1993 Legislative Session: 2nd Session, 35th Parliament HANSARD

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JULY 27, 1993

Afternoon Sitting

Volume 12, Number 19

[ Page 9227 ]

The House met at 2:06 p.m.

V. Anderson: I would like the House to join me in welcoming Mr. Kang Tan, a businessman from the Vancouver-Langara area, to the House today.

Hon. D. Miller: It's my pleasure today to introduce a delegation in the members' gallery. It is led by the hon. Minister of Forests for Papua New Guinea, Mr. Tim Neville, who is accompanied by his wife, Fiona, and a number of people from the PNG Forest Authority: Mr. Stanley Pil, who is a Member of Parliament; Mr. Kanawi Pouru, Deputy Managing Director for the Forest Authority; Mrs. Cathy Munagen, the scientific officer for the Forest Authority; Ms. Joann Kaputin, executive assistant to the minister; and advisers Mr. Terry Warra and Mr. Conrad Smith. They are accompanied by Mr. George Nagle of Victoria, a forestry consultant who has done a lot of work. The minister and his staff are seriously engaged in trying to bring modern forestry practices to their magnificent country, and we certainly wish them well in that endeavour.

L. Reid: I'd like the House to please welcome Steve Hussey, his daughter Kelleen and his son Kyle, who are visiting today. They are residents of Esquimalt. I ask the House to please make them welcome.

N. Lortie: It's my pleasure to introduce in the gallery today two very good friends, John and Peggy Mackie, from the community of North Delta, their daughter Laura and a visitor from Mexico, Se�or Jos� Porras. Would the House please give them a warm welcome.

G. Brewin: It gives me a great deal of pleasure to welcome to the Legislature today a group of people who are doing a lot of good work for British Columbia. They are the community and client relations subcommittee of the B.C. Ferries Corporation board of directors. Here today -- if they're not here yet, they're coming -- are Frank Collinson, a board member from Haida Gwaii; Arne Olsen, who represents and comes from Hornby and Vancouver; and Maxine Williams from Alert Bay. Also with them are B.C. Ferries staffpeople Rod Morrison, Nancy Addison, Ian Curtin and Marie Hickey. Would the House please make them welcome.

Hon. R. Blencoe: Hon. Speaker, I have the privilege to introduce a very special guest today who is visiting our province, the hon. Carol Carson, Minister of Municipal Government in Saskatchewan. Carol is also responsible for housing, sports and recreation and a number of other areas that keep her very busy. The hon. minister and I have had the privilege of representing our provinces at provincial ministers' meetings on housing, sports and recreation, and we look forward to working together in the future. Would the House please make the hon. minister welcome.

Hon. A. Charbonneau: I would ask the House to welcome Sharon Moore, who is a constituent from Kamloops on her first visit to the legislative buildings. I ask the House to make her welcome.

C. Evans: I have the pleasure to introduce today a friend of mine from Parksville, Barbara Barrett. I'd like members of all parties to make her especially welcome. I have it on good authority that she is one of only three people in the province who think we're interesting on TV.

Hon. L. Boone tabled the annual report for the Ministry of Government Services.

Oral Questions

B.C. RAIL LABOUR DISPUTE

G. Farrell-Collins: Hon. Speaker, my question is for the Minister of Transportation and Highways and the minister responsible for B.C. Rail. In the absence of the Minister of Labour, who I notice has departed on holidays, can the Minister of Transportation tell us who in cabinet has taken responsibility for the dispute at B.C. Rail to ensure that it's settled at the earliest opportunity?

Hon. A. Charbonneau: The normal procedures are being followed. The Minister of Labour plays a role, and I play a role as Minister of Transportation and Highways and the responsible minister for B.C. Rail.

G. Farrell-Collins: My supplementary question is to the Premier. Given that the B.C. Rail dispute is costing approximately $800,000 a day out of the British Columbia economy, can the Premier tell us, first of all, if he's been attending cabinet meetings? Secondly, how long will he let this dispute go before he'll take some action?

Hon. M. Harcourt: Yes, I do attend cabinet meetings -- and the sun does come up in the east and go down in the west. Quite frankly, the two ministers who are involved in this, the Minister of Labour and the Minister responsible for Transportation and for B.C. Rail, have spoken on this issue many times, and the member has heard their response.

G. Farrell-Collins: This reminds me of May when we bungled through the labour dispute as it related to teachers. We've let this thing drag on quite a while now. I think it is about time we started to get some direction from the government on how long this dispute is going to go on. With the House likely to rise within the next week or so, can the Premier tell us which Sunday in the month of August, or September, or October, the opposition should be booking off in order to return to this House to deal with the B.C. Rail strike?

EFFECT OF THE BUDGET ON THE AUTO INDUSTRY

L. Stephens: Last week the Minister of Finance was asked how much retail car sales were declining because of his tax policies, and the minister told this House that car sales were up. The truth is that the retail 

[ Page 9228 ]

car sales are down by 26 percent on average. The minister was using figures on fleet sales, including government fleets, which are seasonal and which do not generate tax, and fleet sales are up. The minister later admitted his deception to the media. Will the minister acknowledge that he owes this House factual information? And will he admit that he used sales figures that had nothing to do with the sales tax revenues?

Hon. G. Clark: I'll let the facts speak for themselves. The Motor Vehicle Manufacturers' Association's own data -- their own data -- show that sales were up 13 percent in May over April, and up again by 4.6 percent in June over May. Vehicle sales are up in April, May and June, the months after the budget, and they were down January, February and March. I might say that sales were up after the budget in British Columbia and down in the rest of the country, so it is quite clear that vehicle sales are up.

Finally, just on the broader question of what is happening in the British Columbia economy, sales tax revenues in British Columbia are up 29 percent in April and May compared to the same period last year.

Interjections.

The Speaker: Order, please.

Hon. G. Clark: For the record, once again we have the highest increase in sales tax revenue and in vehicle sales in the country.

L. Stephens: The minister knows very well that the revenues are down from decreased car sales. These are the '93 figures here, and they're down from '92. Here they are.

Interjections.

L. Stephens: I will be pleased to; they're your own numbers. The minister was in a position to record and clear this record, but he chose not to. Will he admit that he misled the House, and resign?

[2:15]

Interjections.

The Speaker: Order, please.

Hon. G. Clark: I have said repeatedly that revenue is up both from vehicle sales and retail sales. The only thing that is down is the estimate of how much revenue we had received, because the historic data on trade-ins was not as significant as we estimated. In fact, this is good news for dealers. We estimated that 50 percent of cars sold on lots historically had trade-ins. It has now been proven to us that the pattern is that about 25 percent of car sales in British Columbia at dealerships have a trade-in value. That historic pattern is continuing, and we're continuing to monitor it. The only reason the estimates were wrong has nothing to do with the tax; it has to do with that assumption we made based on historical data.

L. Stephens: I assume the Premier agrees that accuracy is a prerequisite for a Minister of Finance. Will he demand this minister's resignation?

B.C. RAIL LABOUR DISPUTE

J. Weisgerber: My question is to the minister responsible for B.C. Rail. Yesterday the minister said: "The union has requested, through the mediator, that negotiations resume." That statement, according to both the union and B.C. Rail, is a complete and utter fabrication. If the minister didn't deliberately mislead this House, will he tell us who misled him, and will he apologize to the House for being so badly informed?

Hon. A. Charbonneau: The information I had was that the union had contacted the mediator. I can add that the corporation has been in contact with the mediator to reestablish talks, and I would anticipate that the mediator will be doing so in the near future.

J. Weisgerber: This is the second time in less than a week that the minister has misled this House regarding the B.C. Rail strike. First it was the issue of the caboose. The minister claimed that that was the only issue holding up negotiations. Both the union and B.C. Rail said that that was ludicrous. How can British Columbians have any faith in anything this minister says? Is he so badly informed, or is he just careless with the truth?

Hon. A. Charbonneau: I would remind the member opposite that he was a member of a cabinet in 1990 when a B.C. Rail strike went on for 25 days. After much harm to the economy of the interior and the north of British Columbia, they finally saw fit to appoint an investigator under the Inquiry Act. At the present time we are about seven or eight days into labour action. It is not unusual for a strike to last this period of time. I have been keeping the House informed of developments to the best of my knowledge.

The Speaker: Final supplemental, hon. member.

J. Weisgerber: I take it from the minister's words that he believes 25 days is too long. Will he tell us how long he is prepared to allow this strike to go on? If 25 days is too long, is 20 days too long? Is 14 days too long? Is seven days too long? When will the minister take action and have B.C. Rail ordered back to work as an essential service?

Hon. A. Charbonneau: At this time it is too early for government to be involved in a labour dispute. It has been underway for seven or eight days. It normally takes time for the parties to come back to the table. Processes are underway, and I believe that the parties will be back to the negotiating table -- where this issues belongs -- shortly.

BUY B.C. PROGRAM

R. Chisholm: I have a question for the Minister of Agriculture. Yesterday in this House the Minister of Agriculture stated categorically that there was no agreement between his ministry and J. Walter Thompson Co. Ltd. on the Buy B.C. program. Now he is saying that his ministry intends to pay $78,000 to buy its way out of the non-agreement. My question to the 

[ Page 9229 ]

minister is: if there is no deal, why is this minister shelling out $78,000 of taxpayers' money?

Hon. B. Barlee: We should all set it in the right perspective. First of all, this is a program that works well, and I will tell you why it works. The consumers are onside, and the producers and the businesses are onside. We talked to 150 of the businesses two weeks ago, in fact, and they are all at the table. They think it's a fine program, and it is a good program.

Interjections.

The Speaker: Order, please. If the minister would take his seat for a moment, I would ask the hon. members to come to order, and I would ask the minister to conclude his reply.

Hon. B. Barlee: There is a party that likes the money to go out of the country. They voted unanimously for the NAFTA. We like the jobs and the money to stay in British Columbia. Businesses are lined up for this program; they are participating and will continue to participate.

The Speaker: Supplemental, hon. member.

R. Chisholm: The program is a good program. It's too bad the ministry and the minister botched it up. The minister claims that there was no contract, yet he tells the media outside these doors that there was a verbal contract and that it was approved in error. Was there or was there not a contract? And did this minister approve it before it was signed or agreed to with J. Walter Thompson?

Hon. B. Barlee: There was a verbal contract, but not from me. And it's within my mandate.... We had 12 contracts, and all 12 were with British Columbia firms. I know you would like to see them go elsewhere, but we would like to keep them in British Columbia. This was one of the contracts, verbally agreed upon by one of my staff, who made a mistake. People do make mistakes. The key, however, is this: is the program working? Yes. Is the program working well for business? Yes. Is it working for the consumer? Yes. Are we utilizing that work done by J. Walter Thompson? Yes. They got paid reasonably for their services, and they did a good job. But they are not a British Columbia firm.

The Speaker: Final supplemental, hon. member.

R. Chisholm: Unfortunately the minister doesn't realize that as minister he's responsible for his bureaucrats. I doubt very much if a bureaucrat would give a $550,000 contract for advertising without the minister's knowledge. It is reprehensible that this minister refuses to take any responsibility for this expensive boondoggle. He's still blaming his staff.

The question to the minister is: can the minister explain why J. Walter Thompson received $78,000 for only ten days' work when the total value of the entire Buy B.C. advertising program is about $550,000 over five years?

The Speaker: The hon. minister, for a very brief reply.

Hon. B. Barlee: Certainly, hon. Speaker, I will accede to your request.

This was money well spent. They did a good job; they're a good firm. They don't happen to be a British Columbia firm. The total price was $78,214.81. We watched it very well; this ministry watches every dollar. We always balance the budget. Frankly, the taxpayer can't ask for much more than that.

RECALL AND INITIATIVE LEGISLATION

D. Mitchell: I have a question for the Premier. The Chair of the Standing Committee on Parliamentary Reform has recently referred to the concept of recall as alien to the process of our parliament. I wonder if the Premier would agree that a reform endorsed by more than 80 percent of British Columbians has to be considered by this government as alien.

Hon. M. Harcourt: The hon. member for West Vancouver-Garibaldi is a student of history. I'm sure he'll acknowledge that in the Canadian experience since Confederation, recall, referendum and initiative legislation has taken place only occasionally and has had a very spotty history in our parliamentary system. It has been utilized in a foreign system -- the United States -- far more often. That is why we are very carefully carrying out the work that the previous government said it was going to do after the question was put to our people. We asked questions on what "recall" means in a parliamentary system and what "initiative legislation" means. We wanted to know, in specific terms, what the wishes of the people of British Columbia were around those two items. The Chair of that parliamentary committee is bringing back the results of the consultation with the people of British Columbia so that legislation can be brought forward next spring.

The Speaker: The bell signals the end of question period.

Presenting Petitions

V. Anderson: I table a petition requesting that private adoptions be continued under regulations.

Orders of the Day

Hon. G. Clark: Report on Bill 45, hon. Speaker.

[2:30]

[ Page 9230 ]

HEALTH AUTHORITIES ACT, 1993

Bill 45 read a third time and passed on the following division:

Hon. G. Clark: I call committee on Bill 79.

SUPPLY ACT, 1993-94

The House in committee on Bill 79; E. Barnes in the chair.

The Chair: We're on Bill 79, Supply Act, 1993-94. Just for the record, I'd like to say to hon. members that we are now in committee stage of this final supply bill. The bill is an administrative instrument, the purpose of which is to implement the appropriation of funds already fully canvassed in Committee of Supply. The amount contained in the act has been authorized by Committee of the Whole and is not subject, in the absence of a clerical discrepancy, to amendment. Research indicates that the only occasion on which debate was permitted in committee stage of a final supply bill was when debate was permitted on certain ministries for which the House had not completed consideration of the relevant estimates.

In that we have a new House, I say this because I realize that there may be questions. It is customary practice to simply ask that the section be passed.

Shall section 1 pass?

Section 1 approved.

D. Mitchell: I have a question for the Minister of Finance on the Supply Act. I was listening, but I do have one question which is of a....

The Chair: Order, hon. member. Indeed, the member may have a question, but the purpose of the statement made by the Chair was to clarify for members who may desire to enter into debate that no debate is permitted on this particular act in the absence of the need to correct some clerical or technical error in the bill itself. Does the hon. member understand?

D. Mitchell: Yes. While I don't question the bill as printed, I did want to ask the Minister of Finance about the timing of Bill 79. We've had in this legislative session a number of interim supply bills, and this final supply bill is now being brought forward at this late date. I wonder if the Minister of Finance would care to share with the committee any observations as to the timing of the final supply bill and whether or not this is going to be considered ordinary practice for the government during a legislative session, or whether or not some consideration would be given to bringing in a supply act on a fixed schedule so that it would come in earlier in the session so that the estimates process could be dealt with in a more orderly fashion....

The Chair: Order, hon. member. Would the hon. member please take his seat. I appreciate the hon. member's concern to get further information, but it does not qualify at this time in committee.

Section 1 approved.

Schedule approved.

Preamble approved.

Title approved.

Hon. G. Clark: Hon. Chair, I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 79, Supply Act, 1993-94, reported complete without amendment, read a third time and passed on division.

Hon. G. Clark: I call committee on Bill 7.

SOCIAL SERVICE TAX AMENDMENT ACT, 1993
(continued)

The House in committee on Bill 7; E. Barnes in the chair.

On section 2 (continued).

L. Fox: Prior to lunch we were talking about whether accessories would be considered part of the purchase price of a vehicle. The minister's answer to that gave me grave concern, and I want to canvass this further. In accepting that add-ons or accessories will be considered for the purposes of applying the so-called luxury vehicle tax, the minister would be creating a scenario I don't believe he wants to create, because 

[ Page 9231 ]

there will be so many innovative ways of trying to get around that kind of logic.

You have to pay the 7 percent provincial tax on all these accessories, and the current practice is that if you buy a pickup and put a canopy on it, which is a removable product, you usually acquire it at the same time as you purchase the pickup. If you are purchasing the vehicle in the fall, in many parts of the country you would also purchase additional wheels and tires, because you may be buying some for winter as well as summer. There are so many things -- for instance, telephones added onto the vehicle at the time of purchase -- that are accessories. You can list tool boxes and a whole host of different things that obviously are accessories to the vehicle and not part of the purchase price of a vehicle.

If you put that policy forward, all you would do is cause dealers to find innovative ways to circumvent the policy. If you bring forward that kind of non-commonsense policy, you're basically making people break the rules in order to apply common sense. I don't think that's what the minister really wants to do, so I would ask him to seriously think about that policy.

[M. Lord in the chair.]

Hon. G. Clark: I thank the member for his input. Obviously we will be monitoring the situation. Just so we're clear, the current rule -- this is not new to this bill or this year -- is that if you purchase a vehicle, then the accessories and repair accessories count as part of the purchase price if they are bought within two days of the original sale. That's the current policy, which has been in existence for some time. In other words, there's a two-day rule. Prior to this bill, if you bought a truck with a canopy, it would be counted in the full purchase price if you bought it at the time of the sale. Similarly, if you bought a truck and had undercoating done within two days of the sale, then you had to pay the sales tax on the full purchase price, including the installation cost of the undercoating. So there is no difference here.

I appreciate that there may be some more importance to it now because of the differentiated tax question, and we'll monitor it. But the rule is that if you purchase accessories within two days of the original purchase, then it all gets added in as the total purchase price of the vehicle. The member is saying that there may be some attempts to deal with that by coming in three days later for a whole series of accessories and paying a lower sales tax on that. Then obviously we'll have to monitor that and see how that goes. But right now there is a two-day rule, and we have no intention of changing that.

L. Fox: The last thing I was implying was that you should make the rules even tighter so that you can capitalize on the clauses that allow you to increase the tax rate every $1,000 after $30,000.

The minister alluded to the reasons that the two-day rule will be a lot more prominent in this legislation than it has been in the past. My concern is that you have to add a $2,000 winch to many vehicles in order to make them functional and provide the protection of being able to get home on a muddy road through the woods. Now, because that's an add-on and may be traded to another unit later on.... It doesn't have to stay with that vehicle; it could be detached and moved to another vehicle. Now, by virtue of the fact that they purchased that on the same day and applied it to that vehicle, they're going to be penalized. I don't believe that that makes a lot of sense or a lot of logic, nor do I believe that it can be policed. The minister suggests that they're going to monitor this. Well, hon. Chair, I would like to have some idea from the minister as to how he intends to do that. There are innovative ways to get around this piece of legislation in order to keep the purchaser at a realistic tax level. There will not be visible records that the minister is going to be able to monitor, just a simple process of postdating an invoice for two weeks down the road, leaving it sitting on a hook, and not processing it for two weeks. The minister could never monitor or catch that. How does the minister expect to monitor that?

[2:45]

Hon. G. Clark: Obviously we can look at the records with respect to these sales, first of all. But if the member is suggesting that car dealers are going to conspire to circumvent the law, I don't believe that. I think that car dealers understand the laws, and will comply with them. My dealings with them have been that they understand that. They may not be happy about it, but they will follow the laws of the land. We will obviously have our usual auditing team to try to ensure that that is the case.

All I am suggesting is that I certainly understand and appreciate the argument the member is making. But the same argument can be made for air conditioning or other things -- air conditioning can be added after, and there's some nuance there. When the regulatory scheme is in place, we will have to be responsive to the environment within which it's trying to operate, and try to look at lists of exemptions and all of those things. That's what we do in the Ministry of Finance all the time. We will try to make it as workable as we can. If there are problems we will try to fix them over the next year. The member said I was suggesting tightening it up and making it tougher, and that is an option. But the other option, which the member might suggest -- not including accessories and the like -- is just as valid. We will continue to try to strike a balance there, and see how it goes over the course of the next few months or a year.

L. Fox: This is not to belabour the point, but I want to straighten out the minister. I wasn't envisioning the dealers trying to circumvent any tax. Even though he fails to admit that the dealerships are hurting in terms of retail sales, the minister has to admit that there's horrendous competition out there between different dealers for that same customer. If that customer can go to one dealer and propose that he would like his accessories added on at the time he picks the vehicle, but billed out at a later date -- and the purchaser puts that condition on the sale of that vehicle -- if that dealer does not respond, the customer only goes to another dealer. Sooner or later, when times are tough, a dealer 

[ Page 9232 ]

will respond to him. It's straight economic sense. I think the minister is fooling himself if he believes that it will not happen. It will happen to a very large degree, because if the consumer is up into a 10 percent bracket for the full price of a $34,000 vehicle, but without $4,000 worth of accessories he can stay down at 7 percent tax versus the 10 percent, that is a tremendous savings to that consumer. There is no question in my mind that the consumer is going to find means of circumventing that particular aspect of this legislation. That is a fact of life. I've seen many requests by consumers over the years that I couldn't comply with, and most dealers will not comply with. There is always somebody out there who wants to keep the doors open. They are fighting very hard, and bending the rules a little bit, especially when it makes good sense to argue that it shouldn't be that way. In a lot of people's minds, that is logic enough.

I thought this bill was so long coming forward because I really believed and hoped that the minister was meeting with the Motor Dealers' Association in a constructive way, and looking at alternative methods to this formula before us in order to increase the revenue of British Columbia. I want to ask the minister why he chose this formula and not the formula submitted by the Motor Dealers' Association of a $63 fee per transfer on all vehicle sales. As I understand it, that in fact would have netted the province as much revenue, if not more, than the $37 million it's now estimated they are going to receive under this formula.

Hon. G. Clark: That's a good question from the member. We had several meetings with the various dealers and organizations -- my staff and a technical group. I know that it may be sort of cold comfort, but I would pay tribute to the organizations that participated in the review. There was a detailed technical review, and their estimates were off significantly -- and our estimates were off, for a variety of reasons. At the end of the day, the dealers proposed -- you are quite correct -- a transfer tax of $63, from $18. I appreciate the constructive nature of that, because it's difficult for any organization to come forward and say that they understand the fiscal situation in the province. They put forward a constructive alternative.

The reason I haven't agreed with that alternative is twofold. One is that we would need special legislation to impose a new transfer tax. Right now we charge a transfer fee of $18, which is cost-recovered -- we recover the cost of service. If we went from $18 to $63, as you can appreciate, that would be a 250 percent increase in that fee. It could no longer be legally sustained as a fee; it would become a new tax. First of all, to do what the motor dealers suggested would require legislation in this House now, in July, to impose a brand-new transfer tax.

Secondly, that tax would be somewhat regressive, because it's $63 on all car transfers -- whether it's a $200 car or a $50,000 car -- as opposed to what we have currently, which is quite a bit more progressive, because you pay a little more if the car is worth more. So currently it's progressive; their proposal was very regressive. Again, it was a constructive and legitimate suggestion -- and I take it as being made very much in good faith -- which I very actively considered. The problem was, firstly, it required new tax legislation to impose a tax burden on a broad range of people; and secondly, it was regressive. So we chose not to do that at this time. Those are the main reasons.

The third reason is that the dealers also had an interesting idea about trying to have a consumer protection package associated with that tax. In other words, you would be essentially putting a big new tax on every transfer, but they suggested that the quid pro quo, to make it not just palatable but also worthwhile, would be to have with that tax the cost of a consumer protection service so that there would be a history of the car. Again, I think that was another constructive suggestion.

There are two problems with that. One is that we would require significant work with ICBC to try to implement something like that. I still think that has validity, and we're looking at it. But again, the lead times would have been months and months to try to do it, technically. Secondly -- and this is of course the biggest flaw, which we haven't overcome yet -- if you are going into your ICBC agent, which is where you'd pay this $63 tax, you would have already bought the car, and then you would receive the history of the car. Obviously, if it's really a consumer protection package, you would want that to be available before you make the purchase. The dealers' proposal was essentially to give you the accident history of the car after you had purchased it. So that's another problem.

It was a legitimate suggestion by the dealers -- although with that fairly large caveat -- which we will continue to review. That's essentially the reason why we chose not to abolish this tax and instead impose a new tax on different people.

L. Fox: I find it quite amazing that the minister suggests that because it would be a 250 percent hike in the fee, the government would need legislation, when we've seen fee increases by this government in many sectors of up to 400 or 500 percent. We certainly didn't require legislative change for those.

I understand that the charging of the $63 may not be known by all purchasers prior to buying the vehicle. The other part of the issue, though, is whether they would know the previous history of the vehicle. This could be done very simply when you transact the deal, because you give a copy of the previous registration at the transaction. All it needs is a very small square on the registration indicating that this vehicle has had damage over $2,000. You would have a good discussion point right there when the history of the vehicle is brought forward at the time of the transaction. If the dealers know that the vehicle has had damage exceeding $2,000, they must make that known to the purchaser at the time of sale -- that is already in law. So I do not understand the minister's hesitancy about accepting that part of the argument.

While it may take some time, and I recognize there is a need to upgrade the computer system to handle it and perhaps work out some software that would carry out that command, I think it is achievable. I hope that the minister will continue to look at that in the future, 

[ Page 9233 ]

because it would be a tool for the dealer when he purchases a vehicle -- he used to get them on trade-ins, but he doesn't any longer, thanks to this legislation. But it would help him to identify those vehicles that have had excessive damage.

There's one other item with respect to this, and the minister has alluded to part of it already. The initial projection by this minister was that they were going to receive $56 million in revenue from this luxury tax over the course of this year, but now they are only going to receive $37 million. Earlier today in question period the minister alluded to the fact that sales are up in British Columbia, and he quoted from the manufacturers' list. That list covers all sales, irrespective of whether they are made to governments, fleets or whatever, and 300 of the car sales reported in May were to the province of British Columbia. That may have been by design, because it helped the minister to suggest that sales were up by a certain percentage. With 300 of the sales in British Columbia in one month going to the province -- and obviously they pay no tax.... As well, the dealer probably gets only $100 for predelivering that vehicle, because the government has such huge buying power that the dealer doesn't get an opportunity to participate much in what the province pays for those vehicles -- the minister is well aware of that, I'm sure.

[3:00]

What we're seeing, in fact, is a drop in sales because of this legislation. In retail sales, the amount varies from 20 percent to 40 percent in different locations in the province, and the average is around 26 percent. Beyond that -- and I would like to make the minister aware of this -- about 25 percent of the car sales business is usually from used cars that they used to receive on trades. Probably another 5 percent of that dealership's business went into the repairing of those used cars, because dealers have to make them roadworthy and safe, and meet the standards required by the inspections. It's a prerequisite that a dealer must do that in order to comply with his licence. So they not only lose that revenue, they lose a good share of the used-car revenue. The stats that the minister reported are only from new vehicles; they are not used-car stats. When you add all that together, it destroys the numbers that the minister has brought forward on a consistent basis; he's only looking at one part of the automotive retail business, not at the total picture.

I'm concerned because, having had some experience in this business, I know how difficult it has been over the last four or five years in any small business to maintain a black bottom line -- and we've been very fortunate. It's extremely difficult. Many people, including this government, believe that there's just mounds of money in each car deal. I would suggest that if you looked at all the audited statements of dealers you would probably find that the gross profit in their deals is between 5 percent and 6 percent. If you take away 25 percent of their sales, on which they only make a small percentage, it is a huge hardship on that particular industry.

I'm really concerned that this government doesn't understand what that's going to mean in layoffs. We already see a lot of pressure on car salesmen. We see nervous breakdowns. In one sales department in Prince George recently there were two suicides. I'm not blaming that on this tax. I don't intend to bring that forward and blame it on a tax, but I'm trying to point out to the minister that there's a lot of stress in sales and a lot of pressure on these people to maintain their numbers. This legislation certainly isn't helping that.

The Chair: Before the minister answers, I would like to remind committee members again that we are not in second reading debate. We are not discussing the philosophy of this bill; we are discussing it clause by clause.

Hon. G. Clark: Very briefly, I understand the member's concerns. I'll just make a couple of comments. First of all, the member is correct: we only have new-car data; we don't have used-car data. No one does, so that's a bit of a problem in terms of access to information that might give us a better handle on it. In terms of the new-car data, it's incontrovertible. Yes, there are fleet sales, but there were fleet sales last year and sales were up this year over last year. Fleet sales are in every part of the country, so we're not doing anything different from anywhere else. So fleet sales are a part of it, but they were a part of it last year and they're a part of it in every other province as well.

Secondly, and maybe more importantly, we have a free market in sales; things are happening in the marketplace that you can't necessarily attribute to the tax. In fact, I would argue that you can't. Imports are down; sales of imports are down significantly in Canada and in British Columbia. I suspect it's partly consumer preference and marketing; it's partly the value of the yen versus the dollar and the cost increase in imported Japanese cars. GM car sales are down across the country. Chrysler and Ford car sales are up in British Columbia, and if you count light trucks -- vans, minivans and that whole market -- they're up dramatically. Sales are up dramatically in the light-truck end of the market because of consumer preference, by and large, and because of style and other choices. So when the dealers say that car sales are down 20 percent, I tell you categorically that we find no evidence of that, unless you take a subset of retail sales of GM cars. If you forget about trucks, light trucks, vans, pickups and everything else and take that subset, they might be down in one sector, and across the country they're down as well. If you add sales of light trucks, minivans and that whole new marketplace into the data, we're doing better than virtually anywhere else in the country. That's a fact. With fleet sales and everything included, we're doing better than anywhere else in the country.

I'm not suggesting that all car dealers are doing extremely well. We did not go through a big recession like the rest of North America, but we had a slowdown in 1990, which was very tough, I'm sure, for all people in the private sector -- obviously it was tough on government finances as well -- and people are looking forward to a strong recovery. We haven't got a booming recovery. We in this province are doing better than anywhere else in North America, but it's not as healthy as one might like. It's a fact that car sales were down in 

[ Page 9234 ]

January, February and March and up in April, May and June, and the dealers agree with that. However, many of them have suggested to me that in March it was really starting to take off, and it would be booming now if we hadn't had the impact of the budget. The numbers are clear that car sales are up, and they're reduced to arguing that their expectations were much higher than what has in fact taken place, which may be the case.

I'm not trying to pick an argument except to say that the facts are really quite clear in this situation. Yes, some dealerships are suffering, as they are across the country. Some sales are down, some are up. In the numbers that we have for fleets and new-car sales as well as light trucks -- apples-and-apples comparisons -- we are doing better than anywhere else in the country. I'm not saying that it's gravy time for dealers. I'm quite sure that they, like all small business men in Canada, are working harder, trying to make a living, and we're not trying to penalize them, but they clearly are doing better than most places in the country.

L. Fox: The reason I point out all these issues is because ultimately it's the consumer who is hit. Ultimately, the loss of the tax credit on trade-ins, for instance, is in real terms an action by this government to reach into the pocket of every individual in B.C. who owns a vehicle and extract 7 percent of the value of that vehicle. To put that into perspective, whether you own a vehicle valued at $5,000 or $10,000, the minute the budget was passed and this particular initiative was put into place, in effect, the government reached into the pocket of the B.C. consumer and took away 7 percent of the value of that vehicle. With the loss of the tax credit, a vehicle that used to be worth $10,700 is now worth only $10,000. The minister has to understand that what he has done is depreciate every personal vehicle in the province by 7 percent.

Hon. G. Clark: I acknowledge that this is a consumer tax -- that the bill is a tax on consumers. Where I disagree, however, is that the majority of British Columbians sell their cars privately and do not trade in the value -- the estimates range from 50 percent to 75 percent -- and those individuals never received a benefit. The only benefit of the tax advantage was to those individuals who traded their car in. It's not true that every British Columbian had some advantage that we've taken away; in fact, it was a minority. Again, there are not clear statistics on this, and the dealers have been arguing historically. The truth seems to be that 75 percent of the people who sold their cars did not trade them in to a dealer but sold them privately.

Yes, the 25 percent who trade their car in will pay more. They'll pay the same as the 75 percent who do not. To that extent, it is a consumer tax, and I certainly acknowledge that. Speaking personally, I always prefer to trade in a car because I think the service is better, and there are some advantages to dealing with a dealership. Many of us obviously don't have the time or inclination to try to market our own sales privately, but I do acknowledge it. Again, the reason that our revenue estimates are down is that we assumed that in something like 50 percent of car sales, people would trade their car into a dealer. We didn't have any accurate information on that; that was our estimate. In talking with the dealers, they have made a very good case that that was not the case prior to the budget. More people sold their cars privately, which is why our estimate number came down.

Is it the case that after the budget, even less people are trading in cars? We don't know the answer to that yet. We are monitoring it, but I can tell you that we haven't seen the evidence that that is the case. I know that the dealers are making that case. We will continue to monitor it, but we haven't got statistical evidence in that respect.

L. Fox: Did the minister research what the percentage was prior to the implementation of the GST? I think that if the minister had researched the impact of that on personal sales, he would have found that the percentage was a lot lower prior to the GST. Just to explain that, if I were to buy a vehicle from the minister I don't have to pay the GST. But if I trade the vehicle in or buy a used vehicle from a dealer, I have to pay the GST, and I get no credit for it when I trade it in. So I think there are a lot of factors in this whole business that deserve some deliberation.

I also believe that if the minister monitored the variance month-to-month.... I recognize that it's difficult on a month-to-month basis, because the trend changes, and in that business you do business with a different segment of the public at different times of the year. So the trade-in aspect obviously changes on a month-to-month basis. My experience is that new-car dealers have fewer vehicles traded in, and therefore have fewer used vehicles for resale.

The important part is that it's not so much the dealer I am concerned about; I am concerned that every time we raise taxes, we put more impact on the consumer, to a degree. Earlier this year the Minister of Consumer Services passed some legislation which gives the consumer more protection, in terms of transactions on vehicle sales.

I'm getting boring, I guess, because one member dropped off. I suppose that could be put down to the many hours that we spend in the Legislature. We in opposition have more opportunity to stand up and keep ourselves awake by talking, but backbenchers have a difficult time doing that.

What I am saying in a nutshell is that the more you take away from doing a legitimate business in car sales, the less consumer protection you give the consumers. If I buy a vehicle from you personally, I get no protection whatsoever. It's buyer beware or civil litigation, and that's a fact of life. But when the transaction happens through a recognized, bonded.... Under this new program the consumer has the protection of this new fund, when they do business with a dealer. By these actions I am concerned that one of the effects will be less consumer protection, and you will have more problems in the transaction of private sales.

F. Gingell: Hon. Chair, as you well know, I have concerns about fairness in subsequent assessments. One could have a set of circumstances where a vehicle that would qualify for a higher rate of tax is taken to a business place other than the dealer from which it was 

[ Page 9235 ]

purchased to have a winch put on or whatever. The person installing the winch on the vehicle would have no knowledge of the original cost of the vehicle. Am I correct in assuming that the amount of provincial tax that should be paid on that winch, as an example, would depend upon the value of the vehicle and not on the value of the winch? How would the winch dealer be in a position to know those facts? I have concerns that the department could subsequently make reassessments, which I would then categorize as unfair.

[3:15]

Hon. G. Clark: If it's the same person selling the package, it would be the full purchase price. If it had gone to somebody else to have a winch put on, there would be a 7 percent sales tax.

F. Gingell: What if it is not a different company but an associated corporation? What would happen there?

Hon. G. Clark: It would be the dealer or an associate of the dealer. This is not unique to cars; this is generally consistent with tax legislation. In other words, anything -- forget about cars, trade-ins or luxury car taxes -- can be brought up and skirted around the tax. For example, some things are exempt from the tax and some aren't. Any attempt to break up a contract to defy the spirit of the legislation is captured through this kind of mechanism.

R. Neufeld: I have a couple of quick questions. In the budget manual, under the heading "Sales tax trade-in allowance on purchase of passenger vehicles removed," there is a sentence that says: "The trade-in allowance on the purchase of other tangible personal property is not affected." Could the minister explain to me what other tangible personal property is not affected? You specifically say passenger vehicles. Are you saying that motorcycles, skidoos and those types of things are exempt? Is that what is meant by other tangible personal property?

Hon. G. Clark: This covers only automobiles. If you brought in furniture or something else, you wouldn't be eligible for a sales tax credit, largely because there is no revenue to be gained by trying to apply this kind of rule in other circumstances. There isn't a very large trade-in trade. Rather than bog down the administrative practices enormously and try to police it where there is no revenue gain, we chose not to do that. If you had a deal where you took your sofa in and bought a new sofa, you would pay....

Interjection.

Hon. G. Clark: A skidoo? I'm sorry, we'll have to get back to you on that. I'm not sure that's a motor vehicle; I don't believe it is.

R. Neufeld: I asked about motorcycles, which are licensed as motor vehicles; skidoos are also. There are quite a number of things, such as all-terrain vehicles. If those types of vehicles are all exempt, that's fine.

I have one more question. In the budget manual where you estimate that revenue of $56 million will accrue to the province through the sales tax of up to 10 percent on luxury passenger vehicles, and the removal of the trade-in value on passenger vehicles.... Can the minister tell me if he has figures that break out that $56 million? What part of the $56 million is attributable to the 10 percent, and what part is attributable to the passenger vehicle tax removal?

Hon. G. Clark: The luxury car tax is about $10 million, and now there is $27 million in the trade-in. The luxury car tax numbers have more or less stayed constant. It's the trade-in value that has come down because, as I said earlier, we overestimated the historic number of trade-ins.

R. Neufeld: Do I understand that you are going to get back to us as soon as you can about what the exemptions are going to be under that heading?

Hon. G. Clark: I don't think that is required. My advice is that skidoos are not passenger vehicles, so the trade-in allowance will still apply to them.

J. Weisgerber: Along that line, the trade in recreational vehicles and motor homes, for example, is not affected. If you trade in a motor home on a new motor home, do you pay a sales tax on the difference as you did under the old system? A lot of dealers will operate a recreation franchise along with a motor vehicle franchise. If a recreational vehicle is traded in on a passenger car, how does that work?

Hon. G. Clark: It depends on what you are buying. If you are buying a passenger vehicle but you are changing from a recreational vehicle, there is no trade-in allowance credit. If you're trading in a passenger vehicle to buy a recreational vehicle, then you would only pay on the difference.

F. Gingell: I want to say one last word. For the amount of money that's involved, you are making our lives terribly difficult and involved. You know what is true: that when you have these difficult and complex tax arrangements, people don't obey the law by mistake -- then your assessors come along afterward and make assessments covering long periods of time. It really isn't the way to run a country.

L. Fox: I want to follow up on a couple of points. I had some real problems with the answer just given to our leader. If a passenger vehicle is traded in on another passenger vehicle, it is not suitable for a tax credit in terms of the trade-in, and yet if I want to trade it in on a boat or a recreational unit, I can then get a tax credit. All of a sudden it is worthy of a trade credit for the purposes of taxation. What's the logic in having those two different policies?

Hon. G. Clark: I may have misled the House. Just so that I'm clear -- and my staff can kick me if I'm wrong -- it is what you are buying that counts. If you're buying a passenger vehicle and you trade in a recreational vehicle, you pay the tax on the full price of the passenger vehicle. If you're buying a recreational vehicle and you trade in a passenger vehicle, then you can get the credit, because it is what you are purchasing 

[ Page 9236 ]

that we're taxing. The removal of the sales tax credit for the trade-in portion applies only to the purchase of passenger vehicles.

L. Fox: I'm glad the minister spoke about the reverse situation, because that was going to be my next question. I am still trying to find out what the logic is. A passenger vehicle, in many aspects, is something that is not a pleasure vehicle. In many aspects, it is something that one needs to get around on a day-to-day basis. Yet a recreational vehicle -- and one would assume that if you can afford to buy a recreational vehicle, you have more ability to pay than if you're just buying a passenger vehicle -- is exempt. You pay the tax penalty when you're buying a vehicle that could be deemed a necessity. I have some difficulty understanding the logic in this policy. Has the government all of a sudden gone totally conservative, ultra right-wing or something? It seems we don't respect the rights of someone buying the average vehicle as a necessity; now we're respecting those buying luxury recreational units. I'm not going to argue that you shouldn't be doing that, but I have problems with the logic. That's one issue.

The other issue I want to clarify.... When the member for Peace River North stood up and asked the question on skidoos, all-terrain vehicles and perhaps motorcycles that are not licensed, the minister said they were exempt. By saying they were exempt, does that mean you also can get a tax credit for trade-in when you trade in your skidoo, motorbike or all-terrain vehicle, providing it's not licensed?

Hon. G. Clark: It has nothing to do with whether they're licensed or not; it has to do with the definition of a passenger vehicle. Motorcycles with engine capacities over 250 cc are classified as passenger vehicles. I went through that earlier, in terms of our schedule and the definition section.

What we are taxing and dealing with in this tax statute is passenger vehicles. That's why recreational vehicles don't count; that's why yachts.... It doesn't matter whether they're all-terrain vehicles or not. If they classify it as a passenger vehicle -- as I've described them at length here today -- then they're captured. It doesn't matter whether they're licensed or not.

L. Fox: If I understand the minister correctly, anything over a certain size in the recreational vehicle -- whether licensed or not -- is.... Is that what you said?

Hon. G. Clark: Sorry. I hate to go through this again, but the members of the opposition.... Passenger vehicle includes trucks and vans up to and including three-quarter-ton trucks and vans, station wagons and motorcycles as defined under the Motor Vehicle Act, and motorcycles with engine capacities of over 250 cc. It does not include trucks or vans larger than three-quarter-ton, camperized vans for the purposes of recreation -- and we've discussed that, motor homes and buses as defined, ambulances and hearses. It's a fairly clear definition. If it's an all-terrain vehicle that is not in the schedule as a passenger vehicle, then this doesn't apply. It has nothing to do with whether they're licensed or how big they are. It has to do with how we've defined it in the act.

J. Weisgerber: The more we hear, the more questions we have. It seems to me now that if vehicles were brought in under the one-ton designation -- pickup trucks, vans, crew cabs, etc. -- then the dealer and customer would not only avoid the penalty of going from 7, 8, 9 or 10 percent, they also would be able to obtain a trade-in credit when they purchase the vehicle. Once the vehicle moves out of that passenger vehicle category, it seems to me that would happen. There would appear to be -- probably unintentionally -- a considerable advantage for people now to stock somewhat larger vehicles to avoid tax.

I don't want to have a long discussion. It's also clear that the commercial trade-in process applies to the range of commercial trucks. Is the difference with transport trucks and that kind of thing, as well as all the recreational vehicles, etc., still taxable?

Hon. G. Clark: Yes, that's correct.

L. Fox: Just one final question. On the increase from 6 percent to 7 percent in section 2(a). Earlier today in question period, the minister suggested that there was a 29 percent increase in retail sales in British Columbia. Will that correspond? The projections were originally $305 million. Will we now look at something like $395 million? Will the percentages be the same in terms of tax collected?

[3:30]

Hon. G. Clark: It's premature to say that. Sales tax revenues were up 29 percent in April and May. That's all sales tax revenues, including the sales tax from cars, trade-ins and everything else. But as you can appreciate, going from 6 percent to 7 percent is a 16 percent increase, so this is 29 percent. So clearly yes, at the current rate there is more revenue than is in the budget. But I want to caution members. Having been in the job 20 months, I see these numbers every month, and they bounce around a fair amount. This is very good news, but sales tax revenue, I must say, is so heavily dependent upon the Christmas season that it is absolutely surprising to those of us who haven't had the experience in that. It's too early to say that this means we're going to have millions of dollars more in revenue.

Also, I'd just say that even if we were to maintain this pace, it's not hundreds of millions of dollars more than budgeted but more like $10 million to $30 million above the budget, because we projected an economic recovery, which is taking place. But it's still very good news and way better than anywhere else in the country, as has been the pattern for the last year or so.

Section 2 approved on division.

On section 3.

J. Weisgerber: I have a concern about this whole notion of the 7.... Is the effect of this essentially to implement those items we discussed in section 2?

[ Page 9237 ]

Hon. G. Clark: I want to just make sure we're clear here. This is precisely what we canvassed at great length in the previous section dealing with the dealers: amendments to tangible property by the same dealer, in this case, as opposed to elsewhere.

F. Gingell: You said before that if it has gone to a different dealer, the second dealer is not responsible. Does this only apply when it is done in-house?

Hon. G. Clark: So to speak. Or an associated company.

Section 3 approved.

On section 4.

F. Gingell: I can't speak as knowledgably and as interestingly as my colleagues and friends did before on the subject of buying cars, but I can talk about parking them. I do park them occasionally. Section 4, section 2.03(4) says: "Where the commissioner considers it appropriate to do so, the commissioner may make a valuation of a parking right that passes at a sale, and the sale price of the parking right for the purposes of taxation under this Act shall be as determined by the commissioner." In the circumstance where somebody is renting office space.... In highrise buildings, you normally rent the parking spaces separately, but you may not. There may be five spaces included in the cost of your lease, and you have to pay for any additional spaces over and above that. But it certainly will be the case in small mall offices or where there are offices with some parking in front that is designated to the lessor. Is it the intent of the ministry to have a major investigation audit to ensure that the taxes on those units are being paid, or do you not believe that that situation will be caught under this section?

Hon. G. Clark: The advice is that this is pretty straightforward, and we don't anticipate a great deal of problems with it. This is one of these sections, as all these tax sections are, which give us certain powers to try to deem value if someone is screwing around, as we speak. That's, of course, similar to other tax statutes. Again -- I'm wandering a little bit, but just so people will know -- there is an appeal to the Minister of Finance and then further appeal to the courts on all of these tax statutes. This is no different.

F. Gingell: It doesn't do you any good.

Hon. G. Clark: Well, that's not correct. About once a month the Minister of Finance overturns a ruling. Obviously, we are trying to be consistent in its application. In any event, we don't anticipate this being a huge regulatory burden on anybody, including the Ministry of Finance's staff.

F. Gingell: But is it your intent that in circumstances where office space leased in large downtown Victoria or Vancouver buildings carry with them the exclusive right to a certain number of parking stalls, that they will be valued and subject to a 7 percent sales tax?

Hon. G. Clark: Currently, if you are charged separately for the parking space, we are taxing it. We're not taxing it if it's part of an overall rental of a site -- if it's one charge. I think it's likely that down the road it may be required to break out the parking component -- that's certainly not what we are doing right now -- in terms of trying to ensure that parking is paid.

On this general topic, interestingly enough, there was a report done today by 2021 and the GVRD, which Mayor Campbell has been involved in. I have a lot of concerns about that report generally, but I will say that they supported a parking tax as a method for funding transit. Again, in case anybody wanted to ask this question, as members know, 100 percent will be flowing to the Transit Commission for the purpose of dealing with the SkyTrain debt associated with the extension. So the $10 million a year revenue will flow to the Transit Commission for that purpose.

However, I want to tell members also that while I might be inclined to offer this tax as part of the areas that the Transit Commission can tax -- right now they have certain rights to recommend taxes to the government -- they have not asked for this right, nor did they get it. So the revenue from the sales tax on parking -- to forestall some questions if they were coming -- goes into general revenue, and I have made a commitment to flow back to the Transit Commission $10 million from provincial taxes toward the debt servicing associated with SkyTrain and also to deal with their funding deficit. So that's a bit of a technical point. This is dedicated to transit, although it does go into general revenue and then the government flows it out -- at the current time anyway.

F. Gingell: Will any parts of the province be paying a tax on parking that will, in effect, not be pushed through to transit? It seems unfair to put a tax on everybody when this portion of it has been dedicated to transit in the Greater Vancouver Regional District.

Hon. G. Clark: I'm sorry if I unintentionally misled anybody. These will be prescribed by regulation, and the only area where this tax will apply is in the Vancouver Regional Transit Commission area. There won't be a sales tax on parking in Victoria. If the transit commission in Victoria, or other people in Victoria, suggested that they wanted to pursue rapid transit in this area at some point in the future, the government may at that time decide to extend the sales tax on parking to this region -- but that's not been contemplated or requested, nor will it happen at this time. So while this is a general tax statute that deals with parking, we will only be applying the regulations to the Vancouver Regional Transit Commission area. It doesn't apply anywhere else even if there is pay parking. Of course, in most cities there is limited pay parking outside of the major Vancouver and Victoria regions.

F. Gingell: I'd just like to go back to the previous subject that we discussed regarding how subsection 4 could pull in the assessment of tax on a purchase of parking rights that go together with a lease. You stated 

[ Page 9238 ]

that you do not presently anticipate doing anything about that. Would you consider that subsection 4 gives you sufficient authority to make that policy change in the future -- or publishing regulations or doing something that clearly tells the public what is happening -- without coming back for new legislation?

Hon. G. Clark: No, this is all that's required. I'll just read the note for the record. "This subsection permits the commissioner to make a valuation of a parking right where it is considered that the reported sale price does not reflect the fair market value. This amendment is necessary to deter tax avoidance where the taxable value of a parking right is deliberately understated. A valuation by the commissioner may be appealed to the minister and to the courts under sections 13 and 14 of the act."

J. Weisgerber: I'm trying to get a sense of the kinds of parking that will be taxed. It seems to me that there is parking that is provided to staff by the employer and owner of a building. There are commercial parking lots where you can rent a monthly or weekly parking spot, and obviously those are intended to be taxed. There are other places where parking is sold by the hour. I'm not sure whether or not that's taxed as well. Then there's the metered parking where you put in coins. Out of that menu from employee parking through to metered parking, could the minister indicate which are taxable?

Hon. G. Clark: Everything is taxed with the exception of metered parking. On-street metered parking is exempt from this sales tax in part because I didn't want to.... Essentially all of that is municipal revenue, so this would be a tax on another level of government, which was attractive in some ways, but we chose not to do that. A future government may wish to do that, I suppose. So on-street metered parking is exempt; residential parking is exempt; and parking that lasts longer than 28 days is defined as storage, and it's exempt. Other than that, the other categories the member mentioned are taxed.

J. Weisgerber: One of the first questions that arises from that is with regard to section 2.03(5), which says: "The tax imposed by this Act shall be calculated separately on every purchase of a parking right...." That would suggest to me that every time someone passes through one of those turnstiles and pays $2, the operator of that has to record the transaction separately, rather than providing a bulk statement at the end of the day. If that's the case -- and the signals I'm getting are that it is -- it doesn't seem to make much sense. It would seem a lot more logical for the operator to report sales at the end of each working day, each week or each month.

Hon. G. Clark: The member is correct: that is in fact what happens. It's the aggregate amount of the sale, and then they remit 7 percent on top of that. Just for the member's information -- and for those who aren't from Vancouver or haven't been there lately -- it has been in effect since June 1.

J. Weisgerber: Is the minister suggesting that the tax is calculated so that on a $2 parking fee, you would pay $2.14, and your receipt would show that you are paying 14 cents in tax? It's obvious that I don't get to use those kinds of parking lots.

Interjection.

J. Weisgerber: But it's recorded on each transaction and calculated to the nearest cent?

Hon. G. Clark: Yes. This is a consumer tax. In this case, of course, the GST applies as well. When you drive through a lot in downtown Vancouver, as I've done recently, there's a sign that essentially says that PST and GST are added to your bill.

[3:45]

L. Fox: I have one follow-up question along the same lines. In many of the parking lots I've gone to in the Vancouver region, you put your money into a coin-operated slot. You will find that the price varies from $1.50 per two hours to as much as $2 per two hours. It seems to me that what will happen is that because the 7 percent will now make the amount for that parking stall $2.14, that amount will be rounded up to $2.25. Has the minister looked at how this tax might increase the cost beyond 7 percent for people who want to utilize those coin-operated parking lots?

Hon. G. Clark: I guess if one assumes that there is no price elasticity, they'll add on. Private operators who manage the sites at the moment are absorbing the 14 percent, because there is the GST as well as the sales tax on the final purchase. If you pay $1 an hour at a meter operation, they are still paying $1 an hour. If you are asking me whether the owners of those parking lots will raise it to $1.25, I guess that's up to them. It's a free market, and they will deal with the consequences of that, I suppose.

R. Neufeld: The minister said that he will be giving $10 million to the Vancouver Regional Transit Commission. According to the budget manual, the revenue raised in 1993-94 will be $10 million, and in a full year, you would expect $12 million. Would I be correct in assuming that next year the Vancouver transit commission is going to receive the full $12 million, because they are receiving the full $10 million this year? Can the minister tell me how much it costs the Ministry of Finance, or the government as a whole, to collect this tax, process it and give it back to the Vancouver Regional Transit Commission, because as the Leader of the Opposition said earlier, we're taking from the general public to collect the tax if it's more than $10 million. If it costs you $1 million to collect the $10 million, then the rest of the people in British Columbia are subsidizing that. Would that be correct?

Hon. G. Clark: That's a good question. But I am not sure if the revenue numbers in the budget are net or not. I think they are net revenue after the costs of collection. The government provides a couple of hundred million dollars in subsidies for the Vancouver Regional Transit Commission. We've added $10 million 

[ Page 9239 ]

as per the parking tax, and the member is correct that we anticipate about $12 million in annual revenue. So there are a couple of million dollars there which the transit commission may request, and we may provide, although it's a bit of apples and apples, because they are obviously subject to other budget deliberations. But our purpose is to flow the money to the commission. At the moment we are giving $10 million, and we anticipate that next year, in the first full year of operation, it will raise around $12 million. There's a little room there.

R. Neufeld: Maybe the minister can clarify that for me. Did I understand him to say that in the budget manual the numbers quoted here for all the income tax, corporation capital tax, social services tax, tobacco tax and the homeowner grant are all net revenue? Have the expenses of collecting it already been taken off that?

Hon. G. Clark: Yes. I'll get back to the member on that question, but it's very minor, believe me. There is a very modest cost associated with extending the sales tax base, because the burden is on the individual to comply with the law. The cost is really a very marginal increase to administer it, and also for more auditors to audit the situation. Even for the capital tax, which was a much more major undertaking, there were some start-up costs of probably about half a million dollars or something initially, and then much more modest costs of monitoring that over time. This one is significantly less because it's an existing tax statute and we have experience in this area.

Section 4 approved.

On section 5.

J. Weisgerber: For my first question, I have to refer the minister back to the definitions under section 1(d)(a)(i). The reference there with regard to services includes interest, finance, service, customs charges, etc. It seems to me that it's an extension into a tax area that I've never seen before. I've never been aware, for example, of sales tax applying to the finance charges that might flow from the purchase of the vehicle. I'm curious to know why this act would anticipate a tax on finance charges associated with services.

Hon. G. Clark: What the member refers to has nothing to do with tangible services. Those words have existed, I believe, since 1948 in the initial sales tax legislation. Just to go back to the definitions section. What we're trying to do here on the purchase price is make sure that they can't carve out an area to exempt themselves from the tax. We're adding a definition on the existing definition to try to ensure that there isn't either double-taxing or the ability to carve it out. I want to assure the member that all of his references to customs, excise, etc., are in the existing statute and have nothing to do with the taxing of specified services in this section we're dealing with.

J. Weisgerber: I would just like to confirm that this refers to the built-in costs of the supplier of the service or goods; that you can't break out your costs and say that some of those are....

Interjection.

J. Weisgerber: Fair enough.

The other area on which I would like to get some clarification is with regard to the provision of services to residents outside of British Columbia. Particularly in the area that I represent, a fair amount of retail and service trade is done with people who live on the Alberta side of the border. They come and have automobile and commercial repairs done. Where the costs of those repairs are of any significance, there is an opportunity for them to apply for a refund of tax. When a trucker from Alberta brings his truck into Dawson Creek for mechanical repairs and then takes the truck back, there is now a provision for a refund on the tax paid on parts. I am wondering if the minister could confirm that the labour tax will be treated in the same way as the tax on parts is currently treated.

Hon. G. Clark: The answer is that they would pay it. As I understand it, there is no refund provision of the sales tax on the goods portion. There is a prorated sales tax if they operate in more than one province, and they pay only that portion which applies in British Columbia. On services, there is no such pro rata agreement between the provinces, so they would pay the sales tax in British Columbia.

J. Weisgerber: I understood that from the minister's answer to the questions by my colleague from Peace River North. I am dealing with a slightly different situation. I think the application there is on interprovincial trucks that travel across the country, and agreements are worked out between the provinces. We are dealing with a different situation. A gravel truck, farm truck, fuel truck -- a truck that is used primarily in Alberta, is licensed only in Alberta but is used in the proximity of the B.C. border -- is brought regularly into British Columbia for repairs simply because Dawson Creek happens to be a major truck repair centre. It is more convenient for some people to bring their vehicles in and they are able, as I understand, to apply for a full refund of the tax on the parts that they have purchased.

Rather than getting into a debate as to whether they get a refund on the parts -- because I am advised by retailers that they do -- I would think that at the very least the labour component should be treated in the same way as the parts. In other words, if there is going to be a refund on sales tax that applies to parts, it should apply to the service as well.

Hon. G. Clark: The answer is no, because we don't have this proportional agreement that we have with respect to parts. If we only charge the proportion based on the services in British Columbia, then they would pay more -- unless I am missing the member's point. Right now, if you get your car repaired in Washington State, you pay a sales tax on labour in Washington State. If you go to Manitoba, Ontario or 

[ Page 9240 ]

Quebec with your car or truck, and you get your vehicle repaired there, you pay sales tax on the labour for repairs, which is much higher than British Columbia's, and this is the same.

J. Weisgerber: Let me then give an example that I am completely familiar with, so that I know that I'm talking about an area that I have knowledge of.

Interjection.

J. Weisgerber: As opposed to some of the other times when I do not have a personal knowledge of particular circumstances.

A farmer brings a truck from Alberta to Dawson Creek for the express purpose of buying a grain box. He buys a grain box, and then has it installed along with a hoist and all the controls. There is an opportunity for that farmer to go back to Alberta and send a copy of the invoice, along with an affidavit, and claim the sales tax on the grain box, the hoist and the other components that were put in. My question is: when the person now makes an application for a full refund of the tax paid on, say, a grain box and hoist, will that person be able to include in the claim the tax paid for the installation of that item?

Hon. G. Clark: I don't want to deal with this specific question, because it gets a bit complicated, but the short answer is yes. If you are eligible for the sales tax exemption now and for the refund, as you are in that case, then you would also be eligible to apply at the same time for the refund of the sales tax you would pay on the labour services.

[4:00]

F. Gingell: I was wondering if the minister would advise us what the likely terms and conditions are in subsection (6) that the Lieutenant-Governor-in-Council may specify to make people exempt from tax under subsections (1) and (4)?

Hon. G. Clark: That's the list we've just been canvassing. There is a huge list of exemptions from sales tax on goods right now, and every year we add to it, and the Minister of Agriculture aggressively lobbies a big long list of exemptions -- from greenhouses to new technology, and usually the Finance minister complies. In my case, I always comply with whatever the Minister of Agriculture requests. In the case of services, we want to ensure that those exemptions on goods also apply to the repair of those goods.

R. Neufeld: Just a few things on the 7 percent sales tax introduced on specified labour services, which will bring in a sizeable amount of approximately $160 million a year, according to the budget manual. One day in question period the Minister of Transportation and Highways confirmed that the cost of this tax change for ICBC would amount to $4.5 million. That's substantial, because that's just passed through to the consumer from a Crown corporation, and this applies to all Crown corporations.

I'd like to know if you have a breakdown on what it is going to cost B.C. Ferry Corporation, B.C. Railway Company, B.C. Transit Corporation, B.C. Buildings Corporation and all the Crown corporations that we have. What is it going to cost the hospital districts? What is it going to cost the school districts? The list goes on and on and on. It's much like the corporate capital tax or the water tax, if you like. It's hidden, and people don't really know about it, but it's a large generator. I would like to know whether the minister has those numbers.

Hon. G. Clark: I do have a breakdown. Not counting ICBC, which the member did refer to, the total cost to the government of British Columbia -- because we pay sales tax on repair labour ourselves for government fleets, etc. -- is estimated to be $6.3 million. Of that $160 million in annual revenue, $6.3 million was paid by the provincial government and its Crowns, with $1.7 million by municipal governments, if the member is interested in that. It just gives you a sense of the magnitude of it.

R. Neufeld: I certainly don't want to dispute your arithmetic, because you obviously can add pretty well when it comes to taxation. You can figure out how to squeeze a dollar out of a rock. It just seems strange to me that with a corporation as large as B.C. Hydro, which is huge, or B.C. Rail, that our Crown corporations are only in the magnitude of $6.7 million. It doesn't seem to compute right.

Interjection.

R. Neufeld: The member just qualified my statement about $4.5 million for ICBC -- that was for six months. There seem to be some discrepancies here that I don't understand.

Hon. G. Clark: It is not surprisingly high. A huge chunk of practically every automobile repair in the province is ICBC. But just to give you a sense, remember this base: real property is exempt. Repairs on real property -- your own home, for example -- are exempt from this. Almost all of B.C. Hydro's repair work is on its own property, whether it's a dam or something else. That is why it wouldn't be as onerous as you might think, given that it is a huge corporation. A lot of the repair work and labour service work would be on its own real property.

R. Neufeld: I would just like to pursue a little further....

Hon. G. Clark: Ships over 500 tonnes are exempt.

R. Neufeld: Ships are exempt. Okay.

I would like to pursue a little further on the prorated trucking companies, and the ones that are not prorated. The minister confirmed again that the 7 percent tax on labour is not prorated, but that the 7 percent sales tax is. I find it amazing that we are doing that, because that 

[ Page 9241 ]

will drive businesses that are right close to the border, in the constituency where I come from, into Alberta.

When you take a large truck in for major work on an engine, or on a transmission or the rear end -- any kind of work like that -- the labour part of that is sizable. I had a small trucking company, and my labour bill for a year was $50,000. Large trucking companies are certainly going to have an awful lot of labour costs that they are going to have to pay the 7 percent on, and it would just encourage them to move into Alberta, into Grande Prairie a little ways away, and run their operations out of there.

I don't think that does anything for the province of British Columbia. Nothing at all. I have spoken quite often about the need for jobs in British Columbia, and the minister confirms that: we need jobs for people in British Columbia. But if we continue to drive businesses across the line into Alberta to operate from there into B.C. because of punitive tax measures, it certainly doesn't do anything for the job market in British Columbia or for confidence in the economy. I'm sure that we cannot take it lightly, because $160 million a year is an awful lot of money. Obviously most of that, by the amounts that are going to come out of the government, is pretty insignificant. What is going to come out of it is all those small businesses, which provide 90 percent of the jobs in British Columbia.

Did the minister do any calculations in the ministry as to what effect this would have on those types of businesses?

Hon. G. Clark: This is the same situation that exists in eight provinces out of ten, so it's not something that's pioneering or dramatic. It's a broadening of the sales tax base. Even after this, we will continue to have the narrowest sales tax base in the country -- outside of Alberta, obviously, which has no sales tax. I'm prepared to say to the member that not this year, but if it became a problem, we could look at taxing labour services on a prorated basis as well unless they paid the tax in another jurisdiction, which is something that would require legislative amendments. In other words, if they paid the 9 percent sales tax on labour services in Ontario, then we wouldn't want to tax them here as well. We wouldn't want a prorated situation right now. If we were the only province to prorate labour services, it would essentially increase the costs for everybody across the country because they would pay there as well as here.

If Alberta continued not to have a sales tax, then I think you could prorate it where they didn't pay the sales tax in their home jurisdiction. I would be prepared to monitor that situation to see whether that's possible and whether it would in fact be desirable. It would reduce the tax significantly below 7 percent if most of their business was in Alberta and they did some repair work here. The pro rata would reduce the tax payable; certainly it would be below 7 percent. We could look at that if it became a significant problem with respect to that corner of the province, and I guess the southeast corner as well. But again, it is exactly the same as virtually every province in Canada. There's a whole series of these kinds of questions across the country. Quebec truckers pay even more than Ontario, so there's some of that problem there. It's the same problem as in Washington State, where, as you know, the combined state and county sales taxes are higher than the provincial tax in B.C. So there's some advantage.

Anyway, that's my only suggestion. There is no pro rata system for labour services in any province, and pretty well all of them have a tax. We could look at it, it seems to me, only in the cases where they didn't pay it in the other jurisdiction, because otherwise we would have an even worse situation.

R. Neufeld: I appreciate it when the minister talks about Washington and Quebec and probably Ontario, but I'm talking about a corner of the province that borders on Alberta, which does not have a sales tax at all. I'm talking about the Yukon, which does not, and about the Northwest Territories, which does not. My constituency actually borders on all of those jurisdictions. For the minister's information, we do tend to penalize those companies that do their business in B.C. and generate jobs in B.C. That's not the fault of the present Minister of Finance, but it does happen. It's carried on through time.

You don't have to prorate for a truck to be able to go into Alberta and the Yukon and B.C. Under those circumstances you can have a company centred in British Columbia -- let's say Fort St. John -- that's not prorated, and at the end of the year you can prorate the sales tax that's paid on parts if you do part of your business in Alberta, if you just happen to buy a plate in Alberta and a plate in the Yukon. On top of that, what we're doing now is saying to that individual: "We're going to tack another 7 percent on the labour that you pay to keep your company going. Because you're such a nice person to stay in British Columbia, we're going to tack another 7 percent on you." Not all companies can do it, but those are the kinds of straws that will make a company move out of B.C. The companies I'm afraid about are those that are close to the border in Fort St. John and Dawson Creek. They're the ones that could easily do that. They don't have to be prorated; they can just be licensed in B.C.

The Chair: The Chair recognizes the hon. member for Prince George-Omineca, and again reminds members that this is committee stage on this bill. The philosophies and principles of this bill have been debated and passed by this House.

L. Fox: I thought the members were ever so mindful of that exact point.

I have a question about the new initiatives in this section. I speak primarily of dress alterations, shoe repairs -- all these very small businesses, many of them home-based or part-time. Can the minister tell me how many new vendor numbers are needed and what process he's going to have to go through to initiate and upgrade the computer files, to accommodate the virtually thousands of new contributors that this particular section will provide the opportunity for the government to partnership with?

[ Page 9242 ]

Hon. G. Clark: As a matter of fact, we don't anticipate very many new filing numbers at all. The principle here is that if it's taxable when you buy it, then it's taxable when you fix it. So most of those, whether it's shoe repair or otherwise, would have a taxable number if they're selling any products which are taxable. Most of them do have -- not all of them, the member's correct. If you're in a shoe repair facility, they sell shoelaces or shoe polish or the sole on the shoe. They charge sales tax on those things now. And they're extending it to the labour service they're providing.

If someone is providing purely the labour service and no sale of any property covered by the current sales tax, then yes, they would have to file. We expect that will be a very modest number indeed, because almost all these businesses currently have a sales number and do provide some sales, and they're just extending the sale to the service.

L. Fox: I don't intend to go into a long debate on this issue. But the fact of the matter is that many of these home-based businesses do sell shoelaces -- you're correct -- but they pay the 7 percent at the time they purchase them, because they don't have a tax number. The same thing applies with dress alterations and watchmaking: they pay the 7 percent at the time they purchase the supplies.

Hon. G. Clark: It's against the law.

L. Fox: It may very well be against the law, but in fact it's been the practice forever. Because there's very little opportunity to find out who's doing all this out there, I'm wondering how the minister is going to be sure that all these home-based businesses.... In the rural parts of the province, the shoemakers do not sell shoes. Very few shoe repairmen ever sell shoes. The history is that they do shoe repairs in some back room in somebody's home. I can point out many communities where that's a fact, and I'm sure the minister knows it is. What process is the minister going to use to seek out these individuals, to make sure they're all complying with this new legislation?

[4:15]

Hon. G. Clark: The short answer is that it's no different than it is today. The member is suggesting that people are breaking the law, if you will, in home-based businesses. That's been the case for some time; again you're quite correct. It's been a modest problem. We have inspectors all around the province -- which certainly predates our government -- who review these questions and try to police the tax statutes so that it's fair for everybody. That simply will continue to try to ensure that the tax statutes are applied consistently across the province.

Sections 5 to 19 inclusive approved.

Title approved.

Hon. G. Clark: I move the committee rise and report the bill complete without amendment.

Motion approved on division.

The House resumed; the Speaker in the chair.

Bill 7, Social Service Tax Amendment Act, 1993, reported complete without amendment, read a third time and passed on the following division:

The House resumed; the Speaker in the chair.

Hon. G. Clark: I call committee on Bill 66.

PUBLIC SERVICE ACT

The House in committee on Bill 66; D. Streifel in the chair.

[4:30]

On section 1.

F. Gingell: The term "auxiliary employee" is used quite often throughout this act. It is going to be defined in the regulations. It is very difficult to understand the full meaning of the act without a definition from the minister now.

Hon. G. Clark: Why is the definition of an auxiliary employee not in the act and left to be resolved through the regulations? The answer is that the definition of an auxiliary employee impacts the collective agreements of three public service bargaining units. To impose a definition in legislation which is not consistent with the collective agreements would not be appropriate, particularly given the spirit of the legislation.

We will, through the consultative process...

[ Page 9243 ]

The Chair: The member for Vancouver-Langara.

V. Anderson: We're not used to having so many members of the government in the House. There's so much noise we can't hear. Is there a way that we could hear what's happening?

The Chair: Thank you, hon. member. The committee will come to order, and keep the side chatter down slightly.

Hon. G. Clark: Again, the answer is that right now there are three different collective agreements that we're dealing with in the Public Service Act. The definition of an auxiliary employee may be different for each of those three collective agreements, so putting one definition in the act would be a problem. We're going to work with the three public sector units to find a common definition which we'll put in the regulations.

F. Gingell: Does the term primarily deal with people who are hired on a temporary basis or on a part-time basis?

Hon. G. Clark: Primarily on a temporarily basis.

If I could, I'd just like to introduce Wayne Scale. I think it was yesterday that I had with me Ron McEachern, who is the director of negotiations services. Wayne is the director of corporate personnel services in the government personnel services division.

Section 1 approved.

On section 2.

J. Weisgerber: I would move the amendment to section 2(b) standing in my name on the order paper.

[SECTION 2, is hereby amended by deletion in section 2, paragraph (b), of the phrase "representative of the diversity of the people of British Columbia", and by substituting therefor the following: "open to all British Columbians equally, on the basis of individual merit".]

On the amendment.

J. Weisgerber: The amendment obviously changes the wording, deleting the part that suggests that the public service be reflective of the diversity of the people of B.C., and instead suggests that it be open to all British Columbians equally on the basis of individual merit. I think it goes to the heart of the arguments that we have had with the bill. Clearly, the criteria for employment should and must be on the basis of merit, and should be open to all British Columbians. That seems rather straightforward and not to require saying. I think it more clearly reflects what most British Columbians want of their civil service, and more clearly reflects the things that potential applicants to the civil service hope will be looked for.

With that, I hope the minister will consider and accept the amendment.

V. Anderson: I would like to speak in favour of the amendment. I think the wording "open to all British Columbians equally, on the basis of individual merit" is a very logical representation. Other acts, including the Multiculturalism Act, represent the equality of everyone in British Columbia. When we say "all people equally," we mean that whatever their background, all people should have the opportunity to be considered and hired. When we use the term "representative of the diversity," I know that the intention is to recognize that everybody is equal. But the very fact that you have to say it in this way implies that everyone is not equal, so I think it's counterproductive and gives out the wrong message. It certainly gives out the message to people of all backgrounds, not of any one particular background, that it is possible for this to be weighted by the bias of those who are doing it, and to deal with people unequally.

I think it is very important that the amendment be passed, because it says: "...all British Columbians equally, on the basis of individual merit." Individual merit includes all of a person's characteristics. It includes their cultural and racial background and their age; it includes all the characteristics that they have. To indicate in this act that it doesn't is counterproductive and gives out the wrong message. Therefore we must very strongly oppose the present wording and go with the amendment.

Amendment negatived on the following division:

F. Gingell: Section 2(b) talks about trying to replicate the diversity of the people of British Columbia in the public service. The number one responsibility of the public service is to serve the people of the province. We have to recognize them -- and we do recognize 

[ Page 9244 ]

them -- because it is a fact of life that there is considerable diversity within the people of British Columbia. I would therefore move that in section 2(b) we strike out the words "representative of," and substitute the words "responsive to," so it would then read: "...recruit and develop a well qualified and efficient public service that is responsive to the diversity of the people of British Columbia."

[4:45]

The Chair: The amendment is quite similar in intent to the one that was just negatived. As such, the Chair rules it out of order.

F. Gingell: May I debate that?

The Chair: No. To clarify: it wouldn't be debatable, hon. member.

F. Gingell: Maybe the words need to be changed slightly. The intention was not to suggest that, heaven forbid, the public service should be open to all British Columbians on an equal, fair basis, or that they be only hired on the basis of merit. Heaven forbid that any government of the people of British Columbia would believe in that. The intention is that this amendment would....

Interjection.

F. Gingell: Does the Minister of Government Services have some standing as Chairman?

The Chair: Order, hon. member. The amendment has been ruled out of order, so we will carry on the debate on section 2.

F. Gingell: Recognizing that the most important thing for the public service of British Columbia is to render and deliver the services that British Columbians pay a lot of money for, and recognizing the need to do that effectively, I would like to suggest to the minister that there's something missing here. Section 2(b) talks about painting the civil service in the same hues and tans as the people, but doesn't recognize that the hues and tans of the people of British Columbia require them to get the service from the public servants in a manner that recognizes those differences and that diversity. Surely the most important thing is to ensure that our bureaucracy is competent and capable, and able to serve all the people of British Columbia, recognizing that many of them need those services in slightly different ways, whether because of cultural or language needs. That surely is the intent, and that seems to be missing here. I'd be interested in the minister's thoughts on that.

Hon. G. Clark: It's not missing at all. Section 2(a) says: "...facilitate the provision of service to the public in a manner that is responsive to changing public requirements." This clearly captures the points the member is raising. We want the public service to be responsive to the changing diversity of British Columbia, and I think it is all-encompassing. Remember that this is the broad purposes section of the bill. It says the public service should be "responsive to changing public requirements." It says that we should "develop a well qualified and efficient public service that is representative of the diversity of the people" it serves, "encourage the training and development of employees to foster career development and advancement, encourage creativity and initiative among employees, and promote harmonious labour relations" between the government and its employees. It seems to be a broad, all-encompassing purpose that is in keeping with a modern public service act. The concerns that the member raised are clearly captured by the broad purposes described in this section.

J. Weisgerber: In section 2(b) the key word seems to be "representative." Is it the intent of this legislation to see various ethnic groups reflected in the civil service in relation to the population of the province? Is the intent of the legislation to mirror the cultural makeup of the province? Or is it merely to be representative by ensuring that at least some members of various cultural groups are represented in the civil service?

Hon. G. Clark: I'm not sure that there's much of a distinction in the member's remarks. This is a purpose; these are the goals. Is it not a desirable goal to have the public service be broadly representative of the people it serves? Yesterday one of the members of the Liberal Party suggested it was unacceptable that we hire an Indo-Canadian in the employment standards branch, even though there are thousands of Indo-Canadian workers and no Indo-Canadians currently employed as employment standards officers. Is it not desirable that we have people in the public service who understand the language and culture of particular ethnic groups? The answer is clearly yes. It astonishes me -- in fact, I might even say it disgusts me -- that members opposite would suggest otherwise, that it's not a desirable goal for the public service to broadly represent the makeup of the population at large in British Columbia. That's all this section does. It doesn't impose quotas; it doesn't say the government is taking affirmative action or anything else. It just says that it is a goal of the public service to be broadly representative of the public it serves; it should be "representative of the diversity of the people of British Columbia."

J. Weisgerber: Those are warm words that sound very good. The practical application, though, is different. If the goal is to achieve a representative cross-section of the diversity, then one group is going to be overrepresented if another is underrepresented. There are a couple of ways of approaching it. One is to say that between 3 and 5 percent of British Columbians are of aboriginal ancestry; therefore the goal of government is to have between 3 and 5 percent of its staff members of aboriginal ancestry. If that's the goal, then it's important to understand that. If the goal is only to ensure that there is aboriginal representation in the civil service, that could mean something quite different. It could mean less than 1 percent or more than 10 

[ Page 9245 ]

percent or 20 percent. Is the government seeking to identify representative groups that roughly parallel their representation in the rest of the province? If so, then we'll understand the purpose of the act, and we will pursue the debate on that understanding.

While the minister speaks with some passion, he avoids the issue; he avoids the question. In order for us to debate this bill logically, we need to know what the purpose is. Is the purpose to have quotas or to identify specific numbers for specific ministries? Is the goal simply to have representation in the civil service? Is geography a factor? As has been stated in second reading debate, there is an overrepresentation of women in the civil service. The argument is that there isn't enough representation in the management areas. So while this is a laudable goal, it lacks so much specificity that no one can understand what it means.

Hon. G. Clark: If the member thinks this is a laudable goal, then he should support this section. How the government chooses to go about doing it is a question for either a later section or for a debate, and the member can attack the government if he chooses to do so. But if the member agrees with this goal, then he should support the section. I don't know why we're debating it or why he's trying to amend it as he suggested. You can't have it both ways.

I'll say this: no quotas are being contemplated. There is no attempt to rigidly say that if 5 percent of the population at large is aboriginal people, there must be 5 percent in the public service. Broadly speaking, we want to try to deal with geographic questions and service questions. If you're doing a new native program on child abuse or on alcohol abuse, then it may be desirable to have aboriginal people in the service delivery capacity. That makes sense. When it comes to reflecting the workforce better, as opposed to the population, aboriginal people make up only 2 percent of the workforce but 5 percent of the population. It would be the workforce characteristics that you'd want to represent in the public service.

Secondly, I think the character of the service you're providing would have an impact on the government's desire to accommodate that. And thirdly, the geography of the region would also have an impact. In the Nass Valley it may be desirable to promote local hiring of aboriginal people in that community. So the answer is a broad one rather than one that deals with specificity -- I think that's the word -- which would certainly not be in this section. This is a broad goal for government.

J. Weisgerber: When you look at the question of women employed in government, statistics are regularly brought out. We're reminded that women make up 52 percent of the workforce, but that only 43 percent of middle management in government are women. That seems to argue that in fact government is looking for quotas. Otherwise, you would argue that 43 percent is representative, if that's the argument the minister wants to make.

[5:00]

While we can't have it both ways, neither can the minister. You can't argue that you're looking only for representative diversity and then make the arguments, specifically to women, about percentages of women in the workforce -- not even across government, because the argument doesn't work there. This government, this party, takes the argument further and breaks it down into various groups within government. Clearly, "representative" means something different in that circumstance than what the minister would have had us believe in his last comment.

Hon. G. Clark: It's not a question of measuring the percentage of women or aboriginal people in a particular category for the purposes of having a quota system or affirmative action program. But how else would one measure how we're doing? The percentage question is a measurement tool for government. How are we doing in terms of representing the public? Well, only 2 percent or 3 percent of the senior management in the government are women. Oh, gee, that's a surprise, because 52 percent of the people who work for the government in general are women. Why is it that very few senior managers are women? How else would the member have the government try to measure how we're doing in terms of representing the broad workforce in the public sector, other than to take a look at those percentages?

It does not mean that we're going to say that we're only at 48 percent, therefore we must have a quota to achieve that extra 2 percent and this is how we're going to do it with rigid guidelines. We haven't said that at all. This is essentially the goals and purposes of the act. It's a broad definition of our commitment to try to see that the public service is representative. All of us should support the goal of a public service that is representative of the diversity of British Columbia. Obviously, percentages are an important way to measure how we're doing. It doesn't mean anything more than that.

Just before I wrap up, hon. Chair, I want to introduce Brian Dagdick, who is the director of employment equity in the Ministry of Women's Equality. He is an expert in the question which seems to be the topic of much discussion from members opposite.

J. Weisgerber: First of all, I expect that representation at the most senior level in government has fallen off in the last 18 months. In fact, there were more women deputy ministers in government when you were elected than there are today. I hear the percentages argument being used as a rationale for bringing in the legislation. I hear the percentages being used to say that we're not doing a good enough job. Therefore it would seem to me that there must be percentage goals that are different from the ones that exist today. If there isn't a goal that is different from what exists today, then the argument about the need for the legislation would seem to fail. If the minister says that there are goals higher than what exist today, then we'll move on.

Hon. G. Clark: I don't quite know what the member is talking about, but let me be clear. It is not required to have this in the legislation for the government to pursue employment equity. There is an employment equity policy, read into the House, in 

[ Page 9246 ]

many cases under the administration that that member was a member of the executive council in. Trying to deal with this question of employment equity has been going on for some time in British Columbia. We don't require it anywhere in the legislation. It's in there because we have a policy that was pursued prior to our coming to office. We're pursuing it. We think there is a legitimate concern about representation in the public service among the various groups that we talked to and that are contemplated in the act. We included as a goal -- and in some other sections -- what might be called enabling legislation, broadly speaking. This act does nothing to advance the cause of employment equity, except to recognize that it's a legitimate policy goal of government, and to say that employment equity within the public service will be carried out within the public service commission which is set up under this legislation.

That is an important distinction which the members opposite seem to conveniently miss. I think it would be dishonest for them to say that they support the policy, but want it taken out of the legislation. We're being honest and upfront about it. It is the policy, we support the policy, we're putting it in this section here as a framework, and enabling that policy. But the debate the members want to have, it appears to me, is better had in canvassing the policy question than the implementation of the policy question, which has nothing to do with this legislation. It is much broader, and in fact, gives employment equity policy in the public service a home within government.

G. Farrell-Collins: I want to address a couple of comments the minister made earlier, as they relate to section 2. First of all, I don't think there are many people, certainly in my caucus, who would have a problem with the intent of what's in section 2. I think our second reading speeches....

Interjection.

G. Farrell-Collins: Well, we probably will. Our second reading speeches were indicative of that, and I'm sure that if the minister listened carefully he would have understood that our problem isn't with the intent or the goals. They are laudable goals and laudable intents.

In my speech yesterday -- and I think the minister referred to it a bit -- I referred to comments by the Minister of Women's Equality, and the example she used of advertisements that were put out or job descriptions that were made for various positions. In her words, those positions should focus on the skills and abilities of the individual, not on certain arbitrary qualifications such as educational standing or access to a driver's licence or their race. When the minister responded to the comment that a member of the Liberal opposition made -- that a Punjabi person should not be hired by the Labour Relations Board -- I think he was being a little facetious. What was said was that those types of job applications should be done in much the same way the Minister of Women's Equality stated: they should outline the qualifications, skills and abilities of the person. If it so happens that that person is Punjabi -- and very likely the person would have to be Punjabi in order to meet those qualifications -- then that's wonderful, that's fine. For the minister to make the type of statement he was making was stepping a little beyond fair comment.

The reality is that one can agree with the intent and the goals, and approach it in a different way. In fact, I am agreeing with the Minister of Women's Equality. If he is saying something different, then he should get together with the Minister of Women's Equality and decide what it is they are really trying to do, because I am hearing different things from the Minister of Finance than I heard from the Minister of Women's Equality in her presentation. I just want the minister to perhaps be a little more cautious in the types of tags he puts on members of the opposition. He should be careful, because Hansard will speak for itself.

D. Mitchell: The member for Fort Langley-Aldergrove makes some good points here. I think the real reason the member might discern some differences between the two members of the executive council is that Bill 66 takes away significant authority from the Ministry of Women's Equality, and enshrines it in the new agency that Bill 66 puts into effect. I suppose that's fine as long as the minister is upfront about that.

We're dealing with section 2, which addresses the purposes of the act. Section 2 says: "...representative of the diversity of the people of British Columbia...." The Korbin commission report refers specifically, on page 25, to "women, visible minorities, physically challenged and aboriginal people." Would this section of the act be based upon that definition when we talk about being "representative of the diversity of the people of British Columbia"? Would it be that part of the Korbin commission report?

Hon. G. Clark: It's broader than just four target groups. If that is what the member is referring to, this is broadly representative of the diversity of the people of British Columbia; it's not just visible minorities or disabled people.

D. Mitchell: I was trying to get a bit more specific than that, although I suppose I understand what "broadly representative" means. I was referring to the Korbin commission report simply because in that report, when commissioner Korbin talks about diversity, she frames it in the context of women, visible minorities, physically challenged and aboriginal people. When the minister now says "broadly" -- that it goes beyond that -- would he include people of different educational levels, or people of different linguistic or ethnic backgrounds, in addition to those Commissioner Korbin referred to?

Hon. G. Clark: It is fair to say that the four target groups Ms. Korbin talked about would be the dominant areas, because they canvass a broad area, but it is broader than that. What we are trying to do is remove access barriers to public service jobs for the broad range of the public, whether it's in the Human Rights Act, the 

[ Page 9247 ]

Multiculturalism Act or in this act. There may be groups who aren't represented in those four broad categories, and we are not trying to be exclusive with respect to that.

D. Mitchell: In response to questions from the Leader of the Third Party, the minister said that quotas weren't being considered. How will the government determine the success of the policy enunciated under section 2, concerning the purposes of Bill 66? When you are trying to achieve a public service that is representative of the diversity of British Columbia's people, how will the government measure whether or not it has achieved that? Will you be setting targets of one kind or another?

Hon. G. Clark: The advice that I am receiving from staff is that in the four areas, it will be more easily dealt with. The percentage question we talked about earlier is an accurate measurement you can use to tell how you are doing with respect to target groups. But in the other areas, broadly speaking, it is more anecdotal. We will be talking to people and listening to them. Believe me, there's a lot of interest in this policy from people who feel aggrieved about not having access to government jobs, whether they are physically challenged people or others who are really excited by the prospect of being able to compete for government jobs for the first time and not be discriminated against on the basis of their handicap. When we choose to try to promote this kind of initiative -- and it's very unfortunate that members would oppose this issue -- we get a lot of feedback from that area, as you can see. We are not doing this in isolation with some rigid quotas and numbers. As we attempt to remove barriers, to make the public service jobs accessible to, say, physically challenged people, we will be talking to those groups and to groups they represent, discussing with them how they think we are doing as a government.

Every government in Canada, of course, has a policy like this. After 20-odd years with the Social Credit government, we are, unfortunately, a long way behind, so we are trying to catch up. Over the course of the excitement that this bill and the government's approach is causing in all those groups who have felt disadvantaged, we are trying to work with them to see where we can assist in removing those barriers.

I am, of course, pleased to be informing them of this debate and of the disgusting comments from members of the Liberal Party, and others, with respect to their opposition to this kind of approach. I will be fully informing them because when we are trying to deal with barriers which exist, the members opposite not recognizing those barriers is a big surprise and disappointment to me and to them as well.

In the course of our discussions today, as we go through it, I say that we will be able to measure our success not only by the percentages but also in terms of the feedback we receive from those groups that have not been heard from by government in years past. The kind of dialogue we're having is one which will help us see and measure how we're doing in terms of achieving some of those objectives.

D. Mitchell: The minister says no to quotas, in response to questions from the Leader of the Third Party. But he did indicate that one of the ways the government will be measuring the success -- or lack of success -- of this policy will be some kind of measurement. There has to be some. I refer one final time to the four categories listed in the Korbin commission report on page 25: women, visible minorities, physically challenged and aboriginal people. Could the minister tell us today where each of those four categories, referred to in the Korbin commission report, stands as a percentage or in straight numbers in the public service of British Columbia? Would the minister have that measurement, so that in the future we could measure the success or lack of success of this policy?

Hon. G. Clark: An excellent question. We don't have those numbers, because, of course, no work has been done in this area for years and years. We don't know how many....

D. Mitchell: How will we know if you're successful?

[5:15]

Hon. G. Clark: Once we pass this legislation, giving employment equity a home in the new commission, I'm sure the first thing we will do is canvass the areas. We have a lot of anecdotal evidence from the groups themselves, and from those of us MLAs who can look around and see a sea of white, elderly, male people who occupy practically every position of power in the government. So there's sort of obvious anecdotal evidence.

An orderly review of the makeup of the public service will happen, so we can get baseline information -- other than on the gender question, which we do have information on. I hope, although I guess it won't happen.... Normally you'd expect the opposition to hold the government to account in estimates and ask the minister responsible for the Public Service Commission how we're doing. If the members opposite aren't interested in that, then maybe that won't happen. But hopefully, the minister will volunteer a report on how we're doing with respect to reducing barriers to those who have not had access to the public service.

V. Anderson: I'm just utterly amazed at the simplistic approach of the minister, and that the minister has not heard that the opposition has never opposed representation of all people equally in the government or any other facet of the economy. I'm also amazed that whenever we raise a question for the minister, to clarify and probably understand what he's about, he is trying to tell us that we're in opposition -- when we're trying to clarify, not only for ourselves but for the public at large, what the minister is saying. If the minister believes that anybody who is trying to clarify is in opposition, and he is going to go out and tell the public that because we're trying to clarify we're in 

[ Page 9248 ]

opposition, then the simplistic nature of the minister is beyond understanding.

An Hon. Member: You'll get your chance.

V. Anderson: You've had your opportunity, they say.

The minister is dealing here in his simplistic manner with only a very small portion of the characteristics of people. When he talks about people he's primarily talking about visible characteristics, rather than the invisible characteristics which are equally important and must also be taken into account.

Let me give an illustration. Most of the difficulties in this world have been caused not by the visible characteristics which we haven't been willing to accept with each other -- and I grant we haven't been willing to do that -- but by the invisible characteristics. Most of the wars around the world have been fought on a clause within this very bill: on the basis of religion. I happen to have a pretty close relationship with that and have been on all sides of that picture. If you want to have diversity, the diversity -- as you're finding in many countries around the world -- is among those on the religious right, left and middle of any of the religions of the world. A great deal of the lack of acceptance of the diversity of people around the world has been caused by this lack of understanding and appreciation of the value systems by which people operate, and how they express themselves. When we talk about recognizing the diversity within our community, or when we are talking about our school community and the private schools, we are talking about the diversity within our community. That has been a bone of contention here among us because that diversity has not been properly recognized or taken into consideration. When we talk about political movements around the world, we know that within every political movement there is religious diversity. When we come to health care, we have the question of abortion, and that's a religious diversity question where people have different values. The simplistic nature of this government that we are trying to clarify and challenge them on....

The Chair: Order, please. We are in committee stage. We have passed second reading debate, and I would remind the members of the committee of the necessity of focusing on the section we are on and restricting the debate to that.

V. Anderson: I am trying to get to what the minister means by religious diversity being representative of the diversity of the people. If we are going to be representative of the value systems of the people, then we need to question the value systems, the philosophical systems and the religious systems from which people come, and if the minister is going to start into that kind of concern, then we are in real difficulty. One of the strengths of our country for years was the separation of church and state so that these did not dominate each other. In this particular diversity system, the minister has brought into the forefront the interrelationship of church and state, of the religious point of view and the value system point of view, and he is upfront in doing this. All we are trying to say is that this position of equality and representing diversity is not as simple as this minister would like to make it. We are trying to question that so that we don't take down one set of barriers and put up another set. We're not trying to oppose the representation of all people. We think that the danger comes from the process that's being put in place -- not the intent, but the process. It is one that is going to create barriers rather than knock them down. That's the concern that we have.

Moving from that for a moment, because I'm not sure the minister would want to respond to that, I would raise another question, on subsection (d). I'm trying to find out how this act will encourage creativity and initiative among employees. Are you saying that you encourage initiative and creativity because of employment standards or by the increased pay you are going to give them? What is the basis within this act for encouraging creativity and initiative?

Hon. G. Clark: Actually, there is nothing in the act that deals with that question. To promote and encourage creativity and initiative among employees is a broad goal of the public service. The public service commission that is struck by this act will have that as one of its goals. It is an enabling bill, which sets out some goals and objectives at the beginning of the act, and it does not deal with how we are going to accomplish them.

J. Weisgerber: The minister is interesting to watch, because when he gets into areas where he is uncomfortable he becomes a bit aggressive, and so his discomfort is rather easy to gauge.

In any event, when I was Minister of Native Affairs I was curious to know what kind of representation aboriginal people have in the public service. The first thing I found was an enormous difficulty in identifying people. People who were working in the civil service did not necessarily want to be identified as an ethnic group. They had competed and been successful on the basis of merit, and that is the way they wanted to keep it. We had an enormous difficulty in identifying ethnic groups. I wonder, as the minister sets out to judge what kind of progress they're making: will there be a process to identify the ethnic structure and the visible minorities within government? Will they set out to identify the number of people who are handicapped? Will they then have a procedure to identify groups as part of their hiring process?

If I accept the minister's argument that he needs to have a way of measuring the progress that's being made, it seems to me that more employment information is going to be required than what is currently provided for under the Charter. When I was trying to deal with some of these problems, I was advised that I would run into some serious difficulties asking questions about race or other things. I wonder how the minister has decided to handle that.

[ Page 9249 ]

Hon. G. Clark: The employment equity policy has not yet been adopted by government. This essentially sets out a framework and a home. When you have an open competition without any barriers, it doesn't matter what ethnic background an individual has. In the seven cases I mentioned from when that member was on the executive council, there was a preference. It said "women only," or "aboriginal people only." There is a self-declaration with respect to that, so I suspect it will be a voluntary self-declaration approach, as opposed to any kind of police rooting out what people's ethnic backgrounds are, which in many cases is not that easy. When there is a policy, I suspect it will be more of a voluntary self-declaration type of approach as to what one's background is, for the purposes of monitoring how we are doing. In a general sense, when there are specific preferences -- as there have been from time to time over the last few years for a variety of areas -- it will be a self-declaration approach to whether one qualifies for the merit competition.

J. Weisgerber: These are the things that make it so difficult to debate this legislation. The government asks us to believe that they have gone through a process that has resulted in a new Public Service Act. But when asked how the government is going to measure its success, the minister says that we haven't passed employment equity yet, although it is dealt with in section 5. Because we are on section 2, we haven't yet passed section 5. Surely to goodness, even this government looks that far ahead -- from section 2 to section 5. You can't expect us to believe that you have come this far and never thought about how you would identify various visible minorities. Surely to goodness, you don't expect us to believe that the government hasn't thought about or decided that. Surely you wouldn't bring in this kind of legislation if you hadn't dealt with those kinds of fundamental questions.

Hon. G. Clark: Obviously there has been a lot of work done on the policy in the last year or so. What we're setting out here are some goals and objectives and a framework, but the implementation of the policy is something that we're continuing to work on. People often feel that they're discriminated against if they're identified as a member of a particular group, so we have....

Interjection.

Hon. G. Clark: It's one of the problems; the member is correct. I don't diminish that at all. It's a question of not being heavy-handed or being interventionist on this. It's a question of working very carefully with the sensitivities to encourage it. That's why I said earlier that we're not talking about quotas or any kind of rigid application. We're simply talking about a goal and about ways through an employment equity policy to make the public service more representative of the public it serves.

V. Anderson: I guess I'm a little sensitive on this. A few years ago we were planning to go to the United States. We went to the passport office to get our passports, and our three daughters were waiting in the other room. We got our passports, and everything was in order. Then the immigration officer went out to photocopy the material. When she came back in, she said: "Are those your three daughters out there?" And we said yes. Then she said: "We have a problem. You can't take them into the States. At least, you can't take one of them...." Her background was Japanese -- Canadian-born, but of Japanese descent. She was identified, and she was not able to go. She has learned to live with that, but if you asked her today on an application form to say that she was Japanese, she wouldn't say that. She would say that she's Canadian and that her descent is not relevant.

[5:30]

What I hear the minister saying is that it's self-declaration. I'm hearing the minister say that if there is a goal to increase the number of people from visible minorities in a particular location or a particular undertaking, then saying that she was Canadian would not be enough; she would have to say Canadian of Japanese descent. Otherwise she would not fit into that political category. The very concern that we have is that people are being identified, and people were put into camps in British Columbia because they were identified as Japanese, not as Canadian. Our concern is about the counterproductive nature of that. We don't want that to happen again. We've been moving away from it; we don't want to move back to it.

Section 2 approved on the following division:

On section 3.

D. Mitchell: I think that section 3(b) really says that this act shall apply to any board, commission, 

[ Page 9250 ]

agency or organization that cabinet so deems. That seems very broad. Could the minister explain why that kind of broad language is necessary regarding the application of this act?

Hon. G. Clark: First of all, it says: "...to all ministries of government, and to any board, commission, agency...to which the Lieutenant Governor in Council declares this Act...to apply." Essentially, what we're trying to do is deal with some of the anomalies -- Glendale and Riverview, in particular. Their employees are not employees of any ministry, yet they are currently covered by the Public Service Act. We'd like them to continue to be covered by it. It's not to broaden it out to cover everybody. There is a public sector, broadly speaking. We've dealt with that act. This is the public service, but there are a few anomalies that need to be included in the act. They just aren't employees of ministries, and there may be other anomalies in the future. So this act is permissive to enable us to capture any board, commission, agency or government organization that should be members of the public service.

D. Mitchell: I think I understand the answer of the minister, but the wording is so broad. Basically it says any other agency that cabinet so deems. Presumably that could even include Crown corporations; it could include just about anything. Is something along those lines contemplated? Could Bill 66 apply to more than the public service? Could it apply throughout the public sector to include Crown agencies and corporations? Certainly the authority seems to be here to apply it to any agency that cabinet so deems.

Hon. G. Clark: No, absolutely not. That's not the intention. I suppose a plain reading does allow the government to take other agencies covered by other acts and see them as members of the public service, but we don't have any intention at this time of going beyond what we have. We have another structure dealing with the public sector, and Crown corporations are part of that. That act was passed this morning. This is just to deal with a narrowly defined public service.

D. Mitchell: The minister's statement certainly wasn't definitive; he simply said "at this time." I'm a little puzzled by this. Maybe I could use an example, and see if the minister could address B.C. Rail, for instance -- a Crown corporation of the province that is currently in a labour dispute. Some statements from the government over the last few days suggest that any settlement in this Crown corporation should reflect that of the public service. If that statement is consistent with what the minister is saying, the application of this act could be to a Crown corporation such as B.C. Rail as well. The minister said that at this time there is no intention of extending it to Crown corporations, school boards or other Crown agencies. Could the minister be a little bit more definitive in his comment on that?

Hon. G. Clark: I won't comment on the false premise with respect to B.C. Rail. On the broader question, why in the world would we want to fold Crown corporation employees under the Public Service Act and have all the Public Service Commission rules and regulations apply, in this case, to a commercial Crown? I can't see any desirability, nor would it be contemplated.

I have just been advised that there are areas.... One would be the Commission on Resources and Environment, which is not attached to a ministry; but it may be that its employees are under the Public Service Act. I suspect they are, because many of them are seconded from a ministry or the like to serve that commission. So it may be desirable to capture them by this section, as an example. That's where we are into a bit of a grey area -- not Crown corporations or anything like that. It would not be our intention to expand the number of people covered by the Public Service Act.

D. Mitchell: I appreciate that answer from the minister. You must understand that the reason I am asking is that the application section seems very broad. Would employees of the Legislative Assembly be covered under the application of this act? The minister mentioned CORE. That raises a question about the ombudsman's office, the auditor general and the Legislative Assembly itself. Would it be contemplated that they be covered under the scope of this act?

Hon. G. Clark: The answer is absolutely not. I will try to explain what I think the answer is. We had this discussion on votes 6, 5, 4, 3, 2 and 1 on the distinction between employees of the Legislature and employees of the government. The Public Service Act covers employees of the government, not employees of the Legislature. The ombudsman and the auditor general are servants of the House. Their employees are accountable to the House, and the government doesn't prescribe them through an act. CORE, on the other hand, is a little different because it has an independent mandate, but the commissioner, Stephen Owen, is appointed by the government and reports through the government to the House. He's not an independent officer of the House. I think that's the only place where that applies. That's probably the best distinction.

It may be, for the purposes of superannuation or a whole bunch of historical reasons, that some legislative officers, if you will, are covered by the Public Service Act -- not necessarily for the purpose of unionization or anything else, but for the purpose of taking advantage of being able to move between government and different agencies funded by the House. In general, I think that's not a bad distinction.

[5:45]

R. Neufeld: I have two questions on section 3(b). The leader of our party brought up an interesting point about trying to find out, for instance, how many aboriginal people were employed in the government and how difficult that was. I see here that this act applies "to any board, commission, agency or organization of the government and its members...." The minister acknowledged that it was going to be difficult 

[ Page 9251 ]

to do that. Also, the member for Vancouver-Langara had some specific concerns around this.

The word "members" says to me that it will be appointees to different boards and commissions by the Lieutenant-Governor-in-Council. What criteria would cabinet use to appoint people to boards and commissions that would represent the diversity of the people of British Columbia? Obviously there must be something in mind to be able to facilitate that.

Hon. G. Clark: I want to assure members of the committee that there's absolutely nothing in mind here. I'm just going to check the existing legislation, because we're not expanding the scope of the Public Service Act, and we're not contemplating expanding the scope of it. We're not bringing in an amending act. The Korbin commission resulted in a new act. So this is just a reaffirmation, I am sure, of the existing Public Service Act.

R. Neufeld: I appreciate the answer that the minister gave, but maybe he missed my question or didn't understand what I was saying. I don't have any problem with the discussion the minister had with the member for West Vancouver-Garibaldi, but the Lieutenant-Governor-in-Council will appoint members to any board, commission, agency or organization of the government and its members or employees.

Hon. G. Clark: The member is incorrect. Section 3 applies to all ministries and to any board or commission and its members and employees to which the Lieutenant-Governor-in-Council declares.... We aren't adding members to a board or commission; we're not appointing anybody. We are simply saying, in the case of Riverview, that this act applies not only to ministries of government but also to people who work at Riverview.

R. Neufeld: You talked earlier about CORE. Weren't the members of CORE -- not the employees; I know how they are hired -- who sit on that board, the commission, appointed by the cabinet? That's what I am getting at.

Hon. G. Clark: No, the commissioner was appointed by the government, but the people who work for CORE are public servants and covered by the Public Service Act. That's all we're trying to capture here. We're not trying to capture anybody other than that. This is just a routine of trying to make sure the act covers everybody who is currently covered by the Public Service Act.

R. Neufeld: I'll try another one. The board of B.C. Hydro is appointed by government. That's what I am asking about, not the employees of B.C. Hydro. I'm not asking to include them or anything like that. I am asking about a board, a commission or anything such as that. What criteria will the Lieutenant-Governor-in-Council use when appointing those people to those boards or commissions -- and they're not adding people or anything; they're already there, but in time they will change -- to represent the diversity of the people of British Columbia? There must be criteria in place if this act is to apply.

Hon. G. Clark: It has absolutely nothing to do with this act. The appointments to the boards of Crown corporations have nothing to with this act. This simply says that it deals with the employees of the public service. If they work for a board, it may be desirable to have them covered by the act, but it has nothing to do with the processes of appointment to boards and commissions. That may be a legitimate line of questioning, but it has nothing to do with this section or this act.

Section 3 approved.

On section 4.

V. Anderson: I have a question about section 4, which is on the consultation process. It's even necessary to define what consultation means, to limit it as well as to broaden it, I expect. The consultation with the employees is fairly extensive when you take in section 8, which has to do with the merit principle, so that the employees are going to be fully consulted regarding merit principles. Under section 25 they're going to be fully consulted before any regulation is passed. I've never known of anybody being consulted as much as the employees will be in this particular regard. The commission is going to be very busy consulting. Will the same kind of consultation be undertaken by the commission or by the Lieutenant-Governor-in-Council with the employers, to balance off the suggestion that there's total consultation on every question with the employees under both 8 and 25? Will there be similar consultation on the side of the employers to balance the mediation, and ensure that the input is equal?

Hon. G. Clark: With respect, there's only one employer, and we're it, so there's nobody to consult with. This says that the employer will consult with the employees. By the way, section 4(1)(a) is exactly the same as the current act, although (b) is different.

Section 4 approved.

On section 5.

J. Weisgerber: Given the hour, it would probably be an appropriate time to move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

The House recessed at 5:54 p.m

The House resumed at 6:31 p.m.

[ Page 9252 ]

[The Speaker in the chair.]

Hon. C. Gabelmann: Hon. Speaker, I call second reading of Bill 74.

PACIFIC RACING ASSOCIATION ACT

Hon. C. Gabelmann: First of all, I move that the bill be read a second time. The purpose of this bill, the Pacific Racing Association Act, is to establish a corporation as an effective means to maintain, improve and operate thoroughbred horse-racing tracks and facilities in British Columbia. For many years thoroughbred racing in British Columbia has, in the main, been operated as a monopoly by a private corporation on publicly owned land. As I'm sure members are aware, the horse-racing industry is an important part of the B.C. economy, providing employment for about 7,000 people around the province with about 40 percent of the wages and expenditures farm-based.

The industry has been in decline over the last ten years partly as a result of increased competition from easier forms of gambling and partly because of the inadequate and deteriorating facility at Exhibition Park. The Jawl commission, appointed by the previous government and chaired by Victoria lawyer, Mohan Jawl, warned in 1988 that continued operation of the present Exhibition Park facility and continuation of the present operational structure could lead to the demise of the industry. Almost without exception, owners and others involved in the industry agree that the Exhibition Park track and related facilities are completely inadequate to the point where an increasing number of owners have declined to run their horses there. The small five-eighths-of-a-mile track and the poor surface have taken a heavy toll on thoroughbred horses. The stables and other backstretch facilities, which currently house up to 1,700 horses and a considerable number of grooms and other workers, have been described as a squalid slum.

The Jawl commission findings went far beyond the physical state of the facility, and I want to quote from his report:

"The industry currently suffers from fundamental structural problems which no solution aimed just at facilities is going to resolve. The industry has too little control over its own future. In the case of thoroughbred racing, the critical decisions are made by the track operator, the PNE and the city of Vancouver, not the breeders, owners, trainers, jockeys and the rest of the people who make up the industry. The industry must, over the long term, work itself out of some of these dependencies.

"The creation of a non-profit society to develop, own and manage horse-racing facilities in the lower mainland area would be a significant move in this direction. The primary attraction of this form of restructuring is that when critical decisions that have industrywide implications are made, the interests of the industry are more likely to prevail over the narrow interests of the track operator if they are made collectively by the members of a non-profit society representing the various segments of the industry and others having an interest in the future of racing."

That was the conclusion of the Jawl commission -- appointed, as I noted, by the previous government.

The new Racing Commission, appointed by our government, was given the mandate to act immediately to study the needs of the industry and make recommendations for changes that would secure the future health of the industry in our province. In the spring of 1992 the commission made its report reaffirming the conclusions of the Jawl commission that restructuring was essential. The commission also recommended two options: either acceptance of the Western Delta-New World proposal for a site at Burns Bog, or the development of a new track and related facilities at Exhibition Park.

Serious environmental and community objections had been raised against such a development at Burns Bog. It was also apparent, after further discussions with Western Delta, that other obstacles remained. Given the risks of the proposal, this was not acceptable to government. Further consultation convinced me that at this time in its history racing was best served by remaining at Exhibition Park. In December of last year, I announced the government's decision to proceed with a new track and related facilities at Exhibition Park.

This bill and its companion Bill 72 are designed to provide the necessary framework to restore the health of the horse-racing industry in our province and to preserve the 7,000 jobs that the industry directly and indirectly provides.

This bill introduces the kind of restructuring recommended by the Jawl commission in 1988 and reaffirmed by the B.C. Racing Commission last year. The bill creates the Pacific Racing Association, consisting of a board of directors appointed by the Lieutenant-Governor-in-Council in consultation with both the Horsemen's Benevolent and Protective Association of British Columbia and the B.C. division of the Canadian Thoroughbred Horse Society. The association will have the powers required for operating horse-racing facilities, including the ability to acquire and dispose of land. Limits are placed on the ability to invest and borrow, as well as requirements for annual operating reports, audit reports and financial statements. As distinct from the B.C. Racing Commission's responsibility to regulate horse racing as an activity, the responsibility of the Pacific Racing Association will be to ensure that horse-racing tracks and facilities are maintained, improved and operated in accordance with the Horse Racing Act and under regulation by the B.C. Racing Commission.

The Pacific Racing Association's objective will be to serve the broad interests of the industry and public rather than the narrow interests of a private operator, although private operators may be contracted to manage the day-to-day operations of the facility.

Given today's events, may I say that discussions continued as recently as this morning between representatives of my ministry and the Jockey Club to try to reach an amicable conclusion about settling a price that might be fair to all concerned. I can say to all members that those discussions are continuing on a very amicable basis and will continue. There has been a fair amount of misconstrued public discussion with 

[ Page 9253 ]

respect to expropriation. Nothing could be further from the truth. We are simply trying to reach a fair and reasonable business deal with the Jockey Club.

In bringing this bill forward, we have acted on the basis of extensive study by knowledgable and concerned people and in response to the express needs of the industry. This bill is vital to the future health of the horse-racing industry in our province. I ask members to consider the public response by the B.C. division of the Canadian Thoroughbred Horse Society:

"We believe this bill will give our industry the opportunity to direct our own future by involving industry members. For the past decade, thoroughbred breeders have been requesting changes to save our agriculturally based industry.... Not-for-profit race tracks have proved to be healthy for thoroughbred industries in other jurisdictions, and we welcome this opportunity in British Columbia...."

With that, I look forward to debate on this very important bill.

The Speaker: I recognize the hon. member for Richmond-Steveston who, I am advised, is the designated speaker.

A. Warnke: I will go as far as I can, because I know others want to speak on this bill. In some ways this bill is very simple in its design, because Bill 74 relates specifically to the Pacific Racing Association Act. Bill 74 has just seven sections, most of which are pretty straightforward: the definition and powers of the Pacific Racing Association, and the duties, powers and financial administration of the board of directors.

As I listened closely to the Attorney General's remarks, I would have to say that there is a good deal of discrepancy in what appears on the surface and the implications and intent of the legislation before us. Bill 74 is clearly the establishment of a new Crown corporation. This corporation, as it suggests in section 2 -- and we'll get into that when we get to committee stage -- is to be known as the Pacific Racing Association. The intention of this bill is to establish a Crown corporation which, when examined further would leave no doubt that the British Columbia government is now involved in the racing business. This kind of development is new and very provocative.

Before we get into the specifics of the horse-racing industry and what the bill intends for horse racing, imagine if we were to apply this principle to the government getting involved in the entertainment industry in general, especially since the government is committing itself to upwards of $50 million just in refurbishing Exhibition Park. I automatically think that there are others in the spectator sports and entertainment industry who say that if the government of British Columbia wants to get involved in the racing industry, why shouldn't it get involved in purchasing a baseball franchise? As a matter of fact, if we're going to be headed along that route, I would prefer to sink $50 million into the purchase of a baseball franchise than into the racing industry. That's not the point. The point is that we have clearly got off on the wrong track -- no pun intended.

To begin with, this is a complex industry, and it is still full of problems. We noted that Bill 74 has to be looked at in the context of its connection to Bill 72. As I listened very closely to the minister's remarks, I noted that the minister's opening remarks were put in a context such that we could not really avoid talking about Bill 72 as well.

[6:45]

I have to mention at the outset that once again we are seeing another example of this government shifting its authority from cabinet and transferring that authority to a commission. This is especially the case in Bill 72, and when we get around to discussing that particular bill, I'll elaborate further. By the same token, in Bill 74 we see an interesting development when one sees the powers of the association and gets into the formation of the board of directors and the duties and powers of the board of directors. I'm not terribly impressed that the government is at arm's length. Oh, prima facie there is an arm's length between the government and the directors, but the appointments to the board of directors are made directly by the government. Indeed, the government -- we will explore this further in committee -- may actually appoint one of the directors it has appointed as chair of the board of directors.

That, to my mind, means that the government has some pretty involved input into the Pacific Racing Association. It has quite a bit of input into a Crown corporation, therefore this generates the view that the government is simply getting involved in the horse-racing industry. It certainly prompts the question: why? Hasn't government got enough problems on its plate without getting involved in a spectator sport -- not even one of the most attractive ones? The minister in his opening remarks acknowledged that this particular industry has not generated increased revenue compared to other spectator sports. I would acknowledge that.

There are some really good reasons for this. Ten years ago the horse-racing industry was one of the few outlets for public gambling, where money was allocated by people for the purpose of gambling in hopes of retrieving a quick, easy profit. The outlets were very few. There were a few lotteries, perhaps, and one bad federal lottery. The horse-racing industry was attractive to the kind of people who wanted to involve themselves in gambling. What we have now, and what we've seen develop over the course of the 1980s, is more and more outlets not only for gambling but more and more outlets for people to allocate money towards gambling in the sporting field. I'm thinking primarily of Sports Action. People make a few dollars by betting on football games, baseball games and soccer games -- you name it -- and that has obviously taken money away from the horse-racing industry. So it is not surprising, I suppose, that the expectancy of increased income from horse racing has declined, and as a result horse-racing revenues in real figures have declined. I do not necessarily discount the fact that more than 7,000 people are employed in the horse-racing industry and that there is some revenue to the government: $6 million or so is not small, but in the overall revenue to government it is certainly not major. But to suggest that 

[ Page 9254 ]

somehow this bill improves on the 1960 bill that protected the public from illegal and unauthorized practices of gambling on horses.... That suggestion incidentally, hon. Speaker, makes a clear reference to Bill 72, so in that sense they are linked.

Nonetheless, what are we getting into here when we get involved in the horse-racing industry? As I see it, we've made some pretty bad decisions. The government of British Columbia has messed up some negotiations, first of all, with South Sea Investment in Hong Kong, who wanted to invest in the Delta track. I recognize that there is some controversy in the attempt to establish a racing facility in the Delta lands, because the Burns Bog is a sensitive environmental issue that has certainly been brought to everyone's attention. Indeed, there has been a serious attempt to try to find some sort of balance between protecting the most environmentally sensitive areas of Burns Bog and establishing a track and also maintaining farming in the area. From my analysis, having spent some time in the area talking with experts who know the area extremely well, not only is some sort of compromise possible, it has been suggested that a certain amount of industry in east Delta was quite possible. The most important point was that the negotiations surrounding the Western Delta proposal were pretty well messed up. As a matter of fact, reported in the press were a number of people who thought they were negotiating with the government in good faith, and all of a sudden, out of nowhere, a decision was taken. From what one can account -- as a result of some of the comments made by potential investors -- the government had not sent any notice. Despite negotiations with some of these groups, they had not been sent a notice that the government was going to make a rather firm decision about Delta. Secondly, when the decision was announced last December about maintaining the track at Exhibition Park, we find that the government has messed up negotiations with the Jockey Club at Exhibition Park.

While I am aware of the comments made by the minister regarding his suggestion that there is an amicable basis for negotiations with the Jockey Club, the record clearly shows not a misunderstanding of the facts but some genuine concerns about how negotiations were proceeding. Then all of a sudden here are two bills placed before us in this chamber. They came in the middle of these negotiations, which, once again, created the suspicion as to the intent of the government in this area. So on two occasions the government has messed up the negotiations -- with Western Delta on the one hand, and with the Jockey Club on the other. A wit might put it this way: given the ministry's track record so far in dealing with this whole issue, it has clearly illustrated why the government should not be in the racing business.

There is another reason that suggests why the government should not be in the racing business. It has been suggested that the Delta track would not have cost the public what the Exhibition Park alternative is going to cost. In order to get that choice underway, it's estimated that we're going to be spending up to $50 million. At a time when governments are complaining that they're having some difficulty gaining control over their finances and having difficulty with expenditures and revenues, $50 million is highly questionable as opposed to some other alternative. As has been put so clearly by many members of the public, up to $50 million -- or maybe more -- will be used to patch up Exhibition Park, but that may be questionable too. Will that $50 million create a world-class facility? No. Will $50 million develop a race track and facilities that are comparable to other tracks around the continent, or at least in this country? Once again, the answer is no.

As matter of fact, it's clear that we're not going to get a one-mile race track. Many in the industry made it very clear that this is what they wanted and believed they needed. We may play around with the idea that seven furlongs with the chute is really a one-mile track. That hasn't convinced those in the industry. As a matter of fact, when the original decision was announced that Exhibition Park would include the seven furlongs with the chute to make up a so-called one-mile track.... The shape of the track was highly contentious. It has proven to be potentially very dangerous to the animals that race this area. We're really dealing with a seven-furlong pear-shaped track with -- I hope I understand this correctly -- at least some adjustment since the original December announcement. Nonetheless, as many in the industry have pointed out, it is still a potential danger to animals that race this track.

The most important feature is that it is not attracting high- quality horses. High-quality horses in this industry only want to race on high-quality tracks, and we don't have this. Also, tracks that we usually think of as having some class include turf tracks. I have visited a few courses in my day, and one of the most beautiful is the new Woodbine Race Track in Toronto. It includes not only a dirt track but also the turf course, and the track scenery is extremely impressive.

If the government is going to get involved and spend up to $50 million for such a track, surely we want to invest in something that would attract high-quality horses to race here, to attract spectators in the Vancouver and Seattle areas. As a matter of fact, I do have one problem: Longacres in Seattle has folded up. There may be some very good reason for folding up that may not apply to the Vancouver situation. Indeed, an optimist might say that as a result of Longacres folding up, we could attract people from Washington State and the Seattle area to a very attractive facility here in the lower mainland.

The point is that we have an opportunity, if we are going to spend that kind of money, to do something about establishing a high-quality track. Yet we don't pursue that direction. What we seem to be more involved in is getting the B.C. Jockey Club out of the horse-racing business altogether and creating a new Crown corporation that believes it can operate the horse-racing industry much better. It's based on sheer belief, nothing else. There's really no concrete assessment that comes out of the ministry or the government that even suggests they could run the horse-racing industry any better. Some people who have been very critical of the government say that it is nothing more than a glorified nationalization of the industry.

[7:00]

[ Page 9255 ]

On top of it all, the old track at Exhibition Park is refurbished, but it still has inadequate facilities for training. The training is spread around. It is assumed that somehow, maybe around the Port Mann Bridge, we could develop a training facility that is very close by -- as someone said, within 15 minutes of Exhibition Park. The hon. member for Port Moody-Burnaby Mountain knows this only too well. It's not all the time that you can zip from the Port Mann Bridge to Exhibition Park in 15 minutes, I can guarantee you. We've heard in this very chamber that the east-west linkages are not all that great. Otherwise, why would we need a new SkyTrain to Port Coquitlam, for example?

Interjection.

A. Warnke: Well, that's interesting. The member for Port Coquitlam has just said "not for Colony Farms out by the Port Mann Bridge." This is precisely what the government favours: the establishment of a training facility out by the Port Mann Bridge. I'm not sure what that hon. member really wants. There are conflicting pursuits that he should figure out.

The fact is that if one really wanted to develop the horse-racing industry and put it on a proper footing for the future, then a substantial amount of land, perhaps hundreds of acres, is needed to attract that kind of investment and that kind of facility. I say "attract that kind of investment," because I'm still not fully convinced that the government knows what it's doing in the horse-racing industry. The government still gets plenty of money from wagers: as a matter of fact, it gets 7 percent. Admittedly, half of it goes back into subsidies for thoroughbred breeders. The track gets 5.5 percent, and the rest goes to the bettors and the horse owners. As a result, when we take a look at what the gross revenue is for betting, and what it has been in Exhibition Park, the government gets a fair amount from it, and I don't know why that isn't sufficient. You know, $9.5 million dollars is quite a sufficient revenue to the government. Now it wants to get involved in the industry itself to make a profit.

The minister quoted the Jawl report, and I found one quotation to be most interesting. One of the report's conclusions is that the horse-racing industry should operate as a non-profit society and that that should be a significant move. If that's a great pursuit, what are we doing trying to establish a commission, a Crown corporation, that does not make money and is a glorified non-profit society? I really find it very difficult to accept that the aim of a Crown corporation is to make no money whatsoever in an industry that has its clear ups and down. I anticipate that this industry, in which the government now is going to be so intricately involved, could get itself into very serious debt. What does it do then?

Interjection.

A. Warnke: Oh, it goes to the taxpayer -- precisely. All of a sudden, the government comes back to this chamber and says: "We've got a problem financing the horse-racing industry, and we want to make it a viable industry. Exhibition Park is going down the tubes. We've got to prop it up all the more, and we want to come back here and borrow more money." It's very clear in section 5 that you borrow more money by somehow making a hit on the Minister of Finance and Corporate Relations.

Interjection.

A. Warnke: Well, thank you very much. Precisely what we do not need is yet another mess that we could potentially get into as a result of a wrong decision that is not based on a business strategy but instead is made because the government simply wanted to get involved in the horse-racing industry. I still find it difficult to understand why the government wants to get involved in horse racing. Hasn't it got enough to do? Hasn't it got enough Crown corporations to fool around with? Hasn't it got enough responsibility to provide services to the people? Hasn't it got enough to do providing health care, education, social services, transportation and all the rest of it that this government brags of?

Then all of a sudden -- boom -- we find that the government is also interested in getting involved in the horse-racing industry. And in the middle of it all, there is this controversy about the Hastings Park lands itself. There are some very serious questions about whether the 1889 Hastings Park lands agreement is valid, and the government hasn't even pursued that. That hasn't been clarified.

The government claims that it consults with the industry. What consultation has taken place with industry? The government claims that it has contacted the Horsemen's Benevolent and Protective Association, when in fact that association itself is in the middle of controversy. It is so involved in controversy that its directorship is even at this time being questioned by its membership. It's in the middle of a mess as a result of the ministry and government trying to get involved in the horse-racing business.

Interjection.

A. Warnke: It's something that they shouldn't be involved in, quite obviously. They don't know how to run an industry, simply because the ministry and government has had no experience, no history, no nothing in the horse-racing business.

I never thought I would see, of all parties, the New Democratic Party become so passionately involved in the horse-racing industry. This is the most exciting debate we've had....

An Hon. Member: Is there money in it?

A. Warnke: An hon. member has asked a very good question. Is there money in it? The normal way of thinking is that obviously the government wants to get involved because there's some money in it, but this is a non-profit society.

Interjections.

[ Page 9256 ]

The Speaker: Order, please, hon. members.

A. Warnke: The rational mind suggests that we should make a profit. Somehow we have to receive enough money from the industry to pay for the industry. It's hard to believe, but that's the way some people think on this planet. We invest money with the idea of doing two things: making a profit and making a go of a business. I know this is hard for some people to visualize, but that is a very rational and a normal thought process, but not to this government. No, despite the fact that we have all kinds of problems raising government revenue and all kinds of problems in terms of expenditure, this government says that where there is money to be made, we're going to take a profitable industry and make a non-profit society out of it.

By the way, one hon. member has mentioned that it is an industry on the decline. Isn't it interesting that you would invest in an industry that's on the decline, not for the purposes of building it up once again, but to make it a non-profit society. When I think of the many businesses and corporations that have gone under in the private sector, I cannot recall one instance where people have said: "Gee, if a business is going under, maybe we'll turn it into a non-profit society. I thought it was a losing business."

This approach to the problem of how to refurbish the racing industry really does escape reality. The reality is that the spectator sports industry is a very complex industry. I know a little about this because I have followed baseball very closely over the decades, not only the various teams' pursuit of the pennant but also the financial aspect. When you take a look at any major sport -- it doesn't matter which -- any franchise involves at least $100 million. That's what it takes. Anyone who wants to get involved in the horse-racing industry or other spectator sports is talking megabucks. This is big stuff, and I am shocked and surprised to see this government say that they want to get involved in this without having a clue of what they're getting into. The spectator sports industry is a very difficult industry to get involved in. It's one in which, if you do not operate a franchise or a sports facility properly, you not only lose money, you lose big money. There's a long history of those involved in the spectator sports industry -- and horse racing is one of them -- talking big bucks and possibly big wins, but big losses. Yet I still find it very odd, even if it were possible to make big bucks, that the government wants to turn this industry into a non-profit society.

So I'm not convinced that this government is on the right track. It's nice to hear the minister suggest: "We'll have some private input all right; it's not that we're ignoring private industry, because private operators will receive contracts." Private operators will have an opportunity to get a few jobs and contracts here and there and make some money. But even that concedes that the government itself, through the establishment of the Pacific Racing Association -- a new Crown corporation -- is going to have its thumbs in the industry. It's going to have its hands in the industry, and it's going to extend its arms into an industry which it doesn't know anything about.

[7:15]

I'm afraid that this is one example of a Crown corporation being set up not for the good of the thoroughbred industry or the standardbred industry -- not for it's good at all -- but to control it. To control it for whose purposes or for what purposes, I do not know. On top of it all, we can't avoid, as the minister has not avoided, the relationship with the Horse Racing Act. There will be points that I want to raise in Bill 72, and I'll elaborate on that, but the point that is relevant here as well is that we will see the Crown corporation acquire and dispose of land for all kinds of racing purposes -- for raising horses, I suppose. Who knows? The key question, of course, is that they can acquire and dispose of land for whatever they want. The Horse Racing Act even bars court appeals. We'll get into that later.

But when the two are melded together.... It's not just setting up a Crown corporation, either. These are really two sets of intrusive documents that put government into every aspect of the horse-racing industry, whether it involves thoroughbreds or standardbreds. That's extremely important.

I think, too, that there's a question with regard to the Pacific Racing Association Act that really asks whether they've dealt fairly with the track operators, the B.C. Jockey Club. We understand -- and there are a lot of people who understand -- the relationship between the owners and those involved in racing and raising horses, and so forth, and that there is also a problem with the track operators. Surely the idea is not to nationalize the track operators; it's somehow to come to terms with them. Have the track operators been that omnipotent or exploitive? I wish for once, if that was truly the problem and the great motivation for Bill 74, that the government would simply say that in their opinion the track operators were exploitive. But I haven't really seen that in concrete terms. So I'm not altogether convinced that this government.... I have heard nothing that convinces me we're on the right track. If the intent....

Interjections.

A. Warnke: I'm glad to see some people are awake. I'm glad to hear that.

The intent of the 1960 legislation was to regulate the industry in a manner that safeguarded the public from any interference, especially at parimutuel betting. It had that as a simple task. Here we're getting the impression, as to the arguments put forward, that now we need something brand-new. I don't know; I would have preferred the government to keep its involvement and intent in the whole horse-racing industry very simply defined, mainly to develop beyond the 1960 legislation an involvement in which it could still monitor and check parimutuel betting to make darned sure there is no illegal interference -- especially with the races themselves. That was the intent of the 1960 legislation. Why not develop that kind of legislation?

[ Page 9257 ]

But no, it wants to run the industry, which now means the government will have a stake and interest in the industry. It means the kind of appointments that are being made. I'm not impressed with the appointment system to the Pacific Racing Association, because clearly they're government appointments. It doesn't say that people have to have some sort of horse-racing background or expertise. On the contrary, it consults with the industry -- but as I've mentioned before, consults with whom? That is a tremendous flaw, as I see it.

We are getting away from the purpose and intention of the 1960 legislation and from the whole nature of what spectator sports is all about. It's something we should not be involved in. Henceforth we're moving in a direction in which something we know nothing about is controlled by government. This is a precedent I do not want to see. I hope this legislation is not adopted, but if it is adopted, I really fear the consequences of what kind of precedent it establishes for the future. I'm not impressed.

On this, I would suggest we'll have to oppose this bill for all it's worth and ensure that this bill does not pass, simply because it lacks the appropriate regulation. It does not in any way assist the industry to adapt to the supposedly rapidly changing world of spectator sports; it's not doing that at all, despite the fact that that was one stated intention of the bill. It hasn't clarified the nature of the Hastings Park site. It has not dealt with the city of Vancouver in a proper light.

I'm also very concerned that industry here in fact might become dependent on more government money. It really bothers me that one director of the horse-racing industry is quoted as saying that legislation is good here, because now big government money can go where a private industry is in the horse-racing business. That was, of course, Harold Barroby. That's what he said. That really bothers me, because that really sets the tone and intent of where we're going in this industry. I could see some of those directors -- which this government will appoint, because they've clearly illustrated who they are going to appoint -- will find themselves in such a financial bind that -- guess what -- they're going to come back here and insist that money be spent by government to keep propping up a failing industry.

An Hon. Member: More! More!

J. Weisgerber: It's an interesting issue, this horse-racing in British Columbia. It seems to me that there is an enormous amount of potential for horse racing in this province. We have a very solid horse-racing industry here: we have good breeders, people with good horses and people with experience. We have all of the elements one would need to have a world-class horse racing industry.

There is interest within British Columbia to expand the industry and interest offshore to invest in the industry here. What most breeders, trainers and racers believe they need is a one-mile track. Most people believe that for horse racing to flourish and reach its potential in British Columbia, we need to have a one-mile track at a world-class racing facility.

It is not an easy issue to find a solution to. The government has been wrestling with this issue for four or five years now. In 1989, the Social Credit government hired a firm of consultants to look at potential sites around the lower mainland. They identified three, and as a result of that, a proposal from Western Delta for a one-mile facility at Burns Bog in Delta was the one selected. I believe that that still represents the best solution to this issue and the best potential for the racing industry. It's a private sector proposal. All other things being equal, that should be the direction the government chooses to go.

I don't have the enormous hang-up with a Crown corporation that others might. If there is a need that can't be filled by the private sector, then it is occasionally appropriate for government, through a Crown corporation, to meet that need -- but I don't see that situation in the racing industry in British Columbia today. We have a private sector operator who has managed a thoroughbred facility for 60 years in British Columbia. We have at least one other well-financed proponent who would very much like to get on with a new facility. In those circumstances, I really believe that government should step back. They should step back at least from the ownership and operation of the track if there are private sector developers who have a quality proposal -- a $100-million project, a 350-acre site -- that includes all or at least most of the things the racing industry has been asking for.

The government has for some reason decided to spend between $30 million and $50 million upgrading the track at Exhibition Park, a track that won't be a one-mile track when it's completed. It is a track that's located in the wrong place, according to many of the studies that have been done, a place that's not the optimum location. That proposal, operated by a Crown corporation, seems to me inferior in many ways to the proposal from Western Delta.

This legislation does a couple of things. First of all, it takes private industry out of the business and creates a Crown corporation to run horse racing in the province. I am not totally opposed to the notion of a Crown corporation in any particular field where there is no appropriate private sector proponent. Where private sector can do it, government should get out of the way. I will be interested to hear from the minister the reasons he believes that a number of private sector proponents aren't going to be able to do the job.

In the proposals that I have heard there has been a lot of talk about how the track is financed and the way the government's share of the revenue from horse racing is used. I know that the proposals at Delta required a different sharing of the take. When we see the reality of what's being proposed, I am not at all convinced that the Crown will get any of the take. I expect that -- if not initially, very quickly -- all of the take will be funnelled into the Crown corporation and into the development, expansion and improvement of the track. I expect that very soon there will be little, if any, money coming to general revenue from the wagering on thoroughbreds at Exhibition Park.

[7:30]

[ Page 9258 ]

I expect that thoroughbred racing will flourish in British Columbia under the private sector model, and perhaps nearly as well under the model being proposed here. I believe a one-mile track would have developed a higher quality industry and attracted more participants to the industry. I find it interesting that the minister suggests that he has the backing of a number of the various associations. That group of people are split; there is not unanimity on many issues. We could rattle off as many organizations and the names of as many people who are opposed to what the government sets out to do as the minister could identify those who have come out in support.

Quite honestly, I don't believe many of them care who operates the track. I don't think many of them believe it's important whether it's a public, private or Crown corporation. They want a quality racetrack where they can develop their industry to the best of its potential. I believe that the one-mile track in Delta would have allowed the industry to develop to its capacity. I believe it would have attracted investors. It would have seen an increased number of horses bred and raised in British Columbia. We would have seen better quality races. We would have seen larger purses. We would have seen more people coming out to the track. All of those things are very much a part of what most people involved in the racing industry want to see. So we have a government that has chosen to reject the private sector model and adopt a Crown corporation model.

In his opening remarks the minister said that contracting wasn't out of the question. I don't think he said that contracting away from Exhibition Park was out of the question, because there is a real concern in the racing industry that there simply is not enough room at Exhibition Park, that the surface of the track is wrong and that there are so many difficulties at Exhibition Park that the potential cannot be reached.

If we're talking about a Crown corporation simply overseeing racing in British Columbia, I think you could argue both sides of the issue. I'm sure there are pros and cons, but my real concern would be to see that we do not drive away a good, solid private sector proposal and, more importantly, that we do not abandon the potential of a world-class, mile-long track. I do not believe that people invest $100 million, or commit themselves to $100 million in debt, unless they have a pretty good reason to believe that their proposal is going to succeed. I suspect that the proponents of the Delta project and the others that came forward did a lot of market research and market studies, looked at sites and options and came up with what they believed was a good investment for their interests and, coincidentally, an investment that served the horse-racing industry.

It is important for us as we enter into this debate, and perhaps most important for the government, to recognize all of the interests. There are certainly more than the horse-racing industry itself. There are the patrons who support and enjoy horse racing in British Columbia, and they surely cannot be ignored in this equation. But these are the important components: a track that encourages and helps develop a good industry, and a track that is located where it can attract patrons in the numbers necessary to ultimately support the facility and the industry there.

Of the studies that I have seen -- and I certainly have not seen as much work on the proposal that the current government has decided to adopt as I have of some of the other proposals -- I really believe that there is a better option than the one that is being pursued here, a better option for horse breeders, a better option for the industry and for the patrons, and that is really the only concern that I have with this issue. I will listen with interest, because I know that a number of members in the House have pretty direct knowledge of this issue which has been around a long time. We have talked to a lot of people who are very committed to it, and most of the people I meet in the industry are doing it out of a love for the industry and a belief in the future rather than for the dollars that are made day to day.

[E. Barnes in the chair.]

There is a very good industry here. We should do everything that we can to husband the industry and help it develop, so I am concerned that we are not going to see the one-mile facility, regardless of who is going to develop it. Quite honestly, if the minister were coming forward with a proposal from a Crown corporation that would develop and establish the same kind of facility, my concerns would be a lot fewer than they are today. I recognize that improvements on the current track are absolutely essentially. I just think that going halfway is not going to serve the industry and the people who support and depend on it in the long run. So with that, I will listen with a good deal of interest to the debate, and look forward to an opportunity in committee stage to get some specific answers to some of the areas that I've touched on tonight.

F. Gingell: I rise to speak to this bill without a great deal of experience in or knowledge of or years of study on the horse-racing industry. But in recent weeks I have had the opportunity to listen to the concerns expressed by many horse owners and those involved in the industry.

What concerns me most about this bill is that the government is setting up another government agency; another Crown corporation; another arrangement of boards to appoint their friends to, to do something that private enterprise is perfectly capable and able to do on its own. It can make its own investment, and create a facility that can be run on a sensible, businesslike basis, with whatever licensing is necessary from the government to deal with the wagering issues and to ensure that those are carried on in an honest, ethical and straightforward manner.

It surprises me. We have been sitting in this House since the middle of March, and time after time we've seen the government produce new councils and organizations, taking away from themselves the responsibility for making decisions -- in this particular case, moving it away from themselves to a commission. I really don't think that's the way the world works best. Surely, in developing this industry and getting the right 

[ Page 9259 ]

facility, we have all of the various interest groups in British Columbia that are interested in doing the job well, and doing it in a manner that will create economic activity on our farms.

I am most interested in that because of the concerns of farmers in my community, which of course made them strong supporters of the proposal to build the one-mile track in the Burns Bog. Whether or not that was the right decision is not the issue that's paramount in my mind. I think the paramount issue is that here is an industry that can be run by private enterprise. They can make their own investment, buy the land, build the track and operate it, clearly within regulations and guidelines laid down by government. We don't need government in the baseball business; we don't need them in the basketball business; and we don't need them owning cricket teams -- if anyone else knows what that is. I am sure the Speaker would agree that government doesn't have any role in the fine sport of football, and I don't know why they need to have a role here.

Government needs to create the right economic climate to allow investment and development to take place, and then to stand aside and allow private investment to do it. Let them fail or succeed on their own efforts. We could very well have here the creation of another Crown corporation, which will require the taxpayers from all over British Columbia to subsidize it. I am sure that that is not the intention of the Attorney General in developing this package.

We all know from experience, and from those enterprises that we tried to start that have failed, that there isn't any sure bet anywhere -- and there certainly isn't one at the race track. I believe that we should create the right environment, stand back and allow private enterprise to do the job. The investment money is there and willing, offering to create the right kind of facility.

It bothers me that this government believes they should be all things to all people. They obviously include within the community that they put their umbrella over those people and animals in the racing fraternity. I think it is unnecessary.

A. Cowie: It gives me pleasure to speak briefly on Bill 74, the Pacific Racing Association Act. Throughout the bill, it refers to horse-racing facilities, not thoroughbred racing facilities. This means that the association is being set up to have jurisdiction over both thoroughbred and standardbred, or harness racing as it is commonly called. This means that the right to operate harness racing at Cloverdale could be expropriated and moved to Hastings Park. Vancouver residents would be faced with year-round racing, and the operators' rights at Cloverdale could be extinguished. I can assure you that the residents around Hastings Park do not want a year-round horse-racing facility.

Section 3 of Bill 74 gives the Pacific Racing Association authority over all horse-racing facilities in B.C. This means that this Crown agency is given authority over all interior horse-racing operations. There is no provision for representation by the Interior Horse Racing Association, and yet they are to be taken over by the Pacific Racing Association.

Section 4 deals with the authorization of duties and powers of the directors. There are no limits on the duties of the board. They can give themselves any powers with respect to any phases of the racing industry. There is no provision in section 6 for the Lieutenant-Governor to limit the powers of the board. These things disturb me.

[7:45]

On the horse-racing facility itself, there were three locations. Colony Farm was mentioned. For various community and climatic reasons, I don't believe that is a good site. It has been ruled out, leaving only the Delta site and the PNE. It's my understanding, contrary to what the minister says, that a majority on the Delta council actually agrees with the Delta proposal, or they agree with that site being explored further. We heard from our leader that the farmers are in agreement with it for obvious reasons. The racing facility would complement the farming in the area. If you have ever been in Kentucky or places where acres and acres of farm-oriented businesses around race tracks are supporting the horse-racing industry, you would see how beautiful that really can be and how it would fit into Delta. It would be possible to preserve much of that portion of the bog that is truly unique, and there are areas of the bog that are unique.

The PNE site is, and will always remain, less than desirable. Spending $50 million on that site will not do the job. I recognize that something has to be done for the next five years or so, just to upgrade it. I believe that horses are putting their legs through that track and have to be put down. Truly, in the last three or four years that facility has become run down.

The private operator in Delta said that he would be willing to spend about $100 million. Of course, the site is already owned by that operator. From past studies in racetrack construction and the provisions around the racetrack, I believe that at least $200 million will be spent if it were to go in the Delta location.

Perhaps there are other sites. I have talked with people in my constituency who feel other sites could be located. But past studies have shown that Delta is the only alternative location, other than a site in Burnaby that has been rejected by the council. It's important that whatever site is chosen have good public access -- good bus and transit access. If it is used all year round, the PNE site will continue to congest that east-west corridor.

The Pacific Racing Association clearly does not have the power to expropriate. I can't see any provision in the bill to expropriate, but they can acquire land. There is a difference. I wonder who is going to expropriate the land if it's necessary? The minister has mentioned that negotiation is going on. Assuming that will work out and a relationship could be worked out with the city of Vancouver -- which, along with the surrounding residents, really wants this area used as parkland in the long term -- I suppose the land could be acquired. The city does not object to the racetrack being there for part of the year. However, if it's used year-round, I think there would be severe restrictions.

[ Page 9260 ]

As mentioned by other speakers, this amounts to nationalization of an industry that should be kept in the private sector. I truly believe that. I have heard of at least one other track in North America that is owned by government, but more than 90 percent of tracks -- and I believe approaching 100 percent -- are private, and that's really the way it should be. This sort of business is a private industry. I believe that government should set the standards, and regulate and tax for the public good, but they should not own the facilities. It requires a certain entrepreneurial skill, which government doesn't necessarily have.

The PNE site is acceptable to the city of Vancouver for the next five years or so. I understand that the mayor and council, along with representatives of the government, are working -- and I believe it is working more satisfactorily than I thought it would be -- on a solution for the PNE site. But the city has clearly said that it sees five years' continued operation is the way to go, while another site is found. I think that's the way it should go.

I want to make a couple more comments about the Burns Bog site, because a lot of people confuse the area where the track is proposed as being environmentally sensitive. There is some agricultural land there, which would have to be accepted by the government. I know this government doesn't like giving up agricultural land, but I am assured that could be worked out. I don't think most people know where the area is. As you go south off the Alex Fraser Bridge, it's the area on the southwest side where all the dead trees are. Around that, of course, land could be upgraded. I am not absolutely positive, but I believe that it was the approach roads and the roadway through there that raised the water level that killed most of those trees. One knows that a bog is always dying and always building up, so most of those trees could have died for that reason.

It's an important industry, as I said. It's an industry for which -- many horse-racing people in this province, including the breeders I've talked with, have assured me -- a one-mile track is absolutely necessary. I've also been told by the manager of the city of Vancouver that no one-mile tracks are really making money. That's why the city hesitates and would rather take a little time in making this decision. But I am assured by the industry itself that while the facility itself may not make a lot of money, it's accompanied with surrounding uses. Undoubtedly a racetrack -- wherever it's located, even if it's to stay at the PNE -- is going to attract hotels and other industries around it. Certainly at the PNE it doesn't have the possibility to do it in a grand manner or a manner complementary to what there should be with racing facilities.

In my opinion the government is really -- excuse the pun -- off track on this Bill 74. I look forward to commenting in more detail at third reading and participating in the debate of the accompanying Horse Racing Act, Bill 72, when the time comes.

K. Jones: It's a real pleasure to rise and speak on Bill 74, the Pacific Racing Association Act. This act really relates directly to my riding of Surrey-Cloverdale. This act is going to establish an association that can ensure that horse-racing facilities are maintained, improved and operated in British Columbia. It's going to have control over the operations of all racing facilities within British Columbia, and that includes the Cloverdale Raceway within mycommunity. The property is owned by the city of Surrey and leased to the operator. It's a unique part of the economy of Cloverdale and Surrey, a unique market for feed and products created through our community, and it has the breeding programs of some of the finest racehorses in the world.

That is what I'm really concerned about, as a result of the process being put forward in this bill. This bill needs to be more responsive to the people actually involved in the industry. I'm concerned particularly that the minister indicates in this bill that the appointments to the board would be done by consultation only. I understand that the Horsemen's Benevolent and Protective Association of British Columbia and the Canadian Thoroughbred Horse Society, British Columbia division, have both provided the minister with lists of recommended persons to be appointed to this association. It would be desirable if people were chosen for this association from these lists, rather than people who might not be experienced in the industry, such as some political appointees or persons who meet certain criteria of geography or background. This association has to be run so that it is going to be directly cognizant of the problems and needs of the people in the industry. It really requires that kind of knowledge to be effective and successful.

I also have to express a concern about the fact that this is going to take over other operations: the Sandown operation in Victoria and the Kamloops operation. Perhaps there are operations in other parts of the province that are done on a short-term basis. It's deeply concerning that all of these would be regulated and owned, literally, by one racing association. Their ability to compete with themselves makes them healthy, and I think it's very important for that type of operation to be competitive. But I would also like to see it be a non-profit organization, because I think a non-profit organization is the most effective kind of horse-racing operation. Fine examples are the Woodbine track in Toronto, which is one of the finest operations in North America, and the tracks in Kentucky and in Oklahoma, which have been very successful non-profit organizations. These, by the way, are one-mile tracks, so it is possible for a one-mile track to be successful, but it requires a real involvement of the people in the industry to do that. That's where a non-profit organization run by the industry itself can be the most effective.

I'd like to differ from my colleagues as to support for the Burns Bog site. I am personally opposed to that site being used for racing purposes. I feel that its major purpose is as a uniquely significant environmental feature in the lower mainland and in the world. As such, I think it needs to be protected and preserved for the ecological benefits it provides to the lower mainland. I would offer, though, alternative locations. There are some very large holdings of land in the 

[ Page 9261 ]

southeast Surrey area that would be suitable for a facility that combines a first-class one-mile track, a training facility immediately adjoining it -- which is a real problem for the Exhibition Park facility, because people trucking their horses back and forth between a site in the valley and Exhibition Park is not desirable by the members of the fraternity -- all combined in one, along with an equestrian facility, which is very desired. We in British Columbia could put on world-class and North American class competitions in the equestrian area, which we are unable to provide at present. The only place in Canada where they're able to provide that is in Saskatchewan because of the lack of facilities for equestrian housing of a large number of horses.

[8:00]

These are big-industry items. The horse industry in all of its various phases is an exceptional factor in our economy and provides outstanding pleasure to our community. We really need to provide the support that makes it possible for it to continue and to grow. As such, it will require the kind of sensitive legislation that would benefit the local people and not have government too involved in the process nor have some private interests be particularly involved. I think that there is a place for private interests to operate as a partnership in some aspects of it, but certainly not as the controlling interest in the whole operation.

The economics are very much a factor, and it's a question of where the parimutuel funding and profits go. There isn't a lot of profit on an annual basis in this business, from what I understand. It's at risk, with all of the other gaming processes that are out there now. I'd certainly like to ask the minister, when he gets a chance to speak, to address what other methods in the bill or in the adjoining bill are being brought in to supplement the financial operations of these bills. Could he give us further elaboration in that regard?

H. De Jong: I'm pleased to rise and speak on Bill 72. I suppose there are always surprises in life. I never thought that a socialist government would bring in a horse-racing act. But I suppose we will have surprises as long as we live. But this government initially claimed that it had been elected by the people because they wanted to work for the people. I'm wondering whether this government is really working for and on behalf of the public with this act, because I haven't heard anyone from the horse breeders' association, or anyone connected with it, say that this should be a government takeover. That's what it basically is: a government takeover, under the umbrella of a Crown corporation. The question that we must ask, and that the public will undoubtedly ask once this legislation passes through the House, is whether the public is really prepared to place $50 million into the hands of people who may be less than qualified to deal with a situation such as horse racing.

When in opposition, the government criticized the previous administration for providing loan guarantees to companies and private corporations that were creating new jobs and new industry in British Columbia. This is an existing industry -- 100 years old, or older. The horse-racing industry has made a real contribution to this province, and certainly to the public as well, in terms of entertainment and whatever else goes along with it.

Now this government is proposing to start another Crown corporation and to place another $50 million or more in the balances. When I hear the talk that this industry will now be a non-profit society, give it a couple of years of this kind of action by this government and all of British Columbia will be a non-profit society; we'll all be in the same boat.

An Hon. Member: We are now, under this government. All you have to do is look at their taxing policies: nobody's making a profit.

H. De Jong: This is basically because this government does not believe in people making a profit.

Interjection.

H. De Jong: The Minister of Agriculture says it is not so. I recall very vividly that back in 1972-75 the NDP government owned a sawmill or perhaps even more in British Columbia. They owned Panco Poultry out in Surrey. Then all of a sudden, the government of the day had some worries about the Milk Board setting the price for the farmers' product before it was sold to the plants. The plants were to pay a certain price, which was set by the Milk Board for the farmers. There was a lot of talk that the price which the Milk Board asked -- and I have to make this point in connection with this bill....

The Chair: Thank you very much, hon. member.

H. De Jong: The price that was set by the Milk Board in those days was considered too high, so even though the government never got around to it, they had a real inclination to buy a dairy farm. They would then run it their way, and prove to the farmers of British Columbia that they could produce the milk for less. All of the farmers were looking forward to that opportunity, to see whether they could produce it for less. They knew full well that there was no government agency or Crown corporation or even experimental farm that could produce the milk for that price, because those kinds of farms are simply not run as economically as private enterprises.

Here we have a government that is now going to put the horse-racing industry into a Crown corporation, thinking that they are going to make more money. Undoubtedly this act of this government will create a non-profit society. What's going to happen, with a non-profit society of horse breeders, to people in the horse-racing industry? They will simply leave this province. There is no question about it: the industry will be leaving the province of British Columbia.

The minister can say that the industry has been speaking with his staff about the problems they are presently engaged in. But because of one or two people who may have a heavy hand in the industry, I don't think it is appropriate, nor should it be the reason to put this into a Crown corporation. There are certainly other 

[ Page 9262 ]

methods of doing that, and I think they should be pursued before the government ever takes the action that it is intending to.

There is a short statement here by the Vancouver Board of Trade: "...the NDP has breached business ethics. 'The government has no business in horse racing. To nationalize an industry like this sends out the wrong signals. History shows government operates less efficiently than private business'." The Vancouver Board of Trade may not be too familiar with farming -- as some of us here in this audience are -- but they certainly know business, and that's the question here. The question is not whether the people who are currently involved in the horse industry can get along with one or two people in the industry who have a certain amount of control, but whether it is appropriate to put this into a Crown corporation run by the government.

The minister said tonight that the horse-racing facilities were to be maintained and improved, and that's why this Crown corporation is to be set up. I believe very strongly that those are not the reasons. The reason is basically to nationalize the horse-racing industry itself, because a Crown corporation, which will have total control over horse racing in British Columbia, is nothing less than a monopoly. That is not good for the economy, it is not good for the industry, and I believe that, as a result, the projections of the industry itself....

I wish the minister had attended one of the meetings that was held last year, as well as this February, in Langley. There were 400 or 500 people, all involved in the industry. They are a very enthusiastic group of people. They are people with determination, and they want to make this industry go. But because of this interference, it will never go. In fact, they will leave this province. The Delta proposal had not been decided on last February when they had their meeting, but if it had gone through, they would have expected strong growth in the industry, not a decline, as will happen with this action.

In every major racing jurisdiction in North America, somewhere along the line there had to be some government involvement. We all agree on that. It has happened in other major sporting events and with other sporting groups, but it does not mean to say that the government should have a complete takeover. As has happened in so many other major undertakings within various types of industries, why not leave the people who are familiar with the situation to run the show? This was done under the previous administration with loans to new corporations, new ventures in British Columbia and new industries to create new jobs. Why not with the horse-racing industry? Why is this government so tunnel-visioned about taking this one and only road and putting it into a Crown corporation? It is not the answer now, and it's not going to be the answer in the future.

There are a number of articles written on this issue, and I am certainly not going to go through all of them, but the main thing is that this government with this undertaking is underestimating -- and I say that very mildly -- the economic spinoff that this industry is creating within the lower mainland and elsewhere in British Columbia. It's not just the 7,000 direct jobs. There are many more people and businesses that benefit from this industry, and that is not being taken into account.

[8:15]

This is a good use of agricultural land. There is lot of marginal farmland in the lower mainland, and it's excellent for feeding and keeping horses.

I must ask the question again, as it has already been determined that it will be a non-profit industry which will not stay: why drive this important industry out of British Columbia? How does the minister, starting up a Crown corporation, expect the horse industry to stay in British Columbia and to flourish? That's the question that needs to be answered. A further question is this: how can the minister justify putting $50 million or more of public money on the line against a private undertaking.

It is a question of whether that undertaking might have happened in Delta or elsewhere, in a place suitable for the industry as well as the main population base so people could attend the horse races. That is the question. If the minister really considers those aspects, he will toss this bill right out the window.

V. Anderson: As I listen to the speakers on Bill 74, the Pacific Racing Association Act, and as they responded on a couple of occasions to what the minister said in introducing the bill, it seems to me that what we have is a very clear expression of non-communication. There seem to be a lot of implications that may or may not be coming from this bill, and we therefore have a great deal of confusion about what is really being established by it. That's unfortunate, because when we put a bill into law we should be fairly clear as to what it says, what it means and what its implications are.

This bill is full of surprises if you take certain directions from it. On the one hand, we hear about the government wanting to downsize government, and then they go into the possible creation of a whole new corporation. On the other hand, we want to look at this government's philosophy of trying to involve itself in private business or, as some say, nationalizing a business. If that's the direction, then it's surprising at this particular time. We know, as they have mentioned here, that there have been government-operated businesses in B.C. before, and the CCF in Saskatchewan operated a blanket-manufacturing business in the early days. I still have some of those blankets. The blankets were great, but the business went broke. That was too bad. They also had one that took scraps of rags and made rugs out of them. The rugs are still wearing, but that business also went broke.

So if we are trying to go into private business, then that's against the philosophy of this government. This isn't really something that you nationalize. The history of the philosophy of this government is that you don't nationalize individual businesses; you take and nationalize those which are used by everybody -- electricity, travel, bus lines and travel lines. This is a hobby, if you like, and the business of only a few people; it's not a general product that's necessary for life. It's an extra -- 

[ Page 9263 ]

probably an important extra for many people -- but it's still an extra. It doesn't fit into the philosophy of this government. We hear all of these kinds of things. If they are going into it as a business, it looks like they have taken on what can be a real nightmare. This government already has its hands full with other things which are more important and necessary than this particular business. So why would they undertake the headaches that go with it?

When you look at "Purposes and powers of the association," it's the only clause in the whole bill that gives some hint of what it might be about. The bill does say that it will have financial administration, but there's no suggestion of where the money is coming from or what money it's talking about. There isn't a dollar involved anywhere in this whole undertaking. Who pays the bills? Where does the money come from? There's no explanation of that whole undertaking, so we really don't know what we're talking about. We're talking about an association -- an association of what persons? The purposes and powers of the association are "to ensure that horse-racing facilities are maintained, improved and operated in British Columbia," but it doesn't say maintained by whom, for whom, and for what purpose. It doesn't say who they are operated by and what purpose they're operated for, other than that we assume they're for horse racing. It just says that one sentence. It also says that the association can acquire and dispose of land, but it doesn't say where the funds will come from in acquiring or disposing of land.

One of the difficulties I used to have in marking essays was learning that it was what wasn't in the essay that was important, rather than what was. In this particular act it's what isn't in the act that's important, because other than that one statement, it says that it will have a board of directors, the board of directors will look after their own regulations, they will have a financial report, and they will exercise the powers of the act. The powers of the act are simply to ensure that the facilities are looked after, that they're "maintained, improved and operated in British Columbia."

Another way of interpreting this is that there was no means of getting the various interests involved in horse racing together. The groups didn't want to talk to each other or cooperate with each other. As I read this act, it looks to me as if the government has devised a way to force people to sit down together, and they've said: "Either you make a decision together or none of you have anything, because we, the government, have the final say and the final power. If you want to operate this track, and you want to operate that track, and you want to undertake that program, the only way you're going to be able to do it is if you sit down with us in our committee and make those decisions, and then we'll help you decide who does what." When you think about the process of mediation that this government uses to try to bring people together who have disagreements, it seems to me that without ever using the word, that's exactly what they've done here. They have forced a mediation. They have forced the different groups to come together -- not only the existing groups, but any other groups that might want to compete in getting a contract for a facility or whatever it might be in the province of B.C.

In some ways this may be a very clever undertaking, but when you read the act it's only conjecture. That's the difficulty of supporting an act like this. You don't know what it is. You don't know what it's intended to do. You don't know what it's going to accomplish. You don't know who the players are within the decision-making process. It's from that point of view that I have a concern. It's not simply whether the operation of horse racing is privatized or nationalized; my concern is the bill itself. The bill doesn't help me to understand who's doing what to whom for what purpose, and that's a concern. I know that the minister said in his introduction that one could contract out. It seems to me that according to this bill, one can contract out the whole racing business in one or two or a multiple set of contracts, depending on who's the best bidder. That may not be a bad idea. At least it gives a focal point for all of this to take place.

However, I'm not sure why the government would want to get into the horse-racing contracting business any more than it would want to get into the contracting business, as has been mentioned, for other sports. It looks to me like they're putting this alongside operating the contracting business for road maintenance in the province. This is just another business venture, which they seem to feel must have government regulation. We will be discussing the Horse Racing Act, which regulates horse racing within the province. If some are right and they are taking over the operation and maintenance of a business within the province, then we have that being regulated and operated by two segments of the same institution. It seems to me that regulation should be separate from operation, not just two branches of the same institution.

My concern about the Pacific Racing Association Act is that in reading it, you don't know what it is, what it's going to do, who's going to be involved in it or what the results are. You don't know whether or not it's going to cost money, and if so, how much it will cost. Hon. Speaker, I can't support it from the basis of reading it. I don't know what it is. All the other speakers tonight have tried to conjecture what it is, what it means and what its possible implications are. All you can do from reading the act is conjecture. At the very least it's an exercise, as far as I can see, in poor communication. We don't understand what the minister has in mind. I have enough respect for the minister normally to say that when he undertakes something, he has done the study well and knows what it's about. In this case, though, I'm afraid that for some reason he hasn't been able to communicate that to us by simply reading the document. I know the community at large is confused, angry and upset because they don't know what's happening. Therefore they don't know how to respond to it. They don't know whether to say it's good, bad or indifferent. That lack of communication is the greatest error in this bill and leads me not to support it.

L. Stephens: It's a pleasure for me to rise this evening and speak to second reading of Bill 74. As the explanatory note says: "This Bill establishes a cor-

[ Page 9264 ]

poration whose purpose is to ensure the maintenance and operation of horse-racing facilities in British Columbia." The maintenance and operation of horse-racing facilities in British Columbia is what concerns me the most about this bill.

Despite the removal of powers from cabinet to the commission under Bill 72, the Horse Racing Act, it, along with this bill, will put the operation of the racing business in the hands of government, despite the impression of an arm's-length arrangement. Previously, the racing aspect of the business was controlled by government, but only with the setting of race dates. An argument has been advanced that Bill 74 is an attempt by government to confiscate a private business and, as a result, that this bill threatens every business that holds a licence to operate within a municipality in this province.

The horse-racing industry in British Columbia directly and indirectly employs about 7,000 people and provides around $6 million annually in direct revenues to the province. Many small businesses, particularly in the Fraser Valley, the interior and the north, are dependent on the agricultural, cattle and horse-racing industries.

[8:30]

In my constituency of Langley we have a large number of breeders, owners and trainers who make the trek to Exhibition Park on a regular basis. The biggest concern of my constituents is the facility at Exhibition Park. I am sure the minister is well aware of those concerns. I know that a number of my constituents have met with him to press home their point: that regardless of the amount of money that is spent on that facility, most of the breeders and owners feel that it just isn't possible -- unless a huge amount of money is spent -- to bring those facilities up to any kind of acceptable level for today's horse-racing participant and enthusiast. I am an enthusiast of horse racing; I have been for a number of years. I enjoy the track. I enjoy a pleasant day in pleasant surroundings, and Exhibition Park can't be categorized as pleasant surroundings. The decision to advance a $30 million or $50 million loan guarantee to upgrade the facilities at Exhibition Park.... I'm not sure that that amount of money would be sufficient. As the minister himself pointed out, many owners will not run their horses on the track at Exhibition Park, for the same reasons that a lot of the local people will not run some of their better horses on that track. They haul them down to California.

The biggest difficulty that most people have with Exhibition Park is the track itself. The argument that we need a one-mile track, in order to advance this industry to the level that it could and should be in British Columbia, I think is just.... I don't think the need for that one-mile track is questioned by people who would like to see the horse-racing industry here advance to the standard that it should. We need a turf track. The stabling for 1,700 horses is something else that's badly needed, and I think anyone who has been to the backstretch over at Exhibition Park would agree that it's really tragic. I fail to see how the money can be justified that would be needed to bring all of that facility -- the track, the buildings and the backstretch -- to a standard where it would generate what the minister is looking for.

I am interested to know if the ministry has done any kind of engineering studies to determine what would be needed to make this track acceptable, and at what cost. The history says that the track itself is built on a dump site, that there are all kinds of things underneath there, and that sink holes often appear in the track. A number of horses have broken their legs, and that's not a funny matter. These horses, as I'm sure everyone knows, are expensive and well cared for. I think all of us want to see a safe facility.

There's not enough room at Exhibition Park to have a facility for a turf track, nor a training track. I know that a lot of constituents out in Langley, Fort Langley and Aldergrove.... There has been a proposal that a training track be located out our way somewhere around 232nd Street. The horse breeders, owners and trainers in our constituencies talk about hauling the horses back and forth. That's what they have to do now, over Port Mann Bridge during rush hour, and even in the morning, because the horses go to the track very early in the morning for training. Cluttering up the highways and hauling the horses is not desirable from anyone's point of view. There are a number of issues that I hope that the minister has really studied in his decision to keep the facilities at Exhibition Park. If there are some feasibility or engineering studies that would support the cost involved to bring these facilities up to acceptable levels, I for one would be very interested to see them.

It's my hope that the proposed organization would allow the horse-racing industry to grow and prosper, but I'm not convinced that a Bill 74 model of a Crown corporation would. I heard the minister say or at least indicate that he thought that it would be along the lines of a non-profit society. I see the minister nodding that yes, that is true. I have to say that a Crown corporation doesn't disturb or bother me. There are things that Crown corporations can do, particularly those that are profit-oriented. If that were the case here, I wouldn't have too much difficulty with a profit-oriented Crown corporation looking after the maintenance and operation of horse-racing facilities in British Columbia. I'm afraid I do have difficulty with a non-profit organization, for some of the reasons that other members have mentioned: upkeep, further facilities, up years, down years and all these things. There are some things that we're going to look forward to in committee stage, and I look forward to the minister's response to a number of these questions then.

D. Jarvis: I just want to say a couple of brief words and perhaps read something for the record with regard to Bill 74, in order to avoid any thought that track operators might be considered bad. I'd like to read a letter to Dr. Peter Larkin, the dean of the faculty of graduate studies at the University of British Columbia. It says:

"Dear Dr. Larkin:

I would like to add a letter of support for the possible nomination of Mr. Jack Diamond for an honorary degree at the University of British Columbia.

[ Page 9265 ]

"Mr. Diamond has played a vital role in the improvement of the city of Vancouver. For example, he helped finance the first community centre in Vancouver -- the Marpole Community Centre. As well, he has been actively involved in a number of charitable organizations that bring assistance to our less fortunate citizens. Lastly, Jack Diamond has almost single-handedly made sure that the thoroughbred horse-breeding racing industry could survive and prosper.

"If you would like any further information, please feel free to contact me, as I am very supportive of this nomination."

It's signed by Michael Harcourt.

D. Mitchell: It's always a pleasure in debate to follow the member for North Vancouver-Seymour, who has a special way of making a very important point in this debate.

I'm going to keep my comments on Bill 74 relatively brief. I just marvel at Bill 74 and what must be ironies for the hon. Attorney General in bringing forth this legislation. I know that the hon. Attorney General was a member of this House some years ago when the first NDP government came to power. I wonder, if he casts his mind back to those years, if he could ever have believed that at some point in the distant future he might become the czar of horse racing in British Columbia, king of the sport of kings in British Columbia, I am sure that the hon. Attorney General would never have imagined in his wildest fantasies that one day he would have to wear these titles.

Interjection.

D. Mitchell: Not even two years ago. Perhaps not even a few months back would he have imagined that it would come to this.

If one thinks back to that previous NDP administration, that government did become involved in a number of private enterprises in the province, including the forest industry, the poultry business and a number of businesses in the service industry. Some of them were very ill-fated investments. They usually took the form of....

Interjections.

D. Mitchell: Some of them may have been successful, but some of them were certainly ill-fated. One wonders whether the corporate forum is the way that government must go when it's making these incursions into the private sector. I don't think anyone could have predicted -- whether it was the Barrett administration of the 1970s or the Harcourt administration of the 1990s -- that the government would be entering into gambling in terms of....

Interjection.

D. Mitchell: Not the B.C. Lottery Corporation, which the Minister of Transportation and Highways knows well, because its headquarters is in his community -- and that's one form of legalized gambling. But now we are going into the horse-racing business in a big way, and the Pacific Racing Association Act does that. Why is it referred to as an association rather than the Pacific Racing Crown Corporation? Maybe the Attorney General will explain that when we get to committee stage, or perhaps when he closes debate later this evening. But as the Attorney General acknowledged, it is an association that is a Crown corporation of British Columbia.

In debate this evening, some members indicated they have no problem with that. I do have difficulty with the creation of another Crown corporation. We have seen many of them created by this government. Crown corporations are running amok in our province. There is little accountability for these Crown corporations. Who do they respond to? They respond to the Crown corporations secretariat, which is run by Bob Williams. I suppose, although it's not clear -- but very little is clear in terms of reporting to Bob Williams -- that this Crown corporation would come under the aegis of the czar of Crown corporations, Mr. Bob Williams. After all, as the hon. Attorney General noted, even though it's known as an association, it's a Crown corporation as far as this government is concerned.

So we have another Crown corporation created with this bill. What is this Crown corporation doing? It's running an industry, not just one company. As the Attorney General noted in his second reading debate remarks, it's going to be taking over the horse-racing industry in British Columbia. The Attorney General also noted that this is an important industry, employing 7,000-plus British Columbians. It's an important industry, which he indicated was perhaps in a state of decline in recent years. Somehow the government taking over this industry is going to make things better. I am not sure that the Attorney General has made his case on that. He will have a further opportunity to do that when we go through the bill in detail during committee stage. But is the creation of this new Crown corporation the best way to restore the health of the horse-racing industry in British Columbia? I don't know.

There are two principles operating here. The government can regulate an industry. We all know that, and the government regulates most industries. People operating an industry sometimes regret that, but the truth and reality is that government regulates industry in our province. To regulate is one thing, and I think most British Columbians would feel that it is fair for government to be regulating an industry such as horse racing. There needs to be some assurance, through regulation, that the industry operates on a fair and level playing field. But to own the industry; to go in and take over the industry.... The term "expropriation" has been used, and I note that members of government are taken aback at the use of that term. I don't know if there is a more polite term that can be used for expropriation, but the truth is that the government has now taken over the horse-racing industry.

It's not seeking to regulate that industry any further. Of course, the other bill that we are going to be dealing with this evening -- Bill 72, the Horse Racing Act -- talks about regulation and gives expanded powers to 

[ Page 9266 ]

the commission that regulates the horse-racing industry. I think that's fair. When we deal with Bill 72 we'll be able to talk about how the government has an appropriate role to play in regulation of this important industry in British Columbia.

But to go beyond regulation, with Bill 74, the Pacific Racing Association Act, which we're dealing with now.... It's unclear why this move is necessary. If we were dealing only with Bill 72 and expanding the powers of the commission that regulates this industry, I think that would make sense. Reasonable, fair-minded members of this House or members of the general public would be able to understand that; we'd be able to comprehend what the government was trying to do. But to go that extra step and actually....

Interjection.

D. Mitchell: Well, some members don't. The member for Delta North in particular would not even comprehend why we would want to regulate this industry. Given that, I'm sure he could not support Bill 74. I look forward to his contribution to this debate, because he can't comprehend even the more reasonable step of regulating the horse-racing industry. Bill 74 goes much further than that.

[8:45]

The industry is very important -- there's no question about that. When I was conducting some research into these bills, I actually went into the Legislative Library to look at major articles in the major urban newspapers in British Columbia -- the Vancouver Sun, the Vancouver Province and the Times-Colonist -- over the last year or two, to see how many major articles were on the horse-racing industry. Members might be interested to know that in the newspapers over the last two years there were over 74 major articles on the horse-racing industry. So it has been much in the news.

But not one of the articles published in the major newspapers, prior to the tabling of this legislation in the House, anticipated or could have predicted that the government would actually be moving in and taking over the industry. No one speculated on that. It is a complete surprise that the government would actually be doing this.

The hon. Attorney General has not explained why he is going beyond regulation and into actually operating and maintaining the industry itself. So I'm going to give the minister a chance to do that; I'm going to take my seat. I know that before the minister closes debate other members will probably want to participate.

But before I take my seat, as we are here on this unlikely summer evening in late July 1993, I'd just like to offer my apologies to all the legislative staff, who continue to be with us every evening as we debate legislation the government has brought in far too late in the session: the staff in the Legislative Library, the commissionaires, the Sergeant-at-Arms staff, all the staff in the caucuses, the staff in the parliamentary dining room -- all of the staff in these buildings. They have really had it with this session because it's dragged on for too long. The government's legislative program is in disarray, and we're here this evening debating Bill 74, the Pacific Racing Association Act. I truly apologize for the fact that the legislative staff who produce Hansard have to be here recording these words this evening, and the electronic Hansard staff who are broadcasting these words and this debate throughout the province to whoever is out there. If anyone's out there, I'm sorry to you and everyone that we have to be here this evening. I apologize.

C. Serwa: What a high note to finish on.

Perhaps as I talk about Bill 74, the Pacific Racing Association Act, I can just say a few words with respect to the reality that is occurring. It is government mismanagement -- or else the plan of action -- where a lot of the controversial legislation such as this, very strongly ideological in nature, is brought up at this time in the legislative session. It's worth noting that there have been more night sittings going past 6 p.m., in this session than at any time in the history of this Legislature, right from its inception. Even in the wildest of sessions in '83-84, when the hon. Attorney General was a member of the opposition, there were only 16 days when the House sat past 6 p.m. Last year we were up to 26 days; currently we're at 29 days. In the administration prior to this one, the maximum was 17 days in '89, but in every other year it was less than ten. You can see that the plan is that this type of ideological legislation is brought forward late in the year. But I don't want to get political. Why should one get political here?

There are quite a number of elements in this bill, and it's very difficult. I know that the explanatory notes say the bill "establishes a corporation whose purpose is to ensure the maintenance and operation of horse-racing facilities in British Columbia." The first thing I would like to talk about, albeit fairly briefly, is expropriation. Whatever name you want to call it.... I know that the Attorney General stated it's an amicable and fair business deal, but the reality is that a substantial club is being held over the head of the B.C. Jockey Club. Nobody can deny that. The reality is that the racing days will be dispensed by this Crown corporation and....

Interjection.

C. Serwa: The Attorney General says no. The indication I have is that that is the case, and without the racing days, the B.C. Jockey Club has nothing of significant value.

Interjection.

C. Serwa: The hon. Attorney General will clarify that for me, but that was my understanding at the outset.

I am always very concerned when someone's property rights are taken away. Whatever nice words we can convey to address it, I become very concerned when we structure the scenario in such a way that it's not what we would normally say is an acceptable business deal. If something is there for the public good or the public interest, or the Crown wishes to get involved in 

[ Page 9267 ]

something, I think that a fair purchase at reasonable market value is the only way to fly. Hopefully, that is the scenario that the Attorney General was discussing.

The horse-racing industry itself is another significant element. Certainly the agricultural base and the opportunities in the agricultural sector are quite prominent, and a substantial capital investment is made. I was in New Zealand quite some time ago, in 1958, and I hadn't been aware of the economic impact of the horse-racing industry. But even at that time in New Zealand, breeders throughout the North Island and the South Island were breeding quality race horses and exporting them to Europe, Great Britain, Australia and North America. It was a very significant agriculture-based initiative. You had capital investment, training and labour employed on the farms. There is a very high demand for labour in this particular industry, and jobs and job creation are near and dear to the hearts of all of us in this Legislature. I'm mindful of the fact, too, that it keeps our agricultural sector green and viable, both in the economic and the physical sense. You can preserve the integrity of the agricultural land reserve through economic viability. That has to be desired too.

I think the horse-racing industry in the province has a strong and positive future. Obviously the influence of the Asia-Pacific marketplace and our population growth, from other provinces in Canada and jurisdictions around the world, create a suitable environment for the expanding industry to survive in. We can clearly establish and agree that the horse-racing industry itself is strong and positive. Hopefully, it has a good future in British Columbia, which I think we all ardently support.

Another element in this bill is government intervention in what I believe should really be a private sector field. Philosophically, perhaps, we differ. I feel that less government is probably better government, and I'll stand by that.

Crown corporations, to a degree, are acceptable when they provide a service or a facility that is necessary for people. You can look at our fine ferry fleet as an example of a Crown corporation which, I think, is working quite effectively. But when you get into a field in which the government has a regulatory involvement, after that the government can stand back. Because of the opportunity for revenue from the system, they can get the revenue without exposing the taxpayers of the province of British Columbia, in this particular case, to any added capital investment or liability with respect to the racing industry.

Government is not a business. Even under our administration, I'm appalled at how ineffective government was at actually running businesses. There's no bottom-line discipline when government runs a business, even when Crown corporations are involved. They have the same luxury as government does. If B.C. Hydro costs go up, we simply increase the rates. If ICBC is being pressed, rather than look for efficiencies in operation, we simply increase the rates. Every opportunity is utilized. Fundamentally, it's direct taxation on the already overburdened taxpayers in the province.

So when government gets involved when they don't have to get involved, then I'm really concerned. I cannot see them running an effective or efficient operation, because of the lack of bottom-line discipline. I don't think it's a good deal for the taxpayers of the province. Ultimately, any monopoly is a situation that I have real problems with. Whether, as the Attorney General said, it's the monopoly of the B.C. Jockey Club or this new Pacific Racing Association, it's still a monopoly, and monopolies without competition are not going to do very well.

We're looking first at a monopoly on establishing and controlling the Exhibition Park racing. There's no question in my mind that the monopoly and the bureaucracy of that monopoly will want to grow and will want to control all racing throughout the province of British Columbia -- not indirectly by allocating racing days, but directly by being the owners and direct participants in all the small communities that have tracks and racing days. So I have a great deal of concern about that aspect.

There are other concerns too. I think the hon. Attorney General has to look at the decision that is being made with the commitment to Exhibition Park at the present time. Obviously the Premier, who is in attendance at the moment, is more conversant with the city of Vancouver and its potential for growth than I am. But I have every reason to believe -- and the projections indicate -- that the population of the Greater Vancouver Regional District is going to continue to grow at an accelerated rate. In the heart of East Vancouver and Hastings Street we have what is potentially a wondrous greenbelt, a people-oriented park. We are not going to use it for that purpose. The purpose that's being projected is to invest approximately $30 million in a race-track facility, which is not appropriate.

We have a high density of population. One of the greatest stress relievers for any densely populated community -- and you see it in a place like London, England -- is a little bit of green within walking distance. The type of increased population density that we're going to get will require that green space in the heart of Vancouver, and that is incredibly important. You cannot replace it with anything else. You cannot go out and purchase that type of a land area in Vancouver today, and if you lose something, you lose something incredibly precious: a tremendous opportunity for the tomorrows.

So we should look at the Delta proposal in view of this expanding and growing population, recognizing that here we have a large expanse of land where a one-mile track can be built. We have lots of room for training facilities and for excellent stable facilities where the investment can be made on a long-term basis. The corporation that makes that investment, if it's private, has a right to a return on capital. I have no difficulty with that, and it does not cause me the slightest tinge of envy. But the reality is that a well-constructed, state-of-the-art -- as the saying goes here -- world-class facility will yield huge dividends to the government, the operators and to the horse-racing industry in the province.

[ Page 9268 ]

It really appears to me that the concept is a win-win-win situation; and the greatest winner, if that was sincerely looked at, would be the people who live in the densely populated area of Vancouver. Rather than single residences on lots, as we see in East Vancouver at the present time, we are going to see an ever-increasing number of higher-density buildings. We are going to see more apartment buildings and more condominiums, and less and less room for people to move. If we want to reduce crime and stress and the results of that stress -- the anguish and pain to individuals -- on our health system, we have got to give them access to these green areas. Thank heavens for the wisdom and the vision of some of the people who established the lands around the University of British Columbia and Stanley Park, for example, who ensured the preservation of accessible green areas for people.

[9:00]

I think you, hon. Speaker, are well aware of the values that I am talking about. There are a number of concerns that I see with this particular bill. The not-for-profit concept sounds good, but there is a reality. If it is a private owner, a private corporation or a private entrepreneur, they pay taxes on everything. They pay taxes to the municipality; they pay taxes to the provincial government; and they pay taxes and insurance on their vehicles. They do all of these things. A government operation is excluded, and rather than being able to keep a lean and mean organization, it tends to go on wages and building up a superstructure of personnel that is not needed in the operation. So I do not think that the people are being well served with the concept and the direction that the current government is going on.

When you look at some of the traffic congestion problems in Vancouver itself, and when you face the reality that the whole lower mainland is going to continue to grow and grow almost beyond our wildest imagination, then it seems ludicrous to place a facility in a property that is difficult to access when you have that opportunity of moving to the outskirts where there is adequate room and where the road systems can handle the volume and the number of vehicles and the traffic that a facility like this would encourage.

So from every aspect -- and I'm not getting into the technical details and the benefits or the weaknesses of the Exhibition Park track system -- when you look at the big picture, I question the wisdom and the validity of the decision. When I look at this decision, it almost seems that there's something factored into it that I'm not aware of. I don't know whether it's the employees who work at Exhibition Park who have an opportunity to work in close proximity to the homes in which they live. I don't really know whether it happens to be in the constituency of the Minister of Finance or not; I know that the Minister of Finance is somewhere from that area. But whatever inspired the decision, it's really worth taking what W.A.C. Bennett referred to as a second look. In order to achieve short-term gains.... When you look at all of the principles that I've talked about and at the elements of the whole decision, the government would be far wiser to look at the long term. It's not here for five or ten years; it's a long-term investment for capital repayment. You may be stuck with this scenario for 30 or 40 years, and once you're stuck with it, the other opportunities are lost.

Fundamentally, the biggest loss is to the people of Vancouver. While it's part of the philosophy and principles of the grand design here, I really question....

Interjection.

C. Serwa: The Attorney General questions whether it's part of the philosophy and principles. It's an opportunity for me to add to what I hope was sincerely considered in the decision-making process, but if this is the end result, then I wonder if they were weighed objectively or subjectively. It seems to me that it's not at all appropriate.

I think the speakers before me covered a great deal of this issue, and I've tried to touch on a little bit more of it. I remember the throne speech at the start of this session and the emphasis on the word "courage." Sometimes it takes courage to make the right decision. I sincerely hope that the vision and the awareness of the implications of this decision are fully appreciated and assessed. I sincerely hope that there is the courage to take a second look and make what I believe is the appropriate decision for the long-term future of the horse-racing industry in British Columbia and, I think, of a very necessary and vital green park area right in the heart of Vancouver.

R. Neufeld: I rise to speak to Bill 74, the Pacific Racing Association Act. Before speaking to the philosophy and principles of this bill I should qualify a little bit. I'm certainly not a horse-racing nut. I cannot say, as did some members who spoke to the bill, that I have regularly attended the track or taken part in that part of the industry. I have not. Probably my only horse race was back on the farm when I was learning to ride a saddle horse. I guess the next real horse race was the election, and that was quite a run. So I don't speak with knowledge of the horse-racing industry or betting, or any of those parts of it. But I would like to speak to the other reasons that I think should be paramount in the government's mind when it starts to deal with horse-racing in British Columbia, and to what is required. I've read a fair amount about horse racing since this bill was introduced in the House, and I'm sure I have information from both sides of the industry. I will try to keep my remarks as brief and to the point as I possibly can.

It's obvious that B.C. should have a vibrant horse-racing industry. It's often a hot topic in the press, and it has been for a number of years. It obviously draws a lot of people to the lower mainland. It provides jobs, and one thing that I've always talked about is the provision and maintenance of jobs in any industry in B.C.

What is obviously needed to facilitate first-class horse racing in British Columbia is a first-class track. That's what is needed, from all the information that I've been given. One thing Vancouver and the lower mainland lacks is a first-class track. That is really what 

[ Page 9269 ]

we're talking about here. One part of it is to provide that first-class track so that we can attract the type of horse racing we want to the lower mainland. Over the years there have been public discussions, studies and proposals of all kinds. I have read about them in the newspapers, from different agencies, from government, from private entrepreneurs wanting to get into the racing industry and from jockeys -- everyone interested in the horse-racing industry. We have had a lot of the input that's needed so the decisions can be made. What seems to come out is a preference for the track proposed by the Western Delta project. That is obviously not what the Attorney General believes is foremost in people's minds in British Columbia; but from what I can get out of the correspondence, and from what I've read and heard, the jockeys and people who race horses would like that type of facility over and above what Exhibition Park can offer.

I will differ a little bit from some others who have talked about Crown corporations and government being involved in the horse-racing industry, to the extent that Crown corporations are set up to run horse racing. I don't think, personally, that that is any place for government to be. I can understand that government has to set the rules and parameters, how it's going to be done -- all those types of things. I've no problem with that whatsoever. They do the same in any other gaming that goes on in British Columbia, and those parameters should be set by government. But to start a Crown corporation to operate the horse-racing industry is the wrong way to go. We've had horse racing in British Columbia for many years. Why all of a sudden do we need a Crown corporation to run the industry? Obviously it's because of the ideology of the government of the day.

Members before me have spoken about what happened between 1972 and 1975 when the government of that day tried to nationalize many industries in British Columbia: it does not work. There has to be a good, healthy, private industry. That's the best friend government can have. A lot of members opposite don't seem to understand that, but that's what's needed in British Columbia. If we're going to continue to enjoy what we enjoy today, that's what we need. We do not need more government intervention in our lives -- that's what people are telling us.

I think someone else read into Hansard a quote from the director of the Vancouver Board of Trade. It tells the whole story. Whether or not you want to believe what I say as a Social Credit member, this person is a representative of the board of trade, and he says that government has no business in horse racing. He goes on to say: "To nationalize an industry like this sends out the wrong signals. History shows government operates less efficiently than private business." No truer words were ever spoken. That's exactly what I'm saying, and it's backed up by that person's quote in a newspaper.

It's also hard for me to believe and understand that we would think about setting up a Crown corporation to run the horse-racing industry when we have a private firm that's willing to invest $100 million in the horse-racing industry in British Columbia. Why would the government want to jeopardize $30 million to $50 million worth of taxpayers' money to run the horse-racing industry? That just doesn't make common sense to me.

We continually stand up in the House, but not to ask for more money all the time. Every time someone asks the government for something in their constituency -- some help because health care or education is not keeping up, anything -- we consistently hear from the government, and especially from the Minister of Finance, that dollars are tough to find. I understand that, and I agree: they are hard to find. It's not easy to run a government. I certainly don't want to be on record as saying that it is easy. It's a tough job. But when we're talking about horse racing and the investment of taxpayers' dollars, when a private developer is willing to invest $100 million to create a world-class horse-racing park, why in the world would we even think about it, as government? Why would we want to take a chance on the taxpayers' money? That part is just beyond me. Regulating the industry is fine, but investing in the industry when there's already an investor there is absolutely ridiculous.

The only way that British Columbia can be taken seriously by the rest of the horse-racing world is to have the private sector construct a modern one-mile racetrack with all the facilities needed for that. With the long history of thoroughbred racing in British Columbia, we have the infrastructure, the people and the breeders. If we have a world-class racetrack, we encourage people to bring their horses from other parts of North America to race. If we can continue to attract that calibre of horse racing, that is only good for Vancouver, and for British Columbia in the end. It's business. They come to British Columbia to race their horses, or they are here breeding their stock. It's not looked after by government money; it's looked after by the private sector. We need a healthy private sector. Horse racing can only grow in this area. When I look through the paper today and see what's happening in British Columbia with the growth, especially in the lower mainland.... My goodness, the populations after the turn of the century are going to be astronomical. So horse racing can be a very viable operation in British Columbia, and it should be in the hands of the private sector.

[9:15]

To have that horse-racing industry at Exhibition Park, as the member from Okanagan said earlier -- right in downtown Vancouver, with training facilities some 25 miles away.... My common sense tells me that that's not a good solution. I have worked around animals; I have moved animals. I know what happens to them, although this type of animal is used to being moved. But to train them 25 miles away.... We're talking about population explosions in the lower mainland. Trying to get from the Fraser Valley into downtown Vancouver to the racetrack with those animals.... It's dangerous on the highway. We're talking about trying to keep traffic down; we're talking about a study on tolls and taxes. "Tolls, Taxes Urged to Fight Road Gridlock" is a headline in today's Vancouver Sun. They are talking about $10 billion worth of improvements over 30 years in road infrastructure for 

[ Page 9270 ]

transporting people to downtown Vancouver. And what is this government doing? They're entertaining the thought that at Exhibition Park in downtown Vancouver we're going to create a horse-racing track, we're going to have a training track 25 miles away, and we're going to continually move those animals back and forth. It just doesn't make sense.

I think the hon. member from Okanagan also spoke about the green space in Vancouver. When we see those kinds of growth patterns in the lower mainland we can understand how downtown Vancouver is going to need more green space. I don't think I have to tell you, hon. Speaker, how much green space is needed in Vancouver. Stanley Park and other parks are great for the city of Vancouver. Thank goodness somebody was thinking ahead. Why can't we do the same thing with Exhibition Park? In about 30 years, or maybe even less, people will be quite happy.

I can tell you of the little community of Fort Nelson, where I lived for quite a number of years. It's a community of about 5,000 people, and dead centre, in the middle of town, there is a 50-acre set-aside that was actually put aside during the war for airport facilities. It has never been developed, other than maybe one acre. It's a green space. Thirty years from now that community could be 20,000 people -- I don't know; it could be more. But there's a green space in the downtown core that people appreciate, take their families to and spend some time at.

I have talked about some of the reasons why private industry should build a new race track, where it should be built and why I have come to the conclusion that Exhibition Park is not the place to build a racetrack. I'll just list a few of them. I am told that the proposed six-and-a-half-furlong, pear-shaped track will be a serious danger to the animals. High-quality horses will never come to race. Racing fans will be forever denied excellent racing form and the joy of seeing legitimately graded, high-quality racehorses. There will be no proper or safe, essential, six-furlong training track on the present grounds; there is at every other modern-day facility in North America.

Interjection.

[The Speaker in the chair.]

R. Neufeld: The member for Skeena is asking me who wrote it. If that member is so much in favour of Bill 74, I wish he would stand up and speak to the bill -- have the courage. And the member for Yale-Lillooet over there -- the two of them, the Bobbsey twins, could stand up. The Premier's in the House, and I'm speaking to the Premier about the philosophies and the principles of Bill 74. It's good to see him here tonight, and I'm sure that he would encourage those members to stand up and speak to Bill 74.

One of the other reasons is that there is no room to build a proper, safe and healthy backstretch or stable area for the animals and the people who work with them at Exhibition Park. There is no real distance between the barns, no grass, no grazing, no place to walk or canter the horses, and no trees. At least 40 or 50 acres is needed for this. There is no room for an essential grass or turf course. There is inadequate parking. I have been down to the grounds on different occasions and tried to find parking around there. It's almost impossible to park when something is happening there. Like I say, I've never been to a horse-racing event, but I've been to some other events down in that area of Vancouver, and it's going to get expensive to park. Land down there is at a premium; it's really expensive. How are we going to move those people around? I guess the last issue is movement of the animals from so far away.

British Columbia needs a first-class track built with private money to nurture the horse-racing industry in British Columbia. Government intervention with a Crown corporation is certainly not the answer. I would rather see the private industry do it. With those few words, I look forward to committee stage.

G. Farrell-Collins: I have listened to the debate all night tonight, and indeed, have been looking into this issue for a number of years. It's something that comes up often in my constituency. A great number of those people in this province who are engaged and active in the horse-racing industry operate out of the Langley area and Langley township. I know my colleagues from Langley and from Cloverdale have spoken on this bill. It is a huge concern to the people in those areas. The Leader of the Opposition, from Delta, also spoke.

There's a real sense of disappointment -- although that would be an understatement. Frustration and anger better typify the comments that we hear from the people who are in the industry these days. For the last five or six years they have hoped that somebody was going to come along with a vision for the horse-racing industry in British Columbia, that somebody was going to come along and actually provide the facilities, or allow the facilities to be provided, to bring the standard in British Columbia up to world class. We have world-class horses in this province, and world-class trainers, veterinarians and people in all areas of the horse-racing industry. We have the people and the potential. We need someone with some vision to come along and let that potential go -- let it happen, allow it to happen -- not force all sorts of government money into it to try and make it happen. That's not what they are asking for, because they know that their industry is vibrant enough. They know that the quality of the people and the horses they have is sufficient to create an industry and allow it to expand to world-class standards. They know they can do it on their own. They are not asking for government handouts. They are asking government to get off their backs. They are asking for government to let them do it.

They have gone out and found people who want to invest. They have gone internationally to find people who want to put up the money to invest, to participate in the development of the horse-racing industry in British Columbia. They have done that work. They found people internationally who had the money, who wanted to come in and participate. They found people locally who had the money and the know-how, and who 

[ Page 9271 ]

wanted to come in to set up the program, set up a new facility and give British Columbia a world-class facility, a one-mile racetrack with all the training facilities that need to go along with that. They went out and they found those people in the private sector, without government intervention -- and the government squashed it.

The Minister of Attorney General often says that there are problems with the proposals that were out there. Well, I'm sure there were problems with the various proposals. I can tell you that if the minister thinks he can work through this proposal he's got -- Bill 74 -- and that it is going to benefit racing in this province, the problems that are inherent in Bill 74 are humongous compared to the minuscule problems that were out there with the other proposals. If the industry and the minister himself had put as much effort into trying to renegotiate some of those other proposals, to upgrade them and make the changes that need to be made, as he is going to have to put into this bill to try to implement it and get it to work, we would be in a lot better shape.

One can look at the horse-racing industry in the social structure and ask what role it plays. It doesn't provide food; it doesn't do anything from a social development aspect that one would think is necessary for society. But it does a lot of things: it creates highly paid and highly skilled jobs, and it provides recreation for people. And if the government decides it is going to be involved in gambling at all, or that gambling is going to exist in British Columbia, then why not do it in the horse-racing industry, where the paybacks are probably the best?

People get more out of it than they do when they go out and buy a lottery ticket. I can't remember the last time I won anything in the lottery. I gave up years ago, because I kept putting money in and it never went anywhere. But I can go out and spend $20 at the track, and some days I come out ahead and some days I come back with nothing, but I have a good time when I go. I can spend an afternoon at the track and enjoy myself as much as I can during two hours at a movie. I'm not a big bettor; I place the $2 bets. But I can go to the track and have a heck of a good time. It's entertainment. It's something we can enjoy, and at the same time, it builds up an industry in the province. I will use the analogy of a movie. To go out to a movie these days you pay $16 for two people. If you happen to have kids and have to pay for a babysitter, that's probably another $10 or $15, plus you've got to pay for parking if you're downtown, where many of the movie theatres are in Vancouver. That adds up pretty quick. Heaven forbid if you buy one of those really expensive bags of popcorn. Then the cost goes up to almost $20. Very quickly, two people going to a movie theatre for an hour-and-a-half film can spend $30 or more. Yet you can spend an afternoon at the track, have a heck of a good time with a number of people and really enjoy yourself, and you're putting money back into the local area, the breeders and the industry.

The government talks a lot about promoting the film industry in B.C. I know the Premier and the Minister Responsible for Culture have a great interest in that and say that it's one of the new areas we should go into. It's an area where we have expertise in this province. It's something that we can put money into and allow to expand on its own. We should get out of its way and allow it to expand. That's good for British Columbia. What's wrong with allowing the horse industry to expand? What's wrong with having the government get off the backs of the horse industry? Let the horse industry get out there and promote itself and find the money on its own. Let it bring in the investors and set the industry up, instead of the government coming up with some sort of an ideal vision and creative way to deal with the future of the horse industry in British Columbia.

[9:30]

Instead, the government has had what I suppose you could call an instinctive reaction -- it has decided to create a Crown corporation to manage it. At a time when everyone wants the government to get off their backs, the government is going in and setting up a Crown corporation to take over all of the assets of the people who have been operating thoroughbred racing in the province. There has been some debate about compensation. We know the Attorney General's feelings about expropriation without compensation. Bill 32, which he brought in last session, never really saw the light of day. It just sort of bounced off the order paper right into the garbage basket. At least we know what....

Interjections.

G. Farrell-Collins: Yes, 32 is an unlucky number. It didn't pass this time either.

We know what the Attorney General's view is on expropriation without compensation. We've already seen that come forward in the form of legislation, and now we see it here again. We understand that negotiations are taking place to sort that one out and ensure that there will be some compensation for the expropriation that the government is undertaking.

Now would be the time for the government to choose to back off on this one, instead of trying to go in there and fiddle around with the horse-racing industry with some sort of a patchwork system to deal with the problems and the pressures that the Attorney General has. You would think that instead of doing this, he would try and back out of it and allow the horse-racing industry to do it on their own.

I have some clippings here that I found in doing some research on this. Some of the comments are very interesting. There have been a lot of undercurrents and issues brought up in the debate over what's going to happen in the horse-racing industry in B.C. It has all been linked to what the future of Hastings Park will be. We know that there are differing opinions within the New Democratic Party itself as to what's going to happen with Hastings Park. Municipal people tend to say one thing and the provincial people tend to say something else. It seems to me there has been the odd membership card cut up over the kerfuffle. I'm just glad to see all parties have their interesting times.

[ Page 9272 ]

It seems to me there are a lot of issues tied up with this; it's a big, thick stew of issues. One of them has been the future of the PNE and what's going to happen to the jobs there. There's a quote in British Columbia Report. I know that the members opposite don't put much faith in British Columbia Report, but the quote is interesting because it's from one of their own employees. It's from Sam Bawlf, a planner in the Crown corporations secretariat, who admits that the protection of the 3,200 unionized PNE jobs is more important to the NDP government than the park itself. That's one of the things that's been up there.

Interjections.

G. Farrell-Collins: Hon. Speaker, I am addressing the bill. We're looking at the government nationalizing the horse-racing industry. It's important to look at what their motivation is.

We have another quote, from Paul Hartsock, executive director of South Sea in Hong Kong. He is one of the international investors who is putting up money and, I believe, one of the people the Premier visited when he was in Asia -- if it wasn't him, it was part of his organization. I assume that at that time the Premier had on his blue double-breasted suit and was playing the role of the business person from British Columbia trying to recruit investment into the province.

Interjection.

G. Farrell-Collins: It's a nice suit, by the way.

These are important investors who are trying to bring their money into British Columbia and invest it -- something the Premier went to Asia to try and do. Mr. Hartsock said: "Dealing with this government has been very frustrating. We felt we had respected the process. We had no idea this two-year process would be summarily dismissed. Without the courtesy of telling us, they chopped us off at the knees." That doesn't play very well in the international finance market. I don't know why the Premier went to Asia to bring people here to invest money. When they get here, they can't play by the rules, the rules change, and then the corporation capital tax comes in and taxes go up -- despite what he says about taxes not going up. All that stuff plays into this.

I want to bring up two other quotes before we go too far. One of the breeders at the track called the whole plan bizarre. "It's a travesty that political hacks are making decisions about things they don't understand. This plan has condemned B.C. horse racing to oblivion." They don't sound like optimistic people in the horse-racing industry. It doesn't sound like they are too thrilled with the government's actions on this issue or with the vision of the Attorney General and the NDP on horse racing in this province.

I think Mr. Bawlf was right. The government is more concerned about those union jobs at the PNE than they are about the whole horse-racing industry. I think if you check with the ideological... I'm not looking for the communists, either, which I know the Attorney General is worried about. There is an ideological bent on that side as there is on this side. We see things from different points of view. If one looks at the way this government makes its decisions on many issues, you know which side they fall on. It's not private industry; it's not private investment or foreign investment in the province; it falls right on the side of labour. We know where that comes from and so do most people in the province. Indeed, that's why many of the labour people in the province voted for the NDP -- not all, mind you. I'm sure there will be many of them, including teachers, who won't vote for them again.

One of the other people who commented on this was Jim Wallace. At the time, he was a vice-president of the 500-member chapter of the Canadian thoroughbred breeders' association. He said that jockeys and owners can always race their horses outside B.C. if the local industry dies. Breeders like him, with farms, have much more at stake, and virtually all of them support the track. He says that "the sport employs 10,000 people in B.C., everything from growing hay to stable tending, and pumps $450 million a year into the economy." That's no small amount of money; that is a great deal of money that comes into the economy of this province.

Before the Attorney General tries to make a Solomon's choice and cut the baby in half in order to come up with a solution to horse-racing problems in British Columbia -- that solves nothing and only allows it to struggle on for another few years -- he should be careful and look at the implication of that decision, because it will have a profound effect. Many people do not believe that the horse-racing industry in B.C. will be able to survive in the long term with this type of solution. I think this is a stopgap solution. It's an attempt by the Attorney General to get this issue off his back. We all know how busy he is. But I don't think he has addressed it in a fair and honest manner. I really believe that he has tried to achieve an end to the problem, despite what that end may be; he just wants it off his back. At a time when people are calling for somebody to show leadership and vision in the horse-racing industry in British Columbia, instead of vision and somebody looking to the future, a decision has been made as a result of impractical practicalities, if you will, and of trying to solve the unsolvable question by cutting the baby in half and ending up with a solution that's not going to do anybody any good.

I think we're going on the wrong track with Bill 74. Many members of this House have made their views known; I know that the Attorney General has heard from many members opposite over the last couple of years on this issue. I wish he had harkened to some of those concerns. I wish we had seen a solution that had a vision instead of a solution that just tries to get the problem off his back.

The Speaker: The minister, upon rising, closes debate.

Hon. C. Gabelmann: The first thing I'd like to say to all members of the opposition is how much I appreciated the comments, which were varied, from various members -- different perspectives; all of them valid, I might say. This is not an easy issue. It was not an 

[ Page 9273 ]

easy issue for the former government, and it has not been an easy issue for us. It won't be an easy issue in the years to come, either. There are many decisions yet to be made and many rocky roads to traverse before the racing industry is at the point where all of us, I think, want it to be.

I was heartened by what I see as unanimous feeling on the part of members of the opposition in support of the racing industry and of the need -- however we do it -- to make it more viable in this province. Something I learned over the years -- and I think the member for Fort Langley-Aldergrove made the point very clearly -- is that the racing industry plays a very real and important role in this province. It doesn't put milk on people's tables or beef on their dinner plates, but it provides a recreational activity, an economic activity and a strength to an agricultural industry that we'd all like to enhance in this province. It enables us to preserve farmland that might not otherwise be preserved, and that's a very positive feature. So I'm very pleased that that kind of support for the industry was expressed in the way that it was.

I also need to say that the expression by many members in both opposition parties of support for a one-mile track is not misplaced. I certainly share the view which many members have that if we could find a way -- and we will someday -- in the short term to get a one-mile track in this province, we'd all be better off. That's the appropriate size that gives the right configuration for races in the thoroughbred field, and I think we would all like to see that.

There has been a lot of talk about a world-class facility for British Columbia, and a number of members talked about all the world-class attributes that exist here in this province now, and that's true. But there's only one feature we lack in respect of obtaining a world-class track in British Columbia: a world-class population on which to base revenues that would support a track of that size. The evidence is clear. We did very careful examinations of other tracks around North America in particular, many of which are in decline, many of which are in public control and many of which are in private control. They are all suffering the same problem: one-mile tracks are not economical in most markets. The idea of a Santa Anita North is an appealing one we would all like to see. But think about the population base on which Santa Anita can draw; we don't have that yet in British Columbia. Nor do we have yet a developed teletheatre wagering system, which may well provide some added economic strength to the industry, and which may enable us at some point to develop that kind of industry.

I think it's fair to say, and most people in the industry would agree, that decisions around the track should have been made in the mid-1980s. Certainly decisions should have been made by 1987 or 1998. I've talked to one of the former Attorneys General about this issue, and I can tell you he was very much central to the issue at the time five or six years ago. I think he would agree very much with my comment that the decisions needed to be made then. The government of the day tried to initiate some processes by which decisions could be made. As I mentioned in my opening comments, they appointed Mr. Mohan Jawl to review the situation. Mr. Jawl produced a report which is very much relevant today, as it was in 1988. The sad feature of it is that the report recommendations did not come to fruition at that time, for whatever reason. I'm not going to castigate the former government for not making a decision at that time. I know from personal experience over the last year and a half how difficult this particular issue is. And if a government is diverted by other problems within itself it may not have the kind of energy and ability to focus on what is a really very difficult issue, which doesn't have any magic answers and any particularly right answers. There are just -- hopefully -- the best answers we can find. So the former government didn't make the decisions in the late eighties.

[9:45]

Closer to their mandate running out, a survey was done in respect of possible locations in the lower mainland; members have alluded to that. The locations clearly were Burns Bog, the Colony Farm, the Big Bend area in Burnaby and Exhibition Park. Those four areas were judged to be valid, possibly appropriate sites for thoroughbred racing in the lower mainland. Any other sites in South Surrey or Langley or out the valley were just too far removed from the population base, at this time in our development, to enable a successful thoroughbred track to operate -- for a variety of reasons. The former government looked at the recommendations in the waning days of its mandate and began some discussions with Western Delta, as I think the Burns Bog site was judged a favourite among many cabinet members of the day. Colony Farm in Coquitlam clearly also had many adherents in the ranks of the former government, including a former MLA from that area who was very much involved in the Colony Farm bid. But they couldn't make a decision on that either. The Western Delta proposal, I think, was favoured by them, but they had the same difficulty we had with the issue. It just didn't add up all the way around. It was just too big a leap, at this time in the development of this industry.

Nonetheless, in November 1991, when I took this job and had to look at this issue, and having a keen interest in the whole industry myself.... My growing up on a farm in the Okanagan has always enabled me to have an interest in farming issues, and I've always been an occasional participant at the track. Like the member for Langley, I enjoy the occasional $2 bet; it's good entertainment. So I've always been interested in the issue, and took a particular interest in it starting in November.

We established a new Racing Commission to replace the former commission at that time. We did something unusual: we put the presidents of the two associations -- the standardbred and thoroughbred associations -- on the Racing Commission. We ensured that they did not participate in regulatory decisions in which there could be a conflict, but we put them on the commission in order to ensure that the two major associations would have some participation in decisions with respect to racing.

[ Page 9274 ]

I asked the new seven-member commission to evaluate all of the studies, and to give us recommendations as to what would be the appropriate solutions. They said there were two solutions: one was Exhibition Park, and the other was Western Delta. The Minister of Finance and I had discussions at our level and others had discussions at other levels. We concluded, rightly or wrongly -- and I know many members of the opposition don't agree with the conclusion -- that there were too many obstacles for the Western Delta proposal. It was a proposal located in an area that had significant environmental problems and local concerns. The member for Surrey-Cloverdale indicated those concerns quite aptly, I thought, in his comments earlier this evening. We recognized the difficulty of the location with respect to bus routes, knowing the clientele who attend at Exhibition Park, and their access to a location all the way south of the Alex Fraser Bridge. We recognized that there was considerable commitment on the part of the province with respect to a track at that site; that if it did not succeed, the government at some future date would have to make a decision to let the whole thing fall apart or to pick up the pieces and try to salvage it. We felt that the costs in doing that would be too great for the taxpayer to bear. The proposals that were made with respect to the financing involved a considerable portion of the handle -- the betting dollar -- in a way that we felt was not in the public interest. However, having said that, it was a viable proposal. It was a legitimate one, and in our view it came second.

What came first was to locate at Exhibition Park: to renovate the existing track to make sure that the running surface was improved, because the running surface there is totally inadequate; and to try to make sure, with the city of Vancouver, that we cooperate in getting a slightly longer track -- one perhaps in the order of six furlongs plus 200 yards, which is a desirable length for running many of the races that thoroughbred owners like to run. We recognized that there needed to be a lot of enhancements in and around the track itself, in particular in the backstretch, which I described in my opening comments as a squalid slum, and I stand by that. The member for Langley indicated that she was concerned about the state of the backstretch, and I think her comments were quite appropriate with respect to the existing situation there.

There is a recognition that the existing operators, the Jockey Club -- the Diamond and Randall families -- have done an outstanding job over the years of ensuring that thoroughbred racing was a viable activity in the lower mainland. If it wasn't for Jack Diamond in 1961, we would not have had thoroughbred racing at Exhibition Park. It is very possible that we wouldn't have the kind of industry from which we can build today if it hadn't been for him. His contribution to this initiative over the years has been recognized by us and by me -- I have said so publicly. I have said in here before, and I have said to him directly, that I value, appreciate and salute his participation in the thoroughbred industry over the last 30 years, and that of the Randall family and the others going back for many, many years before that.

But in the last five to ten years there has been no reinvestment in the plant, as it were. It's run down; it's in poor shape. The number of bettors has declined. Interest in the track has diminished. Many of the owners, and in particular many of the breeders, are no longer keen on racing at Exhibition Park. In fact, some breeders and owners will not allow their horses to run at Exhibition Park because of the deterioration. In talking to them and to many others in the industry, I came to the conclusion that we could have a far more vibrant thoroughbred industry in this province. The breeding industry could be significantly improved. We could do what another member talked about, which is what New Zealand has done successfully, and that's to export thoroughbred horses from this province as well. They're developing markets in Asia now that will enable us to develop a really good export business for the thoroughbred.

But in order to develop that kind of industry you have to have a local infrastructure that includes a proper racing facility. That's the appeal of a one-mile track. I don't deny that. I said earlier that I understand that. But at least we have to have a proper track that can be supported in this province, one that is appropriate for quality horses to run on. All of those considerations formed part of our decision-making on what to do about the particular problems. The recommendations of the Jawl report were thoroughly reviewed. As I said earlier, the current Racing Commission recommended that we proceed along those lines. I met with many of the members of the industry, including breeders and owners, and talked to them about it.

We decided that the best way of ensuring what I describe as a successful transition period in the history of thoroughbred racing in B.C. to a new and higher state -- and cabinet and the government has agreed with me on this -- is to have the owners, the breeders and all of the players in the industry play a far more significant role in running the events and running the track. How do you do that? Legislatively, you need to provide some mechanisms for a society to run the track, which is what we were looking at. A society can't do it; you need the powers of a corporation, because money will need to be borrowed to do some of the renovations. The track will need to be run as a business. In order to do that, the society we had envisioned needed to be established as a Crown corporation. It is a Crown corporation for those legal and financial reasons only. It is not a Crown corporation like B.C. Hydro or B.C. Rail or any of the other Crowns; it is designed to act more like a society.

My intention is that initially there will be seven members on the board of directors. A majority of those directors will come from the lists that another member talked about, which were provided by the HBPA and the breeders' association. It is my clear intention to take a significant majority of the board from their lists. I intend to ensure, with cabinet's approval, that one of their number be chair of the board. It's my intention that all members of the board will have a keen and determined interest in racing, a good business sense and a good ability to develop and enhance this industry. I have no interest, nor does the government, in using the track and its environs as a political or a partisan 

[ Page 9275 ]

endeavour. It is not that kind of issue. In the best sense of the word this is a bi-partisan or a multi-partisan issue. My best support for the initiatives we are taking comes from very prominent supporters of the former government, including members who sat in this House, as well as other prominent supporters who have never sat here but were very close to members who did, and many others -- not just former Socreds but many in the industry. They can identify themselves should they wish. The support has been widespread. That is not to say that those individuals don't believe there shouldn't be a one-mile track; they do, and so do I. But they agree with me that it's not doable at this time in our development of the industry.

Our thinking also includes the development of a training track in the valley that will enable the industry to train its animals better than it is able to now. There is some discussion at this stage about locations in Langley, but that's not finalized yet. We're very interested in finding a way to ensure that owners and breeders have full and proper training facilities, and that there be sufficient numbers of barns at Exhibition Park so that horses can be brought in and settled down for a number of days before they actually have to race, and you don't have to transport them the same day, like in some locations around the world. All of those considerations have been discussed.

There's been discussion in debate about taxpayers' money going to the endeavour. No taxpayer money will go to the renovations and enhancement of this industry at all, in the sense that at the moment, 5.5 percent of the handle is devoted to the operator. That's what the operator gets for running the track. That same 5.5 percent will be made available for the new operators, the Pacific Racing Association. Out of that 5.5 percent, they will generate revenue, which will be enhanced by teletheatre as it develops. That revenue will service the debt that will be needed to enhance the facility. The board will not be allowed to borrow more than can be serviced by that handle, and we will do this in a very conservative way in the beginning. We will not spend the full amount of money right off the bat and do all of the renovation, because that would be foolhardy. We are going to do this slowly, carefully and entirely within the revenue that can be generated by the industry itself.

I think I have covered most of the general issues that have been raised by members. Others can be covered in committee stage when we get to that -- tomorrow, perhaps. With that, let me say again that I thank hon. members for their contributions. It has been a good debate, and I very much appreciated the comments made by every single one of the members in this second reading debate. I move second reading.

[10:00]

Motion approved on the following division:

Bill 74, Pacific Racing Association Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. Gabelmann: I call second reading of Bill 72.

HORSE RACING ACT

Hon. C. Gabelmann: I move that the bill now be read a second time.

The existing Horse Racing Act is an old -- or you might say ancient -- act. It was designed to regulate horse racing when the industry was relatively simple and unsophisticated. It is inadequate to meet the challenge of regulating an industry whose future is threatened by increased competition from a wide range of other leisure activities and the availability of gambling in many forms that is more accessible than horse-racing wagering. To enable the Racing Commission to fulfil its mandate to regulate horse racing in our province, and to protect the public interest by ensuring that the industry continues to operate in an open and honest manner, this bill will substantially revise the Horse Racing Act.

The principal features of the revised act include clearly established authority for the Racing Commission to regulate horse-racing and the individuals directly involved in the industry. It empowers the Racing Commission to establish the technical rules for the conduct of racing, which at present is done by the Lieutenant-Governor-in-Council. This transfer of power will enable the commission to act in a more expeditious and effective manner. Limitations can still be imposed by the Lieutenant-Governor-in-Council if required. Similarly, the commission is directly empowered to allocate racing days, rather than making recommendations to the Lieutenant-Governor-in-Council, as at present. Overall, these revisions to the Horse Racing Act will bring greater certainty to the regulation of the industry and greater public confidence in it. They will ensure that the Racing Commission has sufficient flexibility to respond decisively to rapidly changing conditions in order to secure the future health of the industry.

[ Page 9276 ]

A. Warnke: It's a pleasure to address today's daily double. Once again, under the auspices of shifting authority from the cabinet, authority is established in or transferred to a commission: in this case to regulate the horse-racing industry. This of course covers standardbred or harness racing, and thoroughbred or flat racing. Accordingly, the authority is shifted from the cabinet to the B.C. Racing Commission, and established so that this commission has the ability to regulate the industry. But the main point is that the members are still appointed by the government. Incidentally, in sharp contrast to Bill 74, which we have just debated, the appointments are not specified in Bill 72. Many of the comments put forward pertaining to Bill 74 are applicable here. The two bills are intricately linked as part of a package. Therefore some of the comments we made on Bill 74 apply here as well -- for example, that this essentially transforms the horse-racing industry in this province in such a way that the government has now become involved. I suppose one could say that prima facie the cabinet is at arm's length from their involvement in the horse-racing industry. But the fact is that they can still make the appointments. Now that we have established the Pacific Racing Association, the government can have considerable involvement in the horse-racing industry. So some of the reservations that we expressed on this side of the House regarding Bill 74 are once again most applicable to Bill 72 -- especially that the government is now extensively involved in this industry. I would suggest to anyone who reads Hansard that it would be highly advisable to look at the comments that were expressed by all our hon. members during debate on Bill 74.

Again, the argument here is that the industry is perhaps best left to those who can actually run it and who have a stake and an interest in the industry. However track operators have sometimes been portrayed, nonetheless the hon. Premier, in a former occupation, wrote a letter to the effect that track operators are pretty good. Indeed, I want to compliment my colleague from North Vancouver-Seymour for reading that into the record. Also, the comments of the Attorney General in his summary of Bill 74 are most appreciated. They too were a strong acknowledgement that Mr. Jack Diamond and others have made significant contributions to the industry.

But as far as Bill 72 is concerned, we are again concerned that the B.C. Racing Commission's involvement in the regulation of this industry is omnipotent. We have some reservations about the direction this is going. One particular exhibition of this -- no pun intended -- is the whole appeal system. An appeal can be launched about licences, but no appeal can be launched about racing days. Another aspect about appeals where we have concerns is that rather than having appeals heard by some sort of an independent body, what the bill states is that appeals can be heard by different members of the commission itself. I think there's a bit of a problem here. This allows room for a possible conflict of interest. How can an appeal be heard by members of the same commission? So there seems to be a problem here as well.

[10:15]

As has been pointed out by the Leader of the Opposition, government should leave private industry to do what it can with investment and development. The government's role is to regulate and administer the law to ensure proper enforcement against illegal and unauthorized practices. That was the intent of the original legislation in 1960. It was good legislation, especially for that time, because it addressed what was essentially potentially a very serious problem as the horse-racing industry developed in the province, which was to monitor and control illegal and unauthorized practices. To bring it up to date, perhaps some extension of that is more appropriate. Perhaps that bill is outdated, but legislation is usually developed on top of framework that is already established. The interesting thing is that the raison d'�tre for changing the bill had to do with illegal and unauthorized practices, and that is not really addressed in Bill 72. That needs some consideration.

Also -- and this has been raised by a number of people -- the act has the potential of depriving municipalities control over many local facilities. I think it is extremely important to re-examine that. Another concern is with regard to how potential changes in the horse-racing industry relate to gaming in general. Gaming decisions will eventually be exclusively in the hands of the B.C. Racing Commission. That needs to be clarified. I heard the Attorney General's remarks summarizing Bill 74. To a certain extent, there was reassurance regarding teletheatre wagering. If it's considered at all, it will be considered in a local context. Nonetheless, I suppose it may establish a precedent some time in the future, and there is a concern about how gaming decisions will fit into the horse-racing industry.

This is linked to Bill 74 in another aspect, which is how the industry could receive moneys. Essentially, large amounts of government moneys may go into the industry. Again, I'm a little concerned about some comments. They indicate that with big government money coming in where private industry was in charge, it is really going to help the horse industry in this province. I just want to caution everyone that this may be an example -- to use the trite old phrase -- of government throwing large amounts of good money after bad. Somehow they are committing themselves to extending large amounts of money to this industry. The commission would essentially follow whatever decisions are made by the now-established Pacific Racing Association. All this commission can do is regulate, and there's really no conflict here. I think there's a problem here. I'm still concerned that the city of Vancouver no longer has the right to deny racing dates to whenever the commission determines.

Many comments that pertain to Bill 72 expressed on this side were mentioned in Bill 74, simply because the two acts are very close together; one does not work without the other. Therefore I will not belabour second reading on Bill 72. I think the Attorney General was quoted somewhere that the purpose of Bill 72 is to maintain the industry's integrity. We're interested in that as well; we want to maintain the integrity of the 

[ Page 9277 ]

horse-racing system. We're still quite concerned as to the general direction.

At committee stage we will especially explore Bill 72 in detail. Obviously at committee stage we will explore some aspects of Bill 74 in detail, in particular one section. Bill 72 is the kind of bill proposed where there is much to be clarified in terms of the structure and intent of the commission. What is the commission's relationship with, let's say, the Public Service Act? We certainly want to explore just what the commission has in mind -- their intent in terms of hiring and who they intend to hire and that sort of thing. So perhaps I red-flag section 4. We will pursue these questions in detail at the committee stage of Bill 72. We have enough concerns to have serious reservations very similar to the reservations we expressed with Bill 74.

J. Weisgerber: It's a pleasure to rise and speak to the new Horse Racing Act. As the Attorney General indicated, a lot of sections in this bill deal with updating an act that hasn't been visited for some time. Undoubtedly many of the changes are necessary and appropriate to bring the bill current with practices of the day. However, some aspects of this legislation have troubled many British Columbians.

The first, I think, is the cancellation of the contract between the Jockey Club and the city of Vancouver. The minister said during his remarks that indeed the negotiations were ongoing and that there was no expropriation of rights. I haven't been in a situation of negotiating with someone who had cancelled all of my rights and then sat down with me and tried to negotiate some compensation for what I'd lost. It seems to me that I would find myself somewhat disadvantaged. If the process of negotiating a settlement includes options for parties, then the negotiations in fact are evenhanded and both parties have an opportunity to make some decisions. It seems to me that the Jockey Club has been put in the position where they don't have any options except to negotiate a settlement with the government, and that's troublesome. The minister....

Hon. C. Gabelmann: Nothing in this bill.

J. Weisgerber: Although the minister says, "Nothing in this bill," the reality is that it's an issue that's causing a good deal of concern.

The other area that I think is causing concern for many people who watch the racing business revolves around the substantially increased powers of the racing commission. This all-powerful group regulates racing with very little opportunity for anyone to appeal outside of the system. Section 11 of the bill gives absolute discretion to the commission on assignment of racing days. The assignment of days is stated to be final and not open to question or review in a court on any grounds. Those are significant powers, far more powers than one would normally expect to see in that kind of a commission. I think that concentration of power within the commission will trouble many people.

My review of the legislation suggests that outside of going to a court of appeal, the commission, which is responsible to oversee testing, enforcement and inspection, is the only available appeal unless it happens that three or more members of the commission were not present when the original decision was made. Not having some appeal outside of the commission seems like an unusual situation. I think there will be a fair amount of concern around this concentration of authority within the commission. When you look at other commissions -- police commissions, marketing boards, many other regulatory agencies -- it's most unusual to see a group like this that is all-powerful in the regulation of an industry.

I, like the previous member, will take the opportunity in committee stage to try to get a sense of the options for people whose very livelihoods will be regulated by this commission. This is not a casual kind of impact on people's livelihoods. People in the racing business are dependent on, and will be very much impacted by, the decisions that this commission might make. I think it would be appropriate to at least ensure that in the appeals process there is a source of appeal short of the court, whether it be in some restructuring of the commission itself or in the way that the commission hears appeals. I don't think it's reasonable for the commission to make a decision that's final and binding, where if you don't like it, you take them to court. In many of the rulings that one might normally appeal to this kind of a group, I would expect that by the time the court date was reached and the issue was heard in the courts, the event would long since have gone.

I recognize the need to modernize legislation. That's an appropriate process, and an ongoing one. It's certainly one that I would never want to criticize. I do see certain elements of this legislation as being troublesome, and I will look for an opportunity in committee stage to explore those further.

[10:30]

A. Cowie: It's a pleasure to stand and speak regarding Bill 72, the Horse Racing Act. The purpose of this act is to regulate horse racing. As I see it, it moves the responsibility from cabinet to a commission. This bill must be opposed, in my opinion, primarily because the commission will be doing what private industry properly should be doing.

Under definitions, "horse racing" has been broadened in meaning to include conduct or presentation of all types of racing. This change gives the commission authority to authorize and license offtrack betting parlours without further reference to the Legislature. This represents a backdoor move into offtrack betting parlours, without any public discussion or review.

[D. Streifel in the chair.]

Section 6 gives the commission, "in its absolute discretion," the right to, "issue or renew or refuse to issue or renew any licence," making a mockery of the appeals section 17, because the commission can set its own criteria to ensure that no appeal is successful. As I see it, this is a setup for dealing with the PNE-Jockey Club situation and any other private racing operations that get in the way of the B.C. Racing Commission. We see "absolute discretion" there in the provision of 

[ Page 9278 ]

section 11(1), giving an immunity from the courts in section 11(2). This ensures that the Jockey Club -- and anybody else who gets in the way of this nationalization of the racing industry -- has no access to the natural justice system.

These powers could apply to a government takeover of harness racing in Cloverdale or Victoria or any interior B.C. racing operation. Such sweeping powers must anticipate expropriation of further rights within the racing industry, or they would not be necessary.

In Section 5(1), "designated race horse training centre," is a new term in B.C. racing. This looks like the start of government-run training facilities for profit, which could put the current owner-operated training farms out of business. In simple terms, government is getting into private business -- which they shouldn't be in; this should remain in the private domain. Regulated by government, yes, but regulated by government and taxed for the good of the public.

[The Speaker in the chair.]

Finally, to undertake this business with a poor facility at the PNE.... This will never be a good facility. The minister himself agrees that we need a long-term vision in this province. I think we all agree we want the one-mile track. Well, let's have the long-term vision.

We have an opportunity to have a one-mile track in Delta, for one location. If we don't like Delta, let's find another location; Delta is the only one that has come up so far. Contrary to what the minister says, I believe there are no environmental hazards or problems in the Delta situation. Let's preserve the proper part of the bog: the part that is environmentally unique. But this portion of the bog is not unique. It's a scare campaign by those who want to preserve the whole of the bog. This is a proper location. If for some reason we can find another location -- fine, if that's what the government wants to do. But let's find a one-mile track; let's have a vision. Let's all work towards helping the horse industry in this province, ensuring that it remains a good industry for a long time. It deserves it. I look forward to speaking on third reading, where I can get into more details.

K. Jones: It's a pleasure to rise and speak on Bill 72, the Horse Racing Act, at 10:30 in the evening. It's unfortunate that we have to speak at this time of the night, but this area is a very important one, and it's one that needs addressing.

I'd like to state that there is a need to update the Racing Commission Act. It's been in existence for quite a few years. It was first brought forward back in the 1960s era, and this is a good and necessary update. There are a few areas that we do have some concern about. I am wondering if, in their all-encompassing role, this government went overboard with this legislation. I'm particularly concerned about section 5, which refers to requiring a licence. I read that, and saw how detailed it is:

"A person must not hold a race meeting, manage or operate a race track or designated race horse training centre" -- then we get into the details -- "aid in, enter in, judge, start, race in, drive in, or ride in a horse race within British Columbia or do any other act in any way related to horse racing unless the person is licensed to do so under this Act."

Below that it says that the prohibitions do not apply to the following:

"(a) race meetings or horse racing of a prescribed type exempted by the commission; (b) other race meetings or horse racing exempted by the Lieutenant Governor in Council."

An interesting situation that I can visualize very easily is two friends out for a little ride, and one challenges the other to a race. Under this all-encompassing requirement, those two people have to go down to the provincial office and get themselves a licence before they can carry on with that decision to race each other. If they cannot get it in the provincial office, they will probably have to go to Victoria to the Gaming Commission or to the Racing Commission to get a licence to be able to have that race. I hope that the minister will recognize the fact that this is going overboard, and perhaps he would temper the wording of this to exempt those who enjoy riding horses for recreation and the pleasure of being on horseback so that they will be able to do that without undue government regulation. I'm sure that the Attorney General recognizes what we are talking about in that regard.

I think the regulation of the industry itself is fairly straightforward. It's self-explanatory. It requires a certain aspect of control, and certainly that's important in the public interest.

I am wondering about the staffing, and maybe the Attorney General can address this in his response. There is a related section under the Public Service Act that the commission may employ officials, clerks and other employees it considers necessary to allow it to exercise its powers and perform its duties. I am wondering if that also includes the actual operating of tracks. He had indicated previously with the other bill that they may be contracting out the operations of the track. If there were a strike or something like that in place, would the government be able to use these powers under the Racing Commission to continue operating by using public service employees?

I'd also like the minister to look at the definition of "race meeting" with regard to the series of days described there. If a series of racing dates are broken with some intervening activities, would they be allowed to continue under the wording that's used in this bill? There may be a problem in the wording. I'd just like to bring that to the attention of the minister. Perhaps he might look at some other wording to make it cover what occurs quite often. There's a break in the racing days; it doesn't come as consecutive days.

I'd just like to conclude by saying that the horse-racing industry is a very important one to all of us in British Columbia, and certainly to my riding. We all want to very strongly support its viability and continuation.

Hon. C. Gabelmann: A number of the concerns that have been raised can actually be better dealt with in 

[ Page 9279 ]

committee, including some of the ones raised by the member who last spoke.

There are a couple of things I just want to clarify in closing the debate. First of all, this legislation is simply to regulate. The member for Vancouver-Quilchena misinterpreted the purpose of the legislation. As with the former Horse Racing Act, the one that is still in place in the statutes of British Columbia, this is a regulatory act. It enables a commission, appointed by the Lieutenant-Governor, to do no more than regulate the day-to-day activities in the industry -- in a fairly comprehensive way, no doubt, as the member for Surrey-Cloverdale indicated in respect of section 5.

Any issues around the Jockey Club are not touched by this legislation. Theoretically, the other bill that we debated earlier this evening is the bill that could have some impact on the arrangements with the Jockey Club, but that's another debate.

The question of appeals mentioned by both the official opposition critic and the Leader of the Third Party is important. Interestingly enough, the appeals are now more available than they would have been before. A number of decisions that cabinet has made, including the establishment of dates, are now transferred to the commission. Commission decisions are much easier to appeal than cabinet decisions. When cabinet makes a decision, you can't go to court very easily and get the decision overturned, except in rare and unusual circumstances. It's difficult to think of very many examples of that. They don't come to mind.

There are appeal provisions and there is always judicial review. In respect of the setting of dates, it says, in lay language, that the decision of the commission is final in terms of setting of dates, but judicial review is always available. The court can order the commission to review its decision if it feels that the decision was made in a capricious or unfair manner. In general, we'll get into the appeal discussion during committee stage, but I think it's important to say that in fact there is now more availability to appeal than there was previously.

I don't think I have much more to say on this bill at this stage. It's simply an updating of the regulatory function. It doesn't change very much of the structure other than to give the commission decisions which we think are appropriately placed in the hands of the commission. With that, once again, I would move second reading.

[10:45]

Motion approved on division.

Bill 72, Horse Racing Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. Gabelmann: I call committee on Bill 62, hon. Speaker.

FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY AMENDMENT ACT, 1993

The House in committee on Bill 62; W. Hartley in the chair.

Hon. C. Gabelmann: Hon. Chair, we are on section 1, and I note that the hon. member for Okanagan West has proposed an amendment to section 1 on the order paper. I am certainly prepared to give us a couple of minutes, if all members agree, to enable the member to come back so that he can have his opportunity.

On section 1.

C. Serwa: I sincerely thank the hon. Attorney General for his courtesy. I would like to move the amendment to section 1 of Bill 62 in my name on the order paper.

[SECTION 1, is hereby amended by adding the following section:

1.1 Section 4 of the Freedom of Information and Protection of Privacy Act, S.B.C. 1992, c. 61, is amended by adding the following subsection:

(4) A public body and local government body must classify their records in such a manner as to allow and facilitate the ease of their retrieval. They must set up and keep up to date a list setting forth the order of classification of the records. The list must be sufficiently precise to enable reasonable exercise of the right of access.]

On the amendment.

C. Serwa: The purpose of the amendment is to strive to control the costs. When we are talking about accessibility to freedom of information, we in this caucus are very concerned about the cost of accessing that information. I know that the provincial government has done a great deal to structure and order their files and records for ready and convenient access and to minimize the cost of the necessary fees. It's my belief that in all of the expanded areas of freedom of information and the protection of privacy under this act, it is going to be necessary that those files be so structured as well. The purpose of the amendment is to increase accessibility to freedom of information for those who want it.

Hon. C. Gabelmann: The member's suggestion has merit in principle. It's not something that we think is needed or will work in the formulation that the member has devised. The intent of all of this legislation is to ensure that records are kept in a way that enables easy retrieval and involves almost no cost once the systems are in place. The whole structure of the legislation is designed to accommodate that. In our view these purposes are accomplished, and this particular wording would not help facilitate that, so with regret and respect to the member's intention, we won't be supporting the amendment at this point.

[ Page 9280 ]

A. Warnke: As members are probably quite aware, there has been a rather celebrated story in recent days about a historian's claim that there is some difficulty in terms of retrieving documents.

I wonder if the Attorney General is tied up. I could pause, if that's all right.

Hon. C. Gabelmann: Just a minor technical issue.

A. Warnke: In recent days there has been a rather celebrated case: a historian has made the argument that there is difficulty in retrieving documents and that sort of thing. Under the amendment proposed by the hon. member for Okanagan West, if I may take the liberty, I wonder whether we should not move in a direction to facilitate the ease of retrievability of documents. I wonder if the Attorney General would mind commenting on the case of the historian in the context of retrievability of documents.

Hon. C. Gabelmann: I think the issue that the member is referring to has some privacy components, which add a complicating feature. We always think of this legislation as being access to information when in fact it's a strengthened protection of privacy as well. That's always a concern. I think this point is as much as I can offer to assist the member.

D. Mitchell: On this amendment, the member for Richmond-Steveston has made some comments that relate to a case dealing with the provincial archives and records service, which I don't believe is a privacy case. It's the case of a well-known Victoria historian by the name of Terry Reksten who is trying to access the standard historical records that she has been accessing for many years as part of her research. She's now having difficulty because of the freedom-of-information legislation and its impact on the B.C. archives and records service. I don't believe it has anything to do with the privacy of records; it's simply a question of retrieval. The member for Okanagan West has brought forward an amendment that would ease the retrieval of information for research purposes. I think that's the spirit of the amendment. I'm not sure why the Attorney General has said that the amendment is not acceptable.

Hon. C. Gabelmann: As I was getting myself organized to switch from one track to another we discovered a couple of little hitches in terms of the order paper, and I haven't had my mind completely on the debate. Now that I've gotten to that position, I think I can more appropriately respond to the question.

There are, in the case referred to by the member, some coroners' records that apply to young offenders' material which was previously not protected by privacy legislation. When I say young offenders, I mean people under the age of majority who may have come into conflict with the law and been subject to a coroner's report. The privacy of that information is now protected. As a result, and given the strength in privacy concerns, there needs to be a process in place to ensure that the privacy rights of those non-adults are protected. The previous systems didn't structure the record-keeping in a way that enabled an easy separation of that; therefore, we have to go through a cumbersome process during this transition period. That's the issue that was raised by the stories in the last few days about the research work being done in the archives.

My public comments and my comments in the House earlier this week stand. I think we have to make sure that there is full and easy access, but because of the record-keeping systems that have been in place there are going to be a lot of teething pains in the early stages as we try to implement new processes.

D. Mitchell: I'm sure the Attorney General is right, but that doesn't address the reason for rejecting the amendment. The amendment very clearly is intended to allow for reasonable exercise of the right to access. These amendments are based upon the spirit of the legislation and the Jones report. Is the Attorney General willing to either reconsider his position or state more clearly why he won't accept the amendment?

Hon. C. Gabelmann: The wording of the amendment is designed to state in a statute how record management is done. That is an administrative matter that is ongoing at the present time which must classify the records. It provides no time for transition or an administrative response to difficult situations that may require some manoeuvring room on the part of a local government, a school board or a direct government body. The whole intent of the legislation is to accomplish this goal, but to legislate it means that we will have very little ability to manoeuvre in the transition periods.

Amendment negatived on division.

On section 1.

K. Jones: I have a question with regard to subsection (h): "a record of an elected official of a local public body that is not in the custody or control of the local public body." What is the reasoning behind that, and what sorts of things are expected to be considered under that?

Hon. C. Gabelmann: The purpose is the same as exists for MLAs -- to ensure that the private records of elected officials are not covered by the legislation.

[11:00]

K. Jones: Does it mean that any record that an elected official at any level of local community may have taken with regard to the operations of a school board, hospital board or anything like that is not going to be available?

Hon. C. Gabelmann: The language of the amendment is clear. If this is a document to reverse the wording of the bill.... If the document is in the custody of a public body, then it is a publicly available document. We are talking about private correspondence 

[ Page 9281 ]

that an elected official may receive that is not part of the record, not tabled at council, school board or local government body, but is the private record of the elected official: notes that the official may have on particular issues that the official is using to assist in developing his or her thinking in respect of a bylaw or a motion or any kind of private record, which all of us have in our own files -- particularly correspondence from constituents. Those are not to be made available unless they are in the public domain; unless they are a part of a public process.

K. Jones: I am concerned about the fact that it says "a record," rather than "a private record" or "a private document." This makes it possible for an elected official to take home things they don't wish to have made public, and therefore they are not in the control of the local public body. Information on secret meetings, documents -- information like that -- can be spirited away from access under this bill, because it does talk about "record." It doesn't identify that these are personal records or private documents, but it says any record of an elected official. As an elected official at the municipal level and at hospital boards, I have had documents that were prepared and submitted to the board. We may not want to have those going to the public through freedom of information, so we could just take them home and they wouldn't be available.

Hon. C. Gabelmann: If these documents emanated from a committee of the board, or from a formal process, that means they emanated from the public duties of the elected official and his or her colleagues. Those documents are in the public domain, subject to the rules in the legislation. We're not talking about any documents of an elected official; we're talking about our record of an elected official that is not in the custody or control of the local public body. These are not minutes or decisions spirited away from a committee meeting or even an in-camera meeting of the school board, for example. We're talking about private documents. This is to ensure that there is no public access to personal information.

Let me put it another way: the member may be lying in wait for me in question period; he may be collecting information from various people that he's going to use to ask a question to try to embarrass me or another cabinet minister. It should not be my right under freedom of information to go and claim to have a look at those documents so that I can prevent the member from doing his duty, which is to embarrass me. I shouldn't have the right to get at those documents; those documents belong to the member. Those are records that are not in the control of the Legislative Assembly or of the government of British Columbia but in the control of the member. In this legislation we want to make sure that the member's right to those records is maintained.

K. Jones: If that's the intention, perhaps identifying the type of record would be appropriate in this case. As it's listed here, the item is all-encompassing; it covers all types of records. Perhaps a clarification of what "control of a local public body" means is in order.

Hon. C. Gabelmann: It's virtually impossible to imagine every possible kind of record and therefore define a whole list in legislation.

Interjection.

Hon. C. Gabelmann: The definitions become problematic. There are arguments about whether or not a document that the member might receive from the mayor, which is a personal correspondence, is a public or private document. Our intention with respect to this legislation in dealing with issues like that is to have regulations and, more importantly, policy manuals that are publicly available that spell out what these words mean in general terms. They're not legally binding in the way the statute is, but they certainly give guidance to the public. That has already been done for the first phase of this legislation with respect to government itself. We have policy manuals developed that do exactly what the member wants, which is to spell out in the policy formulation what those words actually mean.

D. Mitchell: Where we're expanding the categories of records outside the scope of the act to include teaching materials and research information of employees and post-secondary institutions, could the Attorney General explain briefly why they are being put outside the scope of the act? I'm not sure that that's clear.

Hon. C. Gabelmann: This is in response to suggestions from academics who wanted to protect their "intellectual property" -- writings or research materials they may have -- and to ensure that professors at universities would be covered but would not have to make publicly available their own research material. That's what this is designed to do.

D. Mitchell: I take it then that this would deal with the principle of academic freedom. I could understand if it applied to research materials for works in progress, but I wonder if there is an issue here that the Attorney General could address with respect to research materials that are created with tax dollars being denied access by taxpayers. Is there an issue there that perhaps treads a fine line of academic freedom in terms of research materials that are being prepared or have been prepared with the assistance of tax dollars, with access being denied to those?

Hon. C. Gabelmann: To have the kind of exemption the member talks about would mean that the whole thrust of this amendment would be lost, because in almost all cases tax dollars pay the salaries for post-secondary teachers. There is a well-established principle of academic freedom and intellectual independence. It seems to me that in responding to that request from academics, we are siding with that intellectual freedom argument, and that's a choice we've made.

[ Page 9282 ]

Section 1 approved.

On section 2.

A. Warnke: The amending section is similar to the current section, with the exception that (b) is added, which would protect the record of an individual by a third party, and in that sense this is a positive amendment. However, I would appreciate it if the Attorney General would clarify the definition of an unreasonable invasion of a party's personal privacy and what types of records would not be released.

Hon. C. Gabelmann: Again, an example might be the best way of dealing with this particular issue. An example would be denying access to a third party's mental hospital record if it would disclose the fact that a person had received treatment for mental health problems. That would therefore constitute an unreasonable invasion of the third party's privacy. So it's for that kind of protection of privacy that this is changed.

K. Jones: In that case, would it not be appropriate to eliminate only the person's name? The information itself should not be of any value as a privacy matter if the person's name, address or anything that might identify the person was eliminated.

Hon. C. Gabelmann: It's conceivable. In fact, it is the case in some situations that the information itself can identify the individual, particularly if there is some prominence or it's a small community. Simply deleting the name or even the name and address is not in itself always going to be sufficient to protect the individual's privacy, because perhaps the particular circumstances in that individual's files would very quickly identify that person to many in the community.

K. Jones: I'm rather concerned that this might be used as a vehicle to bypass the whole principle of the bill, which is to provide access, not to provide privacy. Privacy is secondary to access; therefore the whole principle under this legislation could be circumvented by utilizing this method of reasoning. The minister uses an argument that could be used over and over again in almost any information that was being requested.

Hon. C. Gabelmann: Again, this is the other side of the legislation that has not had that much attention, which is the privacy side. We are determined to ensure that an individual's privacy is protected. This cannot be used to get around the access question; it can only be used in situations where that information being made public would have or could have a detrimental effect on an individual. There's no intention, in establishing this difficult balancing act between freedom of information and protection of privacy, to have one side of the equation subvert the other. What we're trying to do here is balance these interests as carefully as we can. This will not and cannot be used to subvert the access side but will be used in situations where that information being made public would or could have a detrimental effect on an individual. In establishing this difficult balancing act between freedom of information and protection of privacy, there is no intention to have one side of the equation subvert the other. What we're trying to do here is to balance these interests as carefully as we can. This will not and cannot be used to subvert the access side, but will in fact be used to ensure the privacy of the individual.

D. Mitchell: Section 2(2) says that "...the head of a public body may refuse in a response to confirm or deny the existence of a record...if disclosure...would be an unreasonable invasion of that party's personal privacy." In this case, who would decide what was an unreasonable invasion of a third party's personal privacy? Would it be the head of a public body? If that's the case, what criteria would the head use? How would you define the head of a public body, broadly speaking, in the public service of B.C.?

Hon. C. Gabelmann: Yes, it would be the head of the public body who makes a decision, and the criteria would be the same as for all of the other decision-making that goes on under this legislation. Obviously there is discretion and there are choices. Particularly in the early going it may be unclear as to where the boundaries are, but the commissioner and his very small staff will be there to assist in helping to resolve that kind of issue.

[11:15]

D. Mitchell: Can I take it, then, from what the Attorney General says, that one role of the commissioner would be educating heads of public bodies by providing some kind of groundings or some kind of test cases for what might be considered to be unreasonable invasions of personal privacy?

Hon. C. Gabelmann: There are two parts to the answer. The freedom-of-information-and-protection-of-privacy branch of the government is now developing the policy manuals that will help to clarify these issues. The commissioner himself will also be involved in educational activities, in particular doing just what the member suggests, which is to help heads of bodies make decisions in a consistent way and help them to understand how to interpret sections such as this. So there will be educational programs and activities.

K. Jones: With regard to that same item, what appeal would there be for the third party, whose information was disclosed, if this head of the public body were to allow the information to be given out? What course of action would the person whose privacy had been violated be able to take? Obviously going to the commissioner would not bring much result, because the information had already been let out, so the commissioner could only give an apology, I guess. Is that the approach?

Hon. C. Gabelmann: Before the material would be released, the third party would be notified that there was an intention to release it, so the third party could 

[ Page 9283 ]

then appeal to the head and say: "Don't release this, because there is personal information in here that I don't want released." The head can then make a decision on whether or not the concern expressed by the third party is appropriate or not. If the head makes a decision the third party doesn't like, then the third party can go to the commissioner before it's released. They go before, not afterwards, so the apology would not come up.

K. Jones: To what extent would there be an attempt to identify the information and tell the third party that there was going to be a release of that information? How long do they hold up the process for? How long do they search for that third party in order to get in touch with them? What form of documentation would there be of their attempt to get in touch with that person? How much effort would they go to?

Hon. C. Gabelmann: The time frame and procedures are spelled out in the legislation we passed last year in this House. The member could refresh his memory by going back and looking at the bill we passed. In addition to that -- because that's not how the citizens will get their information -- there will be policy manuals which will set out those kinds of answers.

K. Jones: I'm fairly familiar with the act, Attorney General, but I don't think it states the extent of the effort that would go into locating the third party in order to inform them that there's a plan to provide information. If they're unable to locate the person, does that mean the information will never be released?

Hon. C. Gabelmann: The head has to make a reasonable effort to find the third party. If they're unable to, they have a responsibility to ensure that the third party's rights are protected and to take even more care in assessing whether or not that information is appropriate to release. They have to make a reasonable effort to locate the individual. That doesn't mean just a casual attempt; it means a serious and systematic effort.

K. Jones: Is a reasonable effort the sending of a letter to notify the person that they are planning to do something in the way of releasing information about them? Is that sufficient, or do you plan something more detailed than that?

Hon. C. Gabelmann: No, the simple sending of a letter would not be a reasonable effort. More effort than that would obviously have to be taken.

K. Jones: What sorts of things?

Hon. C. Gabelmann: The degree and nature of the effort that would be taken by the head would depend on the circumstances involved in the nature of the request and the difficulty in finding the person. If it's simply a matter of a change of address and the letter is returned, they have to make some effort to find out where the person has moved to. There are all kinds of ways you can track people down. It's not possible for us to spell out in legislation all of the steps somebody is going to take to exercise their responsibility; nor is it possible for me to stand up here and give an explanation as to what steps they will take to try to find somebody. They have to make every reasonable effort to locate them.

K. Jones: I'm pressing this point because it's very vital to the whole privacy issue process. If we don't define in the legislation the extent they have to go to, you're not going to find people making anything more than a superficial attempt to contact the person. I think it's important that the minister at least define the search limits. Actually, I hope he would actually put it into the legislation, so that people who are making these decisions will only have to go through a minimum amount of process.

Hon. C. Gabelmann: Those guidelines will be in the policy manuals. If we put that kind of detail in the statutes, the walls in this room wouldn't be long enough to contain all the statutes we would have in this province.

Section 2 approved.

On section 3.

A. Warnke: There is a statement here that some references are too restrictive. I would just like some clarification. Why were they removed?

Hon. C. Gabelmann: First of all, the amendment is complicated. It takes all of us a few minutes, sometimes, to sort out what these technical changes actually mean.

K. Jones: It's late at night.

Hon. C. Gabelmann: No, that's not it at all. I do my best thinking at this time of day.

The amendment removes the restrictive references, sections 21 and 22. It clarifies that the time limit may be extended for consultations with third parties. An example of a third party is another government under section 16. More time is available, in a broader way, than it would have been if we hadn't made this change.

Sections 3 to 6 inclusive approved.

On section 7.

A. Warnke: I'll ask this on behalf of my colleague from Chilliwack, who has some concerns about the clarification of this section in the context of victims' rights. There is just enough ambiguity in here about whether victims' rights are protected. Perhaps we could pursue that.

Hon. C. Gabelmann: First of all, this amendment is a direct result of comments and suggestions in committee stage last year about who could have knowledge or who could be told of these 

[ Page 9284 ]

investigations. I have forgotten which member of the opposition made the points in last year's committee stage, but the point was well made. We are making an amendment to clarify in very specific terms who has the right of access to the reasons for a decision not to prosecute.

Section 7 approved.

Hon. C. Gabelmann: We are proposing a new section between sections 7 and 8. It's on the order paper. I move the amendment standing in my name on the order paper.

[SECTION 7.1, by adding the following section:

7.1 Section 16(1)(a)(ii) is amended by adding "the board of a" before "regional district;".]

This simply adds the words "the board of a" before "regional district," so that it doesn't refer just to the regional district; it's the board of a regional district. I think it's quite straightforward.

Section 7.1 approved.

On section 8.

A. Warnke: I am particularly interested in this section as it involves intergovernmental relations. The amendment does add the specification that the Attorney General must give consent for the release of law enforcement information that would be harmful to intergovernmental relations. What kind of information might this include?

[11:30]

Hon. C. Gabelmann: This amendment clarifies some concerns that the law enforcement community have had about the original bill. This establishes that the 15-year time limitation is removed, so there is no time limitation. Information could, theoretically, be kept forever if that were deemed necessary, but the Attorney General of the day can consent to have the information released.

K. Jones: That information is really critical to allowing access to a lot of the decisions of government. What type of information are you indicating would be harmful to intergovernmental relations and would require the Attorney General or the cabinet give the exemption for its release?

Hon. C. Gabelmann: The reference to the executive council is in the bill. That's not a change; that's not an amendment. That was in the bill that the member is so very familiar with that we passed last year. The amendment we are talking about now is the removal of the 15-year limit, and the provision that the Attorney General can consent to the release of law enforcement information.

K. Jones: Again, could the minister give us examples of the type of information that would fall into this category?

Hon. C. Gabelmann: It's most likely to apply to information that a group such as CSIS would have in its possession. It may not be the case in post-Cold War society -- and hopefully it won't be -- but CSIS used to have information that a 15-year time limit would not be sufficient to protect.

K. Jones: I am still not clear what sorts of things the CSIS would want to hold after 15 years. If it's 15 years old, the public should have knowledge of what they are holding in their huge data files. We've gotten rid of that idea that great powerful government should be able to control all of the data that is held on various people and the actions of states. Today we are in an open society, and I think that allowing them to hold stuff that is 15 years or older is inappropriate. What specifically are we talking about? Or is this sort of a flyer to protect somebody's private little information bank?

Hon. C. Gabelmann: From a philosophical perspective, I could agree that last year the Legislature agreed with the thrust the member is pursuing tonight. When that legislation went through the House, the police authorities in this province expressed considerable concern. They discussed the issue at considerable length with the member for Burnaby North during his review. They discussed the issue with senior members of the Ministry of Attorney General, who are familiar with policing matters, and it was the informed conclusion, following those lengthy discussions with the CLEU, the RCMP and other police bodies in this province, that this provision should be implemented in order to protect, in those occasional cases where it's necessary. The executive council has had the authority, and in these law enforcement matters the Attorney General will now have the authority, to order the release. Beyond that, if the policing authority wants to release at any stage, it certainly can.

This is one of these questions where you make a judgment call. Do you stand up for the law enforcement agencies in their effort to provide adequate and proper policing, or do you say that the right to know is more important than a longstanding police investigation that may require some information be kept for several decades? In this case -- and the member for Burnaby North recommended it -- we've accepted that the police argument here is valid, and that's why we're pursuing it.

K. Jones: Was the Attorney General aware of the information provided to the member for Burnaby North when making that decision?

Hon. C. Gabelmann: If the member is asking about the reasons advanced by the police -- yes.

K. Jones: If that's the case, would the minister please give us that information now in this Legislature, so that we can also have the ability to make that judgment? This is where the judgment should be made.

Hon. C. Gabelmann: I have just given it in my previous response. The police feel the need to be able to 

[ Page 9285 ]

protect some information beyond a 15-year limit in some cases. They made the argument in a convincing way, and we accepted it.

K. Jones: In the questioning so far this evening, the minister has not given us a clear example of what he is talking about. He has said that the police have made a request that there be some secret withholding of information. If they are going to do that, let us know about the type of information. I'm not prepared at this time to give blanket authorization to hide material just on the basis of the decision of the police.

Hon. G. Clark: Vote against it.

K. Jones: The Finance minister obviously doesn't care about people's right to access information when their private lives may be under investigation by the police. If that's his attitude.... I feel sorry for this province and country when that type of leadership is in the position of controlling. By the majority vote of this House, he does control the information that is going to be made available.

Hon. C. Gabelmann: Let me try again, for the final time. Maybe I can be more persuasive this time. Let me give the member an example. The coordinated law enforcement unit was established in this province in, I think, 1974, more than 15 years ago. They have been working on a variety of issues over that period of time, some of which include information that affects investigations and continuing work. Some of that work started more than 15 years ago, in the mid-seventies. It would be inappropriate and inexcusable to have it released if it could jeopardize ongoing investigations by CLEU. I think they made that case very persuasively and, as I said before, we've accepted it. If the member wants to help criminals go free, he should vote against this section.

K. Jones: I do not wish to interfere with ongoing investigations that are still active after 15 years. But I feel that if the police have a case like that, let them bring it forward to the cabinet and the Attorney General; let them prove their case. Let's not give them blanket access to keep information; let them bring, on a case-by-case basis, their justification for that privacy. Let's make this what it was intended to be -- an open bill with access to information, and offer protection of privacy only when the privacy can be justified.

C. Serwa: I just have a quick question. Listening to the minister's response, it wasn't clear to me the reason for the change. Under section 8, the Attorney General's consent must be given before the head of a public body can disclose law enforcement information. Formerly it required the approval of the executive council. I guess we still require the approval of the executive council in section 8 with respect to the information being discussed at the present time. I don't know if you would call it "downgrading," but why is it necessary to move the approval to disclose law enforcement information from the executive council to the Attorney General, and why is it retained for the executive council?

Hon. C. Gabelmann: The member and I have talked before of the unique role of the Attorney General in British parliamentary government. There are matters that come to the attention of the Attorney General that do not get dealt with in cabinet; they are dealt with only by the Attorney General. Those matters often have to do with policing and criminal justice. This provision is here in order to protect the independence of the Attorney General so that a particular matter may not have to be shared with cabinet colleagues. And if a decision is made by cabinet, then cabinet would obviously have to know why.

Sections 8 to 10 inclusive approved.

On section 11.

A. Warnke: I just want to review this section. It adds subsection (b), which permits the disclosure of information. But it also provides for an exception to certain material in archives. What kinds of exceptions might this apply to?

Hon. C. Gabelmann: This enables historians and others to have access to historical information that may be more than 50 years old and, without this provision, might never be available under the current rules. What we're saying here is that after a certain period of time, 50 years, there will be full citizen and historian access to that information.

C. Serwa: Why the extended time limit of 50 or more years, when normally we're looking at 15-year time limits in other sections of the bill?

Hon. C. Gabelmann: The reason is that this is third-party information that's protected under privacy provisions and would normally not be available even after 15 years, in order to protect privacy. But after 50 years of having been stored in the archives would be available automatically.

Section 11 approved.

On section 12.

K. Jones: Could the minister give us further clarification of what is meant in section 12(a)(d)?

Hon. C. Gabelmann: This amendment comes as a result of concerns expressed by persons involved in health care activities in British Columbia. Their concern was that employment documents they are in possession of also include occupational histories, which they felt should be included in this section. In effect, all we are adding here is "occupational history."

[11:45]

A. Warnke: To follow up on that, I wonder if there are other agencies or organizations that might be 

[ Page 9286 ]

supplied names and addresses for the purpose of fundraising or something like that. Does this access go beyond that?

Hon. C. Gabelmann: Is the member on section 12?

A. Warnke: Section 12(d).

Hon. C. Gabelmann: I wonder if the member might clarify which particular part he's referring to.

A. Warnke: Essentially, the aim is to strengthen the protection of personal privacy, as it is elaborated in the notes on the page over. It provides the release of the individual's name, address or telephone number for mailing lists or solicitation purposes. This is presumed to be an invasion of personal privacy. I am wonder whether there are organizations and groups who are involved in fundraising.... I want to make an assessment of the extent to which this section adversely affects or perhaps enhances these particular groups in their efforts.

Hon. C. Gabelmann: Prior to the amendment, the list was name and address; now it's name or address. So a list of names is protected even if addresses are not included.

K. Jones: Does that mean that the telephone directory is no longer a document that can be legally published?

Hon. C. Gabelmann: Only the one in Surrey-Cloverdale.

Section 12 approved.

On section 13.

C. Serwa: In section 13, the duty to notify third parties applies only if the head of the public body intends to release third-party information. Bill 50 indicates that where practicable, the head must promptly give the third party notice, while here in section 13 we have "may give" the third party notice if the request is being denied. At the present time it is mandatory; with the "may" under the new legislation it will not be mandatory. Why the difference?

Hon. C. Gabelmann: The amendment here is actually to save some paperwork. If the head does not intend to release particular information, then the head is not required to send out notice to everybody saying that they're not going to release it. The head will still have to send out notice to the people affected if the intention is to release. The way it was worded before, they had to send out that information to all of those people even if they did not intend to release it.

K. Jones: When people start doing searches into people's private lives and private information, isn't it really in the best interests of the people being investigated or having queries made about their private information that the third party should be informed of that? Don't we really have an obligation to tell that third party that somebody is doing a check on them -- even if we're denying the issuance of the information? It's like somebody coming along and saying: "We want information about your participation in the New Democratic Party, and we want to get some documentation on you." Wouldn't that be worthy of giving you or the third party the information that some police body is checking you out?

Hon. C. Gabelmann: The legislation, as we debated last year, did not envision providing individuals information about the fact that somebody had begun a search. The whole design of the legislation is to ensure that if the information is to be released, it will be run by the affected party first -- not stating that some search might be going on.

But the head can inform that third party that a search is going on, if in the opinion of the head it seems appropriate to do so. If there is some kind of activity that the head feels is important to draw to the attention of an affected third party, then that can -- and in those kinds of cases I think should -- happen, where there's a feeling that there's some need to notify the person. But it's not a requirement; otherwise we will get caught up in a bureaucratic maze here that will trap us.

Sections 13 to 19 inclusive approved.

On section 20.

A. Warnke: Section 20 amends section 66, delegation by the head of a public body. We would like to see clarification. Why would this section not apply to a local public body?

Hon. C. Gabelmann: I just had this explained to me, and I'm not sure that I understand it, but if you read section 66 in conjunction with section 76.1, I think the answer will become clear.

Section 20 approved.

On section 21.

A. Warnke: I want to pursue this a bit, insofar as the description says that the minister need not include all the information for local public bodies in the freedom-of-information directory. Why won't the minister be responsible for this any longer? I think I understand the reason, because we are setting up the freedom-of-information-and-privacy commissioner and all the rest of it. Perhaps the minister could clarify that, seeing that the provincial government implements the program to other governing authorities?

Hon. C. Gabelmann: This is simply a response to local governments who were concerned that the directory, in their case, would have to be too long, complicated and expensive. We are simply doing this to simplify the directory for local public bodies.

[ Page 9287 ]

Sections 21 and 22 approved.

On section 23.

A. Warnke: The amendment moves to include that no action may be brought against the Crown, a public body or an elected official of a public body. We're seeking clarification why each of the above is now to be included?

Hon. C. Gabelmann: The only change here is for disclosure in good faith, so that if you were acting in good faith when you disclosed, you would not be subject to legal suit.

Sections 23 to 24 inclusive approved.

On section 25.

Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.

[SECTION 25, in the proposed section 79.1 by deleting "and addresses" and substituting ", addresses and drivers' licence numbers".]

Amendment approved.

On section 25 as amended.

A. Warnke: I think it is worth exploring a bit, because at second reading this program, which has been around for quite some time, was certainly mentioned on this side -- I believe I may have mentioned it. Certainly I and the other opposition members recognize that a concession could be made to this particular program. On the other hand, I think what we need to have firmly clarified is: should we leave it at that? Does the Attorney General perhaps see some problems with what I said at second reading? If there is a problem with that, I certainly would like to hear how we could address it, recognizing that the Tuberculous and Chest Disabled Veterans' Association has been around for some time and is very well recognized. I would like to see how we could protect that.

Hon. C. Gabelmann: Following the passage of the act last year, and during the review by the member for Burnaby North, it became clear that the legislation would in fact prevent the TB vets from doing what they have traditionally done with respect to the decal you get for your keys. We took some time to think this one through, and we felt that this exception for this particular group is warranted, because they provide a very valuable public service. The principle that's established here is not being extended to any new activity. This is to protect a historical activity. In a sense, it's what we call grandmothering in the modern vernacular.

K. Jones: With regard to section 76.1(c), the setting of fees by a local body, I'd like to point out that it deeply concerns me when they're given the ability to set their own fees. I've had sufficient experience -- and I think many other people at the local level have had sufficient experience -- of the local government, school board or others utilizing the charging of fees to make it almost prohibitive to get copies of information, even in the limited form that was available to persons prior to this freedom-of-information act. The municipalities had a tendency to charge very high fees for simple things like photocopying, and they used that as a means of limiting access to that information.

I would really urge the minister to put forward an amendment to actually set a fee structure, at least through regulation, that would be the maximum amount that any local government would be allowed to charge, so that the fee structure would not be an impediment to getting information that should be duly available to people.

Hon. C. Gabelmann: This amendment is a result of representation to us from local government. It felt that they should not be constrained by following the fee schedule set by the province, which may have different considerations than a small municipality might have. We acceded to this request from local government because it made sense. If the fee schedules are out of line one way or another, representation can be made to the commissioner, who can deal with the local body and make suggestions. And if this doesn't work, this Legislature can, in the future, make a necessary amendment to go back to the original thinking. It's simply a response to local government trying to ensure that they feel comfortable with this legislation.

[12:00]

K. Jones: That's what I suspected was the case. The administration of local government has often used the fee structure as a means of preventing access to information that the public wants and needs in order to be vigilant of what's going on in city council, at the school board level or at the hospital board level. In most cases the hospital board won't even make that information available.

We are concerned that there be a maximum fee which can be charged. Perhaps it could be the lowest fee publicly available in the community, within reason. In many places there are five-cent copy offers. In most cases it's either that method or the actual cost of the photocopying. Administrative staff charges should not be allowed as a charge item in the provisioning of these copies, which is what they tend to try to do. They escalate those charges quite grossly.

Hon. C. Gabelmann: Other sections of the legislation prevent the use of fees as a deterrent, so fees could not be set that would have that impact. In addition to that, there will be a provincial schedule to give people a guideline for what the fees should be. If a local government is out of line, there is also access to the commissioner. But the key point here is that you cannot use fees as a deterrent.

K. Jones: If the minister confirms that it is already set in the later parts of the legislation that the fee structure cannot be used as means of restricting people from access, why is it necessary in this part to give the 

[ Page 9288 ]

municipalities the right to set the fees at whatever level they require or choose?

Hon. C. Gabelmann: It is simply responding to local government. If individuals have a problem with the fee, they can always ask for it to be waived under yet another provision of the statute. This is our response to local governments' concerns, and we think it is the right way to go. The member may disagree. We disagree then, and he should vote against it.

K. Jones: The minister said that a person can ask to have the fee waived. To have the fee waived, they have to make a submission to the commissioner. Is that correct? They have to go through some process. It wouldn't be to the same municipal council or school board that's already setting the fees.

Hon. C. Gabelmann: The request is made to the head to waive the fee, and there's a subsequent opportunity to request the commissioner to waive the fee as well.

Section 25 as amended approved.

Section 26 approved.

On section 27.

A. Warnke: I just want to expand a bit. Actually this relates closely to a question raised a little earlier by the member for West Vancouver-Garibaldi on another section. By expanding this section on freedom of information to universities, it prompts one to ask whether universities that receive provincial grants are obligated to reveal the nature of expenditures and those sorts of things under this section.

Hon. C. Gabelmann: That issue would be dealt with under the Financial Information Act, rather than under the freedom-of-information act.

K. Jones: With regard to the definition of "head," if the public body is a ministry or office of the government of British Columbia, the member of the executive council who presides over it is the head in that definition. I understood that the deputy minister was the head under most ministry applications in the previous bill or that a senior department head at a local-level office had the authority. Is this stating that only the minister can now give authorization for release of material?

Hon. C. Gabelmann: The minister delegates, presumably, to the deputy, and the deputy, then, is the head.

Section 27 approved.

On section 28.

C. Serwa: I am certainly relieved that section 28 has been amended -- in the wisdom of the Attorney General -- by making certain that the office of the Premier and the executive council operations are added to the list of public bodies. I have long held a suspicion that we must look more closely at the operation. In all seriousness, why is B.C. Rail -- a public body -- now exempt from the act's provisions?

Hon. C. Gabelmann: As I have learned over the last year, B.C. Rail is in a unique position with respect to Crowns in this province. It is a full commercial Crown, in absolute competition with other railways and transportation companies in other activities that it carries out. It is not in any way comparable to the other Crowns. For the most part, the other Crowns are delivering a monopoly service, which B.C. Rail does not do. B.C. Rail argued persuasively that information they might be required to release as a result of this legislation could be used by competitors -- whether railways or others in the trucking industry -- to give some advantage to their competitors. This was to ensure that that kind of unfair competitive advantage could not be gained by B.C. Rail competitors, who would not be required to disclose comparable information.

K. Jones: With regard to B.C. Rail, does this mean that this would be in effect as long as B.C. Rail does not receive any government funding or loan guarantees?

Hon. C. Gabelmann: It will be in effect as long as the Legislature leaves it in effect.

K. Jones: Is the Attorney General prepared to say that B.C. Rail is in the true sense a competitive organization at the same time as it is receiving funding -- or guarantees of funding -- from the government, which then makes it not truly competitive and therefore not in the same light as others but actually a liability of British Columbia, and therefore open for information access?

Hon. C. Gabelmann: No tax money is going into B.C. Rail. It is a commercial Crown -- in fact, a profitable one these days.

K. Jones: I realize that's the case today. That has not been the history of B.C. Rail -- or PGE, as it was previously called -- and it could tomorrow not be the case. The government could not afford to allow this company to go bankrupt, because all of the people along that route would be isolated. Therefore it continues to be a public utility of the province even if it is competing in the marketplace like any other operation, both in telecommunications and in rail and trucking. In order for it to be truly exempt, which I don't think will ever be the case, you have to cut the strings. That means it has to stand alone. But I'm afraid the government is not prepared to let it stand alone; therefore it should be included as a corporation whose information is accessible, just like any other Crown corporation.

If a competitive business interest is involved in this, then they can bring forward the justification for restricting that information because it would affect their 

[ Page 9289 ]

competitiveness, but let's not give them a blanket exemption from the act. Let's make sure that they're just as accountable and open to the public, which is actually running them. Its board, on behalf of this government, is still working for the people of B.C. and therefore should come under this legislation.

Hon. C. Gabelmann: Even Canadian National, which I believe is subsidized by the taxpayers, is not covered by freedom-of-information legislation. The fastest way to ensure that B.C. Rail goes bankrupt is to require them to give out all of their competitive information, and we are not going to do that. The member may disagree, but that's all I have to say about it.

K. Jones: Using the example of Canadian National is like comparing this bill to the federal freedom-of-information bill. As we all know, the federal bill is also not working on the basis of access to information; only after privacy and special interests are considered does it provide access to information. There is a definite trend in the federal field to bring their legislation into line with the progressive legislation being put forward here by this bill and the previous bill we're amending. The purposes are to provide openness and access to this information.

If B.C. Rail wants some aspects of its operation to be protected because of competitiveness factors, they have the same right to do so as any other public utility. B.C Tel and other regulated organizations have to submit their information to the CRTC on a public basis and have to justify their reasons for having some portion of their information restricted due to its competitive nature. I say that same thing holds for B.C. Rail.

Section 28 approved.

On section 29.

A. Warnke: I want some clarification as to the process for adding or subtracting occupations or professions from this list. What would be the procedure?

Hon. C. Gabelmann: If the member is asking about schedule 3, the public bodies, these are all the self-governing bodies governed by statutes passed in this House.

[12:15]

A. Warnke: Just to tease someone way off in the corner there, why is the Barbers' Association of British Columbia included?

C. Serwa: Going on the minister's concern with the commercial aspects of B.C. Rail, on the governing bodies of professional organizations, I think the minister appreciates the competitiveness between the Applied Science Technologists and Technicians of British Columbia and the Association of Professional Engineers and Geoscientists of B.C. They must have a similar degree of concern with the fact that privileged information may be made available.

Hon. C. Gabelmann: B.C. Rail made its argument, and we responded. In the case of all of the public bodies, they accepted inclusion. In each case, they specifically indicated that acceptance.

Section 29 approved.

On section 30.

A. Warnke: I have a very quick question about the implications of the appeal. Is more revealed as a result of repealing the confidentiality provision?

Hon. C. Gabelmann: The provisions under the Insurance (Motor Vehicle) Act were tighter than the Bill 50 provisions, so this makes information more readily available.

D. Symons: I'm just wondering if section 30 would have some effect on the recent disclosures at ICBC, where certain individuals were given letters of reprimand because information got out on the minister responsible for ICBC and also on its chief executive officer. Would this remove those letters of reprimand? Would it allow people access to driving records as happened at that time?

Hon. C. Gabelmann: The issue the member is discussing is protected by the privacy side of this legislation, and this wouldn't change that.

D. Symons: I'm curious, hon. minister. This is a freedom-of-information act, but you seem to be saying that it's privacy of information. It would seem that drivers' records should be in the public domain. If somebody is breaking the law, why is that kept secret?

Hon. C. Gabelmann: I'm not sure if the member understands. This legislation strengthens access to information, and it also strengthens personal privacy. What we are saying is that a person's driving record is their record and should not be available for you or I to go searching through at our whim. The member's driving record does not belong in my hands.

Sections 30 to 33 inclusive approved.

Title approved.

Hon. C. Gabelmann: Before I move the motion, I just want to express my thanks to all members. We had an agreement to finish by 12 o'clock, and I very much appreciate that we were able to go the extra eighteen minutes.

Interjection.

Hon. C. Gabelmann: We'll make up for it.

With that, I move the committee rise and report the bill complete with amendments.

Motion approved.

[ Page 9290 ]

The House resumed; the Speaker in the chair.

Bill 62, Freedom of Information and Protection of Privacy Amendment Act, 1993, reported complete with amendments to be considered at the next sitting of the House after today.

Hon. G. Clark: I move that the House at its rising stand adjourned until 10 a.m.

Motion approved.

The House adjourned at 12:19 a.m.

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