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)
WEDNESDAY, MAY 11, 1994
Afternoon Sitting
Volume 15, Number 6
[ Page 10733 ]
The House met at 2:09 p.m.
Prayers.
F. Gingell: In the precinct with us today are some students from grade 11 at Delta Secondary School together with their teacher, Mrs. Parker. I ask all members to make them welcome.
L. Reid: I would ask the House to please join me in welcoming Karen Legeer to the chamber today. Karen is visiting from White Rock, British Columbia.
G. Wilson: With us in the gallery today are 15 students from Langdale Elementary School, accompanied by their teachers, Ann Skelcher, Gordon Stevens, Sandra Kelly and Graham Crowell. I would ask that the House please make them welcome as they see firsthand how democracy does, or perhaps doesn't, work so well.
HEALTH STATUTES AMENDMENT ACT, 1994
Hon. P. Ramsey presented a message from His Honour the Lieutenant-Governor: a bill intituled Health Statutes Amendment Act, 1994.
Hon. P. Ramsey: This bill amends a number of existing statutes within the jurisdiction of the Ministry of Health. A total of nine statutes are being amended or repealed. I will be providing details about all the amendments in second reading. I would, however, like to note several key provisions of Bill 38 for the assembly.
First, the Health Act is being amended to broaden the authority of the provincial health officer to monitor population health, and to report publicly on key health issues in a manner that he or she feels is most appropriate. These changes were previously announced in "New Directions for a Healthy British Columbia." Second, authority is being provided under the Health Authorities Act to permit the appointment of regional health boards in areas where community health councils have not yet been established. Third, provisions for public protection in the Continuing Care Act are being broadened. The unduly narrow provisions for appointment of a public administrator have been expanded to encompass all types of continuing care. Finally, Bill 38 provides for the repeal of the Physiotherapists Act. However, I hasten to add -- and assure the House -- that physiotherapists and massage practitioners are not being deregulated; rather, they are going to be designated as health professionals and regulated under the new, up-to-date Health Professions Act.
Bill 38 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
WORKERS COMPENSATION AMENDMENT ACT, 1994
Hon. D. Miller presented a message from His Honour the Lieutenant-Governor: a bill intituled Workers Compensation Amendment Act, 1994.
Hon. D. Miller: The amendments to the Workers Compensation Act will mean that the Workers' Compensation Board may consider full compensation for workers or their dependents who make late applications for occupational disease claims. A late claim may be made because when the individual first became aware of the disease, the medical knowledge was not available to link it to the workplace. Workers or their families who make occupational disease claims within three years after they became aware of the link between the disease and the workplace will be eligible for full benefits. The legislation will also improve the compensation and rehabilitation of workers who move to and from other provinces. It will allow the Workers' Compensation Board to enter into agreements relating to these issues with boards in other provinces.
Bill 13 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
INSTITUTE OF TECHNOLOGY AMENDMENT ACT, 1994
Hon. D. Miller presented a message from His Honour the Lieutenant-Governor: a bill intituled Institute of Technology Amendment Act, 1994.
Hon. D. Miller: Bill 23 contains amendments to the Institute of Technology Act which will give the British Columbia Institute of Technology the power to grant baccalaureate degrees that have been designated by the Lieutenant-Governor-in-Council; change the composition of the board of the institute to include faculty, students and support staff; and create the education council, a new body for institute governance to be composed of elected members representing faculty, students, support staff and appointed administration members.
Bill 23 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
COLLEGE AND INSTITUTE AMENDMENT ACT, 1994
Hon. D. Miller presented a message from His Honour the Lieutenant-Governor: a bill intituled College and Institute Amendment Act, 1994.
Hon. D. Miller: Bill 22 contains amendments to the College and Institute Act which will give the university colleges and provincial institutes the power to grant baccalaureate degrees that have been designated by the Lieutenant-Governor-in-Council; change the composition of the boards of universities, colleges and institutes to include faculty, students and support staff; and create the education council, a new body for institutional governance to be composed of elected members representing faculty, students, support staff and appointed administration members.
Bill 22 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
[2:15]
The Speaker: I recognize the Leader of the Third Party.
[ Page 10734 ]
J. Weisgerber: I rise to make a personal statement regarding party affiliation. I'm delighted to advise all members of this House that my friend and colleague the member for Okanagan-Vernon has joined the Reform caucus. He not only brings a wealth of knowledge gained as a mayor, a cabinet minister and an opposition critic, but he also brings with him, as you have noted, Mr. Speaker, official party status to Reform. As such, we will be grateful to him for all of his contributions over the ensuing years.
The Speaker: Thank you, hon. member, and congratulations.
CALL FOR INQUIRY INTO ABUSE OF CHILDREN IN GOVERNMENT CARE
V. Anderson: I rise on a very serious matter. Over the last two days I have received over 85 letters from people in this province objecting to the Minister of Social Services' response regarding child care in British Columbia. These citizens from all across the province are furious that the Minister of Social Services has refused to accept responsibility for abused children...
Interjections.
The Speaker: Order, please.
V. Anderson: ...so much so that the ombudsman...
Interjections.
The Speaker: Order!
V. Anderson: ...has had to step in.
Interjections.
The Speaker: Order! Hon. member, please proceed.
V. Anderson: The question is: even though the ombudsman had to step in, will the minister undertake to give her support to a full, independent inquiry into the abuse of children in the care of her ministry?
Hon. J. MacPhail: I have committed to the hon. member across the floor, and to everyone in this House, that the findings of my ministry will be made available in full for all of us to consider. After we have considered that report, I have made it clear that if further action is necessary, further action will be taken. It is really time for us to set aside the politics of this issue and actually deal with what's happening within the system, and I'll tell you that I am committed to that fully.
The Speaker: Supplementary, hon. member.
V. Anderson: The minister does not seem to understand. We are not talking at this point simply about one review of one case. The minister should be defending all of the helpless children in British Columbia, not the ministry. Today I have called upon the ombudsman to expand her investigation to cover all children who have been abused while under the care of the Ministry of Social Services. Will the minister undertake to support us in asking the ombudsman to expand her review to cover all the children who have been abused while under the care of Social Services?
Hon. J. MacPhail: Hon. member, your memory is very convenient. You know that over the last two years an investigation has been conducted into the children in care in this province and into the systems of how we deal with family and children's services. There have been two reports released with recommendations. We have issued a White Paper, and we have promised action in this area over and over again. I call upon the hon. member and all the members of this House to join with us in support when those actions are introduced into this House.
The Speaker: Final supplementary, hon. member?
V. Anderson: The citizens of this province are confused, because they have heard the Minister of Social Services say: "Our ministry hasn't been found to have liability." She went on to indicate, as has been reported widely, that she was asking the Attorney General's ministry if there was moral responsibility.
I ask the Premier: since the Minister of Social Services cannot decide whether her ministry has a moral responsibility for children in this province, will the Premier himself accept responsibility for addressing the needs of abused children in British Columbia?
Hon. M. Harcourt: I fully accept the responsibility, and I fully back the Minister of Social Services. She's made it very clear that this government has conducted the most extensive review -- bringing in experts, bringing in the people of British Columbia -- to make sure that the children of this province receive far better treatment than they have from past governments. I back the minister in that. I will back the minister when she brings forward some initiatives, some legislation, in the near future. And I hope that the minister will find that the member for Vancouver-Langara will do more than play politics with the tragedy of our children.
EFFECT OF HEU SETTLEMENT ON PATIENT CARE
L. Reid: My question is to the Minister of Health. The same minister who cut the Island Highway kickback deal is responsible for road kill in our health care system. The sweetheart deal with the Hospital Employees' Union, cut by the Minister of Employment and Investment, is now creating a crisis for British Columbia patients. Can this Minister of Health tell us how B.C. hospitals are supposed to stop the epidemic of bed closures and resignations in health care? How is he going to return decent health care to British Columbia?
Hon. P. Ramsey: Over the three budgets we have brought down, this government has spent about $1 billion of additional money to support quality health care for British Columbians. That's a record we can be proud of. We are also doing what needs to be done to build a comprehensive network of health care, including both hospitals and community care. That includes the shift of services to the community sector through initiatives such as the Closer to Home fund. But we are not prepared to do that at the expense of health workers, who have served the citizens of this province well. I support the accord. It was signed by the employers, the employees and this government. It is a
[ Page 10735 ]
critical part of doing what we need to do to ensure quality health care.
The Speaker: Supplemental, hon. member.
L. Reid: It is now becoming obvious that the Minister of Health is prepared to put his union friends ahead of patients in British Columbia. This government has proven that it will raise election funds on the backs of charities and through highway kickback schemes. Are the patients in British Columbia next?
Hon. P. Ramsey: I find this very strange coming from this member. It was this very member who stood up in this House not so long ago to urge that we reach a settlement with the community nurses of this province, and she shed great crocodile tears of concern for health workers. I'm pleased to advise the House that we have now reached that deal with community nurses in this province. We will continue to negotiate fair agreements with health workers in this province that respect their contribution to our health system.
The Speaker: Final supplementary, hon. member.
SEPARATION OF SERVICE BETWEEN VGH AND UBC HOSPITAL
L. Reid: This minister is not putting the welfare of British Columbia patients first. This week no acute care neurology patients will be admitted to Vancouver General Hospital. They in fact will find themselves at the UBC site; the services will remain at Vancouver General Hospital.
Interjections.
The Speaker: Order, please. Would the member please state her question.
L. Reid: My question to the hon. minister: if indeed the patients are at the University Hospital and the services are at the Vancouver Hospital, why is this pathetic scheme, where we'll see patients going back and forth in ambulances in this province, being allowed to continue under your leadership?
Hon. P. Ramsey: There is no doubt that hospitals in this province face challenging budgets this year. I'll be releasing their funding to them later this week. As they implement those budgets, I have asked them, first, to do what they have not done in the past and work with other hospitals in their city and in their region to ensure that access to services is not diminished; to work with community groups to make sure that services are passed from acute care institutions to the community and home setting; and finally, to assure my ministry and me that services and access to services have not been diminished for the people of this province.
VIOLENT CRIME IN B.C.
J. Weisgerber: My question is to the Attorney General. British Columbians are shocked and scared by the rampant increase in crime in this province. They are worried that they are seeing crime patterns develop that make this province look like many American cities. What specific steps is the Attorney General taking to ensure that there is a comprehensive review of the Criminal Code of Canada, including the Young Offenders Act?
Hon. C. Gabelmann: That question properly should be put to the federal Minister of Justice. But I can tell the member that at the recent meeting of all ministers of justice in Canada -- in March, if my memory is correct -- we talked about a number of changes that are needed in the country. I note that the federal minister has now talked publicly about one of the initiatives, which is a community participation crime panel proposal to try to get the public more involved in matters of security in their community. We talked extensively at that meeting about proposed amendments to the Young Offenders Act. Every justice minister in this country is concerned not so much about increases in crime, because it hasn't been increasing dramatically, but about the fact that violence in crime has increased dramatically. That's an issue that we have to get to the bottom of, and every one of us across this country is determined to do so.
The Speaker: Supplementary, hon. member.
J. Weisgerber: Again to the Attorney General. British Columbians are looking to this government to provide leadership in dealing with violent crime in this province. Does this province support the three-strikes-and-you're-out policy that would see people convicted of three crimes involving violence or drugs given a life sentence without parole? Does this government support that position?
Hon. C. Gabelmann: No.
The Speaker: Final supplementary, hon. member.
J. Weisgerber: I can tell the Attorney General, then, that he is out of step with many British Columbians. I have raised this issue with groups around the province, and there is wide support. Will the Attorney General commit to ask a question of British Columbians on this particular issue in the next opinion poll done by the province, and will he agree to share with British Columbians the results of seeking that information?
NANAIMO COMMONWEALTH HOLDING SOCIETY
M. de Jong: The special prosecutor investigating the NCHS scandal has indicated that he would be content to release his report to the public, following the completion of criminal proceedings. Presumably he has been guided by the same considerations that prompted Mr. Peck to make similar recommendations regarding the release of his report involving the Attorney General. Now that the special prosecutor has made his position clear, will the Attorney General, on behalf of his ministry, to whom that report has been delivered, commit to releasing the special prosecutor's report, along with the RCMP's report to Crown counsel, following the completion of criminal proceedings?
Hon. C. Gabelmann: As the member should know, the Crown Counsel Act very carefully and very deliberately separates the responsibility of the criminal justice branch -- in particular, special prosecutors -- from members of this cabinet. Following the criminal proceedings, if Mr. Henderson and Mr. Quantz make decisions in respect of the information they have and how much of it they want to release to the public, that will be their choice, and will not be interfered with by me.
[2:30]
The Speaker: Supplementary, hon. member.
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M. de Jong: I wish the Attorney General would read sections 5 and 7 of the act he quotes. The government's utter disregard for the victims of crime becomes clearer with each passing day. There are victims in this case: the charities whose good works have been disrupted because of the alleged misappropriation of funds in favour of this NDP....
Interjections.
The Speaker: Question, hon. member.
M. de Jong: Will the Premier now commit to referring this matter to the House committee on ethical standards for a complete investigation, following the completion of the criminal proceedings?
Hon. C. Gabelmann: The member makes reference -- as he did a week or so ago -- to other provisions in the Crown Counsel Act. I want to say to the member that it is true that the Attorney General can direct -- in writing, if it's gazetted -- the decisions made by the criminal justice branch. This Attorney General will not do that in a matter that has the kinds of political overtones this matter has.
COLUMBIA RIVER TREATY
D. Mitchell: I have a question for the Minister of Employment and Investment regarding the downstream benefits of the Columbia River Treaty -- the approximately $1.5 billion due back to British Columbia commencing later this decade. Could the minister tell us whether or not British Columbians can expect an agreement with the Bonneville Power Administration in Washington State to have all the cash benefits from the new negotiations flow directly back to the province of British Columbia rather than to B.C. Hydro, the Crown corporation? Will they come back to the consolidated revenue fund of the province as opposed to going to the Crown corporation?
Hon. G. Clark: The short answer is yes, but I should give a full explanation. The entitlement is the result of a treaty negotiated by the government of British Columbia, not by B.C. Hydro. Therefore the negotiations taking place are between the government entities. B.C. Hydro, obviously, with their expertise, are involved in those negotiations. If we were to take back the power, then obviously there would be no resale and no direct revenue, although B.C. Hydro would pay revenue. If we were to negotiate any sale of part or all of the entitlement, or any variations thereof, any benefits from that would go to the people of British Columbia, not to the Crown corporation.
The Speaker: Hon. members, the bell terminates question period.
Hon. G. Clark: In a preamble to a question, the member for Richmond East referred to a highway kickback scheme. The member knows full well that that is an outright lie, and it impugns the integrity of members of the House. I'd ask her to withdraw those comments.
The Speaker: The Chair would ask the hon. member for Richmond East to withdraw that, if she in any way imputed an improper motive to another member. Would the member withdraw any....
Interjection.
The Speaker: Hon. member it is the custom and tradition....
Interjections.
The Speaker: Order, please. It is customary....
Interjections.
The Speaker: Order, please.
Interjections.
The Speaker: Hon. members, may I have order, please. It is a matter of courtesy that if a member did not intend to impute an improper motive to another member, the withdrawal is granted out of deference to the person who is objecting. The person simply does this as a matter of parliamentary custom and decorum. If the member is suggesting that she is not concerned about the feelings of a member, then the Chair has to tell the hon. member that it is an unequivocal request being made by the Chair that the member withdraw.
If the member is simply refusing to withdraw, I would caution the member that this is not a suggestion that the member has done something deliberately, or intended to; but where there is a question of a person's motive and an hon. member feels offended, it is customary in this House that a member simply withdraws out of deference to the request by the member. That's all the Chair is asking the hon. member. If the member refuses to withdraw, then I would ask....
On a point of order, the hon. member for Richmond Centre.
D. Symons: I think if we look back on the statement which the member alluded to, there was no mention of a person involved in there; it was an agreement made. There was no mention or impugning of the character of an individual at all, so the need for the withdrawal of that comment is not necessary.
The Speaker: Order, please.
Hon. members, the Chair would like to try to clarify this situation. With the assistance I've just received, I request of the hon. Minister of Employment and Investment that he consider the remarks he made in standing up on a point of order. He indicated that the hon. member for Richmond East had herself lied, in making his protest with respect to the remark she'd made. That in itself, albeit an attempt to bring a point of order, is an unparliamentary expression. I ask if the minister would withdraw his terminology and perhaps use different language; then it would be appropriate for me to make a request of the hon. member.
Hon. G. Clark: Obviously, hon. Speaker, I withdraw any unparliamentary language I may have used. I simply asked the member to withdraw the reference to highway kickbacks, because I believe that that is clearly incorrect.
The Speaker: Thank you, hon. minister. In light of that cooperation, would it be the wish of the hon. member for Richmond East to also withdraw any unintended imputation of impropriety on the part of any other member?
Hon. member, I regrettably must ask that the hon. member withdraw for the remainder of this sitting of the House.
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Hon. G. Clark: I call Committee of Supply in Section A, the Ministry of Transportation and Highways estimates; and in the House, I call committee stage of Bill 32, BC Forest Renewal Act.
BC FOREST RENEWAL ACT
(continued)
The House in committee on Bill 32; D. Lovick in the chair.
The Chair: I'd like to call the committee to order. I ask those members who have not yet decided whether they are staying or leaving to please make that decision promptly. Then we shall begin.
On section 5.
W. Hurd: I have a series of questions regarding the reporting of the committees to the board of directors of Forest Renewal B.C. Could the minister indicate whether the reports that are required to be filed or to go forward to the board of directors will be made public? Will there be an opportunity for the public of the province or the people of the regions of British Columbia to scrutinize those plans that are brought forward, in connection with these broad areas of forest industry diversification and investing in environmental values?
Hon. A. Petter: I have absolutely no reason to believe they would not be. I am sure they will be part of the scrutiny of the legislative committee, and I would expect they would also be available through freedom of information. But my expectation is that that wouldn't be necessary; they will be available.
W. Hurd: Could the minister elaborate on the nature of the makeup of these committees? Once the board of directors is appointed by the Lieutenant-Governor-in-Council, the Forest Renewal board has the mandate to appoint the committees. During the course of this debate we have sought to ensure that the representation of the forest sector strategy group and the diversity that that group represents will be reflected in the makeup of the board of the Crown corporation. Could the minister provide us with a commitment today that the kind of diversity he is not prepared to write into an amendment, but to which he is committed, will be a fact of life on the board of directors and be reflected in the work of the committees which report to the board?
Hon. A. Petter: Yes. With the committees, the concern was to have a group that could look much more specifically at particular elements of concern in advising the board on its responsibilities. So there will be a balance between expertise with respect to particular areas -- such as value-added or silviculture, for example -- and an attempt to ensure that there is as broad representation as possible. But certainly the spirit of partnership and the representativeness of the overall structure will be reflected on these committees, as I anticipate they will be on the board.
As the member will note, it is expected that the committees appointed by the board to serve these functions will be qualified to advise on the subject matter assigned to that committee. That adds the further element that we are looking for people to serve on these committees who will have particular expertise and knowledge in the area that the committee will be advising on.
W. Hurd: One assumes that the committees will be, in essence, directing the work of the Crown corporation. They will be given specific duties in the areas of forest industry diversification, investing in environmental values, fostering forest employment opportunities and supporting community development. During the early stages of this debate the minister introduced an amendment guaranteeing regional equity. I wonder if he could commit to the committee, under section 5, that.... First of all, how does he hope to achieve regional equity with the committee structure? My second point would be: how are the committees going to present their plans to the board? Is there going to be a dollar figure attached to the committees? Are they going to cost out the recommendations? Or is it going to be up to the board itself to receive plans for these various activities and then attempt to set a budget for them? Can the minister elaborate on the work of the committees: whether they are going to have a budget recommendation responsibility; whether they are just going to identify projects that make sense; whether they are going to be charged with the responsibility of bringing forward this regional equity that we've talked about in earlier clauses of the bill?
Hon. A. Petter: The role of the committees is not to direct the board; it is to provide advice to the board on the areas that are specified in the legislation. So it will be for the board, in accordance with its mandate -- which includes the goal of regional equity -- to establish the parameters for the investment program and then draw upon the advice given to it by the individual committees in developing that program.
[2:45]
When we get to section 6, I'm sure the member will be pleased to see -- if he has not already done so -- that there is a specific reference that the committees must provide advice to Forest Renewal B.C. on appropriate regional goals, which complements rather nicely the amendment that was passed as a component of section 4.
W. Hurd: It's important during the course of this debate on section 5 to really attempt to clarify exactly what the minister means by these particular activities. I'm particularly interested in section 5(2)(e), which talks about "supporting community development and adjustment." Can the minister advise the committee whether that means employment adjustment? Does that refer to job losses that he's expecting to occur as a result of other activities, whether they be declining annual allowable cuts or whatever? What exactly does he mean by adjustment, and what will that committee be recommending specifically when it looks at community development and adjustment?
Hon. A. Petter: The five committees that are specified flow very much from the work of the Forest Sector Strategy Committee, which identified these five areas as ones that required attention and were appropriate for investment strategies. With respect to section 5(2)(e), "supporting community development and adjustment," the intention is to assist communities in taking full advantage of the benefits of the forest renewal program -- of the investment strategies that it will provide to communities and the opportunities for enhanced work and opportunities in all of the elements, be they investments in the land, the environmental component, value-added or skills and training.
The reference to community adjustment is a reference, I think, to the transition or adjustment that we see taking place
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in communities as a result of this forward-thinking initiative -- moving from a situation in which those communities have been threatened by the failure of past governments to address declining employment and come to terms with the need to better steward the resource to a situation in which there is an investment back into the resource that will support those communities and enable them to grow and thrive in the future.
W. Hurd: When the committee charged with the responsibility of supporting community development and adjustment compiles some sort of plan that's regionally equitable and submits that plan to the board, is the minister telling us that the initiative for accessing that portion of the $400 million that's being generated every year will be a bottom-up process whereby the communities are galvanized to apply for funds? Or will the board, having received this report from the committee on community development and adjustment, decide from a top-down position which programs they're going to fund? Is it this committee's mandate to advise the board that we're going to experience an employment loss in region A of British Columbia, for example? Perhaps the committee has been in contact with the mayors or some of the community development officers in that region: "These are the ideas they have given to us as a committee; these are the recommendations that we are making to the board, and we're going to put the communities together with the board to access the funds." Or, on the other hand, is the strategy going to be delivered from the top down? Is it going to be the board that looks at the committee reports and then makes a decision as to what they're going to support and what they're not going to support? What role will there be for the communities through this particular committee?
Hon. A. Petter: I don't know how many times I can answer the same question when it's asked in different forms, but I'll try perhaps one last time. As I've made clear throughout this entire debate, the intention of the forest renewal plan is to support communities. Its intention is to provide support to existing institutions, including communities. In that sense, it is very much a bottom-up initiative designed to provide support to forest-based communities. The structure of these committees and their relationship to the board is that the committees will no doubt -- particularly the committee concerning communities -- involve community representation in developing an investment program or strategy to support communities in taking advantage of the elements of the program and in strengthening economic development. Those committees will act in an advisory capacity to the board, and the board will make the decisions on that strategy. Those decisions will have to be consistent with its mandate, which includes the goal of regional equity.
W. Hurd: How does the minister envisage that these boards will acquire the information they need to make recommendations to the Crown corporation board? Will they in fact be holding public meetings? Will they be touring the province? When these committees are struck, I imagine that they are going to be immediately inundated with ideas for forest renewal, with the identification of environmental stewardship problems, areas of the province that may be facing the loss of a sawmill -- whatever the case might be. How are they going to access this information, first of all? How are they going to reach out to the public? With the committee structure, what is the opportunity for public meetings, public involvement?
Hon. A. Petter: There will be many opportunities for the involvement of communities in a number of different ways. I don't want to prejudge, however. The member wants to have it both ways. He wants to say, on the one hand, that it shouldn't be top-down -- at least I take that as the implication. On the other hand, he wants to prejudge how best to engage with communities.
The committee and the board will no doubt be discussing with communities and other stakeholders the best way to engage with them. I imagine -- and I'm just imagining here, because I don't want to prejudge what the committee and the board may decide -- that that would involve opportunities for direct input from people in those communities, and it would also, no doubt, involve some relationships with the municipal organizations and with the municipalities directly. But the mandate of the board and the committee's role in advising the board is to ensure that these funds are delivered in a way that supports communities, that doesn't create new bureaucratic structures, and that delivers it in a regionally equitable way.
W. Hurd: Assuming that that kind of dialogue goes on -- and I hope the minister is correct that it will -- I see the committees establishing a wish list, which is something that I guess all committees do at one time or another. But the assessment of how funds will be allocated to support the wish list will be at the total discretion of the board, subject to approval from the cabinet or from the Forests minister. I just wonder whether we aren't going to potentially run into difficulty, where each committee, through its zealous good work, comes up with a wish list that can't in fact be met with the resources of the board. Is there a cutoff point where each committee determines that we must be almost out of funds or almost near the envelope of the funds that exist, or are they just basically going to be compiling a set of recommendations for these various activities around the province without a price tag attached to them?
Hon. A. Petter: I really didn't want to get back into this, but I find it ironic that the member is so concerned about these processes when he fundamentally opposes this whole initiative.
However, I anticipate that the committee's primary role will be to devise a policy to assist the board to fulfil its mandate, not to develop a wish list. But wish lists will no doubt be forthcoming. Part of that mandate will be to ensure that funds are dispensed in a way that ensures that this initiative is not overdrawn but can provide a consistent and long-term commitment to communities.
The committee will have a direct relationship with the board and its mandate. Indeed, it will have a representative of the board on the committee to ensure that linkage. It will be for the board, therefore, to ensure that the advice the committee provides enables the board to carry out its mandate, which will include ensuring that the program of investments looks to the long term and is sustainable.
Some of these imagined problems of the member, I think, are more imagined. Perhaps he's being paid by the hour; I'm not sure how his leader remunerates him for this kind of questioning. But I would urge him to get on to some more substantive questions, rather than making up problems that run contrary to his own philosophy, which is opposed to this act.
[ Page 10739 ]
W. Hurd: I know the government is very concerned about hourly rates these days; we see evidence of that every day.
I have a series of further questions on section 5, because I think it's an important section -- the creation of these committees. I wonder if the minister could tell us why he has decided, under section 5(4), that the Minister of Forests should be required to approve the makeup of the board. Why wouldn't it be a function of the corporation itself to simply make the decisions on who needs to be appointed? Obviously he feels there's a role for the Ministry of Forests in appointing the committees as well as the boards. I wonder if he could elaborate for this committee on what involvement he would expect his ministry to have in looking at the selections recommended by the board for the makeup of the committees.
Hon. A. Petter: Yes. I think this provision speaks directly to the concerns the member earlier raised -- to ensure that there is adequate representation and that that representation is reflective of the various stakeholders and regional interests. Obviously, in the final analysis, this is a political responsibility. I expect that the minister -- be it me or some other minister -- would be exercising the responsibility to ensure that the makeup of those committees is reflective, in the best way possible, of the various stakeholders and regional interests that the member himself has signalled are an important component of this initiative.
The Chair: Next is the member for Surrey-White Rock.... I'll take the member for Prince George-Omineca. We're all being so gracious today.
L. Fox: The Chair is always gracious when it comes to the third party.
I have a couple of specific questions around section 5. Some of it flows out of discussions that we had earlier on section 4. When you look at the five objectives outlined in subsection (2) of section 5, it's fairly easy to identify a common thread throughout those objectives. One of my questions has to be: given the discussion we had in the earlier section around the number of regions, does the minister envision that each committee would have a member from each region, who will be identified somewhere down the road, to look after the regional equity part of this legislation?
Hon. A. Petter: As I mentioned in response to a question from the member for Surrey-White Rock, when we get to section 6, we'll see that "the committee must provide advice to Forest Renewal BC as to appropriate regional goals for expenditures."So I certainly expect the committees.... We and Forest Renewal B.C. will seek, in the appointment of these committees, to achieve a measure of regional equity in representation. I don't want to prejudge exactly each and every committee. I don't think it would be useful to say ahead of time that each and every committee will have exactly this form of representation. But clearly, because their role is not only to advise on the substance of the area in which they're advising but also on the regional goals for that investment strategy, it would be appropriate. I expect attention will be paid to ensuring that these committees have regional representation.
[3:00]
L. Stephens: I ask leave to make an introduction.
Leave granted.
L. Stephens: Today in the House we have 27 grade 7 students from Langley Prairie Fundamental school in Langley, with their teacher Mr. Wiebe. Would everyone please make them welcome.
L. Fox: I guess the reason I'm concerned is that I've sat on this type of structure before. I know that normally the flow of information is from the bottom up, but along with that go priorities. Usually the recommendations are prioritized in terms of an action plan, and the board would give consideration to that. I'm somewhat concerned about regional equity if the input of people from a particular region of the province isn't contained within those priorities. I would like the minister to give us some assurance that indeed that kind of consideration would be given. I think it's very important, if the flow is going to be from the grass roots up, that each region has an opportunity to take part in all five committees.
Hon. A. Petter: To the extent that I, as minister, can speak for what will unfold under this bill, I certainly think it would be unthinkable for there not to be full opportunity for regional input into this committee process. What I don't want to do is signal that we are going to design a structure that's so large or unwieldy that it will not be able to carry out its functions efficiently.
I anticipate that the committees will be appointed with regional equity in mind. But certainly the committees will also be quite able to draw upon the input and advice of those in the various regions, and they will have to do so in order to fulfil their obligations under section 6 and to advise Forest Renewal B.C. on how to fulfil its mandate, which is now more clearly than ever stated as implementing a regionally equitable program of expenditures. To the extent that I can add to those assurances in the legislation, I'm happy to do so.
J. Tyabji: I notice that in section 5(1), where it says "The board may establish committees," there's no limit to the number of committees the board may establish. Does the minister have any comment on that?
Hon. A. Petter: I think the comment is that the work that has taken place over the past year has identified the five areas laid out in 5(2)(a) through (e) as areas that are going to require ongoing attention. But there may well be other emerging issues that either require some short-term advice or, though unforeseen, may justify separate consideration by a committee of a different composition and structure. We wanted to ensure that the board had the flexibility to establish a committee to achieve those other unforeseen or more specific purposes.
Rather than simply have some boilerplate -- "The board may establish committees" -- we thought it was more forthcoming to identify the five areas that we believe justify ongoing committee work but to leave the board with some additional flexibility to deal with other issues for which they may wish to establish a committee, either on a short-term basis or, if the need emerges, for a longer term.
J. Tyabji: So there are no limits to the committees that may be established by the board. Obviously the board would establish committees in addition to the five named committees according to the mandate outlined by the appointed board, and those committees would sit for as long or as short a time as the board then deems necessary.
The next questions that come up are: what is the remuneration for the appointees to the board? What are the
[ Page 10740 ]
expense accounts or allowances that will be provided for the mandated committees? Are there any limits to the remuneration for the committees that the board may strike in addition to the five listed?
The Chair: Before I go to the minister, I caution the member that she is anticipating matters in another section of the bill -- section 8, board remuneration. So would you defer that question, as I'm not really allowed to let it go yet.
Hon. A. Petter: Hon. Chair, I think the question of remuneration for both board and committee members is dealt with in section 8, and that will be the appropriate place to deal with it.
J. Tyabji: I would assume, then, that when we're talking about committees in section 8 -- which are in addition to the five listed -- those would also be struck by the board that would be governed by section 8. Is that correct?
Hon. A. Petter: The member is asking about section 8, and we're on section 5, so I have a little difficulty. When we get to section 8, I think the member will find that the language there refers to "committee member." It doesn't define it in respect of a particular committee assignment.
J. Tyabji: The only reason I'm raising this in section 5 is that I don't want to get to section 8 and have "committee members" mean the ones who are mandated. As I see it, there are no limits laid out in section 5 as to the number of committees that may be established by the board, in addition to the five specified. I'm assuming that the minister is assuring me that they will all be dealt with in section 8. That's the assurance I needed with regard to the limitations.
With regard to the committees that are mandated, I don't see a limit to the number of members on those committees, except that there are stipulations about some of the requirements for those members. Could the minister comment on that?
Hon. A. Petter: The only comment I would offer is that the board and also the minister or the government, to the extent that they are involved, will no doubt want to make sure that the committees are not overly large, but they will want to make sure that they are representative and that they provide appropriate input. So there is some flexibility provided here on committee size -- subject, no doubt, to the searching scrutiny of this member and other members when the matter reaches the legislative committee -- in order to ensure that the committees have been established in an effective and efficient way, which is the intention.
J. Tyabji: I note that some committees that have been struck in the term of this government have been extremely large, such as the regional committees of CORE, which have had numerous members on them representing a wide diversity of interests. Since there are no limits, I would assume that any of these committees could have in excess of 30 people on them in order to meet the objectives laid out in section 5(2) -- whether it be in (a), (b), (c), (d) or (e) -- with all of them receiving relative rates of remuneration.
This question comes up. Subsection (5) says: "At least one of the individuals appointed to each committee established...must be a director of the board." Five members will have characteristics with regard to the five different areas of interest. The minister has said that these members should be experienced, yet I would assume that they are meant to be independent, whether it be of the workings of the forest industry, the unions or government. Where would the minister find a person who would have the qualifications to meet one of these five requirements and yet be independent of some of the people who have special interests in the Crown corporation?
Hon. A. Petter: I guess my problem is with the member's assumption. I have tried to describe this agency throughout as a partnership. That will be true of the committees, as it is of the board. I would anticipate that committee members will be drawn from various sectors, including the industry, unions, other worker representative groups, communities and environmental organizations. I think there are plenty of people in those various sectors with the talent, ideas and expertise to fulfil the roles.
In addition, I would point out that one of the intentions of having more focused committees is so that you don't have to replicate the 30 or so people that might otherwise be necessary. You can have a more focused group looking at particular issues without having to ensure that people who have other expertise have to waste time engaging in the process. One of the rationales for having committees advising the board is so that people with a more focused mandate can advise on particular areas. That should also obviate the need for extraordinarily large committees, bearing in mind that we want to ensure that the committees are representative to the greatest extent possible.
J. Tyabji: It would seem that by the general nature of subsections (2)(a) through (2)(e), the board committees would have to be extremely large just to make sure that everybody is represented at the table, even though the minister is saying that he has narrowed it down. It is slightly narrower than CORE, but when subsection (2)(a) says "increasing investment in the forest resources and in the forest land base," and then one of the people who must be appointed is someone the board considers to be qualified to advise on the subject matter, it would seem to me that the committee could be extremely large. But the question I'd like to ask is: does the minister think it's a concern that the person whom the board deems to be qualified may be somebody directly related to one of the -- I prefer to say sides; the minister prefers to say partnership -- partners of the Crown corporation?
Hon. A. Petter: I really think the member does not have the same conception of this agency that I do, and perhaps that's because it's her role to have a different conception. What is intended here is not to have committees that replicate all of the groups or all of the areas of the province but to have committees that can advise on policy matters to the board in a way where those policies are reflective of the general interest. The committee will have to do some work -- as previous members asked, and I responded -- engaging with communities, those in industry and others. The committee is not there to replicate the entire province. Each committee is there to be a small, focused group that can, in itself, be somewhat representative but, even more importantly, can draw upon the representative input of stakeholders throughout the province.
Do I envisage a problem in terms of the advice given? I do not. Clearly, if the advice given were of such a specific nature as to affect a particular stakeholder group, then the member might have to remove himself or herself. Generally, these committees are to advise on general policy. The expectation is that the stakeholders will be there, to some extent,
[ Page 10741 ]
advising on that policy from the point of view of the stake they have. I think that's the nature of a partnership. I expect that that can work well, as the process to date has worked well.
J. Tyabji: I'm not sure how the minister defines stakeholders, but it does seem that he has left out the most important stakeholder: the public, which owns the resource from which the Crown Corporation is going to reap its financial benefits. So that's an interesting point. I think that the minister, when he refers to stakeholders, talks about either industry, government or, perhaps, the unions. It would appear from the minister's comments that he can expect some of these committees to have only three members. The way this is written, the committees can have a membership of one -- or two, I suppose, because you'd have the member of the board, and then you'd have the qualified individual. The minister is not concerned that the qualified individual might be directly tied to one of the people who the minister sees as a stakeholder, whether that be government -- mandated to have the expansion of government through the Crown corporation -- or industry.
Section 5(2)(a) says that "increasing investment in the forest resources and in the forest land base" is to be the mandate of that committee. I wonder: if the increased investment is taken to be private investment, is the Crown Corporation then going to make recommendations to the private sector, or is the increased investment solely with regard to the investments of the Crown corporation?
Hon. A. Petter: There are so many elements. I guess I continue to believe that government represents the public of British Columbia. I'm sorry that the member doesn't hold that view, but I think that's why we're all here. Government certainly will be one of the partners represented, and it will be speaking on behalf of the general public. It may come as a surprise to the member to know that members of the public are workers, representatives of the forest industry and environmentalists, and they are represented in communities. I think that the public will be adequately represented, in every way, through all the partners. Any concern you may have about any stakeholder group or individual not being represented as a partner will be represented by government. That's what governments are here to do: to represent the community at large, and that's why it's important that government be a partner.
[3:15]
In terms of increasing investment in forest resources and the forest land base, that investment speaks to both meanings. We are principally looking at the investment that will derive from the investment program being managed by Forest Renewal, but I certainly hope and anticipate that that investment strategy will also encourage and foster added investment by the private sector as well in, for example, value-added industries. By doing market research and facilitating research and development in new value-added products, we can do an awful lot to encourage private investment in the value-added industries and increase both employment and the value of the products we export from the province. Investment can mean both senses of investment here, although in section 5(1)(a) the "increasing investment" refers to investment in forest resources and in a forest land base. Nevertheless, there may be opportunities to encourage private investment in that case as well.
J. Tyabji: It would appear the minister is saying that the priority of Forest Renewal B.C. is to encourage the investment of Forest Renewal B.C. in the forest land base. That seems to me to be in direct competition with the private sector, which has generally been the vehicle through which investment has occurred in the forest resources. The minister is saying no, so perhaps he can address that before I go further.
I find it extremely odd that this minister stands up in this House and tries to tell me that this government represents the public's interests at the table with regard to the land base when this government has excluded the public from talks on aboriginal land negotiations, for example, and has said that it is this government that represents the public's interests there as they carry through on the Charlottetown accord with regard to the aboriginal land strategy. It's not a big comfort to the people of this province to know that this government is going to be representing the general interests of the public.
If the minister is not saying that Forest Renewal B.C. is moving into direct competition with the private sector, could he please explain how the mandate of Forest Renewal B.C. is going to increase public sector investment? I see Forest Renewal B.C. being defined as a public sector investment in an area which has traditionally been private sector investment.
Hon. A. Petter: If the member and others in this Legislature, particularly in the official opposition, consult with the public on the issue of Forest Renewal B.C. and this investment program, they will find that it is they who are out of step with the thinking of British Columbians, and that through this initiative the government has done an exemplary job in representing the short- and long-term interests of British Columbians. I would encourage them to examine themselves and talk to their constituents, and maybe the member would find some reassurance as to who is best representing the interests of British Columbians.
Leaving that partisan comment to one side, I will deal with the question of investment. As a partnership, this initiative involves both public and private investment. I find it astounding that I have to constantly remind members that the forest resources of this province are, for the most part, publicly owned by the citizens of the province. I suppose some members wish it were otherwise; I have heard some members in the official opposition who seem to wish it were otherwise. But that is the case, and as steward of that resource, the public has an obligation to ensure that it is managed in a way that ensures its long-term sustainability.
Historically, there has not been much private investment in this province in the kind of advanced silviculture contemplated in section (2)(a). That is why a program of investment is required. Because the public as landowner is the most appropriate mechanism for coordinating a partnership arrangement for that investment, industry supports this initiative. Once again, the member is trying to create distinctions and ideological battles where there are none. This is a public resource. The industry accepts that; the people of B.C. accept that. As stewards of the resource, the government has an obligation to ensure that there is investment of a kind that hasn't taken place in the past: back into the land. We have an investment strategy that takes the value of that public resource and returns it to the land, in partnership with the private sector. Everyone can support it -- except, it seems, the official opposition and a few other misguided members in this House.
J. Tyabji: I really wish I could believe that the minister's rhetoric -- which is, as always, very eloquent -- is something that addresses the point in front of us. First of all,
[ Page 10742 ]
the minister has pointed out something that everybody knows: the forest lands of this province are primarily publicly owned. But the other thing that the minister is forgetting -- conveniently, it seems -- is that the number one issue in front of the public isn't great confidence and rejoicing over Forest Renewal B.C. What people are saying in general is: "I don't trust the government. I don't trust the government to look after my needs or to steward my interests." That's what they're saying.
I've talked to my constituents, and you know what? They shrug when they hear about Forest Renewal B.C., because they're not sure if it's some sort of Orwellian doublespeak or if it's just another way to have some extra revenue coming into the government coffers. If this minister is interested in accountable stewardship of the resources, he would continue to have the stewardship of those resources through his ministry, where they're more accountable, and not through a Crown corporation. He would take the money that is going into remuneration for all these millions of little committees that are going to be set up and put it into subsidizing silviculture which is currently being conducted in the private sector.
The Chair: Excuse me, member. Will you take your seat for a moment, please. I want to emphasize that I offer this caution to all sides in the debate: we are long past second reading; we are now in clause-by-clause on section 5, the establishment of committees. All questions must be directed very specifically to the items in section 5. I give members notice that I will no longer allow any latitude. Please continue.
J. Tyabji: I don't know what comes over me when I hear that kind of rhetoric from a cabinet minister.
With regard to section 5(2)(b), it says: "...promoting activities that assist (i) forest industry diversification." I'm assuming that that diversification refers, once again, to Forest Renewal B.C. being public sector investment in diversification, which would also be in direct competition with the private sector. Is that correct?
Hon. A. Petter: No, that is not correct. I know the opposition likes to think in dichotomous terms and divide everything into one side or the other, but in this case let me assure the member that forest industry diversification is, again, a partnership. A partnership, member; think of it. We will be working in partnership with communities and the private sector to ensure there is a diversification. In this case that kind of diversification may be -- indeed, I would expect it would be predominantly -- a diversification of private sector initiatives in value-added processing and manufacturing on a scale we have not seen in this province in times past, but which can now take place because of this initiative.
J. Tyabji: That goes back to the original questioning. How big are these committees going to be in order to allow that kind of diversification? Just so I can be clear on this -- I don't want to stray from the questions in the committee section of the bill -- if the minister is saying, then, that this one committee is promoting activities that assist forest industry diversification, then what he's saying, I would assume, is that in effect the person who has been appointed to this committee and is supposed to be qualified to advise on this is someone who is going to do market research for private sector investment, community dialogue to see where the communities are going and those kinds of activities. Could the minister elaborate on that? It's quite interesting.
Hon. A. Petter: Whenever a member says that I'm interesting, I'm always tempted to go on and on, but I'll try to discourage myself from doing so and keep my answer brief.
Forest industry diversification refers to the very obvious notion that we have a forest industry that could produce far more jobs and far more wealth for the province if, in fact, we branched out in the kinds of products and processes that we have in this province to better utilize our forest products. I expect that the committee will be advising on policies that will lead to that diversification, be they policies that are directed at market research through educational institutions or other private or public sector structures, or be it through research and development initiatives aimed at generating new products. There will be a general set of policies and investments that the committee will advise the board on that will enhance and promote the diversification of the forest industry.
J. Tyabji: In addition to policy on regulation or legislation, would this committee be empowered or be, perhaps by whim, providing recommendations to the board that would then go to the minister? If not, why not -- if this committee is supposed to be doing such in-depth market research on what's going on in the forest industry?
Hon. A. Petter: I think that's been made clear in section 4, where we had a very extensive debate. The mandate of Forest Renewal B.C. is primarily to oversee a program of investments and not to engage as a regulatory body.
J. Tyabji: Perhaps the minister didn't understand the question. I understand this is not a regulatory or legislative body. What I was talking about was advising. The minister has said that these committees will be advising the board with regard to policy for financial investment. It would seem to me that if there's going to be enough field research done, given the package of legislation that's coming down in this session on the forest industry.... We've got the new forestry code; we've got the new water act. We've got all these things that I would imagine these committees will be coming directly in contact with, because they're supposed to be dialoguing with the communities and talking to all the various interests in this sector. It would appear logical that some recommendations would be made with regard to changes in regulation or legislation as they see the new regulations and legislation being enacted. I'm curious about that. If not, why not? All the money is going out, anyway.
Hon. A. Petter: The answer is simply that this is not the focus of these committees or of Forest Renewal B.C. The focus is on the investment side. Government may well pursue policy initiatives to complement the investments, but that is not their focus. I suppose recommendations may be made and passed on in the course of events, but they will not have the same place within the structure of things, because this agency is about making investment decisions, not about engaging in regulation of the forest sector.
J. Tyabji: In section 5(2)(b)(ii) it says, "the further processing of wood supply," and in (iii), "increased manufacturing of wood products." In those cases, would the committee be empowered to recommend to the Crown corporation that there be a branch of the Crown corporation or that the Crown corporation itself engage in those activities to fill any sort of market gaps? Or would they be analyzing
[ Page 10743 ]
private sector opportunities and then communicating them to other companies in addition to the Crown corporation?
Hon. A. Petter: Again, this is well-trodden ground. The whole function of this agency is not to deliver programs itself or to compete as an entity in the market, but rather to deliver an investment strategy that will support entities that currently exist and those that may become possible through this strategy. The answer is no, I do not envisage any possibility in which the agency itself would engage in the processing of the wood supply or manufacturing of wood products. What I do envisage are many new opportunities for private sector investors and perhaps local communities and others to get involved in one way or another in the job opportunities that will be afforded and economic activity that can be generated as a result of investments and the investment policy implemented by the board on the advice of the committee.
J. Tyabji: With regard to subsection (3), where it says that each committee must take into account the need for increased participation of first nations and aboriginal persons in the forest economy, I have two questions. How is that going to be cross-referenced with the activities underway in the Ministry of Aboriginal Affairs and the Ministry of Environment, and to what extent will there be dialogue? There are, of course, ongoing negotiations in those ministries.
[3:30]
The other part is -- and this may have been canvassed before; if so, I'd like to be referred to the part in Hansard where it would be: will the committee, in giving its advice to the board, actually be advising on how these first nations and aboriginal peoples would be getting involved in each separate committee's activities?
Hon. A. Petter: We have discussed the fact that all of the activities of the agency are to be made available to first nations; there is not a separate envelope or a separate approach for first nations. In fact, I now recall that I did engage in this debate at some length at an earlier stage, and I'd be happy to reference the point in Hansard where that occurred.
In terms of the wording in section 5(3), the member may be aware that first nations and aboriginal people in this province are underrepresented in the forest sector relative to their numbers and have not received the same opportunities to participate and benefit from forestry activities that non-aboriginal people have. We believe it's important that attention be paid to ensure that first nations, who in many cases exist in areas where significant cutting activity, for example, takes place, enjoy a fair share of the opportunities that this initiative will provide. I expect that there may well be coordination and work with other agencies that have a regard for first nations interests -- for example, the First Nations Forestry Council -- in developing policies in this regard.
The intention is to attend to the fact that first nations citizens have not been adequately represented and have not adequately benefited from the benefits of the forest resource in the past, and here is an opportunity to ensure that first nations and aboriginal people can do so. Therefore we have included a specific reference in the act asking the committees, in the course of carrying out their duties, to ensure that these programs will in fact be afforded to first nations and aboriginal people.
J. Tyabji: How is this going to be related, then, to the joint stewardship arrangements that are currently in place? Are the lands that are under joint stewardship, such as up in Mackenzie or the Clayoquot lands, going to be under the jurisdiction of Forest Renewal B.C., or are they excluded? If so, on what basis?
Hon. A. Petter: Forest Renewal B.C. will not have jurisdiction over lands. Forest Renewal B.C. will not be negotiating jurisdictional issues with first nations or aboriginal people. What Forest Renewal B.C. will be doing is providing a forward-thinking program with investments for all British Columbians and, as part of that investment program, ensuring that that investment program is one that can be accessed by first nations and aboriginal people to ensure that they enjoy the benefits that can flow from this kind of initiative.
Any negotiations with respect to land rights issues, be they treaty negotiations or pre-treaty negotiations, would not be conducted under the aegis of this agency; they would continue to be conducted, presumably, under the aegis of the Ministry of Aboriginal Affairs, the Treaty Commission and other agencies established for that purpose.
J. Tyabji: I think this is my final follow-up question, unless something comes up in the minister's answer.
I understand, obviously, that Forest Renewal B.C. doesn't have jurisdiction. But if Forest Renewal B.C. is putting a financial investment strategy in place, I'm assuming that the financial investment strategy for forest renewal in British Columbia has a defined area of land that it's looking at. Especially when it's making the regional equity programs, there must be a land base that is referred to.
This goes back to a question that we had last week, when the minister tried to say that the protected areas strategy was not relevant. I'm just trying to define that where there is land that is relevant to this financial investment strategy.... Would land that is under dispute or the subject of negotiations with aboriginal people be excluded from the financial investment strategy, particularly with regard to regional equality?
Hon. A. Petter: We're straying perilously far from committees, but given that it's the last question, I'll be characteristically generous.
The investment program will be directed to provincial forest lands. To the extent that first nations may have rights they wish to assert against those lands, there are forums to assert those rights. Indeed, some tremendous initiatives -- which I won't go into, because they're far from the purview of this section -- to enable those rights to be advanced have been put forward by this government. But this agency will not be dealing with those issues. It will be dealing with the economic and other opportunities that can flow to first nations and aboriginal citizens as a result of this program of investment into the provincial forest lands of the province.
J. Tyabji: I have three more.
The Chair: I'll just remind the member of Robert Service's words, "A promise made is a debt unpaid," and remind her she now owes us.
J. Tyabji: Considering the debt this government has racked up in the last couple of years, I think mine is minimal.
Hon. Chair, my follow-up is: if the minister is referring to provincial forest lands, would the lands in the Clayoquot cut
[ Page 10744 ]
be considered provincial forest lands or outside that category?
Hon. A. Petter: The lands that have been identified for forest management and harvesting within Clayoquot Sound or any other part of this province would fit within my definition of provincial forest lands.
G. Campbell: I have a quick question for the minister. As I have gone around the province and talked with people about Forest Renewal B.C., the consistent message is that they are concerned about how their region will be represented. I haven't heard an answer from the minister that I think gives any comfort to people in parts of the province that they are going to be represented.
Let me be specific. The issue with regard to section 5(2)(c) is: "...investing in the environmental values of the forest." Will there be another layer of response created by Forest Renewal B.C. beyond the Forest Practices Code that I understand the minister is intending to introduce? Or will the committees be responding within the purview of the Forest Practices Code, so that we won't have different rules applying across the province?
Hon. A. Petter: I can't let this question pass without saying that I find it ironic that the Leader of the Opposition is concerned about consistent messaging, particularly in reference to Forest Renewal B.C. However, let me strive to answer his question.
Clearly the activities that will take place, in terms of the environmental components or investment in the land base, must all be consistent with the regulatory requirements that will flow from the Forest Practices Code. But the Forest Practices Code will not preclude additional investment activity, provided that is carried out in a way consistent with its requirements.
[J. Pullinger in the chair.]
So, for example, there is plenty of room to restore damaged lands -- which may not be required under the Forest Practices Code, because the damage occurred in the past. There will be opportunities to engage in commercial thinning and further forms of silviculture beyond those required under the Forest Practices Code as licence conditions or minimal standards. So we see here an opportunity to build upon the Forest Practices Code an investment strategy that will have to be consistent with, but will go beyond, the minimal regulatory requirements of that code.
G. Campbell: I appreciate the minister's confusion. Unfortunately, I have served on a Crown corporation board in the past, as well as on committees to Crown corporations, and under this government and previous governments they are not accountable and often do not carry through with the purposes set out by legislation. That is why the minister is having some trouble with this side of the House on this legislation.
Again, in terms of the people across this province and the regional representation that is demanded and required and requested of the minister, what guarantees can the minister give us that regions will be represented, so that they do not feel they are going cap in hand to the minister or the Crown corporation board in what is really an exercise in futility? That is what has happened with other Crown corporations that the government has had control over.
Hon. A. Petter: I regret the fact that the Leader of the Opposition wasn't present when we had a full and vigorous debate on section 4, the mandate of Forest Renewal B.C., which includes the requirement to implement a regionally equitable program of expenditures. In addition, when we get to section 6, the member will find out that each of the committees is required to advise on regional goals. If the member wants to raise the question again in section 6, I guess he could do so, but we had an extensive debate around regional representation. I can assure the member, as this government has assured all British Columbians, that one of the goals of this initiative is to ensure that not only is there a much-needed investment back to the land, but the investment will be carried out in a regionally equitable way, in a way that is sensitive to the various regions.
If the regions in this province are concerned, it's probably because the member has gone to those regions and told those regions that he supports this plan, and then he comes back to this House only to vote against it. That's the real source of their concern, and not the puffed-up concern for regional equity that the member now brings to bear.
D. Lovick: I ask leave to make an introduction.
Leave granted.
D. Lovick: My introduction today is on behalf of the Speaker. In the galleries we have 48 grades 5 and 6 students in the company of their teacher Ms. J. Gerhard, as well as 22 adults. These are students from Cathcart Elementary School in Snohomish, Washington. I would ask all members to please join me in expressing a warm welcome to them.
D. Mitchell: While we're on section 5, I would like to question the minister with respect to section 5(2)(a). I believe this is one of the committees that is going to be formed. They are enumerated (a), (b), (c), (d) and (e). Committee (a) is going to be looking at increasing investment in the forest resources and in the forest land base. I know the minister discussed that at some length already. Certainly that committee has a very broad mandate, a very broad function. One wonders whether or not it's too broad, whether there is a need to limit or guide the work of that committee more specifically than is done in the bill.
The minister has talked a bit about the need for this committee to fulfil its mandate. But when we talk about investment in forest resources and in the forest land base, we could be talking about just about any conceivable thing, including campsites in parks, for instance. I wonder whether or not the minister agrees that perhaps there needs to be a limit on and guide to the kinds of investments that should be recommended by this very important committee of Forest Renewal B.C.
Hon. A. Petter: I think we may be in danger of replicating a debate we had earlier. Just to set out the relationship, the committees in section 5 will be advising the Forest Renewal B.C. agency that is referred to in section 4, whose mandate is to implement a regionally equitable program of expenditures in order to carry out the purpose of this act, which is established in section 2. If we go back to section 2, we find, front and centre, that the purpose is to enhance the productive capacity and environmental value of forest lands and to renew the forest economy of British Columbia. So there is adequate guidance given here as to the direction that this committee will take from the purpose clause and from the other sections.
[3:45]
[ Page 10745 ]
I would simply say this to the member: obviously one likes to define things as specifically as one can, but the opportunities to increase the productive capacity of the land are considerable, and I wouldn't like to foreclose some of those opportunities. Those opportunities include things we can foresee today, such as investments in better disease control, advanced silviculture and commercial thinning, but there may well be other opportunities to enhance the productive capacity of the forest land base and the products that the land base can provide that are unforeseen today. I think it's appropriate that we have a committee that has a clear focus -- I refer back to the purpose clause -- but whose mandate is not constrained from looking at every possible strategy to enhance the timber supply and other productive opportunities to utilize the forest resource for the future of this province and its people.
D. Mitchell: I'll just ask the minister, then, if any of these five committees that are being established with this section of the bill will be assigned the specific responsibility of dealing with the matter of stumpage fees that are going to be collected. I know that the key rationale for the bill is that increased revenues collected through stumpage are going to be directed to this new agency for investment in the province, but the minister has said -- and he's on the record as saying it -- that stumpage fees may have to be reviewed from time to time, based on lumber prices and future economic uncertainties. In the event of future economic uncertainties, dealing with the price of lumber or the log market, would any one of these specific committees be given the specific task of addressing stumpage-related issues?
Hon. A. Petter: The answer is no. If we want to explore the issue in more detail, we might want to do it at a later section, such as section 11. But very briefly, there is a process in place within the ministry to review technical issues. At the end of the day, the setting of stumpage will continue to be done by government through the existing processes, which involve certain consultation and technical review, and not through this agency.
L. Fox: I have a couple of very short questions to ensure that I understand the intent of the five objectives. Specifically, with regard to section 5(2)(c), "investing in the environmental values of the forest," I'm assuming that the intent of this particular clause is to increase the opportunities for more jobs and investment coming out of our working forests. Could investing in the environmental values of the forest include such things as a spotted owl protection area or having committees recommending certain set-asides for different values, or are we merely talking about working forests and not about environmental values on their own?
Hon. A. Petter: There is no role for the committee to deal with land use issues. This is an investment program, and therefore questions of land use will not be determined by this agency. There are opportunities to enhance and promote environmental values that I think, as the member indicates, do have tremendous economic potential. If we can bring back into forest production some of those lands that have been lost due to slides and poor road construction, that has economic potential. If we can enhance the wildlife and fish values of the forest in terms of recreation and tourism, that has economic potential. If through research and development we can find better ways to manage the forest to protect environmental values on the one hand, in a way that does not limit economic opportunities on the other, that will also be of benefit. I think all those opportunities exist here. But what does not exist here is an agency that can get involved in the land use decisions that the member is referring to.
L. Fox: I thank the minister for that assurance. I certainly thought that was the case, but I wanted the response on record.
I have one final question. It's almost a statement, rather than a question. The minister knows that I and my colleagues supported this bill at second reading. We are still extremely concerned about the regional equity issue. I guess I want one more statement from the minister, saying that he will do the best he can to ensure that all regions will be given consideration in the appointments to these committees.
Hon. A. Petter: Very briefly, the philosophy that underlies this piece of legislation and this section is that for too long in this province we have seen the wealth taken out of forest-based communities and the forest and not reinvested back into the forest and those communities. Secondly, we want to ensure that that investment back is equitable -- that it takes account of the relative contributions of regions, to ensure that those regions enjoy the benefits on an equitable basis. I hope that assurance and that philosophy can further reassure the member that in fact this initiative does speak to regional as well as provincial concerns.
Section 5 approved.
On section 6.
W. Hurd: I really hesitate to bring up the issue of regional equity yet again, but it does tend to show up in some of these items in the bill. I note with interest that the minister saw fit not only to introduce an amendment on a previous section but also to issue a press release emphasizing the regionally equitable distribution of funds.
With respect to section 6(b), where the committee functions will be to provide advice to Forest Renewal B.C. as to appropriate regional goals for expenditures, this gets us back to the same sort of difficulty in defining regional equity and defining the regions. I know the minister has received a submission from the northern interior lumber sector that sought to identify four regions of the province, based on the stumpage formula that exists in those four regions. Since we are talking about regions -- it certainly has been raised by the member for Prince George-Omineca and by the opposition and has been the subject of a rather hastily contrived press release by the Minister of Forests -- we have to ask the question again: are we talking about the four regions of the province in which -- the minister will agree -- there are different stumpage formulas? Are we talking about timber supply areas? Are we talking about the BCTV weather map? What do we mean by regions?
Hon. A. Petter: I want to inform the member that in terms of stumpage it's two regions, not four. In terms of the ministry it's six regions. I indicated earlier that I think the six-region approach is the one that the Forests ministry and I as minister would likely look to as an initial take on regional considerations.
But let's recognize that the province does not neatly fit into predetermined regions. For certain purposes some regions make more sense, and for certain purposes others do. When you're designing an investment strategy that you want to make sure is equitable overall and also serves the
[ Page 10746 ]
particular needs of particular communities, you may want to look, for example, at things I would call subregions but others would not -- certain parts of the province that have particular characteristics or kinds of wood supply that lend themselves to certain opportunities.
We will want to make sure that, overall, the program is one in which there are appropriate regional goals for expenditures, in the sense that we maximize the benefits from the investment on the one hand, while ensuring there is equity in terms of the overall return on the other. That's the essential balance, so that over the piece -- I see the member is perusing the press release; I hope he is, anyway -- there will be the assurance given in the legislation and in the press release that regions can look to this fund to ensure there is a return to those regions of the wealth or value produced by those regions. It will be fulfilled, but in the most effective and efficient way.
W. Hurd: Again referring to the section and the role of the committees, and with respect to item (b) on the appropriate regional goals for expenditures, as the minister knows, there is now a growing concern in the communities of British Columbia that there be a dollar-for-dollar commitment with respect to Forest Renewal B.C. funds. So I ask the question under section 6(b): does the minister believe that the appropriate regional goal for expenditures should in any way be a dollar-for-dollar transaction in terms of regional equity?
This may cause the hon. member for Prince George-Omineca to leap into the debate again, but I note from the minister's press release that he makes reference to the Prince George region, where appropriate investment focus might be. At least it seems to imply some sort of dollar-for-dollar return to Prince George. The minister will know that in their submission to the Premier, the northern interior lumber sector felt very concerned about this type of provision. Is there any sort of dollar-for-dollar notion inherent in the regional goals that are going to be set by the committee, or is it a nebulous term that does not imply any specific area or specific region? We have not really defined that in the course of this debate. Again, I would ask whether there's any dollar-for-dollar notion inherent here so that there's an equitable regional distribution of funds.
Hon. A. Petter: We had a full debate on this very issue under section 4, which provides that Forest Renewal B.C. must plan and implement a regionally equitable program of expenditures. That is the mandate of Forest Renewal B.C. In section 6 we are talking about designing appropriate regional goals for particular expenditures to achieve that overall equity.
If you read the press release really closely, hon. member, you will find that the reference to Prince George gives a very good example of how one might achieve regional equitability but on specific initiatives would direct funds to a particular region. Let me take you through the example in the press release. There is considerable marginal agricultural land around the Prince George region that might be better utilized as forest land. That situation doesn't exist on the coast, and therefore if one's looking at that component of your investment strategy that's directed at converting marginal agricultural land into forest land, it would be nonsensical, stupid, counterproductive and idiotic to direct it in a regionally equitable way. You would want to direct that component of the investment strategy to Prince George, ensuring that other components are directed in their most sensible way and achieving regional equity overall so that there is a payback to each of the regions on an equitable basis.
Section 4 sets out the general principle of regional equitability, which we've debated at length. Section 6 directs the committees working within that general principle to devise particular goals for particular investments in a way that will maximize the benefit without compromising regional equitability.
W. Hurd: Referring to section 6(b), again we run into this term: "appropriate regional goals for expenditures." I have no wish to belabour the point of regional equity -- and I'm sure the minister is relieved to hear that -- but there is mass confusion developing out there.
While the minister was sending out his press release, the Premier of the province was speaking to groups in the Okanagan. I refer to the Kelowna Daily Courier, which says: "'Revenues from the government's forest renewal plan will be returned to the communities that need it,' [the Premier] says." Whether it's erroneous or otherwise, there appears to be a belief developing out there that there's going to be a dollar-for-dollar return to the regions of the province. I know that the forest organizations and the people in the northern interior and in the Prince George region have determined that they may be sending out $50 million in stumpage under the forest renewal stumpage increases, but they have a belief that that $50 million is going to be returned to the region which generates it. I throw it out because obviously much more clarification is needed here than just an amendment and a simple press release.
Under section 6(b), the committees are to "provide advice to Forest Renewal BC as to the appropriate regional goals for expenditures." Again, I advise the minister that there is an expectation that that represents a dollar-for-dollar return. I hope he will issue more press releases in the future to combat that misinformation.
L. Fox: In earlier discussions with the minister we talked about the reforestation of marginal agricultural lands, and he just mentioned that again with respect to his press release. The minister suggested earlier that within this bill -- not in this particular clause -- there may be the opportunity to acquire some of those marginal lands presently owned by private individuals. Under the last section, he also mentioned that it isn't the mandate of this Crown corporation to own land. This is all going around in my head. How is this going to be? Is the land going to be purchased by this Crown corporation? Would this committee recommend lands to be purchased by the Crown corporation, and then the Crown corporation would decide whether or not that is a worthwhile goal? At the end of the day, should everything fall in place, who would own that land? Would it go back to the Ministry of Lands? What would happen to it?
Hon. A. Petter: I don't want to get drawn too far down this line, because as I recall, the earlier question was: what if? I certainly don't want to foreclose the possibility that, while I anticipate that most of the investment being referred to would take place on Crown lands, there may be some private marginal agricultural lands that could be better utilized for forestry purposes. One way of achieving that might be to acquire them and bring them back into the provincial forest. If this investment program were to take that direction, I would anticipate that it could take place through acquiring that land for the provincial forest, for example, or perhaps through a local community. But it would not be through this agency.
[ Page 10747 ]
L. Fox: I have one brief observation as to why I mentioned it. In the Vanderhoof area of the Prince George region, most of these marginal lands were brought forward because of an agricultural land lease program in the past, and acres and acres of land are privately owned but sitting dormant. So it may very well be a major objective identified by that respective committee. That's why I ask the question.
[4:00]
D. Mitchell: Just for clarification, I want to make sure I understood the minister's response to the question by the member for Prince George-Omineca about the possibility of land acquisition by the agency. Did the minister indicate that that is not a possibility, that Forest Renewal B.C. will not specifically be acquiring lands? Is there a specific prohibition against that?
Hon. A. Petter: We might want to discuss this in other sections. There is not a specific prohibition. The function of this agency is not to become a manager of land; it is to act as an agency that directs investments in a way that draws upon existing structures, be they industry, government or community structures of one kind or another. My answer was that I do not envisage that. It would be inconsistent, in my view, with the long-term goals of this agency, to become a landowner of any sort. It may in order to establish an office or something, but not to manage public lands in the way contemplated by the member.
The whole thrust of this initiative is to facilitate agencies that are currently established to do that job. In this case, if the purpose of the acquisition was to bring lands into the public domain, as Minister of Forests I naturally think that the Ministry of Forests might well be the most appropriate agency.
D. Mitchell: While we're on section 6, I have a question about the relationship between the committees and the board. The section deals with the committees' functions, and it says that the committees can "make recommendations," "provide advice," etc. Is it correct that none of the committees have any binding power on the agencies, then? Can I ask the minister whether or not any of the recommendations or advice offered from these committees to the board is binding in any way? The board must have the final authority, I would imagine.
Hon. A. Petter: No, the committees are not binding upon the board. They are advisory to the board and are to carry out their function in accordance with the mandate established for the board.
J. Tyabji: I'd like to know from this minister why he was so nice to the member for West Vancouver-Garibaldi. If I'd asked that question, he would have been flailing his arms and saying: "We covered that in section 5." I'd just like to encourage the minister to keep up that level of etiquette with all members of the House.
Under section 6, I note that the committees' functions have no time lines. Later on in the bill we will be canvassing the business plan that the board is mandated to provide, which will eventually end up before the Legislature. In terms of these committees' functions, what time lines are they within and who determines that? To what extent does the minister have a say in guiding these recommendations so that they have some input into the business plan?
Hon. A. Petter: I only flail my arms after the fifth question, hon. Chair.
The committees referred to in section 5 and that are now referred to again in section 6 will have ongoing functions because this is an ongoing commitment -- at least insofar as this government is concerned and so long as this legislation stands. The actual time lines for the advice provided by the committees will be established by the board.
J. Tyabji: Then the minister has no concerns when looking, for example, at section 6(a), which says: "...make recommendations to Forest Renewal BC as to expenditures to be made." That seems to me to be directly tied into what we will be getting into later with regard to the business plan that the board has to make. If the committees have been mandated with these very specific tasks, as we see in section 5, then the deliberations of each of those five committees -- or 500 committees, since there's no limit on them -- will result in recommendations that go to the board. Does the minister believe that those recommendations should be given to the board with enough time so that the board can include those in their thoughts for the business plan?
Hon. A. Petter: Absolutely, and I'm sure the board will ensure that. The committees do exactly that.
J. Tyabji: When we look at section 6(d), it says: "...develop and recommend initiatives that fulfil the purpose of this Act." The minister was quite clear in the previous section that the committee was only to be making recommendations. This reference to developing initiatives is, I would assume, a conceptual development. The minister is nodding his head. Could you put on the record that this is not for the committee to actually develop any initiatives other than on paper?
Hon. A. Petter: The purpose of section 6(d) is to indicate that the committee must develop but not implement those initiatives. That will be within the purview of the board. If the member wants me to say, using her lexicon, that it is to develop the ideas that go into the initiatives, fine. That's what it means.
J. Tyabji: What am I on? Number four? One more and I'm in trouble -- flailing arms.
I'm sure the minister recognizes how important this debate is in guiding those committees, and since there is no limit to the number of committee members or to the number of committees, they will need some guidance, no doubt, from these debates.
Section 6(b) says: "...provide advice to Forest Renewal BC as to appropriate regional goals for expenditures." I know that the member for Surrey-White Rock has talked quite a bit about regional equity. In the previous sections we've talked about the private sector investments, and in section 5, of course, the committees are going to be responsible, I would assume, for a lot of the field work in determining what Forest Renewal B.C. should do based on what is already out there. I just wonder to what extent the advice to Forest Renewal B.C. on appropriate regional goals for expenditures will take into account what the private sector is projecting for that area. Is that part of the mandate of that section, or will they only be looking at what Forest Renewal B.C. will do?
Hon. A. Petter: I'm sure that in ensuring that the investments are directed in the most beneficial way, the committees would certainly look at the activities of the private sector in ensuring, for example, that investments are
[ Page 10748 ]
directed to maximize benefits for the communities as a whole, including investment through private sector and public sector initiatives. I'm sure that the committees will read this exchange with rapt interest as they go about their function, and that they will take guidance from this fifth answer.
J. Tyabji: I recognize that I take my life into my hands with the next question, but the minister had his hands safely in his pockets last time, so perhaps they'll stay there.
Following up on that last question -- because it was a little bit fuzzy in the previous section -- am I to understand that if Forest Renewal B.C. perceives an opportunity in the marketplace in an area, whether it is because it's regional equity or otherwise, and if it appears that the private sector is moving to take advantage of that opportunity, this committee would still make a recommendation that Forest Renewal B.C. move in to make those investments? That would obviously be direct competition.
Hon. A. Petter: The whole function of Forest Renewal B.C. is to work with and promote benefits for the community. Certainly, if there was an interest and facility for the private sector to act without the participation of Forest Renewal B.C., I'm sure Forest Renewal B.C. would not want to duplicate or impede that investment. On the other hand, there may be cases in which Forest Renewal B.C., through some small incremental investment, can enhance and encourage private sector involvement that would not otherwise take place, and there, I think, Forest Renewal B.C. would work closely with those private sector opportunities.
Section 6 approved.
On section 7.
D. Mitchell: I have a quick question on section 7 that deals with resolutions of the board. I'm wondering about the power of resolutions of the board of Forest Renewal B.C. I would imagine that resolutions coming forward from the board of this agency would have the force of law, effectively. I guess I'm looking for an interpretation by the minister here. This is a hypothetical question, but it's one we may have to anticipate: what would happen if the board of Forest Renewal B.C. passed a resolution that was at odds with or contradicted provincial policy of the government of the day? Would the resolution of the board have the force of law? How would we regard that? I'm anticipating any potential or hypothetical conflict between an action of the board and an administration of the day. Could cabinet, for instance, override a resolution of the board?
Hon. A. Petter: The member will find that back in section 4(3), the Lieutenant-Governor-in-Council has the power to ensure that Forest Renewal B.C. complies with general and specific direction with respect to its exercise of powers and functions. With respect to the member's question on the status of a resolution, the status of a resolution is that of a resolution.
J. Tyabji: This is number one -- we start over with each section.
Section 7(1) says: "The board must manage or supervise the management of the affairs of Forest Renewal BC...." Are those the same activities? If they're different activities, who decides which one of them the board must do?
Hon. A. Petter: As is commonly the case with any agency, sometimes the management functions will be exercised directly by the board, and sometimes they may be directed by officers of the agency at the direction of the board or under the supervision of the board. I think that's what's being referred to here.
J. Tyabji: So that line is meant to say that the board must manage the affairs of Forest Renewal B.C. in the event of there not being a senior officer who would be responsible for management, and when there's a senior officer responsible for management, the board supervises that senior officer. Is that correct? Is that how it's to be read? It's a little confusing.
Hon. A. Petter: The board would supervise the management that has been delegated to officers.
J. Tyabji: To which...?
L. Hanson: That's three.
J. Tyabji: That's three, says the brand-new Reform party member. They're new....
D. Mitchell: New bottle, old wine.
J. Tyabji: Same product, new packaging.
Section 7(1)(c) says: "...delegate the exercise or performance of any power or duty conferred or imposed on the board to the chief executive officer of Forest Renewal BC or to any of its employees." Who would be imposing these powers or duties? Where would that be coming from?
Hon. A. Petter: The answer, I assume, is a power imposed on the board by the board itself through resolution, or it could be through the Lieutenant-Governor-in-Council, or it could be through this Legislature in this legislation.
J. Tyabji: So the minister is saying, under 7(1)(c), that the cabinet can, in effect, impose some powers or duties that the board can then delegate to some of their senior employees or to their chief executive officer, and then the board is mandated to oversee the activities of those employees. What I don't understand is that that's a lot of power for them to delegate. In what circumstances would the Lieutenant-Governor-in-Council be imposing these powers or duties on the board? Why would the board delegate it if the Lieutenant-Governor-in-Council specifically imposed that on the board? Can you give me an example?
[4:15]
Hon. A. Petter: It's very common to include a clause in legislation of this kind allowing for a subdelegation of authority. The reason is that there was an assumption in common law that powers delegated to an agency could not be subdelegated. I don't want to go through an entire statutory interpretation class, but that rule dates back to a time when we had a far less sophisticated notion of boards and agencies than we do today. To overcome that historical impediment, provisions of this kind are traditionally placed in our legislation in order to enable subdelegation, which facilitates good and effective administration by agencies such as Forest Renewal B.C.
J. Tyabji: It's actually not the delegation that concerns me; it's the word "imposed." I can understand that the board may delegate the powers that the board has under this act to a chief executive officer or to any of its employees. Well, that
[ Page 10749 ]
might be a bit of concern, but considering that it's an appointed board, I think that's where our concerns begin. But the word "imposed" seems to imply that beyond this act there could be orders-in-council, or the Lieutenant-Governor-in-Council could impose further powers on the board. The minister is saying that that's not the case.
Hon. A. Petter: It doesn't imply that. One would have to go to other sections of the act, which we have. We can debate them as we move forward through the bill to determine where powers exist and who can impose them. For example, if you look at subsection 7(1) -- since I want to stay within this section -- it says: "The board must manage or supervise the management of the affairs of Forest Renewal BC...." That is a power imposed upon the board. They must do it, therefore that power will be referenced in section 7(1)(c).
J. Tyabji: In answering my first question on this section, the minister said that powers could be imposed by the Lieutenant-Governor-in-Council, and I assume that that would be in addition to the act. Would the minister foresee policy or regulations -- specifically regulations -- that would be parallel to or with reference to this act coming up through the Lieutenant-Governor-in-Council after the act is passed?
Hon. A. Petter: I was struggling to determine the previous question. Could the member repeat the question -- the sixth or seventh question, I might add. But I won't count it as an additional question.
J. Tyabji: I believe that I am allowed to flail my arms this time.
Interjection.
J. Tyabji: Welcome to the House.
When the minister first answered the question, he talked about the Lieutenant-Governor-in-Council possibly imposing further powers or duties on the board, which obviously it always has the power to do. Does the minister foresee companion regulations in reference to this section coming through the Lieutenant-Governor-in-Council after the act is passed?
Hon. A. Petter: There will be regulations, and we can talk about regulation-making power at the appropriate time. I don't have any preconceived notion of a particular form of regulation that would be engaged by this section. When we debated section 4 we noted within that section that certain powers were given to the Lieutenant-Governor-in-Council, for example, to authorize Forest Renewal B.C. to do additional things and to ensure compliance by Forest Renewal B.C. with general directions, etc., and we debated that at that time. This section doesn't enlarge upon those other powers; it simply references them. Where powers are conferred, imposed by legislation, regulation or whatever, on Forest Renewal B.C. through this act, they are referenced here. But they are not enlarged by this section in any way.
J. Tyabji: I would like to follow up on a question from the member for West Vancouver-Garibaldi about land acquisition by Forest Renewal B.C. and whether there was something in the act that precluded land acquisition. The minister said no, although he said he didn't believe that was on the agenda of Forest Renewal B.C., because it's going to be a financial investment strategy and therefore there won't be land acquisition. In section 7(1)(c), the concern is that in the event of the Lieutenant-Governor-in-Council imposing duties on Forest Renewal B.C. which would include land stewardship or land acquisition, it would be something that's unforeseen in this debate, and if there is....
The minister is shrugging. I'm not sure what that means. Perhaps he will elaborate on his feet, and I look forward to it. Maybe it will be enlightening.
Does the minister foresee anything being imposed by the Lieutenant-Governor-in-Council, or are there no regulations currently in draft form somewhere that would be adding to what the act has?
Hon. A. Petter: There are currently no regulations in draft form. I love a free-flowing and wide-ranging debate as much as the next person -- although I just talked to the next person, and I'm not sure he was as keen about it -- but we're simply talking about a power to delegate. If the member has concerns about powers that may be imposed or created by this legislation, we should debate those in the sections that create those powers or allow the Lieutenant-Governor-in-Council or others to give direction to the agency. All we're talking about here is a simple clause providing that in order to carry out its functions efficiently and effectively, the agency has the power to subdelegate powers imposed upon it elsewhere in this legislation. If the member has concerns about those powers that appear elsewhere in this legislation, we should debate them elsewhere in this legislation.
J. Tyabji: I appreciate the minister providing the commentary from his assistant. It's unfortunate he doesn't have a voice in the debate.
Since the minister is directing me to the sections of this bill that would allow me to debate future plans passed by the Lieutenant-Governor-in-Council, if he could direct me to the section under which we could talk about powers imposed by the Lieutenant-Governor-in-Council, maybe we could canvass it there. But the only place where I see "imposed" is in section 7, which is why I brought it up.
The main reason I'm bringing it up is that we have seen from this government in the past -- not that we want to revisit other debates -- acts that have come before this House with regulations in draft form. The acts passed, then the regulations came out, and there was no avenue to debate them at that time. If there is nothing planned in addition to this act, and we have it on record, that's very reassuring. But if the minister is trying to say that somewhere else we can debate what may happen in the future, I don't see it. So we've received the reassurance, and I think I've run out of my five questions, anyway.
Section 7 approved.
On section 8.
D. Mitchell: A brief question on section 8 dealing with board remuneration. I note that section 8(b) says that if the director or committee member is not a member of the Legislative Assembly or a public servant, remuneration at rates fixed by the Lieutenant-Governor-in-Council can be paid. We know that there are going to be 15 directors, approximately. I'm interested that it's contemplated that some of them might be Members of the Legislative Assembly. How many members of the board will be Members of the Legislative Assembly, and where can I hand in my resume for the job?
[ Page 10750 ]
Hon. A. Petter: There has been no determination made at this stage about Members of the Legislative Assembly or, indeed, public servants who might sit on the board. It's an issue that we wanted to make sure was covered off, in the event there was a decision to appoint members of this assembly or public servants, to reassure the public and to establish the rule that there would not be double remuneration. But the member is free to send in his resume.
D. Mitchell: I don't know that it's going to be based upon party membership, surely, but I'll make this commitment to the minister: if I do send in my resume, it will list me as an independent.
Could the minister tell us what is contemplated in terms of remuneration for members of the board who are not Members of the Legislative Assembly or public servants? Is there a range of remuneration contemplated here? Will it be paid on a per diem basis -- $100, $200, $300 a day? Can the minister give us some idea of the range that's contemplated?
Hon. A. Petter: It will be on a per diem basis, I anticipate, and it will be consistent with other public agencies. The rates -- which, again, have not been predetermined -- will enable us to have participation from all sectors and to remunerate people sufficiently to ensure that. But we'll be as modest as possible to ensure that the dollars that flow into and through this agency are not consumed by administrative costs, but rather flow out to communities and to the investments that I think we all desire -- at least, that most of us desire. There are a few who don't seem to desire it, but those of us who desire it, desire that, I'm sure.
J. Tyabji: I'd like to hear the minister recite "Jabberwocky." I think that would be very interesting.
With regard to section 8, we started and I was asking in section 5 about the committee members. The minister assured me that the limitless committees and limitless members of those committees would all fall under section 8. With that in mind, would the allowances and remuneration fixed by the Lieutenant-Governor-in-Council be the same? Or does the minister believe that there'd be some sort of tiered payment schedule, depending on which committee they would be on?
Hon. A. Petter: These either/or questions are always difficult to answer. I'll answer the first half. I don't envisage it necessarily being a uniform rate for committee members and board members.
J. Tyabji: The minister said he doesn't envisage the committee members and board members being the same. There are five mandated committees and an unlimited number of committees that the board may or may not set up. The question actually was: would those be separate rates of pay? Or does the minister believe they'd be the same?
Hon. A. Petter: My reference earlier was that I don't necessarily expect that the remuneration for board members and committee members would be the same. I expect that the remuneration for committee members, regardless of what committees they're on, would likely be the same. The goal here is going to be to establish fair rates of remuneration that do not deplete the resources of the agency but do enable people to participate who otherwise would not be able to do so, because of the need they have for some remuneration.
[D. Lovick in the chair.]
J. Tyabji: What are the limits being set on the expenses? Who sets them? And how accountable will they be to this House?
Hon. A. Petter: The rates will be set by the Lieutenant-Governor-in-Council. They will be consistent with general government policy on such expenses. And they will no doubt be reviewable as part of the accountability that can occur through, for example, the legislative committee that will scrutinize the business plan of the agency.
J. Tyabji: For the purposes of debate, would the business plan -- which obviously we can't get to right now -- include the levels of remuneration and the expenses? Or is that just the financial investment strategy? If the remuneration and expenses are not contained in the document that will come before the House for debate, what will be the time frame through which we will find out how many people are employed and how much they're being paid?
Hon. A. Petter: That information will be made public when orders-in-council appointing members are passed; the remuneration and expenses information will be made available at that time. I don't necessarily anticipate the business plan itself will set out those rates of remuneration. But obviously the amounts for purposes in the business plan presuppose a certain degree of remuneration for board members. I'm sure the committee will be able to scrutinize that as part of its scrutiny of the agency's activities, and scrutinize whomever it decides to look into as part of its scrutiny of the business plan.
J. Tyabji: When these committees are being set up -- and there could be any number of committees and of people on them -- to what extent will there be some control by the minister, or will the minister be advising the board? If anyone studied physics, for example, they'd know that inertia is an overriding principle. The concern I have is that the committees would be forming committees which would be forming committees, because it's the tendency of almost all governments in this country that when there's an issue you form a committee around it. Since there are no limits on anything here -- including the expenses, the number of members or the number of committees -- what's the control mechanism by which we save ourselves from an endless mushrooming of committee numbers and members and expenses?
Hon. A. Petter: Well, there are provisions in section 4 whereby Forest Renewal B.C. is required to comply with directives provided by Lieutenant-Governor-in-Council. There are provisions in section 5 dealing with the approval of the minister concerning the appointment of committees, and there is the power of the Lieutenant-Governor-in-Council to establish rates of remuneration and expenses, so there are plenty of control mechanisms. Of course, the government itself will be held accountable for the decisions it makes through this Legislature.
[4:30]
J. Tyabji: Is the minister saying that if the orders-in-council show a large number of committees with a large number of members and a large number of expenses, this minister or the cabinet, through the Lieutenant-Governor-in-Council, will then actually make a directive to the board to limit the number of committees, members or expenses? In what way is there some accountability on the part of the cabinet to this new Crown corporation?
[ Page 10751 ]
Hon. A. Petter: I anticipate that there will be members of government sitting on the board as one of the partners. In addition, the government has the power to issue directives if necessary. I do not believe that will be necessary; I believe that the agency will reflect the concerns of the government to maintain a slim, trim and effective administrative structure that will impress the member with its effectiveness, efficiency and ability to deliver these programs in a way that maximizes the benefits for communities and minimizes the bureaucracies that might otherwise occur.
J. Tyabji: I find it amazing that the minister could say that with a straight face, because his government has one of worst records for growing bureaucracy that this province has seen. There is a proliferation of jobs, and now we have a new Crown corporation. We had two new Crown corporations last year and two just this spring, and each one of them requires employees, committees, boards and officers. I think that this Crown corporation itself shows that the minister's reassurances are not that reassuring.
The minister said that if the committee expenses, the number of committee members and the number of committees appear to be getting out of hand, there would be a directive through the Lieutenant-Governor-in-Council to the board to limit that. Then the minister said that there should be some members of the government on the board, and therefore there shouldn't be a problem. I don't think you would get a lot of agreement from the opposition members in this House that the government will be a good watchdog on the size of government. We haven't seen that.
Now the question that I have for the minister is: in the event....
Interjection.
J. Tyabji: I'm sorry that there's a member of the cabinet here having a very difficult time with this debate. Perhaps he'd like to get in. Ironically, the Minister of.... What is he the minister of? What has he got? You made up a portfolio for him. Government Services?
Interjections.
The Chair: Could we get back to section 8, please.
J. Tyabji: Government Services is a good example of where we've got a problem.
Interjection.
J. Tyabji: I think the minister should get it on the record.
This minister was implying at one point that the Lieutenant-Governor-in-Council would make a directive in the event of some kind of outcry about the number of committees, the number of members and the expenses. Is that true? Would this minister give the House the assurance that in the event of question period raising this issue, for example, the minister would then follow through and make some directive so that the Crown corporation doesn't continue to proliferate, based on the mandate that has been given to this Crown corporation?
Hon. A. Petter: Last shot; arms not flailing.
There are plenty of mechanisms in this legislation for the government to exercise control. I'm comforted by the fact that the member has faith that the government will do so, and I'm comforted because, in fact, that is the case. But there must be prior approval from the government before committees are appointed. There must be prior approval of the business plan. There are other mechanisms of accountability, including the capacity to issue directives, which I don't think are going to be necessary in this case. There is much more in the way of accountability in this legislation on all these points than I think you would find in most other jurisdictions, hon. member.
Section 8 approved.
On section 9.
W. Hurd: I have, I promise, a brief question on section 9. With respect to section 9(1) -- "On the recommendation of the board, the Lieutenant Governor in Council may appoint a person as the chief executive officer of Forest Renewal BC" -- can the minister tell us whether the standard approach for appointing the heads of Crown corporations is that the board recommends the appointment? I would just ask that one question first.
Hon. A. Petter: I don't know.
W. Hurd: It occurs to me that if the board at B.C. Hydro, for example, had made a recommendation about the appointment of the head of that corporation, and it had been someone different than the choice of the Lieutenant-Governor-in-Council, that information might have been of public interest.
My next question is: since the board will be making the recommendation to the minister and cabinet, will the minister commit that that recommendation will be public knowledge before any such appointment is made by the minister? Given the fact that the board will have such wide-ranging latitude to make recommendations with respect to forest renewal in B.C., I'm sure that if the board had come up with a choice of who should head the corporation, the public of the province would be very interested in who that choice might be.
Hon. A. Petter: This provision is here to strengthen the sense of partnership with the board and the agency. Clearly, I would not give a commitment that names recommended would be made public prior to appointment, because it could compromise someone in private industry who might, for very good reasons, not want it to be known that they are asking to be considered for such a position. It could jeopardize their career opportunities. The intention is to provide a substantive role for the board in the choice of a chief executive officer. Clearly, that is there because the government wishes to ensure this is a partnership and that the recommendation will be taken most seriously.
W. Hurd: I assume from section 9(1) that in making its recommendation, the board would be choosing someone who currently sits on the board. Is the minister now advising that...?
Interjection.
W. Hurd: When I read section 9(1), I assumed that the board would be appointing, or at least recommending, the name of a chief executive officer from somebody currently sitting on the board. What the minister is now advising the committee is that the minister may choose or at least approve someone from outside the board to be the chief executive
[ Page 10752 ]
officer of Forest Renewal B.C. What exactly will the board be recommending?
Hon. A. Petter: I can't imagine restricting the choice of chief executive officer just to those who sit on the board. We would limit the possibilities of bringing in someone who might not be currently sitting on the board, and that would limit the potential unreasonably.
The purpose of the section is to ensure that the board has a substantive role to play in the selection of a chief executive officer, and that the chief executive officer certainly will not be restricted.... The board will not be restricted in making its recommendation to members of the board, nor would it be good public policy for us to make such a limitation on the board.
W. Hurd: Then the board will just be making a recommendation with respect to a list of candidates who might.... I am still seeking some notion from the minister of what the board will be recommending with respect to the chief executive officer. Will they just be approving the appointment once it's made? Will they be having unofficial discussions with the minister and cabinet about who might be chosen? I'm just seeking some clarification from the minister of the role of the board in the appointment of a chief executive officer.
Hon. A. Petter: As I say, the intention of the section is to ensure the board has a substantive role in the selection of a chief executive officer. I guess it will be for the board to determine how to make that recommendation. I would anticipate that the board may well look at the potential candidates and make a recommendation on an individual. If the board feels that there is more than one qualified candidate, I suppose they could recommend more than one to the Lieutenant-Governor-in-Council. The Lieutenant-Governor-in-Council would then decide to act or not act on that recommendation. The board's recommendation is that of the board, and it's for the board to decide how to communicate it.
W. Hurd: We on this side of the House always hope that some day in the province the heads of such important Crown corporations will be chosen by an open hiring and an open competition process. Can the minister tell us whether it is ever envisaged that the board in this case would be in a position to interview potential candidates or to inquire as to the availability of certain individuals with the qualifications to be the chief executive officer of the board? Or would the recruitment of an individual or person with that kind of qualification be the purview of the cabinet or the minister? I mean, would the board be involved in an open search? What role would they play, assuming that the list is narrowed down to a list of potential candidates? Would they be involved in hiring? Would they be involved in interviewing? Would they be involved in discussions about compensation or pension arrangements -- that kind of information?
Hon. A. Petter: It will be up to the board to decide how to formulate its recommendation. It may well choose to use an executive search service. It may well choose to engage in a more public process. It will be up to the board to decide how best to find the individual or individuals best qualified to fill this role, which the board would then recommend to the Lieutenant-Governor-in-Council.
L. Fox: Having had the privilege at one point of sitting on a Crown corporation for four years, I had the privilege of going through the process of selecting the chief executive officer for that particular corporation. I don't have any fears with respect to that selection process, because I've seen it work. I've seen how the board has controlled that process and has actually taken ownership of that process, and the government of the day respected the decision of the board. I can only hope that that is going to be the circumstance that will fall here.
I have three questions. Very simply, does the minister have a vision as to what the pay scale would be for this chief executive officer? What kind of parameters are there? How many employees does he envision this Crown corporation would need, at least at the start-up stage?
Hon. A. Petter: If you look at section 9(4), which is the reference to the Public Service Act applying here, the pay scale of the chief executive officer would approximate the deputy minister range of pay. In terms of the number of employees, clearly the number will be kept as small as possible. I don't want to prejudge it, but I would have thought in the neighbourhood of 20 or so employees.
L. Fox: One question would flow from that. If we have 20 or so employees, does the minister envision all of those employees being in Victoria, or are they going to be spread around the province? Just where are they going to be housed?
Hon. A. Petter: The decision about the location of the agency itself and of employees is not predetermined. It's one of the issues that we need to engage in further consultation on. It may well be that the board might like to maintain some kind of regional presence. Whether that's done through its own employees or is done through government agents' offices or others is an open question. Clearly we're going to want to make sure that this agency does not proliferate, that it does not become a large bureaucracy, that it is small, effective and efficient. On the other hand, I take the member's point: there must be opportunities for people in the regions to have input. That may be assisted through arrangements with other agencies, the location of the agency itself and other arrangements that can be made.
L. Fox: Perhaps the minister senses what I was leading up to. Given that 34 percent of the harvest is in the northern interior of the province and given the statements and concerns about regional equity, he could allay many fears and also be very proactive in reaching out to the regions by locating this in the Prince George region. Technology is such today that it could operate every bit as efficiently in Prince George as in Victoria. I hope the minister will see that as a golden opportunity and be willing to consider it.
[4:45]
I have another issue in mind with respect to employees. One other way we could deal with regional equity is to have the 20 individuals who will be employed come from all regions of the province, so that there's some understanding among them as to the different interests and characteristics of specific regions. They should not all be hired from the vicinity where that office is located.
Hon. A. Petter: Following the member's earlier line of argument, I was afraid he was going to ask me to commit to locating 34 percent of the agency in Prince George. I'm glad the member didn't pursue that. I'm certainly open to his representations. I want to assure the member that the fact
[ Page 10753 ]
that the Victoria Cougars have been stolen by Prince George will not influence my determination in any way; neither will the fact that Prince George has the highest rate of government investment -- as the mayor told me when I was up there.
I take the member's point: in terms of where the agency is located, how it functions and its employees, it must be an agency that can draw upon and represent the interests of the various regions. If the member has more specific suggestions -- the general one about the location of the agency, I will take under advisement -- I'd be happy to receive them. I'm sure some of my colleagues in caucus may share his views or have other suggestions. I also think that his suggestion about the employees having a sensitivity and being drawn from various parts of the province is certainly well worth serious consideration by the government and the board.
L. Fox: I want to make it clear that I don't have any interest in a vacant building in Prince George or anything along those lines. But I'm sure the member for Prince George-Mount Robson and the member for Prince George North would join me in requesting that Prince George be considered as a location for the headquarters of this particular initiative. I think that would be in the best interests of the government, and it would be seen by northern British Columbia -- where 34 percent of our forest industry production comes from -- to be an act of good faith in terms of regional equity.
J. Tyabji: I'd be happy to defer to the member for Prince George-Mount Robson if she chooses to stand up.
I'd like to concur with the member for Prince George-Omineca and the member for Cariboo North, in that it does make sense to have this Crown corporation in the interior. Prince George would probably be the logical place.
Having said that, I need some help from the minister on this section -- and he has been ever so helpful so far -- with regard to the office's employees. What I see happening here is that we have this Crown corporation, which by definition is less accountable; we have the cabinet appointing a board; we have the board appointing committees; we have the cabinet making recommendations to the board to appoint a CEO; and then the board may appoint the officers and employees. So in what way is there any public input or proper representation that will not reflect the partisan agenda of the government? How can the minister possibly reassure me? There are appointments from the top down. Basically, it's a wing of cabinet that is less accountable than cabinet -- although if you're going to spend money on it, you might as well put it in the interior. Having said that, why would the minister have the board appointing the employees of the Crown corporation, even though the cabinet has appointed the board and the board has appointed the committees?
Hon. A. Petter: First of all, the Lieutenant-Governor-in-Council makes the appointment of the CEO on the recommendation of the board, not the other way around. In terms of officers and employees, it would be peculiar indeed if the board, which has charge of this agency, did not have the power to make those appointments.
J. Tyabji: I finally discovered this cabinet's problem: they can't understand the difference between hiring and appointing. If you're going to hire, you have an open process for all kinds of people to submit their resumes. As the member for Prince George-Omineca was saying, they could be from all over the province. But an appointment by the board means that they don't even have to consider the resumes of other people. We're not talking now about the cabinet needing to have the final say on who's the CEO or needing to appoint the board; we're talking about employees. Surely the government would have said: "The board will hire these people." Why would the government choose the word "appoint" unless the government is so worried that if the board hires them, they won't be consistent with the agenda that the government has set out for the board as they've appointed them?
Hon. A. Petter: I don't want to disappoint the member, but if she looks at section 9(4), she will find: "The Public Service Act and the Public Service Labour Relations Act apply to Forest Renewal BC and to its officers and employees...." I think that provides the measure of protection she is seeking, in the sense that it ensures a fair hiring process.
W. Hurd: I have a brief question with respect to section 9(3): "The board may appoint officers and employees...." I would be interested in the minister's comments about what kind of bureaucracy he feels would be needed to manage a Crown corporation with a five-year mandate which will be spending about $400 million of taxpayers' money. He has described to the committee today this lean, green, mean machine that will be the ultimate expression of efficiency. I wonder if he has given any thought to the kind of bureaucratic organization that will be required. At one point today he talked about 20 employees. He has suggested to the committee that as part of its mandate the board will reduce the cost of administration in order to maximize investments in the land base. Does the minister have in mind a ballpark figure of what he feels will ultimately be the size of the organization required to manage, administer and deal with the programs under Forest Renewal B.C.?
Hon. A. Petter: As I've tried to make clear on numerous occasions, this is not an agency that is going to actually deliver programs; it's going to be an agency that will coordinate and design an investment strategy. That means that it can be lean and effective. I indicated earlier that 20 or so employees is what I would expect initially, perhaps 25 for long-term, ongoing operation. I don't see this agency requiring hundreds of employees.
W. Hurd: I suppose this gets us somewhat off the track, though I hope it doesn't. Earlier in the debate the minister indicated that the committees will be bringing forth a series of recommendations with respect to everything from regional equality to appropriate silviculture and community development projects. My concern is: how is an organization with 25 employees going to be able to manage that kind of flow of information? It will require complex budgeting, I would assume, since we're dealing with $400 million, and will require looking with a trained eye at the plans that come forward. How is this flow of information from the committees with respect to such a huge expenditure of public funds going to be dealt with by 25 employees? How does he envisage that small number of employees being able to deal with the budget information? This is reminiscent of the debate we've had over regional health councils, which were responsible for spending $300 million, and the concern that the bureaucracy may, of necessity, plane upward.
Given this mass of information that will be flowing into the Crown corporation board from the committees, how does he envisage the 25 employees parcelling or contracting
[ Page 10754 ]
this out? If that's what they'll be doing, how does he envisage that taking place?
Hon. A. Petter: I envisage that this agency, both through its committees and at the board and employee levels, will be drawing on the expertise that's available from other agencies, particularly government agencies. The member earlier talked about the Ministry of Forests and its considerable expertise in areas such as silviculture. Clearly we have no intention of seeing that expertise duplicated. So the agency will be drawing upon that expertise and that of other ministries and agencies, plus the input that the committees themselves will provide, as it goes about developing its program.
W. Hurd: I know that committees, industrious organizations that they are, are almost certain to generate an exceedingly ambitious project list. I would assume that the project list will require some research and field verification. I hear the minister saying that the 25 employees of Forest Renewal B.C. will receive a recommendation from a committee and then get on the phone and fax machine to enlist the expertise in other ministries to assist them.
The question is logical: does he feel, given the constraints in other ministries, that they will be in a position to respond to those requests by Forest Renewal B.C. for information on everything from employment levels to silvicultural projects? Clearly there would have to be a considerable flow of information back and forth, because the committees themselves will be receiving ideas, one would assume, but not the technical data that would be needed to make an informed decision.
I recognize that the minister is utterly convinced that 25 employees will be able somehow to do all this work, and I accept that that would be an ideal solution. But again I say that it seems to us overly ambitious to believe that a Crown corporation mandated to spend $400 million per year, or $2 billion over five years, would be able to remain a streamlined operation like that -- given the information from the committees, from the various ministries and from the community. I just hope that the minister feels confident he can realize and honour that commitment on behalf of this new Crown corporation.
Hon. A. Petter: Earlier in the debate, this member was questioning why we weren't using existing ministries, the Ministry of Forests in particular, implying that all of this could have been done through existing structures. Now the member finds it difficult to accept that this agency, in partnership with existing structures, can achieve this. I find the position quite perplexing.
[5:00]
Yes, there will have to be a good flow of information. Contrary to what the member's preconception and misconception appear to be, the committees are not going to be operating independently of the board of the agency. They are part of the process through which the agency and its employees will develop the investment strategies. They will in turn draw upon the resources of the Ministry of Forests. So I am not concerned. I think the member's concern runs completely contrary to his own assertions, in the last component of this debate, that the resources already exist in government. Yes, there are many resources in government. This agency will draw upon them, coordinate them and ensure that this program is carried out in the most effective and efficient way.
W. Hurd: It's my understanding that there is a desire on the part of the House Leaders to proceed with debate on Bill 10. I therefore move the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; D. Lovick in the chair.
The committee, having reported progress, was granted leave to sit again.
Hon. A. Petter: I call committee stage on Bill 10.
SCHOOL AMENDMENT ACT, 1994
The House in committee on Bill 10; A. Hagen in the chair.
On section 1.
L. Stephens: Section 1 repeals paragraph (d) under "capital expenses" and states: "...expenses incurred in acquiring buses and their accessories." Could the minister please explain the reason for this change and define "buses"?
Hon. A. Charbonneau: There has been some uncertainty in the past as to the definition of "vehicle." Normally only school buses are capitalized, not other vehicles such as trucks or tractors. This clarifies that capital expenses with respect to vehicles means school buses only.
L. Stephens: Does this relate to vans or any other vehicle that is used to transport children?
Hon. A. Charbonneau: Vehicles in the broadest sense would be meant, of course. With respect to this act, it means that if a van, tractor, truck or car were to be replaced, it would be under operating expenses and not as a capitalized item. School bus purchases, being larger -- in the order of $100,000 -- are capitalized, and that is why we have taken the step of specifically defining vehicles to mean school buses.
Section 1 approved.
On section 2.
Hon. A. Charbonneau: I have an amendment that will delete the proposed section 87.1(3) and substitute the following section 87.1(3): "A reading of a bylaw may, if a written or printed copy of a bylaw is in the possession of each trustee and is available to each member of the public in attendance at the meeting at which the bylaw is to be read, consist of a description of the bylaw by (a) its title, and (b) a summary of its contents."
The amendment is intended to allow the board to consider for reading a long, complex money bylaw, for example, without having to actually read the bylaw as it was originally proposed. This allows the bylaw to be printed and distributed to all of the board members in printed form, in the same way as we allow a large and complex bill to proceed on the basis of the written material, and does not specifically call for the reading of the bylaw.
The Chair: Have you a copy of the amendment available for the table, please?
[ Page 10755 ]
Hon. A. Charbonneau: It was my understanding that my staff have copies of the amendment and two of the amended pages for distribution. I believe they are on the way down from my office, and I expect them momentarily.
The Chair: Perhaps then, minister and members, we could stand down that section until copies of the amendment are in the hands of members and proceed, with everyone's agreement, to section 3. We will come back to section 2 once we're able to deal with hard copy. Section 2 is now stood down, and we are moving to section 3.
On section 3.
L. Stephens: I would like clarification from the minister on section 126(1), (2) and (3). Could the minister explain (1)(a) and (b) particularly?
Hon. A. Charbonneau: The primary change in this section is in section 126(2), where it now states: "On or before March 30 of each year, the minister shall prepare, approve and provide to each board the estimate of the board's debt service expenses for the next fiscal year." The way it is established now, Treasury Board staff assist in determining the plan. That plan goes to the board. They include it in the bylaw, and it comes back for approval. We are simply eliminating the redundant step of bylaw approval with respect to the capital plan. Rather, the ministry will prepare it, approve it and pass it to the board. Their subsequent passing of the bylaw obviates the need for it to come back to the ministry for subsequent approval.
L. Stephens: Section 126(1)(b) states: "...any other information that the minister requests respecting revenue or other financial matters." Could the minister give some indication of what that may constitute?
Hon. A. Charbonneau: It is my understanding that it is standard terminology. It authorizes the minister to request any other information that might pertain to the capital plan of the district.
L. Stephens: Could the minister please explain the ramifications of subsection (3)?
Hon. A. Charbonneau: Are you referring to section 126(3)(a) and (b)?
L. Stephens: Yes.
Hon. A. Charbonneau: The reason for the change is set out in section 4 of this bill. We are now going to allow boards to pass a second budget which will include more up-to-date information for the purposes of looking at the subsequent school year's budget. Section 126(3) allows for both a final and a preliminary budget for the fiscal year, to be adopted under section 129(1)(a). There must now be the two references, as we are introducing the concept of a final budget and preliminary budget.
Section 3 approved.
The Chair: I note that the minister has drawn a connection between sections 3 and 4. I am going to suggest that we go ahead with section 4 and then come back to section 2, because members now have a copy of the amendment that the minister proposed. That will give people a moment or so to review that amendment.
On section 4.
L. Stephens: Section 4(c)(3)(b) states: "if the bylaw is one adopted under subsection (1)(b) and includes the information referred to in subsection (2)...." Is this making reference to a referendum? Would the minister please clarify that?
Hon. A. Charbonneau: This is making reference to a referendum. If they were to have one, then it must be referred to in the bylaw.
L. Stephens: Could the minister please explain that whole section 4(3)?
Hon. A. Charbonneau: Again, the need for these changes is brought about by the fact that we are introducing a preliminary and then a final budget. In the present act it simply states that the budget bylaw must be submitted to the minister and to the municipality if a referendum has occurred. Now it states that whether it's the preliminary budget or the final budget, the same procedure must apply.
Section 4 approved.
The Chair: Members, we will return now to the amendment to section 2.
On the amendment to section 2.
L. Stephens: Would the minister give a little fuller description of why this amendment was brought forward and what the reason is for it?
[5:15]
Hon. A. Charbonneau: In Bill 10 the original section called for the bylaw to be read. Upon reflection we realized, if it was a large and long, complex money bylaw, that to take the time to read the document would be pointless. So we have simply amended that section to allow a printed version of the bylaw to be in front of each trustee and in front of any interested members of the public before the vote is taken. It simply does not require it to be read aloud.
Amendment approved.
Section 2 as amended approved.
On section 5.
L. Stephens: Would the minister clarify this section?
Hon. A. Charbonneau: At the present time, if boards borrow money to meet their operating requirements, any interest attached to that borrowing is paid by the province. On the other hand, if boards have received operating funds from the province and have put those funds in the bank so that interest accrues, the district keeps the interest. I am simply putting it on the same basis: if they borrow money, the district must pay the interest; if they bank money, the district can keep the interest.
M. de Jong: The minister will know that in past years districts have in certain circumstances received authorization to run deficits, notwithstanding the fact that that is
[ Page 10756 ]
not necessarily permitted by the existing legislation. Does the section that we are now discussing have any implications for what has happened in the past, when districts have been required to make payments to service the debt they have incurred from their next year's operating budget?
Hon. A. Charbonneau: No, this section will not impact on that. This is a cash flow issue, as opposed to a deficit issue.
Sections 5 and 6 approved.
On section 7.
L. Stephens: Could the minister clarify "an approval of a capital plan" in section 7(b)(2), please?
Hon. A. Charbonneau: The section makes clear that the approval of the capital plan does not in itself constitute approval of borrowings for the specific capital projects that will follow on. The specific capital projects still need their individual approvals, and that just makes that explicit.
Section 7 approved.
On section 8.
L. Stephens: Section 8(b)(a)(ii) reads: "...with the approval of the British Columbia School Districts Capital Financing Authority, the partial repayment of the debentures at their maturity." Could the minister clarify this particular section? In the instruction side, it says it would be fully paid out at maturity. Could the minister explain this, please?
Hon. A. Charbonneau: This increases the flexibility of financing and would allow for two or more short-term debentures to be taken and paid out in order to take advantage of favourable interest rates, for example.
Section 8 approved.
On section 9.
L. Stephens: Section 9(1)(a) is a new addition. Could the minister clarify this?
Hon. A. Charbonneau: This is clarification intended to increase accountability, generally speaking, by ensuring that any accounting records are kept in accordance with generally accepted accounting principles.
Section 9 approved.
On section 10.
L. Stephens: This section permits the minister to make orders relative to the appointment of auditors. Would the minister explain the rationale for this and the reason that this has been included?
Hon. A. Charbonneau: At the present time, the process under which an auditor is appointed is not specified. It was criticized -- or a suggestion, at least, was made by the auditor general that there be a process that all school boards must follow in appointing an auditor. Section 10 establishes that process.
L. Stephens: Will there be instructions going out to the school boards as to what that new process will be, or has it already gone?
Hon. A. Charbonneau: Following the passage of Bill 10, the specific instructions would go out as a ministerial order.
L. Stephens: Could the minister share with the committee what those instructions will be? What will the process be for auditors?
Hon. A. Charbonneau: As soon the ministerial order is created and signed, it becomes a public document, so certainly it would be made available.
M. de Jong: The minister may know that in the past there have been ministerial appointments of auditors to examine local school boards' accounting practices and accounting reports. There is a suspicion that the provisions being introduced now will facilitate that and that there is a plan for ministerial appointments of auditors to take place on a more regular basis. I should say, in fairness to the minister, that in some of those instances boards themselves have requested the appointment of a ministerial auditor or a restricted audit involving several school boards.
As I say, the section could be interpreted as facilitating ministerial appointments of auditors on a more regular basis. Is that the intention, and does the minister expect that to take place? Can he give some assurance, beyond what he's already said, as to the intention of that section?
Hon. A. Charbonneau: That is not the intent. The auditor general lauded the general quality of the auditors and their reports, but he recommended that there be a process to ensure on an ongoing basis that that would be the case.
M. de Jong: Again in fairness to the minister, school boards have approached this from the perspective of: "We'd like you to check what our neighbour is doing." When confronted with such a request -- as the ministry certainly has been in the past -- could the minister contemplate making use of the section now being discussed to order such an audit or review at the behest of a particular school board?
Hon. A. Charbonneau: That is not the intent of the legislation.
M. de Jong: I have one other matter that I think is within the realm of the section. The minister pointed out that although the act as it presently stands requires the appointment of an auditor, it doesn't stipulate the manner in which that will take place. I'm wondering whether the minister has contemplated, or whether he could see being incorporated within such a section, that the appointment of the auditor at the board level would require some manner of tendering. I think the minister will acknowledge that it's a costly endeavour at the local board level. Could he contemplate instructions from the ministry to that effect?
Hon. A. Charbonneau: The intention is to accomplish what I'm sure the auditor general intended: to ensure that the independence of the auditor be clear and that the process of selecting an auditor, should it be required, be a public process. In some districts, it may involve a tendering process. But whatever the process for selecting or replacing an auditor, it should be a public process -- that was the concern
[ Page 10757 ]
of the auditor general -- with, as an end point, the desire that the independence of that auditor be maintained.
M. de Jong: Speaking to both those issues, independence and accountability, which the minister referred to earlier, does he contemplate regulations in the future, pursuant to this section, that would require a tendering process be employed?
Hon. A. Charbonneau: I am not contemplating that. It is possible that due to future requests from boards, something might develop. But at this point in time, it is certainly not being contemplated.
[5:30]
F. Gingell: When I first went on the school board in the early 1960s, the auditors had been there for many years. The school board at that point made a determination that it was time to change.
Interjection.
F. Gingell: Many years ago. And we did change.
The arrangement that was made required the board, reasonably, to give the auditors some certainty of being auditors for more than one year. When auditors come in, in the first year there's a history of the board and a whole series of schedules that they have to prepare anew, because one recognizes that the auditor's working papers are the property of the auditor and not of the school board. So they will normally recognize, in making a tender offer, that they will lose money on the audit in the first year, probably lose a bit in the second year -- that's losing money against the measurement of their charge-out rates -- and probably break even in the third year. Or maybe in the third, fourth and fifth years they will start to recover some of the investment they made in the first year.
It really is not appropriate to think about changing auditors every year. You need to balance the need for some continuity with the fact that in public bodies it is appropriate and good for the auditors to be changed every so often, because their relationships tend to be with staff rather than with the board. Can we have the assurance that the minister's office, in making any directions they might make under this section, will recognize those issues?
Hon. A. Charbonneau: There is no intention through this section to step in and appoint auditors or cause auditors to be appointed. It is strictly that if a school board, in the normal course of doing business, comes to the point of wishing to choose a new auditor, for whatever reason, then there must be a public process before appointing that new auditor. That's all. It will not change or put any demand on any district to change an auditor either now or on a certain frequency basis or anything like that. It will be strictly business as usual, except that when the new auditor is to be appointed, for any reason, a public process should be involved in the selection of the new auditor.
Section 10 approved.
Title approved.
Hon. A. Charbonneau: I move that the committee rise and report the bill complete with amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 10, School 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. R. Blencoe: Seeing that we've come to the end of the day, I wish everybody a pleasant evening and do now move the House adjourn.
Motion approved.
The House adjourned at 5:34 p.m.
The House in Committee of Supply A; G. Brewin in the chair.
The committee met at 2:47 p.m.
ESTIMATES: MINISTRY OF TRANSPORTATION AND HIGHWAYS
(continued)
On vote 55: minister's office, $420,000 (continued).
J. Dalton: As the ICBC critic, I will be starting off this afternoon's proceedings. I'd like to welcome some of the ICBC officials. I see that Mr. McCourt is here, and we're looking forward to what I guess we can say is his indirect participation. I'll just wait until these gentlemen settle in.
I'm sure other members will be jumping in during the afternoon, but I intend to cover several topics that I consider should be canvassed. This afternoon's session obviously doesn't allow all the items that ICBC and other issues invite, but estimates is of course only one of many processes we could adopt. Let me preface my remarks by saying that I compliment ICBC for the cooperation my office has received over the last few months since I was appointed critic. I have had a particularly good working relationship with Murray Rogan, the government services official. I do appreciate that cooperation and hope that the officials here could pass on those remarks to those who are directly or indirectly affected.
I would like to start with an item dealing with body shop repairs. I should preface my remarks by saying there is a lawsuit before the courts, and we obviously won't get into the detail of that. I'm sure the minister and the ICBC officials are familiar with the particular lawsuit I refer to. It involves Number 1 Collision and allegations of restraint of trade and other things that we don't particularly have to discuss here; maybe there will be other forums for that.
I would also like to make reference to a letter the minister very kindly wrote to me on April 22, 1994, in response to my letter of March 25, in which I did raise this general but also
[ Page 10758 ]
specific concern. The minister quite correctly concludes her April 22 letter to me by saying, as I've already commented, given that this matter is in litigation and "it would be inappropriate for me to intervene in any way." I agree with that.
However, let me just deal with several issues that I feel come out of the case -- or the controversy, to put it that way -- that's arisen. The minister comments in her letter that the criteria dealing with body shop and other settlements must be "firm and fair," and she goes on to address the issue of expense. We all know how expensive the automobile is both to maintain and repair. I have no quarrel with ICBC's approach -- or philosophy as she describes it -- to be firm and fair.
As we go through this line of questioning, I will take into account one issue. I'm not so sure that ICBC is being totally fair to all concerned, but they are being firm. Firmness will hopefully address an issue and solve it; perhaps there is firmness that is untoward, but I'm sure some of the comments that we'll hear will address that.
The minister comments on unreasonable costs. Obviously we have to put a cap or a realistic ceiling on allowable expenses. Let me just get right to the quick on this one. The document that has given rise to the controversy is the claim estimate repair form, the CL14, properly titled "Claim Estimate Sheet." I know people in this room will be familiar with it. There were changes announced on March 1, 1993, to the rates to be paid to body shops and on the policy of reimbursement from ICBC. The document states who is affected by the change, which includes all repairers who are authorized by ICBC to submit accounts and details some of the new conditions that will apply.
I would like to raise an issue where, at least from my perspective, I'm not so sure that ICBC is being totally fair, but certainly they are being firm. On the effect of non-compliance with the above conditions, it says: "If a repair facility does not comply with the conditions, it must make separate arrangements for the collection of the entire repair account." As the minister will know, this is central to the particular lawsuit and the debate that some repairs, obviously not all.... I'm not on my feet to defend auto repair shops; I'm here to extract information that will help us all understand the process. The document goes on to say: "ICBC will not pay to a repairer any amounts for repairs where there have been additional charges levied." As we all know, Number 1 Collision and other body shops are charging above and beyond the agreed rate, which is $51.51 at this time.
My question to the minister is: is it appropriate that ICBC say to these body shops, through this policy, that they will not be reimbursed through the normal authorization system? I've visited Number 1, seen the work they do there and feel they are truly professional in their approach, even though they may charge beyond what the minister and ICBC considers a fair rate. In fact, this is not dissimilar to direct billing by doctors. They are submitting the bill to the client, in this case the customer, and then the customer has to go back to ICBC for reimbursement. The bottom line is that unfortunately some of these businesses, rightly or wrongly, are literally -- no pun intended -- being driven out of business.
Hon. J. Pement: First of all, I'd like to introduce staff here with us today from ICBC. You mentioned Bill McCourt, who is chief executive officer; also with us today are Bill Heese, chief financial officer, and Ken Hardie, manager of public affairs.
With regard to repairs and the question the member has put forward, don't forget that the CL14 form clearly states the conditions of work. That should be understood when a shop takes on particular work.
British Columbia has one of the highest pay-out rates for body work: $48 is the base rate, plus the $3 allowance. We gave a 2 percent increase, which did not happen anywhere else in Canada. If the repair work defined is within industry standards, then the repair is done.
J. Dalton: I don't know whether this is a fair analogy, but I think it's one that the public can certainly relate to. I alluded to it previously.
We know that some doctors are extra-billing, but they don't suffer what I consider, at least in part, to be a penalty, because they can still bill through the Medical Services Plan. If the doctors care to bill the extra, this will be passed on to the customer, who will be advised of that.
Last year I had occasion to tell a doctor in North Vancouver that I was not taking my son to him because he was extra-billing. I had a choice and I went elsewhere. I suppose the minister might respond by saying that these customers have a choice if they want to go elsewhere. It comes back to my central theme: we don't want to be driving businesses out of the industry because we're being vindictive or because we're trying to place again what the government considers to be firm but fair ceilings on rates. If doctors are allowed to extra-bill -- they don't, in effect, get penalties -- why shouldn't body shops be entitled to extra-bill and submit the $51.51 that they're allowed and let the body-shop customer worry about the toss of the coin on the difference?
Hon. J. Pement: First of all, with regard to the doctor situation, I would suggest that the member broach that subject with the Minister of Health. I'm talking about the repair of cars.
We have many body shops in British Columbia, twice the average, which causes a high competition rate within the province. Within the industry, we want to ensure that the repairs being done are good, sound and safe. We feel that the rates and standards assure that those repairs are done well. Other body shops have been able to do these repairs within the contractual agreement.
J. Dalton: I can appreciate that line of argument. There are some body shops -- and Number 1 Collision is an example -- who specialize. The cars they tend to work on are the more expensive European and other foreign models; they're not the run-of-the-mill automobile that I drive, I can assure you. If I was in the market to repair my car, I wouldn't take it to Number 1 Collision, because I know it wouldn't be appropriate for my car to be repaired there.
I don't think it's fair that we are treating those select body shops differently than all the others. I do agree that there are lots of body shops. Of course, there are good body shops and bad body shops. We know there are -- rightly or wrongly -- allegations of repairs that are authorized by ICBC and not done properly. I don't think we should get into that here, because it tends to be more headline-grabbing than real. However, that is a perception.
The minister also advises me in her letter of April 22 that when repairs are contemplated and shops selected by the customer, the vehicle owner will be advised of any alternatives. She refers to the fact that if you to go to Number 1 Collision or some of these renegade body shops, you are going to be advised that ICBC isn't going to pick up the tab -- any of it.
[3:00]
[ Page 10759 ]
With all respect, I don't believe the minister directly answered my last question. I don't want to belabour this point. Could we have a statement as to whether the position taken by ICBC truly has merit in the marketplace? Most body shops, of course, are quite happy and they submit their bills according to the maximum allowed. There are a few who seem to have got off on a tangent, and maybe they're the authors of their own demise. I'm not here as the advocate for those body shops; I'm here to understand the ICBC policy decision-making process and why we're in this situation. I do not see anything wrong if a customer who owns an expensive European automobile goes to Number 1 Collision and says: "I would like you to fix my car because I have confidence in you. I understand that you're billing rates are higher than ICBC. I'm an ICBC-insured driver" -- because every car owner in this province must be insured by an ICBC basic policy.... Why should ICBC not pick up the tab to the ceiling? That would be fair, and they could also be firm -- to be consistent with the minister's position -- and say: "Beyond this you're on your own; you'll have to pay it out of your own pocket." Then everyone is advised of the alternatives and, I would submit, everyone is happy.
Hon. J. Pement: I would advise that we not discuss particular names of body shops. However, there are agreements regarding rates, etc., and body shops do sign agreements with ICBC. A customer has the option to choose the body shop where they want to take their work. I really feel that if you look at the rates which ICBC pay out, they are fair considering other rates in Canada. Certainly, we are firm; we do not want to see costs rise unnecessarily.
D. Symons: I have only a few questions on the same issue; I had it down in my questions as well, but it has been fairly well covered by the hon. member. I just can't understand the attitude of ICBC: if you don't go along with the figure set by ICBC and the collision repair place does not go along with it, then the individual pays the whole shot and seeks reimbursement up to the level that ICBC will pay. This generates a great deal of paperwork and makes more bureaucracy necessary to handle the extra work of first putting out an estimate, then going through the process of withdrawing from that and reimbursement. Would it not be better to, as the member suggested, extra-bill -- just for ease of paperwork? That is my first comment, and I'll ask for a response on that.
Hon. J. Pement: Again, I want to point out to the member that ICBC rates are good within the context of the rates being paid in Canada. If you want to pay more in premiums, that's the result of escalating charges. The firmness has to be there. If the member feels that it's good business to have ever-increasing costs and that we do not try to have firmness to reduce the costs.... We are fair in consideration of other rates that are being agreed to. I don't know what the member would really want out of the corporation other than the good business practices it now has.
D. Symons: The minister is skewing my comments and giving me an inappropriate answer, because we are not arguing that somehow all the rates are going up. We're simply suggesting that those who want a certain service that may be provided should have the opportunity, through extra billing, to be able to have it. You brought in a whole other issue.
While we're on this other issue of fair labour rates, let us consider other labour rates in British Columbia. Consider a rate we settled just recently that has to do with the building of the Island Highway. It seems the employees on that particular project are going to be paid considerably more than they would have been paid if a certain agreement had not recently been put in place, and this bumps up the labour rates in the province. We have some fair-labour legislation coming up very shortly in the Legislature that is going to change the labour base of this province. You don't seem to admit, however, that we're dealing with a group of people doing work on automobiles who can't share in this largesse of the government, which is paying out higher labour rates to people in other industries.
Is it required that you belong to a union? Would this be the method we'd suggest to automobile repair people -- that they join a union and they'll suddenly be in the good graces of this government and will get something fair? Your definition of "fair" depends on who's using the word when you talk about fair rates.
Hon. J. Pement: I would like to say to the member that he's trying to compare apples and oranges, and I would suggest that he stick to the topic at hand. I point out to him that the rate that has been agreed on with ICBC for shop rates is one of the best in Canada, and I think that's very good.
L. Hanson: I find the discussion quite interesting. I guess ICBC will adopt a fair-wage policy eventually, but we're not really talking about that.
I wonder if the minister could tell us the process of establishing the fair rate, which the minister keeps mentioning. What process does she use to establish that? Or does ICBC establish that?
Hon. J. Pement: As to the process that was used, it was done in conjunction with the ARA to look at the profitability of the shops. A study was done, and the Ference Weicker report came out. Rates were determined through the recommendations of that report, in conjunction with negotiations with the ARA.
L. Hanson: Could you elaborate a little on the report you mentioned?
Hon. J. Pement: Ference Weicker was the name of the report. Again, this report looked at the profitability of body shops throughout the province. This report was used as a basis for negotiations, and it was agreed upon by both the ARA and ICBC.
L. Hanson: The question that comes to mind is: who decided what a reasonable profit for body shops is?
Hon. J. Pement: A joint study was done between ICBC and the industry, and the terms of the study were agreed upon by both the industry and ICBC. Again, it looked at the overall costs and returns that body shops have with regard to their profitability.
L. Hanson: It's kind of nice to be able to bunch everybody into that nice little standard, but I suspect that profits, profitability, overheads and all those things vary widely right across the province. Yet I understand that the repayment rate is standard across the province. Is it not the same in Vernon as it is in Vancouver, for example?
[ Page 10760 ]
Hon. J. Pement: Again, one has to have a starting base from which to work, and usually one develops standards no matter what industry one is dealing with.
You're right: the repayment rate is the same across the province. Overheads may be different depending on property costs, material costs, etc. But on the whole, the feeling was that the report was fair.
L. Hanson: I have a little knowledge of the business, actually, and the concern the official opposition mentioned is quite often recognized in the number of hours allocated to a job. If it is a very exotic car, it probably has some special hours, and I think that's there.
But getting back to this labour rate, it seems to me that we recognize, generally speaking, that the difference in overhead all around the province is pretty drastic in a lot of cases. I think the minister would admit that one of the biggest problems with the process is that ICBC has a monopoly. I don't know what the amount is, but I suppose you could go to the ARA or someone like that and they could tell you very quickly what portion of automobile body work -- repainting, crash renovations and that sort of thing -- is done outside of ICBC. I suspect that it's probably a minimal amount, but significant. Mr. Hardie might even have the figures at his fingertips. I think the minister would have to admit that that puts ICBC in a very influential position as it relates to the body shops.
I think the minister also recognizes -- and this is some of the doctor issue too -- that a customer usually pays on time when dealing with the government or ICBC, but the government doesn't always pay on time. Usually customers pay without any questions, so you don't have bad debts and other things. It's probably not fair to compare the retail rate that customers who just walk in off the street pay to the rate that ICBC pays.
[3:15]
I hope that the position of influence that ICBC holds in those negotiations is a very sensitive one. The body shops don't always feel that they're dealt with fairly and reasonably, because when push comes to shove they really don't have a significant appeal process they can go to if that comes to a confrontation. It seems to me that ICBC, in its desire to be fair -- and I know that it has a desire to be fair -- should look at some sort of an appeal process if there can't be a reasonable resolution to the rates established through that negotiation.
Hon. J. Pement: One needs to approach working with a stakeholder or an industry group with some sensitivity regarding their concerns and issues. There is the process to bring these issues forward through negotiations with ICBC. I think we are always looking at the more reasonable, commonsense side with regard to trying to come forward with the best cost for the best result for the customer.
L. Hanson: That's a nice pat answer, hon. minister, but you and ICBC are in a very monopolistic, influential position.
The Chair: Excuse me, hon. member, I wonder if you would take your seat for just a moment. I just want to remind you about addressing your comments through the Chair, as opposed to the minister directly.
L. Hanson: If the public perception, hon. Chair, is that there is one side of the bargaining process that has much more strength than the other side, that is really the reason why we have appeal processes in place. All I'm suggesting to the minister is that it seems fair and reasonable that there be some appeal process allowed if there can't be a decision reached at the level of negotiation that is there now.
Hon. J. Pement: If this is a major concern within the industry, I would suggest that the industry bring this issue forward in negotiations with ICBC.
L. Hanson: The industry has brought it forward to me and to almost every MLA, if the number of letters and phone calls I got on it is any indication. The indication they give me is that their concerns are not being recognized. I hope the minister, after going through this discussion here, will recognize that there are people concerned about it and will listen to those people. I hope the senior administrative people in ICBC will listen to those concerns and find a method that gives some comfort to the weaker side of the bargaining table that their concerns will have a fair hearing by someone who is not necessarily biased.
I recognize, having had some experience with ICBC myself, where there is a desire -- and I think a responsibility -- to keep costs as reasonable as they are. But there's also a responsibility that goes with a monopoly, and that's to be fair and reasonable with all the people you deal with. There is a perception now that ICBC is not being fair to the people in that negotiation process.
Hon. J. Pement: I will definitely take the member's comments into consideration with regard to this issue.
D. Symons: Dealing with the same issue, body shops, I'm wondering if there might be a need for independent arbitration. There are a good number of cases where there seems to some dispute, and we have named a couple of shops where there seem to be frequent disputes with ICBC over the estimates given for a particular project. As a matter of fact, if that is in the works, or if the car is partly done and some further damage is discovered, there's a great deal of downtime for the shop while they wait for somebody to come out and re-evaluate it. That costs time while the car is sitting there in a bay but can't be worked on. They have to wait until the ICBC person comes out and re-evaluates whether there are extra costs involved that weren't noticed. So we need that.
Secondly, it might be even better if we could simply have independent repair estimators. Repair estimators are now employees of ICBC, and there's a vested interest on their part to see that costs are kept down. Indeed, it's the duty of ICBC to see to that for all of us who pay premiums to ICBC. But it should be the duty of the estimator to see that the car gets the proper repairs. And if one aspect is to try to keep costs down, I think there's a conflict that they shouldn't be facing when they're giving the public proper service.
Hon. J. Pement: There has been some concern raised, and I have met with members of the ARA on some of the concerns that have been raised, particularly with the supplemental work done when it's identified in the shop. Resulting from some of those discussions, we have looked at it and are reviewing the possibility of reducing the downtime. Therefore it's a case of working with the industry to identify some of the concerns. I'm hoping that we will reduce that downtime in terms of any extra work identified in the shop that is quite reasonable and within industry guidelines and standards.
With regard to independent people coming in to do work, you have to go back. We're working with the people who
[ Page 10761 ]
come in and do the inspections and write out the claims. We're working with them to ensure that the work is identified clearly, that the work being done is fair and that necessary extra work is recognized.
D. Symons: I have a concern regarding independent estimators. The word I was looking for before was "compromise." That's indeed the case when the estimator is not really at arm's length from ICBC and is trying to keep costs down when estimating the cost of repairs on a given vehicle. It would be fair to the public to have an independent evaluation of the expense of repairing that car. In that way, people who are involved in accidents won't have the perception that they're getting less than what is required to bring a car back to the state it was in before it was damaged, or at least to put a safe vehicle on the highway again.
Hon. J. Pement: Remember that the estimate is on damage and the costs come from identifying the damage. So it's not a case of keeping costs down; it's a case of looking at the damage of the vehicle, deciding what repairs need to be done and estimating the costs within that scenario.
J. Dalton: I'd like to move to something that seems to be working out well. Could we get some information on the unsafe intersection policy? I know firsthand -- I'm sure Mr. McCourt is familiar as well -- that the intersection at Westview near the infamous Upper Levels Highway lacks an overpass. A light has been installed there, which is working out very well. I can tell all members of the committee that I'm very happy to see that because my wife came to grief there when there wasn't a light. She wasn't at fault. Unfortunately, it was one of many accidents that occurred at that intersection.
I would like to know the number of intersections ICBC has identified as being unsafe. I think every intersection in the province is unsafe. How much money has been spent to date on this project?
Hon. J. Pement: Seventeen intersections were identified, and $500,000 was spent. Holdom and Broadway in Burnaby has had analysis for a year. The feeling is that there has been a decrease in accidents at that intersection.
J. Dalton: The minister has identified 17 intersections; I presume those are in the lower mainland area. Does ICBC have it in mind to expand this process beyond the lower mainland, which we all know is the worst area of the province, given the crowds and other things? There certainly have to be other intersections considered.
[3:30]
Also, is ICBC in a position yet to determine the cost savings that presumably...? I know these may be difficult things to project. But do we know whether in fact the accident rate is going down, which, of course, will help to pay for the intersection work that is taking place? Maybe I'm firing too many questions, but in the case of the Westview light that I commented on, I know it is a joint venture between ICBC and the city of North Vancouver. How do they split out the costs when these intersections fall within municipal jurisdiction?
Hon. J. Pement: The policy is throughout the whole province; it is not directed just to the lower mainland. However, there are congested areas, as the member mentioned, that are a concern.
Again, the municipality's cost-sharing would be a fifty-fifty scenario, and we need the full year to be able to identify what the real savings are in the accident rates. In the one intersection I mentioned to the member, we have a better feel for the fact that accidents have been reduced.
J. Dalton: I'll just make one more observation on this; I believe my colleague has some follow-up. All of us in the travelling public.... I can tell you, quite frankly, that I don't enjoy driving in the Vancouver area anymore. I get on a bus to go downtown at every opportunity so I can avoid these intersections. I very seldom go to the Westview Shopping Centre for a variety of reasons, that being one of them.
There is obviously a cost factor built into this. The minister mentioned half a million dollars that is extracted from insured motorists or car owners. If this program is indeed going to be expanded -- and I believe it should be, even though we're not yet in a position to project -- I'd appreciate the minister's comment as to what the cost savings might be down the line. I'm hoping -- I guess this is more of a remark than a question -- that we'll be able to see demonstrable savings as soon as possible so that the public will know that its premium dollar is going into these unsafe intersections, plus taxpayers' dollars in general.
For example, the city of North Vancouver has had to contribute 50 percent of that cost. I happen to be a taxpayer in the district of North Vancouver. Probably the district gains more benefit from that intersection in a way than the city does, but there are other cost factors built into it. However, I do applaud ICBC for its initiative. Perhaps we should be placing more of the onus on the Ministry of Transportation and Highways and on the municipalities to ensure that intersections which are clearly unsafe.... It doesn't take a rocket scientist to figure out that an intersection such as the Westview one I have alluded to is clearly dangerous.
It's just a bad mix; you're trying to get in and out of a shopping centre that's right next door to a very busy highway, which, as we all know, lacks a very important overpass -- if I can get that dig in once more. All these things are a terrible mix. Finally, somebody has woken up -- again, I apply that to ICBC -- and said that this has to be dealt with. Of course, it's affecting our premiums, so the public is certainly happy in that sense. We'll look forward to seeing the results of the studies that ICBC is conducting.
This doesn't require a response, unless the minister cares to comment. I believe my colleague will have some follow-up.
D. Symons: I have some mixed feelings. I applaud the corporation if it is able to reduce accidents at intersections and therefore save insurance premiums for people covered; that's good. But at the same time, it seems to me that it should be the responsibility of the communities or the Ministry of Transportation and Highways to see that the roads are in safe condition. To my mind, that shouldn't be the responsibility of the insurer. When you pay your premium, you're buying insurance, not a road repair program. That bothers me a little.
I notice that Vancouver did a study of its dangerous intersections, and the same ones keep turning up. The most dangerous one in the last while is Granville and 49th; in 1993 there were 57 accidents at that particular intersection. Then we find Knight and 41st, Knight and 49th, Knight and Kingsway, Clark Drive -- which is really an extension of Knight as you go further down -- at Broadway, and Clark Drive at 1st Avenue.
Knight Street is where they put in the Knight Street Bridge; that was a Highways project, and basically it put that Highways problem into Vancouver. Vancouver has a whole
[ Page 10762 ]
set of dangerous intersections going down Knight Street that were generated when extra traffic that used to go over the Fraser Street Bridge moved over to Knight. Obviously those intersections are not capable of handling the traffic in a safe and efficient manner. I feel that it shouldn't be the responsibility of the ICBC premium payers to upgrade those intersections. I do have that concern.
I'll just hit another concern. I believe ICBC is now paying to the Medical Services Plan the hospital costs of people injured in automobile accidents. We have a health care system in British Columbia that over the years has paid for that. This seems to be an off-loading of hospital and of Ministry of Transportation and Highways expenses, or municipal highways expenses, onto the ICBC premium payers for vehicle insurance. Again, that seems to me a way of removing something from its normal payment channel and finding another way of getting the money out of the taxpayer's pocket through their insurance premiums.
Hon. J. Pement: The member has identified some of the concerns that my ministry has to deal with in regard to growth since certain highway developments have been carried out in the past. We're dealing with growth situations in many of our major cities. We definitely see congestion, and we are trying to alleviate that through different projects.
Again, looking at the limited amount of dollars we have to deal with, we prioritize our projects according to traffic safety issues and the volume of traffic. It's an ongoing issue and it's difficult to deal with, but I believe we work hard to try to reduce traffic accidents through recognizing and upgrading when and where we can.
This ICBC program is not an upgrade of intersections; it's not a case of construction in the sense of actual work being done at intersections; it is lights at intersections, that type of work. The rationale for the $500,000 that has been expended is that we are looking at returns from a decrease in accidents. We will be getting a return of about $750,000 from a decrease in accidents in less than a year, so it's a win-win. I find that municipalities -- and I don't think it's off-loading in any sense of the word -- try to work with their traffic congestion. They work where highways are involved and we work on signalization. We work with municipalities on traffic flows and volumes in trying to find better routes for truck traffic, etc. In identifying problems, this policy assists in reducing traffic accidents. I think it's a plus for the province.
D. Symons: I have one more follow-up comment on that. I notice that the Ministry of Transportation and Highways has cut back municipal grants to about 50 percent of what they were just a couple of years ago. I suspect some of those ministry ones would have gone into doing these sorts of things.
I gather from the answer the minister gave that none of the $500,000 which has gone into moving curbs or putting in curb lanes or left-turn lanes has involved any pavement work whatsoever. Is that correct? Is it just for traffic lights and rearranging traffic patterns?
Hon. J. Pement: It's directed to lights, left-turn lights and that sort of thing.
R. Neufeld: If I understood you correctly, are the 17 identified intersections the responsibility of the Ministry of Transportation and Highways or of some municipality? Could you give me a breakdown?
Hon. J. Pement: It's both Highways and municipalities, about a fifty-fifty split. As to intersections, some municipalities, some Highways.
R. Neufeld: I understand that you need one full year to assess the savings, but you estimate on the $500,000 spent so far by ICBC that you're going to have a saving of $750,000? If that's the case, is the $250,000 going to be reflected in the rates of everyone in the province, or just those in Vancouver?
Hon. J. Pement: The $250,000 is significant individually, but across the province, I don't see much reflection in the rates in that instance.
D. Symons: Your answer to the previous member raises another question.
You said roughly fifty-fifty on the division of the 17 intersections identified. Who would have been responsible for putting in traffic lights and making that intersection safer, which is being done now through a funding arrangement with ICBC? Who would have been responsible, before that was put into place, for doing those intersections that are part of Highways and not part of the municipality?
Hon. J. Pement: Highways is responsible for Highways intersections, but we address it on a priority basis, which I had mentioned before with regard to other questions he has brought up. We prioritize according to volumes of traffic and safety issues. We have funds to deal with those priorities. If we can find ways of enhancing other intersections, this is where the ICBC program could apply.
D. Symons: My concern with that answer is that you're prioritizing knowing that if you happen to leave intersections out of it, you can get a fifty-fifty payment on this and save yourselves whatever sum or figure. You could decide that doing these intersection improvements will be somewhere else in your priorities and that the money will be put into pavement and then get ICBC to help share the costs of the other. I'll just leave that as a thought that concerns me, but I'm sure that this thought has not crossed the minister's mind -- it might cross the minds of the public, who are paying premiums every year.
[3:45]
I just want to go back to collision shops for a moment. This is something I should have maybe asked before we got onto this topic. I believe some shops have indicated they have a bit of a cash-flow problem. The payments from ICBC would help them, of course, because that's primarily where most of their money comes from. They have to pay for the parts, the employees and the other things that they're responsible for. I believe ICBC is working at a 28-day payment turnaround cycle. Have they maintained that? Are they improving on that? What is the situation in regard to payments to shops?
Hon. J. Pement: We try to actually do it within a three-week time frame, from the time that it comes from the shop through the system. It can take up to 28 days; however, we try very hard to ensure that we get the payment in as quickly as possible.
The Chair: The hon. member for West Vancouver-Capilano.
J. Dalton: Hon. Chair, I must compliment you. You're keeping track of all of us well; we're up and down the row here as everyone, of course, thinks of other things.
[ Page 10763 ]
I just have one more question about unsafe intersections in municipalities. I presume that ICBC identifies the ones that it would like monitored by lights or upgrading. Does the municipality, then, have the say as to whether it will or will not participate? What I'm getting at is what the minister referred to as the fifty-fifty arrangement. If the municipality decides it doesn't have the money or thinks the intersection isn't unsafe, can ICBC dictate that that intersection should be dealt with? Of course, ICBC's philosophy here is to cut down accidents, and rightly so, but a municipality may have a different approach on that topic.
Hon. J. Pement: One does not just go in and work in another jurisdiction without consultation. Actually, as minister, often when I have met with municipalities, they have identified some areas that they would like to be part of the program.
J. Dalton: That precipitates, I guess, one more question. While I can certainly agree and understand that municipalities would be more than happy to have ICBC come along and pay half the rate for probably every intersection within its jurisdiction, we can't extend it that far. At least it's a happy thought that ICBC, on a cooperative basis with both municipalities and the Minister of Transportation and Highways, is addressing something that clearly.... If you talk to the police, who are, of course, faced everyday with traffic problems, it's intersections in urban areas, in particular, that we must give every thought to. I'm horrified by the things I see, such as people running red lights and doing every other thing. Even though this is more of an editorial comment, I quite frankly don't understand the thinking of people who seem to be sane and sober when they're not behind the wheel and lose all sense of perception as soon as they get into an automobile. That's more of a comment, and it doesn't need a response.
I would like to move into some aspects of the suggestions proposed by the trial lawyers of British Columbia dealing with the escalating cost of insurance and, of course, with their relationship to ICBC. The first thing I should perhaps ask the minister is whether she has had any formal presentation from the trial lawyers.
Hon. J. Pement: Yes, I have met with the trial lawyers.
J. Dalton: That's helpful to know, because I'm sure, then, as I expected, that she'll be conversant with some of the issues they are proposing. I've had occasion to talk with some of them informally, but I haven't yet had the opportunity to sit down with their representatives collectively. I am aware of some of the things they are throwing out for discussion purposes that may or may not be helpful.
I believe this point was touched upon previously by my colleague from Richmond Centre, so we don't need to get into it, but one example they mentioned was mandatory bicycle helmet legislation. There seems to be some controversy as to whether that is or is not a good thing. I personally think it's good, because I have three children, all of whom ride bicycles, and my wife and I certainly try to impress upon them that they should put their helmets on. It only makes sense, but I don't think we need to pursue that here.
Here's an example, however, that the minister could comment on. The trial lawyers are suggesting -- and these are not things they are necessarily advocating as being authentic from the point of view of whether they will or won't work -- that ICBC consider one extra year's delay in reinstating the safe-driver discount. They believe this might generate $60 million in additional income for ICBC each year. Is that an accurate figure, and does that policy have merit?
Hon. J. Pement: We were just discussing it. We have a little difficulty with the $60 million figure. We would have to look that up to try to compare the figures.
Interestingly enough, 86 percent of the drivers in British Columbia are at the top of the scale, which I think is of interest to the member. We are looking at ways of having incentives for good drivers and penalizing poor drivers. I don't think this particular process you've brought up as a consideration is going to do it for us. We need to look at other ways.
J. Dalton: I certainly agree with the minister. There are many things we all have to look at, whether we be members of the travelling public, the insurance company from which all of us must purchase insurance or the minister responsible for all this. It doesn't really matter. I look forward, though, to seeing whether this $60 million figure suggested by the trial lawyers has any accuracy.
It is pleasing to hear that 86 percent of us are at the top and have presumably behaved ourselves for at least four years. Many people come to grief through accident or otherwise, of course, and go down to the bottom. I don't have a lot of sympathy for people who -- probably due to their negligence as much as anything, whether that be speeding or inattention -- cause accidents. I think some of them should be hammered even heavier than they are. The other day I just happened to spot -- and this is at least indirectly related to our discussion -- an item in the Times-Colonist dealing with "muscle-car owners." ICBC is exploring whether these owners should pay higher premiums. It reminds me that when ICBC's FAIR policy was originally brought in, whereby all drivers started off at the same rate, regardless of age, experience or otherwise, I had some concern with that. Is this the sort of thing that ICBC is looking at, or is this something that is just a headline-grabber? Does it have merit, and is ICBC contemplating looking at the age and experience of drivers, and maybe even lifestyle? I don't want to pick on muscle-car drivers or owners, but there are people you could clearly identify as having a certain attitude. If we can prove that that attitude causes accidents and higher premiums, I would applaud ICBC nailing those people.
Hon. J. Pement: As it said in the headline, ICBC is having a look at muscle cars. Other jurisdictions are taking a look at them as well with regard to costs. Often these are the cars that are stolen, too.
J. Dalton: That raises another topic that we won't necessarily get into today. The problem is automobile theft, which comes back directly in ICBC costs. The hon. Chair reminded me that we should also make comments about boom cars -- you know, these horrible things that are wired for sound. I can literally hear them a block away from my house, and I know darned well who's behind the wheel; I can just picture the individual. Though this is probably more of a police than an ICBC matter, does ICBC have any policy or position that it might like to advertise about people who not only enclose themselves in metal -- and perhaps have questionable driving habits at best -- but are also totally oblivious to any sound? For example, if an ambulance or fire truck was about to run over them, they wouldn't know it
[ Page 10764 ]
because they sure wouldn't hear it, and we know that people pay no attention to emergency vehicles anyway. So is that the sort of thing that this muscle-car headline might also be taking into account?
Hon. J. Pement: When it comes to boom cars, you did mention that it was a police enforcement issue, and municipal bylaws are involved. We don't insure noise, but we do insure the equipment, and if there's equipment in there that is insured, it would certainly have a cost.
J. Dalton: Perhaps an answer for ICBC to consider is to put such a high premium on the equipment that if they wish to insure, they won't even consider putting that equipment in their vehicle. I would applaud that.
Let me move into something that is perhaps a little more serious -- not that all these things aren't serious, because they all contribute to accidents, and accidents contribute to costs. ICBC's no-crash, no-cash policy is one the trial lawyers -- and I'm sure the minister is aware of this -- express some concern about. For example, here is one comment from a member of the Trial Lawyers' Association suggesting that the no-crash, no-cash ICBC program is perhaps -- I'm sure the minister has heard these arguments from various sources -- a bit unfair to the clients of lawyers. Of course, lawyers will always argue their case, which is their job on behalf of their clients. Quite frankly, I'm not always sympathetic to every argument that lawyers put forward. I think we all have to recognize that trial lawyers have a position within the ICBC framework as the rest of us do, and they do have some legitimate concerns that I think should be heard.
For example, a lawyer suggested that it's the members of the profession.... This may be a good thing not just for ICBC but also for the lawyers and their clients to consider. If there's any doubt about a claim on the no-crash, no-cash situation, perhaps they should consider going to small claims court. This less expensive litigation would at least take some of the pressure off the Supreme Court. That limits the client to $10,000 or less.
[4:00]
The other factor here is the well-noted ICBC movement against fraudulent claims in general. Perhaps the minister can tell the committee what savings ICBC has demonstrated by the crackdown on fraud, which is of course a terrible problem. I've heard some horror stories about people claiming to be involved in an automobile accident, and they weren't even in the automobile, let alone in an accident. That's the sort of thing ICBC is clearly acting against. Has cost-saving, which must be passed on to the motorist, been demonstrated? How successful is that program?
Hon. J. Pement: First of all, I don't have a breakdown of the costs of claims in the area of fraud. We can work out the exact numbers and get that information back to the member.
Regarding no-crash, no-cash, we've saved about $20 million. However, the plaintiff chooses the court process if they wish. I believe there were six jury trials that awarded a total of $150 per case.
J. Dalton: I'll follow up on that once more. Well, that's entertaining; I love to hear it when litigants go to court and end up with those kinds of judgments, because that really nails them to the wall. Then they have to pay all the court costs and all their legal bills out of their own pockets. I've got no problem with discouraging litigation. Many lawyers will tell us that the best advice to give their clients is to stay out of court, but I'm not sure that enough lawyers truly believe that. That's not a criticism of the legal profession; I think that's just a fact. Our court system is clogged enough. So that's good news, and I'm happy to hear that.
We can work together on the question of fraud later. I look forward to a continuing dialogue with all of your officials on that. Those are the things I wanted to comment on. I'll pass to my colleague.
Hon. J. Pement: I want to clarify something. I said $150 per case. It was, all told, $150 for the six trials.
D. Symons: I'm still amazed at that $150 figure, whether that's all the actual awards or that includes court costs and the whole bit, because I didn't think lawyers worked so cheaply.
I have a question to do with ICBC. Instead of these things going to litigation in the adversarial system we have now, there seems to be some promotion for using mediation. I'm wondering if you might give us a flavour of how that's working, and whether it's going to be expanded in some way so we can cut down on the costs. I think a lot of the cost to ICBC of settling claims in litigation is the fees involved in the litigation itself and not necessarily the awards given.
Hon. J. Pement: Mediation is definitely the far more preferable route to go. If we can work it out between ICBC and the client, that is a far better route. We have done training throughout the province with our staff to assist them with good mediation processes. There have been approximately 2,000 cases dealt with this way.
L. Hanson: Here is a slightly different twist on what we've been discussing to date. In a case where ICBC finds that it has no liability in an accident, and the accident deals with someone or something insured by another entity -- likely out-of-province -- what is the responsibility of ICBC to represent the insured in British Columbia, even though they may not have a liability for paying any of the claim?
Hon. J. Pement: In an out-of-province example, if the person in the accident is not covered by our insurance and is covered by, say, an Alberta insurance company, but is at fault, it is up to that insurance company to pay out. If it's a case where an individual has been in an accident, and is not at fault, but their insurance is difficult to access, we may help out, given the circumstances.
L. Hanson: I'm not sure I totally understood that answer, but I might clarify it a bit by asking if the underinsured motorist protection protects the British Columbia driver from out-of-town insurers. Even though they are insured by an insurance company that is responsible to pay for their damage, they've been found by the police to be not at fault in the accident. The person carries underinsured motorist coverage, yet they can't access or get a response from the out-of-town insurance company to acknowledge that it has a liability or to pay the claim.
Hon. J. Pement: We were trying to come up with an example for you. If there were a million-dollar accident and the other insurer insured up to $200,000, we would have the underinsured portion of $800,000.
L. Hanson: Maybe I didn't express the question as clearly as I should have. You've just told me that you would take over the underinsured protection at the level that is required to fulfil the claim. The concern I have is that an individual who is insured by ICBC and has an accident in British
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Columbia may not carry collision, because some of the older cars don't necessarily have to. But let's say they get into an accident that is totally the fault of an Alberta, Ontario or U.S. driver, and the claim is $500,000. They have a limit of $400,000, so you'll pick up $100,000 under the underinsured. But the insurance company doesn't or won't acknowledge the $400,000. Does ICBC have a responsibility to assist their insured driver in those circumstances?
Hon. J. Pement: First of all, in the scenario put forward, if we paid out money, then ICBC has the right to join the person in going after the money from that company. We can do that through a court action. If we have not paid out money, then we have no right to go after the other insurance company other than to send them a letter and encourage them to pay through.
L. Hanson: Then I guess you've answered my question. You suggest that you don't have the right. I know all sorts of things happen in the world that you don't necessarily have the right.... The question was: do you have the responsibility? I think your answer was clearly no. I know you reserve the right, as any insurance company does, to take action to recover your losses if someone else is responsible, and that's understandable. But you have no responsibility to your insured to cover or to help them other than a moral right, as you suggest, or a responsibility that you might assume.
[4:15]
I have one final question, and then I can sit down and take my place. I've often wondered -- and have never really gotten a completely straight answer -- why it is mandatory to have collision insurance on some automobiles. I can understand why it is in the circumstances of an automobile being purchased on a financing basis, where the lender may require some sort of protection for their coverage. If I understand the insurance principle -- and maybe I don't understand it that well -- it's to protect the public at large from sustaining a loss by someone who is irresponsible -- by irresponsible, I mean not obtaining coverage. If you accept that as a reason for insurance, then it seems to me that the requirement must be for liability insurance. Anyone who has control of an automobile -- quite often termed a lethal weapon -- can do damage to other people and must have coverage for that purpose. Yet if an individual owns an automobile, you'd think it would be their own decision as to whether to provide coverage for their own investment. It makes good sense quite often -- I don't argue that -- to have it. But why is it mandatory?
Hon. J. Pement: Collision is optional; it's liability that's mandatory.
L. Hanson: Do I understand from the minister that I can buy my liability insurance without collision coverage of any kind?
Hon. J. Pement: As you pointed out, with a financing situation, that's usually where the criteria come in. Otherwise, you're right.
L. Hanson: That's quite enlightening. I suppose I have an overambitious insurance agent, and it seem apropos that I should review that dealing. But thank you for that information, because it was something that totally astounded me. I happened to know that the other was the case, but in the last discussions I was told that it wasn't the case. I thought this was a good opportunity to find out.
D. Symons: I wasn't sure if there had been a response. I was also under the impression that at least for newer cars -- although neither of my cars is covered by collision because the premiums cost almost as much as the cars are worth on the market.... This gives you an idea how old my cars are; they're reaching what we call the age of majority. Anyway, it's true that I get my value out of them.
I have a couple of questions dealing with a variety of issues here. ICBC has a monopoly, as far as the public liability portion goes, in the province of British Columbia. I wonder if it might not serve the public better to have price competition. If ICBC does, as it says, offer insurance cheaper than the private sector can, then why not prove it by opening up the private sector? Also, what the private sector may be able to do, because there seem to be some problems at times expressed in the press and elsewhere with the degree of service they get from ICBC.... We could bring in the rates to auto shops and all the rest. If we opened it to the private sector, then we might be able to find out whether the claims that they are cost-effective and are giving drivers a better deal in B.C. than anywhere else in Canada are true. Prove it. This way we will know for sure, ICBC will win out and the others will drop out through competition -- or lack of it.
Hon. J. Pement: These issues have been debated for a number of years. I'd like to remind the member that optional insurance is a competitive scenario.
D. Symons: I realize that with optional insurance. There is, I suspect, a drawback with that, in that almost all the agents who sell insurance around the province are ICBC agents for Autoplan insurance. That does give an edge on the optional ones too. They're already writing out a policy for ICBC. It's just as easy for the agent to carry through and do the whole thing on it. I don't think too many of them ask: "Hey, do you want to take it from company A or B or C, besides ICBC?" In that sense, the optional one doesn't catch on that well. I don't think it's because the rates are higher in the private industry.
I am more concerned that the larger dollar figure in insurance is with the public liability portion. That has not been opened, so I suggest that we move into that area, given the free enterprise spirit of the current government.
I will move to another topic dealing with the road sense program the government had a while ago. I have some concerns about the road sense index, which to me seems a bit nonsensical. I listened to it on the radio. There were days when the road sense index -- the possibility of having an accident -- was high when it was a great day, yet on days when there was snow on the ground in Vancouver the number was fairly low. There didn't seem to be any correlation between the numbers given and conditions. I don't know if it's being carried on. I haven't heard the numbers recently, so I assume that it's been re-evaluated and taken off.
I was just going to throw in one more question, if I could. Tied in with that was a community crash reduction challenge. When I was looking over the road sense program, I was interested to see it included there, because I haven't heard anything about it. Has it taken place, and what's happened to it? It doesn't seem very visible. I think it was all part of the road sense index, which was brought in about a year ago.
Hon. J. Pement: It's interesting that when the road sense index was introduced, it really did make people think a little about their driving habits before they left the house in the
[ Page 10766 ]
morning. If we can work on driver attitudes, I think that's a positive as well. The index was not based only on weather conditions; it was also based on time of day, day of the week, and that type of thing. It's interesting to note, after talking to many police officers, that it's often on nice days that they stop speeders and see traffic accidents, because people seem to have a particular attitude when driving in good weather. So there are many reasons for accidents, which is something one tries to recognize when dealing with the drivers themselves.
The community crash program, which was set up to look at challenges between communities, was somewhat successful with the smaller communities -- from one mayor to another or one council to another -- but was not totally effective, therefore it was dropped.
D. Symons: I can definitely compliment you on the purchase of the speed reader boards. I think this is a great idea. Besides looking at their speedometers, drivers can look at those numbers up there and think: "That could have been a radar trap, and I'm going 15 kilometres over the speed limit." That's a good idea. Also, because you have community people involved in operating those boards, it takes it out of the realm of the police department, which I think is also a good idea.
It was in the news today that the government is purchasing 30 Multanova radar cameras for catching speeders. Is that being done through ICBC or through the law enforcement aspect of government?
Hon. J. Pement: The article is totally speculative at this point.
D. Symons: Just a couple other concerns. One of them deals with a lady in Surrey whose car was accidentally stolen from her by ICBC. She had been involved in an accident and was offered a write-off on it, but she hadn't signed a write-off agreement and her car was sold in the meantime. That was acknowledged as an accident, and ICBC tried to correct it by buying the car back for her.
There are some problems with cars that are quite seriously damaged and when the owner at the roadside signs a document he thinks is for towing the car, it is often a write-off form that says the car now belongs to ICBC. That document should be made clearer so the owner of the vehicle involved in an accident will know that he is signing something saying that his car is being towed to a lot, or that the car is being written off, and he is going to get the value ICBC puts on it at a later date.
Hon. J. Pement: In this particular case, the client did sign a release but changed her mind, and, during that process, a transaction had happened. It did require some backtracking, and I think the results were positive.
[4:30]
D. Symons: I don't know. The minister didn't respond, and I haven't seen these forms, but I've heard there's some confusion about the forms used because the print that indicates you are signing your car over to ICBC is fairly small compared with other print on the thing. People think it's a towing agreement rather than one signing something over to ICBC. I would like a response on that, and I'll give you another question at the same time so that we move along.
This involves an accident. It wasn't an accident occurring, in a sense; it was a gentleman who realized that there was a runaway car. The driver in it had had a heart attack or something of that sort, and the gentleman positioned his car in front of the runaway one, slowed it down and actually stopped it. In the process, his car was damaged. For a while, ICBC said there was no way: he had put himself in that situation, and they were not paying for it. It was in the paper for a day or two, and then ICBC relented. I'm wondering if we might take a more humane approach to cases where there are special circumstances like that, so a judgment doesn't come down too quickly. We might realize in hindsight that it would be better to consider what the person has done for the community, in the sense of preventing a larger accident and taking initiative in preventing a possible death or larger injury. It's just the idea that we shouldn't react too quickly on things and say no before we've had a chance to evaluate the whole situation before it becomes a press issue and gives ICBC or others a black eye.
Hon. J. Pement: First of all, with regard to the forms, there are two release forms: one for towing, as you mentioned, and one for write-off. I think it's just a case of ensuring that the clients understand by pointing that out to them. We will certainly take those thoughts into consideration.
In the case of the fellow who stopped the other vehicle, it was a matter of saying to him that there was a policy in place and that we would take a look at it. It was dealt with in a couple of hours, not a number of days. The result was positive in that case as well.
D. Symons: In that couple of hours, the press got involved, and it did get out into the press, which was a rather negative result. That's unfortunate, and that was my concern. I'm pleased that this has been resolved. We all know, because it was reported in smaller print inside, but the initial one was not a good image for the corporation to have.
Another one involved a vehicle that was vandalized in Nanaimo a while back. It turns out that the owner of the car didn't know that the oil pan had been damaged as well, and when he was called by the police to pick up his vehicle, he picked up the vehicle and drove it home. In the process, the engine was ruined. ICBC's attitude was that he should have called in a person to evaluate the car. If that's going to be the attitude when a car is either stolen or vandalized -- that you take your chances if you do anything with the car -- is ICBC going to pick up the bill if the person calls a garage mechanic or BCAA to safeguard themselves? Will you pick up the bill for them to have the car evaluated before it's moved?
Hon. J. Pement: With regard to these scenarios, it's a case of common sense and reason. The unfortunate side of the case you pointed out was that the red dashboard light was on to indicate that there were problems, and the driver chose to continue to drive. Therefore, under those circumstances, that was the problem he ended up with. It is the responsibility of the owner or the driver to assure that the vehicle is in running condition before moving it.
D. Symons: The newspaper article didn't mention the dashboard light; I guess it was selective reporting. I'm glad to hear that was the case, and it wasn't ICBC.
In relation to this, some communities are concerned that when an accident occurs either within their community or on the highway, they have expenses in responding to it, particularly if the Jaws of Life or other lifesaving devices are used. Currently in the municipalities, the police department or fire department -- whichever responds -- has to pick up those costs. A few mayors have suggested that these costs are related to the accident and therefore should be the
[ Page 10767 ]
responsibility of ICBC. Has ICBC been approached about that? What would your response be?
Hon. J. Pement: The case of the Jaws of Life has come up with UBCM at their conventions and at meetings I've had with councils as well. They have brought up the issue of who should pick up the cost. We are picking up the costs of the accidents. Shifting the load.... You were talking about road sense and intersection programs and who should pick up these costs. We are taking a very close look at it. However, at this point we're saying it is under the jurisdiction of the municipalities.
D. Symons: Going back to what I refer to as off-loading the health aspect from Health to ICBC premiums, and repairs to intersection lights and what not from Highways to ICBC, this seems to be the same thing. If something is definitely related to an automobile accident, the costs of that should be borne not by the municipality but borne by the people who are insuring against that. I would hate to think that a person would remain in the car -- not be cut out of it -- because the community says that's not their responsibility. I know that wouldn't happen; nevertheless, it does seem that they shouldn't be stuck with the expense of something that was not of their making.
I have two other questions. To go back to muscle cars, I gather that ICBC premiums are currently structured on the year and make of the car. There has been some talk of moving more into the liabilities of the make and model of the car involved in an accident and the costs of repairing it. So cars that have anti-locking brakes or other safety devices might get a reduction in their premium. Rather than being based on the fact that it happens to be a 1989 Chev, it's based on the fact that a 1989 Chev that has anti-locking brakes and other safety devices might mean that it won't be likely to be involved in an accident. Are these things being taken into account? Will there be other considerations? With house insurance, if you're a non-smoker you get an extra little bonus on your premium. Will that same thing happen with automobile insurance now?
Hon. J. Pement: It's another area that ICBC is looking at.
D. Symons: I have this question down under the Motor Vehicle Act, but I think it impinges on the problem of write-offs as well -- where they end up and whether they end up back on the road again. If they end up back on the road and they're really unsafe vehicles, at that point it becomes an ICBC problem and a safety problem. When ICBC writes off a vehicle, what steps are being taken to ensure that that vehicle doesn't end up in Alberta, or other places that have a tradition of accepting cars without any sort of examination as to their roadworthiness, and then end up back in British Columbia being sold as a roadworthy vehicle when indeed it may not be? Has that been tightened up in such a way that we're not going to see the probability of unsafe cars getting back on the road after they've been written off?
Hon. J. Pement: We have tightened that up. We recently made an announcement regarding the issue, particularly the identification number with a D for dismantling. The D is behind the number, and R is for repair.
D. Symons: Adjusting the identification number will then appear on the registration, so from that point on anybody purchasing the car would know by looking for a D or an R that this car really was dismantled and therefore shouldn't be.... Well, the motor could end up going into another car, I suppose, but the vehicle itself would not be a registered vehicle anymore; it disappeared in the process of dismantling. Is that sort of arrangement going to work? I gather that there were other techniques suggested by automobile dismantlers that could be brought in to ensure that we don't have this happening. They have an interest, too, in seeing that their dismantling business stays as such and that back-yard boys and so forth don't purchase the write-offs through ICBC and then recycle them onto the road again.
Hon. J. Pement: The program we set up is quite comprehensive in terms of casting a fairly wide net. Also, as part of the program, we have talked about the buyer beware side of it and have tried to put out information so that people purchasing cars understand what to look for, and have someone inspect the car, look at the registration number and ensure that there are identification numbers.
D. Symons: I'm wondering if that program could be expanded in a way so that when an automobile is in a serious accident, this could be a permanent notation on the registration. Rather than just having a D on the vehicle identification number, a line could be printed on there -- computers nowadays can do all these marvellous things. The D could go by somebody buying a vehicle. It might not mean a great deal to some young person buying his first car who looks at the vehicle identification number and sees a D or an R. I think a printed line would be better than just a letter that might be meaningless.
Hon. J. Pement: The D does come up on the computer printout, and it refuses to allow that vehicle to be licensed. It just means, in a sense, that when a person purchases it, they have to be aware of it and have that buyer-beware attitude.
[4:45]
J. Dalton: I have one other major item. There may be some other things that we won't have time to deal with today, but I'll be more than happy to approach the minister after hours, and we can follow up then. I might also add that my caucus is looking forward to a visit, hopefully sooner rather than later, from Mr. McCourt so we can have more informal dialogue on some of these issues.
The topic I would like to address is one that I'm sure is a favourite around ICBC boardrooms: no-fault versus other options of insurance. The first thing I would add is another compliment to Murray Rogan, who very kindly sent me two very weighty documents out of Manitoba. One, in particular, I would recommend to anyone, be they law students or people interested in insurance in general. Its title is "A Review of Alternate Automobile Personal Injury Compensation Plans." This was produced by the Manitoba Public Insurance Corporation in February 1993.
I'm sure all the ICBC people and the minister will be familiar with this document. I make particular reference to that because it's excellent reading. It's laid out very well, it's in plain English and it has a very good bibliography and glossary at the end. Some of the terms that I have never quite understood -- I've heard them all, but I wasn't quite sure how they fit into the insurance context -- are very well laid out here, and I thank Murray Rogan for that, plus this other one. Unfortunately, I have not had a lot of opportunity to get into it. It's headed "Bodily Injury Compensation," and it has a lot of interesting discussion of case law and things. It's
[ Page 10768 ]
probably more technical, but it does give some very good background.
I think I know the answer to this first question, but it will lead into discussion. Am I correct that Manitoba recently went to a no-fault compensation plan, as it's properly called?
Hon. J. Pement: My understanding is yes.
J. Dalton: That confirms what I saw in the paper somewhere. It didn't get a lot of spread out here, but I think it's important to be aware of that as background to our discussion now. The documents I've already referred to indicated that Manitoba was likely to go that route. Through a few questions I will direct to the minister, I would like to know what the position of ICBC is with regard to this issue.
I want to provide a little background not for the people in this committee room who already know, but for those two or three people who might have occasion to pick up Hansard and read this stuff. British Columbia is in the majority of provinces that have what is called an add-on fault system. Ontario has a threshold system, and now Manitoba is joining Quebec in having, as this document terms it, a pure no-fault system. I don't even know whether pure no-fault is correct terminology, but that's the way they've listed it. This document, by the way, get's into the details of American states. It lists what policies or compensation plans all the American states have adopted. I believe it's of interest to this committee that no American states listed in this document have a pure no-fault system. Most of them have the traditional tort system or they're heading into add-on thresholds; British Columbia, of course, is in that second category.
This document also sets out cost savings from the Manitoba perspective, and that's the bottom line we have to discuss: whether the cost savings as indicated here or otherwise could be passed on to the motorist and the person insuring the vehicle. Has ICBC got to the discussion stage and detailed documents like this with regard to no-fault versus other compensation plans?
Hon. J. Pement: Definitely. ICBC looks at all the different options with regard to premiums and no-fault right through to the threshold and tort systems. It's imperative that they look at all options.
J. Dalton: I appreciate that ICBC is examining these things from the point of view of the insured public and also special interest groups, such as the trial lawyers. It's well known that they have a particular position that they are more than happy to advance. In fact, some trial lawyers would probably want to go back to a pure tort system and start reversing the field. I'm not convinced that we want to start adopting that line of reasoning, but I think it's important for all of us who insure cars and use the roadways to get some sense of ICBC's position on this. Has ICBC sat down and produced documents of this weight, or is ICBC relying on documentation that is coming out of Manitoba, for example? Maybe I'll even throw this in: it was very clear from my reading of the Manitoba position paper that they were going to do the very thing they did. It reminds me of a line of questioning we recently had in the Attorney General's estimates. It was quite predictable that the change to the Legal Services Society was going to happen the way it is happening because of statements contained in a position paper.
Is ICBC looking at the various categories -- as a point of reference, they are contained on page 51 of this Manitoba document -- and at the potential cost savings that were documented? I presume that will be the approach ICBC will ultimately take. Unsafe intersections are an example. If there are demonstrated cost savings, can the public of British Columbia expect that we will go the route of Quebec and now Manitoba?
Hon. J. Pement: It's imperative that ICBC take a look at all product mixes. We'll certainly look at the different areas you have pointed out.
J. Dalton: It's a topic that, from my perspective -- and I'm obviously not alone -- is of vital importance to all the constituencies that are directly or indirectly affected by ICBC insurance rates. We can look forward to an ongoing debate both here in the assembly and, perhaps more importantly, through public dialogue or debate, which is probably more useful because people can be more candid and frank in their approach. I will certainly be keeping track of these issues, and I'm sure the trial lawyers, as I referred to earlier, will be giving their opinion in detail on this subject. I think we can look forward to a useful ongoing dialogue. Like anything else, I'm here to ascertain information, and I don't have any particular feeling on this topic at the moment. I want to digest some of this material, and there's probably a lot more out there that would be helpful. I will certainly be doing that.
There are just one or two relatively minor things I want to touch on with ICBC, and then we can have some follow-up later. A very disturbing case has recently been brought to my attention, dealing with an arbitration on a stolen vehicle. I just want to put this on the record for now. Once I get more information, I'll approach the minister outside these estimates.
It's a case out of Kelowna, where a Corvette was stolen about two years ago. The owner contacted me recently, and I've talked to an appraiser in Surrey who has been working on this file almost since the day the vehicle was stolen. Both parties tell me -- and they're going to supply documentation -- that what they felt would have been a simple $250 to $300 arbitration has now blossomed into a bill of almost $3,000. They still haven't resolved the issue of the value of the automobile. Perhaps it's the sort of thing, like law and order, that tends to grab headlines. The more outrageous the example is, the more likely it is to get publicity. I just want to share that example with the committee. Once I get more background on it, I certainly intend to follow it up.
We were talking earlier about arbitration and mediation, which we all agree is a far better route to go than litigation. But if we have disasters like that one -- if indeed it's that bad -- then perhaps we have to rethink either the attitude of the people involved in arbitrating it or the policy. Perhaps I can ask: is the minister familiar with this particular case? Does it set off any bells or alarms or otherwise? If so, we can talk about it a bit now, but I will follow up later.
Hon. J. Pement: On that case, we'd have to take that concern on notice to get the specific details. You were saying that you didn't have them all.
In the case of arbitration, for your information, we have two independent estimators come in -- one for each side. If they disagree, then a third independent person is brought in. So it's not employees of ICBC that do the arbitration; they're independent of ICBC. That third person is brought in by agreement of the two parties involved. When the arbitration has been decided, it is incumbent upon ICBC to follow that recommendation.
[ Page 10769 ]
J. Dalton: I can appreciate that the minster is not familiar with that case, and I didn't expect that she would be. I am told by these two people, who I've talked with recently, that the independent third party was a lawyer. Apparently, the bill got so outrageous because the lawyer was billing his hourly rate that he would bill his clients, and they thought that was quite improper. From what I'm told -- and I must get the backup documentation -- what would normally be about a $300 arbitration is now 100 times that amount. Who knows where it's going to end? Is that 100 times or ten times? I guess I'm exaggerating. I see Mr. Hardie is pointing out that I'm 100 times out in my figures. I will follow this up. I think it's appropriate that we should be concerned about these individual cases and that we should deal with them later.
[5:00]
There is one other thing I want to comment on briefly, since it's probably not a point of major concern. Recently ICBC has been involved in three freedom-of-information appeals, which caught my eye because they're all quite weighty. I wonder about the volume of the freedom-of-information requests ICBC gets and how it vets them. Some of the cases I have in my file indicate that people are searching for information which the freedom-of-information commissioner has ruled should be precluded from the insured driver. I'm anxious to know what ICBC's policy on that is.
Hon. J. Pement: I can't say how many freedom-of-information requests have been given to ICBC at this point. There is a freedom-of-information officer at ICBC who deals directly with that issue and also works with the freedom-of-information office. That's the process.
J. Dalton: I have one more follow-up to that.
Probably the most significant of the three that have come to my attention recently involves somebody who is requesting information. ICBC took the position that litigation was likely to result from the claim. The commissioner's appeal ruling pointed out that, given the likelihood of litigation, the information should not be disclosed. I think that's fair enough. It probably frustrates the applicant, but then we cannot freely disclose files that may be inappropriate or may compromise a subsequent court case.
The other one which really.... I can't even understand why it got before the commissioner, but I'm sure Mr. McCourt will remember the shredding of files that ended up on a movie set in North Vancouver. That was a one-day wonder, I guess, that caught the cameras because it happened on a weekend. It's a well-known fact that if you want some news coverage, go to the media on Saturday or Sunday, because nothing else is happening. Unless the third world war has broken out, you can sure grab some attention, and that one did. In fact, I was amused when I saw Mr. McCourt on the television screen sticking the files through his paper shredder. He did the job that perhaps should have been done by someone else in the first place. Those are my questions on ICBC. I think my colleague from Delta South may have an ICBC question.
F. Gingell: One of my constituents has recently contacted me about an issue with ICBC, where a brand-new car was virtually destroyed. There was an agreed settlement that $250 would be deducted due to the fact that it had been running for two or three months.
When the actual payment was made, ICBC had also deducted $795 for dealer preparation and freight, and had suggested to my constituent that this was an option that had been taken, as though the option was that you could pick up the car in Halifax or wherever Volvo has a factory. This matter hasn't been settled yet. My question is: can the minister advise me if it is the policy of ICBC to deduct such things from the price of new cars as an option as well as the $20 deposit for the battery? One finds these things rather small; it is surprising that they are at issue. Is it the firm policy of ICBC that, in the case of the destruction of a brand-new car which they are paying out totally, they will deduct those items?
Hon. J. Pement: I would like you to bring that case forward to me so that we could have a look at it. It is my understanding that we pay the value of the car.
D. Symons: The question asked by the member for Delta South brought to mind something I was asked in the constituency. There are additional costs that are the result of an automobile being damaged or, as in this case, a write-off due to a fire in an apartment building where cars were burned. He found he had to pay for the licence and all sorts of other things that would have carried on. If his car hadn't been damaged, he wouldn't have had to pay them twice. It was written off on the automobile registration. All these fees for the replacement car became his responsibility. So it's a similar question here. When you lose a car, there are additional costs besides the cost of the vehicle itself that become part of the expense for the insured. The insured seems to have to pick up those added costs rather than ICBC picking them up. To be fair, ICBC should put the person back in the situation they were in before they lost their vehicle.
Hon. J. Pement: The responsibility is for the value of the car. Could you bring those specific cases forward so that we could see more details and be able to respond to those cases?
D. Symons: I have one other question. I wonder if the minister can tell me whether there's a formalized agreement between the Autoplan brokers and ICBC, and whether there's an arbitration process in place that would help to resolve any disputes between them. Is there just a handshake agreement? Is there a written agreement that can be referred to when there are disputes?
Hon. J. Pement: Overall it's a handshake agreement, as expressed by the member; however, there are individual contracts with the individual brokers.
F. Gingell: Does ICBC think of the agents around the province who are selling the products of ICBC as representatives of ICBC or as representatives of the insured? From my years in practice when I dealt with insurance brokers who, in those days before ICBC, carried a whole range of insurance -- home insurance to liability to automobile insurance -- one always dealt with the broker because the broker was the representative of the insured. There was clearly an understanding that the broker was the representative of the insured and not of the insurance company and was there to help their client, the small consumer, deal with this monolith of an insurance company. Can the minister advise us whether the policies of ICBC in dealing with both the brokers and the consumers encourages or discourages that relationship?
Hon. J. Pement: Legally the broker, the agent, is the representative of the insured, and we work to have a good relationship with the broker as well.
[ Page 10770 ]
R. Neufeld: I had to leave for awhile, and this question may have been asked: what would the 7 percent charge on labour represent in dollars to ICBC, and what percentage would that be in cost to the average insurer of a vehicle?
Hon. J. Pement: The overall cost is $20 million, which represents 1 percent of the insurance.
R. Neufeld: Is ICBC subject to the corporate capital tax, and if so, what did it pay?
Hon. J. Pement: No.
R. Neufeld: I live in Fort St. John. There is quite a wide separation in the cost of insurance in British Columbia and in Alberta. It varies. It depends on who you talk to and what kind of insurance there is. I appreciate that, and I know that.
One businessman, who operates a company in Alberta and in British Columbia -- his main office is in British Columbia -- has a three-quarter-ton pickup. The licence for the vehicle in British Columbia would cost about $1,500. But if the vehicle is insured in Alberta, the cost is about $800 -- a dramatic difference. That person licenses the vehicle in Alberta, and prorates the difference, and British Columbia loses.
I don't understand why the rates in British Columbia are so high. Is it because we are poor drivers and Albertans are much better? Has it to do with government insurance versus private insurance? Or is there some other reason I'm not aware of for such a tremendous difference between the two provinces?
Hon. J. Pement: Some of these rates are also based on accident rates, and Alberta has a lower accident rate than we do in B.C. That's one of the concerns. However, you're looking at other insurance companies that "cherry-pick." They can charge far more for the young driver compared to a mature driver. There are those types of cases within private insurance. In B.C. we try to treat all drivers the same.
R. Neufeld: I appreciate the difference with the young drivers in B.C. and Alberta. Can the minister tell us how much worse drivers in British Columbia are compared to drivers in Alberta? Is it on a prorated basis? How do you arrive at these figures? Is it the number of vehicles licensed or the number of accidents? How do you say that we are worse drivers in British Columbia than they are in Alberta?
[5:15]
Hon. J. Pement: That actually comes from a Transport Canada report. Looking at the rate of injury, Alberta has 40 percent less, with regard to distance travelled.
R. Neufeld: If our driving habits are that much worse than they are in Alberta, what is the Insurance Corporation doing? You're obviously proactive by putting in left-turn signals and those kinds of things in the city of Vancouver and the lower mainland. How are we being proactive in trying to get our driving record a little better so that people can afford the insurance? Obviously I think the minister is well aware that in some cases the cost of insurance is just prohibitive to somebody having a vehicle. It doesn't matter whether you have an old beater or not, you just can't afford to put it on the road.
Hon. J. Pement: Driver training, driver safety and drivers' attitudes within B.C. are issues. Through the motor vehicle branch we're looking at traffic safety initiatives. Also, ICBC does a number of different types of campaigns directed at drivers from speeding campaigns through to the CounterAttack program. We have various programs to try to work with drivers and encourage them to drive more safely. In the area of speeding, for instance, it's not only excessive speed but also a case of looking at the weather or road conditions. So it's certainly an issue within British Columbia.
R. Neufeld: I know it's the Attorney General's department, but I asked the Attorney General the first year I was here about a graduated driver's licence system of some kind where youngsters who are first learning to drive have to have an adult with them for over a year. In my constituency -- the greatest part of the province -- there is a tremendous difference in summer driving, gravel driving, highway driving and winter driving. Does ICBC agree with that kind of system? Would they be prepared to recommend that the government do that?
Hon. J. Pement: The motor vehicle branch is now in the Ministry of Transportation and Highways, and we're looking at that type of scenario. At this point, it's a case of doing reviews. I have discussed those initiatives with the ICBC board, and certainly those types of recommendations will come through.
R. Neufeld: I think I heard the minister say earlier that 86 percent of the drivers in British Columbia are good drivers and are on a reduced rate. What age group is the other 14 percent indicative of?
Hon. J. Pement: That age group is young drivers who are 16 to 25. But you also have to look at the fact that they start out at the lower rate instead of at the top end.
R. Neufeld: I know the rates, because I have a young person who's had an accident and is obviously at the top end of the rates.
There has been talk about giving a better insurance break to people who have been driving accident-free for a number of years. How would ICBC go about that? Would they just tack it onto the higher-risk drivers?
Hon. J. Pement: It's an issue that ICBC is looking at at this point, but it means that at the bottom line you would have to rebalance the over-premium rates from one to the other.
R. Neufeld: I have only a couple of other questions. One concerns the ICBC rate that was discussed earlier -- the shop rate of $48. Just as a point of clarification, in my constituency big corporations deal with different groups and organizations, most of whose membership comes from the lower mainland, since that's where most of the people are in the province. Running a shop in Fort Nelson, Fort St. John, Dawson Creek or any of those places does have an effect. We know from private companies that run shops and do vehicle repairs that shop rates are higher in the north than they might be in the interior or in the south. I'm not trying to put a plug in to increase shop rates all over the province, but I would rather that we took a closer look at varying that rate depending on what area you're in. Even in Vancouver, because of its high cost of property or taxes, that's definitely a problem. But rather than having carte blanche all over the province and saying, "This is great, everybody's going to have to live with $48," I would rather that we looked closer at paying in different regions rates that are more
[ Page 10771 ]
commensurate with what is already in place in private industry.
Hon. J. Pement: We have talked about the topic before. The rate is based on an overall look at different shops in the province. The $48, plus a $3 allowance, is a fair rate within Canada.
The Chair: Is there any further discussion, or shall we move a motion at this point?
D. Symons: I gather we were going back into Highways.
The Chair: Is it the wish of the group to talk about that? We should see if the minister is ready for that.
D. Symons: I just have three questions on Highways, which I think we could finish in the few minutes left. Then we would have motor vehicles for whenever we resume, if that is satisfactory with the minister and the people present.
The Chair: From what I can gather, that sounds like a good idea.
D. Symons: I mentioned to the minister that I'd be asking about a sign shop that is going to be set up in Kamloops. I'm wondering if the study was done to show that privatization wasn't cost-effective and whether that study indicates the government should begin again in the sign business. Is that study available?
Hon. J. Pement: A study was done, and it was found to be more cost-effective to bring it back in-house. It was also cost-effective in the sense of control over production and distribution, and that sort of thing. The study is available.
D. Symons: I thank the minister for her answer, and I would appreciate a copy of the study. Secondly, will the shop be bidding on other work besides highway signs? Will it be doing work involving signs for other ministries? I'm thinking of Forests or possibly Environment, Lands and Parks. Would it be bidding on private sector signs?
The Chair: We have a message that they're waiting for us in the other House, so, if I may, I request a motion to rise and report.
Hon. J. Pement: I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 5:28 p.m.
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