settlement or compromise of a claim referred to in subsection (3), and
(b) to any costs the court orders.]
Amendment approved.
Section 35 as amended approved.
Sections 36 to 38 inclusive approved.
On section 39.
A. Warnke: There has been some concern raised about the bill's impact on the role of power of attorney. Just to alleviate fears along this line, could the Attorney General assess the effect of this bill on the power of attorney?
Hon. C. Gabelmann: An existing power of attorney can be registered under this act.
V. Anderson: Does that mean that an existing power of attorney which has an enduring clause in it can be registered as well?
Hon. C. Gabelmann: This is actually to deal with the enduring power of attorney, and that can be registered.
Sections 39 and 40 approved.
On section 41.
G. Wilson: I have two quick questions. With respect to section 41(a) -- the power of attorney that the person made outside British Columbia, before or after this section comes into force -- I am assuming that any prescription made in British Columbia will take precedence or have binding effect over any other subsequently made outside. Or is it the last one signed?
Hon. C. Gabelmann: The last one signed.
G. Wilson: Whatever jurisdiction may be invoked to provide for an agreement outside the province to take effect, is there a requirement for the agreement in British Columbia to be revoked formally? Or can there simply be proof of documentation of some other agreement in some other jurisdiction, even if the jurisdiction may not have anything close to the kind of onerous requirements that are accepted here? The reason I'm asking is that in some jurisdictions you can have it done with your uncle signing as a witness, and that's about the sum total of it.
Hon. C. Gabelmann: The basic safeguards provided in this legislation would have to exist in the other jurisdiction for us to recognize it.
Section 41 approved.
On section 42.
A. Warnke: At section 42, it is appropriate to explore the fact that it will take two to three years before the package will be fully in place. Indeed, the regulations will perhaps not be defined until next year. I would ask the Attorney General what parameters the government is considering here.
[ Page 8698 ]
Hon. C. Gabelmann: I'm not certain what the member means by "parameters." Does he mean time limits, or scope of the regulations?
A. Warnke: The extent of the regulations.
Hon. C. Gabelmann: The regulations are to be determined, and they will be done in a continuing process with the community. The parameters of the regulations will be sufficient to enable the proper operation of the act.
Section 42 approved.
On section 43.
C. Serwa: I'm not familiar with section 5 of the Offence Act, but does this mean that, under this act, there are no offences that can occur?
Hon. C. Gabelmann: That's correct -- civil remedies only.
Sections 43 to 45 inclusive approved.
On section 46.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 46, by deleting the proposed section 46(b) and substituting the following:
(b) in subsection (2) by striking out "Subsection (1) does" and substituting "Subsections (1) and (1.1) do".]
Amendment approved.
Section 46 as amended approved.
Sections 47 to 53 inclusive approved.
On section 54.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 54, by deleting the proposed section 54 and substituting the following:
54. Section 73(1) and (4) is amended by adding "representative under the Representation Agreement Act," after "assignee,".]
Amendment approved.
Section 54 as amended approved.
Sections 55 to 65 inclusive approved.
Title approved.
Hon. C. Gabelmann: I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 48, Representation Agreement Act, reported complete with amendments.
The Speaker: When shall the bill be considered as reported?
Hon. C. Gabelmann: With leave, hon. Speaker, now.
Leave not granted.
Bill 48, Representation Agreement Act, reported complete with amendments to be considered at the next sitting of the House after today.
Hon. C. Gabelmann: Hon. Speaker, I call committee on Bill 49.
ADULT GUARDIANSHIP ACT
The House in committee on Bill 49; W. Hartley in the chair.
On section 1.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 1, in paragraph (b) of the proposed definition of "self-neglect" by deleting "or inadequately treated".]
C. Serwa: As a point of order, it is 10:40 p.m., and I would suggest a motion to adjourn to carry on with it at a more reasonable hour tomorrow. It's been a fairly successful and productive episode. Perhaps the Government House Leader would consider making that motion.
Hon. C. Gabelmann: I think this place only works if we all work together. I wonder if the members might see how far we can get for half an hour or so, and then I would be prepared to allow an early break. If I get a nod or a shake, I'll get some indication. I think that everyone in the House knew that the intention was to do all three of these bills. This is the second night that the staff have come over from Vancouver. We didn't get an opportunity last night for whatever reason. I would like to try and make some further progress. If the hon. member wants to give me a signal, perhaps in half an hour or so I'd be prepared to think about it.
C. Serwa: I'd like the opportunity to engage in this. There is no possibility of staff to get back to Vancouver at this time of the day; they are here overnight in any event. It seems reasonable that we could schedule this starting at 10 a.m. tomorrow, and by not allowing anything to interfere, progress quite reasonably in a civilized fashion.
Hon. C. Gabelmann: Give us half an hour to get started.
[ Page 8699 ]
Amendment approved.
On section 1 as amended.
A. Warnke: I want to pursue one definition. It appears that the definition of spouse is certainly expanded. Is this in the context of the Divorce Act, which is mentioned here? Is this an attempt to be consistent with other legislation that has been brought forward by the government?
Hon. C. Gabelmann: Yes, it is our view that spouse should be widely defined in the context of this legislation. As the legislation says, it allows for a marriage-like relationship. I may say that this can apply fairly broadly, but I'm sure members would recognize that for many people who are living with AIDS, for example, in the so-called gay community, this legislation is very significant and important, and it's really crucial that it apply in those situations. This language will allow for that.
Section 1 as amended approved.
Sections 2 to 5 inclusive approved.
On section 6.
A. Warnke: Section 6 indicates the types of decision-makers, which in turn determine the level of involvement that the decision-maker has in the process, and they're clearly outlined here. I would just like to have the Attorney General clarify what procedure would be followed for the same person to go from an associate decision-maker to a guardian, or variances in between.
Hon. C. Gabelmann: One would have to go to the court to have the next stage adopted.
[10:45]
Section 6 approved.
On section 7.
G. Wilson: With respect to eligibility for the appointment of decision-maker or guardian, it says under section 7(1)(a)(ii) that an individual who does not provide personal care or health care services to the adult for remuneration.... In the instance where there may be an assigned person, because of lack of family or whatever, who may in fact be under contract for provision of services, presumably this means that they cannot be a decision-maker or guardian even though that assignment may be stipulated under a legal agreement. Is that correct?
Hon. C. Gabelmann: The answer is yes to all but the last phrase of the member's question, which we didn't hear. Was that a different question?
G. Wilson: The last phrase simply said that even if there was an agreement for an assigned person.... I'm thinking specifically of somebody who may be living in the province of British Columbia whose family is overseas, can travel no longer or can't afford to and has a relatively limited life expectancy. If there was a hired guardian who could look after the interests of that individual in the province, that person would be exempted from having this status. Is that correct?
Hon. C. Gabelmann: The member is correct.
G. Wilson: It says under section 7(1)(a)(iii): "...does not have a conflict of interest with the adult...." What is intended by that? Could you explain what it means?
Hon. C. Gabelmann: The primary example of someone in conflict is someone who has a financial conflict with the adult. They could not be appointed. The most obvious conflict-of-interest issues are financial.
G. Wilson: Section 7(1)(b) says: "...for decisions about the adult's financial affairs, business or assets, a credit union, trust company...." In light of the bill we've just passed, I'm questioning whether or not the decision-maker's status could be part of an assignment made under the previous act. I'm thinking specifically of people who have no immediate family in British Columbia and have made an agreement for assignment of a caregiver.
Hon. C. Gabelmann: Individuals can make their wishes known to the court; they can express their views and their preferences. In the final analysis, however, the court will make the decision.
G. Wilson: If I can cite -- without giving names, obviously -- a case in point, a very elderly gentleman in his nineties, who remains at home, has had a longtime housekeeper looking after him. She is on salary and is paid out of his estate. She basically makes his decisions and is a guardian and trustee, because he has no family in Canada. I think he has one son who lives in California. Is that person not going to be able to continue under this in the status of a legal guardian?
Hon. C. Gabelmann: No, that person could not be appointed under this act. The public trustee, however, could be appointed. The situation here is that the housekeeper -- I forget what word the member used to described the person living with the individual and having cared for him for many years -- could obviously continue to do many things, but under the legal guidance of the public trustee.
C. Serwa: Under section 7(1)(a)(iii), who will judge whether a conflict of interest exists? Can the appointment the court makes be disputed by family members or friends, for example?
Hon. C. Gabelmann: In doing the assessment, names would be considered by the public trustee's office and presented to the court. A name wouldn't be
[ Page 8700 ]
presented if there was a conflict. If there was an argument about whether there was a conflict, the court would decide.
Section 7 approved.
On section 8.
Hon. C. Gabelmann: I move the amendment to section 8 standing in my name on the order paper.
[SECTION 8, in the proposed subsection (1) by deleting "and" at the end of paragraph (c), by adding ", and" at the end of paragraph (d) and by adding the following paragraph:
(e) any representation agreement made by the adult.]
Amendment approved.
On section 8 as amended.
G. Wilson: I wonder if the minister might enlighten us a bit as to why, in the amendment, there was the requirement for the addition of subsection (e). What was intended by that? It seems somewhat unnecessary.
Hon. C. Gabelmann: It was a drafting oversight. There's an obvious need to make sure that the representation agreement is in fact included in the documents to be filed and served.
Section 8 as amended approved.
Sections 9 to 13 inclusive approved.
On section 14.
A. Warnke: This section indicates that the power of attorney given by an adult becomes void when the court appoints a decision-maker or a guardian for the adult. Again, I'm seeking clarification. Let's say a husband has the power of attorney over his wife's affairs, and the husband has appointed a decision-maker. What is the process for ensuring that the wife's affairs are looked after?
Hon. C. Gabelmann: I had a little trouble following the husband's various roles in this example. I'm not sure if I know what the question was, but if the husband had the power of attorney and then had the guardianship authority over his wife, then the powers that are under this act would apply, not the authority that was granted by the power of attorney.
A. Warnke: Just to follow up, what is the process for ensuring that all affairs are being looked after?
Hon. C. Gabelmann: Once he is appointed as the guardian, he has to report at least once a year to the office of the public trustee. Of course, if there's a monitor in place, the monitor is available to monitor the situation too.
C. Serwa: It doesn't really seem to be quite right, as far as I'm concerned, to automatically relinquish or terminate the power of attorney if a guardian is appointed by the court for the adult. If the person with power of attorney is looking after financial matters effectively and efficiently, for example, and the problem happens to be with the adult being abused or neglected, why should the guardian who has been appointed by the court take over the job that the person with power of attorney is doing in a most competent fashion?
Hon. C. Gabelmann: If this act comes into play and we no longer have either the representation agreement or the old power of attorney in play, then there's a higher test, as it were. There's a more significant situation, so the guardianship legislation takes over and the authority of the court-ordered guardian would apply. It can be the same person who had the power of attorney or who was named in the representation agreement. We're looking at a situation here where the courts, because of the nature of the issue, have interposed themselves. That has to take priority over a voluntarily agreed-to power of attorney or representation agreement, because we're in a situation here where there's no longer an ability to deal voluntarily. I don't know whether that deals with the member's question. I may not have heard it all.
C. Serwa: I have asked the question on section 14. If the person with power of attorney is in fact doing his job, is there any type of process that provides instructions to that person or the court-appointed guardian for financial control or decision-making under the existing power of attorney? Is there any basis or process for continuing that power-of-attorney relationship?
Hon. C. Gabelmann: The power of attorney could remain. If, for example, the guardianship was being presented to deal with health care matters and not financial matters, then the power of attorney dealing with financial matters could remain intact.
Section 14 approved.
On section 15.
G. Wilson: With respect to the appointment of a decision-maker, it suggests that the court has to specify the authority that will be granted. There's a limiting factor here, I would assume. It reads: "...is necessary to make, or assist in making, decisions about the adult's personal care, health care or legal matters or the adult's financial affairs, business or assets...." That's pretty all-inclusive. I don't know what else it is that the decision-maker would have some powers over.
If you come to section 15(b), it says: "...will result in the most effective, but the least restrictive and intrusive, form of assistance and support for the adult...." Is it intended in this bill that when the authority of the decision-maker is set down, the court will essentially determine what those parameters are going to be? Is it left up to the authority of the decision-maker to
[ Page 8701 ]
determine what those parameters will be? And if we are going to have those parameters set by the decision-maker or guardian, then what measure of monitoring is there to make sure, given the fairly broad kind of matters this decision-maker has discretion over, that the applications will indeed be in the form the court put down? What kind of checking system is there going to be on that question?
Hon. C. Gabelmann: The court makes the decision as to what powers the individual has -- and only those powers that are necessary to accomplish that particular need.
G. Wilson: So when the court makes its decision, then presumably the court will stipulate within that decision what the parameters of the guardian are. In the event that under this section those powers are restrictive, or seem to be too restrictive, is it the intention that the decision-maker or guardian assigned those powers under the court is going to have to go back to court to request that the powers be expanded? Is that the intention?
[11:00]
Hon. C. Gabelmann: Yes.
G. Wilson: I suspected that was so. If that's so, then under section 15(c), "in the case of a guardian, is required to provide the care, assistance and protection necessary to meet the adult's needs," one might assume that protection and assistance is of a more general nature. If that's so, it suggests that the provision of care, which may indeed include health care -- at least I would assume so, given the nature of how quickly one's health needs may change.... Is there in this section, or in some other section, latitude with respect to health care for the health care giver under a court order?
Hon. C. Gabelmann: The court can give the guardian or the decision-maker all the health care powers or all the financial powers or any combination of necessary authority.
G. Wilson: So with respect to the duties and liabilities of these guardians, I assume that the court is the determinant of who the guardian would be. That's point one. Point two is that given section 15(a), the guardian has latitude in the areas of health care or legal matters and financial matters. Therefore in setting down its ruling, that will occur. I understand that under section (c), then, there is assistance and protection and so on, and there will be latitude provided to the guardian on those grounds.
Given that, my next question is: what kind of limitation is there in this act to prohibit the court from ruling with respect to guardianship where it may be contested as to what the interests and needs of that individual may be, given that there may be one or more who wish to have the guardianship role?
Hon. C. Gabelmann: In addition to the guardian or the decision-maker, the court can appoint a monitor for the purposes of monitoring interests that the court may feel are needed to be represented. And if there is a suggestion following that decision of the court, the party or individual can go back to the court to seek a variation of the initial decision.
G. Wilson: There's a reason I bring this up, but I think that we might canvass it more fully under section 19. Reading through the act, I don't see where there is a provision for a contested guardianship. I would imagine that that happens. I can think of instances where there may be two or more members of a family who wish to take over guardianship, particularly in a divided family -- or whatever you call them now; a common family, I think, is probably the appropriate term. There may be a move by one or more members to have guardianship, and given the fact that the powers with respect to section 19 -- which we'll get to -- have a pretty wide latitude in decision-making on behalf of the adult -- where they live and all those other kinds of things -- what provision is there for some form of appeal or contesting of the original agreement that the court may set down? Or is the court's ruling final? I don't see anything in here that says it can be appealed.
Hon. C. Gabelmann: Section 36 -- and, I think, subsequent sections -- deal with the way in which a guardian can be removed. But in the initial appointment, if there are competing claims to be the guardian, the court will make a decision based on the evidence presented, and that can be appealed. Then there are later provisions for removal or replacement by the courts of a guardian, so that another individual could be appointed if the first decision turned out to be wrong.
G. Wilson: I wonder if the minister could just point me to that appeal section. I've obviously overlooked a section here. I understand the removal section -- once the decision has been taken. But in the event that somebody takes action to have the guardian appointed, where is there a provision to prevent that appointment from being made or to take initial action on the appeal? I don't see where it is in the act. If you could just point me to that section, I'll sit down.
Hon. C. Gabelmann: In the blue statutes behind the member, under the Court of Appeal Act.
Sections 15 to 17 inclusive approved.
On section 18.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 18, by deleting the proposed paragraph (d) and substituting the following:
(d) without limiting paragraph (c), may authorize the guardian to
(i) physically restrain, move or manage the adult, or
(ii) have the adult physically restrained, moved or managed when it is necessary in the adult's best interests to do so and despite the adult's objections,.]
[ Page 8702 ]
Amendment approved.
Section 18 as amended approved.
On section 19.
C. Serwa: If a member of the adult's family feels that the guardian is making irresponsible or bad decisions, can the decisions of the guardian be challenged?
Hon. C. Gabelmann: Yes. It can be done, first of all, by going to the public trustee or alternatively, directly to the court.
G. Wilson: Maybe you could clarify the initial language for me. It says: "Without limiting section 17 or 18, the court may in an order under this Part authorize a substitute decision maker or guardian to do one or more of the following...." Does that mean that you can, within the rights and the duties spelled out in terms of the powers of the guardian.... Section 19(d) says: "...decide whether the adult should apply for any licence, permit, approval or other authorization required by law." Maybe the minister can explain. I would assume that you're talking about a discretionary licence. How can a guardian have authority to determine whether or not you should apply for a licence that's required by law.
Hon. C. Gabelmann: We're talking here about drivers' licences or fishing licences or licences of that kind. We're talking about examples of the decision-maker's or guardian's powers.
G. Wilson: So if a person wants to go fishing, as an example, the guardian can prohibit them from doing so by simply denying them the right to get a licence? It sounds a little bit peculiar to me. I wonder if you could tell us if that's so.
Hon. C. Gabelmann: The court will have looked at the capability of the adult and made a decision as to whether or not these kinds of powers would apply. If the court had decided that the adult needed someone to have the power to get the licence or not, then the court will have decided that. In packaging up what will be covered by the powers of the guardian or decision-maker, they could leave out the licence to go fishing and the individual could make their own decision. This whole list needs to be read not as being all-inclusive but as being illustrative and, hopefully, helpful to the public in learning about how the act works and helpful to advise the court, in particular, about the kinds of issues that we're talking about so the court can make some clear decisions.
G. Wilson: All right. So let's move away from the rather non-contentious issue of whether he should go fishing or not, and move toward the more contentious issue of deciding whether or not the adult should work and, if so, the type of work, for whom the adult is to work and related matters. That's a pretty awesome power to be giving to a guardian. I'm thinking specifically of some instances where you've got people who are new to this country and who for linguistic reasons and lack of education and so on don't have the ability to go out, and have trusteeship and get an appointed guardian. I don't think that's unusual. These are pretty awesome powers to give to a guardian.
Hon. C. Gabelmann: The powers would not be granted to the guardian or to the decision-maker unless the court determined that there was an absolute need to grant those powers. I think the beauty of the legislation is that rather than have the all-or-nothing situation that exists now, we have an ability to allow the courts to say: "In these matters the individual is incapable of making decisions; therefore the test has proven that the guardian must be given those powers." But there are a whole bunch of other things that the adult can do on their own and should not have a guardian interfere in respect of those matters. But the test is very much that the court has to have evidence that there is a need to have an individual's powers -- some or all -- transferred to a guardian.
Hon. Chair, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. C. Gabelmann: I move the House do now adjourn.
Motion approved.
The House adjourned at 11:14 p.m.
The House in Committee of Supply A; D. Lovick in the chair.
The Committee met at 2:41 p.m.
ESTIMATES: MINISTRY OF FINANCE AND CORPORATE RELATIONS
(continued)
On vote 35: minister's office, $335,102 (continued).
F. Gingell: In your annual report last year you were pleased to announce that you had the public accounts published by December 1992. Can you tell me when you expect the public accounts to be issued this year?
The Chair: Before the minister answers, I would like to establish very clearly for committee that we speak in the third person, not the second person.
[ Page 8703 ]
Therefore the appropriate question is, "Will the minister advise..." or "Can the minister answer..." rather than: "Can you...." Giving that caution, I'll now ask the minister to proceed.
Hon. G. Clark: We're on the same timetable to try to bring it in around the same time -- in other words, December. Realistically, you're not going to get much better than that in terms of getting the final receipts in, checked off and balanced.
F. Gingell: While we are dealing with the issue of the public accounts, the minister is well aware, of course, that in the office of the comptroller general there is an internal audit group that does what are referred to as value-for-money or effectiveness audits. I was wondering if the minister would make a commitment to publish, table or issue those reports in the same manner that the auditor general issues his reports.
Hon. G. Clark: I can't give you that commitment right now. We're actually in discussions with the auditor general to try to coordinate this. As you know, in some respects this is a question of jurisdiction. It's my view, and I've said upfront, that the government should be doing value-for-money auditing and effectiveness auditing, and the auditor general's appropriate role would be to essentially critique and review those. The auditor general's view, I think, is that that's an appropriate place for value-for-money auditing, but in some respects having both agencies doing it is fine as well. Some of the value-for-money auditing or effectiveness auditing we are doing is purely for management purposes -- to manage better -- and there are some consequences to releasing it publicly, which we have to consider.
[2:45]
Secondly, some of them -- in fact, maybe the majority of them -- are for Treasury Board or cabinet deliberations, and again we have to be a bit careful in that respect. In principle, I don't disagree with what you're saying, but we're grappling with this question as to how to proceed with working with the auditor general to coordinate this kind of question and making sure that they're effective tools for management. We wouldn't want to make them public documents if that impacts on our ability to implement or manage them.
F. Gingell: I can quite understand that those reports would be viewed perhaps in two categories: those that would be appropriate for release and those that clearly would not be. I'd like to suggest to the minister that going partway would be better than going no way at all.
I'd like to now turn to the question of insurance and risk management. Statements on insurance and risk management in the minister's report indicate that there are substantial savings realized through this program. I wonder if the minister could advise the committee how you measure these savings.
Hon. G. Clark: Actually, I think I'll let the deputy minister, Michael Costello, answer. It's essentially a technical question.
M. Costello: The savings that accrue to the public sector from the risk management branch activities would be measured against a benchmark of the situation had the public sector entities been purchasing insurance in the private sector versus the self-insurance and pooling aspects of the risk management program itself.
F. Gingell: If these bodies aren't in the market trying to buy insurance, how do you ever find out what their premiums would have been. Are schools, colleges and hospitals a special risk? Every particular facility would be carefully evaluated by a company wishing to bid on the insurance. Companies aren't going to spend the time to make these bids if they know the insurance is not going to be placed. I'm interested in a response about how you get a competing bid.
M. Costello: The risk management branch does actually purchase insurance, and so, from time to time, they are in the market obtaining quotes. For other aspects where it wouldn't be market-tested, I would imagine that they make an estimate to derive the savings figure. I could certainly find out the exact methodology that was used.
F. Gingell: I don't need to be advised, but I am interested in pointing out to the minister the importance of not just carrying on with programs that get started. The measurements are made by people who are in the programs. It is critically important to have some outside evaluation, as time goes by, to make sure that the savings are still there.
I was wondering if the hon. minister could advise us of the government's accounting policies with respect to the estimation and recording of losses -- whether it be at the time of the loss, the time that they are so advised or the time of settlement -- and exactly how they handle those procedures.
Hon. G. Clark: With respect to the first point the hon. member made, I agree entirely. Risk management, in terms of our value-for-money auditing, is the kind of candidate we might review -- although frankly, there are higher priorities. That is a program which, by all internal accounts, shows significant savings. But taking his advice, I am sure that I will monitor that a bit more closely.
With respect to the last point, I will just ask for further clarification on the member's questions, with respect to what losses he is talking about. I assume he is talking about loan provisions, loan guarantees and business losses. He is shaking his head in the negative, so I had better ask the member to clarify a bit more.
F. Gingell: As I understand it, the province is presently a self-insurer for a series of liability and property damage claims -- that is the issue. My follow-up question, which you can maybe deal with all
[ Page 8704 ]
at once, is: what are the provisions in the financial statements at the end of 1992 for such losses that have been recorded but not yet settled?
Hon. G. Clark: I will ask my deputy to explain again, more fully.
M. Costello: It is my understanding that where the loss is known, obviously that cost would be booked as an expense. Where the loss has taken place and the final costs are not known, the normal procedure would be for the comptroller to identify the most likely outcome or the expected cost, to make an estimate for the likely outcome of the loss.
Hon. G. Clark: Peat Marwick identified it.
The Chair: Excuse me. Please address your remarks through the Chair. The hon. member for Delta South.
F. Gingell: I wonder if they can advise me -- from their backup documents or the files they have with them -- of the amounts of the estimates for the cost of unsettled claims at, say, the end of March '91 and 92, and whether they have any idea of the amount outstanding at the end of '93.
Hon. G. Clark: No. I will have to get that information for the member. But what I was questioning my staff about.... I am not sure what the member's question is, but generally speaking, if we book something -- in other words, there is an estimate -- it is booked in this fiscal year, so it is both an actual expenditure in the year and/or.... That's been our and the previous government's loans policy. If we give a loan or a loan guarantee for whatever reason and it turns out to be something which may be a doubtful account, or some of it is, then it would be called a doubtful account. That's actually expense now. This is a significant policy change by the government. We expense the actual estimated provision for doubtful accounts on the current account deficit, and that is, of course, a substantial change from the previous administration. But I'll get the risk management information for the member shortly.
F. Gingell: The amount I'm interested in is the accumulation of losses that have not been settled. My reason for asking the question is just to assure myself that the Ministry of Finance's officers and the risk management group are not slowing down the process, that the amount of unsettled claims isn't rising -- that really was the issue, so perhaps you'd bear that in mind when we get the response.
[D. Streifel in the chair.]
I'd now like to turn to the economics and policy division of the minister's office. In the 1991-92 report they describe a series of projects that they've been doing, one of which was of great interest to me. This branch, along with the Ministry of Social Services, has reviewed the combined effects of income assistance and taxation systems on income distribution. The results will be used in future discussion papers on welfare reform. I recognize that we can't keep track of everything, but I was wondering if the minister would be good enough to advise the committee exactly what the status is on this subject, and whether any papers have in fact been issued.
Hon. G. Clark: The status is that that's an ongoing review. It was started a year ago as a somewhat more academic review to do with the relationship between income tax and social services and some of the trade-offs that are made implicitly, never explicitly. The work has, of course, over the last year become much more intensive, and there's a variety of initiatives underway reviewing these very questions. I don't mind discussing them with the member, but there's no actual report completed. It's a report that's sort of iterative, and we're working hard on it. Michael Butler, the director of federal-provincial relations, is a key staff person assigned to deal with this question, which is integral to federal-provincial fiscal arrangements.
I have one last point. As members may be aware, the federal government has been not so quietly leaking major suggestions of an overhaul of the Canada Assistance Plan -- social assistance. It's no surprise that all provinces are grappling with this question. In Finance, we are active players in working with the federal government, monitoring the federal government, understanding what the federal government is doing in this area and preparing possible provincial government responses. That's where the process is today in British Columbia.
F. Gingell: The economic development and social policy branch does a series of evaluations for you. Looking at the description, they were special project items, each one separate and distinct. In 1990-91 they evaluated school lunches, University of Northern B.C. and the tire and battery recycling project. Would the minister be good enough to inform the committee what projects this group took on in 1992-93 and what they have planned for 1993-94?
Hon. G. Clark: I'm not prepared to give him an itemized list. The economic development policy and social policy branches are -- if you're looking at the annual report, I'm not sure whether it's particularly clear -- the two key branches of Treasury Board secretariat that, in a detailed way, review and critique line ministries, whether they are social policy ministries or economic policy ministries. That's a bit of an artificial distinction for the purposes of organizing the structure of government. In addition, their principal task, and increasingly so for government, is major program reviews for the purpose of finding efficiencies in government. The two branches in their respective areas are engaged daily in major program reviews, and there's a whole list of items under review -- probably upwards of 20 major programs being reviewed all the time -- for the purpose of feeding into the budget process. It's an internal review process for Treasury
[ Page 8705 ]
Board, which, again, I'm not really prepared to discuss because the work is ongoing. It's work that has to be done with ministries, and then it feeds into the Treasury Board deliberation process for the budget process.
F. Gingell: Mr. Chairman, the question that would seem to follow that discussion regards this effectiveness or value-for-money audit group that presently sits within the comptroller general's department. I'm wondering whether it would be more appropriate for that group to report to Treasury Board. There would seem to be some interlacing or overlap in the type of work they do. Following on that, a further question is: has Treasury Board in the past used, and do they intend to use in the future, the effectiveness and value-for-money audit group of the comptroller general's office in any of its work?
Hon. G. Clark: That's an interesting question, actually, because it's a question that we in fact have been grappling with. How it works is that they are not separate and autonomous agencies that don't talk to each other. In fact, they report through Treasury Board.
[3:00]
As for the comptroller general, for example, all accounting policy changes -- such as the one I alluded to in terms of doubtful loan accounts -- are worked through the comptroller general and then reported through Treasury Board. But how it works in practice, aside from that, is that the Treasury Board secretariat branches -- economic development and social policy branches -- do intensive program reviews and critique ministry proposals for new spending or for cuts in spending geared essentially toward the short term, trying to drive toward a budget target. The internal audit branch is doing what might be called comprehensive value-for-money audits that are very similar to what the auditor general is doing, and we feed that into the budget process as well. Clearly, there is a bit of overlap, and that actually works out quite well.
So we have Treasury Board analysts doing program reviews, effectiveness reviews and major program reviews, and trying to find efficiencies. We have the internal audit branch in the comptroller general's office doing comprehensive value-for-money audits -- slightly different tasks -- which feed into the budget process as well. They are different methodologies and different tasks geared a bit towards different time lines, but they work very well together. We had this debate about a year ago when we set up the internal audit branch, and I'm pleased to say that the division as I've described it is working very well. It's a bit of an artificial distinction in the sense that there's no real division. But where they're housed is actually quite an important function in terms of how it actually works.
F. Gingell: Am I to take it from the response that this particular group in the comptroller general's office has only been in existence since this government came into office?
Hon. G. Clark: No -- sorry if I was a bit misleading. The internal audit branch has been there, but it was designed to catch fraud or make sure the accounting policies were being followed. A classic example of internal audit branch work was the work done on Mr. Dueck and Mr. Dubas, the former Deputy Minister of Health. In other words, they are sent in to audit if they catch problems with people's expenses or the like. Since we came to office, we have expanded the internal audit branch and added the value-for-money component to it. Sunny Mathieson is the executive director, and he is doing the kind of comprehensive value-for-money auditing which never existed in government anywhere prior to the election of this administration. The branch was there, and we have built upon its strengths, which is largely why it's housed in the comptroller general's branch.
F. Gingell: When new legislation comes through the government process, I am sure that it's a fairly involved and circuitous route. I'm interested in the issue of whether Treasury Board gets involved in all of the financial costs of all of the various pieces of legislation that come forward. For instance, yesterday in the House we were discussing the new Health Council. Would that specific subject -- the anticipated cost of that Health Council in current and subsequent years -- have been dealt with and passed on and taken into the planning by Treasury Board under the minister's jurisdiction?
Hon. G. Clark: The answer is absolutely, unequivocally yes. The budget implications of proposed legislation are a major part of the review that goes on by Treasury Board.
R. Neufeld: I'm going to take you to a different area altogether than what the Leader of the Opposition is talking about. I want to ask some questions about some of the costs related to Cassiar. I went through a number of ministries' estimates -- Social Services; Energy, Mines and Petroleum Resources; and Economic Development -- and they all referred me to your ministry and you as the person ultimately responsible for the costs of the shutdown in Cassiar. Just for the purposes of myself and some people who'd like to know, can the minister give us what it cost to shut Cassiar down? Or are we even close to having those numbers, to start with?
Hon. G. Clark: The total cost to the province of the assistance to the residents of Cassiar as a result of the closure was about $12 million. I'll just give a breakdown if the member would like: direct financial assistance to the residents, $9.9 million; essential services, because when the mine shut there was a requirement to maintain essential services which would otherwise be maintained by the mine, $1.189 million; retraining and tax remission, as we provided some tax relief for some of the financial assistance, $960,000; and assistance to aboriginal communities, about $105,000.
[ Page 8706 ]
It's important for members to recognize -- and I know this member and I could have a good discussion on this -- that in most of these cases that money was not required to be paid out. These are not obligations or things we're required to pay. These are things that we as a government chose to pay in order to mitigate the impact of the closure. Virtually no other government in Canada that I know of has tried to make the closure of this kind of operation as smooth as is certainly possible, with such a major disruption in people's lives. Most of those costs are in fact discretionary costs that the government chose to undertake.
Just to give the members one last point on that, when the mine declared bankruptcy, having asked for and not received about a further $25 million from the government, the workers would not have received severance pay, for example, because the company was bankrupt. The government in fact chose, without any legal or other requirements, to provide that kind of assistance to those workers to try to ease the transition. That's just one example of many, in terms of the government's attempt to deal with this question.
I will say that, obviously, weighing those costs versus the cost of trying to continue to subsidize the mine was a key question the government had to grapple with. If we thought for a minute that the required $25 million investment would have led to a viable operation of the mine, then that would have been a very difficult decision for government to make. We would have had to weigh very carefully the costs associated with the $25 million to keep it going, or whatever it is, versus the costs of closure.
The problem with the business plan and all of the evidence we received and worked through with the townsfolk -- even in terms of sharing information with them -- was that there was no evidence that the $25 million investment or grant to the company would have resulted in a viable mine. It would have kept the mine open for a couple more years; and then these costs would have been incurred by the government in any event, had the mine closed some two years later. That, of course, is the crux of the question that faced us. We made the very difficult decision to proceed to not subsidize the mine any further, to take the write-off of the investment that had been put into that mine by the previous government, and in spite of the costs of some $12 million, to try to ease the transition for the people who live there to other employment or other regions.
R. Neufeld: I actually wasn't trying to get to that point; I just wanted to know the numbers. I appreciate what you said, though.
Would the severance that was paid be in the financial assistance of $9.9 million, by any chance?
Hon. G. Clark: The answer is yes. As a matter of fact, again, if the member is interested, $6.29 million is termination pay. There was relocation assistance of $1.2 million, and administrative costs associated with the windup sale of assets, etc., of some $740,000. There was another program to try to give some break on the equity that people had invested in a home -- the town was disappearing and their homes were liquidated, so we tried to provide some equity. It amounted to about $1.3 million.
R. Neufeld: I asked some of the other ministers these same questions about the employees. Can you give us an update on those families that were removed from Cassiar? Has the retraining that they went into provided them with new employment now? Are they someplace else in British Columbia working or are they out of the province? What has happened to those people? I would like to get a kind of a trace on what happened to all the people who were dislocated from Cassiar.
Hon. G. Clark: We don't have that information. The Minister of Economic Development or others may.... I appreciate it if the member has asked this elsewhere, but from the Ministry of Finance's perspective, as I said, we are trying to facilitate the smooth transition. Some of the costs which are not in here are federal government costs, because in this kind of thing there is the program for older workers' adjustment. There is also industrial adjustment money. So a lot, although not all of it, was 50-cent dollars. We don't have a tracking of what happened to those individuals once they moved.
I will say this, though. From my perspective in government, I was getting about 1,400 letters a week. That has escalated from time to time, depending on that actions of the government. I was very touched by most of the letters received by the people who live up there -- not necessarily about their support for the government's decision, because obviously that wouldn't be universally held in the community -- because of their support for the government's attempt to try to deal with their personal problems and ability to get work. I haven't received any letters recently, for example, from individuals who worked at Cassiar who have criticisms of the government for its actions. Letters are not an indicator of much, except you would think that we might receive some if there was some deep concern. So, rather, it is the opposite. We get letters of support for the government's actions in trying to deal with this as humanely as possible.
No, we don't have a track. Obviously, this is a free country and people move to find work. Miners in particular do that regularly; there is a pool of miners in Canada who move from site to site. In this respect we don't anticipate any difference.
R. Neufeld: I am sincerely trying to find out whether these.... The minister may think that I have an ulterior motive in asking these questions -- I don't. I am serious about the retraining of these people and about where they are and what they are doing. These are the questions that I have asked the other ministers in a serious way, because I am very concerned, for some specific reasons, about those people who had to move out of Cassiar. I come from the north and I know some of those people, so I want to know what happened.
If the Ministry of Finance doesn't have that kind of information, Energy and Mines doesn't have it, Social Services doesn't have it, and the Ministry of Economic
[ Page 8707 ]
Development doesn't have it, is there some way that we could find out? Could the minister maybe advise me of some area in government where I could go to find this out?
[3:15]
I appreciate the money the government put into it. But with the magnitude of the closing down of the minesite and the town of Cassiar, there should have been, I would have thought, some almost automatic tracking. I appreciate the money that the government put into it. There are arguments on both sides, but I don't have any problem with severance pay, with looking after the people the way they were, and all those types of things. I'm concerned about those people that were there and what happened to them.
Hon. G. Clark: I don't think there is really a very good way of getting a handle on it. I appreciate the way in which the member is asking his questions; it is certainly a legitimate question.
The challenge, of course, is that living in a free market economy, people move, quit, retire and move from job to job. Particularly in the mining community, that's a fact of life that miners go through. We don't track the individuals who move. Perhaps a legitimate exercise for someone would be a case study of a mine closure. It's an almost academic question to ask what happened to the individuals, and to track them over time.
It might be a fascinating topic, but I'm not sure it's one that the government would be prepared at this time to undertake, although I don't mind taking that forward, particularly in the area of training. We spend a lot of money on training in the Ministry of Advanced Education. They have a lot of statistics -- which are always debatable, of course -- showing that if we spend this much money, it creates this many jobs and everything else. It might be an interesting question for them to pursue in terms of the effectiveness or the success of this initiative, whether it led to productive employment elsewhere and where this was. So I don't mind taking that up internally; it's not something the Ministry of Finance or government does regularly, or that we can really afford to do in some respects. It might be an exercise for the training division to have a sense of how successful -- I hate to use that term in this case -- the money spent was in terms of what it has produced from an economic point of view and, maybe more importantly, from a human point of view. I'll take that forward internally to the ministry, but we certainly don't track those, and as you can appreciate in the dynamic free market economy, this is happening all the time. We simply don't track the individuals and what's happening with government transfer payments throughout the months or years after they are paid.
R. Neufeld: I appreciate that response. I guess part of it is also to try and get a bit of a handle on what could happen in another situation if that same issue arose. That's not an impossibility; that could happen. I think all of us have to face that, unfortunate as it is. We don't want to say that this is where it's going to happen, but it could happen again. All I'm saying is that if we have some model from what we did in Cassiar and what the successes were and the downsides were, the next time -- if there is a next time -- we're faced with anything like that, we might go at it in some areas a little differently than we did in this area. That's basically another reason why I'm trying to find out a bit more about what transpired there.
Hon. G. Clark: It's a legitimate question. I want to make the point, though, that Cassiar really was a unique case, an isolated community where the energy that heated the homes of the people who lived there came from the production of the mine. When the mine was closed in the middle of winter, there were costs associated with that, which government undertook for humane reasons which are not likely to be duplicated elsewhere. There are other communities that have been hard hit by recession or economic disruption where the government has not acted in this fashion, largely because of the uniqueness of Cassiar. I want to be just a bit careful in dealing with this question not to leave the impression that the government would take this as a precedent for all closures across the province; in fact, I would say the opposite.
I will say this, though. The government, partly as a result of Cassiar, established the natural resource community fund. So there was almost a contingent liability. It is an emergency fund to deal with the kinds of closures which might happen from time to time in single-industry towns. As a government, we're very much cognizant of our obligation to try to mitigate some of the consequences of single-industry towns being faced with abrupt closures or economic disruption. I'll just say that this was certainly no precedent; it was a unique circumstance. But naturally, any lessons we can draw from it -- the member is correct -- we should try to do so. As I said, I will try to take that up.
R. Neufeld: I have a few other things on Cassiar. One has to do with the removal of items in Cassiar, and Maynards auction service and the receiver. I understand from some correspondence I received from a corporation in Fort St. John -- a fairly large company that has bought quite a bit of equipment in Cassiar at the auction sale -- that it is experiencing a bit of trouble with some of the removal. When I talked to Energy and Mines during estimates, I was going to ask the minister these questions, but the minister referred me to the Minister of Finance as ultimately being the responsible person. So you're on the hook again for this one, hon. minister.
I'll give you a scenario of what's happened here so you understand where I'm coming from, and then maybe you can help me with a bit of it. First off, we know the auction was in September l992. Of course, snow flies in Cassiar at that time. I remember that it gets pretty deep through the winter -- in fact, up to ten feet deep. The removal of a lot of the items couldn't be done. I imagine the smaller stuff, the equipment and what not, was removed fairly quickly. This particular business removed quite a number of loads of stuff. He bought $250,000 worth of items; there were 430 items,
[ Page 8708 ]
actually. The bidder's card that you sign stated when everything had to be removed by. Other than that, it said that major items such as buildings or roadway drying kilns could be left over the winter at the purchaser's risk and responsibility, but it did not set a date when those had to be removed. The minor items, it said, had to be removed by September 26, l992, and major items by October 31, 1992. Then they listed buildings and those types of things that were fairly big items to remove.
So this business went on that assumption. Also, knowing that the snow does not leave Cassiar until sometime in May, he moved a camp of his own into Cassiar -- probably in mid-June -- for his own men to dismantle some buildings, some cranes and some fairly large things that he had purchased. At that time, there was a letter from Maynard's saying that they had until the end of June to remove all these items. It became evident that they couldn't remove them all by then, so after a lot of letter-writing and discomfort, they finally extended the date until July 31 -- but July 31 is still not enough time. The letter from the receiver states that July 31, 1993, will be the very last extension given and at that time, the items will revert to the Crown or back to the receiver and will either be resold or destroyed. They say the gates will be locked and that type of thing, and that it will be shut down. This particular person, for instance, bought a large crane and a building in which there are generators. As the hon. minister talked about earlier, those are huge generators that ran the whole minesite and the mill, and they are actually on their way to Peru. The company hasn't started to dismantle those generators, and he cannot take the crane out until the generators are out. The earliest they think they'll have the generators out -- and, of course, that person will meet his commitment -- is by the end of July. This person who's waiting until that other stuff gets out, what does he do?
Right now, he has a camp up there of his own with a crew of men dismantling equipment. What happened in the meantime was that Energy and Mines came along and named it a minesite, so the rules about work hours changed. Now his men can work ten hours a day, five days a week, eight hours on Saturday and none on Sunday. You must remember that Cassiar is a long way from anywhere. The people working there go up there to work probably a 12-hour shift; that's the way most of those types of jobs are done. When those people need time off, they go back to the community they come from, and other people are taken in there.
The other thing is that this particular company had a crane in there, and under the Mining Act a crane has to be certified to a fairly high degree, more than in the construction industry. Before he took his crane up there he knew it would be on a site, so he had it certified. Now, because of the change in the act and it being a mining site, it's not certified. He has to haul that crane from Cassiar back to Fort St. John to have all the wells magnafluxed so that he can get it certified by a proper person doing certification; and he may have to take it to Edmonton to have this done. This gentleman is wondering what he can do. Really, he's got a $250,000 investment. I'm not saying that all of it is left there, but there's still quite a bit. He has to deal with a receiver and the auction company on all these items. On top of that, just so you know there are some other things happening, he has to pay $30 a day. He's really not complaining about that, but it's for compensation and those types of things. This fellow has his own compensation. He has a huge company and does his own work, but he said: "Look, $30 a day is not going to kill me, but I don't want to argue with everyone from Arthur Anderson to some auctioneer to try to have the gates left open."
The second part of it -- this is just this gentleman -- is that there was a new school built in Cassiar, and fortunately most of that school will be dismantled. In fact, it's being dismantled right now and moved to Hudson's Hope in my constituency to replace a school that is outdated. To tear down the school and get it all moved, they expect they will be until September getting it out of there. This creates a bit of a problem for them also. These are the two people from my constituency who have talked to me about this issue, and I'm sure there must be others who are having the same problem. Changing it to a mining site does all kinds of things. You can use a cutting torch for only so many hours a day -- I think it's six hours a day and only on certain days. There are really some stringent rules on it.
The ultimate responsibility, as I understand from Energy and Mines, and from the receiver, lies with the minister. I would like the Minister of Finance to please tell me what I can do to let these people know that no, we're not going to close the gate; no, we're not going to shut them down; and yes, we are going to let them continue in an orderly way to dismantle the items they purchased in good faith in Cassiar and move them out -- and not only that, you'll get your money.
Hon. G. Clark: The member tells a good story. I certainly take it very seriously. I'd like, if I could, to ask the member to put it briefly in writing -- I'm not talking about spending a lot of time on this because obviously time is of the essence -- and give me some of the specifics that he's alluded to with the names of the individuals. I will definitely look into it.
I just want to caution members -- and I'm not trying to cop out, because certainly we can have some influence on this, I'm sure -- that there is a court-appointed trustee who is handling this bankruptcy. They have legal obligations which, as a creditor, we have some influence over. But we simply don't have total influence over it. Secondly, Maynards Auctioneers, of course, is a very professional organization that has been charged by the trustee to carry out the auction. None of that is directly the responsibility of the Minister of Finance or the government. But I'm not saying we don't have some influence over it. I suspect we will try to have some influence over it.
[3:30]
My understanding is that the trustee, for purposes of the bankruptcy, is winding up the court action. Maynards -- basically the trustee -- wants to level the townsite by the end of the summer in order to facilitate any new, smaller operation going in to mine the tailings or whatever. Given the weather window that exists in
[ Page 8709 ]
the north, they have a very tight time frame to accomplish this. It's not really surprising that they are putting some pressure on to move this thing along.
I'm not fully briefed on all the nuances; this is the first time I have heard these concerns. If the member would give it to me in writing as soon as he is able, I'll try to have my staff review the question immediately and see if we can resolve it to those individuals' satisfaction. My only caveat is (a) I'm not sure that we have ultimate authority on that question because it is before the courts, and (b) there are probably some time constraints on the trustee as well in terms of trying to proceed. I will take it very seriously, however, and see what we can do.
R. Neufeld: I have a copy of the letter. I will copy it and give it to you. You and I know about receivers and those types of things, so I can appreciate what the hon. minister says. This business will certainly appreciate any.... You can see the trepidation he's moving with because it is the middle of July, it's only 14 days and there is no way he can get his stuff out. The other thing is to do with the school. That is directly funded by the government, and I think we would like to make the best possible use of the money expended on the school. I'll get that to the minister, and I thank him very much for those answers.
F. Gingell: I want to go back to the responsibilities and programs being carried out by the planning and statistics division of Treasury Board. That division has developed a comprehensive aboriginal claims model to assist in dealing with negotiations with first nations people. Could you briefly describe the model? What are the inputs and outputs?
Hon. G. Clark: For the information of the committee, that division is now called quantitative analysis and statistics because we merged some branches from them. There have been some changes. We've eliminated an assistant deputy minister as part of our delayering exercise across government. This is perhaps a minor point.
With regard to the member's question, I'm going to discuss this carefully because what we're doing in Finance in this area is very comprehensive work arming -- to use that terminology -- the province's negotiators with accurate information. There are three parties in the negotiations: the federal government, the aboriginal people and the provincial government. I don't want to jeopardize the province's strategic position by discussing at great length the statistical work that goes on behind negotiations. A lot of the information in negotiations.... We have an outstanding and favourable cost-sharing agreement with the federal government. As you can tell by those remarks, the Ministry of Finance was involved in the information-gathering that went into that.
If you've looked at the question you also know that questions of land value and the value of resources are debatable questions. It's absolutely critical to the success of the province -- I'm not talking now from just a financial perspective -- that we have negotiators who are fully equipped to articulate the points and achieve the maximum benefit for British Columbia taxpayers. I might say that when we took office -- again, this is not a gratuitous political attack on the previous government; there was a move to start looking at native land claim questions -- there was no, and I mean no, analytical work done. The federal government, on the other hand, has a huge apparatus in Ottawa to bring to bear on the question of negotiations. I think they spend $1 billion a year or so on this kind of question. Very quickly after coming to office, we realized that before getting into any discussions, we needed to tool up in a quantitative or an analytical sense to make sure that we knew exactly what numbers we were dealing with.
So perhaps I could say to the members across the way that.... No, I won't. I will just say that I don't mind discussing this question, but I am reluctant to get into details governing the kind of statistical work that we do, other than to say the obvious: the province has to have an accurate inventory of lands in dispute and of the market value of various resources, including land. It has to work through essentially economic modelling -- based on certain proposals that come forward -- so that we can adjust and have an accurate costing of them and of alternatives. We have to have senior people and others engaged in this econometric modelling, and we do.
For the information of the committee, at the moment we have Don Wright, who was the deputy minister in Saskatchewan under the Devine government, and worked on contract with the previous government in the Premier's office, in interprovincial relations, as one of the lead people in Finance working on the question. We also have the whole quantitative analysis branch, which is largely an econometric modelling unit of very qualified, capable people running the models under his supervision to guide our negotiators as we move forward. So in a broad sense, that is the kind of work that has been done.
It has been an enormous undertaking by the Ministry of Finance in terms of making sure that decisions aren't made without the appropriate fiscal consequences spelled out, including the range of options that might come about. As we move forward with detailed negotiations on a case-by-case or a nation-by-nation basis, we are now in a position -- in terms of the modelling work that has been done -- to have what we believe is better information than the federal government, to ensure that we are in a position to at least negotiate with full knowledge of the consequences of our actions.
F. Gingell: I guess I can't get you to advise us of what the total estimated cost might be out of these models, if you have run anything through. Perhaps you might advise me -- and this may be public knowledge, but I am not aware of it -- who the negotiators representing the province will report to. Will they report to your ministry?
Hon. G. Clark: The negotiating teams are in the Ministry of Aboriginal Affairs, but the mandates come from Treasury Board. Before negotiations, the
[ Page 8710 ]
Aboriginal Affairs negotiating team will have to come to Treasury Board for a mandate for negotiations, and the quantitative work done by the Ministry of Finance enables Treasury Board to understand the options and the likely costs associated with any of the options, to better inform the decision-making. So that is kind of the process.
The major negotiating team in place right now is the Nisga'a negotiating team in Aboriginal Affairs that reports to their deputy minister, and gets its mandate from Treasury Board. The outstanding and very talented individual involved there is Jack Ebbels, who I think used to be in the Attorney General's ministry in years gone by. He is basically driving that team.
F. Gingell: Just moving on but moving back, because we touched on the subject briefly when a question came up before, I notice in your report that the office of the comptroller general makes recommendations about audits, appraises ministry operations and recommends the appointment of external auditors for specific tasks. When you review all the various audits that finish up in Public Accounts, a series of them are done by the auditor general and a series of them are done by external auditors. Can you advise me what guidelines the comptroller general uses in making that determination?
Hon. G. Clark: Shortly after coming to office I asked a similar question of staff. I think the real answer is a kind of historical development over time. There is no real handle on why a certain Crown corporation would use the auditor general and others would use private auditors. In truth, I think that where it's a sort of subsidized Crown or subsidized agency, it has generally been the auditor general. Where it's a commercial Crown, the board has appointed the auditors, and it's approved by the Ministry of Finance. It goes through a very formal and rigorous bidding process, which the comptroller general requires every three years.
I'll just give you anecdotes. I used to quite often get a request from a college board or something saying that they wanted to extend this for one year at 5 percent more because they didn't want to go through the bidding process. After rejecting literally dozens of those, they don't come forward anymore, or they come forward with a rollover at zero cost or a minus number, because it's very competitive in the auditing field right now. We have a requirement to have competitive bids on all college boards, universities and Crown corporations. The auditor general supervises the bids. When the board makes a recommendation, the auditor general scrutinizes that recommendation to ensure that it is in fact the correct or the cheapest and the most effective use. From time to time there are some disputes, because boards might like to use someone they feel has developed a particular expertise in that area over time. It may not be the low bid, and always the comptroller general prevails, because the Minister of Finance must approve all appointments of auditors under the act.
There isn't a neat and tidy division between those agencies of government which are fully funded by government -- 100 percent -- that use private auditors and those agencies that use the auditor general. The auditor general from time to time has discussed with me the possibility of him -- or whoever is in that office -- doing a bit more of the audits. I'm not opposed to that, although right now we have a pretty good system of private companies. It's very competitive; the prices are coming down across the board. In fact, most of the major firms routinely complain to me about the state of their practice and the state of government bidding, which drives the price down. I'm not inclined to make any precipitate changes, because we have a rigorous review. The comptroller general approves them, and we have competitive bidding across the board. So I don't think there's really anything broken to fix, but there's no particular rationale that I've detected yet for that.
F. Gingell: The office of the comptroller general has been working quite hard for some time to bring in a project that deals with the electronic data interchange of information with major suppliers. I wonder if the minister could advise where they are at with that. It isn't GASSP; it's a different one.
Hon. G. Clark: I'm going to ask my deputy to answer the question.
[3:45]
M. Costello: There is the so-called EDI initiative within the government, which has been in place for a number of years. Work is taking place among the comptroller general, the provincial treasury and B.C. Systems to look for applications for EDI that save the taxpayer some money. I believe the pilot project in place last year at this time between Chevron and the government for paying gas bills is still in operation. The representatives of the three agencies are continuing to look for other potential applications. It's a matter of considerable discussion between provinces and the federal government as to where EDI might become applicable in the future in terms of tax collections and the like.
F. Gingell: That leads us to the concerns that have been raised in the House and in the media about welfare fraud and EDI electronic data exchange. Electronic funds transfer can be a way of reducing those kinds of concerns and even creating some solutions. I'd be most interested in whether people in the ministry have been dealing with that issue at all and coming forward with any proposals.
Hon. G. Clark: There's no proposal right now.... I apologize -- I was trying to get caught up on it. If the member is asking whether there is a proposal for EDI for electronic funds transfer for welfare recipients, the answer is no, in part because there is often no bank account to transfer to in a place like the downtown east side. It is possible and does have some government cost savings, but may have some expenses attached if it reduces the ability to detect the fraud. All I can say is that I don't know of any proposal from Social Services or anywhere else to pursue electronic funds transfer
[ Page 8711 ]
with respect to welfare payments. So at this time there's nothing current for us that I know of.
F. Gingell: I'd like to move on to the issue of pay equity. In April 1992 the ministry made a salary adjustment that is reported as being in the amount of $10.8 million. Was that $10.8 million amount in April 1992 a lump-sum payment that was paid out at that time, and if so, what was the annualized cost that the government incurred on that particular issue from the point of the settlement on, for the next year?
Hon. G. Clark: The ongoing cost is a 1 percent increase in the payroll costs of government. It was an $11.8 million adjustment paid in January 1991, and $10.8 million was paid in April l992. The next salary adjustment has an effective date of August l993, and we think it will cost approximately $12.2 million. These are not one-shot payments; these are incremental spendings that go right into the base amounts. To answer the hon. member's question, the annualized cost is 1 percent of payroll per year. That's the annualized impact of these costs; that's the annualized cost associated with those payments.
We now have the completion of the pay equity program scheduled for March l994; that's where we have an agreement. This has been an enormous undertaking: a computerized, gender-neutral, point-rating job evaluation plan to apply to all female-dominated classes within the bargaining unit. We have developed and implemented a computerized job-description-prepared system and established a basis for future internal equity within the bargaining unit through the application of the job evaluation plan.
As of fairly recently, there is an absolute that we have a framework for the development and implementation of pay equity. The initial 1 percent instalment, if you will, or payment under the previous government was an intuitive payment which was essentially bottom-loading to female-dominated, low-paid classes. There's nothing necessarily wrong with that, but it's not something on which you can build an ongoing program. With an employer this size, you have to actually set up a very sophisticated program to ensure that the money that you're spending is in fact going to deal with the question of pay equity. So the first one or two payments -- one by the previous government, I think, and one by this government -- were ones which were literally bottom-loading the female-dominated classes without the benefit of that kind of agreed-upon and sophisticated job evaluation program. Now that we have that, the money is targeted more specifically -- not more easily -- to deal with problems identified as relative to that job evaluation plan. We also know now, as a result of this, that when it ends in March 1994 -- when we have completed what we set out to do, to end the gender-based discrimination in government -- then obviously there's an ongoing evaluation as a result of classification changes, which we will have equipped the system to deal with. So just for the committee's sake, that's a kind of update of where we are on pay equity and how we're moving forward.
The costs each and every year are essentially 1 percent of payroll, because that's what we limited the amount to. Now that we have a program up in place, we know what the gap is and what it costs to make the difference. We have, for fiscal reasons, limited the amount that can be paid out in any given year to 1 percent of overall payroll costs.
F. Gingell: I'm afraid I'm going to require a little more help, because I don't completely understand it. Let me put it in these terms; you can tell me if I'm right or wrong, if that's all right. In April 1992 you made adjustments to a certain number of individuals -- perhaps 25 percent of the provincial workforce -- for which the total cost was equal to 1 percent of the provincial payroll at that time. If it was 25 percent and they were treated in an equal manner in relation to their own salary, it will be 4 percent. The $10.8 million is the movement of those individuals' annual salary, from what they were being paid before to what they have been paid now -- the difference was $10.8 million. Exactly the same thing will happen in August 1993, and the final amount in l994. Can the minister advise the committee of the increase in salary that has resulted from this program, as a percentage for the lowest-paid employee in the system?
Hon. G. Clark: I don't know the answer, but I'll be happy to find out for the member. It is substantial. The member's arithmetic is correct: it would be 4 percent for the bottom 25 percent. But in fact that isn't what happens. It's much more dramatic at the bottom end, and very modest in some classifications over time. It's not insignificant -- I'll leave it at that.
F. Gingell: I would just like to point out to the minister that I would like to know the total package. It isn't 4 percent, it's four times 4 percent, so it's actually 16 percent.
I have very little knowledge of or experience in the field of labour relations, and so I am a little confused when I read in the report that the labour relations division within the ministry is responsible for settling unresolved grievances filed at arbitration -- it's on page 23, two-thirds of the way down the left-hand column. Does that indicate that the ministry in these circumstances, who I presume is representing the employer, acts as both advocate and judge?
Hon. G. Clark: Maybe I'll just explain it, if I could, for the committee. The government personnel services division is to human resources what Treasury Board is to finances. The government personnel services division is the goverment's agency that deals with negotiating and implementing the contract. It gets its mandate on the fiscal side from Treasury Board. That's why, in this case, it's in the Ministry of Finance. It doesn't have to be in the Ministry of Finance, and hasn't been historically, but one can see why it might be.
Right now, each ministry has a personnel department and a labour relations department. Typically, the personnel department would do something that would cause a union member to make a grievance, if you will,
[ Page 8712 ]
against that ministry personnel agency. At the early stages those are handled between the union and the personnel agency. If it is not resolved, then the government personnel services division, the government's central agency, takes over the grievance from the ministry and pursues it or gives in, if you will, to ensure consistent application of the collective agreement across government.
Sometimes it may well be that a ministry's management may be sympathetic to a union position in a particular area, or a personnel position. But if that were applied to the government as a whole, it would have consequences for management rights or for the ability of government to manage. So the government personnel services division says to a ministry: "We are sorry. You may like to concede on that grievance, but we are not going to allow you to do it, because it has consequences for the government." The reverse is true as well. The government personnel services division may say to a ministry: "You are not being fair on this one. You are wrong. We have lost some arbitrations in other ministries on this area, and therefore we concede on your behalf." That is essentially the function of the government personnel services division.
In addition, government personnel services is the negotiating arm, or a piece of it. It actually negotiates the collective agreement on behalf of the government with the Government Employees' Union, and on behalf of some what might be called not-so-arm's-length Crowns. As I understand it, B.C. Buildings Corporation negotiations are handled by the government personnel services division, although again, there is no consistency. The Systems Corporation has their own negotiating team, even though it is an almost in-house Crown, if you will.
That is part of what Korbin was looking at, and we are trying to deal with some of those questions. But if you are asking whether GPSD is the judge, it isn't. It is the advocate for management at arbitration hearings. It is the employer's enforcement for ensuring that the employer's position is consistent across government when dealing with labour relations questions.
F. Gingell: If I may, I would now like to move on to the provincial treasury.
Hon. G. Clark: Hon. Chair, I seek the committee's indulgence. Richard Bridge is a special projects adviser from the Crown corporations secretariat. He has been here because I thought I advised the member across the way that we might deal with that. It would be helpful if we could deal with that first, if that is okay for the committee. Then the chief executive officer of the Financial Institutions Commission is coming -- Mr. Hobart. The only reason I suggest this course of action for the committee is that the treasury is the responsibility of Mr. Costello, who is here for the duration, so we can call treasury at any time. The other two are subject to other pressures. So could we do the Crown corporations secretariat now?
[4:00]
F. Gingell: As this is primarily a two-way exercise and it is 4 o'clock, I wonder whether we could call for a five-minute recess.
The Committee recessed at 4:02 p.m.
The Committee resumed at 4:09 p.m.
[D. Streifel in the chair.]
F. Gingell: Perhaps an appropriate place to start this discussion is with the mundane issue of money and where it has been spent. We are all aware that the Crown corporations secretariat was a new vote last year, so their original budget had been set up without a great deal of knowledge of what exactly they planned to do. I wonder if, from your records, you can give a quick rundown of the expenditures under vote 37 for l992-93 for the Crown corporations secretariat, broken down into the major items that appear in the budget summary.
Hon. G. Clark: Certainly. Salaries, roughly $680,000; employee benefits, $149,000; travel expenses, $45,000; professional services, $800,000; data processing, $70,000; office expenses, $50,000; building occupancy charges, office furniture and the like, about $250,000.
While I'm on my feet, Mr. Chair, the $800,000 for professional services is because this organization is not a big bureaucracy. Its mission predominantly is to use professional contractors on a project-by-project basis. So to maximize flexibility and keep the agency a small secretariat, the professional services part of the budget is the largest part, and we'd like to keep it that way.
F. Gingell: I didn't write down the first number; I didn't add them up. I was wondering if you could just tell me what they amounted to.
Hon. G. Clark: I'll give you the exact ones; I was giving round numbers before. The exact total amount is $2,069,206.
F. Gingell: It's strange that the amount they spent in l992-93 is exactly, to the penny, equivalent to the amount they are going to spend in 1993-94.
Hon. G. Clark: Well, the answer is that because it's largely professional services and because it's a $10 vote, which is fully recovered from the Crowns, we gave them zero in the budget process. That's why they then work within the budget we allocated. In the budget process when we're reviewing everybody's budget, having gone through the process, they were told to keep the budget to last year's level. Whether it be exactly that amount or not.... You know, it will likely be somewhat different from that -- or a little bit. That's a $10 vote fully recovered from Crowns. So from the impact on that, we approve a budget each year and expect them to live within it, and they will.
[ Page 8713 ]
F. Gingell: During the course of the estimates debate last year, it became apparent that the Crown corporations secretariat wouldn't be spending all the money that was budgeted for salaries, purely and simply because they had made assumptions about how individuals would be brought on staff. From January, February and March they had fewer people on staff in April, May and June than they had anticipated, and they had a much slower growth of the office than they had originally budgeted. I was wondering if the minister could inform the committee -- if he has the information available -- whether in fact they did spend their full salary budget in 1992-93 in accordance with the original estimates, and what kind of staffing growth that resulted in.
[4:15]
Hon. G. Clark: I'm not absolutely sure. The present base salary budget is $681,000 -- I said that earlier. That is ten FTEs. Full-time staff includes eight full-time staff. There are another ten contracted staff who are covered by the contract budget. That's 18 people, although the contractors are not always working in there; they're paid on a contract basis. That's about the size of the salary budget that we think is adequate and optimum, and gives some flexibility for contractors to work on specific projects.
F. Gingell: Can the minister advise us if, with this staffing level of basically eight full-time -- and ten contracted; I appreciate that when you get projects you take them on and let them go, etc. -- you sort of have a permanent staff of eight, that's going to run through the whole of this year, and then you'll just add and subtract people as you need them?
Hon. G. Clark: That's essentially right, although some of the contracted staff are pretty well full-time, and that would continue. Richard Bridge who's here today, for example, is a lawyer who's on contract. Essentially, he's working full-time for the secretariat but is not a member of the Superannuation Commission or anything else. He's a contract employee. Just so we're absolutely clear, two or three of the contracted staff are essentially full-time.
By and large, the rest are definitely contractors in that sense of the word. I'll just give you an example. Harold Halvorson, who actually did a lot of work for Jack Davis when he was Minister of Energy and is an interesting consultant, is one of the contractors. He's working there now essentially full-time, but he's a noted consultant and has been around a long time and isn't really an employee by any stretch of the word. He just happens to be working full-time at the moment on a variety of projects. He has a business and other opportunities that I'm sure he pursues.
Just so we're absolutely clear, it would be more like ten sort of full-time actual employees, and then the remainder are contractors who work from time to time on a full-time basis but aren't....
F. Gingell: I presume the minister is saying that the salaries of this gentleman he spok of and Mr. Bridge are charged to STOB 20, the professional services contracting group. And the eight individuals on full-time permanent staff earn $680,000; simple division tells me that's an $85,000 average.
Hon. G. Clark: It seems a bit high. It's actually 10 FTEs; my assumption here would be that the $681,000 is for ten FTEs. I'm saying there are eight FTEs there right now. So it strikes me that there are two vacancies right now as we speak, in terms of the salary budget. Over the course of the year they'll either be filled or they'll be underspent on the salary budget.
If the member would like, I'll just read the titles of the individuals who are full-time staff. There's a secretary to the committee, assistant secretary, senior policy adviser, analyst, operations coordinator, executive secretary, receptionist and branch secretary. Those are the full-time staff associated with it. To put it another way, there is a deputy minister, two assistant deputy ministers and, to put it in bureaucratic jargon, one director-level person, then secretaries and receptionists and the like. So it's a fairly small team even at the executive level.
F. Gingell: Perhaps before this vote is passed, the minister would like to -- without giving us names; we don't need them -- just give us a breakdown of how that $680,000 item is made up. It just seems on the surface to be a rather high number.
Interjection.
F. Gingell: I divided it by eight -- when I counted up the number of people you had, it didn't come to ten.
During its first year of operation or its first period, the Crown corporations secretariat did a review of the hazardous waste corporation and the Compensation Fairness Commission, both...
Interjection.
F. Gingell: It says in the book they did it. Anyway, that isn't the point. The issue is that the results of both of those reviews determined that neither of theses bodies were necessary, and as a result they were both disbanded -- a practice and a result that this opposition in no way argues with. I was wondering if the Crown corporations secretariat has done any further work in this fashion in this past year, or has any projects going on that look at the need for a particular organization to exist which could result in the demise of such an organization?
Hon. G. Clark: No. In terms of actual reviews of the agencies, I can't think of one right now that's being contemplated. It is more likely that what the secretariat is reviewing is pieces of Crown corporations and whether they can in fact be eliminated. Essentially, we are now in the situation where it's regularized, where the business and capital plans are scrutinized by the secretariat. Rather than pursuing the initial approach of going in, reviewing and perhaps recommending abolition, we are now into a more regular businesslike
[ Page 8714 ]
approach of reviewing the business plans and critiquing them for the Crown Corporations Committee of cabinet. In some cases, we go through that to the Treasury Board in terms of trying to find cost savings and efficiencies.
In the case of B.C. Transit, as a result of working with their staff, there was some $20 million cut from last year's budget -- some small capital and some operating costs. That work was done by the corporation itself, by Mr. Denhoff, and it was also assisted early on by the secretariat in terms of trying to apply some rigorous analysis to see if there were some efficiency gains. So that is just an example of where there was some effect on the administrative costs of B.C. Transit. I think it's minus one-half of 1 percent in terms of what happened year after year -- not this year, last year. We are hopeful that more efficiencies can still be found.
So initially there were some reviews, which resulted in the elimination of a Crown corporation. Now it is more likely to take the Crown corporations and review their business plans to look for efficiencies or synergies between the Crowns.
J. Weisgerber: I'd like to just go back for a minute, if I could, to the discussion on staffing. As I understand it, under STOB 1 there are eight or possibly ten employees earning about $681,000, and another ten or so contractors under STOB 20 earning about $820,000. Far be it for me to criticize the use of contractors, but it seems most unusual that an entity that is entirely the creature of this government would spend more money on contractors than it does on agency staff. Indeed, we have listened not only over the last 18 months or so but over the last few years to a rather continuous critique of the use of contractors. As a matter of fact, I would suggest that critique is probably too kind a word for it. There have been a lot of allegations about the impropriety and, in some cases, the illegality of contractors, and here we have a Crown agency secretariat that has more contractors and pays more in total for contractors than it does for its hired staff. Again let me say I am not going to follow the example of the minister and the government and criticize that practice. I've always thought that it was a very good practice, and I would be interested to hear the minister's new justification and rationalization of this policy under this particular secretariat.
Hon. G. Clark: We've never criticized the use of professional contracts for the purposes of various projects. What we have criticized is the sort of shadow FTEs -- the phony contractors who are really employees of government. What we have here are not employees on contract. Generally speaking, the vast bulk of that $800,000 is in small project-related contracts to do reviews, and I can name dozens of them.
When we're doing commuter rail, we got the best expert in North America, Carl Englund from New Hampshire, to come up to British Columbia and spend a month working with the CPR, B.C. Transit, the government and the secretariat to provide that invaluable expertise which doesn't exist in very many people. To have that gentleman up here is invaluable on an important task. So the flexibility of professional contracts....
That's not a staff person. That's not putting someone on contract and pretending they're not an employee. These are genuinely professional contracts that we let. I have never said that; Ms. Korbin in her review has never said that. There continue to be contracts let by the government, whether it's for WEFA, Informetrica or other professional services. That will always be the case. Within reason, we want to avoid the use of hiring secretaries on personal services contracts and pretending that they're not employees of the government. That's not what the secretariat is doing. We have a very small team of about ten FTEs. There are only eight working there now who are the core unit; then most of the work is done on a project-by-project basis, hiring professional contractors to undertake it.
I must say that I make no apologies for that; that's the way it is. In this case, I think it's the best and most flexible use of the kind of expertise we want to bring to bear on some of these problems and issues that are before the Crown corporations.
J. Weisgerber: I wouldn't and didn't suggest that the minister should apologize for it. I thought it was pretty good public policy, myself.
Can the minister tell us whether or not.... Let's go at it this way: how many of the contractors now paid under STOB 20 have been there since the secretariat was formed? Maybe we'll hear that and then carry on.
Hon. G. Clark: The answer to that question, hon. Chair, is not very many. I think there are two individuals there. Alistair Crerar, who worked in Alberta for the Energy Resources Conservation Board and is an older gentleman with a superb wealth of expertise, is on contract and has been there continuously since we took office; and Richard Bridge here next to me, who is a lawyer, is on contract and has been continuously. So in that respect I plead guilty. There are a couple of contractors who are there for a variety of reasons, but I think that's all.
J. Weisgerber: The one question, then, is where Mr. Williams's salary falls, whether it's under STOB 1 or STOB 20. The minister indicates it's under STOB 1. I don't wish any of the members present a short duration with the secretariat, but are the two individuals you mentioned as being on contract under STOB 20 not anticipated to continue with the secretariat, or is the intention to move them into STOB 1 and hire them as permanent staff?
Hon. G. Clark: It's a personnel question, I guess. Generally speaking, you're correct in the assumption that if these people -- and in particular, the two individuals I mentioned -- are going to stay on, then obviously we're giving serious consideration right now as to whether those individuals would be more appropriate in the salary component. Again, no decisions were made on that, but it's a legitimate question we're reviewing.
[4:30]
[ Page 8715 ]
J. Weisgerber: With the indulgence of the committee, I'd like to ask a few questions surrounding the recoveries -- the amount that balances off the expenditures of the secretariat. As I understand it, the $2 million-plus comes from a levy applied to the Crown corporations. We've been over this before. But just to refresh my memory, can the minister tell us on what basis the appropriations or the levies are applied -- or have we been through this already?
F. Gingell: Not today.
Hon. G. Clark: We allocate cost recovery by adding operating expenses and then calculating the percentages. To use an example, BCBC is a $312 million operating expense; that's 9 percent of the total operating expenses of all the Crowns in British Columbia. They are paying 9 percent of the costs of the secretariat, which is $179,000. It's an interesting formula, which one could debate. For example, the Lottery Corporation, which is extremely profitable for government, pays only $30,000 because of very small operating expenses. We used operating expenses because of our desire to try to drive them down; part of the secretariat's main task is to try to achieve those efficiencies. We thought it was a useful tool to gauge, and it gives a more or less reasonable breakdown of the costs of the secretariat vis-�-vis the requirements of the job.
To use the same example, the Lottery Corporation is a fairly small operation that makes a lot of money and isn't a big tax on the secretariat's demands. It has a pretty straightforward and very successful business plan. The same individuals are there who were there before, and obviously in many cases are leading the world in the lottery business. On the other hand, a Crown corporation like B.C. Transit, which has a fairly large operating expense, is also subsidized. It is paying a larger part of the bill, but in the first 20 months of this administration, it has consumed a fair amount of time -- my time, in this case. Also, the secretariat is trying to work with that Crown to achieve efficiencies which have been a real success story. At the early stages, the work on commuter rail was being done by the secretariat, which was really work on behalf of Transit.
J. Weisgerber: I would assume that B.C. Rail and B.C. Hydro would probably pay a significant portion of the $2 million between the two of them. One could argue that in Hydro's overall budget, that's not a large contribution. I wonder what kind of services the secretariat might provide to Hydro in exchange. If I were president of Hydro, what kind of benefit would I reasonably expect? What kind of benefit would I explain to an interested observer, perhaps to the Utilities Commission, in exchange for the fee I pay?
[J. Pullinger in the chair.]
Hon. G. Clark: In B.C. Hydro's case, they do pay 38 percent of the operating costs, which is about $770,000. In B.C. Rail's case, it's quite a bit less -- 7 percent, or $143,000.
First, I want to make sure it's clear. In this case, I appreciate the shareholder question, but this is not.... They're paying money and they are getting some benefits, but the real benefits accrue to the government, as a shareholder, to provide scrutiny on the business plans and the like from a central agency perspective. They're not always happy with the work of the secretariat because it is in fact an agent of government, scrutinizing and reviewing the business plans and capital plans of those Crown corporations. That's the first point.
Secondly, in the case of B.C. Hydro, there is real value added to the secretariat, particularly in the person of Marvin Shaffer, who is sort of like an assistant deputy minister and a salaried person at the corporation. Mr. Shaffer has a BSc in economics and is doing a lot of the capital evaluation across government, but he also has a tremendous expertise in the area of electricity as an expert witness at various utilities commissions across the country. He is involved in a team that is dealing with some of the negotiations around the downstream benefits of the Columbia River. Those Columbia River Treaty negotiations are a very important topic for government, as you know, and we have used the expertise of Mr. Shaffer, together with B.C. Hydro as a dominant and lead player, to provide some professional expertise. This is a bit of a project for government which the secretariat is keenly interested in, as is the cabinet committee that's reviewing Crowns. There have been significant resources applied -- through the secretariat, through Hydro as well as through Energy, Mines and Petroleum Resources -- to that very question as they move forward. That is just one example where I think there is genuine value added, and I am absolutely positive that B.C. Hydro would agree with that in terms of the rigour that's being applied to that analysis by the secretariat.
The basic business plan of the secretariat is to review the business plans and the operating and capital budgets of the Crown corporations, and to provide that to government -- and they do that. It is more routinized now, and there's a regular review.
In addition, it undertakes projects from time to time with the Crown corporations, and the secretariat has been involved in one of the major tasks that Hydro faces. Maybe Hydro faces lots of major tasks, but I would argue that from a government perspective the downstream benefits question is a very important one. There has been a symposium in the Kootenays in the last couple of weeks that was organized by the secretariat. It brought together politicians, regional community people from the Kootenays, MLAs, people from B.C. Hydro and the ministers responsible for B.C. Hydro, Economic Development and Energy and Mines. They were at the conference to discuss the community's and the region's very heightened interest in this question, and to try to deal with some of the community's expectations. Not all but some of the costs of organizing that symposium were associated with the secretariat, which undertook the upfront staff work and the review and discussion documents leading to the discussions on behalf of government, because it's not just a Hydro question, it's a governmental question.
[ Page 8716 ]
There are varying levels of demands placed on the secretariat by the Crowns, depending on the nature of the issues at play. B.C. Hydro is the largest contributor to the secretariat's funding, but it is increasingly consuming a lot of time, not in the review of capital plans so much as in some of the major projects underway with respect to the Crown, and the government is interested in ensuring that that is consistent with government's agenda.
J. Weisgerber: I don't want to overplay the effect of the levy on B.C. Hydro, but I think it is important because Hydro represents such an enormous opportunity for government to look for revenue income that it doesn't have to collect directly in the form of taxes; it can instead use the hydro rate process as a means of collection. As I say, I don't want to overdramatize the effect of this, but I think there is an important principle here. Quite honestly, I am not sure that it is Hydro's responsibility to bear the costs of public consultations with regard to the downstream benefits. The reality is that the downstream benefits belong to the province; they don't belong to Hydro. Therefore, if there are expenses that would flow from those kinds of public activities, they would be more appropriately paid for by the taxpayer, by the entity to whom the benefits would accrue. I am concerned only in this one instance. I think we have to be aware of this tendency of government to use B.C. Hydro as a revenue source. This is not to argue about the $700,000 out of a $1 billion-plus budget; the amount is not significant. But when you look at the amount of revenue that generally comes from Hydro to government, it becomes an important part of the rate base.
In any event, I don't particularly expect a reply from the minister, other than to acknowledge those concerns. I will just allow this debate to move on and see where it goes from here.
L. Stephens: I have a few questions about the B.C. Endowment Fund as it relates to the B.C. Trade Corporation.
Interjection.
F. Gingell: We will deal with it later then; we will stick with this. I am sorry -- I thought it was the Crown corporations secretariat.
L. Stephens: No, sorry.
D. Mitchell: I have a question on the Crown corporations secretariat for the minister. While other ministers who are responsible for Crown corporations were before the Committee of Supply, we asked a number of questions about the relationship between the secretariat and individual Crowns, and we had a number of very interesting responses. Some said that we should follow up with the Minister of Finance, so this is the opportunity.
The one project I would like to ask a question about perhaps serves as an example of the relationship between the secretariat and Crown corporations. It relates to the current St. Ann's Academy upgrade here in Victoria, and it involves BCBC and the Provincial Capital Commission. I understand that the expertise of the Crown corporations secretariat has been used in helping to coordinate this, and I believe that the individual who has been appointed as the coordinator is Mr. Sam Bawlf from the Crown corporations secretariat. I would like to ask the minister a question about the role of Mr. Sam Bawlf in this project, and about his role with the Crown corporations secretariat, because we are dealing with the whole issue of contractors and their role, and with the issue of the influence of the Crown corporations secretariat -- which seems to be just about everywhere in the public sector. For a small body it certainly gets around.
I understand from the Ministry of Finance's annual report that the Crown corporations secretariat is certainly involved with the St. Ann's Academy upgrade. It is interesting that a brochure that was put out on the Victoria accord refers to the fact that Mr. Sam Bawlf is the province's project manager for the whole project. Interestingly enough, in the same brochure it points out that among the architects who have been retained for the Y lot project, which is an integral part of the St. Ann's Academy project, is the firm of Bawlf Cooper. That is kind of intriguing. I wonder if the minister could talk a little about the controls that are put in place for employees of the Crown corporations secretariat, and about whether or not these are similar to the controls, checks and safeguards that would be put on any public servant in British Columbia. Here we have what appears to be an example of Mr. Sam Bawlf, the province's project manager for the Crown corporations secretariat, hiring his brother's firm as one of the chief architects for a major project under the Victoria accord. Is there something wrong here, hon. minister? Can you explain how this might happen?
Hon. G. Clark: The Crown corporations secretariat is dealing with the process of the various Crowns and integrating them in terms of moving forward on the Victoria accord with the city of Victoria. The Y lot redevelopment, which is part of that, is not the responsibility of the secretariat but of B.C. Buildings Corporation. The B.C. Buildings Corporation put for open public tender the architectural contract associated with that project. A firm, one of whose principals is Mr. Bawlf's brother, was the successful bidder in an open public bidding. The rules applying to the secretariat staff are exactly the same rules that apply in government. I can assure all members that this is an open public tendering process, and it would clearly be inappropriate for government to discriminate on the basis of one's familial relationship when there is an open public bidding process. Mr. Bawlf had nothing to do with the bidding process nor did the secretariat. The Buildings Corporation has an excellent and well-deserved reputation, and they were the low bid and the successful bid on that project. I think any suggestion otherwise is, first of all, clearly incorrect.
[4:45]
[ Page 8717 ]
D. Mitchell: The minister may be interested to know that when I questioned the Minister of Government Services about this -- who is responsible for BCBC -- it was intriguing. She apparently had never heard of Mr. Sam Bawlf and couldn't answer the question. When I asked the Minister of Aboriginal Affairs in the House who is responsible for the Provincial Capital Commission, he took the question on notice. I haven't heard back from him in the House.
The minister is saying that it went to a full, open, public tendering process. I wonder if the minister would be willing to commit in this committee today to release the details of that tendering process for members of the committee, so that members can assure themselves that there isn't some aspect of nepotism going on here. Could the minister also inform the committee what role Mr. Sam Bawlf had in reviewing the proposals for selecting the architectural firm? The successful bidder in that process was, of course, the firm in which his brother is a principal.
Hon. G. Clark: Mr. Bawlf had absolutely nothing to do with the choice of the architectural firm or with reviewing the architectural plans. That was done completely in-house by B.C. Buildings Corporation. I have no hesitation whatsoever in committing to this committee, to that member or to anybody a full review of the tendering process. BCBC, I am sure, would be delighted to do that. It's above board and up front. Subject to any commercial considerations that BCBC might have, which I'm not aware of, I have no hesitation in asking them.
I will just make one small point, and that is that B.C. Buildings Corporation does not report to me; it reports to the minister responsible, the Minister of Government Services. I certainly will ask. I have no hesitation in suggesting that they will agree, but it is a small point. It's not in my jurisdiction, so I'm powerless to compel them to ask. From my perspective with respect to the secretariat, I assure members that Mr. Bawlf was not a participant in the review, in the selection or in the bidding process with respect to the Y lot.
D. Mitchell: I have just one final question on this. Mr. Bawlf is the province's project manager for the whole Victoria accord project. I presume he was appointed the project manager prior to the selection of the architectural firm, which includes the firm of his brother. I presume that Mr. Bawlf's salary, which is paid by the Crown corporations secretariat -- at least indirectly -- is paid for in this case by BCBC or by the portion of the Crown corporations secretariat funding that comes from that particular Crown corporation. Were any special efforts made on the part of the Crown corporations secretariat to ensure that there can be no suggestion of interference on Mr. Bawlf's part? He is being paid by BCBC which, the minister says, appointed the firm of his brother. What assurances and what measures were taken by the Crown corporations secretariat to ensure that there is in fact no conflict of interest here?
Hon. G. Clark: Well, you know, the process is clean and above board and consistent with what takes place in every building project in government. The B.C. Buildings Corporation conducts the tendering process for all direct public construction in British Columbia. Absolutely no change was made to that process in this case. Mr. Bawlf had nothing to do with it nor would he have. I don't mind advising members of the committee that I was advised of the fact that Mr. Bawlf's brother was bidding on the project, and that my instructions were to do absolutely nothing different, to ensure that the process, which is independent and is handled by BCBC as a public, open tendering document, was followed exactly as it would have been otherwise. And that's exactly what happened. I also made the choice, very clearly -- and I don't mind saying this to the members of the committee -- that it would have been entirely inappropriate for me, having had it brought to my attention, to have done the opposite, which was to intervene politically and say to BCBC or anybody else that they must discriminate because someone is a relative of someone who happens to be working for the government. I assure members of the committee that the same type of open bidding process which exists for all BCBC contracts existed in this case. I have no hesitation in asking BCBC to provide any member with that information, because I am absolutely confident that that was the case.
D. Mitchell: I have one final question. The minister told us that in this case the firm of Bawlf Cooper was the low bidder for the contract. The minister is obviously familiar with this bidding process. Can he tell us whether or not there is a policy in the Crown corporations secretariat, throughout the Crowns, to always accept the low bid in open tendering processes?
Hon. G. Clark: It wasn't the Crown Corporations Committee that accepted the low bid. It was B.C. Buildings Corporation; they handled it entirely.
The low-bid question, of course, is a bit vexing. We do have a low-bid policy generally across government. From time to time, however, there are other factors which come into play in bidding processes. We have not changed the policy which existed since we came to office, which is essentially a low-bid policy. Any good operator, including BCBC, does not always accept the low bid. There are other factors involved in making those decisions. As long as those decisions are upfront and accountable, that's acceptable. Nobody in the private sector would simply take the low bid. In this case, I'm advised that Bawlf Cooper was the low bid and was accepted. That is almost always the case in government generally. I hesitate to say that it is always the case, because from time to time in the bidding process there are other factors that come into play. If that member -- or any member -- would like, I'll ask BCBC regarding specifics on that process.
A. Warnke: I have a couple of questions with regard to funds solicited from the risk management
[ Page 8718 ]
branch. In questions to the Attorney General earlier this year, the Attorney General....
F. Gingell: Is this Crown corporations?
A. Warnke: No.
F. Gingell: Could we hold it, then?
A. Warnke: Okay.
F. Gingell: Thanks. We are dealing with Crown corporations.
At this time last year when we were dealing with the original creation of the Crown corporations secretariat, Mr. Minister, you advised us that the secretary was being paid as a deputy minister. Is that still the case?
Hon. G. Clark: Yes, it is. It's a standard deputy minister's salary.
W. Hurd: I have a couple of questions on the relationship between the Crown corporations secretariat and the boards of directors of the various corporations. This is a line of questioning we pursued last year in estimates with the minister responsible for ICBC, when changes were occurring in the board of that corporation. When it was first established, the Crown corporations secretariat recommended new boards of directors for B.C. Transit, ICBC and B.C. Hydro. Obviously, the Crown corporations secretariat would have had some background on the performance of these boards in making that assessment. Can the minister advise the committee what role the Crown corporations secretariat has in monitoring the performance of the new boards that have been appointed, and what recommendations it might make with respect to future changes in these boards?
Hon. G. Clark: That's not quite right. The secretariat monitors the performance of the corporations, as opposed to the performance of the boards. And the choice of board members is not the role of the secretariat. It's the role of the government -- the Lieutenant-Governor-in-Council, usually on the recommendation of the minister responsible and other people who participate in those processes. The secretariat has no say in the makeup of the boards.
Having said that -- because the secretariat is reviewing the performance of the Crowns, and obviously the role of the board is to assure the performance of the Crowns from their perspective -- a very close working relationship takes place between the boards and the secretariat. Often a board will see the secretariat as a useful source of information, to counterbalance or get a check on the information presented by the Crown itself.
In addition to that, the secretariat has performed some, what might be called, training functions or overviews of the board for new board members. At least from time to time, the secretariat will make maybe a half-day presentation on the structure or makeup of that Crown and where they see the problems, prospects and opportunities for the Crown. The management of the Crown obviously makes a similar presentation. It's part of a kind of education process for the new Crown. After that, the boards work with the Crown corporations secretariat just in terms of information back and forth.
Just so we're clear: the board members are not monitored by the secretariat, nor does the secretariat have any control over who's on the board. Those decisions are made by the Lieutenant-Governor-in-Council.
W. Hurd: Certainly this issue was raised again when the entire board of ICBC walked the plank, when the minister responsible was on constitutional duties back east. By a miracle of miracles, the Crown corporations assistant deputy minister went in as an interim appointment, as the minister well knows.
Mr. Chairman, maybe the minister could clarify the original terms of reference for the Crown corporations secretariat. In particular, the annual report of the Minister of Finance and Corporate Relations indicates that new chief executive officers or directors were recommended for those Crown corporations. This is going back to the original; I'm just reading the information out of the annual report, where it indicates that new boards of directors or chief executive officers were recommended for B.C. Transit, ICBC and B.C. Hydro.
Can the minister assure the committee that was a one-time involvement of the Crown corporations secretariat? Or is there any possibility of the Crown corporations secretariat making such recommendations in the future, in the event that its ongoing review of a Crown might indicate that a change is warranted? Was this just a one-time involvement by this body of the Finance ministry?
Hon. G. Clark: Obviously there's a transition period on taking office when all of these are reviewed. I want to make sure, though, that members are clear that while the Crown corporations secretariat may from time to time make recommendations, those recommendations aren't always accepted. The government clearly has the responsibility, the minister responsible has responsibilities, and the Premier's office and others take a keen interest in appointments to boards of Crown corporations. One shouldn't conclude at all that the Crown corporations secretariat has any control over who is appointed to or removed from boards. That would be false in the extreme.
Having said that, in the transition period, obviously, the Crown corporations secretariat was asked by government to review the business plans, the operations and the boards of the Crown corporations, and to make recommendations to government. I wouldn't anticipate any further changes, although for the changes being made, one can use B.C. Transit as an example. We will get to that later tonight if members want, but decisions around senior personnel of B.C. Transit are not made, and have not been made, by the Crown corporations secretariat. They are made by the board of directors of B.C. Transit, usually but not
[ Page 8719 ]
always in consultation with the minister responsible. That's the appropriate role for the boards of Crown corporations. The secretariat is a service agency to government, to Crowns and to boards. But on the matter of personnel practices, not just at the senior level but throughout the corporation, while the policies may be reviewed or the practices in general may be reviewed by the secretariat, the actual policies and personnel decisions are not at all made by or influenced by the secretariat.
[5:00]
We will get to the case of B.C. Transit tonight. I'm responsible for it, so I'm obviously deeply familiar with it. In the case of the new chief executive officer, a headhunting firm, or whatever they call it, was hired. Advertisements were widely placed, seeking in the private sector. It was a conscious decision of the board to seek a private sector person and not someone from another transit agency or the public sector. I wasn't consulted on the advertisement. I wasn't consulted on the company which had the successful bid and which was to recruit. It was a subcommittee of the board that interviewed a shortlist, and the decision was made by the board -- with consultation with the minister responsible; in this case, me -- but without any interference by me, the Crown corporations secretariat or anybody else in government. That's the appropriate way in which boards are handled and how Crown corporations are dealt with. Those kinds of decisions are made by the Crown corporations' boards of directors, appointed by the Lieutenant-Governor-in-Council in consultation with the minister.
W. Hurd: The mandate appeared to be for the Crown corporations secretariat to make a broad assessment of the business plans at every one of these Crown corporations, and in making that determination, it was suggested that they needed new business plans. I'm intrigued by the case of Hydro, for example, which as the minister knows is currently involved in a massive changeover to balance sociological factors, pay equity and a whole range of government initiatives. Can the minister tell us what role the Crown corporations secretariat would have in monitoring the sort of massive changeover that's ongoing at B.C. Hydro? Would that be totally within the purview of the minister responsible? Obviously Hydro is involved, as the minister knows, in a major change at the moment. It was outlined to us during the estimates of the Minister of Labour. Can the minister advise us, Mr. Chairman, on what auditing or monitoring procedure might be undertaken by the Crown corporations secretariat in connection with Hydro?
Hon. G. Clark: In the case of Hydro or any other Crown, those decisions are made by the Crown itself, not by the secretariat. The secretariat provides an independent critique, an evaluation of changes that have taken place for the Crown Corporations Committee of cabinet, which the minister responsible is on. But the administrative structure and those questions are made by the Crown itself, not by the secretariat. The secretariat may well have and often has comments on the activities of Crowns.
On the broader question, I'll give you maybe a fuller understanding of some of the changes that are being made. We are asking Crowns to do a cost-benefit analysis on capital expenditures, including a multiple cost accounting. So we're looking at social and environmental costs associated with decisions. A multiple cost accounting framework for evaluating that is being developed by the secretariat, and all Crowns are being asked to comply. As surprising as it is, in the past, Crowns never had to justify their capital plans on any cost-benefit ratio. Some Crowns did -- B.C. Rail, for example, in recent years, under the current chief executive officer, has had a very rigorous private sector business test, which they apply to every penny they spend. As a result of that, I think they are a very effectively managed Crown. That's not been the case in many of the other Crowns -- to varying degrees.
The secretariat, then, is saying that that kind of business test should be applied everywhere. It has developed, and the Cabinet Committee on Crown Corporations has approved, cost-benefit guidelines for capital expenditures of Crowns. We then ask the Crowns, through the ministers responsible, to impose those guidelines on themselves. So they have done the work when the Crown corporations secretariat evaluates their capital spending plans. Instead of the secretariat going in and doing cost-benefit analysis, the Crowns are being asked to do it themselves, and then there's a sort of an audit function by the secretariat.
In addition to that, we are in fact expanding that envelope somewhat to try to take into account the job impact analysis or, in other words, the social and environmental costs associated with various decisions, to try to get a more quantitative and rigorous analysis of expenditures made by Crowns. In Hydro's case, they become somewhat more complex when one looks at things like wood waste burning, where there is some cost for the power in a traditional economic sense. That cost may not be able to compete with Hydro power. I'm sure you've canvassed this with the minister responsible. On the other hand, there are some huge environmental costs associated with the disposal of wood waste. In government there has never been a way of dealing with that question. Through the secretariat we are trying to develop consistent guidelines in order to better equip the Crown and government with objective criteria to weigh the various costs and benefits associated with any project, and hence a more full explanation of the role of the secretariat vis-�-vis the Crowns.
The Chair: Just before I recognize the member, I'd like to advise the member that I'm not a man. If you would address me in the chair appropriately, I would appreciate it.
W. Hurd: Hon. Chair, I suppose -- or Chairperson -- is....
The Chair: Whatever.
[ Page 8720 ]
F. Gingell: Hon. Madam Chairman.
L. Stephens: Hon. Chair.
W. Hurd: Hon. Chair, I want to ask whether the B.C. Energy Council has any reporting function with the Crown corporations secretariat, because it is making recommendations to Hydro with respect to export policy and the type of cogeneration plants that the minister referred to earlier. Clearly, we would express concern if there was an overlap between the Energy Council and B.C. Hydro. I fail to understand how such a small group of men and women in the Crown corporations secretariat can possibly monitor and evaluate the business plans of these myriad Crown corporations, particularly B.C. Hydro, which has ongoing dealings with the B.C. Energy Council. Perhaps the minister could clarify exactly what he means when he says that these business plans are being challenged and monitored. Are we dealing with a regular reporting schedule here with the Crowns? Is it a matter of sitting down and having quarterly meetings? What form does it take?
Hon. G. Clark: There's no relationship with the Energy Council, and the distinction would be that the Energy Council is a policy-making body. The secretariat is more involved in policy implications, and is trying to drive businesslike practices in the Crowns. If the government chooses to make decisions with respect to that, they want to make sure that all the information is there.
I have here -- and I would be happy to give to the members, if anybody is interested -- the multiple account evaluation guidelines prepared by the Crown corporations secretariat. This is exactly what the secretariat does. It prepares these kinds of documents, and then we ask all of the Crowns to adopt these guidelines -- across all the Crowns, and including, now, some of the ministries that are very interested in it as well -- in terms of getting an apples-and-apples comparison among various options. This is the kind of rigorous economic analysis that has never been done before.
Having done this analysis doesn't mean that the government.... In a sense, it is an administrative policy to pursue these kinds of guidelines. But on a decision as to whether to proceed with a cogeneration plant, if it showed through these multiple account evaluation guidelines that it was not the best or the cheapest alternative to pursue, the Crown corporations secretariat may comment critically within government. But it doesn't make those decisions. What it is doing is driving more rigorous and comprehensive analysis and trying to provide a framework for analysis for government decision-makers and boards of directors, but not to impose those kinds of policy decisions on government or on Crowns.
I think that's the best distinction, and that's why it isn't a huge apparatus emulating Hydro or trying to monitor Hydro. Rather, it is trying to impose a set of disciplines and guidelines, and to have them do all of that work. Then it's a matter of them reporting in -- you're quite correct -- on a regular basis, so that we're receiving the reports on a variety of capital spending. The secretariat will evaluate this and make comments on it for decision-makers, whether it's the Crown Corporations Committee of cabinet or -- more likely and more often -- the actual board of directors of the corporation. I think that helps to give you the difference in roles between the agencies.
You asked about whether they meet quarterly. As a matter of fact, that kind of more routinized thing is just being developed by the secretariat, literally as we speak. Now that we have new CEOs and new boards up and running, we have a lot of the business plans -- the first ones -- approved, and among the strategic plans are some real success stories, some that haven't been as successful and some that will take some time. Now it's a question of having this small agency ensure, in a more businesslike and almost routinized way, that these guidelines are followed. We will check them or audit them, if you will, from time to time to make sure that those kinds of accounting policies are provided for. That will then be, and is developing into, the main function of the secretariat. In addition, obviously, there are projects undertaken from time to time with the secretariat and the Crown corporations and other things like the accord. So I think that gives you a full explanation of where we are going.
J. Weisgerber: I find it interesting that the hon. minister would raise the issue of wood waste cogeneration, because it is one that I have a particular interest in. I have been puzzled for some time about why the government abandoned the wood waste cogeneration projects and the criteria that Hydro had adopted prior to the election of the government. Why would the government have instructed Hydro to abandon that particular initiative? Is it because the Crown corporations secretariat was developing this method of analysis? I understand that we are a little bit outside the minister's own estimates, but since he raised that particular example, I am curious to know. There was, in fact, an instruction in place to Hydro to pay a 25 percent premium for energy produced by wood waste cogeneration. On election, the government instructed Hydro -- as I understand it -- to at least place a moratorium on entering into agreements with any potential new proponents of wood waste cogeneration. So this is probably the first logical explanation that I have heard as to why the government would have changed that fundamental policy -- one that I happened to think was a very good policy, but then perhaps the fact that I had a hand in it has biased my decision, to some extent.
The Chair: Just before I recognize the hon. minister, I would like to suggest that we are, indeed, wandering. We might be a little careful of getting too far away from these estimates.
Hon. G. Clark: I can't answer the question. I know of no specific instructions that went out, so you will have to ask the minister responsible. All I do know is that we have a surplus of domestic power, and we had
[ Page 8721 ]
no real export policy -- or we're reviewing it. It's clear that while I think all of us.... I shouldn't speak for the government, but I think most people would like to see more projects developed. Wood waste projects, capital spending -- that's all good news. The question is: at what cost? What we as government have been determined to avoid is cross-subsidy of developing projects that are expensive and having domestic consumers pay a sort of hidden subsidy to bring projects on stream before they're economical.
[5:15]
It is correct that we've been concerned about a policy that pursues more generation without proper, rigorous economic analysis in place. We now have, in terms of export policy, a policy in place to make sure there's no cross-subsidy; but stand-alone projects that make sense can go ahead. I'm very optimistic that there will be projects that go ahead -- cogeneration projects or otherwise. We now have the guidelines in place that can help to quantify not just the costs in the narrow, normal sense, but also costs associated with not pursuing wood waste generation. If we can quantify that, then we have a rational policy that might in fact be biased in favour of wood waste generation, if that's how it works out. As long as those are up front and people can see them, and there are rational guidelines and they make economic sense, then I think all of us on the government side would be delighted to see that kind of development take place. Frankly, like the member, I'm optimistic that there will be a variety of projects take place, but you can't just....
What we inherited, if I can be partisan, was a policy that said that all wood waste projects are a go and everything is a go without any kind of framework for making a more rational analysis as to how much power the province needs, what the least costly way of generating that power is, what our export policy is -- we are now allowing exports, but let's make sure there aren't exports that are subsidized by domestic consumers -- and all of that framework in place. Now that the rules of the game are very clear, we will, hopefully, see private sector projects tested by these analyses and then proceeding.
Again, it's not my area, but in general the secretariat has been working to bring some rigour and some objective analysis to these kinds of projects. From my perspective, I'm not aware of any directive saying you can't do anything until these guidelines are in place, although it does make sense to have projects reviewed on a consistent basis. We are now in a position to do that.
J. Weisgerber: I am sure that everybody would like to have a formula into which you could put a series of numbers, quantify everything, and come out with a yes or no answer that takes away the responsibility to make a decision. I am interested in the example that the minister raises, because I think it is worthwhile to try to develop these kinds of cost-benefit analyses. I take it from the minister's comments that these kinds of formulas have now been developed, so all that's left is for the Crowns to simply buy into the idea.
I would point out to the minister that one of the costs of entering into this kind of an undertaking is that sometimes decisions that aren't made have real costs as well. If we were debating this issue in the municipality of Mackenzie, where the water level is being drawn down dramatically because Hydro failed to identify sources of generation.... While I now believe that these kinds of analyses may have been going on, it suggests to me that as well intentioned as these kinds of programs perhaps are, there can be some real costs in the delays that result from this kind of an undertaking.
Hon. G. Clark: Any delay costs are taken into account as well.
I want to make it clear here that providing multiple-account evaluations does not make the decision for government. It is not some mechanistic thing where you have a formula which tells you what the decision should be. It is information to guide decision-makers most of the time. In fact, in my experience as Minister of Finance, almost all the time there is no right answer. There are options that have pros and cons on both sides; there are winners and losers in every option.
With respect to judging the decisions by government, whether it is cogeneration or otherwise, there won't be a formula -- as much as you might like one -- that tells you what the obvious decisions are. That isn't what this does. In many cases one can make the argument that this makes the challenge of decision-makers more difficult because we'll have more information. We try to collate in such a way.... But it means we have fuller information with which to make decisions which I think will be defensible -- in fact, I know they'll be defensible, because we'll be making them. But there will be other arguments and other choices which could be made and which would be defensible by government.
I just say that I don't believe there's been a delay. I don't believe Hydro's review of domestic supply would have resulted in a burning huge demand -- huge development projects in the 20 months we've been in office -- to provide supply which would have altered the effect in Mackenzie. Most of the demand forecasts don't show that the requirements for domestic demand are.... Well, clearly there are requirements. There hasn't been any loss associated with that. Prebuilding of expensive projects has a cost as well, and not building has a cost. Anyway, that is appropriate for the Minister of Energy and the minister responsible for B.C. Hydro.
With respect to the secretariat, I think from all accounts -- no pun intended -- there's a wide degree of acceptance of the multiple-account evaluation guidelines, which I think allow for better, fuller and more rational decisions to be made. But those will still be political or policy decisions made by the appropriate authorities, and not by the secretariat or otherwise.
J. Weisgerber: Let me say again that I think the situation that exists today in British Columbia with regard to electrical generation and the need to draw down reservoirs suggests very strongly that there was a need 20 months ago to proceed on those projects. I
[ Page 8722 ]
think, further, that when you finish your analysis, you'll decide that a 25 percent premium for electricity generated by wood waste is not only a rational but a very defensible position. I think I'll find the minister very soon one day defending the other side of that argument.
F. Gingell: I was very pleased to hear that the Crown corporations secretariat is taking an active role in helping new directors get acclimatized and understand their responsibilities. I appreciate that a part of that program will unquestionably be advising them about the particular Crown corporation, its intricacies and the kinds of things that the Crown corporations secretariat has concerns about.
One of the other things I'd be interested in a response to is whether or not the secretariat gives assistance to the people appointed to these boards about the responsibilities of being a director -- this government has tried, as we've seen, to widen the scope of the people appointed to these boards -- where their roles start and end and whether their legal responsibilities are important. I wonder if the hon. minister could advise us if the Crown corporations secretariat is helping in that regard.
Hon. G. Clark: I think it is a good question. It's probably fairer to say that the Crown corporations themselves have a kind of rigorous training program explaining the roles and responsibilities of boards of directors. The secretariat provides a different perspective, if you will -- more of a critical perspective on the prospects and concerns that they bring to bear, which gives the directors a different perspective. Often directors get all their information from management. So it gives a bit more of a reflection.... But I think it is a valid idea: a training program for new directors, particularly those who have never -- I think I heard the member saying -- held directorships before. Moving into that capacity, it's important that they have some kind of training program.
I think it's more to the point that the secretariat is ensuring that the Crowns are actually doing that work rather than doing it themselves, monitoring to ensure that that kind of training program exists in Crowns, and then providing usually a half-day kind of situation after the training by the management on the roles and responsibilities. There is a kind of more critical perspective from the secretariat. Again, it's a very important function. I agree with the member. It's a function that is generally done by the Crown itself rather than by the secretariat.
F. Gingell: I took it from the discussion that went on in the committee at the time the hon. member for Surrey-White Rock was asking questions that the minister was perhaps not aware of the paragraph at the top of page 39 in the report. I would like to suggest to the minister that it is important for the Crown corporations secretariat, rather than the Crown corporations themselves, to play an active role in dealing with the issue of the rights and responsibilities of directors.
In the case of ICBC last year, where all the directors got summarily fired, we were advised by the minister in charge of ICBC that they were fired because of the investment returns on the funds which they held on behalf of policyholders to pay future claims. It was quite a shock that they would be fired for doing something that was clearly the responsibility of management. So someone needs to advise them that they are safe from being fired, or they should be, because of those particular issues. I must admit that I was terribly concerned -- my colleague brought the subject up first, but I had it all circled and highlighted here -- about the actions in dealing with the directors of these corporations last year. The ICBC directors were fired, and the reasons given were clearly reasons why the management, not the directors, should have been fired.
Then we got onto the issue behind the firing of the directors of B.C. Hydro, which, I see, as recommended by the Crown corporations secretariat.... They had come through the most profitable year the corporation had ever had. They made so much money they were required to put $180 million into a rate stabilization fund, and they still asked for rate increases after that, which is hard to understand. Now we discover that all of these things were in fact done by the Crown corporations secretariat. Or is that not true? Perhaps the minister would like to respond.
[D. Streifel in the chair.]
Hon. G. Clark: The hon. member makes a very good point. It is one that I don't mind saying I would take under advisement in terms of training in the roles and responsibilities of directors, and that division that does exist. I think it is true that in the early stages the secretariat was making reviews of the business plans and making recommendations to the government.
With respect to boards, based on the quality of some of the work that we were seeing, in some cases.... In the case of ICBC we had a major review by Peat Marwick -- by an expert who came out from Toronto, Ray Healey -- and it was in such appalling shape generally that there were recommendations made to government with respect to the board and some of the management. Those recommendations were followed up on. In that respect, there was sort of an involvement going on.
[5:30]
There were no recommendations made on who would necessarily fill the positions. Those decisions are made by my government. The secretariat had no involvement -- nor should they have had any -- in the recruitment of the current new CEO of ICBC, Mr. McCourt, for example. Again, as for B.C. Transit, the recruitment, review and hiring was done by a private consultant committee of the board. There was no involvement by the secretariat in that capacity.
F. Gingell: I am pleased to hear that the hon. minister will consider having the Crown corporations secretariat play some kind of a role in that area.
[ Page 8723 ]
In the report there is also a paragraph that talks about the desire of the Crown corporations secretariat to encourage joint-venture type arrangements -- partnerships -- between Crown corporations and the private sector. Other than the St. Ann's Academy exercise -- and I am not quite sure whether that is one of the types of things being described here -- I wonder if the hon. minister could advise us if they have any other projects that are in process, or what type of projects they are thinking of.
Hon. G. Clark: Yes, we certainly do. Unfortunately, because they are of a commercial nature.... I'll just check and see whether I can inform you of some of them.
We are working on some possibilities of joint ventures between private corporations in British Columbia and Crowns, and between different Crowns. One which is not public knowledge has some potential -- kick me if I'm not supposed to say any of this. The new subsidiary of B.C. Rail, Westel, which will be competing in the telecommunications field, may string the fibre optics under the ALRT guideway. Westel will pay B.C. Transit for the right to have access to that guideway. That's an example of something which has come about in part through working with the secretariat, although in this case mostly through the entrepreneurship of B.C. Rail, Westel, Mr. Trotter and others who are very capable in that regard. That's an example. I don't think it's public yet. There would be some revenue there that in a sense is revenue from one arm of government to the other. It's an example of using a couple of Crown corporations more efficiently.
I can't mention them today, but there are what one might argue are more exciting opportunities for Crowns to work in partnership with private companies, through joint ventures, where there is some mutual advantage both to the government and to the private company. I'm hopeful that over the course of the next year there will be one or two projects bearing fruit.
One that just came to mind, which I think I can talk about, is the notion of our Assessment Authority and land registry doing some work in some of the former communist countries. This is an area where the Assessment Authority, under Mr. Johnstone, is a world leader. Whether one likes assessment or not, they are world leaders in terms of the technology and the ability to track assessed market value. With our Torrens system, we have a very good system of land registry that is better than the American one. The combination of land registry and the Assessment Authority, two arms of government, and the ability to market that in eastern European countries is a very exciting project. It's hard to fathom that there is no way of actually creating a land market in a country that has eliminated communism. There is no way of actually registering title, making sure you have that title and selling and buying land, which one could argue is one of the most significant aspects of developing a modern market or capitalist economy.
K. Jones: He almost chokes on the word.
Hon. G. Clark: Members on the opposite side might be excited -- maybe more excited than government members -- to see a Crown corporation or a couple of agencies of the government of British Columbia marketing expertise to aid the flourishing market economy in eastern Europe. That's a project which I don't want to overstate because, obviously, there are lots of opportunities, but lots and lots of problems to overcome before that is the case. Clearly, we're actively exploring it, and I believe there has been some interest and some funding from the federal government in terms of moving that forward. That's another example of partnerships between Crowns and agencies of government which the secretariat has been driving.
F. Gingell: You were speaking just now about B.C. Rail. B.C. Rail recently acquired ownership of Vancouver Wharves. The acquisition of Vancouver Wharves moves B.C. Rail into a new area, a new business enterprise. Did the Crown corporations secretariat have any involvement in that decision, other than asking them to make sure they followed your little blue book?
Hon. G. Clark: Let's be clear. In B.C. Rail's case they developed a business plan which, to be completely candid, is a model for the other Crowns. It is a superb document. The secretariat reviewed that, there was some rigorous debate back and forth and it was accepted by the board of directors. Part of that business plan is this kind of opportunity. The opportunity to proceed further with the purchase of Vancouver Wharves was scrutinized and evaluated by the secretariat. It didn't slow it down one iota, because they were moving everything apace, and there was consultation back and forth. In that case, yes, there was a critical review, but rather than being a passive criticism of that project, it was more a cooperative venture where they were moving forward and keeping the secretariat informed.
With that, I'll move the committee rise....
F. Gingell: May I ask one more question?
Hon. G. Clark: I'm in the hands of the committee.
The Chair: It's past the normal hour to rise, hon. member.
F. Gingell: I just wanted to make sure that everybody's questions with regard to the Crown corporations secretariat had been dealt with. No? Then we will rise and come back to the Crown corporations secretariat after we have reported.
Hon. G. Clark: I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The Committee rose at 5:38 p.m.
[ Page 8724 ]
The House in Committee of Supply A; D. Streifel in the chair.
The Committee met at 6:39 p.m.
ESTIMATES: MINISTRY OF FINANCE AND CORPORATE RELATIONS
(continued)
On vote 35: minister's office, $335,102 (continued).
F. Gingell: We will carry on with Crown corporations for the moment. Actually, I don't have a lot more questions on Crown corporations, but some other members do. But I had one question I'd like to ask you. I asked Richard Bridge for his card. He's not an employee; he's on contract, but his card reads Ministry of Finance and Corporate Relations. My question is: is he an employee of the Ministry of Finance and Corporate Relations?
The reason I want to bring up the subject, Mr. Chairman, is that there are some points at which your desire for the Crown corporations secretariat to have the flexibility to hire special skills on a consulting basis is a different situation from someone who has been on staff for a year or l8 months. I wonder if you'd like to comment on that. I would also be interested, if you don't have any objection, in having Mr. Bridge give the committee an idea of the kinds of the things he does.
Hon. G. Clark: First of all, I think we've canvassed this. You are quite correct; there are a couple of people who have been on contract for the full l8 months, and Mr. Bridge is one of them. We are reviewing that situation because that is not the intent. Obviously that's a two-way conversation -- whether or not Mr. Bridge wishes to continue indefinitely as a member of the public service. But we are canvassing that question.
With respect to whether Mr. Bridge can answer questions of the committee, I'm not absolutely certain of that. I'll ask the Chair's guidance. My understanding is that deputy ministers are the only people who currently can speak under the standing orders. I've tried to be pretty open about that and have my deputy answer questions. Richard Bridge is a contractor -- I don't want to hide behind that -- not the deputy minister. He's not the assistant deputy minister-equivalent in the secretariat but rather below that in terms of his project work. I don't think we've done that to date. If we have, then I'm prepared to do that, but I'm not sure we want to change the standing orders of the House at this time.
The Chair: That's actually correct, hon. minister. In the amendment to the sessional orders that was passed in April, point No. 1 permits deputy ministers and that level to answer questions. I don't believe contract employees would fit under the sessional orders as amended.
F. Gingell: We are going to be coming back to the Crown corporations secretariat, so perhaps we should move on now to FICOM.
Hon. Chairman, the member for Langley has some other commitments and is leaving Victoria, and she has some questions to do with another issue.
L. Stephens: I have a few questions primarily on small business and taxation. Before I ask those, when we were doing the Premier's estimates with the B.C. Trade Corporation and also when we were doing the estimates for Economic Development, Small Business and Trade.... The trade initiatives fund that is through the B.C. Endowment Fund, which is under your control.... I'd like to know what the trade initiatives fund does and has done, particularly in relation to the B.C. Trade Corporation.
Hon. G. Clark: There has to be a B.C. focus to the Endowment Fund. We have, as my hon. critic is aware, put a request for proposals for private sector matching funds to manage merchant banks, banking opportunities and venture capital opportunities. We hope to be able to announce to members and to the public in the fall the successful closing of several merchant banking ventures, which are 50 percent owned by the province and 50 percent owned by private matching funds.
[6:45]
I say that by way of introduction to the Trade Corporation, where we're looking at a role for them. We've allocated $10 million of the $500-odd million in the Endowment Fund to be managed by the Trade Corporation -- almost like an external manager. We haven't consummated this, but the notion is that they would then be able to invest on a commercial basis in trade-related opportunities with the private sector, and we would essentially treat them the way we do a private manager of any fund. We would allocate $10 million from our pool in the Endowment Fund and allow them to manage that for the purposes of promoting trade in British Columbia. The one exception is that in a private manager's context there are fees charged with respect to management of the funds. We don't anticipate any fees from the Trade Corporation's management of that rather small amount of funds on a commercial basis.
L. Stephens: I was going to ask, because the intent was on a market return basis, and I think the initial amount was $30 million. That has since been downgraded to $10 million. Is there a reason that it is now $10 million as opposed to the original $30 million that was anticipated?
Hon. G. Clark: We've come to the conclusion that $30 million was a bit ambitious. We want to start with a smaller amount and grow the fund as it matures. Initially we were looking at $30 million of the Endowment Fund, co-managed with B.C. Trade and the provincial treasury and matched with private sector funds. We have developed some very exciting opportunities again, which unfortunately I can't say for the committee. Private sector funds have been successful or are on the verge of success in terms of managing pieces of the fund matched with the private sector, and we'll have several of these in the fall. That became a focus of
[ Page 8725 ]
our activity, and I think it has a very high prospect for success. The Trade Corporation won in terms of matching funds and how it would work.... We ended up basically scaling it back and then taking $10 million rather than $30 million co-managed with private sector funds. We're going to take $10 million and literally allocate that to B.C. Trade to act on a commercial basis as if it were a private fund manager. I fully anticipate that they'll be successful.
It's off the topic, I guess, but as you probably know, the Trade Corporation runs the most successful loan guarantee program in government. It's an export loan guarantee, which at the moment has not quite a 100 percent success rate at levering funds guaranteed against contracts in other countries. They're building that expertise to be able to provide actual investment with the private sector through this fund. We have high hopes for it, but we want to start small -- it sounds condescending -- and then allow it to develop over time. You're absolutely correct. We initially thought $30 million would be co-managed with private sector funds, etc. It's scoped down a little, although the loan guarantee program is expanded in the Trade Corporation, and we will let them manage it for trade-related activities.
L. Stephens: I would like to know the hon. minister's thoughts on having property taxes levied on all property owned or occupied by Crown corporations, for municipal, school, regional or other purposes, and his thoughts on locally set rates equivalent to private businesses without exemption from statute?
Hon. G. Clark: This is an area where the Crown corporations secretariat is taking the lead. As the Minister of Finance, I will say that it is a very complex area that requires great care and attention to proceed. As you know, B.C. Buildings Corporation pays full property taxes just like any other property owner. The Ferry Corporation, however -- and I know the hon. member for North Saanich and the Islands would be interested in this -- pays grants in lieu of taxes. Depending on who you talk to, one could argue that these come closer to the cost of property taxes, but perhaps don't meet them fully. B.C. Hydro, on the other hand, pays no property taxes on their dams, and B.C. Rail doesn't pay the same level of property taxes on their rail lines.
I guess what we are grappling with is a government policy question. There are enormous cost implications. I think that in Hydro's case alone the annual cost would be about $80 million if they were to pay full property taxes on some of their facilities. Then there are interesting equity questions associated with that: where there is no service cost to the municipality for a dam, should it pay huge property taxes? In other cases there are real costs drawn on municipalities, and yet they don't pay property taxes.
We are now trying to review all of these questions, because we get a lot of demands for property taxes to be paid. I guess I shouldn't say this, but the one I am quite sympathetic to is the University of Victoria and Simon Fraser University. Let's take the University of Victoria's case. That campus straddles the two municipalities of, I think, Oak Bay and Saanich. If there is a fire on the campus, the taxpayers in those communities would undoubtedly -- and I think are probably required -- to send firefighters. There are also some costs associated with pumping stations and the like that the municipalities incur, but the university pays no property taxes. We are reviewing all of those questions. But it is difficult to move, and probably not desirable to move incrementally, even though I fully acknowledge that there is currently no real rationale to the breakdown of who pays and who doesn't. The move to full property taxes for all Crowns is in the hundreds of millions of dollars of cost to the taxpayer, and it's extremely difficult to justify in the current fiscal environment. We are very actively reviewing that question, and the secretariat has done a lot of the work on that subject. For the first time in government -- again, surprise -- we are now actually quantifying what it would cost in each sector to move to the full property taxes paid by those Crowns.
L. Stephens: I have a little about small business and taxation, and particularly cross-border shopping. I know the minister is aware that 50 percent of the retail business is in the lower mainland, particularly close to the U.S. border. Most small business people feel that there should be an agreement. They would like to see the province negotiate an agreement with Revenue Canada to work out some kind of solution to collecting all the provincial taxes that are due on goods brought back through the federal entry points. I wonder what the minister's comments would be on that.
Hon. G. Clark: This is a matter of concern to the government and to members opposite as well. Just so we understand it, at border crossings the federal government should be collecting provincial sales tax on purchases. There's no question about it in terms of fairness. They collect the GST now.
The federal government has taken what I think can only be described as a blackmail position. They are using this as a stick to tell the provinces to harmonize with the GST. They have been absolutely rigid on that position. In federal-provincial meetings this is a topic of considerable discussion. I'll say for the record, if it has not been said before, that British Columbia's position, which was formally put forward by me and my staff, was that they should tax....
Before I get to that, the federal government's position is that the problem with the provinces is that everybody's sales tax base is different. In B.C. we don't tax bicycles; every other province taxes bicycles through sales tax, for example. British Columbia's position is that it's a simple matter for the federal government at every border crossing in that province to have a list of all the items that are covered by that province's sales tax base. Manitoba put forward a compromise proposal that said: let's take the lowest common denominator, which in most cases is British Columbia -- in other words, the narrowest base -- and then apply that to every province if they are not prepared to do it on a province-by-province basis.
[ Page 8726 ]
British Columbia, as a fallback position, ended up lining up with all the provinces in supporting Manitoba's proposal, which is a compromise proposal, so that there would be one provincial sales tax base right across the country they would collect taxes on. That has been rejected by the federal government fairly recently. But we win, in that we convinced them finally to move on alcohol and tobacco, so we have that. In the scheme of federal-provincial relations and at the glacial speed at which they move, it is a major victory for the provinces that they moved in that direction. We are still fighting on it, and they haven't completely closed the door. The Manitoba proposal refutes many of their criticisms, which makes it harder to fight, but frankly I don't hold much hope for a review of that question until after the next election.
L. Stephens: My next question is the harmonization of GST and PST. I'm sure the minister knows as well that one of business's hopes is that that will happen. Being a small business person when the GST came in, I myself know that the cost of compliance is really quite significant for businesses in general, and particularly for small businesses. It meant that a lot of small businesses could simply no longer do their own books; they required accountants on a monthly basis to keep track of it. So a harmonized GST and PST is one of the things that business would like to see. From that point of view, it makes it much simpler, with fewer compliance costs and less regulation.
The other issue I would like to talk about is the machinery and equipment tax, and this is something that keeps coming back. Perhaps there could be a phased removal over the next two or three years of the tax that's applied on the machinery and equipment, and perhaps on energy and supplies as well, and on the computers and software used, consumed or expended directly in the production of manufactured or processed goods for resale. I would like to hear the minister's thoughts on that.
Hon. G. Clark: The committee has canvassed those questions. I apologize if I'm brief on the subject to the member, but we have no plans to harmonize at this time. There are no financial benefits to the province for doing so, at least directly, aside from other problems. Secondly, while some small business people would like to harmonize -- and I appreciate that for the compliance and the paperwork burden, to which I'm very sympathetic -- other small businesses in the service sector, on the other hand, are not in favour of harmonizing because it does expand their sector's sales tax base. There are some advantages and clearly some disadvantages. We have no plans at this time.
With respect to manufacturing, we do receive a lot of input from business on the question of applying that tax to manufacturing equipment. It's always under active review, each year, by the Ministry of Finance. In our current fiscal environment, unfortunately, we haven't been able to look for any tax relief for anybody, really, except in the case of the last budget where we had the sales tax credit. We will review it every year. As sympathetic as I am to it, it's a very big cost item for the government. Given competing demands, it's very difficult for the government to justify at this time. We've chosen not to do so. We'll continue to review it.
L. Stephens: I have one last question concerning value-for-money audits. During their estimates other ministries said that this was something that was ongoing in their ministries. I know the minister talked about that briefly. I'd like to know if it is a policy of government, that in each ministry, including Crown corporations, there would be ongoing value-for-money audits and regulatory compliance measurements versus benefits gained, and those kinds of issues?
Hon. G. Clark: I don't want to criticize ministries; they do ongoing program reviews. The full value-for-money auditing is now conducted in three places. One is internal audit in the office of the comptroller general. That's a new program. We've had some success with this fairly ambitious program of value-for-money auditing. The auditor general, of course, is to continue to do value-for-money auditing. Treasury Board, although we don't call it value-for-money auditing, is in effect a detailed and intensive program evaluation or review. We have canvassed this at some length. To varying degrees ministries do what might be generically called value-for-money auditing. They don't have the kind of accounting staff and expertise to do it in a major sophisticated way. That is my general view. We are doing it; it's a high priority for the government. We have seen some successes already, and we're continuing to develop that branch in the comptroller general's office.
F. Gingell: May we move on to FICOM? Recognizing that the Financial Institutions Commission is a regulator, would you start off this section by telling us the most embarrassing thing that happened to the commission in this past year?
[7:00]
Hon. G. Clark: This is a delicate area for any Minister of Finance. In fact, my predecessor lost his job over something to do with FICOM in terms of information. Excuse me if I'm more careful than I am normally. As the regulator, any public discussion of FICOM's activities can lead to very unfortunate consequences for those firms. I just say that as a caveat at the outset.
For the committee, let me introduce Bob Hobart who is sitting next to me, whose title now is the chief executive officer of the Financial Institutions Commission. Just by way of background, FICOM is a fairly new commission, established by the previous government. It was a very positive initiative of Mr. Couvelier, whom I know the member knows quite well, and his staff. It was a regulatory regime reform which took credit union deposit insurance, the superintendent of financial institutions and the like and put them into something called Financial Institutions Commission.
The chair of that commission was a full-time person named Dale Parker. Dale Parker is a former banker and an upstanding British Columbian who has done an
[ Page 8727 ]
outstanding job really, I'm happy to say for the record, in setting up the commission. He did such a good job that he did himself out of a job, because there is no reason for a full-time paid deputy minister level chair of that commission. He has now moved on to the private sector working for Mr. Toigo, along with Larry Bell. He has, however, now agreed -- and I'm very thankful for this -- to stay on as chair of the commission, essentially on a part-time basis or virtually as a volunteer like other chairs of other agencies, but he is still chairing the commission. As a result of that kind of reorganization, Mr. Hobart, who was one of two senior people under Mr. Parker, has become the chief executive officer. I think it's fair to say that he has been a career civil servant and has done an exemplary job for government.
So I just want to give that little commercial and background to the Financial Institutions Commission. I don't get a chance to talk about it very much, and most of the notes I get sent over are very fascinating notes about regulatory information and at the bottom they say in big bold print: "Don't tell anybody about this ongoing investigation." So in that respect I'm not really prepared, as you know, to canvass at any length any concerns that we have, and I don't mind saying for the record that there has been some withdrawal of certificates which are a matter of public record. I'm sure Mr. Hobart can provide members of the committee with a list of them, which will give you a sense of the magnitude of some of the regulatory decisions on revoking certificates that FICOM asks the minister to make.
If I could, Mr. Chair, I wouldn't mind asking Mr. Hobart, who is the equivalent of a deputy minister, to address the committee with a bit of a brief overview of the regulatory activities of the commission, which I'm more comfortable with him saying and which would be public information, here before the committee.
R. Hobart: As Mr. Clark has indicated, we are a regulatory body. We have basically a fourfold duty: to protect depositors of credit unions and trust companies against insolvency; to protect insurance policy holders against insolvency of insurance companies; to monitor and administer regulatory rules with respect to practices in the financial marketplace, with the intent that the consumer is to get full disclosure; and to administer a credit union deposit insurance fund. In case the regulatory regime fails, there is that backstop mechanism.
During the last year, I don't think there was too much out of the ordinary. One of the larger issues that we face, and we continue to face, is in a sense a complete reorganization of the trust industry. I'm sure you are all aware that two very large trust companies have come into severe financial difficulties this year. The first one was Central Guaranty Trust, which was eventually taken over by the Toronto-Dominion Bank; the second one was Royal Trust, which is now in the process of being taken over by the Royal Bank. The trust industry has been our biggest challenge this year. I think there is public record to indicate that several other trust companies have some sort of difficulties and the industry has some sort of difficulties.
On the other hand, we have approximately 328 insurance companies in British Columbia. The minister suggested that I could tell you all those that we revoked business licences for this year; I'm afraid I can't. There were 28 of them. Most of them voluntarily requested a suspension of their business authorizations because that industry is converging and players are leaving or merging. The suspensions in the insurance industry have been voluntary; it's just a consolidation of the industry.
In the credit union field, the industry is quite healthy. Again, there are public statistics to indicate that. Virtually all credit unions are in profitable positions; they all have sufficient capital. This year perhaps one of the trickiest regulatory actions we took was against a British Columbia insurance company called Universal General Insurance Co. We went to the courts and appointed a receiver for that company. At the time there did not appear to be sufficient assets to meet the liabilities. After much arm-twisting, we were able to get the owners to inject sufficient funds. I was very pleased when on Christmas Eve they gave me a cheque for $400,000, which I promptly turned over to the receiver. We will be able to settle that company without anybody losing a nickel. I think that has been our toughest case this year, and our biggest success story.
F. Gingell: Had that particular insurance company not had the further injection of $400,000, would it have been a loss to the creditors, or would the province have been responsible for any shortfall?
Hon. G. Clark: The answer to that is the creditors, in the form of insurance companies.
This is fascinating; I'm quite delighted to have this line of questioning, because FICOM never gets the chance to talk about what we do in that operation in Hansard and in the House. I must say that as a critic I was delinquent for five years by not pursuing this questioning. It's good to have this on the record, to expose members of the committee and the public to the kind of work that many dozens of staff people do on their behalf every day.
F. Gingell: FICOM is responsible for the International Financial Business Act. According to the reports I have to this point -- but they are 15 months outdated -- you hadn't had any licences yet. I wonder if in the last 15 months you got any licensees. And I am wondering if FICOM is making any active plans under the provisions of this act to develop the international financial business on the west coast.
Hon. G. Clark: The hon. member is quite correct. As of today, under the International Financial Business Act there are no licences granted. Under the International Financial Business (Tax Refund) Act, there are now 49 registered companies or subsidiaries which take advantage of that. In a sense that's very positive news as well.
[ Page 8728 ]
In terms of activities the ministry takes, it's obviously clear that the Financial Institutions Commission as a group is not an advocate or some group that markets this kind of initiative. It's strictly a very tough regulatory function which requires -- with the provinces in western Canada in particular over the years, and we can all name them, from Principal Trust on -- the regulatory reform that was initiated by the previous government. So obviously that's the principal -- in fact the sole -- focus of their attention.
The promotional kind of activity is one that we do as ministers in government; it's one that the Premier and B.C. Trade do in particular. But it's not one that comes within the aegis of the Financial Institutions Commission. Nor, I must say, do we have a sort of arm in the Ministry of Finance that's promoting.
The Tax Refund Act is being very well taken up and has contributed significantly to business operations in the province. As a matter of course, we in the Ministry of Finance sort of have on the list to do, over the course of the next year or so, a kind of review of where we're at and what the contributions are -- to try to quantify them -- to make sure it continues to justify its existence.
F. Gingell: I think many of us -- I know I do -- get a little confused between the International Financial Business Act and the provisions of the federal government under the International Financial Centre, or something of that nature. Perhaps the minister could brief us on what the federal provisions are, whether they have any tie-in to the provincial matters, and whether they are competing or complementary legislation. Would one register under one or the other?
M. Costello: The provisions of the federal and provincial statutes are complementary, but they're quite different. The federal act only allows federal corporate income tax credits or rebates for offshore banking. The provincial statute allows for provincial corporate income tax reductions for a much broader list of financial activities -- banking, but also securities, trading, fund management, leasing and a much longer list, a broader range. So they are complementary, but the provincial statute is much broader.
F. Gingell: Could the minister advise the committee of the amount of funds paid out under the tax refund for the year l992-93? And what is included in your budget for the year l993-94?
Hon. G. Clark: No, it is not an expenditure. It would be a tax expenditure; in other words, a reduction in revenue received to the Crown for corporate income taxes. We've had this discussion, and as the member knows, I'm sympathetic to listing and tabulating all the tax expenditures. We don't do that in British Columbia as of yet, and as a result there is no handy number to quantify how much tax revenue we're losing. That's one of the reasons I mentioned to the committee a minute ago that it's something we have on our list for a program review.
First, I want to assure members of the committee that this is not a huge tax loss at all. Of course, the argument is that this business is coming here because of the tax break and would not be here otherwise. So the argument I would make is that there is no net tax loss associated with this act because that activity wasn't here before the act. It has come here only because of the act, and all of the associated income tax and all the sales tax, etc., is paid, so the corporate tax refund is a tax expenditure associated with it. But the philosophical argument is that there would be no activity here at all unless there was a tax break associated with this.
So having said that, I will check with my staff to see whether we have some -- and I'm sure we do -- working estimates as to what we think the tax expenditure is; but they are only very broad estimates. They're not published in any documentation, and at the moment they are very modest. However, one of the reasons why I suggested a review down the road is that as this accelerates -- and it has been accelerating in terms of people taking advantage of this -- we want to get a better track on what the costs are and what the tax expenditure is.
F. Gingell: Could the minister advise us, Mr. Chair, whether there is a provision in this monstrous bill that the Attorney General has tabled to change the name of this act from the International Financial Business (Tax Refund) Act to the Tax Exemption Act because, as I understand it, what you're talking about is a tax exemption, not a tax refund. Is that correct?
[7:15]
Hon. G. Clark: No, I apologize. I was just getting that corrected by my staff. It shows up as a tax expenditure in terms of the accounting. I understand we actually do mail out a tax refund cheque for corporate tax payables. My deputy has corrected me and said that this information is clearly available because we write a cheque on it. But we don't have that with us today.
Interjection.
Hon. G. Clark: And I certainly will.
F. Gingell: Moving now to the financial statements of FICOM, I'm having a little problem and would appreciate the help of whoever can help me.
On page 8 of the Financial Institutions Commission Annual Report 1991-92.... We don't have anything more recent than that. Actually that isn't bad, but some people have their 1992-'93 reports out. For the 1992-93 budget you show a gross voted expenditure of $6.408 million. The provincial budget for the year '92-93 showed the amount as being $6,690,000, so I wonder why that is different.
The next item in the Financial Institutions Commission expenditure, vote 36 on page 131 of the budget issue, only deals with the expenditures and the costs less the recoveries, which I presume are the portions of the expenses you have charged to CUDIC. The other item that is missing here -- I presume it is in
[ Page 8729 ]
revenues, but I couldn't find it -- is the fee charged by FICOM.
First of all, if it's easy -- and I don't want you to spend any great amount of time on it -- could you explain the difference between the amounts in the provincial budget and the amounts on your FICOM budget on page 8 for '92-93? Secondly, could you advise me where the revenues are shown? Thirdly, could you tell me what the results finally were for the year 1992-93?
Hon. G. Clark: I am trying to understand what you have asked for. I assume you are saying that in the '92-93 budget, estimates were tabled that showed $6.4 million. Then in the '93-94 budget, it shows not the actuals but the revised budget estimates of $6.69 million for '92-93. Is that the difference the member is asking about?
F. Gingell: Yes.
Hon. G. Clark: If that is the difference, again, it is similar to other areas. The main difference is the increase in salaries and benefits from $4.466 million to $4.750 million, and that is largely the difference between the two numbers. It is similar to the questions that you asked earlier with respect to salaries and benefits coming out of contingencies as they get recalibrated through the ministries when the '93-94 budget is tabled.
F. Gingell: I have one quick question to finish that up: does the minister appreciate how much trouble he has caused the people of British Columbia by taking the amount from the contingency fund and allocating it back through the budget system? It has made life very difficult for us.
In dealing with the actual results of 1992-93, which we're now past by some months, can the minister please advise us of the approximate results of the operations?
Hon. G. Clark: If you are asking what the actuals will likely be in Public Accounts, they are under budget by roughly $500,000, so there is a $500,000 saving off that number -- which is even a little bit less than what we had in the budget estimates of '92-93.
I would like to make one last point, if I can, while I am praising FICOM. For the member's recollection, when the government named Mr. Parker a full-time chairman at deputy minister level salary, the budget, as I recall, was $9 million. The original budget was $7.74 million. When you are a new minister, and you go around and review budgets and talk to personnel, this was one of the agencies. It has been downsizing consecutively each year, and is a real success story in terms of constantly achieving productivity improvements all the way down the line.
I was hoping that Mr. Parker would stay, because we might look at using some of his services as we review other areas of government. He had a very businesslike approach: he was constantly evaluating and seeking productivity improvements, with a huge training component in the organization, and constant retraining. Every year the results have consistently come in under budget. Whenever we have sent out instructions to cut the budget, they are usually the first up with suggestions. They have driven the budget down consistently as the business has in fact increased, and as some of the costs and complications have increased. Obviously there is a limit to what you can do there. I don't want to set up Mr. Hobart for down the road, but you can see that since its inception, FICOM has dome down in budget every year. We expect that to continue for at least a little while yet.
F. Gingell: I take it from the discussion that the net expenditures after CUDIC went down were $500,000 less than you expected. The next issue that I asked about was where in the budget the fees show up. But the first question is: how much were they for 1992-93?
Hon. G. Clark: The answer to the first part of that question is that they go into general revenue, miscellaneous fee revenue and the consolidated revenue fund. The answer to the second question, as I understand it, is that the fees for 1992-93 were $4.2 million.
F. Gingell: I take it that FICOM made a profit -- if you want to look at it in those terms -- of a million dollars. That is very good. Recognizing that FICOM is not intended to be a profit centre but is intended to be a cost-recovery project, do you intend -- seeing that your profit is equivalent to almost 25 percent of your annual fees -- to reduce the fees charged to its captive customers, which is what they are, by 25 percent?
Hon. G. Clark: We don't anticipate lowering the fees, but let me explain why. A significant amount of government overhead isn't factored into the costs -- the costs of the auditor general, the costs of the Attorney General's advice as drawn upon and the costs associated with the Ministry of Finance's policy and legislation unit, which deals with policy governing the Financial Institutions Commission. So there isn't full cost recovery in those numbers, therefore I think it justifies some modest return to the general revenue fund over and above the narrow definition of cost recovery.
Obviously I agree with the member that we have to be a bit careful in that respect. It's not a profit centre, but clearly there are costs associated with government and with the Financial Institutions Commission. So in this case, given the profit -- to use the term the member used -- it fairly closely approximates the costs associated with government that are not part of the current cost accounting.
F. Gingell: I'd like to move on to CUDIC. In 1991-92 CUDIC didn't have to charge any premiums to the credit unions -- or I presume that that was the case. Under the term assessments, it said that it was zero. I presume that the only premiums they presently pay are to SCCU. Can you advise us what those premiums are?
[ Page 8730 ]
R. Hobart: You're quite right. We haven't charged premiums for the last several years, and indeed we do not intend to charge premiums this year. The Stabilization Central Credit Union, which is our regulatory partner, has been charging premiums at a rate of 13 basis points per insured deposit. The rationale behind this basically was the result of the work of an analytical task force in 1990 which, based on empirical evidence, determined that the appropriate size of a fund to protect depositors would be roughly 60 basis points, and the fund should be split two ways -- half for CUDIC and half for the Stabilization Central Credit Union. We have achieved our half of that in the fund, and we can rely on investment income to keep up with the growth in deposits.
Up until last year, Stabilization Central Credit Union was charging the full 13 basis points, but at the end of last year they had achieved equity of approximately $29 million, and they were getting very close to their target half of the fund as well. It is my understanding that they will be reducing their assessments from 13 basis points to some lower number this year. The result of this is that credit unions in B.C. will pay the lowest level of deposit insurance premiums of any financial institution in Canada.
F. Gingell: We all recognize the problems of the economy and the movement of interest rates, real estate values and all the things that can cause problems in financial institutions, which borrow money from some people and loan it out at a fraction more to others. We have heard the minister and the CEO speak earlier about the problems that have been apparent in Canada with some of the trust companies. Trust companies so often get involved in problems because they sometimes tend to borrow long and loan short. Credit unions tend to do those things too.
[7:30]
Seeing that the fund is doing so well, and that we at this moment don't have any major credit union problems -- although we will touch on that later on -- isn't this, surely, an opportunity for you to build up the fund? We should never be complacent. We are talking about deposit insurance for British Columbians, and the people who deal with credit unions tend to be people who are working folk, if I can put it in those terms. It really would seem to me to be an opportunity, while you have a couple of good years, to keep the assessments up, because they really are very small. It is something that the credit unions can afford to pay, at 13 basis points or maybe something less. I would be most interested in a response to the issue that I bring up, which is that in these times, when things are reasonably good, you shouldn't relax the gathering in of the insurance funds. That's what they are. Sometimes times are good and sometimes times are bad, as Lloyds of London has discovered, and it's best for us to do that. I'd be interested in your response.
Hon. G. Clark: You should know that there's a board to the Financial Institutions Commission, and its members take their responsibilities very seriously. I will undertake to convey that question, because from a lay perspective, I tend to be sympathetic to the remarks made by my colleague across the way. Frankly, from what the industry and Mr. Hobart say, the professional judgment is that reserves are sufficient, acceptable and satisfactory, and they are doing well. The last thing you want a regulator to do, it seems to me -- not the last thing, but one of the things you have to be careful of -- is to use the monopoly power that exists to extract more money from an industry than is required to meet all of the tough tests they have. I guarantee the hon. member and all members here that there is absolutely no relaxation of the rules whatsoever. We have tougher rules and they are more rigidly applied, I would argue, than anywhere else in the country. The reserves are sufficient now, and therefore it is not required that we attempt to get more than what a professional judgment of staff says is required.
I don't diminish the point that there is an opportunity now, with healthy profits in the sector, to build up more of a reserve. But if that reserve is judged not to be required, then I think we would hear from that industry and others if the regulators were putting undue burdens on the industry. We try to be sensitive to that. The tough regulation is firmly applied, but it is not overly applied where it is not required. The Ministry of Finance, of course, manages the funds in that operation, so the other side of the Ministry of Finance is always keen to build up the reserves because they are managed by the ministry. I just make the suggestion that we feel very strongly that there is a level of sufficient reserves now, and that it is not required to continue to make credit unions pay more than is judged professionally to be the reserve requirements.
F. Gingell: I won't carry on with the discussion, except to make a couple of last points.
When the original evaluation was done, I understand that the recommendation was that it be between 50 basis points and 60 basis points. FICOM, in their wisdom, or CUDIC, in their wisdom, settled on 50 basis points. Hon. Chair, it may have been wiser for them to have settled on 60 basis points. In painting my picture of gloom and doom, I've mentioned Lloyds and I've mentioned the trust companies; I'll just finish by mentioning the S and Ls. During 1991-92, there were a series of changes in the regulations. These are done by order-in-council, and of the very many that are there, there were just two that.... I wonder if the minister could explain this. One is called the credit-union-minimum-level-of-capital regulation. This new regulation prescribes a minimum level of capital of 2 percent before FICOM may order a credit union to amalgamate or dispose of its assets.
R. Hobart: Yes, that was a regulatory change. It had previously been unspecified that there was a level of capital required before the superintendent or the commission could order a credit union to amalgamate. That is but one of the many regulatory powers that we have, of course. The major other one with credit unions is supervision or administration. Administration is where we can virtually take over the running of a credit
[ Page 8731 ]
union and relieve the board of directors of their duties and do whatever action we wish to.
F. Gingell: Just from the words in the description on page 10 of the report, it envisages in my mind that the credit union is in trouble. If you demand that it have capital equivalent to 2 percent of its gross assets -- or I presume it would be gross liabilities -- and it's in trouble, where would that money come from? Who puts it in?
R. Hobart: The capital-requirement regulation, which is based on a risk weighted asset approach, requires all credit unions to have 8 percent capital. You are indeed correct that we dealing with an emergency situation with respect to a credit union whose capital would fall below 2 percent. This would be an institution which would have been in significant trouble for a period of time. The merger, or amalgamation, is basically the last resort. At a 2 percent level, there is still some solvency in that company, so it is possible to find a willing partner to merge with that institution. I believe, from a policy perspective, that the 2 percent was put in there to refrain FICOM from taking action prematurely. That's why the regulation was put in, although, as I pointed out, we have an arsenal of other regulatory tools to deal with these situations.
F. Gingell: As I understand it, it is the partner who is going to merge that would put in the capital to now enable them to qualify. That sounds strange to me, because if it's a disposition, you're going to sell the assets off. Who is going to put the money in, unless it's CUDIC? If it is CUDIC, it would seem that CUDIC is now insuring the credit union rather than insuring the depositors. I'm a little confused.
R. Hobart: By definition, if a credit union has 2 percent capital, it has more assets than it has liabilities. So the company is not solvent; it has some value to it. A partner can be found. A partner would benefit by taking over that institution for zero dollars. It would earn, in essence, that difference between assets and liabilities. This institution is not yet insolvent; the institution still has a cushion that would not.... CUDIC would not have to put funds into the institution under the conditions of it having 2 percent capital. You could liquidate the institution, and the shareholders would still have a return.
F. Gingell: I'm still not satisfied, and I'll talk to you about it afterwards. I don't think estimates is the time for us to get into a technical discussion about it.
The other one that drew my attention was the one dealing with inactive-deposit regulations. I know that as far as the federal banking system is concerned, they are required to pay the money over to the Bank of Canada, and you apply to the Bank of Canada to recover your bank deposits when nothing has happened. As I understand this, it used to be that inactive-deposit amounts used to be paid over to the Minister of Finance, and this regulation has exempted that. I wonder why it has exempted it and who the moneys are now paid to.
R. Hobart: Indeed, inactive deposits in credit unions are required to be paid over to the Minister of Finance. There are some very old deposits in the credit union system that have attached to them a life insurance component that says that the obligation to the.... If the depositor dies, he virtually gets twice what the deposit was. There are very few of these in the credit union system. The exemption is to have those deposits not be paid over to the Minister of Finance. It's a very narrow exemption.
F. Gingell: We spoke briefly earlier on about the number of credit unions that are under administration. I see the results here for the year 1991-92 started at 12 and finished up with only six. From what you said earlier, I think you started with six and you finished up at the end of 1993 with a smaller number. Rather than just deal with numbers, could you advise us roughly how many dollars are involved at the end of 1993? This may be a more critical number.
R. Hobart: There is currently one credit union under supervision. It is Sharons Credit Union. It's an ethnic Korean credit union and is the only credit union under supervision. Its assets are approximately $15 million -- and I say that tentatively, because one of the reasons the credit union is under supervision is that it is experiencing very rapid growth. Its asset values have virtually doubled every year, and the administrative structure of the credit union is having a difficult time keeping up. It was thought wise to have that credit union under supervision. It is the only one under supervision.
F. Gingell: Under the responsibilities of FICOM in the area of real estate and mortgage brokers, the superintendent is required to take regulatory action where the public interest is considered to be in jeopardy. So I'm wondering if the minister would advise us if that action has been required in any instances.
Hon. G. Clark: The short answer is yes. In fact, in several instances I have been required to revoke licences and to take action with respect to that area on the recommendations of FICOM.
C. Tanner: I appreciate that in British Columbia we guarantee credit union deposits to $100,000, and that the federal government guarantees bank deposits nationally at $60,000. I guess the advantage to the province is that it's an inducement to British Columbians to put their money into credit unions. Since they're in such good shape now, and I think you said 12 of them have come out of supervision in the last three years, would you see increasing that amount from $100,000 to a somewhat higher figure?
[7:45]
Hon. G. Clark: Well, not at this time. It's an interesting question. You know the credit unions were
[ Page 8732 ]
self-insured for a long time, and they actually marketed deposits in credit unions as having unlimited protection. I remember the debate at the time when I was in opposition, where the credit union movement was arguing for a government guarantee. I very much took the position, along with the government of the day, that this was a very interesting proposition because if the government was going to guarantee a deposit on a credit, then the government had a higher onus to regulate that sector. In other words, in the past there was some government regulation, but it was self-insurance. They were asking the government to pick up the tab or to guarantee the deposits.
They were, to put it politely, furious with the government of the day for limiting the protection to $100,000. Even though I was in opposition -- and this is a lesson I hope members of the opposition take from time to time -- I strongly supported the government of the day in limiting the exposure to the taxpayer to $100,000. Having said that, FICOM is up and running and, along with CUDIC, it is doing a superb job, as you've heard outlined already.
The credit union movement is in much better shape now than it has been probably since its inception. That's across the board and part of that is largely due to the economy, but also the regulatory regime is much tougher and much cleaner -- the deposit insurance is there. So perhaps at some point, if that were to continue, one might consider increasing the exposure of the government to deposit insurance. But the credit unions have a competitive advantage now vis-�-vis banks and trust companies because of the differential between federal and provincial deposit insurance. So I think it's probably sufficient at this time for them to continue marketing that, and they do very well.
But I would be open down the road to reviewing that question, should I be lobbied by members opposite or by the industry. But that was a very tough debate earlier on with the government of the day, and we were interested bystanders in opposition looking at the question. I think the judgment made at that time by Mr. Couvelier was a valid one, and one which I continue to support. We certainly could revisit it over time, but I don't intend to do that now.
C. Tanner: I have one last question. The CEO mentioned, among other things, that he supervises trust companies. As I understand it, many trust companies are federally chartered, so the only authority you have is obviously over their operation in B.C.. If they are doing something that you don't like, but it's federally chartered, do you still have any control?
R. Hobart: The legislation gives our office authority for operations Canada-wide. In reality, most trust companies are federally incorporated, and we use what we call a designated jurisdiction approach to regulation, in that we follow the lead of the jurisdiction of incorporation. In the case of the federally incorporated jurisdictions, we follow their lead.
However, the legislation gives us the authority, if we don't particularly like what the primary jurisdiction is doing, to take the lead, and we have done so on one or two occasions. Quite frankly, our relations with the federal authorities are very good, and I would speak to them at least once a week with respect to Central Guaranty Trust and Royal Trust, which I alluded to earlier. We had weekly conference calls with all regulators in an attempt to get input from everyone in order to deal with these difficult situations. Clearly all the other provincial regulators, including ourselves, look to the federal regulator in these instances since they were federally incorporated companies. I believe that if it was a B.C. incorporated company, we would do the same thing, and we would take the lead role but get input from other jurisdictions where the company operates. That's basically the process that has been working over the last several years.
F. Gingell: Mr. Chairman, we don't have any more questions on FICOM. We wish to thank everybody very much for the open and frank discussion, and we'll sit for a moment while we get a new group.
The Chair: Shall we have a short recess? Is that what the concern is? We'll recess for five or ten minutes. The Chair would like some direction. Everybody's leaving me. Five minutes?
C. Tanner: Mr. Chairman, would you like me to make a motion to recess for five minutes?
The Chair: No, we'll just recess for five minutes.
The Committee recessed at 7:50 p.m.
The Committee resumed at 7:56 p.m.
K. Jones: I'm just wondering if I could ask the minister to give us some details on the benefits and the superannuation and severance agreements that the CEOs of the various Crown corporations have -- the ones we haven't got; we have some of them already.
Some Hon. Members: That's in the Korbin report.
K. Jones: I haven't seen the severance detailing.
Hon. G. Clark: As I understand it, it's all published in Korbin, or we've released that documentation in the past. I don't have it here with me. They vary from employment contract to employment contract. I'd be happy to get that information for the member; I don't have it here with me today.
K. Jones: The question I wanted to clarify was: what is the actual pay and benefits of Crown corporations secretariat Bob Williams?
Hon. G. Clark: Exactly the same as a deputy minister. I think that's around $110,000.
F. Gingell: Is it $119,000?
[ Page 8733 ]
Hon. G. Clark: No, I think only three deputy ministers make the maximum rate: Mr. Ford, the deputy responsible for the entire public service, and a couple of others. But the deputy minister level is lower than that -- I think $110,000. Mr. Williams makes the same amount.
D. Symons: While they're deciding on their second question, I'll just follow up on that one now. When you say the salary is the same as a deputy minister, would all the other benefits that the Crown corporation head may receive also be the same as a deputy minister's? Or does he have some other benefits besides what a deputy minister might have -- the perks of a job?
Hon. G. Clark: No, he has exactly the same standard terms and conditions as any other public employee of deputy minister rank.
[8:00]
Can I just clarify the first question? I want to put on the record a bit of a clarification; I was just checking with my staff. Some of the personnel contracts have some confidentiality provisions, so I just want to talk subject to that concern. We've published all of the documentation with respect to CEOs of Crowns in the past. We'll provide that for the member. For the record, I just wanted to have that bit of caveat there, in case there was in the back of my mind some recollection of some employment contract confidentiality arrangement. That's my only small caveat.
K. Jones: Does that confidentiality caveat you're referring to have anything to do with the severance agreements?
Hon. G. Clark: I'm sorry. I just wanted to say for the record that I'm happy to get all the terms and conditions of employment for all the CEOs. It's a matter of public information; the Financial Information Act requires full disclosure. With respect to severance, there may be -- I'm just saying there may be -- some confidentiality arrangements. If there are then obviously I can't provide that information. I don't know the answer to that. I will provide everything I can to the member, but I just want to say that there may be a small caveat to that.
K. Jones: With regard to the Crown corporations secretariat contracts that the various ministries have to do services, what is the actual role of the secretary of the Crown corporations secretariat? Does he have a mandate to go into any ministry if called upon to take whatever action is recommended?
Hon. G. Clark: No, absolutely not. We've canvassed this question. The Crown corporations secretariat has no role whatsoever within ministries.
F. Gingell: I'm sorry, you have every right to ask as many questions as you want. Please carry on.
K. Jones: No, carry on.
F. Gingell: We don't have any more questions of the Crown corporations secretariat. Thank you.
Hon. G. Clark: Thank you very much. I appreciate the cooperation of the members opposite. We have had a full discussion on this.
Mr. Denhoff is here from the Transit Corporation, and I know there were some questions from members. This would be an opportune time to proceed with any questions people have about that very large and heavily subsidized Crown corporation.
D. Symons: I'd like to welcome Mr. Denhoff back and apologize for bringing him out at this hour of the evening rather than on Friday morning, as was planned. I have a number of questions that I would like to get into.
The first one is financial, and maybe our Finance critic should be the one to ask these. I notice on page 29 of this year's annual report that the debt service costs for the Vancouver Regional Transit System runs about 37 percent of their funding. That seems to be an extremely high figure. I wonder if you could verify that the vast majority of that 37 percent is due to SkyTrain capital costs.
Hon. G. Clark: You've got that right. It is an over $1 billion system and very expensive. It's all debt-financed, and it's a huge proportion of the cost that is taxpayer subsidy. The previous government made some commitments, as you know, in terms of 100 percent funding for this extension to Whally -- 75 percent funding from the province. As a senior government we subsidize transit in this province more than any province in Canada, and I think more than any jurisdiction in North America does. The biggest reason for that is the unilateral decision of the previous government to proceed with a $1 billion project over the wishes of municipalities. Again, I'm not really taking a side on that question, but the logic is that the province then pays the lion's share of it. We're paying the bills today, and they are very, very large.
D. Symons: I wonder if the hon. minister might give me a feeling for what the payback time would be when you purchase a bus or buses, compared to the payback time on the SkyTrain. I note that the fare on the SkyTrain more than pays the operating costs. I think there is a 90-cent operating cost per passenger on the SkyTrain, whereas I believe it is somewhat higher on buses. In a sense, looking at only the operating side, SkyTrain is making money for the corporation, whereas the buses are more or less breaking even. I guess they are not breaking even, because we are subsidizing the operating costs of B.C. Transit. In a sense, SkyTrain is in a payback position. How do the buses compare to that?
Hon. G. Clark: I'll just get the cost per service-hour, which gives you the all-in cost. The hon. member is essentially correct; SkyTrain more than pays for its operating costs. It makes money in that respect. Of course, it seems rather ridiculous to look at only that side of the equation when you have a $1.2 billion capital
[ Page 8734 ]
bill. It has a huge debt service repayment cost which, of course, SkyTrain doesn't come close to covering. However, SkyTrain has exceeded expectations, I think -- and many of the critics' expectations -- in terms of the volume of passengers. The cost per service-hour is lower than many anticipated.
On the bus side, it's quite correct that there's a reverse. SkyTrain is a substitution of capital for labour -- less labour costs, less operating costs and more capital. Buses have less capital costs and are much more labour-intensive. You're absolutely correct: the operating costs are quite high on the bus system, and they lose money in that respect. A bus is roughly $250,000 and lasts about 20 years -- although Transit has done a good job of extending the life of buses -- and it's debt serviced over about 20 years.
We know that some bus routes make money. They cover their operating costs, make money, generate money and pay the debt service associated with buses. Many of those are in the urban areas. In the suburbs, there are no routes that make money. We're doing some route-by-route analysis to get a better handle on that than we had in the past.
I have here the total cost per service-hour, including debt service. For SkyTrain in 1991-92, it was $394 per service-hour; in 1993-94 it, is $360 per service-hour. We brought that down. For buses, the total cost per service-hour, including debt service, was $80 per service-hour; now, in 1993-94, it's $87 per service-hour. There's a logic to that going up. As you add more service, it becomes subsidized. With SkyTrain and debt financing, the cost of financing comes down with increased traffic. Because it's a fixed cost, you have a better chance of bringing those costs down somewhat over time. That's an apples-and-apples comparison of cost per service-hour. It's substantially higher for the SkyTrain service.
D. Symons: Because I'm not a finance person, when you talk about service-hours, I'm not sure if that's per vehicle or the whole thing. Would the passenger ridership more than make up some of that difference? Those are interesting figures, anyway.
One of the problems is financing the transit system. Some suggestions have been made as to how Vancouver can raise the shortfall they have in their financing. We've heard of the green tax, an enviro-tax added on your ICBC -- around $50 is the figure that's been mooted for that -- to raise the money for B.C. Transit. Last year it was Bill 52, I believe, that suggested a parking tax. I believe the minister has also suggested having a lower mainland property tax on residential property, as is used in other communities around the province. Is the minister able to give us a flavour of these different ideas and his opinions on them? I realize that it's actually Vancouver Regional Transit that will make the decision, but you give them the options to choose from.
Hon. G. Clark: I will answer your first series of questions. This may be a little simpler in the magnitude. Per-passenger cost of a bus is about $2 to $3. Every time someone gets on the bus, it costs us $2 to $3. You subtract from that the fare, and that gives you the subsidy that we pay every time someone gets on a bus. Every time someone gets on a SkyTrain car, it costs the taxpayers $9 to $11.
An Hon. Member: What about ferries?
Hon. G. Clark: The ferries are quite a bit smaller than that. That gives you a sense of the magnitude of all-in costs per passenger. Those numbers bounce around on different routes, but that gives you a sense of the magnitude of the numbers.
With respect to funding questions, we have reached a unanimous agreement with the Vancouver Regional Transit Commission. We have been to-ing and fro-ing for 20 months now. I make no apologies for that, because we were trying to look at a variety of questions, one of which is governance. One of the things I said to the transit commission and to the GVRD when we took office, was that it is an odd Crown corporation -- no disrespect to the Chair -- in the sense that while the service is determined by municipal politicians appointed by the provincial government, the provincial Crown corporation manages the system. The province pays more than any other jurisdiction in North America in terms of subsidy.
Coming into office, one of the things naively said to local politicians is: "Look, you want more control." They clearly do. I think it makes sense to have a municipal or regional bus service controlled by municipal politicians. That's what they want. The problem is that they want to continue the funding arrangement, and the province is basically paying the lion's share of the bills. One of the options, and one of the things I've said, is that we would continue the historic subsidy, but any new service that they add, they pay for -- the way they do in Prince George, Kamloops or anywhere else in the province. We've really been discussing this question. I'm still open to devolving some authority to the regional transit authority. We're still discussing it with them, and we haven't made a lot of headway.
In the meantime, in terms of trying to get them to say, "If you want more power, you have to take more responsibility for the costs as well as the system," we've been going back and forth to deal with both that broad governance question and how to fund a deficit that we inherited from the previous government. We inherited it because of the SkyTrain extension to Surrey, which was a very big bill, and the costs associated with that.
In terms of dealing with that deficit, we've been trying as a Crown corporation to cut costs, and last year we cut some $20 million from the budget of B.C. Transit, which flows through. So in the share that's supposed to be funded by the municipality, where there's a deficit, they got real relief because of actions taken by B.C. Transit.
Anyway, the short answer was that I was suggesting to them that they look at a parking tax, which I would devolve to that authority. That had some discussion. They chose not to exercise that. It is in the law. They don't want that.
[ Page 8735 ]
At the end of the day we've achieved essentially a compromise where the province is putting a sales tax on parking and turning over all the revenue to the regional transit authority. Some $10 million will be given to the transit authority, and I accepted their request to have a 1-cent-a-litre gas tax. I resisted that for 20 months, but they kept coming back with that same request, so we chose to do that. Now we have solved the deficit problem, and we're in a good position. If we want to move forward with new expansion of service, at least we're not digging our way out of a hole.
They put forward some other options. I don't mind saying to members that the transit commission suggested a $50 tax on ICBC. My problem again is that the local politicians want the province to pose a tax on something that they're administering for their deficit, and I've done that in the form of the gas tax, because that's really a provincial tax as well. But I was reluctant to put a brand-new tax on ICBC premiums, particularly in the current climate, when premiums have risen far too quickly for our liking. To have the infrastructure and the costs associated with that tax wouldn't be particularly productive.
So we've reached this compromise; I'm pleased with that. It was unanimously approved by the commission. We solved the current deficit problem, and now we're in a position to look at new expansion, which is desperately needed in transit facilities, and to discuss with the transit commission and local authorities how we might fund new incremental expansion.
F. Gingell: In the year ended March 31, 1993, the Vancouver share of the shareable deficit was $106 million. What do you anticipate it being in the coming year?
[8:15]
Hon. G. Clark: I believe the number I'm looking for is in the annual report. It's $203 million. It's the Vancouver Regional Transit Commission share of the 1993-94 budget. That includes $94.8 million for operating in non-rapid transit capital; $100 million almost exactly for rapid transit capital; and almost $8 million for the handyDART service. Again, the only thing I'd say about the regional share is: remember that the regional share is largely composed of provincial taxes, like the gas tax.
F. Gingell: No, the number I was looking for was the Greater Vancouver Regional District's share of the anticipated operating loss that is funded by the gas tax, the non-residential property tax and the power levy.
Hon. G. Clark: I'm sorry if I'm confused. According to this information in the annual report -- no, this is not the annual report, I am sorry. The provincial share of the l993-94 budget is $203 million for Vancouver, and the local share is $246.9 million for l993-94.
F. Gingell: In l993 the Vancouver share was $106 million, against which they only raised $92 million: $51 million from gas tax, $27 million from property tax and $13 million from the power levy. So we are off on different numbers.
Hon. G. Clark: I apologize to the hon. member, but the numbers I have here are pretty clear, and I am happy to share them with the committee. The operating revenue for Transit '93-94 in Vancouver is $141.7 million; the gas tax, at 3 cents a litre, raises $52 million; the Hydro levy, at $1.90 a month, raises $13.5 million; non-residential property tax raises $29.7 million; and the total is $236.9 million. Now that's the total....
F. Gingell: Oh, through the fares.
Hon. G. Clark: Yes, the fare revenue all goes to the local share of revenue. So that's a bit of an interesting problem for government. In a way, again, this hybrid question.... All of the fare revenue goes to the local share, and the provincial government, through B.C. Transit Crown corporation, is the body that polices fare revenue. It's another interesting example of some of the problems associated with this tax. In fact, I think there is a bill before the House today which deals in part with this question. Just for the committee's enlightenment, some people are arguing something which is being reviewed: turnstiles at SkyTrain stations rather than the current honour system. Well, it costs money to invest in turnstiles. The current formula means that the cost in putting turnstiles in is paid for largely by the province. But all the incremental revenue generated by fares goes to the local share. Even though it's all one taxpayer and all of that, we are working with a complicated formula. Again, I am very anxious to work to try to make this a better fit, but to date, we've continued along with the existing kind of formula.
D. Symons: Having ridden the SkyTrain a few times and not encountered anybody to check whether I had bought a ticket, I was watching it. I did once see a ticket checker on the opposite platform and felt that, yes, I got away with this all the time, but I did have a pass, so I could have proven my identity. But I have ridden it, and I have wondered how many people around me have actually paid. The honour system is an interesting concept, because we can get ripped off. I think the majority of people are paying, so I hope we're not.
I wonder if I might move into a slightly different tack on this, because we have been talking about the expense of funding SkyTrain. One thing that we might look at is possibly moving it out of the public domain into privatization. I note that there have been a few studies done on that. Price Waterhouse did a study on Los Angeles where apparently they had some money-losing routes. They turned these over through competition and tendering to private firms, which were able to turn a good number of the money-losing routes into money-making routes, and it cost the city nothing. So by taking the routes that were threatened with cancellation and turning them over to private operations, they managed to turn them around and make them financially viable.
[ Page 8736 ]
Denver did the same thing, and your friends Peat Marwick did a study and found a 31 percent savings overall on the routes that they had privatized in Denver. Is the provincial government thinking of doing something similar here? Instead of taking over more and more areas and encouraging privatization of some other areas, that option might be a little more expensive and less onerous on the corporation.
Hon. G. Clark: First, on the earlier point, the member should know that B.C. Transit has taken very aggressive action on the enforcement side: we issued 717 violation tickets in February. The new board's instructions were to hire several more people, and they have a very aggressive enforcement policy. Part of it is to monitor this question of fare evasion and to see whether there is any justification for something more elaborate.
With respect to privatization, obviously if we were to privatize SkyTrain and make the province whole, then the fares would go to the $9 to $11 range that I mentioned earlier. Perhaps with some very efficient operators, they might go to $8 or $9, but because it's a debt service associated with a massive capital expansion, and because the province's borrowing costs are lower than anybody's in the private sector, privatization of the existing route simply is not feasible.
Having said that, I am quite keen on and very pragmatic about looking at any new transit opportunities to see whether there might be some opportunities for private construction and even operating. One that comes to mind is a possible commuter rail route where there is a CPR right-of-way. There may be some operating agreement with CPR to run it, as opposed to Transit; and there may be some costs associated with capital costs, that might be funded privately. I'm quite open to all of that, and so is the government. We are actively analyzing it, and we have had some interesting proposals, somewhat unsolicited, from some major or rather monster corporations. As you know, we're very actively considering the private construction of bridges with tolls to pay off the revenue. All of those options are under active consideration by the government, including B.C. Transit.
The prospects of privatizing the existing system just aren't there if you want to make the government whole in terms of their borrowing costs, and also if you want to keep the fares at any kind of reasonable level. We haven't explored the opportunity of privatizing any of the bus system -- again, they are so heavily subsidized. I will say that I have some concerns about B.C. Transit's crowding out private operators as they move to expansion. So you can appreciate this is an interesting problem in places like Maple Ridge or Mission, where the municipal council will have a contract with a private transit system. They desperately, almost uniformly, want to get into the B.C. Transit system, because the provincial taxpayer is subsidizing part of it. In the case of Maple Ridge, to their credit, the council wants to do it and get a subsidy, but their residents also get a 4-cent-a-litre gas tax applied to that region as well. Then you get the B.C. Transit system, which is a more elaborate and subsidized system and is having an impact on local contractors, which I'm concerned about. I'm also concerned about B.C. Transit generally. I've had several meetings, and we're working very hard to try to ensure that we're not using the monopoly power or the subsidy power of the government to crowd out private investment.
There are some places in Victoria here that have been brought to my attention, and we're reviewing them. Tour buses go to Butchart Gardens; then suddenly Transit is going to Butchart Gardens on a subsidized fare. The transit commission decides on the service, not the provincial government or B.C. Transit, so I have no power to actually deal with route questions -- other than a crude one of budgets, or firing the commission, etc. Nevertheless, I've been keeping the transit commission and the transit staff sensitized to this potential problem of dedicated private tour operators who are very successful, doing fine and charging a premium price and then face having a subsidized bus service come in and do away with their business. In fact, the costs to us increase because it is a subsidized service. The argument against that, of course, is that Transit services are sometimes called milk runs: they stop all the way along to go to the Butchart Gardens. Nevertheless, there is that tension, and we are keeping everybody sensitive to not trying to compete with the private sector where there's no actual increase in benefit to the province.
D. Symons: At the beginning of the minister's comments, I thought he was interpreting my question as meaning the privatizing of the whole transit system, and I wasn't. It was more what you were saying toward the end, that it is possible individual routes aren't working that well. Of course, the problem is that B.C. Transit doesn't pay GST, and all the rest of these companies would, so it puts them at a disadvantage.
Hon. G. Clark: We do.
D. Symons: You do. Oh.
You mentioned the crowding out of private lines, and that brings to mind Cascade lines and Mr. Dubois, who has been in contact with me because of his concerns in that respect. I'm pleased to hear that the minister at least has sympathy for this poor man, although Mr. Dubois doesn't seem to have gained any recognition as far as getting back some of the business he has lost due to B.C. Transit moving into that area.
There was a minibus experiment in Maple Ridge that was contracted out to a private company, and I believe that the study on it found that it ran about 20 percent cheaper than when it was run by B.C. Transit. The service costs were somewhere around $65 per hour, compared to B.C. Transit costs of about $80 per hour. I believe those figures are fairly accurate. If that were the case, I'm wondering if you might give me the costs per hour for B.C. Transit in that neck of the woods. If you seem to have had a minibus system that was operating in a less expensive way, why wasn't that experiment expanded and continued?
[ Page 8737 ]
E. Denhoff: I can't give you the actual operating costs per hour. I didn't anticipate that question on the minibus this evening, but it's fair to say that they are substantially less than the large 40-foot buses. This issue arose in Maple Ridge, and it has arisen over the years in Vancouver, New Westminster and other areas. There were a number of concerns raised, to the point where an independent individual -- Alan Artibise, from the University of British Columbia -- examined the question of using small buses for a variety of different purposes. He looked at the variety of issues that have plagued the implementation of small buses over the years, one of which is that the operators argue, I think quite reasonably, that a bus is a bus is a bus and that they want to be paid the same wage rate to drive a 20-foot bus as a 40-foot bus. To be fair to the drivers, we argued the other way, and I think successfully, that when you drive an articulated bus that is twice as long and heavy as a regular bus, you shouldn't have a wage premium. So now we're a bit caught, frankly. We can't argue easily the other way -- that when you drive a bus that's a little shorter, you should have a wage discount. There is also a series of work rules that accrues to the larger buses and the regular runs that adds a premium to the cost of running small buses, and until we can resolve the wage issue, the work-rule issue and where those buses would be used geographically, we are at a bit of an impasse.
[8:30]
As a result of Alan Artibise's work, the union has agreed to a joint committee that will work during the course of this year to try to resolve those different rules that make small buses a bit more expensive if you use them the way our large system is designed to. By the end of the year, we will hopefully have made some progress and can get buses into places like New Westminster where, frankly, there is a real problem. As you may know, there are overpasses there that you can't get a regular 40-foot bus under due to a planning error, I guess, on the part of the city some years ago. We don't have small buses to go in there and you can't get a large bus in -- and quite rightly, those residents are concerned. We are experimenting more in the small communities where there are already more flexible work rules. That's probably the best answer for now.
D. Symons: Thank you for that answer. What you are saying, then, is that it's a union problem, in negotiations between the company and the union. If they drive a big bus, the union thinks they deserve a premium, but if they're driving a small bus, they deserve the same premium anyway. That doesn't seem to be quite right, but I'm sure the company will continue pressing that matter and make the small bus the less expensive article that it should be. You mentioned the study done by Mr. Artibise, and I believe that report was in a few months ago. I haven't had a chance to see it, so if it is possible, I would love a copy of that.
I will move on to the next topic, which deals with a report that came out six or so months ago by a Mr. Ahad, I believe, commenting that B.C. Transit could cut $20 million through looking more carefully at its operations. It talked about a lack of accountability; bureaucracy; fare-cheaters, which we've touched on already; and particularly duplication of services. I think his words were: "Duplication of services is rampant." There were four personnel departments, four purchasing departments, five public relations departments, three labour relations departments, three training departments, four planning departments, and so forth. The suggestion was, of course, that that could be tightened up a great deal in order to cut expenses.
I gather that the deficit -- if we can call it that -- has been cut this year from the $20 million or so it was a year ago to somewhere around $12 million. So I suspect that you are looking more carefully at some of these. But I notice that some things are mentioned regarding planning. One of these was, I believe, that radio phones being installed in the buses are apparently not compatible with the ones in SkyTrain. I'm wondering if those sorts of things have been corrected so that the communications can work. Indeed, SkyTrain does fit in and coordinate with the bus routes and bus loops that tie into SkyTrain.
Was that an oversight? Was that intentional? Are these being corrected? How about that report? I'll throw it all into one question there.
E. Denhoff: The report that was produced by Mr. Ahad is one of a number of reviews that took place at B.C. Transit during the course of the last.... It's slightly over a year, I guess, since the new board was sworn in. His report found inefficiencies on the part of the company. Other examinations that took place independently of Mr. Ahad also found ways that we could improve the way business is done at B.C. Transit. There were some suggestions, I think, that perhaps didn't fully contemplate the complexities of B.C. Transit. That is to say, SkyTrain is actually a separate legal entity; it's a separate B.C. rapid transit company. Therefore, because it's a separate company, you have a different personnel officer dealing with a different collective agreement. Although it's the same overall union, it's a different local of the union under a different collective agreement with a different company. It would be nice, perhaps, to merge all of the activities of the various entities -- Victoria and Vancouver -- of SkyTrain, but it's not as easy as perhaps an outside consultant might think.
What we have done, though, is we've taken a look at the suggestions that Mr. Ahad and others made over the course of the last year, and we've found, as you mentioned, several tens of millions of dollars of savings -- about $20 million so far. We have in fact taken into account some of those suggestions. We've closed the payroll department in Victoria and merged it with Vancouver, because it was our view that that would save money and could be done as efficiently and wouldn't penalize in any way the workers in Victoria in terms of when they got their cheques and that sort of thing.
Similarly, we've asked the management of B.C. Transit to reduce expenditures, particularly in the administrative overhead -- the white-collar areas, including travel and some duplication of services that
[ Page 8738 ]
you touched on in communications and planning and other areas. I think you'll find that over the course of this year most of the things that were talked about not only in Mr. Ahad's report but in others have been addressed by the management and the board of B.C. Transit, although not every one of these three or four units will be merged into one because of some of those legal complexities.
Regarding the radios, it's another area which is a problem in that it was something we inherited. We inherited a radio system that was three-quarters of the way to being installed on the buses and on SkyTrain. Yes, there are some differences. Again, one of the problems is that the police have a different radio system than our bus system has and than SkyTrain has and than an ambulance has. So to get one that matches everybody -- so I'm told, at any rate -- is rather difficult. We're not satisfied that the SkyTrain system is very good. In fact, I've asked them to take another look at it and see if there's any way, without incurring a large new capital cost, that we could plug our radio system in better.
With the bus system, the radio system that is about three-quarters of the way to being installed will be finished by the end of the summer. The bus drivers seem to be ecstatic about it; it allows them to get a response much more quickly from the mechanical division or from the police or from anywhere else. They used to have to stop, find the nearest pay phone, or get someone to call for them. It has had a big impact on helping bus drivers, in terms of just getting repairs done faster, but also in providing a greater measure of security for drivers who are often alone at night.
J. Weisgerber: I am curious to know what progress the minister or the chairman, perhaps, has been able to make with the collective agreement. It seems to me that this particular agreement has caused government a considerable amount of concern over the last few years. As a matter of fact, I recall successive ministers over the years taking on the responsibility, determined to improve the collective agreement from the perspective of the government. In order to know the kind of progress that is being made, the expiry date of the current agreement would be useful. When that agreement was signed would give me a good place to start.
E. Denhoff: You would have to answer that question through the speaker, although the Deputy Minister of Finance points out that my answers are longer than my speeches.
As the hon. member points out, the collective agreements with B.C. Transit have been difficult over the years; labour-management issues have been difficult. We successfully negotiated a contract in December l992 with the main union -- the Independent Canadian Transit Union, which represents bus operators, SeaBus employees and maintenance and maintenance trade staff -- that allowed for a wage increase of 2 percent in each of three years, expiring in March 31, l995. That contract, which I think has been recognized as a fair one to both parties, also introduced some changes to working conditions. For example, a bus that had transported maintenance workers to and from their jobs was a convenience and a good use of public transit, but it was too expensive, so that was renegotiated. The Office and Technical Employees' Union, which represents office staff of B.C. Transit, negotiated a similar wage increase to provide for 2 percent in each of three years, expiring at the same time.
Finally, the B.C. Rapid Transit Company, which has a separate local and collective agreement, as I mentioned, and had not signed at the time the others did, signed -- I think it was last week, or the week before last -- essentially the same agreement: two, two, and two; there was no difference in the wages, and there were no significant differences in the working conditions. So all of the unions have now settled for the period to March 31, l995.
J. Weisgerber: My recollection, again, is that there were some clauses in the agreements over the years around issues like sick time and overtime that were particularly expensive. I am curious to know whether the current government, with its outstanding connections with organized labour, has been able to perhaps negotiate something that serves the taxpayer more efficiently than we were able to achieve.
E. Denhoff: As sensitive as I am to the full history of this complicated question, there have been some absenteeism problems at B.C. Transit, for a variety of reasons that labour and management recognize. Bus drivers come in contact with people with the flu and that sort of thing more often than probably any workers, other than maybe day care workers. In addition, there were some other difficulties. With the union we recognize that one problem was the archaic way of scheduling holidays. You basically scheduled your holiday block at the beginning of the year, and that was it. So if your kids wanted to go skiing because the weather was great, and you wanted to book off a week in advance to go skiing, our agreement didn't allow for you to do that; you were locked. So perhaps some people worked around that. We agreed with the union that we would allow people to bank overtime -- because by virtue of the construct of our system there will always be some overtime -- in return for a corresponding reduction in sick leave. That is to say, they can bank up to five days of overtime, but by the end of the year we would want to see a corresponding reduction of five days in sick leave -- not per individual, but on average across the board. The union agreed to that, and it has formed a part of our collective agreement. A task group of B.C. Transit human resources and finance and operations managers are now working to implement that with the union. It is ambitious. We don't know if we will get all five days in the first year. I think the break-even point for us is about two and a half days. Anything over that returns to the company; everything under that loses us money. So it will be a test for us this year. In an attempt to do it cooperatively, we think that we will make a stab at it.
[ Page 8739 ]
D. Symons: I had some questions along that line also, and maybe I will jump into one or two of them, because they tie in.
First, I think it is lucky that the Labour minister isn't here, because it sounds like we just did something with employment standards that you might be doing -- with booking sick time, and so forth, and using it in that manner -- that might be contrary to some legislation that was just brought forward.
How does the time off or sick leave compare to that of other major transit companies, such as Toronto or Seattle? I gather that Vancouver comes out quite badly in comparison. Is that because of the scheduling things you were commenting about? What might account for the large differences?
Hon. G. Clark: The last time I looked at the numbers in Vancouver, it was 20 sick days per person. In Victoria it is 12 sick days per person at B.C. Transit. I think the provincewide average is about eight or nine, so obviously we have some work to do, which is why the company negotiated an agreement and a working group to try to bring the level down to something closer to the average.
To put B.C. Transit in a slightly better light, the sick-leave dollars, if you will, or the money paid out as a percentage of payroll is 6.2 percent in Vancouver, using those numbers. It is 4.1 percent in Victoria. Calgary is 6.9 percent -- actually worse than Vancouver. Hull, Quebec is 5 percent, and Ottawa is 4.4 percent. It is obviously stressful, in addition to the interaction with the public, so there may be some objective reasons why there are more sick days. In terms of transit systems, we are not quite as bad as it would appear when you compare it to other industries.
The difference between Victoria and Vancouver is a problem that we will just have to do a better job of. I know that Mr. Denhoff has been working on that. During negotiations, I think that the union set up a process to try to bring those numbers down. I know the new CEO sees one of his tasks as trying to work on that, because these are very expensive dollars, and there are some very big cost savings to the government and the taxpayers if we can achieve some reduction in sick days.
D. Symons: Before we got into the second half of the answer from the minister I thought this was the reverse economy of scale. As you got down in the smaller districts the thing was going down, until you mentioned the other cities around Canada, and that seemed to kill that thought. There are other factors in there that obviously have to be looked at.
[8:45]
This one is basically a freebie to the minister. I noted a while back in the paper that he was quoted as indicating that he thought that a free bus system in the central part of Vancouver was a possibility. I wonder if the minister might comment on where that has gone or where it might go.
Hon. G. Clark: This is frustrating for me. I am absolutely convinced that there should be a free bus system in downtown Vancouver, both for environmental reasons and in terms of just transit -- getting people out of cars. Calgary has a free bus system, Seattle has a free bus system in the downtown core, and Portland has what they call a fare-free zone in the downtown core. But again, the Vancouver Regional Transit Commission is the body that determines the service plan and the fares, because the revenue goes local. As the minister responsible, I have written them letters, and I have had the chair carry this forward, but we have been unsuccessful to date. I am determined to continue to try to convince them that it makes good environmental sense to have a fare-free zone.
Lastly, as you know, the government is imposing a sales tax on parking. That raises about $10 million, and because the government of British Columbia is then going to give it to the transit commission as part of dealing with the deficit, I'm hopeful that they might be more inclined to listen when I ask again that they actively consider a fare-free zone in the downtown core. This would really change the nature of transportation downtown, and it has really positive benefits for development downtown, particularly for the environment.
W. Hartley: I'd like to follow up a little on the Vancouver Regional Transit Commission and how it might relate to areas up the valley, such as Maple Ridge and Pitt Meadows and Mission. For some time now there has been a strong interest on the part of the municipal councils of those areas to become voting members of the Vancouver Regional Transit Commission. I think there's also some advantage, as far as the taxpayers are concerned, to the Vancouver Regional Transit Commission as well. I was wondering if the minister could comment on the likelihood of those communities becoming part of the transit commission.
Hon. G. Clark: Just for members of the committee, we expanded the service area, including the tax and the subsidized service, to Maple Ridge and Pitt Meadows. The act says the transit commission shall be composed of a variety of municipal politicians from certain districts, and the act has to be amended to add Maple Ridge and Pitt Meadows. As you know, I put that into the legislative pipeline. Unfortunately, because of the summer recess, which we hope is very soon, it didn't make it into the miscellaneous statutes amendment act. I give the member my assurance that it will be on the legislative calendar next year. It's a very minor amendment to add those two towns, and I support the option. It's logical; it makes sense. It didn't make it this year for a variety of technical reasons. But it definitely will make it through, and I know all members will support it when it comes before the House.
W. Hartley: I appreciate that that's coming forward, but I guess I'd like some clarification as to membership should these communities be added. Would that give them a voice and a vote on the commission?
Hon. G. Clark: Just to clarify that, right now the act reads like this. One member from the Burnaby city
[ Page 8740 ]
council or New Westminster city council -- currently, it's the mayor of New Westminster -- one member from Surrey, one member from Richmond or Delta -- currently, it's the mayor of Richmond.... What would likely happen, and what I would probably take forward, is that Maple Ridge will be added as one of the members of which you could draw from the appointment. Currently, there are seven members on the Vancouver Regional Transit Commission. There are 30 areas represented in the bill essentially, and seven are chosen. I would be adding 32 members, from which the seven would be chosen. The unfortunate reality is that in order to add, for example, the mayor or a councillor from Maple Ridge, it would require taking off the Coquitlam member or somebody from the commission, but that's a decision which I know the member will be lobbying me hard for, and I will deal with it at that time. Right now we don't have that option, so the first thing to do is to amend the legislation to include those communities; the second would then be to review the composition of the transit commission to see whether that area is represented or whether at some point it should be represented on the commission.
J. Weisgerber: Before we get off the collective agreement completely, I was interested in the comparisons that the minister used with other cities. I suppose those were legitimate. I suspect, though, if one were to look at other agreements and other groups of people who have similar contact with the public and perhaps even similar stress factors in their jobs, one could find some comparisons that weren't nearly as flattering, and I'm wondering whether perhaps as part of the bargaining process the commission has identified some of those areas, and whether the minister might be willing to put those on the record as a balance so that we understand there is a serious problem in that respect.
To move things along, I'm curious to know whether the current agreement has areas that contravene section 2(2) of the Employment Standards Act, and whether particular areas -- shift hours, shift length, split shifts, those kinds of things -- now in the collective agreement are going to have to be modified because of the introduction of new legislation.
Hon. G. Clark: With respect to the first question, I don't have any hesitation in saying on the record that the sick days are a problem. As the employer, 20 sick days for transit operators in Vancouver is too high; 12 in Victoria is higher than the average in the province, and we have to work on that as well. That's why in bargaining it was on the table from the employer's side, and we achieved something which we think will lead to lower sick days. It's a bit of a challenge; we have a way to go. But clearly it is a problem and I've personally raised that.
With respect to section 2(2), I believe the member is correct in saying there was a problem with total hours worked per week, which would have contravened the Employment Standards Act. That is being modified to comply with the legislation. That's before the legislation was changed; there's been some modification to deal with that question. So they won't be in contravention of the Employment Standards Act.
J. Weisgerber: Perhaps the minister could give us an idea of the cost to B.C. Transit of the changes in order to comply with the new legislation.
E. Denhoff: In this particular case there isn't a cost. You are no longer allowed to work more than a certain number of hours at one stretch before having a rest or whatever it is. So some folks would work shorter hours and other people from the spare board, who are already there, will go on and take their shifts. This was a matter of some debate between ourselves and the union, as to whether it would in fact be an additional cost. People might have to be brought in on overtime. It was our argument -- and we seemed to have been successful -- that we didn't have to. We simply reassigned people from existing spare board operations to cover off the people on the shorter hours. Very few people were affected. I think there were something like 17. I might be wrong; it might have been 21 or something, but there were very few people affected who were working longer hours than will now be allowed.
D. Symons: For my first question, maybe just a nod would do. It goes back to the question dealing with the transit board. I gather that some communities have to share positions each year. Has that worked reasonably well? The communities simply rotated among them. A nod on that would do, and I will move on to my next question.
Hon. G. Clark: First of all, there's the transit commission, then there's the transit board. The transit board is appointed by the government. On the board, the government is trying to be sensitive to representing some communities.
[J. Beattie in the chair.]
On the commission, I don't know if it's worked extremely well. In a way it has, in the sense that the regions are reflected. But I know that some municipalities feel it's their turn to be on the commission. It is a bit challenging -- it's a minor issue, I guess -- for a minister or government to fire someone in order to replace them when there's no regular schedule of alternating between communities. In fact, in Vancouver's case the act was changed by the previous government to require the mayor of Vancouver to be the only statutorily driven person on the board. That person can't be changed, even if the minister wanted to, unless we change the legislation. It has worked well in terms of giving a regional body.... It's worked fine in that respect. I hear some grievances from time to time from communities that feel it's their turn to be rotated. In that respect, maybe one could give some thought to a regular rotation or something.
[ Page 8741 ]
D. Symons: I was surprised, because I thought the mayors would automatically take their turn. Obviously that's not quite the case.
I want to move into something that might be a little more controversial now, and that's dealing with transit in the northeast sector and the other transit options that are being brought out. I noted a headline a while back that said something to the effect that the northeast corner was front of the line. I believe this is a comment that the Minister of Transportation had made as far as transportation -- it was either you or the Minister of Transportation. I'm wondering if that's going to really be the case. I notice that some reports say that the Richmond line, in which I have a particular interest, should be the next line to go in. The minister says one thing and reports seem to indicate another.
Hon. G. Clark: What that's referring to is that if you use the GVRD's own studies, they've argued.... I think it's fair to say that if you see transit as a way of promoting increased densities and ridership, the northeast corner is an area where there's more potential for increased densities. Richmond is almost of that capacity, but there isn't the same ability to get increased zoning and density associated with it. If you follow the GVRD logic, there's a logic to the northeast corner being at the head of the line.
Government has not made a decision on the transit options. We've been aggressively pursuing the Richmond line, the northeast corner, and recently very actively the commuter rail option. Notice has been made just getting the numbers and doing the work. I suspect in the fall we'll have to make some significant decisions about transportation generally and transit in particular. We'll have to make a decision at that time as to which one of these two expensive capital investments we will proceed with first.
There's no question that transit services to Richmond and the northeast corner are needed. Both those lines are going to be built. The technology and all those questions can be debated, but there is a need for rapid transit to Richmond, rapid transit to the northeast corner and a variety of other options to improve transportation linkages in both those communities. We're committed to that and working hard on both of them. We haven't slowed down at all on the Richmond route as we continue to plan and look at options in the northeast corner.
[9:00]
Realistically, and fiscally, all the information will be gathered together for the fall. Cabinet then will have to make a decision as to which to proceed with first. I hope that any quotes attributed to me regarding priority are in the contexts of that kind of discussion and the information generated by the regional district about land use questions.
While I'm on that point, there is a Transport 2021 task force funded by the Ministry of Transportation and Highways, B.C. Transit and the GVRD. That's a good example of municipal-provincial partnership working to look at transit options in that community, and B.C. Transit is an active participant in that. So we're trying to work with the GVRD as well as with the other players in the province to make sure that whatever decisions we make are consistent with overall transportation planning, which is being generated in a cooperative way between the regional district and the province.
D. Symons: Staying in the northeast sector then, I'll just read a few headlines. The first one is from Saturday, April 3, in the Vancouver Sun: "Northeast a Top Priority for Building, Minister Says," and it was the Minister of Finance. Then we find another item soon after that date saying: "Politicians Rail Against Plans for Northeast Commuter Train." It seems that some of the politicians in the communities that would be served -- some of the local mayors -- aren't too happy with the train option. I think their main concern is that putting in the train may be a stopgap measure rather than really dealing with the transit issues that won't be satisfied by a commuter rail there.
If we read on in more recent times, we find in the Burnaby newspaper, "Commuter Rail Route Found Lacking," and on June 22: "Commuter Rail System on a Fast Track: Clark" and "Commuter Rail Feasible: CP." I suspect they have a biased opinion in saying that. Finally, we have one in the Province recently that says in an editorial: "Various studies show a commuter line would be outrageously expensive and underused."
I wonder if the minister might give us a flavour. I've given you a flavour of various opinions on it. Where are we going on this? I tend to think that commuter rail is not the way to go, and as a stopgap method maybe we're putting a lot of money into something that we could be putting into a final solution.
Hon. G. Clark: I know that there has been a lot of discussion on this. Let me say, first of all, that commuter rail is not the solution to all the transit problems in the northeast corner. I don't have any hesitation in saying that. But can it be part of a solution? That's what we're looking at, frankly, and that's what we're driving hard to see.
Part of the problem, as you probably know, is that there's lots of misinformation around commuter rail in terms of the costs and some of the debate. Some of the earlier cost estimates were just staggering, and the costs per passenger were enormous. Clearly, if that's the case, we won't be proceeding, and I give the member absolute assurance of that. You read one of the headlines that says CPR thinks it's feasible, and the member said they've got a bit of a conflict. The member might also know that the CPR has been the stumbling block to commuter rail over the years and that they were the ones generating the numbers and saying how outrageously expensive it was. The whole reason the numbers were so inflated in the past is that CPR was the obstacle. The member is correct in pointing out that there has been an incredible conversion at CPR as they look toward tough business times and trying to promote it. They are now working with some of the experts we brought up from the United States, with the secretariat and with an individual from Calgary. Working with them on the real numbers, we see the capital numbers coming down quite dramatically, and with the growth in that community and the ridership
[ Page 8742 ]
going up, the cost per ride is coming down dramatically. I'm not prepared to say it's a great deal yet, because we're really trying to get a handle on those numbers. We are trying to make sure they are clean and objective numbers, but right now it is very encouraging in terms of the cost per passenger. Part of it is also encouraging because the ballpark capital costs now, for the entire commuter rail route all the way to Mission, is $80 million. While I know it's a lot of money -- and I don't say that lightly -- you know that $80 million doesn't buy you a lot of highway in this province. And $80 million certainly does not buy you....
R. Neufeld: How would you guys know?
Hon. G. Clark: And $80 million does not buy you a light rapid transit line. Just to give you a sense of it, the entire capital cost of commuter rail is less than one year's debt service costs associated with the SkyTrain. While yes, it's not a panacea, and no, we won't do it if it's not viable; it is a modest initiative in capital-cost terms, with the growth where the numbers really do look a lot more attractive than they have in the past, and I appreciate that people would be concerned that we would be doing something like that instead of doing a billion-dollar rapid transit route, say, down Lougheed. I assure members of the committee that that is simply not the case. It's not an either-or proposition. It is true, however, that a major rapid transit line down Lougheed is a five-to-seven-year kind of project -- these are huge projects -- whereas a commuter rail, as an interim step if the numbers do in fact prove out, is a very modest cost and has some immediate payback. In fact, I think it's two years -- maybe a little less or a little more -- from the time of a government agreeing to do it to the time it opens. So the turnaround time is quick. That's exactly the work we're doing now, and I know there's some concern about it. I frankly believe very strongly that that concern is based on old information, and if these numbers prove out -- again, we're still doing some work on it -- I think we'll be able to allay most people's concerns on the financial side -- recognizing that it isn't the solution to all transit problems in the northeast.
W. Hartley: I think it's important to carry on with this subject, and perhaps the member wants to go on to something else if I could just come in here.
I know that this is not the place to get into a debate about how great commuter rail might be, as compared to other forms of transit. I'd be the last one to point out that we've just had a transit review committee go through the whole process and recommend commuter rail to the Maple Ridge, Pitt Meadows and Mission area. Being a former mayor of Maple Ridge, I also probably would not use this forum to point out that there have been years and years of news clippings -- if some members want to refer to news clippings -- that would bring up the subject of commuter rail and the importance that it might have for the area of Maple Ridge-Pitt Meadows. Also, the federal money that's already been promised year after year towards commuter rail in the area would indicate federal government approval. And certainly municipal approval, having all the mayors of the municipalities along that corridor talking about commuter rail for years.... As a former mayor I could mention the petitions that have piled on my desk in favour of commuter rail.
I just want to use that opening to suggest that the northeast sector has come into an area covered by B.C. Transit, just recently having a regional transit system brought into the area. I think that entrance into the northeast sector, along with some improvements I see coming up in the way of bus-only lanes and other transit-related factors.... I guess my question to the minister is: now that we're seeing a regional approach to the area of the northeast sector, might we encourage the communities to come together on a regional basis and suggest any number of changes -- where the ferry crosses the Fraser River at Albion, for instance, there could be a B.C. Transit connection -- and many other suggestions that would come up on a regional basis? I guess my question to the Transit Corporation would be: what kind of thinking is going into looking at that area as a regional concept?
E. Denhoff: I think there are a whole host of questions that relate to regional transportation, not just transit issues that are going to require greater cooperation among B.C. transit, municipal governments and regional governments. We have taken some initiative to approve at the board level a plan to increase Transit's involvement with municipal and regional planning, and we are participating now with the GVRD in trying to address some of these questions.
The plans that are now being reviewed by the government for the northeast and the south are being reviewed by staff at B.C. Transit. Then there will be an opportunity for people to provide input on them before government makes its final decision. But there are hosts of issues around the Pitt for a bridge and its relation to transit and transportation generally, and a variety of other things that I think are just now being addressed cooperatively between the Ministry of Transportation and Highways and B.C. Transit. In fact, we had the first meeting, I think, in recent history with all the major transportation players in the lower mainland, chaired by the Premier. It involved ferries, rail, federal port authority, federal airport, provincial transit, and I was there for transportation because there were a number of bottom lines to work on.
D. Symons: I am debating where to go at this point, because I have some more contentious questions or ones that are going to take more time. I could go into the quickie ones and then come back to these another day or just jump into the other. Well, we'll just carry on in the order that I have things planned here.
Leaving commuter rail for a moment, because the figure I saw was in the neighbourhood of $200 million rather than the $80 million that the figure indicated. So I hope he is right. I like the idea of anything that will get people out of their cars. If commuter rail will do it, I will commend the government for being able to get people to ride commuter rail. If it can be made
[ Page 8743 ]
successful there and competitive costwise with other methods, great. We'll have to see how that's going to turn out.
If we could move back to SkyTrain and get on to rapid rail, one of the problems in the transition between the past government and this one has been a different philosophy as to SkyTrain, the importance of it and possibly the need for it. Now the government realizes it's there, and it has cost a mint to put it in, but they are making it work well. It seems that there have been some deals done by the previous government that have been undone by this government and done back again, and this is causing a problem. One of these involves the renegotiation of the deal made by the Social Credit government on the Whalley station. In the process of doing this, the government pulled out of the deal, saying the Socreds hadn't negotiated a good enough deal. They were going to do a better one. I gather that after trying for awhile, they really didn't come up with a better deal. They managed to renegotiate pretty well what they had before -- if they didn't lose a little bit in the deal. I see the minister's surprise on that, but I think I'll get into something that might explain why the explanation he's going to give might not be quite as bright and cheery as he's going to imply.
E. Denhoff: The hon. member referred to the earlier history of B.C. Transit, that of issuing requests for proposals for this station in September 1989 and looking for financial participation in the construction of a SkyTrain station for the planned Whalley extension. Three proposals were initially accepted, including one from King George Development Corporation, whose property was located at King George Highway and 100th. I think this is the station that the member is referring to. Negotiations resulted in the signing of an initial agreement on September 13, 1990. The basic terms of the agreement required the development corporation to pay an amount of money toward the station construction, plus a certain amount of money toward land acquisition. In addition, B.C. Transit undertook to sell a portion of land previously owned by the Ministry of Highways to the Development Corporation at our cost. On July 11, 1991, King George Development Corporation advised B.C. Transit they would not be proceeding with the agreement. Just to put the time in perspective, we were advised prior to my arrival and prior to the election of the new government that the Development Corporation didn't want to proceed.
A new agreement was consummated in February 1993, giving B.C. Transit 2.25 acres of land valued at $2.9 million, together with a seven-year lease on 4.4 acres of land at nominal rates. King George Development Corporation has leased the land to us is for park-and-ride. They can cancel that lease with certain extensive notice provisions to us; however, they are committed to providing it to us in the event we wish to use it for park-and-ride. We also retain about $340,000, which was paid to us under the original agreement, and a statutory right-of-way for station construction, obviously with some restrictive covenants. The agreement allows the station to be constructed utilizing the infrastructure that's in place. We expect all three stations along that line will be open in spring or summer 1994. We end up with 2.25 acres of land as a result of the deal, which has a value of about $3 million to us.
[9:15]
D. Symons: I would gather from the CEO that he feels this wasn't a bad deal. Is this the station where a building that's going to be called Station Tower is being constructed? That's one of those stations in there, I believe -- a different stop, though.
Interjection.
D. Symons: Okay. I gather that B.C. Transit is moving its headquarters from Airport Square to this new Station Tower building. The figure I have is $1.6 million for that move. I'm wondering if you can confirm those facts, as well as what the rent on this new building will be. How does that compare to the market value and to the value for the space you're paying for at Airport Square now?
E. Denhoff: A number of questions. The costs of moving haven't been finally tallied. We are expected to move when the development is completed. We'll move in, I think, in the fall of 1994. A number of issues relative to the lease were identified by the new board when we took over B.C. Transit. First were the anticipated moving costs. Now the bureaucrats -- of which I'm one, so I must speak carefully -- had planned to spend $1.4 million on new furniture, and we told them that that was ridiculous. They could take the furniture they had with them. So some of these preliminary planning costs that may have been identified earlier have been cut back quite significantly. There are costs in moving, however, not only the staff but for constructing a radio room for this new radio system we discussed earlier -- at the considerable expense of, I think, several hundred thousand dollars -- which might have to be moved again.
All in all, it's fair to say that the board is not enamoured with the idea of making the move, although the jobs will clearly benefit Surrey, and we have no difficulty living and working in Surrey. It's probably not the best use of the taxpayers' money at this time to pick up and move from a space where we have a base cost of around $12 a square foot before operating costs -- something like that -- to a space that will cost us between $14 and $21 a square foot for the base, based on the first number of floors that were taken, and even more than that on an additional floor that was leased after the original agreement was reached.
By way of explanation, B.C. Transit is committed to a total of about 106,000 square feet of space in that building. It was taken in a series of floors, as I remember it. There were approximately six floors originally and then, after the original lease was signed, for some reason that's not clear in the history of it, B.C. Transit then leased an additional floor space -- the eighth floor -- at a rent of between $25 and $28 a foot. When I say from $14 to $21, I'm talking about over the
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life of a 15-year lease, so it starts at a $14-a-foot base before operating costs, and rises to $21 in the fifteenth year. On the latter floor, it's a 10-year lease, as I remember it, and it starts at $25 or $26 a foot and goes to $28. So we have done a number of things. First of all, we've tried to reduce the cost of the move. Second, we've tried to identify whether B.C. Transit really needed all that space or whether some other agency of government couldn't be convinced to come in and rent some of our space and therefore lower perhaps the overall cost of government. That's probably as much as I can say today, because those talks are still underway.
D. Symons: That sort of answers my question. I gather that the $12 a square foot you're now paying is probably the market value, so by moving to Whalley, which seems further out, you're paying slightly more than you're currently paying in the city. I note too that if you had put SkyTrain out to Richmond -- of course, I have a vested interest in your doing that -- you would have been on the SkyTrain route, and where you're relocating is on SkyTrain, so it does make access to headquarters quite good for the people who are going to be working there. But why was it necessary to move? I'm sure it wasn't because you're now going to be on SkyTrain compared to where you were before. You gave me the square footage that you will be taking -- the 106,000 square feet before you took in the eighth floor -- so could you give me a rough comparison of how many square feet you now have at Airport Square compared to what you're going to have in total at Station Tower? What I'm basically asking here is how much the bureaucracy is growing.
Hon. G. Clark: The 106,000 included the eighth floor, the extra floor, and we are currently in the 80,000 square feet range. This is an interesting line of questioning and the member might -- I say this for the committee's sake -- want to talk to Gordon Campbell who was on the board of directors at the time, because this is a series of rather unexplained decisions which will cost transit significantly more money than they are paying currently. The decision to build, rent or lease a new substantial space in an office tower attached to a station in the former premier's riding in Surrey was required -- at least this is the argument -- to make that project go. In other words, if you want to make the town centre development take off in Surrey, then there was a requirement to induce that development by way of government purchases of leasehold space. So a decision was made to put transit at the end of the line. That was a political decision, essentially, I think it's fair to say, and one which I have a bit of sympathy for. I want to be candid about this. Surrey had a good argument for the Crown agencies to be moving out into areas like Surrey or some of the suburbs. I don't want to say that this is all bad because of a political decision, but it was a decision made by the government of the day to enhance the prospects for development around the station site. They leased property at rates which, in today's market environment, are very high.
Having said that, as a result of those leases, this is a very major redevelopment taking place in Surrey, and B.C. Transit is part of it. It does have the positive benefits of having transit on the SkyTrain route and part of a flagship development of Surrey. I want to be careful here, because I think there's some merit to the government moving in a major way into a community like Surrey. I'm delighted to participate in that major redevelopment as a Crown. The costs are a bit higher than they would be perhaps if one stayed at the existing place or moved to another accommodation.
The last point I would make is simply that while the costs are higher, the space is nicer -- at least, if one believes that a brand-new building in a new town centre is going to be fairly attractive, although they have a pretty spectacular view right now at Airport Square. In any event, it's a brand-new facility, and it is the anchor tenant, which allows the redevelopment of that site to take place. But there are some unexplained questions around the move and some of the costs associated with it, which we're continuing to explore and to minimize on behalf of the taxpayer.
D. Symons: I have been in the CEO's office in Airport Square prior to the current occupant of that position, and I would gladly change my legislative office for that office over there any day. I don't know that they're terribly disadvantaged by a rather ugly building or location.
What the minister seems to be saying, number one -- and I haven't heard this too often -- is that he isn't too unhappy with some steps that the previous administration had taken, and that's unusual to hear a bit of a compliment, left-handed as it may be. There seemed to be some sort of sweetheart deal along with the developer of the station and all the rest here, which may or may not be a good thing.
I would like to move -- and we're running very short of time here -- back to other types of topics. One I'd like to move into for a moment is right in Victoria here. Apparently studies have been done and proposals made to do with streetcars in downtown Victoria, one being a double-decker streetcar proposal that came up in Victoria, and the second one had to do with heritage trolley cars. It seems that these both were proposed for roughly the same sort of area. I gather the trolley car one is 5 kilometres at a cost of $28 million, which sort of amazed me. So we are looking at about $5 million per kilometre, which seemed to be a rather expensive process for a streetcar rail down streets where you don't have to buy any right-of-way. A Doug Spaeth report was done on this; it was due in mid-May. Has that report now come out? And what were the recommendations?
Hon. G. Clark: I'd just advise that that Doug Spaeth report is due in a couple of days, so hopefully I can share that with the member. I might say that the numbers are coming in very positive for the SkyTrain. In fact, one recent study....
Some Hon. Members: Streetcar. A different city.
Hon. G. Clark: Streetcar, excuse me. Anyway, obviously there has been a lot of work done on this question. One recent study shows something like up to
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700,000 tourists trips a year. We're obviously checking some of the numbers again, but there's some suggestion that the entire operating costs of the streetcar can be paid for by fares. There's some debt service and some costs associated in terms of building it, which again we're still refining, but it does have some real attraction in terms of generating revenue.
I want to make it clear that we have a very elaborate process in the Victoria accord, which the government is working through with the Provincial Capital Commission, B.C. Transit, the Crown corporations secretariat, B.C. Buildings Corporation and the city of Victoria. One of the reasons for the streetcars -- aside from the attraction for a city like this, and services -- is that we are redeveloping some lots. We've heard some discussion earlier today of the Y lot development, etc. When you're eliminating parking lots, there's a nice fit to be able to move people around this core area on a transit service. We want to make sure it's a modern service and not an antique streetcar. It will be nice; it might look like an antique streetcar, but it will be state-of-the-art service. We are looking at all the numbers -- and obviously it is part of a broader planning process -- and we haven't come to any conclusions yet. We want to make sure that we are satisfied financially, that it makes sense and, probably more importantly, that it fits with the local community and the development around that, which includes St. Ann's Academy and redevelopment of some sites. We are not there yet; lots of work is being done. The space report is a key element in all of our decision-making in terms of providing the information. That report will be out in a couple of days.
D. Symons: I would appreciate a copy of that when it is available.
You used the word streetcar, and I assume by the last few words that you meant the heritage one, because I believe that the double-decker is also a streetcar. So when you said that the figures are coming in and looking fairly promising, that was on the heritage streetcar rather than the double-decker streetcars.
Hon. G. Clark: It is heritage-looking.
D. Symons: Heritage-looking -- yes, I realize that.
I have one last topic before our time runs out for this evening: the zero-emission bus that I believe B.C. Transit has some financial stake in. The Ballard fuel cell powers this. I gather that the B.C. government has put some money into the experimentation with this type of locomotion, and I wonder if you might be able to give me a breakdown as to which moneys came from which ministries. I think B.C. Transit, the Ministry of Advanced Education, Training and Technology and the Ministry of Economic Development are involved in it. I wonder if you might give me an idea of how much in total has been given to the development of the zero-emission bus, and what amounts came from those various departments.
Hon. G. Clark: I will get the breakdown; I don't have it here tonight. I do know that B.C. Transit contributed $250,000. I am pretty sure it is $2 million or $3 million from the science and technology fund, then there was some money from Energy, Mines and Petroleum Resources. Further funding is required, of course -- at least, that is what we were advised -- and there is some possible funding from California and other places.
[9:30]
From this phase, which is completed, we now have a prototype bus. As you know, the technologies are very exciting, and there are real leading-edge prospects for the Ballard technology. The province has put in significant resources, but it is nice to see some real potential there. Government has yet to make any decision on any future funding with respect to that bus, but you can tell by my remarks that we are very sympathetic to trying to make this very exciting project work. I don't see significant funding from B.C. Transit -- it will more likely be the science and tech fund or some other source available in government.
D. Symons: I would be delighted to see a public transit vehicle whose pollution is water and oxygen. That sounds fantastic compared to what's put out of the tailpipes of all the internal combustion engines now. I have information from scientists, however, that the problem with the Ballard fuel cell is that hydrogen will fuel this, and hydrogen cannot with present technology be produced inexpensively. Therefore the whole project is likely not to pass because of the problem of producing the fuel needed in the Ballard fuel cell economically. Could the minister comment on whether this is the case and if we are putting money into something that is going to be feasible in the near future?
Hon. G. Clark: I remember this very debate in high school. The reason hydrogen fuel is not utilized is that it costs money to produce hydrogen. It takes more energy to make hydrogen than it generates. That's the classic dilemma faced by this technology. That's precisely the questions you're looking at, and it's a big hurdle.
This is out of my ministerial responsibility. There are some possibilities of using surplus spillage from hydro to generate hydrogen at very little incremental cost. It can then be used for certain technologies, and all of those are being explored. Energy, Mines and Petroleum Resources -- the former minister is here -- contributed to the project because of that. Environmentally, it's a wonder fuel. We are looking at it very seriously. The member is absolutely correct that the key essential problem remains. While it's a wonderful fuel source, there are costs associated with the generating of that fuel. That's what's prohibited its development in earlier years.
I move that the committee rise, report progress and ask leave to sit again.
The Chair: This has been a very interesting discussion about science. I'm sure everyone hates to go home this evening but the question has been put.
Motion approved.
The Committee rose at 9:32 p.m.
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