1994 Legislative Session: 3rd Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
MONDAY, MAY 2, 1994
Afternoon Sitting
Volume 14, Number 21
[ Page 10423 ]
The House met at 2:07 p.m.
Prayers.
J. Dalton: This morning at 5:30, when most of you were probably still in bed, I had the pleasure of climbing on a bus with 25 students from my son's school, Handsworth, in North Vancouver; their teacher, Mr. Jim Adams; and two of my constituents, Dr. Len Hendrickson and Mr. John Geeling. I would like the House to make all of them welcome.
G. Brewin: Hon. Speaker, at this time, if I may, I would like to make a suggestion -- inasmuch as this is entirely in order -- that you or the Clerk's office send congratulatory messages from this government to the government of South Africa regarding its new elections and the election of President Nelson Mandela. I think it would be appropriate for this House to do that, and I would like to have that happen.
The Speaker: Thank you, hon. member. The Chair, of course, would be extremely happy to convey those congratulatory comments to the new government of South Africa on behalf of all members of the Legislature. If permitted, I would like to embellish somewhat on this most special historic occasion, inasmuch as I can recall that in my first years as a member in this House, I stood up and demanded that we delist some of the South African products in the British Columbia liquor distribution system. Mind you, that was a long time ago. This is a story we have all been waiting and praying for. I will be more than happy to convey those good wishes to the new government and to the people of South Africa.
CONFLICT-OF-INTEREST STANDARDS FOR CABINET MINISTERS
G. Campbell: My question is for the Premier. When the Premier was in opposition, he constantly derided the former government for their inability to separate personal interests from public interests. Last Thursday the Premier informed this House that it was perfectly satisfactory for a member of his cabinet to pursue personal interests without regard to the public interest. Indeed, he said that if someone did not belong to the constituency of an MLA, then it was perfectly acceptable for that MLA to pursue personal interests. Can the Premier tell us in this House how the public is to determine when MLAs are pursuing public business and when they are doing personal business in their constituency offices?
Hon. M. Harcourt: The Leader of the Opposition, I think, is referring to a matter that he referred to the conflict-of-interest commissioner, and instead of letting the due process of law take place, he is carrying on an investigation here in the Legislature, too. He can't have it both ways, hon. Speaker.
The Speaker: Supplementary by the Leader of the Official Opposition.
G. Campbell: Hon. Speaker, the conflict-of-interest commissioner certainly did not try to redefine the role of a publicly elected official in British Columbia, as the Premier did last Thursday. I can only assume -- and I must admit that in view of his performance in the House in the last few weeks, it is a fairly broad assumption -- that the Premier is aware of the brochure that he has put out, called "Standards of Conduct for Public Service Employees" in British Columbia. I would like to quote from that. "Conflict of interest includes situations where employees' private affairs or financial interests are in conflict with their duties, responsibilities and obligations, or result in a public perception" -- of conflict of interest. Can the Premier tell me when he decided that in his government the standards for cabinet ministers would be below those for others in our public service?
Hon. M. Harcourt: I find it a bit hypocritical to have the Leader of the Opposition standing up here talking to a government that has introduced the toughest conflict laws in Canada, with an independent conflicts commissioner. I would like to have the approach that this government has taken to bring in these tough new statutes, and then see how the Leader of the Opposition, who lectures us, would stack up against these conflict laws. When he was mayor, he was involved with contracts to a very good friend and voted on those contracts. That wouldn't stack up very well, hon. Speaker.
The Speaker: Final supplementary, hon. member.
G. Campbell: It's always interesting to watch the Premier squirm about as he acts differently than he talks. The fact of the matter is, the Premier who tells us about his tough conflict-of-interest laws constantly ignores them. He does not even hold his cabinet ministers to the same level of accountability as he holds the public service. When will the Premier put aside his double standard and start acting in the best interests of the public in British Columbia, and stop protecting those ministers who pursue their private interests on public time and on the public payroll?
[2:15]
Hon. M. Harcourt: Once again, I say to the Leader of the Opposition: look at your own track record. The way he was dealing with conflicts when he was the mayor of Vancouver leaves a lot to be desired. The opposition can't have it both ways. They cannot send a matter to the conflict commissioner, have that independent officer carry out an investigation they triggered, and then carry on that investigation here in the Legislature.
ABSENCE OF AGRICULTURE MINISTER
W. Hurd: My question is for the Minister of Agriculture. Last week the Minister of Agriculture cut and ran from proceedings in this House, abandoning a ministerial statement. Could the minister tell the House what was so urgent that he had to miss making an important ministerial statement to this House?
Hon. D. Zirnhelt: The opposition laid some charges, and I wanted to find out the nature of those charges. I issued the contents of the ministerial statement in a press release. It dealt with the very serious matter of the international salmon commission. If you wish another copy of the statement that was released, I would be happy to provide you with one.
The Speaker: Supplementary, hon. member?
[ Page 10424 ]
LAND PURCHASE BY AGRICULTURE MINISTER
W. Hurd: I have another question for the Minister of Agriculture, who has been making a lot of comments lately about the controversy at Opheim Lake. Could the minister tell the House if he agrees with the Premier that sometimes it's all right for an MLA to act as a private citizen in his own office rather than an MLA?
Hon. D. Zirnhelt: In this matter, one set of facts has been provided by the opposition in laying their charge under the Members' Conflict of Interest Act. Mr. Hughes is interested in hearing all sides of the matter. Mr. Hughes has interviewed me.
Interjections.
The Speaker: Please proceed, hon. minister.
Hon. D. Zirnhelt: He has been to the Cariboo; he will be back to the Cariboo. I will be talking to him again later this week. He will consider all the matters that he has. All the information has been provided. Any comment about the matter before him will be left for his consideration.
The Speaker: Final supplementary, hon. member.
W. Hurd: The minister has been very busy making comments in public about this controversy, even though it's under investigation. He has advised the Williams Lake Tribune that he considers the road along Opheim Lake to be private, even though it was paid for by public money. Why would the taxpayers, whether it be 50 years ago or 50 years from now, not be able to benefit from money spent on their behalf? How is this attitude acceptable from the minister, who is supposed to be acting on behalf of the taxpayers of the province?
Hon. D. Zirnhelt: I have to repeat that there is a set of facts provided by the opposition and some of their Liberal informants in the Cariboo. They read information from the paper, and they provide those as facts. I suggest that the matter is before Mr. Hughes, and he will examine all the facts and come to an appropriate decision.
REVIEW OF BAMBERTON PROJECT
L. Fox: My question this afternoon is for the Minister of Municipal Affairs. The former minister promised that there would be a comprehensive review of the Bamberton project if it passed third reading. He was turfed out of his post because of a conflict of interest, and now the province is reneging on that commitment. Why is the minister refusing to honour the government's commitment to conduct a social, economic and environmental impact assessment of the Bamberton project?
Hon. D. Marzari: I'm glad to address the Bamberton project in the House. Just before Christmas last year I issued, after an eight-week period of developing a process by which we could bring to the public eye the nature of the processes around decision-making on such projects.... Just before Christmas that process was outlined in full detail for everyone up and down the east coast of the Island -- in fact for the whole province -- to understand. Basically, the process involves a natural and normal process that has been used in this province since zoning, regional mandates and city mandates came into being.
Interjection.
The Speaker: In deference to the limited time period, I ask the hon. minister to please conclude her remarks.
Hon. D. Marzari: Basically, this process outlines a concrete and very transparent methodology by which the decision around Bamberton will be made. I must advise the member that the process is unfolding as it should and that the decision will be made promptly -- within the next month.
L. Fox: The minister knows well that the review she has appointed Mr. MacKay to undertake will be a bogus, Mickey Mouse study; the minister knows full well it will not be sufficient. It will not address the liquid waste, the water supply, the geotechnical information or the road design.
Why is she allowing this debate over the Bamberton project to rip apart the local communities in the CVRD? Why doesn't she muster her courage, use the authority she has to throw this back to the first reading stage and allow this process to go through a meaningful process, so that the people of that region have an opportunity to support or disagree with the project as we now see it?
Hon. D. Marzari: Actually, the member should know that the ball was in the court of the regional district involved. Just a week or so ago, that regional district decided that it would not take the process back to first reading stage and would leave it at third reading stage, thus putting into motion the process of decision-making I outlined in my previous answer. As I say, since the ball was in the court of the regional district -- to decide whether it wanted to go back to first reading or stay at the third reading stage -- it was very important that I pay attention to that regional district. Hence the decision will be made within the month.
L. Fox: I'm disappointed in the minister. She knows full well that the vote to keep this at third reading stage was split. Four supported it and four were opposed, and therefore it became an affirmative vote. The minister should be well aware that normally....
The Speaker: Order, please. The member has a question?
L. Fox: Yes, I do, hon. Speaker.
The Speaker: Please state your question.
L. Fox: Will the minister not respect the director who has been elected by that region in his concern that the impacts have not been studied sufficiently for this project to go forward? Will she not respect that and turn the bylaw back so it can go through the process?
Hon. D. Marzari: There is nothing more important in this whole process than the democratic decision-making of the regional district involved. And the democratic decision-making of the regional district involved said, two weeks ago, that the process should proceed as it stands. It would accept third reading. Hence this government will be making a decision within the month.
[ Page 10425 ]
RENT SUBSIDY TO FORMER CHAIR OF B.C. TRANSIT
G. Farrell-Collins: My question is to the minister responsible for B.C. Transit -- and I know he'll be pleased. When Eric Denhoff was appointed chair of B.C. Transit, the government agreed to pay $1,500 a month in rent on his False Creek condominium while he tried to sell his house in Victoria. It appears that he wasn't trying very hard to sell that house. In fact, he listed it at $549,000 -- 150 percent of its assessed value of $360,000. Why were taxpayers paying for his digs in Vancouver while he was not trying at all to sell his house in Victoria?
Hon. G. Clark: It's a slow news day, I assume. I have no idea what Mr. Denhoff listed his house in Victoria for.
But I am delighted to take this opportunity to talk about the changes at B.C. Transit under Derek Corrigan, who has been made chair. We're very excited by the opportunities at B.C. Transit.
The Speaker: Order, hon. minister. With the greatest of respect, is the minister declining to respond to the specific question?
Hon. G. Clark: No, I'm trying to give a full and complete response.
The Speaker: Thank you, hon. minister. The hon. member has a supplementary question?
G. Farrell-Collins: I know the minister isn't aware, but I'll be glad to make him aware. It appears that over the period of a year, Mr. Denhoff listed his house first at $549,000, then at $529,000 and then at $500,000 -- still 140 percent of the assessed value. Was there no responsibility for the government to ensure that while they were paying out $1,500 a month of taxpayers' money, Mr. Denhoff was doing everything possible to sell his property? If he wasn't, shouldn't he have admitted that and given up his $1,500-a-month subsidy?
Hon. G. Clark: Mr. Denhoff is obviously a capable private sector individual who is seeking to make a rate of return on his property investment here. Mr. Denhoff was temporarily assigned to B.C. Transit for a two-year term, which expired in June. He was undertaking to assist the government in transition, and he has done a superb job with that transition. We're now well poised for some significant announcements at B.C. Transit. Mr. Denhoff has chosen to pursue work in the private sector. I assume he'll dispose of his house then, if he so desires.
The Speaker: The bell terminates question period.
G. Wilson: I rise today under standing order 35 to ask leave to make a motion for the adjournment of the House on a matter of urgent public importance -- namely, the comments that were made in British Columbia this morning by the Leader of the Official Opposition in Ottawa. Today, for the first time in the history of Canada, the leader of Her Majesty's Loyal Opposition is travelling this country and advocating the secession of one province from every other.
Interjections.
The Speaker: Order, hon. members. The hon. member is stating the matter to determine whether or not it is a matter that can be addressed. He does not require permission to rise on this matter. Let's hear what he has to say and make the determination afterward.
G. Wilson: The comments made today by the Leader of the Official Opposition on both CBC-Radio and CKNW were heard by literally tens of thousands of British Columbians and made a direct attack on the people of British Columbia and the people of Canada with respect to the intention of that member, in representing all Canadians as the Leader of the Official Opposition, to separate the province of Quebec from Canada.
I believe that British Columbians wish to know the position of this government and of every elected member of this House with respect to those comments. It is urgent that we respond, because those comments were made in British Columbia today and should have a response from the elected members of this province today. I believe there is no matter more pressing and more urgent for the people of British Columbia with respect to this province as a strong and equal partner of a united Canada. I urge that we enter this debate now.
The Speaker: Thank you, hon. member. I appreciate the hon. member's notice.
The hon. member for Fort Langley-Aldergrove rises on what matter?
G. Farrell-Collins: I'd like to make a submission on the standing order 35 request. I think all British Columbians -- indeed, all Canadians -- take all those types of comments made by the Leader of the Opposition in Ottawa, or whoever it is, very, very seriously. We all know how interested and how concerned British Columbians were a year and a half ago when we debated the Charlottetown accord. I think they were all amazed at how important people thought that issue was.
But I think what's more germane to this House -- if there's going to be an emergency debate -- are the treasonous comments that were made by the member who just spoke in demanding an independent British Columbia in this country. I think what British Columbians really want to know is not the position of the Leader of the Opposition in Ottawa, but where this member got his ideas and where he plans to take British Columbia in the future.
The Speaker: Thank you for your submission, hon. member. The Chair will be pleased to take the member's motion under consideration, and bring back a decision later.
T. Perry: I seek leave of the House to make an introduction.
Leave granted.
T. Perry: I'd like to welcome to the east gallery students from Maimonides School in my riding -- the only Jewish secondary school west of Winnipeg -- and their teacher Dr. Court. Would members please join me in making them welcome -- but not for too long with the applause, because I hope to meet them in a minute or so.
[2:30]
J. Dalton: I ask leave to table a document on the Pacific Salmon Treaty.
Leave granted.
[ Page 10426 ]
Hon. G. Clark: I ask leave of the House for the Select Standing Committee on Forests, Energy, Mines and Petroleum Resources, the Select Standing Committee on Environment and Tourism, the Select Standing Committee on Transportation, Municipal Affairs and Housing, and the Select Standing Committee on Aboriginal Affairs to meet tomorrow during sitting periods.
Leave granted.
Hon. G. Clark: I call Committee of Supply A, the Ministry of Aboriginal Affairs; and in the main House, I would first of all like to call third reading of Bill 11.
CEMETERY AND FUNERAL SERVICES AMENDMENT ACT, 1994
Bill 11, Cemetery and Funeral Services Amendment Act, 1994, read a third time and passed.
Hon. G. Clark: Hon. Speaker, I call second reading of Bill 15.
CORPORATION CAPITAL TAX AMENDMENT ACT, 1994
Hon. E. Cull: This bill increases the exemption threshold for the corporation capital tax to $1.5 million of paid-up capital from the current $1.25 million. It also increases the threshold at which financial institutions are required to pay the 3 percent tax from $500 million, where it currently is, to $750 million of paid-up capital. The bill also exempts cooperatives and incorporated family farms from the corporation capital tax. Finally, it makes a number of technical and administrative changes that will clarify the application of the tax.
With respect to increasing the threshold, this increase in the exemption level will make about 1,000 additional small businesses totally exempt from the capital tax, and the tax will now be phased in between $1.5 million and $1.75 million of paid-up capital. Previously the tax was phased in for taxpayers whose capital was between $1.25 million and $1.5 million. As a result of this increase in the threshold, a further 1,000 firms will pay less capital tax. All in all, over 2,000 small businesses in British Columbia will benefit from the changes made under this act. The threshold for financial institutions has also been changed. The threshold will be increased now so that the 3 percent rate does not come in until $750 million of paid-up capital is involved. This has been done to ensure that the tax does not discourage the growth of locally based financial institutions.
Incorporated farms are being exempted from the tax in order to remove an inequity within the farm sector and also to provide assistance to B.C.'s agricultural sector. The exemption for cooperatives is designed to foster the growth of the cooperative movement within the province. As a result of these changes, about 500 family farm corporations and cooperatives will now be exempt from the tax. The technical changes to the capital tax are designed to clarify the application of the tax. They confirm existing policy and administrative practice.
In summary, this bill increases the fairness of the corporation capital tax and makes it less complex. On that basis, I move second reading.
F. Gingell: I was fascinated by the minister's final words in dealing with second reading of Bill 15. The minister said that these amendments increase fairness. I'd like the minister to understand that when something is unfair and you just change it a little bit, it doesn't increase fairness; it perhaps just reduces the number of businesses that are being treated in an unfair manner.
"Unfair" is exactly the right description to use about the corporate capital tax. It is a tax that is unfair, it's a tax that is unjustified, and it is a tax that, unfortunately, is one of the factors causing businesses to decide to invest in other provinces and in other countries. Certainly I know it's a factor that's taken into account when new businesses are looking at where they shall establish themselves to take advantage of the opportunities we all see from the growing trade and economic activity in the Pacific Rim.
[J. Beattie in the chair.]
It simply goes without saying that it is an important matter -- a critically important matter -- for the provincial government to repeal this act in its entirety. It was brought in in 1992; certain changes were made in 1993; we now have more changes in 1994. I can assure the minister that all British Columbians -- particularly those who are unemployed, particularly those who are looking for the new job opportunities this government speaks about so blithely -- are hoping against hope that this government will repeal the corporation capital tax. Then we will be able to encourage business to locate here, and we will be able to encourage investment to be made here.
British Columbia, as we all know, has tremendous advantages. We have the advantage of our environment, we have safer streets, we have a medical health system -- all of which are looked upon with envy by our friends south of the border and in countries around the Pacific Rim. Let's try to take advantage of these things; let's stop doing things that cause people to make decisions to go into other jurisdictions.
We of course will support these amendments -- they make a bad piece of legislation somewhat better -- but the bill that we intend to support with all enthusiasm in the future is when this government has the courage to recognize what it must do, and that is to bring forward a bill that repeals the corporation capital tax.
J. Tyabji: I have some brief comments with regard to Bill 15. First of all, I'm obviously in favour of the amendments to the corporate capital tax. But the position of the Alliance is that the corporate capital tax should be abolished without any amendments. In lieu of it being repealed completely, I have to give credit where it's due, and I'm very happy to see the amendments with regard to agriculture. I'm sure the minister recognizes the serious constraints on the agriculture industry right now, and this is one small measure that should alleviate some of the problems. I would hope that if cabinet recognizes the serious problems that exist in the agriculture industry in B.C. today, the one section of Bill 15 dealing with the corporate capital tax not applying to agriculture will be expanded to include recognition of some of the very serious financial hardships occurring with the repeal of the Farm Income Insurance Act and with federal resistance to import restrictions. So although I am in favour of the amendments, I wish the government would reconsider the corporate capital tax in its entirety. The mining industry is still very hard-hit by the corporate capital tax, as are other resource industries -- but most particularly mining because of the high capital that would appear on the books before
[ Page 10427 ]
any revenue is generated from it. So I'm in favour of the amendments but against the act in its principle. I hope the government will take further measures on agriculture.
R. Neufeld: I have a few brief points on Bill 15. It's not that often in the House that one can stand up in favour of legislation presented by the government, and I certainly support the changes forthcoming in the amendments. I believe this is the second amendment to the corporate capital tax since it was introduced in the first year of this government's administration. It was introduced by the now-Minister of Employment and Investment and was introduced in a way that made British Columbians feel they hadn't been paying their fair share of taxes -- especially corporations. The minister of the day talked incessantly about how fair this tax was going to be, and I think all the opposition parties at the time spoke against it. Specifically, I recall speaking against it in relation to the tax on corporate farms, because of the difficulty that the agricultural industry was going through at that particular time, especially in my constituency. So I am happy that we have removed it from corporate and family farms. It's a move in the right direction.
Of course, just like the two speakers before me, I feel that the removal of the corporation capital tax altogether would also be a move in the right direction. I think we would find an awful lot more investment in British Columbia. If there is one thing investors talk about incessantly when you hear them or read them in the newspapers, it's how regressive the corporation capital tax is and how it affects investment in British Columbia. So I would hope that if this government is still here next year at this time, they will come forward with a third amendment, and that will be the removal of the corporation capital tax in its entirety.
With that, hon. Speaker, I take my place, and I will be voting in favour of Bill 15.
G. Farrell-Collins: Just a few comments with regard to this bill. As we know, it is an amendment to the existing corporation capital tax, and there are some changes in this amendment that I think many members of the opposition will be pleased to see. But we are still looking for, number one, a complete removal of the corporation capital tax, since it is seen by international and domestic investors as the single largest deterrent to investment in this province. I think the government should always be mindful of that. In an effort to create jobs and to create an economic future for the people of this province, young and old alike, it's incumbent upon the government not just to spend the taxpayers' money, which they have gone out and borrowed, but also to make B.C. a welcome place for investors to bring their funds and to encourage small and medium-sized businesses to start up here. Indeed, if we can get some large businesses, it would be even better.
We know that when this tax came in, there was rather loud comment from those investors in Asia who have tended to bring substantial amounts of money into British Columbia over the last ten years or so. That was because the Premier had just recently visited them to tell them that there would be no new taxes in British Columbia, and he subsequently turned around and taxed the capital they had just invested. So I know they weren't very pleased either by the apparent lack of communication between the then-Finance minister and the Premier or, I would say, by the Premier's perhaps slightly less than forthright comments dealing with tax increases in the province.
[2:45]
The question of valuations is another that needs to be addressed, and I imagine the opposition Finance critic will be putting amendments in committee stage. Many people may not be aware of the valuation problems with the corporation capital tax -- except for those who are getting hit with it. It's a case where one person may for some time have held a piece of equipment or piece of property that is valued at something below the threshold rate for the corporation capital tax, and therefore tax isn't being paid on that asset, whereas somebody who purchased it recently or a new competitor who is expanding -- perhaps located right across the street, with a similar piece of land or equipment -- ends up paying corporation capital tax on it. So I think there is an inherent problem with the tax, as far as the valuation of assets goes. I hope that the Minister of Finance, if she's not willing to get rid of the tax altogether this session, would be willing to look at some of those valuation problems and see if we can't correct them, so that all corporations, all small and large businesses in this province, are competing on an equal footing.
D. Mitchell: I only wish that I could be rising to address a bill by a different title. I only wish Bill 15 could have had the title An Act to Repeal the Corporation Capital Tax.
This bill, which is perhaps the most inequitable piece of legislation brought in by the NDP government since its election two and a half years ago, really has been duplicitous, and it has not done what the government said it was going to do when it was first introduced. That's borne out by the Minister of Finance's estimates, which she tabled in this House this year with her budget, in which she shows that last year, although they estimated that the corporation capital tax was going to bring in $288 million for the government, it actually brought in $335 million. That's almost $50 million more than they themselves estimated.
When the government brings in an inequitable tax -- which is a tax on assets, which includes debt as well -- for many businesses, including small and medium-sized businesses, and it raises more money than even it, in its most optimistic forecast, could have projected, one has to wonder where these tax revenues are going. After the government brought in this tax, it indicated that the revenues from the corporation capital tax would go toward reducing the debt of this province. Yet the budget that the Minister of Finance brought in doesn't even begin to address the accumulated debt of the province of British Columbia.
There is a good argument that because they raised another $50 million with the corporation capital tax in the last fiscal year, perhaps that should be rebated to the businesses that the tax was levied on in the first place. We hear nothing from the Minister of Finance about a possible rebate of the extra revenues being generated by this inequitable tax, to people who are paying this tax but can ill afford to. We have to support this bill, of course, because it makes a very terrible piece of legislation somewhat less terrible. But it's still unacceptable to the majority of British Columbians.
The Minister of Finance received a lot of representation during the budgetary process, and she received briefs from a number of organizations. It's not a surprise to me that she ignored the recommendation of the Business Council of B.C., which made a submission to her in February of this year. It says:
"The government should move to reduce existing business taxes and fees that are unrelated to companies' profitability. A top priority is to eliminate the corporation capital tax because of its damaging impact on the attractiveness of British Columbia as an investment location."
Under the section of their brief entitled "Tax Policy," they went on to say:
[ Page 10428 ]
"The single most important step the provincial government could take to improve the investment climate in B.C. would be to eliminate the corporation capital tax -- a tax on assets, not profits, and one which does not exist in most of the jurisdictions with which B.C. industry competes."
I'm not surprised that the government doesn't take all the advice that's proffered them, but they would have done well to accept the recommendation of the Business Council of B.C. to repeal the tax -- not to amend it or make it somewhat less terrible than it is, but to repeal it completely. At the very least, the minister should explain why the tax has raised almost $50 million more than the government forecast a year ago, and she should tell us whether or not she will consider a rebate to companies and businesses that have been forced to pay this inequitable tax in the first place.
H. De Jong: First of all, I'd like to state a few positive things about the bill. It has eliminated a totally unfair tax against certain groups of farming enterprises, and that is good. We on this side of the House have fought hard for that. I congratulate the minister for finally admitting that it was a mistake to put that tax on in the first place.
Going back to when this bill was introduced for the first time.... It almost seems that the government recognizes that it was a total mistake to put that tax on. The only point is that they are repenting their mistake little by little. As other speakers have said, it's unfortunate that the total corporate tax against the business community is not being taken away.
What seems more strange in this bill is that the minister has said that cooperative sales outlets and plants that process agricultural products are now being exempted from the tax. We all know that within this province we have cooperatives and independents who try to be of service to the farming community. Why not those independents that are particularly processing farm products? Why make a distinction between cooperatives and non-cooperatives -- or independents, as they're usually called? I think it's absolutely ridiculous and unfair, and it certainly will do no good in terms of trading beyond this province -- not only within Canada but also in international trade. I think that perhaps it excludes a portion of those independents, and they can no longer compete with those in a cooperative setting.
It would appear that this bill was intended to be a money grab at first. The government has recognized it was a mistake and repented little by little. It would now seem that it is used as a bag of goodies, which I cannot accept. I think the government should come clean and say, "Let's abolish this whole corporate tax," because that's what it's all about.
W. Hurd: I'm pleased to rise in my seat today and speak to Bill 15, Corporation Capital Tax Amendment Act, 1994. This is the second amendment the government has made to this act. Both involved small incremental increases to the amount of the exemption, and now the total exemption of the family farm, which is certainly a supportable venture but one which really reveals, I think, the government's lack of understanding about the farming community in British Columbia.
When I was at a Federation of Agriculture meeting last year, I had occasion to talk to a number of farmers who, five to ten years ago, had been encouraged to incorporate in British Columbia because of the advantages it offered a sector of our economy -- a sector which, as the hon. Speaker well knows, is a variable occupation that can see fluctuations from year to year. They were snared in this tax completely unfairly, I would say. I can recall the accountant delivering the dissertation on the corporation capital tax at the Federation of Agriculture meeting and pointing out how difficult it was to even define the term "paid-up capital" when it comes to assessing the value of the family farm. Clearly, the fact that two years after the introduction of this bill we are now finally dealing with the exemption for the family farm re-emphasizes, I think, the notion that the government really didn't understand the difficulty this tax would pose to those in the farming community, even though it has been there for the last two years.
The exemption allowance increase of $250,000, while it may seem a great deal to a layman, is really minuscule compared to most corporations in the province. It's interesting to note that the fundamental philosophy of the corporation capital tax remains unchanged. That philosophy is that if you go to the bank or other financial institution in this province to borrow money for expenditures on plants and equipment, to hire people or to perhaps improve the quality of employment and life in your community, you will pay a tax on that capital. That is the principle and philosophy of this act, which remains unchanged, despite the amendments we're dealing with today.
It speaks volumes for the differences between that side of the House and this. There has to be a recognition that when capital is borrowed for purposes of expansion and employment creation, benefits flow to government from that activity, which really speaks to the need to avoid tax on that initial investment or initial borrowing from the bank. Unfortunately, the philosophy of the capital tax remains unchanged in this province. The fact is that those small corporations that do go to the bank to borrow the capital they need for expansion take a risk -- and it is a considerable risk with the business climate the way it is now. They are going to see their net share capital increase and their paid-up capital increase, and they are going to pay a tax on that type of risk-taking venture.
It never ceases to amaze me that we sit in this assembly and deal with small incremental changes to this act. It's almost as though the fingernails of the government are sliding down the blackboard on this issue. What is needed, and has been needed for some time, is the recognition by government that this tax is punitive and unfair, and that it acts to discourage risk-taking and investment in the province. Before the term of this government is up, I hope that we will be debating a bill which would completely eliminate the corporation capital tax in British Columbia.
Hon. E. Cull: I find it very curious to listen to the opposition speak about this bill. On the one hand, I am pleased to hear credit being given to the changes that we're making; but it seems to me that they want to have it all ways when they go on and say that not only do they want what we're doing but they want the corporation capital tax repealed immediately. They stand here in this House and tell us that they want the tax cut, and they also want the deficit cut. But when we talk about their particular ridings, they want schools, hospitals, education funding and more money for tourism marketing. They want all kinds of things that are good investments to have in their communities, but you can't have it all ways. Somebody has to pay for all the things these members ask for when they stand in this House representing their own constituents and their own ridings.
When they called for the elimination of the corporation capital tax, not one of them said where they expect that $330 million that was raised last year to come from. Do they want it to come in cuts to services? Maybe they could tell us where they'd like it cut: out of the Education budget or the Health budget? Do they want us to build fewer schools or to make
[ Page 10429 ]
fewer renovations to hospitals? There are all kinds of things that we could do, but we are striving for a balance. There has to be a way of paying for the very necessary investments made by the public in this province, because it's not only the private sector that's making investments.
[3:00]
The critics also suggested that investment is being hampered by the bill. Clearly, people who are making investments in the province don't like this tax; they don't like any taxes. If you ask anyone if they would like to eliminate a tax or if they like paying taxes, being human, they are all going to say: "No, we don't want taxes. Let's get rid of them." But people and businesses have to pay their fair share. With this capital tax, capital spending in British Columbia in 1993 increased 8 percent. That's compared to a drop of almost 1 percent in the rest of Canada. The opposition is suggesting that somehow this tax is driving investors away from the province, when the evidence is entirely contrary to that. An 8 percent increase in capital spending exceeds the stated indications. When StatsCan does its survey and asks: "How much do you think you're going to be investing this year?" -- it exceeded that by 2 percent.
To the member for West Vancouver-Garibaldi -- if I've got that right -- who asked why our estimate was exceeded, our estimate was exceeded because investment in this province is stronger than even we expected. And that's what's happening here. People are continuing to invest in British Columbia because they know that we have the second-lowest taxes overall -- and the lowest debt burden in relation to our economy in Canada, and that we're one of the best places in this country to invest. And I think the evidence is shown by the decisions that have been made by business over the last year.
Now let's get down to the nub of the problem here. The corporation capital tax was brought in in 1992 to break the back of the deficit. The mess that we inherited in terms of the finances of this province had to be turned around if we weren't going to see a ballooning deficit. We brought in the corporation capital tax so businesses could pay their fair share in eliminating the deficit. And it has been effective. The deficit has been reduced from the $2.4 billion we inherited in 1992 to under $900 million this year.
It is part of our overall debt management plan. Taxes have been frozen overall in the province for three years. As I've said a number of times to the business community in the last number of months, when the deficit is gone -- as it will be in 1996 -- we will be able to consider the corporation capital tax, and we will reconsider it at that point.
With that, hon. Speaker, I now move second reading of Bill 15.
Motion approved.
Bill 15, Corporation Capital Tax Amendment Act, 1994, 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. E. Cull: Hon. Speaker, I call second reading of Bill 19.
TAXATION STATUTES AMENDMENT ACT, 1994
Hon. E. Cull: I am pleased to rise to speak on the Taxation Statutes Amendment Act. This is an act that includes a number of amendments to different taxation statues that will provide tax relief to both individuals and businesses by focusing on tax fairness, on the reduction of red tape and on support for economic development. The bill actually contains amendments to seven provincial statutes to effect changes which British Columbians told me they supported very strongly during my prebudget consultation, when I went around the province and talked to business, labour and community people throughout British Columbia.
The first amendment in the bill is to the Home Owner Grant Act, and it increases the home value threshold to $450,000 from $400,000, for reducing the homeowner grant. The increased threshold reflects the higher assessed values, and it ensures that the intent of the act remains unchanged: that 95 percent of British Columbia homeowners receive the full homeowner grant.
There are also amendments to the Income Tax Act, and they form part of a tax relief package for the mining industry in recognition of its role as a major exporter and important regional employer. The assistance is designed to revitalize a key sector of the province's economy at a time when it faces low commodity prices and increasing competition from low-cost producers in other countries. The income tax amendments will allow mining companies to deduct mineral taxes in calculating provincial corporate income tax.
Another amendment in the act concerns our support for strong ties between the province and the Pacific Rim. To help the province take advantage of the expected growth in the Asia-Pacific area, the Motor Fuel Tax Act has been amended to provide for a fuel tax reduction of 1 cent per litre on international flights. This measure will allow the Vancouver International Airport to enhance its role as the North American gateway to the Pacific Rim.
Another change to the Motor Fuel Tax Act deals with people who are able to receive the fuel tax rebate if they have disabilities. We are now increasing the annual limit from $300 to $400, which will be a considerable benefit to people who are able to take advantage of that rebate.
There are also a number of changes to the Social Service Tax Act. The two most significant are the restoration of the trade-in allowance on the purchase of passenger vehicles and the increase in the luxury tax threshold to $32,000 from the previous $30,000. The balance of the amendments are intended to improve fairness and enforcement and to clarify various provisions of the act.
In keeping with our commitment to review the taxation of automobiles, the Premier and I met with industry representatives over the last number of months. Indeed, the consultation began with the former Minister of Finance, who struck an industry task force to look at the impact of last year's tax changes. What was really interesting -- and I know that industry representatives will say this as well -- was that in working together over the last 12 months, we discovered that information that government had and that industry had was not entirely correct. By working cooperatively, we were able to come up with a common understanding of what was happening in the industry and then recommend changes.
As a result of the work that was done, we decided to restore the trade-in allowance on the purchase of passenger vehicles but also to raise the threshold for the luxury tax from $30,000 to $32,000. The government believes that British Columbians who can afford to purchase more expensive vehicles can afford to contribute more to the cost of providing essential government services. But the increase has been put in place to recognize that prices have increased as well, and that some higher-priced vehicles are required in
[ Page 10430 ]
order to live and work in many northern and rural parts of the province.
The balance of the amendments to the Social Service Tax Act in Bill 19 are intended to improve fairness and enforcement and to clarify some provisions in the act. Let me summarize those changes very briefly.
First of all, there's a refund provision that has been replaced with a point-of-sale exemption for bona fide aquaculturalists on the purchase of boats, motors and related parts. This change will reduce compliance costs for business and administrative costs for government, so it's a win-win.
A refund is also provided for the tax paid on materials used to construct portable buildings for export, so we can ensure that British Columbia manufacturers are not placed at a competitive disadvantage in competing for contracts in the export market.
An exemption is provided for the purchase of liquor and certain other supplies by commercial airlines for use in serving their passengers on international or interprovincial flights, to ensure that B.C. suppliers are able to compete effectively to supply these products.
The act is also amended to require people who regularly sell motor vehicles to be registered as dealers under the Motor Dealer Act prior to being registered under the Social Service Tax Act. This amendment will prevent unlicensed individuals from purchasing vehicles for resale that are exempt from the provincial tax.
The act is also amended to clarify that businesses operating both inside and outside B.C. are eligible for a refund of the tax paid on goods purchased and stored in the province but not otherwise used in the province. And then there are some definitional changes.
Bill 19 also provides for two changes to all of the province's consumption tax acts, including the Social Service Tax Act. The first change ensures that businesses selling tobacco, fuel, hotel-like accommodations and other consumer products and services are eligible for a proportional refund of tax remitted on bad-debt accounts. The second extends the appeal period to 90 days from 60 days for appeals received by the province on or after March 23 of this year.
To summarize, we're pleased to introduce the measures in this bill to reduce the tax burden on individuals and businesses and to improve the fairness of the tax system. I now move second reading of Bill 19.
F. Gingell: Again, as with the last bill, we will not be opposing these amendments. We are pleased that the amount of the exemption on assessed residential property for the homeowner grant has been increased. But like the corporate capital tax, the homeowner grant and the provisions that claw it back in no way deal with the issue of ability to pay. As we all know, many of Vancouver's early families have lived in family homes in Vancouver, sometimes at great cost and sacrifice to themselves. They have no intention of selling, wish the home to remain in their family and are being unfairly treated because of reductions in the homeowner grant that are based purely and simply on assessed values.
I was also interested when the minister spoke about a task force that was struck by the previous minister to deal with the issues that became apparent on the disallowance of sales tax credit on car trade-ins. I think that the minister, by using the word "struck," described only part of it. The truth of the matter is that the previous Minister of Finance struck out -- and struck out badly. Here was a minister who brought in a property supertax which had to be cancelled. He brought in the cancellation of trade-in allowances on new automobile purchases, and one year later that was recognized to be the disaster it was, and that was repealed. The minister got moved from his responsibilities. I think the sad thing is that the Premier didn't realize that this minister can do as much damage in his new portfolio as he did to this government in his last.
An Hon. Member: That's terrible.
F. Gingell: True.
This government has to recognize that that taxation must seem to be fair. Again, the particular matters that have been dealt with here are only making minor changes to those items that are not considered fair.
I am pleased that the Minister of Finance obviously has read through last year's Hansard, has taken the advice of the official opposition that came up during the exchanges on the social services tax and has finally stopped requiring businesses to pay taxes that they do not collect from their customers. I'm really pleased to see that the adjustments for bad debts are finally going through; that's long overdue. I'm really pleased that this Minister of Finance is recognizing many of the problems that have become inherent in our tax system and is taking steps to change and improve them. I hope that this isn't the end of the minister taking these actions and that next year there will be further amendments to try to correct some of these inequities, if this minister is still in her current post.
[3:15]
We will be voting with the government on this bill. I look forward to dealing with these various items in committee stage, which is perhaps a more appropriate forum for discussion.
L. Fox: I'm pleased to stand, take my place and speak on Bill 19, the Taxation Statutes Amendment Act, 1994. I think it's only appropriate that it should be recognized that most of the amendments contained in this bill are, in fact, amendments to statutes brought forward by this government over the course of the last two years.
Specifically, I very clearly recall the debates in this House on the jet fuel tax and the loss of the trade-in credit in the automotive section of this bill. It's a shame that over the course of the last year the people who purchased an automobile had to pay 7 percent more out of their pockets because of an action of this government and the arrogant then-Finance minister. He failed to respect the opinions brought to him both by the Motor Dealers' Association of British Columbia and by opposition members, when that minister was told very clearly by all people opposing the legislation then that it would result in less taxes being collected by this government. It's really unfortunate that that minister failed to heed the arguments of the day and that subsequently many British Columbians had to pay 7 percent extra for their purchases of automobiles over the course of the last year. That is merely an indication of the tax-and-spend attitude of this government, whereby they pay little heed to the concerns of taxpayers and pay heed only to the concerns of those who are very close to them and advise them on a day-to-day basis, but who really haven't got the pulse of the common concerns of British Columbians.
I would be pleased to support this bill. But I find it extremely ironic that it took a change in the Finance minister portfolio, in terms of the individual representing that government, before we saw the courage to correct a very dramatic mistake made by this government over the last two and a half years. Had this government had the courage and
[ Page 10431 ]
wisdom to listen to British Columbians, we'd have seen a lot less taxation and spending, and we'd have seen some of those very crucial areas of the province's economy affected by less spending, not more taxation.
I find it rather ironic. A few months ago when the Premier announced no new taxes, it had a very hollow ring. Ever since that time we've seen increases in virtually every fee being collected around the province, including a substantial new tax on the forest sector. This bill only reminds us that even with this government it is possible, occasionally, to admit error. Unfortunately, it's usually too late and at the expense of the economy. It's unfortunate that we have Bill 19 before us, because this bill could have been prevented had the government listened a year ago when we were discussing those taxation issues.
However, I will be supporting this bill. It is a very minor move towards righting wrongs, but I think British Columbians will understand that the government really doesn't know what it's doing. It doesn't do research before it brings legislation forward, and it passes legislation and then looks at the impacts. It's really unfortunate in today's world that we have a government that operates in such a manner.
J. Tyabji: You can almost look on this bill as the cumulative mistakes from last year's amendment act. It covers quite an area, and some questions arise. On the one hand, it's very easy to be encouraged by the government's recognition that people with disabilities need a larger refund under the Motor Fuel Tax Act, and the increase in appeal time under a number of acts in this bill, from 60 to 90 days, is very encouraging. Having had some experience with what happens once an appeal is launched, I hope something can be done on the government side to reduce the amount of time that it takes to hear an appeal and come to a decision.
With regard to the change in taxation on cars, I find it interesting that the act referred to car leases in addition to car sales, and that those provisions will be removed. The question that arises for committee stage is whether that is in effect for people who incurred leases last year, how much money was raised by the government last year with the car tax, and whether or not the....
Interjection.
J. Tyabji: The previous Minister of Finance says $30 million. Why isn't this retroactive? Why isn't there some recognition of the people who contributed to the $30 million? That will come up in committee stage, obviously.
We know that last year's budget was particularly difficult for the airlines. Although Canadian Airlines will experience some capital infusion with the recent purchase of shares by American Airlines, I hope the government will recognize that steps like these allow Vancouver Airport and B.C. to be a more competitive environment for businesses to operate in.
I hope we will see more recognition of the need of people with disabilities to have allowances of the kind made with regard to their motor fuel tax rebate increase from $300 to $400.
Committee stage is where we have to ask some questions about why this government made these decisions last year, what decisions were taken to bring these amendments up at this stage, and how the people who paid these taxes in the intervening year can have some redress. That is what is really regrettable. We can all support the amendments, but we have to recognize that millions of dollars were generated from taxes that were seen to be so unfair that the government brought in an act to repeal them. If the government is going to recognize that these taxes were unfair enough that they need to be repealed, then the government should recognize that the people who paid them deserve some redress for the amount of money they are out of pocket.
I'd like to conclude by saying that the Alliance is in favour of this bill but in opposition to some of the taxes that remain as amended by this bill.
R. Neufeld: I would like to speak briefly to Bill 19. I can tell you from the outset that I will vote in favour of Bill 19, because it is a move in the right direction to reduce punitive taxes that this government has introduced over the last two years. One should not forget that what we've been dealing with here all afternoon are reductions or changes in regressive taxation measures introduced by the NDP government over the last two years.
This government talked very much, and still talks very much, about consultation with the public -- with those affected -- before they bring forward any legislation, so we wonder why they would now be bringing forward this legislation to change back a little what the opposition talked about a year or two ago as being regressive.
I recall the homeowner grant. Of course, it does not affect my constituency at all -- $400,000 and $450,000 homes -- but it certainly has an effect on a number of people in Vancouver and in the lower mainland in general. That was one that I think all opposition parties talked about at quite some length. This government was not willing -- or, I should say, the minister of the day was not willing -- to listen to recommendations that were forthcoming on that.
I'm glad to see that there is change for the mining industry. Maybe this government is finally learning that the mining industry is leaving British Columbia. Even though the Minister of Finance says that everything is rosy in British Columbia, I'm sure she will agree that the mining industry is not so rosy and hasn't been for a number of years -- not just since this government took office but before that. But the regressive taxation on the mining industry that this government brought forward through a corporate capital tax and through electricity increases -- you name it; there's just about nothing they missed -- has certainly had an effect on that industry.
The 1 cent reduction in motor fuel taxes. I think the minister who introduced that bill a year ago is in the House now and will certainly admit it was a terrible mistake. It shouldn't have been put there to start with. We have an industry that was asking for a guarantee from government so they could keep operating, and government taxed them more.
The social services tax on luxury vehicles. I recall saying during the debate that people and businesses in the north purchase vehicles that cost in excess of $30,000 for business purposes or even for private purposes, such as four-wheel drives if they live on ranches or in places out of the community. Again, no one listened. But now, all of a sudden, those people who purchased vehicles over the year are stuck with having paid that extra tax.
[D. Lovick in the chair.]
The one that really is the worst one and that this government should be chastised for dramatically is the removal of the tax on trade-in allowances on vehicles. That was the most ridiculous move I've ever seen in my life. We made presentation after presentation to the government on the effect this would have on that part of the industry in British Columbia. The minister admits that the government
[ Page 10432 ]
had the wrong information and that the industry had some wrong information. They finally got together -- but that's this year. It took them a whole year to get together. This is a government that talked about consulting with everybody. In fact, the minister that introduced this bill is in the House at the present time, and I remember him saying many times: "Yes, we've talked to that industry. Yes, we have, and it's not going to affect them." He was happy to introduce it. One year later -- bang! -- what have we got? We're changing it totally because we had the wrong information and because we didn't consult.
Now you tell me what's fair. What happens to all those taxpayers who purchased new vehicles or who traded in vehicles and didn't get the tax allowance? This year, all of a sudden, the government admits that it made a stupid error in introducing the legislation in the first place. They penalized people who bought vehicles over the last year. That's what's so unfair about this.
If they didn't want to listen, I can understand that, because they don't listen very well; they never have listened very well. They don't consult the public, and they don't consult the industry. But I don't know what this minister is going to do now to compensate those people for last year. Are we going to do anything? Are we going to look back at it and say: "Yes, this was a really bad mistake, and I'm sorry"? Or are we just going to write it off to experience?
[3:30]
It's no wonder that taxpayers in British Columbia are so disillusioned with the tax system and with the government we have today. One year they introduce a tax that they say is really fair; the next year they take it out. What's going to happen next year? Heaven only knows. Are we going to introduce some more, or are we going to take some more of this regressive taxation out? Are we going to bring forward more taxation statutes amendment acts? I assume we are, because we're going into the fourth year of an administration. It's called election fever. It's called spending money.
One of the NDP members from Prince George was catcalling here awhile ago, when one of the opposition members was talking about a bill, saying: "You shouldn't say anything, because you're not going to get any B.C. 21 money spent in your constituency." That's as ridiculous a statement as I've ever heard.
L. Fox: It's pretty factual, though.
R. Neufeld: But I guess it's pretty factual. Is that what happens with this government? This government doesn't know that once it's elected, it's supposed to represent all of the people in British Columbia, not just the favoured few, not just a few buddies, friends and labour unions. It should represent all British Columbians -- every one of them. And to every one of them who bought a car or a pickup or a vehicle of any kind last year, this government should be writing a letter explaining the stupid move they made, saying: "Yes, we are sorry, and we're going to look at it."
If you go to the estimates, you'll see that they raised more money than they expected for social services. I don't know which part it came out of, but maybe....
F. Gingell: Taxpayers' pockets.
R. Neufeld: Exactly. Someone said the taxpayers' pockets. There's only one taxpayer, and that's where it came from. People who bought last year and who contributed fairly, as the minister says, to all of the programs that we need in this province -- education and social programs.... They contributed totally unfairly for one full year. That's not fair, and something should be done about that.
It's unfortunate that the ministers changed. Now we have a new Minister of Finance in place who is trying to clean up the bloody mess left by the last minister. I feel sorry for her some days. Other days I don't, because she is part of the government that agreed to do that in the first place.
The minister also talked about a reduction in social services taxes on liquor served on aircraft in order to make the B.C. liquor industry more competitive. I don't have any problem with that; I think that's another good move. I live in Fort St. John, which is close to the border; we're not very far from Alberta. What we need is a government that will bring us more in line with what Alberta taxpayers and businesses pay in taxes. We have all kinds of companies that headquarter in Fort St. John -- and some that don't anymore. They headquarter in Grande Prairie because it's cheaper, and they operate in Fort St. John.
This is a government that talked about not wanting Alberta people working in the province, especially on the Island Highway. This government is concerned about Victoria and any place on the Island -- and Vancouver, I suppose. Is that where all the concerns are? Obviously it is. Why aren't they concerned about those industries and companies that work out of Fort St. John and Dawson Creek? A multitude of communities right on the border have all kinds of difficulties competing with Alberta companies. Alberta companies are free to come into British Columbia, do their work and then go back again.
L. Fox: Except for on the Island Highway.
R. Neufeld: Except for on the Island Highway.
Part of that bill last year was a 7 percent tax on labour. That was another stupid move. It raised a bunch of money, but it was a stupid move by this government, because it drove all kinds of business out of the north. In my area specifically, the business that works on drilling equipment and those types of things left Fort St. John and Dawson Creek. It went to Edmonton and Grande Prairie -- all because of some regressive moves by a government that just wanted to gobble up more money and bring in a bigger amount.
They certainly have. In three years, they have brought in $4 billion more through increased taxation and fees from people in British Columbia. In her wrap-up of the last bill, the minister talked about a terrible mess left by the last government. I'm not going to dispute any part of that, but the fact is that it wasn't as bad as what she talks about, and that was proven. It showed up in the Peat Marwick reports time and time again. When this minister talks about cleaning up the mess and reducing the deficit from $2.4 billion to $900 million, what she's failing to say is that most of that debt is transferred into Crown corporations or some other place. It's called creative bookkeeping, and the average British Columbian knows about it and is darned tired of it.
It's time that this government started to be a little more fair, not just to corporations but to the average taxpayer in British Columbia -- that average taxpayer who bought a car for $30,000 and traded in a vehicle for $20,000 and was missing that $1,400. That's what they should be concerned about, but they're not. They're not concerned about the corporations, and they're not concerned about the working person. It's obvious from legislation such as this, which was brought forward and is now amended one year later.
It's time that they amended a lot of legislation that this government has brought forward. This is just the tip of the
[ Page 10433 ]
iceberg. I will be very happy to see a lot more of it amended, but in a greater amount.
Hon. E. Cull: Hon. Speaker, in listening to the last member speak about wanting to come down to the playing field of Alberta and how taxes should be the same as they are across the border up there in Peace River country, I guess he's also calling for the same kind of cuts that they've made in spending. They made a 20 percent cut to education funding.
Interjection.
Hon. E. Cull: I hear somebody over there talking about scare tactics. I guess they're suggesting that the Alberta government isn't really serious. If the Alberta government is serious with their spending plans, then there are going to be very serious cuts made to social services, education and health care spending in that province. The member has got to take the good with the bad.
The other thing, though, that I find peculiar about his remarks is that I understand he was on a platform with the Minister of Municipal Affairs just last week, calling not for tax cuts to business but for a greater share of taxes to be paid by business towards local municipalities to support services up there. Again, the inconsistency of the opposition.... The opposition manages to argue it all ways -- totally inconsistent. It's about time they showed some responsibility to a consistent argument, so that their constituents know exactly what they're going to get with what these people are promoting.
To conclude, I know the opposition critic would like to believe that I spent many hours poring over last year's Hansard, but I have to tell him, and you, hon. Speaker, that the changes brought about in this legislation are a result of my staff and I making over 50 presentations to community, business, labour and other groups around the province. You yourself were involved in some of those presentations. These are the good ideas that have come forward to the government from the people of British Columbia. Within the constraints of the fiscal situation that we're in, I am happy to accommodate as many of them as possible, and we will continue to do so. With that, I move second reading.
Motion approved.
Bill 19, Taxation Statutes Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. G. Clark: I call second reading of Bill 18.
MEDICAL AND HEALTH CARE SERVICES SPECIAL ACCOUNT ACT
Hon. E. Cull: This is a very short and straightforward bill that creates the medical and health care services special account within the consolidated revenue fund. It also allows that a subaccount can be established within the special account to reduce fluctuations over two or more fiscal years in demand for payment from appropriations under the Medical and Health Care Services Act.
Essentially, the bill allows the implementation of an important provision in the agreement that was negotiated last year between the government and the B.C. Medical Association. Part of that agreement set out a number of actions that the government and the doctors of the province would do to try to contain the costs of medical services in the province, particularly to reduce utilization. There was recognition that if that was to be successful in years of underutilization, some provision should be made that would allow for the carrying forward of underexpenditures into the next year to allow for some flexibility in years when the utilization might go up. This is recognizing that medicine, as much as we like to think of it as a science, is somewhat unpredictable in terms of demands on services. It will allow for greater and more cooperative management of medical services than has been done in the past in the province. On that basis, I now move second reading of Bill 18.
F. Gingell: I would have been pleased if this had been a genuine move to multi-year budgeting. I really do believe that it must be difficult for government to try to deal with one year at a time and at the same time try to find a cure for the terrible disease of March madness that all governments seem to have. I'm not completely convinced that this bill is going to accomplish what the minister intends it to, and I look forward to discussion during committee stage.
Every time I get involved in these rather complex and difficult accounting procedures through these special accounts -- which everybody seems to be confused by -- it seems to me that we should try to understand that an expenditure out of a special account will still require a particular vote in a subsequent year. The funds cannot be expended without the amounts being included in the estimates and in the vote process. I presume that the intention here, or what will in fact happen, is that this will only be a notational account that will indicate from year to year whether specific subgroups of expenditures made under the Medical and Health Care Services Act have been underexpended. I look forward to debate during committee stage, in which I hope that I and other members of this House will get a better understanding of the intricacies of the accounting proposed here.
[3:45]
Deputy Speaker: Seeing no other speakers, the minister closes debate.
Hon. E. Cull: This is the kind of bill that will probably be more thoroughly discussed in committee stage. As I said, it is an important step in implementing our agreement with the B.C. Medical Association. I now move second reading of the bill.
Motion approved.
Bill 18, Medical and Health Care Services Special Account 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. G. Clark: I move that the House recess for ten minutes.
Motion approved.
The House recessed at 3:46 p.m.
The House resumed at 3:56 p.m.
Hon. G. Clark: I call second reading of Bill 16.
[ Page 10434 ]
MINERAL TAX AMENDMENT ACT, 1994
Hon. G. Clark: Bill 16 contains some significant tax concessions for the mining industry. The Minister of Energy will, of course, wish to carry this bill in committee stage debate, and may wish -- I just advise members of the House, with their indulgence -- to make some broader comments in the first stage of studying the bill.
With that notification, I simply say that this is good news. We've been listening to and working with the mining industry for some time, particularly the coal industry -- and other mineral activities -- and we have been endeavouring, within our fiscal ability, to make some concessions to them in order to encourage exploration. After all, the coal and mineral sectors are major contributors to the B.C. economy. Historically, the mining industry has been a real driving force behind the economy of British Columbia -- and continues to be.
We believe that the mining industry has a strong outlook in British Columbia. We believe there are already some new mines ready to go into production this year. We're interested, of course, in encouraging that stable base and that economic development. However, we do know that the coal industry, in particular, has had tough times with international competition and the international recession, which has led to a decline in steel production. We've made significant moves here to try to give some tax relief to the industry in British Columbia. We're confident that by working cooperatively with the industry through bills such as this, we can accelerate some of the projects that we know are economically attractive and will take place over the coming years.
So I'm delighted to commend second reading of this bill to the House. I want to acknowledge to the members of the House that the Minister of Energy intended to be here. She will be participating in carrying this bill in committee stage. I know the members will give her an opportunity to make some general comments at that stage, as we, of course, always afford members of the opposition. So with those few remarks, hon. Speaker, I move second reading.
D. Jarvis: This is a bill that we will have to support -- not that we don't like supporting government bills. When the Premier says there will be no new taxes, and this tax amendment in actual fact does not increase taxes, it's an improvement on the tax situation for the coal industry. As the member over there said earlier, at a time of world oversupply, when the pressure is on the coalmines in British Columbia, every bit of help this government can give the industry is appreciated.
I imagine that we could have had some more significant changes. Although she's not here now, the minister has said that she's always concerned about the mining industry. Similarly, the Minister of Employment and Investment just said that he's always interested in mining development in this province. However, it's a sad state of affairs when we see that revenues from mining dropped considerably over the years of the previous regime. This present regime has done nothing to encourage the development of mining, although they do say there are a few mines coming on. Five or six of those mines have been approved, but they're a little reticent about coming on. Due to the environment in British Columbia, it seems that they do not wish to put their capital into it.
[4:00]
One of the good things about this bill is that it is of benefit to the coal industry, in that it levels off its taxation to equal that in other mines. There are problems coming for the coal industry in the future. In the next four years contracts are looming with purchasers throughout the world who are all trying to batter us down further and further. So we will need help in the coal industry. I suggest to the minister that she should also change taxation as a provincial barrier, such as with fuel taxes and the corporation tax. This government also raising the price of electricity to the mining industry has caused untold problems for them.
I'd like to close by saying that a few minutes ago, when talking about the corporation capital tax, the minister said she was amazed that opposition members were criticizing the fact that we should have less taxation and all the rest of it. She said that you can't have it both ways. I would just like to say that the Finance minister should bear in mind that you can have it both ways: if you don't help out your revenue sources, you can't have taxes coming into this province. It's obvious that they haven't done too much on this end of it, because the revenue from our resources has been continually going down. On that point, I will sit down, thank you and say that I will be supporting this bill.
D. Mitchell: I'm pleased to rise to speak to Bill 16, the Mineral Tax Amendment Act, 1994. I'm somewhat surprised by the way the bill has been brought to the House. The bill stands in the name of the Minister of Finance, the Minister of Employment and Investment has made some very brief and very modest remarks about this important piece of legislation, yet the minister indicates that the Minister of Energy, Mines and Petroleum Resources will actually take the bill through committee stage. I'm kind of confused about the government's legislative program.
Bill 16 is a positive piece of legislation. Hallelujah! The government has finally discovered, after two and a half years in office, that there is an important industry in British Columbia called the mining industry, and that, yes, it needs some help to sustain well-paying jobs in British Columbia, instead of chasing them out to South America and the rest of the world, as they have been doing for their first two and a half years in office.
Bill 16 actually is a very significant piece of legislation. I'm not sure why the government is so modest about it and isn't defending it more seriously. It reduces the tax rates for coalmines in this province, one of the most important sectors of the mining industry. It provides more flexibility in deducting exploration costs for mine operators; that's very significant and, hopefully, will prevent more mines from leaving the province or closing down. It provides an additional capital cost allowance for mines to encourage new mine development in the province. I think all of that is extremely positive. I'm not sure why the government isn't more enthusiastic about this piece of legislation. It's been a long time coming; it's much needed. The government seems to want to pretend that the mining industry continues to be the province's best-kept secret. The bill doesn't do everything. It is significant. It provides a package of assistance to the industry that runs into the millions of dollars, and I think that's much needed.
As the official opposition critic indicated, over the last period of time, this government has done far too little to assist the mining industry in the province. We hope this isn't too little too late, because the mining industry has pointed out that more serious issues face British Columbians when it comes to preserving such a well-paying industry as mining -- issues such as land access, security of mineral tenure and the regulatory and permitting changes that are required to attract mining investment as a safe, environmentally sound industry.
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The realities that the industry faces in our province are quite grim. Employment levels are at a low that we haven't seen over the last decade, dropping by over 2,000 workers between 1991 and 1992. During the first year of this administration, we lost more than 16 percent of the employment in the mining industry in British Columbia. Exploration and development are at an all-time low in the province; $29 million was invested in the mining industry last year, compared to $213 million if we look back just a few years to 1988 -- an all-time low in exploration and development spending in our province by the industry. Total mining expenditures declined almost 50 percent in 1992, the second year of this administration. The industry lost over $1.6 billion in the last three years in British Columbia.
We've had a number of mine closures in B.C. I won't list them right now, but there has been depressing news over the last few years since this administration came to office.
When the mining industry suffers, so do government revenues and so does employment. Tax revenues to government are down, dropping from $401 million in 1991 to $351 million in 1992. How can we support this government's misguided policies when they have led to a steep decline in revenues to the Crown?
Our mining industry isn't being given a full opportunity to live up to its potential. Bill 16 is a good start in the right direction. It's a very belated attempt by this government to recognize that we do have a mining industry in B.C., and it should be supported. Once it was the number two industry in the province, standing behind only forestry. We should be restoring it to its rightful place. We should be encouraging exploration and development. We should be doing more.
Bill 16 deserves to be supported by members of this assembly. But we should also recognize that this government should hang its head in shame for almost killing what was once a vital industry in only two and a half years in office. We can only hope that this is a small step in the right direction and that the government is going to recognize the mistakes it made in the first half of its term of office. Bill 16 is a start in the direction of believing that mining really does have a future in British Columbia.
R. Neufeld: I want to briefly go over a bit of Bill 16, the Mineral Tax Amendment Act. As the Minister of Employment and Investment said, this is a good-news bill for the mining industry.
I'm pleased that the government is starting to see the error of its ways. They're starting to catch on. After two and a half years, we have an overtaxed industry. They've increased hydro rates by -- what? -- 6 or 8 percent or higher, and they are going to increase them every year from now on. They've introduced a corporate capital tax on industry, and they wonder why industry is moving out of British Columbia. They wonder why we've lost 2,000 jobs in the last couple of years. Investment in the mining industry is 10 percent of what it was a mere five or six years ago. The corporation tax was increased by this government. All these taxes have come into place since this government was elected in 1991 and brought in their first budget in 1992 -- just a little while ago. Now they're trying to bring industry back. I'm glad they're finally starting to see the error of their ways, but I think it's a little late for some of them.
We've seen fees of every kind being increased in the last two or three years. The fuel tax was increased. In fact, that's a big issue with the mining industry that this government doesn't want to deal with. There are WCB increases. We see ICBC increases. We see sales tax increases to the mining industry. We saw a 7 percent tax on labour brought in by this government. Now they're finally coming forward with the Mineral Tax Amendment Act in order to give the industry a break. After we've choked them this hard for this long, it's about time we released the hand a bit so that this industry can again start generating for the province what it did a few short years ago.
It's interesting to note that we will be debating six bills in the House today, and five of those six bills are amendments to legislation that was brought in by this government in the last three years. Most of it deals with reducing the taxation that this government put on the people and the industry of British Columbia. They're finally seeing the error of their ways.
The mining industry is very important to British Columbia. In fact, this year I believe it will contribute about $50 million -- not including taxes -- in fees and royalties to the province of British Columbia. That is way down from what it used to be. Hopefully, with the tax breaks they're finally going to give the industry, after choking it half to death over the last two or three years, it may come back, but I'm not sure. We don't know what's going to happen with the corporate capital tax next year. We see how they change it every year. This year they changed it for farmers. Maybe next year they will say that they need a bit more. The mining industry may pick up a little, and they will take a bit more money from them. Or maybe they're going to increase the corporate tax. Who knows?
When you see what this government has introduced in the last three years, and the amendments, it's no wonder that we have a nervous investor out there. Who would invest in this climate? One year you're paying 7 percent tax on something, and the next year you're not. Way to go -- that's a good way to make investors in British Columbia feel secure. At the present time they're certainly not feeling secure. Because of that, along with a massive increase in this province's debt and the amount that's going to be gobbled up in order to service the interest on the debt, the mining industry in British Columbia is nervous.
We have also seen it in forestry, where another example comes to mind. The government talked about a forest renewal plan that was going to cost the industry something like $600 million. About $400 million would go back into the renewal plan. Then all of a sudden there was a big surprise: "I'm sorry I didn't tell you this, but you're going to have to pay another $100 million in royalties." It was another little slide-it-under-the-blanket surprise, another little under-the-rug trick, which this government is great for. It's no wonder we have an industry that's nervous about investing in British Columbia. It's because of this government's actions.
Earlier the Minister of Finance chastised me because I went to Fort St. John and stood on a podium with the Minister of Municipal Affairs and talked about taxation fairness for industry. I make no apology for that. I have supported that move for a long time. In fact, we want the same as what the southern communities on Vancouver Island and in the lower mainland enjoy. This government is very attuned to them; they know all about them. The taxation that we are trying to get for the people in the north -- it's not for anyone other than the taxpayers in the north -- is no different than what is enjoyed in the south. So I can't for the life of me understand why the minister would chastise me for doing that. It's obvious that this government doesn't care about industry or about the people in British Columbia.
[4:15]
Not too long before that, the Minister of Energy, Mines and Petroleum Resources went to Fort St. John and announced that they were going to give a tax break of $600,000 a year to the largest oil company in the world,
[ Page 10436 ]
Imperial Oil, which doesn't even have an office in Fort St. John. They moved their office to Grande Prairie because it was a little more competitive there, and the climate was a little better for business. That tells you how much in tune this government is with what's going on in the province. What did this government do? They chastised me for wanting to give the people in industry in Fort St. John a few dollars so they could enjoy some of the same things that people in the southern part of the province enjoy, and then they turned around and gave the largest company in the world a $600,000-a-year break on royalties that isn't going to help one person in British Columbia -- not one person. That's how backward this government is. It's no wonder they bring in bills and then have to bring in amendments.
But this is one amendment that I can vote in favour of. I hope that it's just a start. I'm sure it will be, because as I say, we're in the third year of this administration. This is just a start to amendments to regressive legislation that this government has brought forward in the last two and a half to three years.
G. Wilson: It's a pleasure to rise on second reading of Bill 16, intituled Mineral Tax Amendment Act, 1994 -- otherwise known as the sugar that coats the pill.
Interjection.
G. Wilson: I see the member from the Cariboo is laughing. He might well laugh. The mining operations in this province have indeed suffered at the hands of this government. I don't think there has been a more articulate spokesperson than the official opposition critic, the member for North Vancouver-Seymour, who for two years has effectively taken up the cause of the mining companies in this province.
An Hon. Member: Did you say articulate?
G. Wilson: I did, hon. member. The member should listen up, because there has been a consistent voice with respect to mining operations in this province, and I think that it's....
Interjections.
G. Wilson: Hon. Speaker, I hear the members saying "mining in every park," and so on and so forth. Clearly, the mining companies in this province have not received anything except bad news from this government, until this particular bill. It's therefore nice to be able to stand up and congratulate a government when it finally does something good, even if it is just to sugarcoat the pill it has been feeding the miners for the last two years. Quite clearly, this Mineral Tax Amendment Act, 1994, is something that all of us should support and use as a yardstick to measure the direction this government is attempting to take with respect to correcting some of the mistakes that it made in the past. We hope that the government has indeed learned from some of the past legislation to recognize exactly how much of a hardship that legislation has put on the mining industry.
I come from a riding which, as most people may perhaps not be aware, has a large number of mines and whose economy is dependent on mining, albeit not the coalmining that is a principal part of this bill. I can tell you that people....
Interjection.
G. Wilson: As the member says, Texada Island -- yes, and the communities on Texada.
Interjection.
G. Wilson: As the member from the Cariboo says, it's nice fishing there. It's a wonderful place to live, and it would be a better place to live if this government would stop providing disincentives to the mining industry and allow people opportunities to expand those operations.
I think that we all have to support Bill 16, and certainly we do. The consequential amendments that are attached to it are significant for many mining operations in this province. While it is indeed good news, as I suggested, it's good news only because it is a sugarcoating of what has been draconian legislation against mining in this province. Mining should be, and always has been, a very sound and solid part of the overall economy. I would hope that we're seeing a trend from this government, and that we're actually going to have adequate legislation coming forward to protect the interests of those people who invest in our extractive sector and recognition that mining is indeed a fundamental part of our economy. It is an important part of our regional economy and supports many local communities.
I am proud to say that the Alliance party supports Bill 16. We are prepared to move forward and assist any who are prepared to work on trying to expand the mining communities in this province. We see it as a vital part of our economy, and we would hope that this government would see the same.
F. Gingell: We recognize that Bill 16 is only just a starting point that deals primarily, from a financial point of view, with the reduction of royalties on coal minerals to the level of those on base metals. Since 1989, provincial revenues in the form of mineral royalties have dropped from $75 million to only $31 million. That is all that this government expects to mine from the mining industry....
Interjections.
F. Gingell: Open your ears -- '89.
Recognizing that the mining industry has exports of $2.5 billion a year, which is probably a good measure of its economic activity, that represents something in excess of 3.5 percent of gross provincial product. They also constitute 15 percent of British Columbia's total exports. One appreciates that this is a critically important industry. The majority of funds that accrue to both the federal and provincial governments from the mining industry come from income taxes paid by employees, from various forms of sales and other consumer taxes paid by mining companies, and include all the other forms of fees and user fees, such as hydro rates, that mining companies pay. It's important to recognize the very small portion of total revenues received by government that comes from mineral royalties.
In order to create economic growth and more employment, and to allow this government to get out of its present deficit position and to start working on the reduction and repayment of our provincial debt, this province needs to create the right economic atmosphere for mining in British Columbia. The issue of the difference between the royalty rates paid by coalmines compared to base metal mines has been one of the thorns in the flesh of mining companies, and I join with all other members of this House in supporting Bill 16 to see that particular thorn being pulled from the flesh.
[ Page 10437 ]
If we are going to have a vibrant mining industry in British Columbia, the first thing the mining companies need is certainty of tenure. As we all know, mining companies start with exploration, and they have to have the certainty and knowledge that the values they find through their exploration efforts will be allowed to develop into mines. This is a start, but this government would be spending their time in a very useful, worthwhile and profitable way if they were to think about all of the things that can be done to encourage and assist the development of our mining industry in a manner that is environmentally acceptable to all British Columbia's citizens.
As my friend for North Vancouver-Seymour said, we will be supporting this bill. We look forward to further discussion in committee stage, but we do suggest that this is just one small step. When provincial government revenues have come down from $75 million in 1989 to only $31 million in 1994, it's clearly time for the government to think about the actions they are taking that have caused this dramatic reduction.
Deputy Speaker: I recognize now the Minister of Finance to close debate.
Hon. E. Cull: My thanks to the Minister of Employment and Investment, who introduced second reading for me in my absence.
I have listened carefully to the debate the last few minutes, and I want to assure the Finance critic for the opposition that this bill is indeed the result of the very process he is encouraging. The Premier has established a forum with the mining industry on the future of mining in this province. Our government takes the future of mining very seriously. We have moved to assist mining in the province not only through tax measures but through some of the expenditure measures which I know will be discussed in greater detail during estimates of the Ministry of Energy, Mines and Petroleum Resources. This process doesn't end with this legislation; in fact, it continues. The Premier will be continuing to meet with the ministers responsible and meeting with the mining industry to see what we can do to improve the competitiveness of mining in the very difficult world economic situation right now. This particular bill will go a long way to putting us on a good footing from the taxation point of view.
With that, I move second reading of the bill.
Motion approved.
Bill 16, Mineral Tax Amendment Act, 1994, 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. E. Cull: I will just take this opportunity to present the report of guarantees and indemnities for the fiscal year ended March 31, 1993, in accordance with section 56 of the Financial Administration Act.
Hon. G. Clark: I call second reading of Bill 7.
FINANCIAL ADMINISTRATION AMENDMENT ACT, 1994
Hon. E. Cull: Bill 7 amends the Financial Administration Act to clarify the responsibilities and duties of the comptroller general and strengthen the reporting requirements for write-offs, extinguishment of debt and remissions. It removes the reporting requirements for refunds, clarifies the references to cash payments when they contradict accrual accounting policy, and allows for electronic signatures in addition to written ones for the authorization of payments.
Dealing first with the duties of the comptroller general, existing legislation doesn't accurately reflect the responsibilities and duties of the comptroller general, which have evolved over time. This amendment places more emphasis on the comptroller general's role in implementing a financial framework for financial management and control.
With respect to the provisions for reporting requirements for write-offs, extinguishment of debts and remissions, the bill acts on one of the recommendations of the Public Accounts Committee, which was that previous provisions were insufficient. These provisions did not require the reporting of write-offs, extinguishment of debt and remissions if they were authorized by any act except for the Financial Administration Act. With this amendment, all of these situations, from all authorities, will require disclosure in the public accounts.
On the other hand, the requirement that refunds be reported has been removed. No public interest is served by reporting the refunds, because they are simply disbursements of funds which were received in error and do not conform to the Financial Administration Act description of public money.
There are further amendments to sections 20, 23 and 32, to correct references to cash payments where there is a contradiction with the government's stated accrual accounting policies. Accrual accounting -- which is based on revenue earned and expenditure incurred instead of on the receipt and payment of cash -- was adopted by the government in 1981; however, certain sections of the act are still using the cash accounting language. This amendment will clarify the language so that those sections which are confusing or contradictory will now be brought into compliance.
[4:30]
With respect to the authorization of payments, expanding the definition of "signature" to include electronic authorization will allow for new technologies to be introduced within the next few years.
The auditor general has reviewed this act with my staff and has expressed some concerns, so I will be tabling an amendment during committee stage to deal with one of the auditor general's concerns.
I move that the bill now be read a second time.
F. Gingell: Far be it from me to stand up and in any way criticize a bill where the government finally takes recommendations from the Public Accounts Committee. I'm sure the government will always find that recommendations from the Public Accounts Committee are worthwhile and should be listened to and followed through on. If only the government would let the Public Accounts Committee sit at sensible times and under sensible arrangements, perhaps even more good things could flow from that.
I also wish to touch very briefly on a subject. A great deal of change is taking place in the way governments are recording their financial transactions and reporting to the public their financial position and the results of their financial operations. Over the last two centuries it has become established that in the normal course of events, financial statements should be prepared and reported in a manner that complies with clearly established standards. Professional bodies -- in Canada, normally the chartered accountants, but they work with the certified management
[ Page 10438 ]
accountants and the certified general accountants -- produce standards and rules by which companies must live when reporting financial results. We can all appreciate that the most important thing in looking at financial statements is to ensure that they have been prepared in a fair manner, that they truly do disclose the results of the operations and the financial position of the organization being reported on and, most important, that they are reported in a consistent manner so proper comparisons can be made from period to period.
[The Speaker in the chair.]
In Canada, an organization called the Public Sector Accounting and Auditing Board deals with the issue of the way governments should report their financial results. We will look to that body to set standards and deal with the issues that we're dealing with at the moment as standards are being changed and practices are being improved. Bill 7, as has been done in the past, leaves the decision on financial statement presentation in the hands of Treasury Board. That means Treasury Board determines the accounting policies that are going to be used and the ground rules for the public accounts. I guess I don't really have any argument with that, except that I would have been more comfortable if this bill required Treasury Board to consider and report on all of the recommendations of this Public Sector Accounting and Auditing Board.
Fortunately, in British Columbia, both with the previous administration and with this one, we have been on the leading edge of improved financial reporting by governments. British Columbia has indeed been recognized as a pace-setter. I really do want to encourage this government and this minister to ensure that British Columbia stays on the leading edge. I will take the opportunity, if I may, during committee section of this debate to deal with some of these matters in a more detailed fashion, particularly with ensuring that we all clearly understand the difference in the roles and responsibilities of Treasury Board, of the comptroller general and of the auditor general.
With that, I would like to draw my remarks to a close, except to say that in principle we support this bill. This bill is clearly a move to improve accounting practices, and we encourage the minister in this regard.
G. Wilson: It is a pleasure to speak to Bill 7. As the opposition Finance critic just commented, I think that the Public Accounts Committee is one of the better committees of this Legislative Assembly to be a member of. It gives you perhaps the best understanding of the workings and financing of government, and therefore is really important. I would also acknowledge, for those who might not be aware, that it is chaired by the opposition Finance critic. I think he does an excellent job.
The opportunity for us to review and improve the manner in which government reports on expenditures and accounts may seem to be really only in the interests of political junkies, but I think it really is critically important to the public, because it is one of the few ways that the public can actually understand how government operates and how their tax dollars are being applied. Therefore I think it is important for us to look at these accounting practices and not only be in sync with the amendments being made across the country, but also be able to provide an opportunity for people to have an understandable set of accounts so that they can see how this accrual accounting process actually works and what the procedures are.
In principle, we in the Alliance support this bill. We have a couple of questions we would like to raise in committee stage with respect to two of the sections of the bill. If I had a general comment to direct to the minister by way of Bill 7, it would be that there must be an easier way to present the documentation without having to repeat the existing legislation to the extent that it is. For example, on page 2 of Bill 7, basically one word is changed in the entire page, and one has to look to find exactly what that word is. Similarly, on page 3 the word "spent" is the only word on the entire page that is changed. For lay people not familiar with accounting practices, sometimes wading through these bills becomes a little bit difficult; and of course, the suspicious-minded in the opposition might think something is being hidden in some of this legislation.
Interjection.
G. Wilson: As the member for Delta South, the official opposition Finance critic, says: "And we're usually right." Therefore there are a couple of matters with respect to accounting procedures that we would like to address when we get to committee stage. Beyond that, it's nice to see the government is listening to those that would try to have an improved accounting system.
R. Chisholm: I ask leave to make an introduction.
Leave granted.
R. Chisholm: Mr. Lemna, a teacher, and 110 students from Chilliwack Secondary school are in the precinct today to see how democracy works. I would like the House to make them most welcome.
The Speaker: The minister closes debate.
Hon. E. Cull: I am pleased to hear recognition for the positive steps taken by this piece of legislation, and I move second reading of the bill.
Motion approved.
Bill 7, Financial Administration Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. G. Clark: Hon. Speaker, I call second reading of Bill 17.
PROPERTY TRANSFER TAX AMENDMENT ACT, 1994
Hon. E. Cull: The Property Transfer Tax Amendment Act, 1994, introduces an exemption from the tax for eligible first-time homebuyers as a replacement for the high-ratio-financing tax relief program. The bill also closes a loophole which has been used to avoid the tax on long-term leases.
Housing prices in British Columbia are among the highest in Canada, and they pose a major barrier to many young families struggling to purchase a first home. The exemption for eligible first-time buyers fulfils a commitment made during the last election campaign and will go a long way towards helping young families achieve their dream of home-ownership. In light of the government's limited resources and the need to spend taxpayers' money
[ Page 10439 ]
responsibly, the program has been designed to target the exemption to those who require assistance to purchase a reasonably priced first home.
To qualify for the exemption, the following conditions must be met: the value of the property purchased must not exceed $250,000 in the lower mainland and Capital Regional District or $200,000 in all other parts of the province; applicants must not have previously owned a home or an interest in a home; applicants must have resided in B.C. for at least one year prior to registering the property in the land title system; applicants must be Canadian citizens or lawfully admitted to Canada for permanent residence; applicants must have registered financing for an amount equal to 70 percent or more of the fair market value of the property and must not reduce financing by more than a specified amount during the first year; and finally, they must reside in and use the property as their principal residence for at least one year following the application for exemption. Partial exemptions are provided for properties that qualify under the fair market value thresholds but are larger than half a hectare in area. Under certain conditions an exemption will also be available for first-time buyers who purchase bare land on which to build their first home. To ensure that applicants meet all of the requirements of the program, a lien equal to the tax will be registered against the property until all eligibility requirements have been met.
As I said a minute ago, the first-time homebuyer's exemption does replace the existing high-ratio-financing tax relief program. But this program will remain in effect until June 30, 1994, to allow purchasers who were in the process of buying a home and were therefore expecting to take advantage of this program to, in fact, do so.
The first-time homebuyer's exemption actually improves on the existing program in three ways: it will benefit more first-time buyers, since more people will benefit under the program I'm introducing today than benefit under the existing one; it will provide a complete rather than a partial exemption; and the maximum house prices have been increased to better reflect current prices.
[4:45]
Bill 17 also closes a loophole that has been used to avoid tax on long-term leases. As announced earlier this year, Bill 17 introduces amendments, retroactive to January 31, 1994, to prevent tax avoidance through the inappropriate use of leases for 30 years and less, which is where a number of leases are stacked up on one another to try to avoid the tax. This amendment will aggregate all of the leases against a property within a six-month period for the purposes of calculating the property transfer tax payable.
I might also note that there is an amendment. I'm not sure whether it's on the order paper yet or is to be introduced. There will be an amendment dealing with the time period during which a purchaser has to occupy a house as his or her principal residence to deal with requirements under the Residential Tenancy Act.
I think the bill clearly demonstrates our commitment to help young families get into a home in a very expensive market.
I now move that the bill be read a second time.
F. Gingell: It's with a little less pleasure than earlier this afternoon that I rise to speak to Bill 17. Hidden away in section 4 of this bill, the amendment to 3.27, is an issue that deals with a false declaration. It's known in the trade as double jeopardy. If you report something wrongly and claim an exemption that is not appropriate -- if you haven't told the truth -- you'll not only pay the tax but you will suffer a penalty of an equivalent amount.
I rise today recognizing double jeopardy and recognizing that in the future this government will throw across the floor to us that we did not support the exemption for first-time homebuyers, which is absolutely wrong. We strongly support the exemption for first-time homebuyers. It is something that we called for time after time. But we did not call for the elimination of the exemption under high-ratio financing. We think this is a retrogressive step. It deals with people who are acquiring a home in the market and who are obviously at the low end of the wealth scale. It gives an exemption to people who are subject to the need for major financing.
During the minister's opening statement on this bill, she stated that getting rid of the high-ratio-financing exemption and bringing in an exemption for first-time buyers would help more people. That has me completely bewildered. Yes, I understand -- and I'm sure the minister wasn't suggesting -- that there will be more people helped because they have raised the threshold level from $200,000 to $250,000 within the Greater Vancouver Regional District and from $150,000 to $200,000 outside it. I'm sure that that's not the reason. So the minister must be suggesting that there are some individuals who would not have qualified previously but who will now. On the face of it, I fail to understand that, because there still is a requirement for high-ratio financing to qualify for exemption as a first-time buyer.
We should realize the kind of money that has been involved in high-ratio-financing relief in past years; the amounts have been reasonably substantial. In the year 1991-92, the cost to the government treasury was $14 million, and it benefited 17,500 people. In 1992-93, the number of people who benefited went up to 22,300, and the total costs were just under $16 million. In 1993-94, as property values began to rise, one can appreciate that fewer transactions qualified, and the numbers came down to 17,000 people. Clearly, it was very appropriate for the government to increase those threshold levels to ensure that people struggling to acquire their first home would not be hurt.
But they have done it, Mr. Speaker. I'm absolutely convinced that when we get the statistics for the year 1994-95, the amount of tax relief afforded through this new program will be down substantially from previous years. If the minister is certain of her numbers, I'd be happy to have a small wager with her as to what the results will be.
I personally believe that the elimination of high-ratio financing is going to have a very negative effect. We think the repeal of those sections is of such importance that we are not going to support this bill. That's where the double jeopardy lies. We were really pleased that the minister announced the exemption for first-time homebuyers in the budget speech. We believe that the majority of those who will be exempt now would have been exempt under the previous regulations. It is the fact of the repeal of those regulations that will cause us to vote against this bill in second reading. We hope that we can convince the minister to change her ways during committee debate.
M. de Jong: The best way to understand the impact this legislation is going to have, Mr. Speaker, is to take a typical family and understand what's going to happen to them as a result of the shell game that the government is playing on this matter. Yes, the introduction of a full exemption for first-time homebuyers is a positive thing; but when you weigh it against what is going to happen to a typical family with the elimination of the high-ratio-financing tax relief aspect of the property purchase tax legislation, it becomes
[ Page 10440 ]
apparent that it's the typical family in British Columbia that is the net loser.
Let's take the Smith family. It is a typical situation. This is under the former legislative framework. They come in and buy a townhouse. They are a young couple, just married. They buy that townhouse for $100,000. Ordinarily, they would be required to pay $1,000 in property purchase tax, but because it's high-ratio financing, as most first-time purchases are, they pay $250 property purchase tax. Three years later they've got two kids and are looking for a couple of bedrooms, because the little loft-unit townhouse isn't big enough. They go out and buy another place. Now they're into a single-family detached dwelling, and they're paying $192,000. Once again, it's high-ratio financing. They don't have that much more money. They need a house with a couple of bedrooms to raise their children in, so they're looking at a higher cost. It's high-ratio financing; that's the only way they can move up to the larger home. They make the purchase....
I'm referring to a document -- it's a transaction that I was involved with in my office. People made the purchase. This is their story. They got out of the townhouse that they'd owned for two or three years and bought the place for $192,500. They should have paid $1,925 worth of property purchase tax but didn't because of the high-ratio exemption. In fact, they only paid $596 for the property purchase tax. Over the course of three years and with those two transactions, they paid a total of $846 in property purchase tax. It's very simple: $250 on the first and close to $600 on the second.
What's going to happen to that family now as a result of this legislation? Same scenario: family buys the first townhouse for $100,000. The minister is right. They don't pay any property purchase tax; they get the exemption. Except two or three years later, they've got two kids and are looking for another house. They're going to move up; they want a back yard, a place for the family to grow. They buy that home for $192,000. How much property purchase tax are they paying? It will be $1,925.
When you compare the two situations, the family that paid $846 property purchase tax over the span of three years under the former framework will pay more than double that, $1,925, as a result of this legislation. It just doesn't make sense. The very people the minister says she's trying to help are being hurt. Quite frankly, there are only two ways to look at it: either it's a classic shell-game tax grab by the government, or the minister doesn't even understand the implications of her legislative framework. I certainly have my suspicions, and they're borne out by what my colleague says: that it's a tax grab by the minister, and she doesn't want to admit it.
The figures will bear out that the exemption which has been created will affect very few people. It has to be pointed out, as well, that it's going to affect those people who paid the least amount of property purchase tax in the first place. First-time homebuyers were traditionally making high-ratio-finance, CMHC purchases. They were paying minimal amounts of property purchase tax on their first purchases: $250, $300 or $400. In exchange for introducing that exemption, the minister is grabbing vast sums of money from every other purchaser in the province.
The people she says she wants to protect with this legislation are going to be hurt time and time again, because as their families grow and they try to move up in the world and find housing that will accommodate their families, this minister is going to have her hands in their pockets to the tune of a full 1 percent and 2 percent over the threshold. There are no exemptions and no relief, and it's going to affect the people she says she's trying to help. I don't think she's trying to help them; I think it's a deliberate tax grab on the part of the minister, and she just doesn't have the courage to say as much.
[5:00]
Having said that, the minister correctly points out that the legislation closes a loophole dealing with the lease side of things. She has correctly identified that, and I'm pleased to see that she has taken action to remove the ambiguity that surrounded long-term leases insofar as the application of the property purchase tax was concerned. But make no mistake about it: this is not a good-news situation for young families or hard-working British Columbians; this is a tax grab by this government, and to call it anything else is simply misleading people.
The numbers speak for themselves. My colleague is correct when he says that at the end of the year we're going to look at the numbers and see the vast increase in revenues collected by the minister as a result of the change to this legislative framework and the property purchase tax. I say shame, because the minister says she's trying to help people, and she knows quite clearly that she's having the opposite effect on their lives. That's why I'm opposed to the legislation.
Hon. G. Clark: I was just provoked into a short interjection in this debate by the whining, snivelling, hypocritical remarks from the members opposite that somehow this is bad news and a tax grab. The previous high-ratio-financing concession cost the taxpayers of British Columbia $15 million; this package costs the taxpayers $35 million. In other words, there's a $20 million increased tax loss, a $20 million increased tax break for young families in British Columbia.
I'm at a loss to understand how the members opposite could oppose this. They want the high-ratio-financing tax break on the property transfer tax, which was a modest initiative that we supported. It was brought in by the previous administration. There's nothing wrong with that. It means that every time a family, rich or poor, buys a home and trades up, they get a modest tax break. Instead of that, we said that better public policy and a more generous tax break for young families getting their first home was to say no, they wouldn't get a modest tax break every time they bought a home. Instead we would entirely eliminate the property transfer tax for families buying their first home in British Columbia. That's what we campaigned on in the last election. It's a $35-40 million tax break for young, working families trying to buy their first home. I'm at a loss to explain why the Liberal opposition would oppose this significant tax concession for young families.
The elimination of the high-ratio-financing tax concessions, which we have continued.... It's unfortunate. These same opposition members stand here day in and day out saying: "We want the deficit down; the government is spending too much money." Then at every opportunity they get up in the House and say: "It's not good enough; we want more. We want more spending here, more tax cuts here. More, more, more." Hypocrites! They are hypocritical opposition members, who don't have the courage of their convictions to stand up in the House and say that they're opposed to school construction and opposed to tax breaks for anybody, because they want to see the deficit come down faster. The deficit is coming down, but it's not coming down as fast as we might like, because we're giving tax concessions to working families -- in this case, tax breaks for families buying their first homes. I implore the members opposite to
[ Page 10441 ]
listen to what they've said. They should be embarrassed by their hypocritical remarks today and should support this tax break for families buying their first home.
Hon. E. Cull: I'm delighted to follow my colleague on this one. The opposition simply hasn't done their homework on this piece of legislation. If you go back and look at those who have benefited under the current high-ratio tax relief program, the number has been declining. Last year just over 17,000 people benefited from it, compared to 25,000 who will benefit under the new program.
Interjection.
The Speaker: Order, hon. member.
Hon. E. Cull: The average benefit under the old program was $736. Because it is a complete exemption from the tax, not a partial one, we expect the average benefit under this program will be $1,400. In fact, 1,131 first-time homebuyers have taken advantage of the new program to date, at a cost of $1.7 million in tax savings and an average benefit of $1,490 to each one of those families. That is an impressive saving for first-time homebuyers.
Interjection.
The Speaker: Would the hon. member for Matsqui please come to order. The hon. member knows full well that he's not supposed to speak from his seat. The hon. member knows that he must stand in his place when he enters debate. I would ask the hon. member to please conduct himself accordingly.
Hon. E. Cull: The first-time homebuyer program is a considerable improvement over the existing program. The qualifying purchase price of a house has increased. The ratio of required financing has gone from 75 percent down to 70 percent. The exemption is a full-time exemption. Using the limited resources we have in this province and trying to balance our other objectives, it benefits those families who are in greatest need: those families trying to get into a home for the first time. On that basis, I move second reading of this bill.
Motion approved on the following division:
|
YEAS -- 37 | ||
|
Sihota |
Marzari |
Pement |
|
Priddy |
Cashore |
Garden |
|
Perry |
Dosanjh |
Hammell |
|
Lortie |
Giesbrecht |
Miller |
|
Smallwood |
Cull |
Clark |
|
MacPhail |
Lovick |
Pullinger |
|
Janssen |
Evans |
Beattie |
|
Farnworth |
Conroy |
Doyle |
|
Simpson |
Jackson |
Tyabji |
|
Wilson |
Hanson |
Fox |
|
Neufeld |
H. De Jong |
Boone |
|
Hartley |
Copping |
Krog |
| Kasper | ||
|
NAYS -- 13 | ||
|
Chisholm |
Dalton |
Farrell-Collins |
|
Hurd |
Gingell |
Stephens |
|
Tanner |
Jarvis |
Anderson |
|
Warnke |
K. Jones |
M. de Jong |
| Symons | ||
Bill 17, Property Transfer Tax Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
[5:15]
Hon. G. Clark: I call committee on Bill 6.
INSURANCE AMENDMENT ACT, 1994
The House in committee on Bill 6; D. Lovick in the chair.
On section 1.
Hon. E. Cull: I move the amendment standing in my name on the order paper.
[Section 1, in the proposed section 11 (1.1) by deleting "promptly" and substituting "within 21 days".]
Amendment approved.
On section 1 as amended.
F. Gingell: Perhaps it would be worthwhile, for the purposes of clarity on a bill that can best be described as consumer protection, if the minister could just give us some background from her briefing notes to ensure that some clearly enunciated statements as to the intention of these various sections are on the public record. There are, after all, only two major sections.
Hon. E. Cull: I would be happy to provide some of the highlights of what we are trying to do here. I think the member is right: this is basically good consumer protection legislation. It puts a better system in place than currently exists.
The major amendment, in section 1, is to the current section 11 of the Insurance Act. Right now section 11(1) sets out an appraisal process that has to be followed if an insurance contract contains a condition for an appraisal to determine a disagreement between the insured and an insurer. At present all contracts for fire insurance in British Columbia have to provide for this appraisal.
In a study of the scope of the appraisal process set out in section 11 of the Insurance Act, the Law Reform Commission of British Columbia concluded that it's unclear whether mandatory appraisal applies to insurance claims that arise from contracts that include both fire insurance and insurance against other perils, such as tornados, earthquakes or theft. The commission also concluded that it's unjustifiable that business interruption losses associated with property damage caused by fire are excluded from the mandatory appraisal. Because of the lack of certainty, a claim settlement is often divided into two parts, and as a result, that's clearly more costly and cumbersome than necessary. The amendment is made to extend the appraisal process to apply to the value of any loss covered by the Insurance Act which has a property damage component.
Four new sections are added. I don't know whether the member wants me to continue or whether that is sufficient information.
Interjection.
Hon. E. Cull: Okay. The four new sections that are added establish this comprehensive appraisal process. First of all, section 11(1) is amended to clarify that the loss appraisal process applies to insurance contracts covering loss by fire, lightning or explosion or from any of the perils listed in section 214, such as an earthquake, tornado or water damage. It will also apply to insurance contracts covering loss of rents
[ Page 10442 ]
or profits or loss from business interruption where the loss results from fire, lightning or explosion or any of the perils under section 214. It will apply to insurance contracts which contain a condition that requires that disputes over matters specified in the contract be determined by appraisal.
Section 11(1.1) is added to require that the insurer give notice to the insured of the availability of the appraisal process. The notice has to be given within 21 days after the insurer becomes aware of a dispute over the value of the property insured, the value of the property saved, the amount of the loss or the dispute under which the contract must be decided by appraisal.
A new subsection, 11(1.2), provides that unless a dispute over the value of the property insured, the value of the property saved or the amount of the loss suffered by the insured or a dispute over a matter for which appraisal is required in an insurance contract can be resolved between the insurer and the insured, it shall be determined by the appraisal process.
Section 11(1.3) is added to provide that before an appraisal can be conducted, the insured must have delivered proof of the loss, and the appraisal process must have been demanded in writing by the insured or the insurer.
Section 11(1.4), another new subsection, sets the following conditions concerning the appraisal process: it has to be conducted before the insured can recover under the insurance contract; it must be conducted independently of any other question; and it must be conducted whether or not the insured's right of recovery under the contract is disputed by the insurer.
That's basically section 1(a), the major part of the amendment. Section 1(b), the amendment to section 11(2), is more housekeeping in nature, and the rest of them are almost entirely housekeeping in nature -- except the amendment to section 26, as my staff person is pointing out to me. If I just quickly go over that one for you.... Section 26 is under section 2. As we're under section 1, you probably want me to stop at this point.
J. Tyabji: With regard to the change in appraisals, I understand and agree with the intent. But when we get to subsection (1.4), it says: "An appraisal shall be conducted under this section (a) before any recovery is made under the contract, (b) independently of any other question, and (c) whether or not the right to recover on the contract is disputed." As the minister has described it and as I'm reading the bill, since either party to the contract can initiate an appraisal, if an appraisal is conducted before a recovery.... What I'm wondering is: I don't see a time frame other than the appointment of the appraiser. So could there be an example where the insurance company disputes the claim and appoints the appraiser, and the appraisal is delayed and there is no recovery to the person who is insured for some period of time? I mean, could there be a situation where the person who is insured actually can't get anything because the insurance company is appointing an appraiser and delaying the appraisal?
Hon. E. Cull: The act itself contains the time lines that would prevent that kind of delay from happening. But because there isn't any amendment to those sections in the act, they're not included in Bill 6.
J. Tyabji: I have the act in front of me, and I don't see any time lines in it -- unless there are regulations. I see time lines for the appointment of the appraisers, but I don't see any for the appraisers to report out.
I guess the other question would be.... What we've got is a mechanism, and obviously the amendment is dealing with the act. So the mechanism, whereby the two parties appoint an appraiser each and then those appraisers appoint an umpire, is described in the act itself. I'm assuming that everybody involved is getting paid and that the insured person and the insurance company are splitting the cost on this. But the one thing that falls down in subsection (1.4) as it's amended is that the appraisal is conducted before any recovery is made. I do see the potential -- and maybe the minister has some precedents under the act as it exists -- of this amendment not precluding someone getting some kind of compensation prior to the appraisal coming out. That would be a big concern, if the person who's insured could have any part of their claim unrecovered while the insurance company drags their feet. I think that would be unfortunate.
Hon. E. Cull: The member raises an interesting point. But it would be inappropriate to allow a recovery to be made until the appraisal was complete, so the act does provide for the appointment of the appraiser or, if it's stalemated, for the appointment of an umpire. I suppose there could be cases that could be totally stalemated and not come to conclusion, and that would be something we would continue to review. I don't see how we could allow a recovery to proceed until the appraisal was completed.
The intent of this amendment -- which doesn't deal entirely with the concern you're raising -- is to expand the appraisal process in accordance with the recommendations of the Law Reform Commission, so that others have the advantage of an appraisal process which makes sense to all parts of their insurance coverage.
J. Tyabji: This is very similar to what we see in other sections of the act, where we have ICBC and some of these other companies, and you can have arbitrators.
The suggestion that I would make under this subsection (1.4) amendment would be for when there's an amount that's undisputed, and what's disputed is whether there's an amount greater or less than that -- for example, if both parties can agreed to an undisputed amount and they're basically fighting over an amount above and beyond that. I see that that could be very easily written in.
Where I would have a problem.... I see this right now with my constituents in other areas, where somebody who has a lot more time and money is withholding compensation, and the other person is having to fight very hard and incur costs to try to recover something, where the original amount is undisputed. But there is something where both parties feel it should be either a little bit more or less, and they can dispute that part. Then I think there would be a bit more protection for the consumer, which is what this amendment set out to address.
Hon. E. Cull: Just to try this again, the intent of this amendment is to take an existing provision in the act which allows for appraisal in a very narrow set of circumstances, and expand it to allow that appraisal to be used in a wider set of circumstances. The member is asking whether the existing provisions in the act are as flexible as they need to be. I'm not disputing the point she is making; there may be something to her argument. We have not consulted on those changes to the act, so without having gone through the process that we have in talking to the parties about the Insurance Act amendments, it would be inappropriate for us to delve into another area.
We have attempted to mirror the existing provisions all the way through so that we don't end up with different
[ Page 10443 ]
provisions applying here than apply under the fire insurance provisions. Every insurance policy in the province that protects you against fire loss is written in this way, and this is simply extending it to other perils and losses.
The Chair: I think we are moving to matters that are beyond the scope of the bill, but I'll certainly let the member continue if there is something else that is more germane.
J. Tyabji: It is directly related to subsection (1.4). I want to make this point, because I find that in existing legislation similar to this.... The intent of the amendment is laudable. It's an excellent intention. If the intent for consumer protection is to be carried to the fullest, I think the minister would want to make sure that any consumer is going to be able to have some pay-out and that there would be a time line. In reviewing the act and the amendment, there is no time line for the reporting out of the appraisal, and there's no necessity for the insurance company.... The minister only has to look to ICBC to see how badly some consumers are serviced when there's a dispute about amount. There is no payment of an undisputed amount, yet they end up going to arbitrators and there are legal costs incurred. I can see this being set up with great intentions, but without a time frame and without some resolution for a minimal recovery while the rest of it is under dispute, I don't think the full intent of the amendment is addressed.
[5:30]
Those are my remarks for that section. I hope the minister will consider my remarks and possibly consider an amendment to the section that would introduce some sort of reasonable time frame and an appeal process -- some kind of accountability so that someone who wasn't served by that would have some avenue to address it before they would be incurring a number of costs on appraisal.
After that comment, I have another question under that section.
Hon. E. Cull: I will take the comments the member makes under advisement for future amendments, but as I said, we've consulted extensively with respect to this set of amendments, and that issue was not raised and has not been canvassed with them. It will have to wait for future consideration of some of the things in the act.
J. Tyabji: I appreciate the minister's remarks. I have a number of files I could pass on for reference on that issue.
With regard to section 1 of the bill, amending 11(1) -- and I have to apologize ahead of time for my unfamiliarity with the activities under the current Insurance Act -- I see they're talking about a contract with regard to insurance against loss or damage by fire, lightning or explosion, and it moves into appraisals. The first question that comes to mind is: to what extent can there be an adequate appraisal after there has been fire, lightning or explosion damage? Is that where the disputes usually come in? Could the minister enlighten me on that, because there's a little more detail in the amendment than there is in the existing act.
Hon. E. Cull: That's sort of the nature of the business. In the case of something being destroyed or lost, you do have to establish the value. The appraisal will have to do that and will have to go back through whatever means are available with respect to property. Presumably, there will be records with respect to the value of the real property. In the case of other losses, the whole point of the appraisal process is to try to use whatever methods are available to establish value for something that doesn't exist and can't be objectively evaluated.
J. Tyabji: Further to the questions raised earlier, if we're talking about a dispute about the appraisal of property that has been significantly damaged by fire, lightning or explosion, at the point where there's the two appraisers -- and we move to subsection (1.4) -- would lawyers be involved, or is it just going to be appraisals? Is it a private dispute? Does it move toward litigation?
Hon. E. Cull: No, lawyers don't have to be involved. The act just sets out that an appraiser will be appointed. You could appoint anyone you wish as an appraiser -- presumably somebody with some knowledge of the subject matter.
Section 1 as amended approved.
Sections 2 to 8 inclusive approved.
Title approved.
Hon. E. Cull: I move the committee rise and report the bill complete with amendment.
Motion approved.
The House resumed; F. Gingell in the chair.
Bill 6, Insurance Amendment Act, 1994, reported complete with amendment to be considered at the next sitting of the House after today.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 5:37 p.m.
The House in Committee of Supply A; G. Brewin in the chair.
The committee met at 2:39 p.m.
ESTIMATES: MINISTRY OF ABORIGINAL AFFAIRS
(continued)
On vote 9: minister's office, $319,041 (continued).
Hon. J. Cashore: I have a couple of answers to questions from the previous debate. The first is in response to a question asked by the member for Powell River-Sunshine Coast in reference to the Nisga'a negotiations. He asked whether it was possible to be eligible for enrolment without being born into one of the four Nisga'a tribes. The answer is yes. If your father is Nisga'a, you are still Nisga'a even if you weren't born into one of the four houses. There were four criteria cited and read into the record, and only one of those four criteria needs to have a "yes" answer in order for a person to be eligible.
[ Page 10444 ]
The hon. member for Okanagan East asked a question concerning the Westbank situation and the application of the Residential Tenancy Act on land under aboriginal jurisdiction. The answer is quite straightforward. First of all, it is a federal issue where property is involved. Secondly, the Residential Tenancy Act would not apply. However, the band may choose to consider a resolution that would be in the spirit of the Residential Tenancy Act and in the form of a bylaw which they would approve; therefore they could agree to follow its essence.
A. Warnke: Prior to getting into questions, on behalf of the members who did pose the questions, I want to thank the minister for the responses, and also thank the staff for providing that information.
I'd like to start where we left off last day, when we talked about economic development, with emphasis on economic self-sufficiency, relating to how aboriginal peoples develop their economy and their society. This touches on many different areas. We talked a little about the primary resource sectors, especially recognizing how aboriginal peoples, perhaps more than any other group in British Columbia, are really hooked into many facets of primary economic development. It does prompt me to pose a few questions as well, but if I may, hon. Chair, I'd like to also provide a little background on the Kemano project.
I recognize, before I get into it, that the project itself really rests under the purview of another minister. What I want to pursue here is the project in relation to the aboriginal peoples affected, and this may be instructive. I'm sure the minister is intimately aware of the background and details. But for the record, I think it would be worthwhile pointing out how the Kemano dam -- on the Kemano River in central British Columbia -- when completed in 1956 was designed to essentially provide Alcan with the necessary power for its mining and smelting operations. That project involved the diversion of one river; as well, it had the implications of flooding several lakes -- I believe seven lakes -- which in turn created, of course, a huge reservoir. As a student at that time in a British Columbia elementary school and then high school, I well remember that we were pretty proud of the economic development taking place in the northwest region of our province, focusing on how the town of Kitimat was constructed as part of the project. I do not recall, I must admit, a lot said about the implications it had for the aboriginal people of the area. We now know how the Kemano project caused tremendous environmental damage throughout the area. In addition, we've all become aware of the tremendous human consequences of that project. First of all, the native people of the Haisla reserve have pointed out that as far as they're concerned, the Department of Indian Affairs officials at the time perhaps did not provide adequate information and the advice required for the Haisla people to make a sensible decision in their own interests. As well, the Carrier-Sekani Tribal Council has made a claim that the dam adversely affected their interests.
[2:45]
For some reason the Cheslatta Indian band seems to be most affected -- that's my personal judgment, which I think is shared by many people. The Cheslatta Indian band suffered tremendous effects as a result of the Kemano project. We don't have to go into details; there are many different kinds of reports on the effect of the dam on the Cheslatta people. In 1952 the Cheslatta people were forced to relocate from the adjacent Murray Lake when it began to rise. I guess it was just the way it has been described -- a matter of days, certainly weeks, before people could uproot themselves. This is a people whose roots were literally placed there over centuries. There were tremendous effects on personal property and other adverse effects. In the 1980s the band submitted their grievances and claims to the federal government, along with representations on the adverse effects.
Here we have a new project, what has been termed Kemano 2 or the Kemano completion project. Alcan has announced its intention to develop Kemano 2 by using the remaining power potential of the Kemano River, but, of course, it goes way beyond that. The past traumatic effects on the Cheslatta and other aboriginal peoples obviously calls for sober second thinking as to whether or not this project can go ahead. From a personal view, having seen the effects on the Cheslatta in particular, I think there's every reason not only for skepticism but also for opposition to Kemano 2. That's the background.
As for the project, I suppose there's an attempt here to say that the project will develop the economy of northwest British Columbia. The fact is that it will also facilitate B.C. Hydro's quest to expand its power potential. Here again, for the record, one should point out that B.C. Hydro does not exactly have the best record in terms of construction of the W.A.C. Bennett Dam, although we British Columbians were indeed pretty proud of that project when it was completed in 1968. Again, we now know in retrospect the adverse effect it's had on native peoples in the Peace-Athabasca delta.
With that background, I want to touch on a number of bases here, focusing primarily on the project's impact on the aboriginal peoples in the area. The question I pose to the minister is not a tricky one at all: has the minister reflected on the Kemano 2 project and its implications on the aboriginal peoples I mentioned, particularly the Cheslatta? I'm wondering if the minister could give some sort of assessment of the state of this project as it affects those peoples.
Hon. J. Cashore: This project has troubled me greatly during my time in government; I'm not in any way hesitant to say that. When our government took office, it found itself having to address an issue that had not been well handled by government in the past. We could go back to the Kemano 1 era; I won't go into that history except to say there was no environmental assessment process carried out. I doubt that you would find, even in the media, any indication then of real concern on the part of the body politic with regard to what was happening to first nations people. So I agree with the hon. member that it's a tragic part of our history.
When we took office, even though that 1987 settlement agreement had taken place behind closed doors, involving the former Social Credit government and the former Progressive Conservative government, we were advised by a very prominent environmental lawyer, Prof. Murray Rankin, after conducting a very thorough study, that the settlement agreement was legally binding. This left us having to decide the nature of the review that would be conducted. After due deliberation we announced that the review was to be conducted by the B.C. Utilities Commission, staffed by an appropriate set of commissioners. As you know, it's on record that that work is underway, and the technical questions concerning the B.C. Utilities Commission hearings are in the purview of the Ministry of Energy, Mines and Petroleum Resources.
Having said that, the hon. member's question specifically regards the first nations people: the Carrier-Sekani and, in particular, the Cheslatta. I have met with the Cheslatta on the site, hosted by Chief Marvin Charlie, who showed me the area where they saw the coffins of their people being washed
[ Page 10445 ]
down the flowing water while the lake was being created. I have heard the subsequent concerns with regard to the impacts of Kemano 2.
We have encouraged the first nations to join the BCUC process, but have also respected their decisions with regard to their position and degree of participation, if any. We have worked to make participant funding available to enable them to participate in that process. Again, that is a matter of record. I think that process is still under consideration on the part of first nations.
Under Delgamuukw 2, the fact of the Utilities Commission hearings does not discharge the province's obligation to consult. Therefore we have a responsibility to address this issue within the context of treaty negotiations and also within the context of interim measures. However, it is our intent not to negotiate the issues with regard to the impacts of Kemano 2 until the report of the Utilities Commission has been received.
In the interim, it is possible for us to be discussing with the Carrier-Sekani and the Cheslatta, on an interim measures basis, other matters relating to economic development where an interest has been identified.
A. Warnke: In mentioning the B.C. Utilities Commission hearings, I wonder to what extent the ministry is supporting.... I believe there is financial support for the first nations to make their case heard, but to be quite honest, I'm not sure of the role of the first nations involvement in the BCUC process. Could the minister elaborate a little on that?
Hon. J. Cashore: The funding with regard to the Utilities Commission comes from B.C. Hydro. There's also some arrangement for participant funding. It's my understanding that the Carrier-Sekani and the Cheslatta have not to this date indicated a willingness to participate in the hearings, although that still remains a possibility because the deadline for the hearings and the venues has been extended, and the dates have been extended as well.
A. Warnke: Could the minister give us an idea to what date the deadline has been extended?
Hon. J. Cashore: Being a more technical question, I believe that will have been addressed in the Energy, Mines and Petroleum Resources estimates. I am quite happy to get the answer, however, and get back to the member. We will seek to do that, but whether we do it during estimates or not, we can make the information available.
A. Warnke: That would be quite sufficient. It's just for the record, so there is no urgency on it.
I want to spend a bit of time on the interim measures agreement, since the minister has raised it in this context as well. I would like to explore whether there has been any assessment on whether the interim measures agreement may have some sort of negative impact. My suspicion is that it does not, in terms of the three I've mentioned, and particularly the Cheslatta, who are still pursuing their interests with regard to this whole controversy. I'm wondering if there has been some sort of assessment made of the impact of any prospective interim measures agreement. Is there one in place? As it stands now, I don't think there is, but is there one in place? And what sort of impact is there?
[3:00]
Hon. J. Cashore: Yes, there was a meeting several months ago that involved the Deputy Premier representing the Premier, myself and other members of cabinet to set up the initial stages toward developing a protocol that would lead to an interim measures agreement. The next stage is to develop a framework that would identify the issues and the methodology for addressing those issues in the subsequent discussions. I made a special trip up there just over a week ago to meet with the Carrier-Sekani to discuss some of the issues, primarily outside the KCP issue.
I'm not sure if the hon. member is getting at this point, but I might as well make it, just in case. Quite often, and understandably, in a situation like this first nations will say that their participation in a process such as the hearings under the BCUC would prejudice their position with regard to the ultimate outcome. There are examples where other first nations have taken a different perspective on that. I think it behooves government to be open to their self-determination and to what their role will be.
Therefore, when it comes to the discussion of interim measures, at this stage the discussions would more appropriately be around subjects not directly linked to the KCP. However, I recognize that that is so important in terms of the future of those people that they point out to us -- and I think appropriately -- that it's difficult to have a full-ranging discussion on something that involves resources in their traditional territory but does not bring those factors into consideration. While this is a difficult set of circumstances, and we've both acknowledged the process and the way it has impacted these people going back to Kemano 1 -- the process going back to Kemano 1 was certainly lacking in justice -- we want to see things move along: the timely conclusion of the BCUC process, and vigorous participation in the interim measures process and also in the treaty negotiations.
A. Warnke: I thank the minister for the answer provided, because I recognize -- as he does, and I guess we all do -- that it is a very complicated issue. It's very difficult when, in this case, a particular nation is trying to pursue something in the courts, and yet there are other things to pursue as well. Negotiating and its complexity make it difficult as to what should be done, when, who should be involved and so on.
For the record, Chief Marvin Charlie wrote the Prime Minister requesting that a thorough inquiry or investigation be held before the project continues. There are a lot of controversies, especially since there have not only been some problems involving the forced evacuation of first nations people and what sort of impact that has, but even charges alleging that there are forged documents, and all the rest of it.
One particularly complicated area is this whole question of financial compensation being sought, and yet -- as I'm sure the minister is aware -- over and over again many aboriginal peoples are so attached to the land that there has to be some sort of settlement in land. On this particular issue, the Cheslatta have pointed out that the land in question for compensation is essentially wasteland. In this context we start looking, I suppose, for financial compensation. But is that the only course? What is complicating it for everybody here is whether there are options other than land, which is something that aboriginal peoples are obviously looking for. Is there something other than financial compensation? Are there cases in which some combination of the two could be looked at? Is there some other option entirely? I would like to explore that a little bit.
Hon. J. Cashore: With regard to the KCP, to my knowledge, the Carrier-Sekani and Cheslatta have not tabled a compensation demand. In a more generic sense, those
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questions come up in the context of treaty negotiations. But I think their position at the present time is to just say no.
A. Warnke: Because it involves some other ministries, I don't want to really belabour this particular issue. I do want, though, to touch on interim measures agreements. Perhaps we can pursue that for a little while.
A number of people have expressed publicly some concerns with regard to interim measures agreements, and I'll give an example. In December of last year, the province and the chiefs of the Nuu-chah-nulth central region signed an agreement that put in place an interim joint management plan for the region's lands and resources over a two-year period. I've heard before what the minister said on this particular agreement in a general context, and I understand some of the positive aspects of perhaps establishing a British Columbia cooperative forest management area that includes aboriginal peoples.
There was some concern raised as to the location of the area that came under the agreement -- namely, the Clayoquot River valley and Flores Island. As everyone knows, that has attracted some attention in the last year, and actually before that. Of course, we understand the efforts to involve first nations in receiving training in forest management and monitoring the harvesting of this area, but there was a question, too, as to what effect that interim measures agreement would have on British Columbia treaty negotiations via the B.C. Treaty Commission. In particular, what has come out is a concern that to a certain extent this is a method of avoiding the Treaty Commission process. It could be seen as a convenient way of avoiding the process. That further prompts a view that using the British Columbia Treaty Commission process has some incentive, but not the incentive it would have had, had we avoided utilizing interim measures agreements in that particular case. I still have a very open mind on that. I've heard different views, but I would like to explore to what degree that aspect of the interim measures agreement is compatible with the B.C. Treaty Commission process. If we can illustrate that by the example I put forward, I would appreciate it.
Hon. J. Cashore: I would refer the hon. member to the report of the British Columbia Claims Task Force of June 28, 1991. Page 63 describes interim measures agreements. I'll read one paragraph: "These interim measures agreements are not intended as substitutes for the terms of the treaty. The parties must be careful that the negotiation of these agreements does not displace the negotiations toward a treaty."
I would point out, however, that where interim measures work well, we'd look back some day and say that those were truly bridging agreements towards a treaty. I think the hon. member is aware that from the point of view of the province, we recognize the necessity from time to time of getting into a bilateral negotiation. Where that is able to roll into a treaty, however, it could very well be in our interest, because in the tripartite process the federal-provincial cost-sharing agreement comes into effect. I don't think there's an example of interim measures avoiding treaty negotiations. There are, however, different scenarios. There could be interim measures agreements with bands that do not believe in the tripartite treaty negotiation process -- that's one possible scenario. But I would say that in virtually every situation where the first nation entity buys into the tripartite process, it would be a bridging process from their point of view as well as from ours.
A. Warnke: I believe the minister is on the right track if interim measures are seen as a bridge, and the reference the minister made to the 1991 report perhaps establishes that.
For some reason, there seems to be some confusion. I understand what the intention is, and it is clearly stated in the report. Yet what has come up is the concern that by instituting an interim measures agreement, even if it is for a very short period of time.... One example I've used was for a two-year period, but even if it's for two, four or five years, I would consider that short-term. The trick is that if one puts that into place, to what extent are we committing the interim measures agreement to something long-term? Might the degree of commitment attached to the interim measures agreement, the agencies and the peoples you involve in such an agreement and the extent to which you institute it have some sort of permanent effect? I think that's where the concern is coming from. For the record, we could perhaps alleviate those concerns by saying that whatever interim measures agreements are agreed upon, there will be steps taken, and there will be a strategy applied by the ministry to ensure that these agreements do not jeopardize the long-term prospects and possibilities of treaties in the future.
[3:15]
Hon. J. Cashore: In the case of the Clayoquot two-year interim measures agreement, it was definitely a bridging one in that context. There may be other examples the hon. member might want to refer to where it might not be quite as readily apparent that that definitely was a mutual intent. One of the things we expect interim measures arrangements to do is ensure that the transition from pre-treaty to post-treaty regimes is as smooth as possible, and that certainty and stability for all interests are maximized at all stages of the negotiations. That should always be the goal we're working toward: a win-win, to use a cliche. At the point that various parties identify an interest, then go the further step and identify a common ground, I think we have a basis upon which to move toward a successful interim agreement that can be factored into the actual conclusion of the treaty.
A. Warnke: I think the key, as the minister states, is the search for a common ground. Obviously that then reflects the interests that are pursued by a number of parties -- or at least the two parties that are trying to come up with some sort of negotiation. I take it that there is every effort to avoid narrowing down the choices, and that in seeking a common ground by coming to some sort of interim measures agreement, the idea is to keep the flexibility as wide-open as possible. Is that correct?
Hon. J. Cashore: The two ideas that I heard were to keep the eventual outcome as flexible as possible and to avoid narrowing the choices. If I understand the statement of the hon. member, that is a desirable approach.
The fact is that the main event is the treaty negotiation. If we have a bridging process, then all parties, in addressing the issue of the treaty negotiation, are able to look at the widest variety of options, but in the meantime have an opportunity to witness the efficacy of what has been crafted in the interim measures agreement.
I wonder if it might be helpful for me to cite two or three other examples, which I have cited before. There is theNuu-chah-nulth agreement with the central region tribes, and I think we know quite a bit about that. There's also the Klahoose first nation interim measures agreement with the Ministry of Environment, Lands and Parks, regarding the creation of Von Donop Park, which ensures that the province
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is able to meet its legal obligation to protect the rights of the Klahoose first nation to use the park for traditional purposes. So that is a use negotiated with regard to the Park Act, in recognition of our responsibility for having the interests of those people identified. It includes a commitment that establishment of the park will be without prejudice to further treaty negotiations. It establishes a cooperative working relationship that will provide new opportunities for the Klahoose nation in planning and management activities, and it promotes resolution of issues through consensual rather than adversarial processes, thus increasing stability for all interests. I'm sure the hon. member would note, as we go through translating that as a bridge towards treaty negotiations, that there is really nothing we would see as narrowing the options as we get into that process.
The Kwakiutl first nations agreement with the Ministry of Agriculture, Fisheries and Food and the Ministry of Environment, Lands and Parks is another one. This is a consultation agreement which establishes processes to ensure that the province meets its obligations to recognize aboriginal rights of the Kwakiutl first nations in the issue of aquaculture on foreshore tenures. When I was Minister of Environment, Lands and Parks, I was very concerned to learn, where a foreshore lease was being considered by the lands branch, that consultation came into effect only if an Indian reserve was identified within one kilometre of the proposed site -- not meaningful consultation in the context of meeting our obligations under the Delgamuukw decision or even meeting our obligations under an ethical understanding of our responsibility.
The Kwakiutl agreement also provides for involvement of first nations and environmental monitoring activities to ensure sound resource management and conservation, and to promote important management and enforcement training; establishes a clear and timely process for consultation and decision-making, thus promoting certainty for all interests; ensures continued access to marine resources for economic opportunities in a manner that does not infringe on existing aboriginal rights; enhances economic and community development and capacity building for first nations through training, employment, cooperative management and research initiatives; and builds partnerships in resource management that form a foundation for future negotiations.
Then there's the interim measures agreement that recently resulted in the announcement of the creation of Ts'ylos Provincial Park with the Ministry of Environment, Lands and Parks and the Nemaiah Valley Indian band. That recognizes and protects aboriginal rights of the Nemaiah band to use the park for traditional purposes, promotes a cooperative relationship and builds partnerships. Again, these are three examples of interim measures that very obviously will be effective bridging mechanisms in the treaty negotiation process.
A. Warnke: I want to thank the minister for the elaboration, and I also want to pursue a few other matters. With regard to the aboriginal fishing strategy, I want to be very careful here not to raise those questions that come under the Ministry of Agriculture. I'm not sure whether Agriculture.... I believe those estimates are still under discussion. Nonetheless, there are different strategies the government and particularly this ministry can embark on to facilitate that part of the industry. Yet at the same time we're faced with a very complicated situation in British Columbia. To put it as simply as possible, the share of resources caught by various sectors of the fishing industry is overwhelmingly in favour of the commercial side. I believe that 93 percent of fishing in British Columbia involves the commercial industry, 3 percent recreational and 4 percent aboriginal. There are those, of course, who believe that the aboriginal involvement in the fishery is much higher than that. At the same time, there is this concern now about the relationship among the aboriginal, recreational and commercial sectors, and how the aboriginal peoples are involved in that. We appear to be in a state of transition, and we really do not know what the relationship among commercial, recreational and aboriginal sectors should be with regard to the fishing industry.
I'm wondering to what extent the ministry has assessed the aboriginal fishing strategy and what sort of involvement it has in terms of promoting the aboriginal side of the fishing industry. The minister can perhaps give us some sort of assessment as to the state of the relationship among the various sectors of the fishing industry and of aboriginal involvement. To what extent is this particular ministry -- aside from the Ministry of Agriculture, Fisheries and Food -- involved in that?
Hon. J. Cashore: Our involvement is mainly on issues of principle with regard to achieving a policy that reflects principles relating to our understanding of the history of first nations, and the commitment to come into a new era founded on respect, where we're able to walk side by side and move out of paternalistic relationships. That all adds up, from a principled point of view, to a more stable, integrated role for first nations people in the industry.
It could be argued that at one point in history the first nations had 100 percent control of the fishery, certainly where human consumption was involved. Prior to the 1930s, I believe, and after contact, when the industry had really taken off, there were 40 or 50 canneries up and down the coast. There was a time when people from aboriginal communities had between 40 and 50 percent of the industry in terms of the catch. We've seen that figure go down to a very small fraction of the catch.
Faced with increasing demand, a much more complex situation and the need for very careful management because of the fragility of the resource, we find that there's a need for adjustment or transition. We saw much of that during the buy-back period when Jack Davis was Minister of Fisheries in the early 1970s. Therefore we see our role, as Ministry of Aboriginal Affairs, as an agent of change affirming an ethic and in a supportive role to the Ministry of Agriculture, Fisheries and Food and the Ministry of Environment, Lands and Parks. Those ministers meet from time to time on this issue and other related issues, which I'm sure will be discussed in the estimates of the Minister of Agriculture, Fisheries and Food.
We see the responsibility to support the aboriginal fishing strategy of the federal government, with the recognition that there are some outstanding court considerations, of which we await the outcome. We seek to support them as long as they are pursuing policies that look after the conservation of the resource, while recognizing our opportunity to have first nations hold a stable place within that industry.
A. Warnke: Given the number of bands and tribal councils, especially along the Fraser River system, is the minister involved in somehow coordinating the various bands and tribes and, beyond that, advocating on behalf of their interests? I suspect there are differences. Is the minister really trying to pull together the various interests along the Fraser River system?
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Hon. J. Cashore: In the relationship we are seeking to affirm, we think that that would not be our role. First of all, it's important to recognize the federal responsibility in this regard and also to recognize in the emerging government-to-government relationships that the developing presence of first nations governments at various levels is addressing these issues on their behalf. Again, I think it's important for us to affirm the ethic that recognizes the authority and responsibility of first nations people and their appointed and elected leaders.
[3:30]
A. Warnke: After the Sparrow decision, there was a recognition of the aboriginal right to fish under section 35 of the Constitution Act. Admittedly, the emphasis was on food for social and ceremonial purposes, not commercial. Yet there is the aboriginal desire to preserve their society and build the economy. Are there any efforts by this ministry to promote the preservation of a society in a way that is compatible with the Sparrow decision but also attempts to contribute to preserving society and building the economy along the narrow definition of Sparrow? Is the ministry involved in any way in building the economy in a general sense?
Hon. J. Cashore: I think the more creative role for the province with regard to the scope of the issues the hon. member just identified is where we have an opportunity to work with first nations to assist in the development of economic opportunities. Again, we had quite a bit of discussion on Tuesday afternoon about the whole issue of economic development and how important it is that government not move in and take the decision-making responsibility, which needs to be the responsibility of those the economic development would involve.
The hon. member raised issues with regard to post-Sparrow and how that may play out in terms of both the ceremonial and the cultural -- and, by definition, economic -- development for the people. I think our role there is to hold a watching brief on how the federal government carries out its responsibilities with regard to the Sparrow decision, but to also seek ways to be supportive in terms of the emerging and developing economic initiatives that first nations are taking. We outlined some ways in which the government, through the First Citizens' Fund, business development loans and that sort of thing, is able to be involved.
It might be interesting to point out -- and I hope I'm not raising a red herring here -- that when I was up in Prince Rupert on the weekend, I heard from a number of fishers that there are way more seals out there than people have seen in a long time. I hear that wherever I go on the coast. It is a recognition that we're into an era where fisheries and wildlife are managed. We may wish for the day when everything was in balance, but except for a few places in our province, the fact is that we are into a management regime. I'm also aware that campaigns in Europe have resulted in the loss of a way of life for many northern native people, especially those who had the adaptability to achieve a way of surviving by getting into the fur trade and then into various crafts involving sealskin and that sort of thing. I did see a letter to the Tsimshian Tribal Council suggesting that they consider getting into crafts using sealskin and that there are opportunities to market the meat. In so doing, there might be a better balance with regard to the number of those seals. I realize that I'm getting into an area that is not Aboriginal Affairs per se; it's Agriculture, Fisheries and Food. Where first nations people are involved, we've seen some very worthwhile enterprises marketing crafts. That's just one thought on one issue that I know one tribal council is considering. Given the different circumstances of the Sto:lo people along the Fraser, I'm sure there are a variety of economic possibilities. I know there are various economic possibilities relating to the fishery and other enterprises that they are looking at.
A. Warnke: That point is an important one to raise. The minister is quite courageous to even embark on this, because we know that about 20 years ago this was a really hot issue, especially on the east coast.
Hon. J. Cashore: I have some scars on my back from then, too.
A. Warnke: Yes, I can imagine.
But it is relevant. Native people have pointed out how it is also highly relevant to their culture. It is not a matter of just going out there and exploiting a raw resource. The emphasis on balance in nature is extremely important, and in a way it's wise, because it establishes the basis where economic growth and development come from. In that context, the aboriginal people are at a tremendous advantage in identifying and understanding what the balance is. We often get sidetracked by being very sensitive about one area of nature and all of a sudden we see, to a certain extent, an imbalance that might occur. We don't want to get involved too much in this, but on the east coast, it has been pointed out that there are adverse effects of putting a ban on sealing and what not. We don't really want to get involved in that, but nonetheless, I think it's wise to put out a caution. In this context, who better to appeal to than the aboriginal peoples themselves on what is relevant to their own culture and society and, of course, on what is compatible with their own economic development?
I also want to touch on one other aspect, since we're dealing in a number of areas related to the economy of the first nations. When we look at forestry, the Commission on Resources and Environment, or CORE for short, obviously embarks on a provincewide strategy for land use, and this would include facilitating the development and implementation of regional planning processes. At the same time, if that's the thrust of CORE, especially as it pertains to the forest industry, and there is the aboriginal quest for land.... It impresses me more and more that this is what the aboriginal peoples are really addressing when they want compensation or whatever: they're looking at land; they always focus on that. It seems on the surface, therefore, that there is a problem of balance between CORE, its mandate and what it wants to pursue on the one hand, and the aboriginal quest for land on the other. What is the balance between the two? I'm wondering what strategy the minister has engaged in to find a balance between CORE and the aboriginal participation, in particular as it applies to the forest industry.
Hon. J. Cashore: This question picks up on some of the themes we discussed a while ago concerning the Cheslatta. As the hon. member knows, the Commission on Resources and Environment has been given three regions of the province in which to develop a land use plan: Vancouver Island, Cariboo-Chilcotin, and East and West Kootenay. In the context of those three, the first question is: what has been the first nations participation? Again it comes back to the point I made a few moments ago that some first nations have reached the position of saying, in effect: "If we participate in
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that process, we're participating in negotiating our own demise, in a sense. We're negotiating something that might be used against us."
We know that in the CORE act, the words "without prejudice" are there. But we also know that many first nations people argue very effectively that those words are not as comforting as some of us might hope them to be. Therefore they have a very legitimate reason, which they have arrived at through their own process of thinking this through, for saying they are not going to participate.
There are variations on this, however. For instance, if we look at Vancouver Island, first nations did not, to my knowledge, participate in the CORE table. If we look at Cariboo-Chilcotin, there was a table in the Anahim Lake area where a consensus was achieved with the participation of first nations; that was quite a significant CORE success in that area. If we look at East and West Kootenay, it's my understanding that first nations are at the meetings there but are not participating in the vote. They are participating by holding a watching brief and also involving themselves in some of the discussion, but they are not voting on the decisions made by those at the table. So those are three different manifestations of how people come at this.
To go back to Vancouver Island, after the Commission on Resources and Environment announced its recommendations several weeks ago, I attended a meeting along with the commissioner, Mr. Stephen Owen, to which the leaders of first nations on the Island came. I won't go into it now, because I realize we have an announcement coming at an appropriate time, but my sense of the meeting was that their critique of the CORE recommendations was very thoughtful and was delivered in a very useful way. It indicated to me that when the government announces its response, the best win-win situation would be that it inform first nations about where the province sits on the land issue. Therefore it should be helpful in the treaty-making process. I think that more than 95 percent of first nations residents of Vancouver Island are included in those entities that have filed statements of claim with the Treaty Commission. If this works as well as it can, there will be an opportunity for first nations people to have a very clear understanding of the province's position. It should help, therefore, in terms of them putting forward each stage of their position. This has the potential to work very well, but it's important that the government not say that we have fulfilled our obligation to consult, when that has not yet been the case.
I think CORE has been a major step, but in terms of my relationship with first nations, CORE is not the main event; the main event is the treaty negotiations. I have met with first nations to affirm that that is my role and my responsibility within government.
W. Hurd: I want to pursue briefly with the minister his explanation of his ministry's input into the First Nations Forestry Council, which is -- as the minister knows -- an initiative designed to promote the development of an aboriginal presence in the forest industry in British Columbia. Can he first advise the committee of what role his ministry plays with respect to the government-appointed First Nations Forestry Council?
[3:45]
Hon. J. Cashore: Our ministry plays a supportive role. Staff within the ministry work with the council and are present at meetings. The Minister of Forests and I attended one meeting. I also held a briefing at the time of the announcement of the forest renewal plan. In our approach to a new relationship, it is recognized that we set up processes whereby first nations people, on a representational basis, will be addressing issues that are on the cutting edge of change. In this case, it's economic change involving employment opportunities and entrepreneurial opportunities relating to issues that have to do with a wide range of considerations in forestry. I would defer some of the questions you may ask to the estimates of the Minister of Forests.
Our ministry does play a supportive role. It is very important to recognize that we should not expect that everything is going to be peaches and cream. It is understandable and within a realm of reasonable expectation that from time to time there would be tensions and expressions, such as those of Mr. Harold Derickson on the weekend. We need to take seriously what he has to say, examine the concerns he identifies and carry on.
W. Hurd: I'm glad the minister referred to Mr. Derickson's comments with respect to this particular council. I am certainly mindful that some of the issues he raised would be pertinent to the Ministry of Forests. Recognizing the important role of the forest industry in British Columbia and that any strategy involving first nations would improve their ability to participate in the forest industry, I think the questions certainly invite comment from the minister.
As the minister will know, Mr. Derickson's principal concern was the issuance of longer-term forest licences to first nations people. While I recognize that those licences would be issued by the Ministry of Forests and would therefore fall under the purview of that ministry, I'd be very surprised if the Minister of Aboriginal Affairs advised me that his ministry had not given some thought to improving the participation rate of first nations people in the forest sector by promoting the idea of a long-term licence arrangement for entrepreneurs who want to get involved in the forest industry. My question to the minister, on behalf of first nations people in British Columbia, is: has his ministry come up with any ideas for forest tenure in the province that it would recommend to the Ministry of Forests, recognizing that this appears to be the major stumbling block in the forest advisory council?
Hon. J. Cashore: Two things. First of all, we are encouraging first nations to apply for licences, and this is happening from time to time and from place to place.
With regard to the council itself, the answer is yes. We've considered the aspects that the hon. member referred to. Again, the important thing is the kinds of recommendations that are forthcoming from the forestry council. As those recommendations come forward and are made public, that is the point at which I would comment on them as Minister of Aboriginal Affairs. I think it's very important that the process comes through the council and the work it has embarked on.
W. Hurd: I must confess that I'm rather troubled by the answer we've received. The minister will know that Mr. Derickson made some rather serious charges about the government's commitment to first nations people having access to the forest industry. He points out that less than half of 1 percent of the annual allowable harvest in the province is allocated to first nations people. These claims are coming on the heels of the situation in Clayoquot, where a licence was awarded and a special agreement was negotiated with the tribal council in the Clayoquot only after the involvement of the ombudsman and considerable public controversy. I would have hoped that the minister would issue a far
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stronger statement and plea in this set of estimates to get more of the annual allowable harvest into the hands of first nations people. As the minister responsible for aboriginal affairs and for easing their transition into proper business activities in the province, can he tell us, on a philosophical level, whether he believes that half of 1 percent of the annual allowable harvest being granted to first nations people -- with no apparent mechanism to increase it at this time -- is a fair and equitable situation? Or would he like to see it increased?
Hon. J. Cashore: I'm very proud of the forest renewal plan and the opportunity for joint ventures contained in that plan. Mr. Derickson was present at the briefing we gave, and he responded very positively on that occasion. The forest renewal plan with the five envelopes is set up in such a way that first nations interests will be represented in the allocation of every one of those envelopes. Also, there will be first nations representation on the board of the forest renewal plan.
With regard to the hon. member's concern, where he compares Mr. Derickson's concerns with the fact that we have made some headway with the central region tribes of the Nuu-chah-nulth, it's a question of whether the glass is half-empty or half-full. If the hon. member is truly consistent with what seems to be the ethic behind his comments, he would be praising the Clayoquot interim measures agreement. I haven't heard him do that yet, but I think it might earn him recognition as a bit of a statesman if he would stand up and acknowledge that that is a very good plan and that it fits in with the thematic thoughts behind the points he's making this afternoon.
I'd also like to point out that I would take seriously what Mr. Derickson says. He's making some important points; we have to do better. There needs to be a greater share of the industry involving first nations entrepreneurs, and even more important than that, it's absolutely inappropriate that we see the level of unemployment among first nations which exists throughout this province. We have to do a lot better. The fact is, using any reasonable measure, that we've done much better in the mere two years since becoming government compared to what had gone on in this province with unsympathetic administration and the total avoidance of first nations concerns. We can say: "Hey, we're not perfect, but we're moving in the right direction." Some very significant aboriginal voices have been enabled to have a key say in this not only through the First Nations Forestry Council but also through other instruments that we've put in place, not the least of which is the forest renewal plan, which very significantly recognizes that we have to do better when it comes to first nations.
W. Hurd: Having had the opportunity to review the comments of Mr. Derickson and the progress of the First Nations Forestry Council, I can honestly say that what's being asked for here is not the envelopes in another Crown corporation, to which the minister refers, but the granting of real tenure in the form of a long-term forest licence commitment to first nations people in order to manage a licence and to participate in an $11 billion industry in British Columbia that features an abysmally low participation rate.
I ask the minister again whether or not he believes that the tenure system needs to be adjusted within the Ministry of Forests, recognizing that it's that ministry's responsibility to which he would provide some input and direction. Does he agree that the system of forest licences needs to be changed? The concern I'm hearing is that these decisions have been foisted off to the Treaty Commission. There's going to be little or no opportunity for first nations people to secure an area-based forest tenure and to develop their own forest industry and forest sector when the Treaty Commission is supposedly dealing with some of these land issues in the province. I pose the question to the minister again: does he envisage an increase in the immediate future in the number of forest tenures granted to first nations people? Or is it likely to be a Clayoquot situation, where we saw an almost after-the-fact involvement of first nations people in a long-term forestry agreement, amid considerable controversy and the involvement of the ombudsman? Does he envisage the government moving in the direction of more longer-term forest licences and small business licences for first nations people, or are they going to be stalled until the whole matter of land claims is dealt with by the Treaty Commission?
Hon. J. Cashore: The initiatives this government is taking will result in improvements in virtually all aspects of first nations forestry. These are moving along appropriately.
The hon. member refers to the treaty-making process. That is one initiative; it's not the only thing that is happening. I'm rather disappointed that the hon. member would not see the opportunity and the potential that exists within the forest renewal plan to address a number of these issues with regard to first nations having a participatory role. I think we have room to improve in a number of areas, whether it's tenure, more participation in silviculture and value-added or training to have the skills to participate in the readjustment that is taking place as we look to the kind of forestry that needs to be done in the second half of the 1990s and beyond. So the answer is yes, I look forward to a great many improvements. We've put the bricks and mortar in place, so we have the structure in which those improvements are going to be developed.
W. Hurd: Perhaps at this time I can read the recommendations of Mr. Derickson, the first nations participant on the forestry council, into the record. As the minister will know, they're seeking 6 percent of the annual forest harvest, which is roughly equivalent to the native Indian percentage of B.C.'s population. That seems like a fairly modest goal. Does the minister agree in principle that 6 percent of the annual allowable harvest in the province, which approximates the percentage of first nations people, is an appropriate goal that his ministry will be pushing for? If he does, how soon can we expect that goal to be reached?
Hon. J. Cashore: We're into a range of discussions all the way from consultation to negotiation. I'm not going to get into the numbers game where we start talking about whether I support this or that figure. The fact is that we've had letters from some first nations disassociating themselves from the concept and the number the hon. member stated. So I'm not going to play that game, but I am going to continue to reaffirm our role in this area.
I have recognized very clearly for the record and for the hon. member that we have to do a lot better. I think it would be statesmanlike on the part of the hon. member to recognize that what this government has put in place has been lacking for many years, which were certainly years of injustice with regard to first nations people in this province. The process has been put in place, and achievements are underway. It's just a bit too convenient to take a successful achievement and use it as a means of finding criticism elsewhere without at least affirming the value of that agreement.
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W. Hurd: It may be a numbers game, but I think the first nations people, whom I talked to in my role as a member of the Select Standing Committee on Forests, understood the industry in the province only too well. They understood that the only way to be a secure and important player in the forest industry in British Columbia is to have tenure -- that is, a secure forest licence on which to build an enterprise on which to build a future.
Hon. J. Cashore: Nobody's arguing with that.
W. Hurd: The message that I think Mr. Derickson is trying to advise the government about is the importance of tenure for first nations people. There is a suspicion out there -- I'm sure the minister has heard it -- that, in fact, there won't be an increase in tenure for first nations enterprises with the Treaty Commission process in place, and the political agenda already being sensitive about the potential for land alienation as part of the Treaty Commission process in the province. There's a concern that the government will not move to increase the tenure available to first nations participants, first of all, because they don't believe in the system of forest tenure to begin with; and second, because there is a political agenda here that this will be tied in some way to the Treaty Commission process. So, in fact, there will be no major increase in tenure. If the minister doesn't agree with 6 percent, what percentage should it be?
Hon. J. Cashore: I just said that I won't play the numbers game.
W. Hurd: Surely he's prepared to offer the committee some idea of what tenure he feels is appropriate to grant to first nations people in the province. We'd settle for any percentage at this point -- any commitment.
The Chair: It occurs to me that we're veering somewhat far from the estimates in front of us. Some of the conversation doesn't seem to tie directly to what's happening in the estimates for the minister's office. I appreciate the interest in philosophy, but we're veering very close to future policy, and that's the purview of another body in another location at another time. I'd like to caution members to focus on the ministry. We've spent many hours on this ministry already, so we may want to move on to another area.
Hon. J. Cashore: The hon. member has said the same thing in a different way several times, and I've responded several times, so I won't answer this question again.
W. Hurd: I'm not going to belabour the point. I'll certainly be raising this issue with the Minister of Forests. As the former minister responsible, I'm sure he will have some ideas for us about aboriginal tenures in British Columbia. I realize that the bill concerning forest renewal is still before the House, but the minister did talk about opportunities with that program. Can he tell us whether he foresees that legislation being of any help to him in promoting investment in first nations activities in the province, or is it a situation where he will have to wait to see how this new initiative evolves? What can first nations people expect out of this Crown corporation in the future?
Hon. J. Cashore: As I said a while ago, I was just up in Prince Rupert, where I had the opportunity of briefing the Tsimshian and the Haisla tribal councils on the forest renewal plan. I can tell the hon. member that the plan was very warmly and positively received, with comments like: "Why hasn't this happened before? This is the first time. This is the first government that's put this type of process into place. This is excellent."
As I said before, I have briefed the First Nations Forestry Council, and the response there was very positive. I briefed the First Nations Summit, and the response was very positive. George Watts of the Nuu-chah-nulth nation has had a very positive response. I'm not going to read this into the record, because I need to confirm it, but I've heard that two tribal councils have formally endorsed the forest renewal plan. The hon. member is very much aware that with the plan having been announced and put in place in such a way that the dollars are going to be there on a secure basis for four years, it behooves all of us to make the plan work as effectively as it can possibly work. I encourage the hon. member to give us his constructive suggestions, either here in estimates or at other times. We will consider them very seriously. I can tell the hon. member that the preliminary comments and discussions I've had with first nations people have been extremely positive and hopeful, along with the recognition that this government is the first one to come forward with a plan that has the support of industry, working people, environmentalists and first nations. It's now our responsibility to make sure it works to the fullest of its potential, and the potential is magnificent.
W. Hurd: Can the minister tell us how the incremental improvements on the land base and in silviculture, which we assume will add value to the land over the long term, will dovetail with the Treaty Commission process when it comes time to formalize the claims that will be dealt with and adjudicated by the Treaty Commission? Will that large-scale public investment in the land base be reflected in any way in the value of the land that may change hands? Can the minister predict how that allotment of capital investment will be dealt with when it comes time to deal with the various cases under the Treaty Commission?
Hon. J. Cashore: It will dovetail beautifully. The fact is that life goes on. In the pre-treaty negotiation process, the line ministries, the agencies of government, have a responsibility to work in an honourable and appropriate way with first nations. That will carry on with regard to a project, such as the forest renewal plan. It's very clear that first nations have a role in virtually every aspect of that plan. With regard to treaty negotiations, it's also clear that if land is enhanced as a result of the work that emanates from the forest renewal plan, then that's simply a matter that's taken into consideration in the work done in the treaty negotiation process. Hon. member, it's a good question, and I'm happy to be able to say that all of those things will dovetail very well. Certainly it's a much better regime than that which existed prior to this government taking office.
W. Hurd: I just have a couple of additional questions on the CORE process, which my colleague for Richmond-Steveston briefly talked about. Obviously there will be some reports issued shortly from the Cariboo and the Kootenays. These decisions are made without prejudice to the Treaty Commission process. Can the minister tell us whether he envisages that there will need to be a backup plan, as there was with Clayoquot, in order to deal with some of the concerns that may emerge from the CORE processes in those two jurisdictions? Or is he expecting that the ombudsman may somehow have to be involved again?
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Hon. J. Cashore: The hon. member knows full well that the Clayoquot land use decision foreshadowed the need to be working the process through with the first nations. That was evidenced with the without-prejudice aspect of it. In fact, there is a "without prejudice" in the legislation bringing the Commission on Resources and Environment into effect. Let me say, however -- as I said very openly prior to the hon. member being in the room this afternoon -- that first nations aren't really necessarily buying into the without-prejudice argument, and from their perspective I can understand that completely.
We're dealing with a number of changes taking place within our province right now, and I think first nations are doing an excellent job of identifying their interests. They are saying: "How does it help us if you have the words 'without prejudice' in there when we may find ourselves participating in a process that could result in it forming the basis of a negotiating position on land use for the province?" That's a legitimate concern on their part. I'm not saying that's what would happen, but very legitimately first nations come to the conclusion that even with the without-prejudice assurance, they do not wish to participate at that stage. Therefore I outlined awhile ago that we find different circumstances and different responses depending on the situation, whether it's Vancouver Island, Cariboo-Chilcotin, or East and West Kootenays.
The fact is, I don't have a crystal ball. I don't know what different issues the ombudsman is going to decide to make a ruling on, or how that's going to go, but I welcome the ombudsman fulfilling the role of the ombudsman's office and making comments. That means that we have a very worthwhile process within the province functioning as it should, so we needn't get uptight over the fact that the ombudsman might make some kind of comment or suggestion. Why would we be upset to see something that the province is funding, which is there to comment on the administration of fairness...? Why would we see that as a problem? I think we need to get out of that negative kind of mind-set and look at the possibilities there are when different agencies of government and different components that have been facilitated by government are able to come up with helpful suggestions. So I'm not troubled by that.
We are also on a cutting edge of change as we see the results of different court decisions -- the second Delgamuukw decision, and that sort of thing. We're learning as we go along. There will be times when we'll learn by experience and say: "Next time we're going to do it a little bit differently." That's going to be the case. But to compare Vancouver Island,Cariboo-Chilcotin and East and West Kootenays is to compare three different, unique areas of the province. The responses of the first nations people in each of those areas reflect their uniqueness as well.
However, as the commission comes forward with its recommendations and as the province goes through the process of responding to those recommendations -- as I said before the hon. member was in the room -- consultation on those CORE processes does not discharge our fiduciary obligation with regard to consultation with first nations. Therefore, even when CORE is all said and done, we still have that obligation, and that obligation is something that we will be following through on appropriately.
W. Hurd: I understand how complex an issue this is. However, the minister well knows that the CORE process is really a land use process, a land-zoning process, if you can use the terminology, which will result inevitably, along with other overlapping initiatives, in a reduction in the annual allowable harvest for the province, for example, and possibly a redesignation for the use of range land and other basic uses of the land. We're seeing land use in the province which will inevitably result in a change in its value. That's the issue that first nations people are bringing to the table with respect to CORE: when you change the land designation, you change the value. It changes the way you can deal with the land in terms of a first nations settlement in the Treaty Commission process. I'm sure the minister will agree that where land is put into a reserve for purposes of environmental enhancement, which we understand from the Delgamuukw decision and other court decisions is paramount to the protection of species and the protection of the resources, that may result in the province having to offer cash or the equivalent instead of land, if indeed it ends up in a preserve for wildlife purposes, biodiversity or any other type of initiative.
[4:15]
I find it difficult to understand how the minister can say that the CORE process is without prejudice to the first nations settlements when, by the definition of change of land use and the plummeting of the annual allowable harvest, in fact it is prejudicial because it does change the designation of the land. It changes land use and, therefore, value. I welcome the minister's assertions to the contrary, but it seems to me that the first nations people who, after all, are on the land, deal with the land and understand what the land provides in the way of forestry values and rangeland values, are the first to be aware that the value of their claims can change based on the redesignation under such initiatives as CORE.
Hon. J. Cashore: Three times this afternoon I have said that I can fully understand first nations concerns with the without-prejudice designation. I don't need to be lectured by the hon. member to be aware of that. I am lectured on it often enough by first nations themselves, and I've said very openly and significantly that I recognize their reason for raising that concern. Does the hon. member suggest that as we go on with activities of the province we not use the without-prejudice clause? Is he suggesting that it not be there? Is he wanting to go to first nations and suggest that to them? I don't think so. If he is, perhaps he would like to put that on the record.
The fact is, hon. member, we're dealing with a number of issues here as we're on the cutting edge of change. As we're going forward, a lot of this is going to depend on the political will of the various parties to make it work. The fact that we have recognized first nations on a government-to-government basis has been challenged by members of other parties within this Legislature, and I commend the hon. member's party for having supported the basic premise with regard to the government-to-government approach. But once we've embarked on that path, the fact is that there are going to be some areas in which there will still be a lot of concern over how this phrase "without prejudice" is going to work. It's a legitimate concern and one that first nations have expressed many times. It behooves government to make that concept work as fairly and as appropriately as possible. The fact is, as first nations point out, while we're waiting to negotiate treaties, every day they see logging trucks going out of what they've identified as their traditional territory.
We have also said, as a government, that we are not willing to put moratoriums or vetoes in place, because of the importance of enabling the province to continue to function. In the meantime, we've put in place traditional methodology to get to a point where we will have the certainty that comes from treaties. So, hon. Chair, if the hon. member wants to
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continue to argue that the glass is half-empty, I'll simply argue that it's more than half-full.
W. Hurd: I just have one further point to make, which I think represents a summary of the discussion to date. The minister has acknowledged that yes, there's prejudice involved in the CORE process, despite the fact that it claims there isn't; that if first nations people feel that way, they have redress to the ombudsman; and that in the interim there appears to be little if any commitment to increase first nations participation in the land base through an orderly process of awarding forest licences for a long-term future in the province.
That seems to be the position as outlined to the committee by the minister. If it is, unfortunately, I see grave difficulties ahead, because that process wouldn't be acceptable to me as a first-generation British Columbian, much less to someone who has been here as part of a first nations founding people. It seems to me a trifle unfair, but I guess it's all logical to the minister, and we'll give him the benefit of the doubt.
Hon. J. Cashore: I think when one is bent on coming out of what has been a very productive discussion with a win-lose idea, one resorts to the tactic of making things up, not listening to the debate and putting words into one's opponent's mouth. I'm not going to do that with this hon. member. I am going to stick to the record of the discussion that has just taken place in this chamber, in which I have made it very clear that the without-prejudice concept is extremely important, but that I also respect first nations expressions of concern. They have been concerned for more than 130 years about dealing with injustice perpetrated by governments, and so it's an understandable concern. It's my responsibility, and it's our government's responsibility, to make sure that this issue is addressed in a way that answers their concern, and we are doing that.
The hon. member has imputed other statements to me that are incorrect; that is inappropriate, and I regret his resorting to that kind of a tactic. I don't think it contributes to a helpful debate. I would encourage him to go over the debate and ask himself how this approach assists first nations in achieving their vision.
W. Hurd: I think the value of the debate is the possibility of averting the type of incident that occurred last week when Mr. Derickson walked out of the government-appointed First Nations Forestry Council in frustration; I'm sure the minister has reviewed the comments. He talks about accusing government, industry and labour of using the council to delay decision-making on forestry issues affecting native Indians. Discussions have "bogged down," in his words....
The Chair: Excuse me, hon. member, I wonder if you'd take your seat for just a moment. It seems to me we have canvassed this issue a number of times, and there is a phrase in our rules that talks about "tedious" and "repetitious." I wouldn't want to apply those words, of course, but it strikes me that we might move into a new vein of discussion at this time.
W. Hurd: Thank you for that advice, hon. Chair. In the spirit of avoiding the kind of confrontation the minister finds offensive in these estimates, I won't read any further comments by Mr. Derickson into the record. I'll accept his version that there's a lot of frustration and concern out there. I hope that the First Nations Forestry Council can get back on the rails again. I hope that this minister, who purports to be vitally concerned about increasing the involvement of first nations in enterprises in the province, will take a leadership role in trying to get this council back on the rails.
Hon. J. Cashore: I wish the hon. member wouldn't put words into my mouth. I don't find the statements of Mr. Derickson offensive. As a matter of fact, I affirm his right to make his statements, and I celebrate a vibrant, healthy process in which people are able to exercise their democratic rights. From time to time that will involve an individual withdrawing participation. I certainly want the member to know that I made no such statement, and I do not find anything about Mr. Derickson offensive. I will not get involved in commenting on what I do or do not find offensive in this chamber this afternoon.
A. Warnke: I would like to pursue some aspects of how economic development occurs on aboriginal land. There are many small items -- I certainly don't want to belabour the point -- that I want to raise. Rather than ask a number of single questions, I could put many comments together.
An issue was raised by my hon. colleague who is not here, so on his behalf I would like to mention the concern about the whole idea of raising revenue on aboriginal lands. There appears to be the process now -- there are a couple of cases the member referred to -- where this may apply. The mill rate could increase on aboriginal land in order to raise revenue for providing the basic services, but at the same time, the way to do that is to raise the mill rate on property or raise the property rate itself.
At the same time, there are grants received from the provincial government. One case in Tsawwassen and another in Vancouver seem to indicate that it is possible that this is an area where government, particularly the provincial government, is giving out grants. That means it's taking money from the taxpayer on the one hand, yet there is an increase in the mill rate on the other. So there is that concern. While I'm at it, there is also the concern about taxation resulting from tobacco sales, and there's quite a bit of controversy associated with that.
The third one I want to elaborate on is raising revenue on reserves by pursuing the issue of gambling and that sort of thing. Perhaps I will proceed with the last one separately, because I believe another hon. member has some questions related to that as well. What I'm after revolves around raising revenue on aboriginal lands and some of the complications with regard to the mill rate. I realize that this question could go to the Minister of Finance, but I wonder if the Ministry of Aboriginal Affairs is somehow involved in this as well. Perhaps the minister could, where appropriate, address the question of the tobacco tax. Also, a question has been raised about what has been perceived as discriminatory -- or racially discriminatory -- regarding the sale of tobacco to aboriginals and non-aboriginals, although that question might be more appropriate to the Minister of Finance. I wonder if the minister has a response to those concerns.
Hon. J. Cashore: I'll respond to the last question. With regard to the others, I wonder if the member could make them more specific, and I'll try.
Concerning the last question, I think the hon. member knows that the Minister of Finance, following a meeting late last week, has decided to postpone -- by three months, I believe -- the announced implementation of the tobacco marketing system insofar as it relates to aboriginal peoples. Some elements of that program will be continuing, but insofar as it relates to aboriginal peoples, that will not be the
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case, allowing for further consultation during the next 90 days.
A. Warnke: So there has been essentially an extension of the deadline beyond May 1?
Hon. J. Cashore: Yes.
A. Warnke: Thank you.
As to the other specifics, I'm not sure of the name of the reserve at Tsawwassen, but it's that one in particular where there seems to be some concern....
Hon. J. Cashore: It's my understanding that the Tsawwassen first nation is seeking the power to levy real property taxation on its lands. The process to assume this power is permitted by section 83 of the federal Indian Act. The Tsawwassen bylaw has been recommended for approval by the Indian Taxation Advisory Board, which is chaired by Chief Manny Jules from Kamloops, and it's now awaiting the signature of Ron Irwin, the federal minister. If approved, this bylaw would take effect in the 1995 taxation year.
[4:30]
When a first nation assumes independent real property taxation powers, the province and its agents -- including municipalities -- withdraw from the taxation of those same properties. This avoids double taxation. The revenues generated from real property taxation are used by first nations for projects or activities that benefit them. Where a first nation assumes taxation powers over properties on reserves that were previously taxed by a municipality or municipal district, the province encourages the two parties to achieve service agreements. Where these have been negotiated and are in place, service agreements have a good track record.
The province and the UBCM have both been concerned about the lateness of federal approval of taxation bylaws. The province has joined the UBCM in writing Ottawa about the delays. I understand that the federal government is attempting to expedite its review and approval process. I attended part of a recent conference of municipalities and first nations on this and found it very worthwhile.
A. Warnke: I appreciate that clarification. Further on the issue of raising revenue on reserves, as the minister knows, one contentious issue is the matter of gaming and gambling on reserves and where we're going with that. It's a good general question, and I think there's one member who is anxious to get involved in this as well. We'll see what happens. I wonder if the minister could, first of all, provide us with a statement on where we are in terms of the pursuit of gaming on aboriginal lands and on reserves and whether the government really is considering approving it. At what stage has it accepted the idea, or is it inclined to suggest that that policy is not on?
Hon. J. Cashore: For the record, I'm sure the hon. member is aware that the Minister of Government Services has the lead role with regard to this issue. As Minister of Aboriginal Affairs, I'm the first to acknowledge my major interest in this issue, given the role of first nations. I want to say that on a personal basis I find the gambling issue a very difficult and challenging one. I have deep concerns, as I know our government does, over social costs and impacts relating to gambling. I'm also aware that very often the perceived potential for profit ends up in various costs in terms of social concerns.
Having said that, I don't see us in a situation of putting the toothpaste back into the tube. The fact is that there are various gambling activities regulated by the province.
I also recognize that there is a need for change. We could take a very simple view and say "no proliferation," meaning no change from what presently exists. But it wouldn't necessarily mean that. If we look at gambling as related to first nations and the fact that this comes under the provincial government's jurisdiction, it has been pointed out.... For instance, with regard to bingo, it's my understanding that approximately 20 percent of the revenues that come into the provincial coffers to be allocated in various ways comes from aboriginal people. On the other hand, it's my understanding that only about 2 percent of the revenue from bingo goes back to aboriginal people. I think that's an indication that we have to look at this in the context of addressing the issue of fairness in the way it's administered. I commend the Minister of Government Services for taking on this role in a very difficult task.
Where first nations are concerned, somewhere along the line the desired outcome is an overall provincial regulatory regime in which it is recognized by first nations that their place within it ensures the appropriateness of supporting that and recognizing that the province has that role. I think we should seek, through the discussions that Minister Blencoe and his people are having with the representatives of first nations -- particularly the first nations gaming council -- to address this most challenging issue in an appropriate and creative way.
D. Mitchell: Thank you to the member for Richmond-Steveston for allowing me to enter into this estimates review. I have a couple of brief questions on aboriginal gaming as well, and I appreciate the minister's comments.
I wonder if I might ask the indulgence of the committee, before I proceed to those questions, to ask another brief question that has crossed my mind over the past few days relating to some allegations made by a Vancouver lawyer by the name of Jack Cram. I don't know if the minister or his officials have reviewed some of the allegations in the pleadings, which are in adjournment in the Supreme Court of Vancouver, with respect to Mr. Cram's allegations regarding the Delgamuukw decision and, in particular, the whole issue as to whether or not there was collusion on the part of the Crown provincially and federally in Canada and others on that decision. He has made some very serious, very grave allegations about the purported lack of independence of the judiciary and senior officers of the court in British Columbia. I wonder if the minister can comment. I realize this is sub judice, but I wonder if the minister could tell us whether or not his ministry has done an analysis of Mr. Cram's pleadings, and whether it would be possible to share them with members of the committee.
The Chair: Hon. members, as the member has pointed out, it is our understanding it is sub judice. Therefore we must guard our words accordingly and very carefully around all of that.
Would the hon. member like to proceed then to another question? I think the minister has indicated that he's not going to respond.
D. Mitchell: I fully appreciate what the Chair has indicated in terms of the matter being before the courts, and I don't ask the minister to comment in any way on the specific nature of the matter before the courts. I'm simply asking for an indication as to whether or not the ministry has
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done an analysis of Mr. Cram's pleadings, because they are so serious and fundamental to the whole issue of the Treaty Commission that has been established in British Columbia. I wonder if the minister might have any brief comments on that.
Hon. J. Cashore: The answer is no. I think the place to engage the issue is over the concerns raised by first nations themselves when they are raised. As I acknowledged in the presence of the Forests critic for the Liberal Party, quite often first nations raise very important concerns. Should they raise concerns around this issue, with regard to analysis and addressing those issues -- apart from the event that the hon. member is referring to -- then the answer is yes, we do analyze and address issues that are raised to us by various first nations, and that's very appropriate because we're there raising these issues. They are asking us to consider a whole range of aspects. I think that's about all I can say.
D. Mitchell: I won't proceed with questions on this sensitive matter any further. Perhaps there will be another forum or another time when it might be more appropriate to discuss some of the details of those serious allegations that have been made.
Returning to the question of aboriginal gaming, though, the minister has indicated that the Ministry of Government Services has taken a lead role with respect to the review of gaming in the province. The Minister of Government Services has indicated that there are two separate processes: a review of aboriginal gaming; and a review of gaming, which has been partially completed, by the Lord and Streifel committee. My understanding is that the Lord and Streifel committee was specifically exempted from looking at the question of aboriginal gaming and that that would be the matter of a separate review. Could the minister indicate why that would be the case? Presumably, if there's going to be one law for gaming in British Columbia, all citizens of British Columbia would be subject to that law on an equal basis.
Hon. J. Cashore: I want to be very careful here not to get into the estimates of the Minister of Government Services. I just want to say that the process that that minister is carrying out is an integrated process, and it includes consideration of all aspects of gaming in the province, which draws into it the Lord and Streifel report and also recognizes issues with regard to first nations.
D. Mitchell: I'm still a little confused as to why we would have a separate review of aboriginal gaming. I ask the minister, while we review his estimates specifically: is it because the government and his ministry believe that first nations in British Columbia have an aboriginal right to gamble? Would this be a constitutional issue? Is there a legal dimension to this? Is that why there is a separate review?
Hon. J. Cashore: It's not a separate review.
D. Mitchell: I specifically asked the Minister of Government Services this question in the House during question period, and he indicated it was a separate review. I don't wish to get involved in semantics. Clearly there is a separate process reviewing the question of aboriginal gaming. I think it is appropriate during the review of these estimates to ask why. It's a simple question. Is there a legal dimension which is a constitutional issue here? Does the government take the stance that aboriginal peoples have a constitutional right to gamble?
Hon. J. Cashore: The answer is no.
D. Mitchell: I appreciate that answer. I'm still not quite certain why there is a separate process, but I won't belabour that point. In the constituency I represent, the Squamish nation has made public the fact that they're examining the possibility of establishing a casino complex. They're looking at that possibility and that opportunity. I've been a strong supporter of the Squamish nation's efforts for economic development, whether on the north shore of Vancouver or in the Squamish Valley. However, I've raised publicly my concerns over whether or not a casino, a for-profit gambling establishment tied in with whatever other development, is the appropriate way to go. I have serious concerns -- and I share them with the minster -- as to whether or not for-profit gambling is the right kind of activity to be promoting in British Columbia, either in the native or non-native communities. Could the minister indicate to the committee today how many native groups in British Columbia are currently proposing casino or gambling developments? Has this minister been tracking this data and can he share that information with the committee?
Hon. J. Cashore: We can seek that information. I don't have that information at my fingertips. One has to be a little careful defining exactly what they have in mind, because even the concept of for-profit gambling is a confusing concept to me. If there are private concerns involved, it seems to me by definition it's free enterprise and therefore it's for profit. I understand it's very tightly controlled in some circumstances. We'll try to find that out.
D. Mitchell: I appreciate the minister's comment. I ask because I've indicated my awareness of the Squamish band's examination of the issue. I'm told that a proposal in Pemberton, which is also in the constituency I represent, came forward a while ago. I'm not sure where that stands. We've been made aware of another possible project in Kamloops, for instance. So there are several. Would it be possible to share information on how many proposed casino or gambling developments, either in joint-venture partnership or by native groups or bands, the ministry is aware of? That would be appreciated. I look forward to receiving that from the minister.
[4:45]
Hon. J. Cashore: I should point out also that, to my knowledge, the Ministry of Aboriginal Affairs is not a recipient of virtually every communication that takes place between a potential entrepreneur who wants to develop a joint venture...and the variety of things that might take place. So any information we are able to make available to the hon. member would be information that has come through our office as a means of first nations wanting us to be informed of their particular desire to have an initiative in this area. I'm pointing out that we would not necessarily have all the information on that.
D. Mitchell: I thank the minister for those comments. I appreciate that it may be his best effort. That's all I'm asking for -- his ministry's best efforts in identifying those proposals his ministry is aware of. It would be a very interesting piece of information, and I would appreciate that. The minister has indicated in the past that part of the mandate of his ministry is to support proposals that come forward for the economic development of British Columbia's first nations. That's a mandate most members of the Legislative Assembly would also support. He's also
[ Page 10456 ]
indicated that he has some difficulty with the whole issue of gaming. The reason I asked whether or not the government was taking a position that there may be an aboriginal right to gamble is not to berate the minister in any way here; I'm simply trying to understand why this issue would be treated separately. Surely in the final analysis, a gaming law, if it is going to be changed in British Columbia -- and there is now some speculation that the laws respecting gaming in British Columbia may be changed -- would apply equally to all British Columbians. I know the ministry takes the role, to some extent, of an advocate for first nations in British Columbia. Is the ministry contemplating, during this year under review in the committee today, taking a specific position on aboriginal gaming? Is that one of the avenues for economic development that the ministry is going to be encouraging or discouraging? Is there a specific position? The minister has indicated some of his own personal views. But does the ministry have a position on aboriginal gaming?
[R. Kasper in the chair.]
Hon. J. Cashore: That is future policy, and I really don't think it would be beneficial to get into that right now. It is clearly future policy, and to me it's quite a logical reason.... I want to see the results of the process we're now in before I give an answer on that. I need time to think that through on the basis of what the Minister of Government Services comes up with.
A. Warnke: I want to follow up on this as well. It was my understanding that the British Columbia government offered aboriginal people a 10 percent share of the profits in the $750 million gambling complex. That may come under the Ministry of Government Services, but I wonder to what extent the Minister of Aboriginal Affairs was involved in that decision, especially insofar as it affects the Kamloops Indian band, as the member pointed out, and the Lheit-Lit'en band in Prince George. They had all signed letters of intent with Murray Pezim, I believe. The minister said he's not aware of that, and I understand that, because that doesn't really come through his ministry. Even so, somewhere along the line someone should have been contacted. I'm just wondering if the minister could comment on that offer.
Hon. J. Cashore: I just want to ask the member to clarify this for me, so I answer the right question, not the wrong question. Could the hon. member advise me if he's referring to the VLC proposal, and what he means when he refers to 10 percent?
A. Warnke: That's correct.
Hon. J. Cashore: Well, hon. member, let's make it very clear for the record that the VLC proposal has come forward outside of any government of British Columbia process. It's an RFP relating to the port development lands on Vancouver's waterfront, which are the responsibility of the Vancouver Port Corporation. It's my understanding that four entities submitted bids with regard to making a proposal. It's also my understanding -- and I could be corrected here -- that of those four bids, three contained casino components. It is my view that those bids, submitted to a federal government entity, included a proposal for an activity that's illegal in the province of British Columbia. I want to go on record as saying that.
As for anything that has to do with 10 percent, that has nothing to do with the government of British Columbia; that has to do with the people who submitted those proposals.
A. Warnke: Thank you, hon. Chair, for the minister's clarification on that. That's extremely important because at least one newspaper report specifically said that there was an offer by the British Columbia government. So I was certainly led in one direction. There was an offer by the British Columbia government -- that's what the article pointed out. From the minister's statement, it seems pretty clear in the minister's mind that the British Columbia government....
An Hon. Member: It just goes to show that you can't believe what they write in the papers.
A. Warnke: Yes, exactly.
An Hon. Member: Not all the time.
A. Warnke: Not all the time. Thanks very much. But that is my understanding.
Moving right along then, there are a couple of other areas to.... Some time ago, in my original remarks, I said there were four central issues I wanted to pursue, and health care, social services and education as it applies to aboriginal affairs is still an area that I want to pursue. I still want to tidy up some aspects of the third issue of economic development before I move into the fourth area.
One of my colleagues raised the question concerning the Champagne-Aishihik people in the northwestern corner of British Columbia and their attempt through land claims, and so on, to address some of the problems in the northwestern part of British Columbia, and the implications this has on projects such as Windy Craggy and others. The one question that I would like to have clarified here concerns, on the one hand, the protection of heritage sites and that sort of thing, and on the other, an attempt by the aboriginal peoples in the area to negotiate a treaty. I'm wondering if we could have it clarified if the aboriginal peoples in the area want to pursue, after obtaining some sort of treaty, one sort of quest while at the same time there is a heritage site. If there is a conflict here, which would proceed, the heritage site or the treaty?
Hon. J. Cashore: There is no conflict; again, it's in the process of MOUs, interim measures, that type of thing. One of the first things I did upon becoming minister was to meet with Chief Paul Birckel and his negotiator, David Joe, in Vancouver. That was within about three weeks of my becoming minister. Then, two or three weeks after that, I flew up to Whitehorse and met with the Champagne-Aishihik and we discussed that very issue. It's my understanding that any decisions with regard to how to address the issue of the world heritage site will take place with all parties being in the loop, and that they will be part of the discussions that would enable that to take place.
R. Chisholm: I asked this question last year from the Native Brotherhood and the fishers. Four years ago they applied through Penfund for a $10 million loan, and they were guaranteed $5 million from the federal government on the stipulation that the provincial government guarantee 75 percent of the $10 million loan. To date, absolutely nothing has happened in four years. I'm wondering why nothing has happened, considering this was a guarantee; we weren't putting out any money whatsoever, and this organization has less than a 1 percent bankruptcy rate, which is far better
[ Page 10457 ]
that what the banks are showing. The federal government has put forward the $5 million, yet the Penfund money is still sitting there four years later. This is one way to increase employment in this area and enhance the Native Fishing Association.
Hon. J. Cashore: A lot of water has gone under the bridge since a year ago. Briefly, it did take a long time for government to come through with the support for that loan guarantee. I'm not going to beat around the bush about it; I personally wish it hadn't taken as long as it did. When it did come through, the Native Fishing Association had found that they were able to work out an approach with the Toronto-Dominion Bank. To my knowledge, they are therefore no longer.... I shouldn't speak for them; please talk to them directly to get their firsthand input on this. They still do have some concerns; I'm not trying to say they don't. They are now in a situation of seeking an arrangement with the Toronto-Dominion Bank where a loan guarantee is not required. I welcome the news that a major lending institution is doing the right thing and recognizing an investment opportunity which is a win-win for the Native Fishing Association and for the bank.
I encourage the hon. member to call Alvin Dixon or Jim White. I met with them two nights ago, and I'm going to meet with them again. They're still not completely happy; I can advise you of that. They would like to see the provincial government put some money on the table as well. As I understand it, that is their position at the present time. I advised them that I am not in a position to state that it can or will happen, but I'm willing to listen to anything they wish to put before me.
I need to be careful not to go over into the estimates of the Ministry of Agriculture, Fisheries and Food, but I have given as open an answer on that subject as I possibly can.
R. Chisholm: I have spoken with Jim White and Alvin Dixon just in the last week. They were not all that happy. The Minister of Environment had gone around saying this was a done deal, and apparently it wasn't. That was two or three months ago. As far as they are concerned, the deal -- as you said -- is still not done. That might take a little more looking into, and maybe you can rectify the misconceptions.
[5:00]
The second question to the minister concerns the Peat Marwick review and the amounts of money this government is putting away. That review warned that this government may not be putting enough money away to negotiate the land deals. I'm wondering about the exact status of what we're putting away and how we're going to honour our obligations when the year 2000 rolls around, which is not all that far off. With our deficits and debts as we know them, are we going to be able to afford it? Just what do we have to come up with?
Hon. J. Cashore: It's not a question of putting anything away; it's a question of the province managing its commitments within the fiscal commitment it has made. Whether we're talking about settlement costs in respect to land claims, or the wide range of the government's financial responsibilities, we have said that we are going to negotiate treaties within the financial commitments we've made. We said that in 1996 we are going to balance the budget and not have a deficit. That is therefore a definitive baseline fact.
R. Chisholm: I don't think I was given an answer to my question. The debt right now is at $27.4 billion, and the deficit is roughly at $1.2 billion. The problem here is how much more we are going to owe by the year 2000. Do we have a ballpark figure? Do we even know what we're talking about in the way of land claims, or roughly what kind of moneys we are looking at? How is it going to effect our debt then?
Hon. J. Cashore: Now I'm into the estimates of the Minister of Finance. Once we have eliminated the provincial deficit, as we have committed to do, we can then start working on the debt.
I did answer the hon. member's question. The hon. member asked about moneys being set aside for settlement costs. I have pointed out that settlement costs will be managed within the fiscal commitments of the government in any given year.
R. Chisholm: I'll keep it very simple this time, then. I would like to know the ballpark figure on what it's going to cost us overall for the land settlements. Let's forget about deficits, debts and all the rest of it. What is it going to cost us, roughly speaking, for the land claims by the year 2000?
Hon. J. Cashore: On average, considering cash and cash equivalents and given the federal-provincial cost-sharing agreement, approximately 17 percent. I will not speculate beyond that with regard to a numbers game on actual amounts. That is consistent with the very good federal-provincial cost-sharing agreement, and our estimates are that settlement costs will be in the nature of 17 percent between cash and cash equivalents.
R. Chisholm: Seventeen percent of what? I have to mirror the statement of the member from Sechelt.
Hon. J. Cashore: Seventeen percent cost-shared. The provincial portion would average out to 17 percent. I have to emphasize average out to, because we're dealing with a wide range of circumstances here, depending on the part of the province it's in and the unique aspects.
Interjection.
Hon. J. Cashore: Our projections are that it would average out to 17 percent after all treaties are negotiated, so that would be 17 percent of the cost of the treaty settlement. That's a very clear answer to your question. I'm not going around in circles, hon. member. You asked 17 percent of what. I gave you an answer, and I don't appreciate you mumbling that I'm going around in circles. I gave you a very direct and clear answer to your question.
R. Chisholm: I'm still going to ask the final question. What is the final cost? In a ballpark figure, what is it going to cost the taxpayer of British Columbia for all our land settlements at the end of the day in the year 2000? I'm not talking about resources; I'm talking about cash out of the pot. What is it going to cost us?
Hon. J. Cashore: Hon. Chair, I will not answer that question.
R. Chisholm: Well, we'll leave that one alone and just see how the public likes the answers, hon. minister.
Over the past three years Chilliwack district has lost about $300,000 per year in unpaid taxes because two of its aboriginal bands have enacted taxation powers and receive tax revenues directly, but they have yet to sign an agreement
[ Page 10458 ]
for services the district provides. This is a revenue loss of almost $1 million that Chilliwack taxpayers obviously cannot afford, and they're paying for it. The cabinet can impose a first one-year agreement. The district asked you in September 1992 to do this, but no action has been taken. They're asking again why no action was taken, considering they're losing their tax dollars.
Hon. J. Cashore: I don't have an answer to that question with me. We will get an answer and get back to the hon. member.
With regard to his question about what it's all going to cost at the end of the day, I would be glad to come back ten, 12 or maybe 15 years from now, if I'm still the Minister of Aboriginal Affairs, and answer that question, because then we will have a very clear and unequivocal answer.
R. Chisholm: I would be glad for you to come back in ten to 12 years, too, hon. minister, but the IMF might walk in in the next two or three years if we don't get a grip on our debts. That's exactly why people want to know what things are going to cost in this province and this country.
My next question to the minister is: why should the restrictions applied by the Agricultural Land Commission and the Ministry of Environment to non-Indian property owners not be applied to the aboriginals? Subdivisions are presently being built on farmland with no reference to environmental concerns. Because they are being built on Indian lands, this puts pressure on the remaining non-Indian ALR lands, as you can well imagine. We were wondering why the same standards do not apply right across, when you consider that we are trying to protect all the ALR lands.
Hon. J. Cashore: The lands the hon. member refers to are under federal jurisdiction, so it's a question for the federal Minister of Indian Affairs and Northern Development.
R. Chisholm: I understand that it is under federal jurisdiction, but the land is still within the boundaries of British Columbia and is under the auspices of the ALR. Unfortunately, the two levels of government have to start talking to each other, because it's putting undue pressure on different areas within the province. That creates an imbalance and forces land out of the ALR that shouldn't be out, due to the other and that is being protected. I am suggesting that you, by talking with your federal counterpart, may be able to help in that situation.
My last point is that the citizens of Chilliwack are concerned when Indian bands talk about plans for casinos, dangerous waste incinerators and general planning issues without any concern for the community....
The Chair: Hon. member, if I could interrupt, we have just been advised that there is a division call.
The committee recessed at 5:09 p.m.
The committee resumed at 5:19 p.m.
R. Chisholm: The citizens of Chilliwack are concerned when they hear Indian bands talk about plans for casinos, dangerous waste incinerators and general planning issues without any concern for official community plans or the community's sensibilities. I am just wondering if there is anything you can do to help alleviate this problem. I realize, again, that we're talking about federal jurisdiction, but this is an area where the two levels of government could talk and possibly alleviate a lot of the antagonism that we see at the municipal level, which would alleviate a lot of these problems when it comes down to treaty negotiations.
Hon. J. Cashore: That's a very good point. I am going to be meeting with my federal counterpart next week, and I will undertake to raise that issue with the federal minister, as well as the issue raised with regard to the ALR. Those are two issues: one about the ALR, and one about the federal government legislation, which is seeking to have environmental controls with regard to reserve lands. I would point out that when I was Minister of Environment, Lands and Parks, a couple of contentious issues came up where we were able to get an agreed approach. The band itself agreed to enable the provincial environmental laws to take effect in a situation that occurred on band land. I agree that it is the responsibility of the federal government, and in this case I understand they are working on legislation that will enable that.
There are some answers that I wanted to put into the record now, but does the hon. member have another question?
R. Chisholm: No.
Hon. J. Cashore: The first thing I'd like to do is table a document that we have distributed to the critics and members of the various parties in the House with regard to the various issues that have been raised on the Nisga'a negotiations. This consists of a list of the province's current negotiating team and the advisers for the team; biographical details of the negotiators for the province; a list of the province's team as of September 1992; and also clarification with regard to a couple of questions that had been raised earlier, one of which I responded to for the record at the beginning of this afternoon's session, the one being asked by the hon. member for Powell River-Sunshine Coast on eligibility. Assuming that estimates will be going over till tomorrow, I would encourage the hon. member to read that answer in the Blues. So I would like to move to table this document.
The Chair: Hon. minister, there is no provision for tabling documents, but just make sure all members of the committee have copies of the documents.
Hon. J. Cashore: I'll just state for the record, then, that I've distributed those documents to the hon. members.
With regard to gaming policy, the gaming policy project is currently conducting a broad policy review on casino and gaming development. However, the review is not looking at individual applications; there is no mechanism to process or accept applications. No proposals have been accepted. Some inquiring parties have provided information with the understanding that their interest remain confidential until a formal presentation is made. Preliminary indications are that upward of 20 first nations have expressed an interest in gaming, some of which involve a casino element, but others are limited to bingo operations.
With regard to the B.C. Utilities Commission, the order-in-council was extended to September 30, 1994, or soon after, to await receipt of the BCUC report. I think that responds to a question that was asked earlier by the Liberal critic. The commission is now in phase three, or the fisheries portion of the hearings, which are extended to mid-June. The commission is currently hearing submissions from the Department of Fisheries and Oceans. Phase four, which is the
[ Page 10459 ]
community phase, follows and is expected to finish by the end of July. To date the Cheslatta and Carrier-Sekani first nations have chosen not to participate in the hearings.
With regard to the forest renewal plan and other aspects of forestry that were raised earlier this afternoon, first nations have one TFL out of 38, and five or six forest licences and perhaps 35 woodlots out of hundreds. There is very little uncommitted wood in the province; however, where there is any, B.C. is ensuring that first nations are aware of the opportunity and encouraging them to submit proposals. One major success has been Burnslake Specialty Wood, which represents a joint venture with the Lake Babine band and Weldwood to produce a variety of value-added products. I would remind you that the Forest Renewal B.C. plan puts emphasis on value-added products. Burnslake Specialty Wood holds a 12 to 15 percent interest in Babine Forest Products. I'd like to read those into the record.
A. Warnke: I would like to follow up on a supplementary question by the member for Chilliwack in response to a statement made by the minister earlier. That was with regard to the figure that the minister had mentioned. We have an idea of the cost of treaty settlement, that the provincial portion of that is 17 percent. Could the minister elaborate where that particular figure has come from? Is that a result of negotiations with the federal government?
Hon. J. Cashore: The member perhaps doesn't remember that at the beginning of estimates I tabled a copy of the federal-provincial cost-sharing agreement. Taking the cost-sharing agreement and the formula within that, projections are made that indicate our estimate that on average it would be 17 percent of cash and cash equivalents relating to such things as land. That is an estimate. It recognizes that there is a great variety of unique situations throughout the province. It is based on the projections that extrapolate from the federal-provincial cost-sharing agreement. It's recognized, as I said before, that where the federal government is involved, it would be mostly cash; where the provincial government is involved, it would be mostly land. I have stated before that there is a distinction in the formula between negotiating costs and settlement costs.
With that, hon. Chair, I think we're at the half-hour, so I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 5:29 p.m.
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