1994 Legislative Session: 3rd Session, 35th Parliament
HANSARD

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

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, MAY 26, 1994

Afternoon Sitting

Volume 15, Number 19

[ Page 11115 ]

The House met at 2:05 p.m.

Hon. R. Blencoe: We have today some very special visitors to our gallery and to our buildings, whom I have just been meeting with. It's my pleasure to introduce to the House His Excellency Maurice McTigue, the newly appointed High Commissioner for New Zealand to Canada. He is accompanied by Mr. Irvine Paulin, the consul general and trade commissioner of New Zealand in Vancouver. These gentlemen were here to talk about many things of interest to the governments of both British Columbia and Canada. And of course, we talked about the Commonwealth Games and the expectation of New Zealand doing well at the Games; I didn't comment on that particular issue. Ladies and gentlemen, would you please welcome our guests today.

L. Stephens: In the precincts today we have 50 grade 7 students from Langley Meadows school in Langley, accompanied by several of their parents and their teacher, Mrs. Brenda Randa. Would the House please make them welcome.

Ministerial Statement

B.C.'S CREDIT RATING

Hon. E. Cull: It is with great pleasure that I advise the House that British Columbia has once again been given the highest credit rating of all the provinces. Over the course of the past two weeks, North America's four major bond-rating agencies have affirmed B.C.'s credit rating: Moody's, Aa1; Standard and Poor's, AA+; the Canadian Bond Rating agency, AA+; and the Dominion Bond Rating Service, AA. The Canadian Bond Rating agency and the Dominion Bond Rating Service have also revised their outlook for British Columbia from negative to stable. In fact, the Canadian Bond Rating Service has placed the province ahead of the government of Canada, which is rated AA-.

These ratings confirm that we have turned the corner and put B.C.'s fiscal house in order. We've cut the deficit. We've frozen taxes for three years, while continuing to provide health and education services that ordinary British Columbians depend on. All the rating agencies have noticed that B.C. has the lowest debt levels in the country. Despite the severe negative impact of federal off-loading -- $2.5 billion to our province in this fiscal year alone -- B.C. has one of the strongest economies in Canada. In three years we've cut the deficit by 60 percent, and we will eliminate it entirely by 1996. This year, spending will be limited to a 3.5 percent increase, which, after adjusting for inflation and population, means a real cut in spending of 1.3 percent. The rating agencies recognize that the working people and the business community in British Columbia have worked very hard and made sacrifices to ensure that our economy will continue to grow. We expect a 3.4 percent growth rate this year and a 2.8 percent growth rate next year.

By working cooperatively in partnership with all sectors of the economy in the interests of all people in the province, we have led the country in job creation, and we will create more jobs this year and next -- 47,000 jobs this year and 37,000 more jobs next year. The strong economy has attracted people from across Canada and around the world. In 1993, nearly one in five immigrants chose to move to British Columbia; traditionally the number has been one in seven. In the first four months of 1994, employment was up 4.2 percent from the same period in 1993; retail sales in the first three months of 1994 were up 6.7 percent compared to the same period in 1993; and after a record year in 1993, housing starts remain strong, fuelled by population growth and increased employment.

We have one of the strongest economies in Canada, and we're bringing down the deficit without cuts to services that British Columbia's families rely on. We are creating a climate for investment in this province that's very positive. The credit ratings are confirmation that we're on the right track, and that benefits us all. The results are increased consumer confidence, increased investment confidence, and increased job creation.

When this government took office, we started out with a sound fiscal plan, and we've delivered on that plan in each and every budget. We will continue our course of action. We said we would eliminate the deficit in 1996, and we will ensure that we do that.

F. Gingell: It is with mixed feelings...

Interjections.

The Speaker: Order, please.

F. Gingell: ...that I stand to respond to the ministerial statement. The difficulty with being in opposition, as we all recognize, is that it is far too easy to continue in the role of naysayer and never acknowledge any positive results. I'm really pleased to hear that the province's credit rating has been affirmed by North America's four major bond-rating services. This rating tells me that we have been given a reprieve. We have one last chance....

Interjections.

The Speaker: Order! Hon. members, the member who has his place is having some difficulty responding due to the constant interjections. I would appreciate it if the members would allow him to speak without interruption. Please proceed, hon. member.

F. Gingell: We have one last chance to lay the groundwork for the long-term growth and success of this province's economy. The minister claims these ratings confirm that this government has put B.C.'s financial house in order. What these ratings confirm is the powerful effect that high levels of migration have had on our economy. They confirm the impact of the low interest rates during the past year, and the strong performance of our forest industry. They confirm that our province has performed well in the short term, despite the measures that this government has taken, which have put B.C.'s financial house in disorder rather than in order.

Yes, B.C.'s debt levels are the lowest in the country. But during this government's tenure, debt has increased by 60 percent, and much of this will be up for refinancing over the next few years -- possibly at significantly higher rates. One of the bond-rating services, Moody's, uses tax-supported net debt as a percentage of GDP as their key measure of economic health. This government has almost doubled tax-supported net debt as a percentage of GDP during their administration. There is no reason to believe that this government has the discipline to ensure that this trend will not continue. How long will it be before our rating is downgraded? Debt services have grown by 43 percent under this government. We have the largest per capita spending of any province. Taxes have grown under this government by 40 percent, and they continue to take an ever-larger slice of the economic pie.

[2:15]

[ Page 11116 ]

Mr. Speaker, I want to encourage this minister to take the steps that need to be taken to get our affairs in order. One of those steps is to finally drop the window dressing and the bookkeeping shenanigans that show we're doing better than we really are. In my response to the budget, I demonstrated how through sleight of hand the minister turned a $1.2 billion deficit into a $900 million deficit. This government has also done its best to ensure that the benchmark in 1992 was so bad that it couldn't have been any worse. I was interested to see that 1992 was the one year that B.C. Hydro did not pay a dividend to the government. What this did was to worsen the deficit for that year and make all subsequent years look better -- no real improvement, just fancy bookkeeping.

In conclusion, I would ask the minister to take some time from her enjoyment of this good news to look into the future: look to taking decisions that will control and start to reduce the debt that this province carries -- I personally would prefer our debt to be $28 billion and going down, rather than the $25 billion that it is and continually going up; look to taking decisions that encourage rather than discourage investment; and look to taking decisions that guarantee strong bond ratings in the future.

J. Weisgerber: It shouldn't go without notice in this debate that when this government took office in 1991, it inherited the best credit rating of any province in the country. This government inherited the lowest per capita debt of any province in this country. In the three budgets since then, this government has managed to double the net debt of the province to equal the debt accumulated over 120 years, and it has allowed debt in relation to gross provincial product to rise from 21 percent to 28 percent. This government has also managed to cause indebtedness to the tune of $7,800 for every British Columbian in the province.

Yes, this province is in better shape than the other provinces in Canada. But for this minister, whose government has borrowed more money in three years than any other government in the history of British Columbia, to stand here and take credit for the credit rating of this province is a little hard to take. It's especially hard to take from a government that deliberately withheld the true extent of the deficit from taxpayers. The NDP....

Interjections.

The Speaker: Hon. members, please permit the member to respond without interruptions.

J. Weisgerber: This NDP government claims to have reduced borrowing by 60 percent over three years, and that's patently untrue. First of all, they deliberately inflated the deficit in 1992 and are currently hiding huge chunks of borrowing under the guise of B.C. 21. It's time that this government came clean with British Columbians about the true extent of debt in this province. It is by far the most important issue facing British Columbia today. It's disturbing to see a government that, rather than recognizing a problem that it is facing, stands here and smugly brags about maintaining a credit rating that it inherited three years ago. If indeed that's all they have to brag about, it is really a record that doesn't bear much repeating.

The Speaker: The hon. member for Powell River-Sunshine Coast rises on what matter?

G. Wilson: I seek leave to respond to the ministerial statement.

Leave not granted.

The Speaker: The hon. member for Okanagan West rises on what matter?

C. Serwa: I request leave to respond to the ministerial statement.

Leave not granted.

The Speaker: The hon. member for Mission-Kent rises on what matter?

D. Streifel: I seek leave to make an introduction.

Leave granted.

D. Streifel: I apologize to the assembly for interrupting at this important time, but I have a group of students from my constituency visiting us here today. There are 70 of them altogether, in two sections, led by Mr. Larry Jepsen. They're from Edwin S. Richards Elementary School. I bid the House make them welcome.

Oral Questions

PUBLIC SERVICE APPEAL BOARD CHAIR

F. Gingell: There aren't many ministers here today, but I think I'll select the Minister of Finance for this question, if I may. The question concerns Joy Leach, the former NDP mayor of Nanaimo, who we understand has now been hired as the new full-time chair of the Public Service Appeal Board, at $78,000 plus benefits, even though last year the previous chair was paid on a part-time, per diem basis. Why has this minister embarked on yet another patronage giveaway to an NDP friend?

Hon. E. Cull: I'm surprised that the opposition would attack a person like Joy Leach, with her impeccable reputation. She did some excellent work for this government as part of the Round Table on the Environment and the Economy. She developed an excellent paper on the Georgia basin initiative that is being pursued by this government. And she has had a long history of administrative service to the college system and the people of Nanaimo. I think she is an excellent candidate for this service.

The Speaker: A supplemental, hon. member?

F. Gingell: I simply don't understand what those particular things have to do with the appointment of the chair of the Public Service Commission. Fifty percent of the Public Service Commission's work in past years has dealt with appeals from external applicants. Last year external applicants were denied the right of appeal. How can this minister justify paying Joy Leach more than twice the money for half the work?

Hon. E. Cull: The public service appeals process has been considerably revised and revamped by this government. It was debated last year in this House. It was part of a process that was worked through to put in place a rational, fair system of appeals for public employees in this government. This particular function is going to involve a fair system for all our employees. I think Ms. Leach will be an excellent candidate to carry out that responsibility.

The Speaker: A final supplementary, hon. member.

[ Page 11117 ]

F. Gingell: The Liberal opposition has learned that the Public Service Appeal Board is moving -- to where? Nanaimo. Coincidentally, the new chairman, Joy Leach, lives in Nanaimo. In the past 71/2 years only one appeal has come from Nanaimo. How can this minister have such little regard for her taxpayers and so much for her NDP friends? Why has she once again allowed the wishes of friends of the NDP to come before the best interests of British Columbia taxpayers, by moving the appeal board to Nanaimo?

Hon. E. Cull: I guess since the Liberal opposition represents such a small geographical area in this province, they are opposed to seeing any government service moved outside Victoria or Vancouver.

Interjections.

The Speaker: Order, hon. members.

Hon. E. Cull: I think it's an excellent idea to be moving this service to one of our regions whereby we can provide more services and employment in other parts of the province.

PUBLIC OPINION POLLING BY GOVERNMENT

M. de Jong: Outside the House on Tuesday, the Minister of Finance stated that the poll -- bought and paid for by her ministry -- didn't ask any questions about how the people of British Columbia felt about her. Of course, that's precisely what question 3 in the poll does ask. Yesterday the minister refused to answer any questions about this abuse of public funds, so I'll ask her again today: was it the taxpayers of British Columbia who paid for the questions contained in the Finance ministry's prebudget poll?

Hon. E. Cull: I'm amazed that this opposition continues to ignore the positive initiatives that were made in this budget and can find only one thing to focus on. They've just heard that the major bond-rating agencies in North America have given us the highest credit rating of any province, and they're focused on an opinion poll at this point. That poll determined that people wanted to see the deficit down, jobs up and taxes frozen, and that's exactly what we've done.

The Speaker: Supplementary, hon. member.

M. de Jong: Accountability in government means telling people where their tax dollars are being spent, so let's have a little accountability. I've got a simple yes-or-no question that deserves a simple yes-or-no answer. Was the poll, which contained questions this minister admits are inappropriate, paid for by the taxpayers of British Columbia?

Hon. E. Cull: I have no problem in answering the question and saying that I think it is entirely appropriate for us to find out what people in British Columbia think about the economy, about budget measures...

Some Hon. Members: Yes or no? Answer the question: yes or no?

The Speaker: Order, please.

Hon. E. Cull: ...and about taxes, and then, knowing what they want and what their priorities are, to act on them in this budget as we have.

The Speaker: The final supplementary, hon. member.

M. de Jong: We have great difficulty getting a straight answer from the minister, so I'll put it in terms that maybe she can understand. Does the minister strongly agree, agree or disagree -- one of the above -- that the Ministry of Finance has commissioned inappropriate polls and that the NDP should be reimbursing the people of British Columbia for the cost of collecting that partisan data? The fourth option, of course, is: "I don't know."

Hon. E. Cull: I strongly agree that this government commissioned a poll so that we could determine what the people in this province wanted in their budget, and I strongly agree that we've delivered on that in this budget.

DELETIONS FROM DOCUMENTS OBTAINED THROUGH FOI PROCESS

J. Weisgerber: My question is also to the Minister of Finance. We finally received one of the internal audits we requested two months ago. This one happens to deal with the procurement process for photocopiers, fax machines and computers. The minister has been given a copy of this censored report, and I wonder if she would tell this House whether she agrees with the method by which it was censored by her staff.

Hon. E. Cull: I have not yet reviewed that report, but I'd be happy to take the question on notice and get back to the member.

The Speaker: The question is taken on notice, hon. member. Do you have a different question?

J. Weisgerber: Yes, I think I have a new question.

One of the areas in this report, which was indeed censored, dealt with the meter charges paid by the various ministries of government -- pretty simple, straightforward information. I wonder why the minister would feel it necessary to censor that kind of information from a public report.

Hon. E. Cull: The member seems to be under the impression that I personally take these documents and a black felt pen and mark out all the lines in them. I hate to inform him otherwise, but there is a Freedom of Information and Protection of Privacy Act. We do have staff hired and in place to implement that act, and they make those decisions. If the member doesn't agree with them, there is an appeal process to the commissioner.

[2:30]

The Speaker: Final supplemental, hon. member?

J. Weisgerber: Well, I wouldn't have dreamt that the minister had done this herself. Had she, I'm sure she would have marked in the relevant sections of the FOI Act beside the areas that were blacked out; secondly, she would have done it well enough that one couldn't hold them up to the light and read the silly stuff that was censored.

The Speaker: I don't believe there was a question.

EFFECT OF GOVERNMENT POLICY ON FISHING INDUSTRY STABILITY

R. Chisholm: The Minister of Agriculture is in Washington today discussing the Canada-U.S. Pacific Salmon Treaty. He is lobbying the U.S. government to get 

[ Page 11118 ]

involved in treaty negotiations that would enhance and stabilize the fishing industry in British Columbia. Meanwhile, with the introduction of the Fishing Collective Bargaining Act, the Minister of Labour is destabilizing the fishing industry. Can the Deputy Premier explain why the government is going in two different directions at a time when this industry needs as much stability as possible?

Hon. E. Cull: I would be glad to take the question on notice for the two ministers.

The Speaker: The questions are taken on notice, hon. member. Have you a different question?

R. Chisholm: I have a new question to the Deputy Premier. Considering the gravity of this and other issues, is it the policy of the government to have their ministers discuss and negotiate issues before introducing bills to this House to enact laws?

Hon. E. Cull: I believe I have already taken this question on notice, hon. Speaker.

The Speaker: The member has a further question?

R. Chisholm: I have a new question to the same minister. I have four letters -- one from the fishing vessels association and three from the native fishing associations -- stating that the minister has not met with them, and has in fact avoided meeting with them. Can the Deputy Premier explain to this House who in this government negotiates with these people? Are the fishers telling the truth, or are the ministers telling the truth?

NEED FOR DECISION ON WCB PRESIDENT

K. Jones: One thing that people tell us in our WCB review panel meetings is that there is no leadership at the top of the WCB. Many point to the fact that the chairman of the board, Jim Dorsey, is also acting president. People are concerned that he cannot do both jobs effectively. We understand that hundreds have applied for the position of president. We now learn that after months of interviewing, there is still no decision. My question is to the Deputy Premier: why has it taken so long for the WCB to find a president?

Hon. E. Cull: It seems to be my day today. With respect to the WCB, I know that a process is underway of looking for a suitable head. Beyond that, I can't provide the member with any further information. If he has further questions with respect to this search, I will take them on notice for the minister responsible for the WCB.

The Speaker: Supplementary, hon. member.

K. Jones: We understand that the chairman of the WCB is getting an additional $30,000 as interim president. Mr. Dorsey clearly has no interest in finding a new president. Will the Deputy Premier show leadership and set a deadline for finding a suitable president to get the WCB back on track?

The Speaker: The member for a final question.

K. Jones: This delay at the WCB is intolerable. The WCB is in chaos. Injured workers are waiting longer and longer for services, and the unfunded liability is skyrocketing, but the WCB still sees no urgency for finding a new boss. The workers are looking for leadership; the staff are looking for leadership; the employers are looking for leadership. The Deputy Premier must concede that....

The Speaker: Order, hon. member. Do you have a question?

K. Jones: The Deputy Premier must concede that the person responsible for finding a new president has no incentive to find a replacement.

The Speaker: Hon. member, if you have no question, you may take your seat, please.

K. Jones: Will the Deputy Premier guarantee that a WCB president is hired immediately?

Hon. E. Cull: I'm glad to see that the opposition is concerned about the future of the WCB, and I look forward to their support when the person is appointed.

G. Farrell-Collins: I can guarantee the minister that if the person hired is a capable person and not an NDP hack, and if the search is done properly, we'll be glad to give unqualified support.

TENDERING PROCESS FOR OGDEN POINT PROJECT

G. Farrell-Collins: My question is to the minister responsible for just about everything. He knows who he is, hon. Speaker. The minister stood up in this House last week in response to a question taken on notice concerning the Victoria Line and talked about rejigging the contract after it had already been tendered and the low bid had come from a non-union firm. Can the minister tell us why that non-union firm was not involved in the consultation determining what the new project would be and did not have an opportunity to participate in bidding on that contract?

Hon. G. Clark: As I stated in the House, we saved the taxpayers some $300,000 by doing it in-house. The management team at Victoria Line did manage the contract itself rather than contract it out. They did attempt to contact all of the parties for the one subcontract that did go out. Unfortunately, the lowest bidder was not available at the very time in which the communication took place. Nevertheless, it seems to me that it's very hard to complain in the defence of any particular company when the taxpayers are so well served by the people at Victoria Line saving some 50 percent of the contract price by doing it in-house rather than contracting it out.

The Speaker: The bell terminates question period

The hon. member for Chilliwack rises on what matter?

R. Chisholm: I rise to table documents.

The Speaker: Would the hon. member state the purpose of the documents, please.

R. Chisholm: The documents are letters from the Aboriginal Fishing Vessel Owners' Association and the Fishing Vessel Owners' Association of British Columbia.

Leave granted.

[ Page 11119 ]

Hon. A. Charbonneau: I rise to answer a question taken on notice.

The Speaker: Proceed.

POSSIBLE CONFLICT OF INTEREST FOR EDUCATION MINISTRY SUPPLIER

Hon. A. Charbonneau: On May 18, a member asked this question:

"The Ministry of Education has been negotiating with Magic Lantern Communications of Toronto to be the government's exclusive duplicator and distributor of educational videos for B.C. school boards. The problem is that Magic Lantern would be pushing their own products, while at the same time having responsibility for distributing their competitors' products. Does the Minister of Education agree that this constitutes a conflict of interest on the part of Magic Lantern Communications?"

The answer is that I thank the member for bringing this matter to the attention of the House, but there are no inherent conflicts in the selection of Magic Lantern Communications. The concerns raised are being addressed in the current negotiations with Magic Lantern.

Orders of the Day

Hon. G. Clark: I call Committee of Supply in Committee A, the estimates of the Ministry of Social Services. In the main House, I call second reading of Bill 41.

COMMUNITY FINANCIAL SERVICES ACT
(continued)

On the amendment.

The Speaker: The debate on Bill 41 was adjourned by the hon. member for Richmond Centre. Is the hon. member proceeding? Concluded?

I recognize the hon. member for Vancouver-Langara.

V. Anderson: I rise with mixed feelings to talk about Bill 41, which is for the purpose of establishing a banking facility in the downtown east side of Vancouver. I am quite aware that such a facility is greatly needed in the downtown east side. I am aware that the Royal Bank of Canada attempted and for some time did undertake that kind of community banking facility within the east side of Vancouver. It was greatly appreciated, and it was a sad time in the community when they withdrew that bank from that area. I am very aware that the people who live on the downtown east side have grave difficulty in undertaking the normal banking activities that other people take for granted.

It wasn't too long ago that -- in making a cheque available to a group of young people in the process of developing a private enterprise business of their own -- I learned that they could not find a place to cash my cheque because they could not find a bank or anywhere else where they could open an account. In order to deposit the cheque, they needed to open an account. I must say that through some intervention and encouragement, they were able to open an account at the VanCity Credit Union. They were able to begin their process of building a business for themselves. I commend their initiative and their undertaking but not the obstacles in their way. However, this is a problem not only on the downtown east side of Vancouver but an obstacle throughout British Columbia and many other places as well.

When I was able to tour the province with the aboriginal legislative commission, I was very much aware of people within the aboriginal community who, likewise, were unable to have the banking facilities that they needed. It's not simply a matter of cashing a cheque; it's a matter of being able to get all of the services that a bank enables people to have. That's a very fundamental part of community life in which we are now engaged.

I'm also aware, having grown up in rural Saskatchewan and lived in very small communities that in many of those places there were no banking facilities. So the people of the community came together and began their own individual credit unions, which they were able to build up both individually and collectively and interrelate with the credit union system throughout Saskatchewan.

I'm also very much aware, through my activities in world development education through the church, of the credit union movement which began in the Maritimes and in which we train individuals to operate in that movement throughout the world. In developing countries and where people have far less financial ability and opportunity than we do -- even among many of our poorest here -- they are able to set up their credit union and co-op facilities and undertake savings, development, business development and many other aspects, because of the opportunities that have come through the education they got in Saskatchewan, the Maritimes and across Canada.

So I'm very much aware that there are opportunities for people to be involved in their own grass-roots objective of developing a system. I cannot understand why, with that kind of experience and expertise that we export around the world, we are not able to undertake that kind of development -- with support, if you like -- here initially in British Columbia. I cannot understand why this apparently has not been researched and developed within the credit union movement in British Columbia. I'm sure that this opportunity could be available, as it must be, in the downtown east side -- and not only there but in Victoria and in the smallest place within British Columbia -- at far less cost than what's being undertaken in this particular venture.

We need to build up a banking credit system for all of the people of British Columbia, because that's part of the equality and rights they should automatically have. Unfortunately, we do not yet have in our human rights legislation that you cannot be punished or prevented from having services because of your economic situation. If we are to represent all the people of our province, then we must move forward to develop a system where all the people of our province have the opportunity for banking privileges, which they must have if they are going to participate freely and openly in our democratic society. To legislate that opportunity against them as we have been doing is not right nor just on their behalf.

[2:45]

Having said that, as other members of our caucus have said, I'm very much in favour of the principle of making banking facilities available in a manner that all of the people of our province are able to make use of them. I have difficulty with the particular act before us, though, because it does not make those facilities available to all of the people of the province. It only makes it available to a very small portion of downtown Vancouver. Most of those people who would make use of those facilities a few miles away in Burnaby, New Westminster, Surrey, Cloverdale or even Marpole, where I live -- those people fortunate enough to have co-op facilities but who do not have the opportunity of economic financial ability to do as they would like -- will not be able to take part in this particular program. Even 

[ Page 11120 ]

though they live in the same city, they are unable to travel to that particular opportunity -- when there are credit unions and facilities next door to them that are not serving them. I cannot for the life of me understand why the research committee of this government did not go through, find that particular opportunity and make it available to all the people of this province.

Having said that, I am not in favour of this particular action of establishing a private corporate bank in downtown Vancouver when we need a credit and banking system that is equally available to everybody in this province and can be managed and undertaken by electing managers, as they do with the credit unions, and controlling the dividends, however small they may be, which then come back to the shareholders. Every person in this province should be able to be a member or shareholder in a credit union set on this basis, no matter how small their initial contribution, which in due course can help them grow with education and investment opportunities in a value-added way through the credit union system. So I fail to understand why this government has been so stupid, if I can put it that way, to bring forth this suggestion instead of one that would serve all the people in the province.

On the other hand, I have to acknowledge that as stupid as it is, it still may be better than nothing at all. It is still an indication of a promise that is only partially fulfilled, but a promise that is only partially fulfilled, that is inadequate and that will break down in due course may be better than no promise at all. One of the realities is that the people of the downtown east side who represent not only themselves but others throughout this province in similar situations have been promised again and again that their interests would be taken into account and they would be able to participate, like others, in the province's banking system. I could not stand it if once again we were to promise and then, because we had a more rational argument and could do it a better way, tell them to wait to another day. We cannot continue to tell people to wait to another day. Mind you, we will be saying that to most people, because if you don't live in downtown Vancouver, you're out of luck. That's not fair to the other people in Vancouver or to other people throughout the province.

I'm in a quandary because I cannot accept that what has been brought forward is a logical way of meeting the financial needs of the people in this province. On the other hand, I cannot personally stand by and say that those people who have been promised again and again should be totally let down without even a symbol that their need is recognized and responded to. That's all this is -- a symbol. In all of life, when you have nothing else to fall back on, symbols can be very important. Symbols at least recognize that you're there, that you're to be responded to and that you have been recognized as important. It is important that we do not turn back and once again say: "You have been promised the world and ended up with nothing at all." Even though this nothing-at-all is not much more than that, at least it is a symbol of recognition that in this little corner of British Columbia at least -- which happens to be, of course, close to the riding of the Premier and of the minister who is bringing the bill forward; that has nothing to do with it, of course.... But it is important that at least that kind of symbolism not be destroyed.

I'm not that unrealistic; I recognize that this may cost us a great deal of money. It has the possibility of losing money in the process and of being a bad financial deal. But if so, we'll know who to call to account for the bad financial deal they have brought forward.

But I must acknowledge that even though it is a bad financial deal, and even though it is an expenditure of money which will not necessarily bring financial dividends, it is a symbol of other dividends which are important and must be supported.

There are many things in the downtown east side, not the least of which is the Carnegie Centre. It is a good centre that has brought hope, promise and new abilities to many people within that community. When it was brought forward, there was an argument that it would cost money, that it would be expensive, and that it would not provide the opportunity that people needed. However, the program went forward, the opportunity was there and the people themselves have made it function effectively and with great promise. They are to be proud of what they have done -- not of what other people have done for them but what they have done for themselves when the obstacles were taken away from them.

If this symbol helps to remove obstacles and helps to make these people aware that there are opportunities and that they can take charge of this and make it work, so much the better for them. But even if it fails, there are lessons learned within it, and there are opportunities. One can write it down, as we do with so much in life, to experience. Nothing succeeds in life or education like experience.

When this is underway, I trust that the government, we in the opposition and all the members of this House who have said that this is not a good deal will get to work and find a deal that is better. Perhaps before this even gets underway, we'll say: "Whoops, we have now triggered concerns and opportunities." And now perhaps the credit union itself will come forward and say: "Hey, we can do a better job than what you're doing." Perhaps there is another opportunity, so let's not throw it all out and say there is not another way to go.

In putting this forward, I must acknowledge that I will vote for the amendment. But if, by chance, the amendment should have to be defeated.... I don't understand why, when it's so logical that we should take it back and bring everyone on board, with an understanding of the process we've had, to discuss it in a rational way rather than emotionally, as we've done here. That's what legislation should be about: bringing it forward, having time to put it into committee to examine and improve it, and to come together with a more rational process that everyone can support. So I support that process. Even this government has said -- believe it or not -- that they believe committees should be functioning more effectively, dealing with legislation as it comes forward and improving it before it goes on the books, not simply saying: "Here is a fait accompli; take it or leave it" -- with all of its warts and ill-fated conditions.

I challenge this Legislature and this government to give it an opportunity to be examined by everyone, by bringing forth a committee together. But having said that, I want to be able to say -- in fairness to the people in East Vancouver, who are a symbol around this province -- that my own caucus is well aware that I will vote for the amendment -- maybe not with their agreement, but with their support. And if that should happen to fail, I will vote for the motion as a symbol. Even if that symbol fails, it's an opportunity for people to get in there and say: "We want to be a part of getting a financial system in our province that works to our benefit." True, I don't expect that this particular one will work well. I don't think it will serve the purpose it was meant to serve, even on the east side.

We will learn lessons from it. The people of the east side will learn that it is not a corporation that they want. What they want is a financial system that they're a part of, that they 

[ Page 11121 ]

control and that deals in a language and a format that's typical to their way of living. They need something that belongs to them, not something that belongs to the government, that will be controlled by the government, that will be dictated to by the government and that in the long run will deprive them of the opportunity to manage the very thing they're being promised.

They've been given a false promise. I have to admit that sometimes when you're desperate, sometimes when you want to look to the future, even a false promise can be a symbol worth hanging on to. It can be the starting point for something better, much more effective and much more meaningful.

H. De Jong: I am pleased to rise to speak on the amendment to Bill 41, proposed by the opposition. I have some difficulty with this issue, because we're dealing with the very serious situation of providing something to people who do not have all of the things to their avail that other people may have. It's always difficult when we deal with that issue by way of another vehicle, in this case the creation of a bank.

I'm not sure if I'm right in what I'd like to say. It would appear, in the government's view, that this bill is an idealistic attempt to provide hope and opportunity for those who have fallen through the cracks of society and are badly used by the current banking system. If that is true.... I believe it was the member for Nanaimo who spoke yesterday and said that these people cannot cash their cheques. They have to go to banking machines or an institution where they cash cheques after hours and take a percentage of that cheque. If the situation is that people who are unemployed or on welfare do not have the time to go to a bank, which is usually open for about seven or eight hours a day, how do employed people have the time to go to a bank? The logic doesn't seem to fall into place. I believe that a lot of people on welfare certainly have the time to get to a bank.

[3:00]

I have yet to hear of any bank that would refuse to cash a government cheque. I have never heard of it. I don't think there is a bank in British Columbia that would refuse to cash or start an account on a government cheque.

Interjection.

H. De Jong: The minister says that it's true. I'd like him to give some specifics on that. I do not believe there is a problem there.

The minister commented at the time of introducing this bill that it would help people cash their cheques and also help to avoid abuse in the social services system -- the abuse that has happened and is still happening today. I cannot for the life of me see how this would help avoid the abuse of social services money. I think the potential abuse in this bill and what it will create is going to be awesome. I don't think the government has really given any thought to that.

I had a visitor to my office a couple of months ago. He has a family of three or four children and had been on social services for several years. This individual has a fairly good job now. When he went to the tax office to fill in his income tax forms, it was suggested that it would have been better for him to stay on welfare, because at that time he was able to buy some RRSPs. His income, now being much lower in total, did not provide him the opportunity to buy RRSPs, because he had to look after his family. If it's possible that a person on welfare can make more money on welfare than by having a job of some $34,000 a year, then I think something is absolutely wrong.

I believe that the creation of a special bank in this case.... I'm not saying that all the people in East Vancouver are that kind of people. But the suggestion is that this would cut down welfare abuse. I firmly believe that the creation of this new bank may well encourage abuse instead of decreasing it, because it would provide them an opportunity to put their welfare cheques in one bank and go to another bank with the other moneys they earn.

I'm not convinced that this is really what we need. If it appears that there are only a few of these people.... I'm not so sure about that, either. I get quite a number of calls from people on welfare in my community, asking for this thing and another thing. When you're on the line discussing their problem with them for a little while, quite often you get asked: "Would you please hold the line, because there is another call coming in." Surely most people drawing a fair wage in our province can hardly afford to have two telephone lines come in to their place, but people on welfare can. At least I wouldn't be told to please hold the line if there wasn't another phone ringing.

I'm not so sure that a bank is the answer. The previous member spoke very eloquently about why credit unions were created, and in the old country where I come from they were created for the same purpose. In fact, there were special credit unions for farmers and for non-farmers. So there was even more distinction there in terms of helping each other, and that's what credit unions have stood for. While this government may well have a private member's bill in front of it at the present time to throw another carrot out to the credit unions, this bill is a direct affront to the many well-run and well-meaning credit unions throughout the province.

If the Vancouver credit union cannot comply with these kinds of things or does not want to be bothered, the credit unions in the big city have missed the mark as to the real purpose for which they were created in the first place. If there really is a special need in East Vancouver for a special bank or a special credit union, why would these people not be asked by the government or on their own initiative through Jim Green or whoever has the concern that this bank is needed...? Why wouldn't they be advised to start their own credit union and have it open at specific hours so that these people can easily have access to it? I simply cannot see why this bank is needed.

Besides that, if the government is so sure that this new bank is not going to create a problem in terms of overrunning their budgets or expending money and not getting money back, why do they need this continual government guarantee? Why do they need the continual supervision of the Minister of Finance? Is it simply to protect the $10 million that's going in there at the beginning? I don't think so. I think that there will be a continual draw. There is the same reference in this bill as there was in B.C. 21: the borrowing is without limitation. That's the scary point, hon. Speaker.

Last year during estimates debate of the Ministry of Municipal Affairs, the former member for Vancouver-Quilchena, Mr. Cowie, referred to a suggestion made by the Minister of Municipal Affairs that the government was looking at various alternatives to deal with the poor people in East Vancouver. One of those was to establish a bank, and some reference was made by the member for Vancouver-Quilchena that this bank would loan up to $50 or perhaps even $100 to welfare recipients in order for them to make it to the next welfare Wednesday. I'm not so sure whether that was really the answer to help people who do not know how to handle money. I'm sure that every one of them would like to know how to budget and how to handle their money so 

[ Page 11122 ]

they wouldn't run short $50 or $100 before the next welfare Wednesday comes along.

Again I must ask myself the question: why another Crown corporation that will be responsible only to the Minister of Finance and not to this Legislature? Why not try and educate those people, if it's education they're lacking? Or is this bank needed because of the lifestyle of some of these people? I'm not sure. But I'm sure that those who are familiar with East Vancouver and the people there know what the real problem is. I'm convinced that if these people were given the opportunity to start a credit union, that would be the way to go -- if they really need another financial institution. But it should not be a Crown corporation, a citizen-backed institution in terms of continual funding.

I'm not sure whether there were a lot of studies done. I'm sure that Mr. Green has pushed very hard for this proposal. I'm sure his heart is in the right place, but I'm not sure whether his proposed actions or the proposed actions by this government are the answer to the problem before us today. In my opinion, the problem is really not about the ability of the people of East Vancouver to do their banking; it is much deeper. I believe that the government should aim its resources at helping to educate them with regard to problems that lie much deeper than the billfold in their back pocket.

[D. Lovick in the chair.]

I'm surprised that the Leader of the Official Opposition has brought in a motion to refer this matter to the Select Standing Committee on Finance of this House. I could fully support the idea of referring it to the committee which deals with the social matters of people in British Columbia. I do not believe it is a financial matter to begin with. I, for one, cannot support the motion on the floor at the present time, because I believe it is referring the bill to the wrong committee. If there is a problem regarding a lack of access and a lack of ability of the poor people in East Vancouver to do banking, it's not because the financial institutions are not available to them; it's either because of their lifestyle or their lack of knowledge about how to budget.

[3:15]

In conclusion, I want to say that I am of the firm belief that there is no need for this Crown corporation bank facility in East Vancouver. If that were the case, perhaps the government should also be looking at providing a grocery store, a clothing store and everything else that goes along with it. Perhaps the only answer would be to give them vouchers instead of money, and that would eliminate the need for a bank.

I am opposed to sending the amendment to the Select Standing Committee on Finance. I could have supported a motion to refer this matter, in terms of the real needs of the people of East Vancouver, to a social committee for further study. Overall, I'm opposed to a banking institution of this kind, as I have explained.

R. Chisholm: I rise to address this amendment. I have to support the amendment. First of all, I have to commend the government because they are trying to tackle the problem in Vancouver. But they must realize that this problem is not just in Vancouver; they have this problem around the province. We have to look at this issue in a little bigger domain.

Creating another Crown corporation is definitely not the way to go. After all, we have had our experiences with Crown corporations, such as B.C. Hydro, B.C. Rail, B.C. Transit and B.C. Ferries. They've all proven to be rather inefficient, ill-run places to put favoured people. This is not the route we need. We need a route that is not going to eat up the resources of the taxpayer but is going to facilitate the needs of the poor of this province. There are many ways we can go about this, which is why I have to stand and support this amendment.

Send it to the committee. Let us take a look at it a little longer and find out exactly what the most efficient and inefficient ways are of doing this. When we have done this, we'll come back here and probably have a good solution. It would be very easy to support this bill at that point in time, because it is very necessary for us to solve this problem no matter where it is in the province.

I personally think that the credit unions might be a way to go. After all, they are throughout the province. They have the facilities and the infrastructure. This would be a good way to approach this problem.

As for this government getting into the banking industry, it is beyond me why we would even want to. Not only does this government intend to cash cheques, it intends to have the full range of banking services. That doesn't tell me that this is a facility that just cashes cheques for the poor. That tells me that we're going to be giving out loans and doing all the banking business that is available at any other institution. Since when is the Canadian Imperial Bank of Glen in competition with the Canadian Imperial Bank of Commerce? It's time we thought about getting into something a little smaller that can facilitate the problem throughout the province.

The community has asked for this service. They did not ask for the extra costs of banks, and they definitely did not ask for a Crown corporation. As I said, Crown corporations are just another arm of bureaucracy, and that arm is ill-controlled by this government.

As a matter of fact, Crown corporations are at the discretion of cabinet, and the boards of Crown corporations are at the discretion of cabinet. Here we have a government that will regulate this Crown corporation, and it has to report to cabinet. It will never report to this institution. The people of British Columbia will never look at the books of this Crown corporation. We've seen this in the past with the B.C. Ferry Corporation and B.C. Hydro. We've seen where we ask for reports, and they're all whited out. I'm sure this government has stock in white-out manufacturers.

Is that the way to go? Do we need another arm of bureaucracy? This government has enough employees as it is. If it keeps on going, we'll all be working for this government. We don't need another bureaucratic arm.

If we take our time to look at this problem and use a little innovation, a little initiative, I'm sure we'll come up with the proper solution. I have to say that I'm dead set against a Crown corporation. They have been far too manipulated in the past, and there's absolutely no reason why they will not be manipulated in the future.

If we look at the duplication in the bureaucracy and start talking about ministries and why we shouldn't have Crown corporations, consider B.C. 21. Just what is the role of the Ministry of Highways at this point in time? Nobody can figure that one out. Just who is controlling that ministry -- a Crown corporation or the ministry? Forest Renewal is another Crown corporation. Who's controlling that? Is it the Ministry of Forests, the B.C. Forest Service or the Crown corporation?

We have to take a long, hard look. Just what do we want to accomplish here? Do we want to build another bureaucracy? Or do we want to facilitate and get rid of a 

[ Page 11123 ]

problem that we have, which is the delivery of a service to the poor of this province?

I'm not going to say much more at this stage of the game, other than that I am going to be standing in support of the amendment. I want to save a bit for the second reading of this bill. But I do wish the minister and this government would look at the direction they're going and at how they're going to deliver the service. Is this the most efficient way? Do we need a $100 million bank? Or can it be done through the ministry or a trust company? Are the facilities or infrastructure there? Do we need to guarantee $100 million worth of funds to support this?

It is being done in other jurisdictions far more efficiently than what we're debating here today. If you look at Alberta, they have a very efficient system of delivering the funds without the problems we're going through. Maybe it's time we started looking outside our own boundaries and taking notice of what they're doing. It might help us to guide ourselves and be a little more efficient in how we do business. On that note, I'll sit down and save the rest of my speech for second reading.

F. Gingell: When the Minister of Employment and Investment spoke in second reading of this bill yesterday, he talked about the needs of this specific geographic area, limited in size, and just a special-purpose institution to meet the special needs that all of us agree need to be met. He likened it to an embryo Alberta Treasury Branch and to a potential South Shore Bank of Chicago.

I want to tell you that our economy in British Columbia in 1994 does not in any way compare to the prairie economy of the Dirty Thirties, which caused the Alberta government to create the Alberta Treasury Branch to meet the needs of the citizens of Alberta at that time. The downtown east side of Vancouver is not the South Shore of Chicago. I know that the minister and I have been in them both. I can assure this House that the South Shore of Chicago is very different from the east side.

Hon. G. Clark: It's more affluent.

F. Gingell: It wasn't when I was there. That's not because of the bank, necessarily, but it may be.

That's not what we're trying to accomplish here. What we're trying to accomplish surely is not to set up a huge new bank organization. The purpose of the exercise is to meet the needs of the people who live there, because if it wasn't that, we wouldn't limit it to this geographic area. We would set it up so that it could be used in all kinds of various things. We wouldn't have the restrictions in the bill that restrict the businesses that it can carry on, even through subsidiaries.

The one issue that I would like to put to bed is that I said yesterday in second reading of this bill, very definitely and very clearly, that if the minister allows this bill to be sent to the Select Standing Committee on Finance, Crown Corporations and Government Services, the official opposition will make a commitment that if it can get back in here within a reasonable time, we will allow the bill to be passed in this House, as much as is within our power. Perhaps we can co-opt the cooperation of the other opposition parties, because we really do want to seriously look at other alternatives that I believe have not been properly canvassed.

The members for Nelson-Creston and Cowichan-Ladysmith and the Minister of Forests all suggested that we were trying to delay and put it off. That simply is not true. I make a real commitment, and I'm sure the minister will take me at my word. The expression was that all the Liberals do is talk, talk, talk. I would like to suggest that the one thing this government should do in this case is look before they leap. I am sure there is a better alternative.

The member for Cowichan-Ladysmith also said there really wasn't any risk of any guarantees that are made. Well, as someone who's a little older and has been through these exercises, I would like to advise the member for Cowichan-Ladysmith that every safe bet that you put a guarantee behind is a very real risk indeed. We in Canada should know that well. We have had two major financial institutions fail. They were regulated by federal government and by an independent authority with a great deal of power, and they both failed. In fact, I can think of three, without counting the international Bank of Credit and Commerce, which perhaps didn't touch us here. But let's recognize that risk does exist. This institution can be run in such a manner that risk can be reduced. That means they won't make mortgages. That means they won't do a whole bunch of things. I suspect that that may not be the long-term plan. Maybe there is an opportunity that this bank could be used for more than just the social purposes that are put forward at this time.

[3:30]

At the moment, how is this bank going to be financed? They are going to take in deposits from pension funds. They are not going to be able to get any government ones, because there was an amendment today to Bill 44 which I think will stop them being able to get any deposits from government trust funds, pension funds, etc., that are administered by the government. But they are going to invest in the same things that those pension funds would invest in, and take 80 points -- I think that is the correct measure -- or maybe 75 points....

Interjection.

F. Gingell: It's down to 60 points now. So they're going to borrow $100 million, invest it, and pay the depositor a return of 60 points less than they hope and believe they can invest that money for. Now, why is anybody going to invest at 60 points less? Why don't they make the investment directly? Here's why: this government is offering a $2 million guarantee. So the pension fund decides that they will accept 60 points less -- why? -- because they will now have this government guarantee.

Now, all these things are risk-evaluated. Someone has made a decision that the risk is worth 60 points, and that number will change. That's the first thing that tells you that the $100 million of taxpayers' money is at risk. The real estate market can die; the Dow Jones can lose a thousand points.

Interjection.

F. Gingell: All of these kinds of things can happen. I don't know what you expect "Oh!" to do, but it is real.

Now I do agree that properly run, sensibly administered and regulated with an eagle eye, the amount of risk can be reduced. But who is going to regulate it? A federal institution? Oh no, it's going to be regulated by the Financial Institutions Commission. So the government is going to regulate itself.

FICOM's responsibilities, as we all know, are to regulate all of the financial institutions that come under provincial jurisdiction: the credit unions, some trust companies, some insurance companies and similar organizations. FICOM has very real powers and very real authority. Since it is the government, it can stop them from being in business, revoke their licences, cause them to do audits and cause investigations. It has an active role, and I believe that it does it very, very well. In this particular case, it's being asked to regulate its own employers, and that 

[ Page 11124 ]

doesn't work. That simply doesn't work. So I'd like to suggest that the issue of risk is not quite as straightforward as has been stated by these members.

This morning, when we were dealing with Bill 44.... I would like to draw the attention of the minister to the particular sections of the Finance and Corporate Relations Statutes Amendment Act, because the government has changed the investment criteria for provincial trust funds this morning -- or it will when this passes. Instead of a series of criteria that all trust funds must meet -- things like being listed on a recognized stock exchange, having paid a dividend for so many years, and those kind of criteria -- they have changed it to a term that I would call that of the prudent investor: "...the minister may invest or loan the money and in doing so shall exercise the care, diligence and skill that a person of ordinary prudence would exercise in dealing with the property of another person." Clearly it would be inappropriate for the government to invest one penny or make one penny deposit into the Community Financial Services Act. Why? Because you would be accepting 60, 70 or 80 points less in the rate of return for your own guarantee. Nonsense! You cannot guarantee your own actions. A guarantee has to be a guarantee by a third party. I seriously think that you will find this a bind and a barrier to such plans, if such plans are part of your overall strategy.

This government has a lot of authority; it has a lot of power; it runs big bank accounts. It does a lot of work with not only the Canadian Imperial Bank of Commerce but with other banks, too. I am sure that we could find a bank to find a solution to this problem.

That brings me to one other thing that the member for Nelson-Creston said yesterday. He speaks quite often in his charming fashion about city folk who haven't been in the country. Yesterday he should have talked about country folk who haven't been in the city, because he described this particular area -- the area outlined in red on the map -- as one in which there are no financial institutions. The longest-standing Royal Bank of Canada is just across the street. The whole area is just full of financial institutions. In fact, I believe that there are more financial institutions in a square mile around there than in any other place, perhaps other than in downtown Toronto. The other thing that he talked about was lack of police service. In fact, it is right next door to the Vancouver central police station. So I don't think he has been there. I understand that. But we should recognize that you have to know the area and think about how you solve the problems that face us all.

I'm really sorry that the member for Abbotsford is not willing to support this amendment to refer this to committee because he believes it is the wrong committee. I don't think that it's the wrong committee, because I think that we all understand what the problem is. We all want to see a solution. The difference between us is what the solution is and what the most effective way is of accomplishing it on behalf of all British Columbians at the least risk and the smallest cost. It is a Crown corporation that they're setting up; it is a matter of finance. I must admit that I drafted the amendment, and I thought that it was the appropriate committee, because the social issues have been well defined.

Mr. Speaker, I will close by reiterating my commitment to the minister. If he will allow this to go to the select standing committee to look for a better solution -- a solution that I believe will be better for everyone, a solution where they won't make $25 on every identification card.... They're planning on selling identification cards at $30 a crack to these people living on welfare, and they are only going to cost $5. It's all in the report. That's one of their sources of income. For a government that keeps talking about ripoffs, I'm surprised that they would be promoting the ripoff of charging people on welfare $30 for an identification card that they can get produced for $5.

Let's just for once allow this to go to a committee, look at it and see if we can come up with a better solution, and put a definitive time line on when they must report back so it cannot in any way be delayed. Set a time line that gives us the assurance that Bill 41, in whatever form it finally takes, can in fact pass this Legislature before it prorogues. With that, Mr. Speaker, I thank you for the opportunity to speak to the amendment today.

Hon. G. Clark: I'll be speaking in closing debate, so I won't make a major speech now. I simply have to respond very briefly to the reasoned tones of the member opposite, because I've been there, hon. Speaker -- so have you. I've been five years in opposition and seven and a half years in this House. I don't want to sound like a veteran, but there are two parliamentary tactics which the opposition can use to demonstrate their opposition to a bill -- in fact, to attempt to kill a bill. One is a hoist motion, and the other is a reasoned amendment. This is what's called a reasoned amendment to refer it to committee. It is nothing short of a parliamentary tactic designed to oppose the legislation. It is not designed, as the members opposite say, as a reasonable attempt to have a discussion about alternatives. It is simply a tactic, disguised in reasonable tones, to oppose the bill.

[3:45]

We know, from all of the speeches on the bill and on the amendment, that all members on the opposition side are ideologically, fundamentally opposed to this legislation and to this institution. We know that, and we hear members opposite. So this pretense that somehow we should vote in favour of this amendment and we'll have a reasonable discussion about alternatives is patently false. As a result, hon. Speaker, the government will be voting against this amendment.

Amendment negatived on the following division:

On the main motion.

Deputy Speaker: I recognize the member for Powell River-Sunshine Coast. Member, I'll just ask you to wait a 

[ Page 11125 ]

moment, if you will, and we'll give members an opportunity to return to their other duties.

Will those members not participating in this debate please take their seats or otherwise give room to the member for Powell River-Sunshine Coast, who will make his comments on second reading debate.

G. Wilson: I'd like to open my remarks on Bill 41 by really commending the government for attempting to take care of a problem that is in need of attention. If we were to be honest in our approach to this so that the people of British Columbia have some understanding of what's being attempted here, we would try to keep the political rhetoric to a minimum and talk to the principle of what we're trying to do.

The government has recognized that there is a problem, and the problem exists in an area of downtown Vancouver and East Vancouver where residents require a banking service that is less than conventional -- or perhaps it is more than conventional; we might argue it from that angle. The fact is that the charter banks and the credit unions could provide the service -- there's no question that they could -- but they have chosen not to provide the service. In fact, they have expressed a lack of interest in providing that service for a whole series of reasons, which are reasonable to them because trying to engage in the kinds of activities that this particular financial institution would warrant would not be viable.

In my comments to the amendment, I talked about not wanting to send this off to a committee. The reason that I don't believe it's sensible to do so is that this proposition has been studied and studied. The Montgomery report has been tabled and reviewed. As I pointed out in my comments on the amendment, it certainly has been in the public domain since the middle of February this year. There's no surprise in this. I talked about it publicly in late February and again in March. I had an opportunity to meet with people from East Vancouver to ask them whether or not they believe that this is the proper service to be provided.

I have differences with the government in the philosophical direction they have taken with respect to financing this bank and in what this bank will be able to achieve with respect to the moneys on deposit and the investments that will be there by virtue of the government guarantee. That is really at the heart of the major first concern I have.

The second is a question that comes from one that was asked by the member for Delta South. He was talking to the amendment when he asked why anybody would invest if there was going to be a return that would be 60 points less than if they went through a conventional banking system. The more appropriate question is not why would anybody invest. The question is: who is going to invest? What is the incentive?

The answer to that can be found under the guarantee section of this bill, where we see: "The maximum amount payable by government under subsection (2)...." Without getting into too much detail, a $2 million guarantee is provided for certain kinds of depositors. Those certain kinds of depositors are "(i) a public sector pension plan, or (ii) an entity prescribed by the Lieutenant Governor in Council...." I'm told that that language was deliberately put in there. I had some extensive discussions with people from the east side of Vancouver who were consulted about this. I also had one meeting with Mr. Green, who was very forthcoming, and I appreciate that. That language was put in there primarily to capture private pension funds.

We are looking at an opportunity for union pension moneys to be invested in this bank in order to provide the base investment necessary for this financial institution to remain solvent. Those who argue that there is no risk are incorrect. The member for Delta South has spoken to that, and I don't intend to repeat his words. There is risk involved in this venture, and it lies primarily with the taxpayer. Ultimately the taxpayers will have to secure those investments if the bank enters into investments which fail, or if it becomes insolvent as a result of less than prudent investments.

I want the members to remember Principal Trust, how it failed and what happened when it failed. An awful lot of people out there are still out of pocket a lot of money because of the failure of Principal Trust. An accreditation system that a former government engaged in failed to protect the securities that investors had deposited in that organization. Principal Trust is perhaps a different proposition, but I raise it as an example because it is important for us to understand that the risk in this venture is very clear and lies primarily with the taxpayer.

Philosophically, I disagree that the government should be entering into the banking business. It is providing a $200 million guarantee for union or for public sector pension funds invested into this bank in order for the bank to make investments into sanctioned social projects -- housing and land developments -- that are underway. It is important that we recognize that this has been happening in this province in a much more aggressive way over the last number of years. Members know, as people in the province know, that I have raised the issue of the propriety of union pension investment with respect to the Bamberton land development and those kinds of investments. I have also raised the question of the Vancouver Land Corp. and its involvement in the casino and gambling operation. Their own prospectus suggested that there was going to be $35 million in revenue coming to the government. We have to go back to that prospectus when we review and consider this community bank proposition.

Certainly members from the east side of Vancouver whom I had an opportunity to meet with had some reasonable expectations that the dividends from gambling were going to be available for investment into the bank. Mr. Green has told me categorically that that is not true, and I have no reason to doubt him. Regardless, we must disagree on principle with putting taxpayers' money at risk by entering into a banking system of this magnitude and with this latitude in its operations. What we're really trying to solve is the hardships of people on low income in East Vancouver who need some place for financial security, a place that cashes cheques and looks after their individual financial needs.

[4:00]

When I spoke to the amendment, I said that it's important for responsible members of the opposition to say what we would do differently. I mentioned the Trillium Account, a government of Ontario initiative that was set up in 1922. If you review it to understand why that account was originally established by the United Farmers, and if you start to look at how it has fulfilled its mandate over the years, you can see that one of the alternatives this government might have chosen -- and one, I would argue, they should have chosen -- was to provide some form of savings association or government facility, not unlike the Trillium Account, that would allow the opportunity for banking to be available in East Vancouver. Clearly, had the government chosen to do that, they would not be looking at the relatively high risk they are going to be looking at as a result of the legislation we're putting in place here.

[ Page 11126 ]

When I put that question to members of the east side of Vancouver, they said: "Right, that's exactly all we want." All they want is somewhere to have that security. They don't necessarily need a bank that is going to attract union pension moneys, essentially, and then have an opportunity for investment and become part of the banking system of British Columbia. Furthermore, they didn't necessarily have an interest in seeing the level of community control directed so closely by government.

That raises a second very important point about this question of a community bank. If we're going to have those services available to members of the downtown east side, it's critically important that they have an opportunity to control that operation. I simply don't believe they are given that level of control in Bill 41, because the directors will be appointed by government and their mandate is going to be absolutely specific: to maintain the solvency of this institution. At least, we should hope it will.

It's bad enough that we're providing the $2 million guarantees for the union pensions that are being invested in blocks under section 19. But it's important to recognize that those directors' mandate will be the solvency of this institution and that the needs and concerns already expressed by the members of the downtown east side are going to be lost in the long term. This will become more of a vehicle through which those investments can be directed into real estate, social housing and other land developments -- which may well seem socially desirable and, who knows, may well be necessary -- than one providing the service for which it originated.

I think there is much to suggest that's exactly what's at stake. When I met with the members of the downtown east side, they provided me with an opportunity to take a look at some of the memos that came out of the development process that provided guidance to the government -- from the Attorney General's office legislative counsel, for example, one of which dates back to January 26, 1994, and discussed issues around the first draft of this legislation. Members of the east side had this, so I assume that it is not a secret memo -- as other colleagues seem to be able to come by -- but was clearly put out there for general discussion. Even back in January, when members of the community were consulted on this and these questions were put forward, there were, very clearly, two functional parts to what was being discussed: one, how do we provide the service; and two, how do we create an institution that's going to remain solvent and not become a long-term burden to the people?

It's on the second part that I have some philosophical differences with this government. I think those differences are legitimate and need to be put forward. I think the Trillium model, the Ontario model, provides less risk, the same kind of community service and, I think, a greater guarantee to the public -- to the taxpayer -- that whatever venture capital is put out by this bank or whatever investments this community financial service gets involved in, it will not cost the government in the long term. That's in terms of either the guarantees if it should fail or -- what I suspect is going to be more relevant -- the level of moneys that will be needed for this institution to remain solvent.

I confess that I'm not an expert on banking or banking systems. I've never pretended to be so, and I don't stand here and pretend to be so now. In February, when this legislation came to my attention, members of the east side asked that I meet with some of them and talk about what is going on here. We had just learned about the new casino proposal for downtown, and we learned that there had been discussions in community meetings about revenues from a government-owned casino flowing through this community bank. That immediately made me concerned. I was concerned that we were essentially setting up gambling as a means to generate revenue for government to provide social housing.

Philosophically, I think that is entirely the wrong way to go. I don't think we should be developing revenue on the basis of an addiction in order to provide social services, especially not for the downtown east side, because the people living in the east side of Vancouver don't support it. For example, the people trying to protect the Crab Park area don't support it. The people who are going to be the benefactors of social housing -- when and if it should develop, such as with the Woodward's development -- don't support it. Similarly, people who are looking at the overall need -- and many of those people have multiple drug addictions and very low incomes and are in very difficult social systems -- don't support it, because they know that the competing influences and changes in that downtown east side area are going to be an overall negative for them, not a positive.

The question is, then, if all of the people I've just alluded to don't support it.... In the past many of these people have supported this government, and they may or may not in the future. They certainly have been addressed by this government, because the government has had many community meetings. I know, because I actually tried to attend one but was escorted out because I didn't have the right political card. Nevertheless, that's another issue.

Hon. G. Clark: What?

G. Wilson: In fact, it's true; it happened at the Carnegie Centre on Main Street. Nevertheless, that's another issue.

Hon. G. Clark: You should have talked to me.

G. Wilson: I couldn't get there; there was too big a crowd for me to get through to ask permission.

An Hon. Member: Was it a big guy who threw you out?

G. Wilson: Let's not get onto that.

An Hon. Member: I thought it was a very petite woman.

G. Wilson: The member suggests it was a very petite woman, which just shows the respect we pay to all people, whether they're large males or petite women. I respected her authority when she threw me out. The member knows to whom I allude.

Nevertheless, the reason for this is not so much to talk about being thrown out of a meeting, which I was told was a party meeting....

An Hon. Member: It's probably not the first time, nor your last.

G. Wilson: That is true: it was not the first time, and it probably won't be my last.

The point is that there has been widespread consultation with members in East Vancouver over this. The reason I raise that is that what we were trying to get to the bottom of in our discussions around this particular issue was why the government would be looking at the kinds of guarantees they're placing in this. Clearly, in all of the interministerial memos and in the memos that were drafted for the meetings 

[ Page 11127 ]

I've just alluded to, the reason was that they were attempting to attract particular kinds of funds that would ordinarily be going into other forms of investment but not necessarily into commercial banks or credit unions. It was intended that this community financial service not be a direct competitor to credit unions and financial institutions.

I then took the issue to the credit unions and financial institutions and sought some advice, from people who know far more about banking than I, about how this bank is going to operate. They really didn't have a problem with it. Most of them didn't think it was going to be an issue in terms of their own operation. Philosophically, I think they -- like I -- argued: why would the government want to go into the banking business? Every one I spoke to said that this is going to be a money loser and cost us money. Every one of them said that the $2 million guarantee is something that could come home to roost on this government if this gamble fails -- and it is a high-risk gamble that we're dealing with here.

That's why I have to give credit to the government. You have to give credit where credit is due; otherwise, you have no credibility when arguing that it is not deserved. In the original proposal the investments were much greater. This government has indeed backed away from that. That signals to the people of British Columbia that this is a high-risk venture. As a result of that, we have to be very mindful, when we get into committee stage on this bill, that there must be some adequate monitoring and protection of the taxpayers' money with respect to those guarantees.

When we come back to section 19 to look at the entities prescribed by the Lieutenant-Governor-in-Council, that has to be fleshed out. When we start to talk philosophically about the operation of the bank and the powers of the directors to invest, we have to know where those investments are heading, what kinds of parameters are involved, and what kinds of returns we're expected to see guaranteed from them. If we fail to do that, we are really going to be putting the people of British Columbia very much at risk with respect to the maintenance of this bank as a credible financial institution.

Let me close my remarks now and suggest that in principle we do not support the manner by which this bank is being established. We recognize very clearly that there are two different parts to the bill. One is the service that is needed in East Vancouver. We recognize that there is a way to do it. We would have preferred to see the government move toward an Ontario-style model, such as the Trillium Account, which has proven to be successful, rather than move toward the community bank, which is essentially going to put the British Columbia taxpayers' money at risk.

Philosophically, we recognize on the second point.... I put it on the record now. Let those who say I'm wrong prove me wrong. This bank is going to be an instrument through which there will be substantial union pension moneys deposited and reinvested. Through that reinvestment those moneys are going to be going into large-scale real estate developments, as we've already seen with the union investments into VLC, Bamberton and Okanagan Land Corp.

I say that the reason they have to have this bank set up this way is to provide them with the guarantees that they cannot get now when they put money into high-risk venture capital. The real estate industry is high risk. VLC has a lousy track record in this province in terms of delivering on its contracts to provide service to the city of Vancouver. It was the creation of the former mayor of Vancouver, along with a Vancouver businessman, who did not deliver on the real estate properties that they were contracted for. It has a terrible track record.

Hon. Speaker, be forewarned that those in the Alliance are certainly going to watch with interest as moneys flow into this bank and as moneys flow out. We would serve notice also that we will vigorously oppose, with every fibre we have and with every act we may have at our disposal, any hint that the government is going to start to run profit gaming to generate profits to filter into this institution to assist those union pension investments. We do not believe that profit gaming is the way this government should be generating revenue. We believe that prior to any kind of implementation of that connection, there better be a provincewide referendum with respect to it.

In principle we can't support the way the bank is being proposed. We applaud the government's attempt, however, to solve a very pressing need for the people of East Vancouver. We would urge them -- and we have urged them for the last four months -- to reconsider the manner by which they would address that need. Had they taken the time to review the Ontario model more carefully, I believe they would have found that that model would have put the taxpayers' money less at risk and would still have provided the same kind of service to the people of East Vancouver.

H. Lali: I request leave to make an introduction.

Leave granted.

H. Lali: I have the great pleasure of introducing a group of constituents from Yale-Lillooet. Visiting us in the galleries today are 27 very inquisitive grades 4 and 5 students from Bench Elementary School in Merritt, my home community, with their teacher Ms. Lisa Fabbro and 14 adults. Would the House please make them welcome.

[4:15]

Deputy Speaker: I am not sure which member was standing first. Will you decide for me?

C. Serwa: I thank the hon. member for Port Coquitlam for giving me the honour of standing and speaking on second reading of Bill 41, Community Financial Services Act.

I have to say the few good things before I really get into what I'm going to say. I'm not going to say an awful lot of good things about the philosophy and principles behind this bill, because I consider them suspect. But the one good thing I will say is that the minister himself has been in constant attendance during the debate on this, and it's to his credit. Hopefully the minister is listening and hearing a great deal of the comment that has been put forward, because I think a lot of it has been well-intentioned with respect to the responsibility we all share as representatives of British Columbians in this Legislature. So I will give that to the minister. It's to his credit that he has been here, and I hope he has been listening.

It's been said a great deal that members in the opposition are ideologically opposed to the concept. I really don't believe that's true at all. As a matter of fact, for myself, there's not a substantial difference between Her Majesty's Loyal Opposition and the government of the day. Voter preference swings either way, just dependent on who is going to win. Sometimes I think that familiarity breeds contempt, and perhaps that's evidenced in the rebuttal that goes back and forth.

If wasting taxpayers' money is something ideological, then I suppose I have to be opposed. I think if you expose a great deal more of the taxpayers' money -- in the case of this 

[ Page 11128 ]

venture, perhaps up to $100 million -- then I have to be opposed. I don't see that as being ideological. I see that as maintaining the public trust and confidence and the public interest as a whole. If it's something ideological to use taxpayers' dollars to provide all sorts of high-paying, perk-type jobs for friends and insiders of government, then I stand very proud in being opposed to that, because I don't think that's an appropriate use of taxpayers' dollars for anyone. If obtaining maximum value for every dollar differs from the ideology of the current government, then I have to agree and stand proud that I as a Social Credit member am opposed to that.

I suspect it's a given that most of the individuals who are here as legislators really do care about other individuals. I think that is the initial incentive to seek election for this responsible role. I think it's a given, too, that there is a need for banking services. The minister has spoken about the need, albeit of welfare recipients, to maintain deposits and to write cheques. I have no difficulty understanding that need and the principles behind it -- and certainly the need to reduce the mugging or crime that takes place, with the loss of cash dollars that are not traceable. I think that need exists in many other areas in the province. I'm not confident of it, and certainly not to that intensity or degree, but there will always be a certain amount of need.

But before I make all my comments, the first thing I want to do is refer members to the city-state of Athens of 2,500 years ago. When we think of that city-state, we're mindful that the democracy we have at this point in time is a derivative of a concept that was developed in Greece in that relatively small community of 50,000 people. But what most people fail to understand about the decline of that city-state is that after achieving democracy, the population decided that their goals should be comfort, security and freedom from responsibility. In striving to attain that, they lost everything. Athens has never again re-established the philosophical greatness that existed some 2,500 years ago.

The reason I say that, hon. Speaker, is that when we're talking about helping the poor -- and I can certainly quote from the preamble of the New Democratic Party's constitution that the abolition of poverty is one of their goals -- we have to really understand that simply throwing money at the situation doesn't dismiss that level of poverty. We have to be realistic in understanding that if throwing money eliminated poverty, then.... Over the years the hundreds of millions of dollars that have been directed that way have not eliminated poverty. The reality is that there are a variety of causes of poverty. We talk about economic poverty, and we can measure it in different ways. We can measure relative poverty, which is not a realistic measurement. We can measure absolute poverty, where we are required to provide adequate food, shelter and clothing for individuals. We can also talk about the unmeasurable aspects of poverty: poverty of the spirit and of the soul. Those have a vital influence on whether an individual can or cannot succeed -- or will or will not succeed -- because they have a great deal to do with attitude. That's why I referred to Athens seeking comfort, security and freedom from responsibility.

Many will say that the move by the hon. Minister of Employment and Investment is nothing but a shallow, poorly veiled attempt to get political support in perhaps one of the last strongholds of New Democratic Party support in British Columbia and ensure re-election of that member, the Premier perhaps, and a few others in that particular area. Others will see it simply as a boondoggle that will utilize hard-earned tax dollars and venture them simply for the partisan political purpose of re-election. The creation of the Crown corporation is interesting, because the minister has a mania, probably, about creating and collecting Crown corporations. As a matter of fact, even Mr. Carter with his pills is hard-pressed to stay ahead of the minister in his creation of Crown corporations. Is that the appropriate way to make more room for friends and insiders? Is that the appropriate way to help the individuals who need the banking services the minister has referred to? It's certainly my understanding and awareness that there is a real need. Is that the solution? I don't think so.

The minister and the government always attempt to make these things sound altruistic. I have to give them and their spin doctors a great deal of credit, because it's easy to sell. It's like selling motherhood; you don't really have to do a great job once you make reference to the altruistic motivation for this. I don't think we are going to help those individuals in that area or ordinary British Columbians who work in all areas of the province. As British Columbians we all work; that's what builds this strong economy. We have to help people to help themselves.

Hon. G. Clark: This does.

C. Serwa: But it doesn't, hon. minister; it doesn't help people to help themselves. Eighteen years ago a credit union was formed in the downtown east side by a small group of people who were willing to make deposits without any assurance that there would be a return on the investment. That was the CCEC credit union -- Community Congress for Economic Change credit union. That group accomplished something very elemental and very necessary. But it was within the community itself, and when the community works within itself and supports and helps others in the community, there is the realization of expectations and the acceptance of responsibility.

Interjection.

C. Serwa: Members on the government's side are having a good chuckle about people accepting responsibility. British Columbians should be well aware that the government members think it's funny that individuals should and must accept responsibility. I believe that they not only should but must accept responsibility, and with that acceptance of responsibility for one's self, we start to develop opportunities for ourselves.

Does the government really want to help those individuals? Are the intentions of government pure and honourable? I think not. I think the intention of this has more to do with the forthcoming election, and that's the sadness of the whole issue. If it wasn't to do with the forthcoming election, there would be no absolute hurry. There are other community financial institutions. If they were given similar consideration, credit unions or chartered banks could provide the service. The minister knows that full well, but that way he won't have a Crown corporation; that way he won't put taxpayers at risk. But for a small amount of money -- and the minister referred to Atlin, where $300,000 is spent annually by the government to keep a bank open in that area -- we can do the same thing; we can certainly sweeten the pot.

The government handles billions of dollars in transactions back and forth. The government has a tremendous influence on the chartered banks. To ask the chartered banks to handle the service and to sweeten the pot so that they can effectively handle the service makes more sense than creating a Crown corporation, staffing it with directors who 

[ Page 11129 ]

have no real responsibility, and creating a situation where the public assumes all of the risk. However, if the investments -- perhaps made with union pension funds -- prove satisfying and rewarding in the real estate field, then they will make profits. That's really interesting. But if they lose, then it's not they that lose; it is the public, the taxpayer, the ordinary British Columbian who loses. That's the tragedy of this whole thing.

The opportunity is there for the community to be involved within itself. If the government is sincere about that, they can genuinely help others to help themselves without the creation of a Crown corporation and without exposing the taxpayer to this massive risk, and the minister knows that full well. The reality is that there will be no great political credit. You have institutions that already exist in that adjacent area. Chartered banks could take care of the banking needs of those individuals. The government will lose a tool that they can use for political manipulation of those areas.

There is no question that the intent of the bill is good. The objective of the bill is valid, but the direction the minister is going is neither realistic nor responsible. That's the issue at the moment.

[4:30]

If this government, after two and a half years, was genuinely concerned with helping the poor.... We just heard the Minister of Finance talk about the wondrous results that this government has attained. When we were in government, I used to hear a great deal from members in the opposition about food banks. Have they eliminated food banks? I don't know of one that has been eliminated. I don't know of one food bank that has had any reduced demand on its services because of this government. The government, in its wisdom, gave a small increase to welfare recipients with one hand; with the other hand, this very same government increased the provincial tax by an additional 1 percent and put that additional tax onto services. What they gave with the one hand they've more than taken back with the other hand. Clever politics, perhaps, but it doesn't seem like a significant or sincere commitment to alleviate the difficulties that the poor face.

In that same period of time....

Interjection.

C. Serwa: I hear a member heckling. He has now returned to his seat so he can heckle more effectively, and that's fair enough.

In that period of time, this same government that purports to help the poor has actually increased welfare expenditures in the province by over 40 percent. When I look around Victoria -- and I don't think Victoria is any different from Vancouver or Kelowna -- I see more and more young people who should be working but who are not. Government policies have encouraged those individuals to become wards of the social services system. Government has acted very differently. When churches were responsible for looking after those who needed assistance, there were expectations of commitment and acceptance of responsibility. Individuals helped those who needed help to become better people. It gave them the opportunity to learn life skills and fend for themselves. The simple giving of money does not do any of those things.

We have a situation in the province where we've had an enormous increase in the number of welfare recipients. We're encouraging it more and more, and it's not simply the government. I'm afraid it's also those who look after welfare recipients. They create an arena and an environment of opportunity that pulls them onto it and maintains them on the system, because everyone in the system is more empowered, busier and happier -- except the public, which is ill-served by that. The tragedy of that is the loss of human potential in individuals who lose those formative and productive years. The minister and others in this Legislature have to understand that.

It is not a joke. Unfortunately, if you don't get going, you're almost looking at a lifelong situation where you're enveloped in that, and it's hopeless. In East Vancouver and other areas of the province, we have third- and fourth-generation people on the welfare system. There has got to be something dreadfully wrong. The reality is that we have to create opportunities for these individuals to become productive members of society again. They are not suffering from any type of disability. The largest-growing group of individuals in the social services system at present is single employable men. There, again, is a real tragedy. There are opportunities in the workplace to provide jobs for these individuals. We'll never solve the problem by attracting more and more people onto the system. In British Columbia, one out of ten adults is now on welfare, one out of eight children is now on welfare, and one out of ten, or probably more, are unemployed. Considerable latitude has been allowed in this discussion. That was done by the minister himself, and I thank the minister for that precedent.

Yesterday we heard the Minister of Forests speak, and he got really excited about Bill 41. I think he was venting his frustration with what has happened with his six-fold increase in royalty rates. When Peter Bentley, the head of Canfor, complained, there was a reassessment, and coastal royalty rates are coming down again. I think we can dismiss his words as just venting his spleen and take them for what they were worth, which wasn't very much.

What are we going to do with these individuals? How are we going to serve them best? It has been stated that there are a variety of other opportunities available to the minister. Granted, they are practical and realistic, and they are cost-effective for the taxpayer in the province. There are credit unions that provide community financial services. There are chartered banks that are capable of providing these services. If the minister is genuine and is bearing his responsibility to British Columbians, as he must as a minister of the Crown, then he should be looking at these other alternatives. I am confident that within the time lines he has set out prior to the next provincial election, it is entirely possible that the CCEC Credit Union could put this credit union in place and not have that type of exposure.

The minister's proposal is not a quick fix; it's not even an attempt at a fix. It's merely a self-serving Crown corporation that can be utilized for partisan political purposes. If there is a sincere commitment on the part of the minister, and if the minister has been listening, then he must acknowledge that there are better ways to not only serve those individuals in his constituency who are in need of the banking services but serve, in a responsible manner, the requirements of all British Columbians and fully bear his responsibility to the taxpaying public of British Columbia.

I sincerely ask that the minister reconsider and perhaps withdraw the bill.

Some Hon. Members: No!

C. Serwa: Some of the members say no, and that's strong support. I understand why: for partisan political purposes.

But the reality of the situation is that there has been a lot of good dialogue on this matter, and an understanding that a 

[ Page 11130 ]

problem does exist and a solution is required. It's up to the minister to take those words in a responsible manner, and I am confident that he will at least think about them.

I have to conclude my talk by saying that I am soundly against the principle and philosophy of the establishment of this Crown corporation, although I sincerely believe in the intent and the objective of providing banking services for those individuals, for their safety and security.

M. Farnworth: It's a pleasure to rise today and speak on Bill 41, a bill that seems to have caused a great deal of consternation, angst and anguish among the members of the opposition. It's some great conspiracy, some plot to undermine the foundations of democracy -- the fall of Athens -- and undermine the family and the moral fibre of this province. People in the galleries have been listening to this, and they must be wondering what on earth this government is doing that is so evil, so profound in its effect on this province, that members are just tearing their hair out over this bill.

An Hon. Member: Speak for yourself.

M. Farnworth: My hair was torn out long ago, hon. member -- long before you got up to speak.

What are we doing? We're creating a bank, a financial institution, in the poorest neighbourhood in this province and one of the poorest in this country. Those people are not served by a financial institution. The only financial institutions they have are the usurious institutions that charge them a fee to cash their welfare or GAIN cheques. Because the big banks don't make a profit, it's too difficult to service them.

What are we met with when we decide to address the needs of these people so that they can start to help themselves and have the same dignity as everybody else in our society and take advantage of the same services that all the rest of us take for granted? We're told by the Leader of the Opposition to establish a petty-cash machine, because the problems they face are petty problems that just require a petty-cash machine. The leader of the Social Credit Party said: "Sweeten the pots for the big banks. Don't spend taxpayers' money to get this institution off the ground. Oh no. Go the Bank of Montreal." A teller there pays more in income tax in one year than the bank pays on its entire $1 billion profit. The leader of the Social Credit Party wants us to sweeten the pot for the big banks so that maybe they will provide a service. I am appalled. The hon. member says that this institution is similar to what led to the downfall of Athens. Providing tax breaks and sweetening the pot for the Bank of Montreal or the Royal Bank would do more to undermine public confidence in this province's system of government.

T. Perry: It's the Socreds who led to the downfall of Athens.

M. Farnworth: The member says that the Socreds led to the downfall of Athens. No, they just led to the downfall of their own government and party. But that was the solution of the Social Credit Party.

As I said a minute ago, the Leader of the Opposition wants a petty-cash machine, because the problems of the poor are really very petty. You know, you have such petty problems in the downtown east side. You can't find a place to cash your cheque, and when you do, you get mugged or rolled, or you're gouged by some unscrupulous landlord. Such petty problems, hon. member. The leader of the Opposition has such a petty solution. I'm surprised that they didn't ask for a return to the "poor laws" or maybe some more prisons or workhouses to get the poor off the streets altogether.

The poor really are a conundrum for the Liberal Party. On private members' days and on December 25, the Liberal Party likes to portray itself as a friend of the poor, but the rest of the year they get in the way of who the Liberal Party really represents: the big banks, the money on Howe Street and those who go to the glitterati social events. They can go to those events to be seen, to hobnob and to generally talk about what a great thing it would be if they were in government. But then issues come up, and legislation comes from a government that cares about people and recognizes that when the institutions in our society don't meet the needs of people and neighbourhoods because there's no profit to be made or because it's too difficult to service a particular group of people in a particular neighbourhood, and when the government comes up with a creative solution that may bring some stability to the lives of people, may give them some hope and offer them some alternatives to the usurious-money lenders in the area, they don't know what to do. They condemn the government. Then they find one of their own and release that person from the obligation to vote with the rest of the caucus as some sort of token approval. It would be much better if they'd take the position of the Social Credit Party or the Reform Party and just come straight out and say, "We don't like this; we don't approve of it," instead of trying to play both sides of the fence once again.

[4:45]

All that's being done here is creating a financial institution to provide services to one of the poorest neighbourhoods in Canada. We're not providing an $80 million loan to Louisiana-Pacific to put a fibre plant up north and then have that loan written off. We're not looking to provide no-interest loans to party supporters and friends so their businesses can prosper at taxpayers' expense. We're looking to fulfil a need in society for people who are struggling to make ends meet on $700 or $800 a month. I know that's a petty amount of money to the leader, who believes that the solution to this thing is a petty-cash machine.

Hon. R. Blencoe: Which leader is that?

M. Farnworth: The Leader of the Opposition. But you know, when that $700 is all you have, that's not a petty amount of money. It's everything that you have: it's your food, it's your shelter; it's your life. Those people should be able to have a financial institution that they can go to. If the institutions we normally rely on are not willing or able to service this segment of society, then government has a responsibility. The hon. member said: "These people need to learn responsibility." All I can say, hon. member, is that these people are our responsibility if the institutions that are in place are not living up to their responsibility.

I don't know what all the fuss is about. This is a project, a piece of legislation, that will stand the test of time. It is going to service a need and help a particular neighbourhood. It will serve as a model for other parts of this country where there are similar neighbourhoods with similar problems. I'm extremely proud to stand up and vote in favour of it.

A. Warnke: I find myself in an interesting situation. This is one situation where I actually asked for leave this afternoon, yet I've spent the entire afternoon in debate. That's a new definition of leave, I suppose.

[ Page 11131 ]

An Hon. Member: That's dedication.

A. Warnke: I appreciate that comment by the member opposite. Once in a while it's nice to be appreciated.

When I rose to speak on the amendment that was put forward by this side, I just asked a couple of simple questions. Essentially, what I was looking for from members on the other side was some reassurance that when the legislation is put forward it would not be a way to allocate patronage. I was looking for legislation that would not have an ideological bent. Those are just a couple of questions that I want to raise again.

The reason I raised those questions was to invite a response from the other side, because the bill states very clearly in its explanatory note that its purpose is to create a Crown corporation. It's very clear that it is to provide "a full range of financial and related services." I emphasize that very strongly, because what some members have put forward is that what this legislation intends -- and I believe that the previous speaker stated this once again -- is really simple in scope. Indeed, when it is simple in scope, members on this side have suggested that the intent of the bill is therefore good. We'll see. There's always the prospect that we could support this bill. There's always that prospect, because what this side is looking for -- I know it's what I'm looking for -- is some reassurance from the government that certain conditions will be met.

When we see that the intent of this particular bill is to create a corporation that offers "a full range of financial and related services," that has to be emphasized. Because what it suggests is quite contrary to what has been mentioned by some members, which is that this is a simple piece of legislation just designed to help the poor in a certain part of Vancouver. When I look at the explanatory note, I see something quite different. I don't see a simple piece of legislation; I see a very complex piece of legislation -- at least I see complex implications of the legislation being proposed here.

Setting up a Crown corporation is not a simple matter; setting up a Crown corporation that has to meet several criteria and that has several intents and purposes is something else. Therefore it's quite legitimate to once again ask the question: will the public and the taxpayer be subject to a liability? Will they have to pick up the tab? What kind of tab are we looking at? Is it just a small amount, or is it potentially a huge amount? All I'm looking for is some reassurance that the intent of this corporation is simple in scope -- simple enough that the public and the taxpayer will not be subject to one heck of a serious liability down the road. Because whatever the intent of this government is -- or this minister, for that matter -- it is quite possible that unless it is written in a certain way, we could have a very serious liability down the road. Some members from all parties on this side have made some reference to that.

Secondly, is it simply to serve members of the community? We've said that it is to serve a select group in a certain part of Vancouver, the very poor of Vancouver. Does it simply serve their interests, or are the interests much broader than that? When I see "a full range of financial and related services" to be provided to persons, I wonder what that means. The legislation proposed here is vague enough that I'm not so sure, not so convinced yet, that it is to serve a certain very select community within Vancouver. Perhaps the minister could address that.

I'm not yet convinced that the government is not setting up a situation where they're really entering the banking business. Many members on this side have pointed out that that's what should be avoided. If it's a matter of serving a specific community within Vancouver, note that it can gain support on this side of the House. But if the intent of the legislation ends up being one of setting up a Crown corporation that enters the banking business in a very complex manner, with a full range of financial and related services on top of it all, then I'm not so sure this legislation does not camouflage some real problems we'd be facing down the road.

So what is the intent of the legislation? By answering that question, perhaps the minister can reassure us that no, the purpose of this legislation is not to enter the banking business whatsoever. We want something concrete to illustrate that.

I raised a point earlier. I noticed that it was not addressed by any member from the other side following the question I posed, so I'll pose it again. If in fact the purpose of this corporation is to serve a certain community, what we need to do -- and it's really based on an argument put forward earlier by the Minister of Forests.... Is not this corporation essentially one that will be filled by patronage? We have to be very careful. I just want some reassurance that this is not a corporation that's going to be set up in such a way that it benefits someone other than whom it's really intended for, and that's certain members of the community in central Vancouver.

The depositors have to be protected, the public has to be reassured and the community has to be reassured that it is exclusively for them. We have to be reassured that the government is not entering the banking business. We have to be reassured about who is to be appointed to those boards. These are legitimate questions that I want to raise once again and that I will be looking for in the response by the minister.

The rhetoric in this chamber has at times been sharp that somehow this is such a critical piece of legislation, and that this clearly illustrates the division of two classes and how they're represented in this chamber. Well, that's nonsense; it's just plain, darned nonsense.

There are some really interesting questions that should be raised, and it's not a matter of Liberals having it both ways. It's just a neat little series of questions that I think we're posing to ensure that this legislation is specifically targeted in purpose and intent to benefit a specific group of people in the central part of Vancouver. That's what we want to be reassured of. If we do not get reassurance of that in very clear and unequivocal terms, then the problem that the opposition has on this bill is quite legitimate, no matter who has opposed it -- the leader of the Social Credit Party, the leader of the Reform Party or ourselves. It's not because those three parties have something in common, or the fourth or fifth party, or whatever.... As a matter of fact, we approached this problem from different vantage points, but we have raised some legitimate questions. So the onus is still on the minister.

[The Speaker in the chair.]

I would hope that in the final closure -- which will hopefully come in a couple of minutes -- unlike in his opening statement, the minister will avoid political rhetoric, examine the questions that have been put forward by us, answer them unequivocally and possibly obtain our support.

The Speaker: The hon. minister closes debate.

Hon. G. Clark: In the seven and a half years, or a little longer than that, that I've been here -- hon. Speaker, you've 

[ Page 11132 ]

been here longer than me -- I cannot think of opposition speeches that have been more patronizing, more condescending, or more insulting to a group of citizens than those we've seen from across the way. We have heard them say: "Those poor people in the downtown east side. Oh yes, the government has to do something about them. Oh yes, we should get on our knees and ask those great bankers in Canada with that great social conscience to open a branch in the downtown east side. That's more appropriate. Yes, those poor people need help."

The leader of the Social Credit Party -- one of the last two Social Credit members in British Columbia -- said we should rely on charity to service those poor people in the downtown east side. The Leader of the Opposition said we should rely on the banks to service the people in the downtown east side. In fact, he said: "There are banks next door that people can use if they decide to use them." That's absolutely false. You know that, hon. Speaker, but I don't know if other members do.

[5:00]

There is a Bank of Montreal in the downtown east side, and yesterday -- on welfare day -- there was a lineup a block long outside that bank, in the rain, for people to cash welfare cheques. That's the only bank -- to their credit -- that will even cash a welfare cheque in the downtown east side. You cannot go into a credit union in British Columbia and have your welfare cheque cashed. You cannot go into a bank and open an account with your welfare cheque and have it cashed immediately. They won't do it; very few institutions will. Vancouver City Savings has recently announced that they will be cashing welfare cheques. But in the downtown east side there is one institution -- and they're not happy about it, because banks and credit unions don't make money from welfare accounts. They don't make money when someone gets $540 a month to live, and at the end of the month it's down to zero. They don't like it. They don't want to do it. They will, reluctantly, if we force them -- if we work with them. And one bank, to their credit, will cash the cheques.

Those people cash their entire month's cheque, then they go down the street and get rolled. We are losing $3.8 million a year because people get their cheques stolen. Only if they have a police case number will we replace it. Half of all the cheques stolen from welfare in British Columbia are in the Vancouver region, because they don't have access to banking services. I don't think that members in this House have a clue what it's like not to have a bank account -- not to be able to go into a bank, deposit your cheque and take money out over the course of the month. That's what most people take for granted. It doesn't exist for thousands of British Columbians, not just those in the downtown east side. Certainly it's acute in the downtown east side. The Leader of the Opposition is simply wrong when he says other banks will serve them.

Worse than that, the Leader of the Opposition asked why we should do this in the downtown east side. He said the demographics are changing: big changes are coming and they won't live there ten years from now, so why should we? Gentrification is coming; they are being moved out. This is like Expo, when there were evictions. Where was the Leader of the Opposition when he was active in city politics, when hundreds of people were carted out of their homes and dragged away to make room for tourists coming here for Expo? Where was the Leader of the Opposition when he was mayor of Vancouver, when senior citizens were evicted to make way for bulldozers and expensive condominiums? Where was he? He was nowhere.

We're seeing his attitude exemplified again in the debate on this bill. He says not to worry about the downtown east side. Those poor people won't live there ten years from now; they'll be pushed away. They'll be pushed out of there; they will be somewhere else. He says that we shouldn't do anything, but that if we do do something, then we should work with the banks and get them to open a branch and help these poor people, who should be charity cases of the government.

What we're doing here is not some charity case. As the leader of the Social Credit Party -- I think he's the leader -- suggested, we are trying to empower people through this bill so they can help themselves. Yes, this institution will have ten members on the board of directors, but three of them will be elected from depositors who live in the downtown east side. It will also have, by way of this legislation, a permanent advisory group to the board of directors who are elected from the depositors.

This is an attempt to say no, we're not just going to give money to a bank to open some branch down there. Yes, it would be helpful if there was a branch down there, but we're not going to just feed money to big Canadian banks to open a branch in the downtown east side. This is about creating an institution that people in the community will own, take pride in and treat with dignity and respect. They will have some influence over how it operates.

Even if we did pay a bank to open a branch in the downtown east side, would it be any different? Would they treat people with multiple dependencies or mental illness with respect? How do we know that? Are we going to take them through sensitivity training that is paid for by the taxpayer? If we stood in this House and said the government of British Columbia was going to give $500,000 to the Canadian Imperial Bank of Commerce to open a branch at Main and Hastings, these opposition members would be the first ones to say: "You're throwing away tax money. You're giving away money to the banks. You don't need to do that."

With this legislation, we're trying to create an institution that the people themselves have created. At 14 public meetings in the downtown east side, they told us what kind of institution they think they could work with that can help empower them to help themselves, that we can use to train people from the downtown east side so they can get off welfare and into the workplace, and that we can use to respectfully treat people who aren't otherwise treated with respect. We can develop an institution that goes on beyond an NDP government or some other government which tries to make lasting change, and that will also, by way of developing deposits, not be an ongoing drain on the taxpayer.

This is a unique institution; it's a creative response to a serious problem, not an old-style response like having charities open up cheque-cashing institutions. This is not a Liberal response, shovelling money out to banks to try opening a branch down there to service these poor people, but a fundamentally different, creative response to develop a different kind of institution.

Members asked why couldn't we get the credit unions or the banks to do it. Why aren't they there now? It's a free enterprise economy; it's a free country. As I said earlier, they can't make money. Credit union members, as socially conscious as they can be and as they are from time to time, also want their credit union to make a profit. They're not necessarily interested in something that is going to be very difficult to make a go of.

There are some credit unions.... We consulted many of them. The Gulf and Fraser Fisherman's Credit Union, which is two blocks away, has outstanding management. I met with the CEO, Len Gatto, from the East End, who said that this 

[ Page 11133 ]

was a great idea. I said: "Why won't you open a branch down there? We'll help you." And he said: "We'd like to help you, but we only have two branches, and we're opening a third. We don't have the management capacity to go and open another branch." And believe me, it will be a special challenge to open a branch in the downtown east side. They said: "We'd like to do it. We'd like to help you. We just can't quite justify it to our members. Even with a subsidy, our management talent can't be expanded to do that very difficult job." They said: "Yes, we'll help you in every way we can." In fact, they do have one individual who would be outstanding but who is in South Africa helping to set up a credit union movement there.

The Gulf and Fraser Fisherman's Credit Union is one of the most progressive, best-run and most efficient credit unions in the province. They were there supporting it when we announced this bill. Yes, they'll help us; we may even hire them to help us. I'm very impressed by them. But they're not really interested in opening an institution down there that would drain away their expertise and talent, trying to do something quite different in a very tough part of town.

Do the banks want to open in the downtown east side? I mean, give your heads a shake, hon. members. The banks aren't interested. These big Canadian banks, which are making record profits, are not interested in opening a community bank with members from the downtown east side on an advisory council giving them advice on how it can run. If we bludgeoned them, if we demanded it, if we gave them a lot of money, maybe we could get them to open a branch down there. Would there be a lasting legacy in the community? Of course not. You members would oppose it in any event, because it would be giving it away.

This is not something we dreamed up, hon. members. Two years of consultation has been mentioned by some people in this House. That's two years of work. We canvassed the banks. By the way, they have been quite supportive of this initiative, and I want to respect that. They supported this initiative because they're not interested in doing this. We consulted the credit unions, and they have been supportive of this because they're not particularly interested. I should say that when I approached the management of one of the largest credit unions about opening a branch in the downtown east side, they said: "Maybe, but those people would become members of the credit union, and they could go into any of our branches. We can't have that."

So we've consulted them, and they've been quite supportive of this initiative, by and large, in part because they're not having to do it. The banks have been quite supportive, because they recognize that the economics of this are tough, and they're not interested in doing this. Credit unions have been quite supportive. Believe me, we will rely on their expertise, and we will work with them. We hope they will give us assistance in trying to do this.

We have spent two years looking for models that will insulate the taxpayer from risk, provide the kind of dignity and respect that we want to see people treated with, and provide banking services. In working with the community, we have come up with this hybrid, if you will, with this unique institution, which we think will work very well.

Is it without risk? Of course not. I've never said it's without risk. Wayne Nygren, the chief executive officer of the B.C. Central Credit Union, said that there is practically no risk, and I agree; there is very little risk if we manage this very carefully and prudently. But is there a risk? Yes. The government of B.C. guarantees deposits for credit unions now -- some $12 billion. Is there a risk? Yes. Is it a reasonable risk? Yes, because we have a Financial Institutions Commission that regulates them, because they're well run, because we have a central credit union, and because we have very tough rules on liquidity. Do they fail? Yes. There was a failure of a small credit union quite recently. Yes, there was a guarantee that had to be made good on.

Is this without risk? No. But are we so timid in government today, have we such lack of imagination and creativity in dealing with these problems, that we can't take any risk to try to deal with something in a creative way? I say, yes, of course we have to minimize the risk. It's being regulated by the Financial Institutions Commission. The liquidity and equity requirements are already there. It's being managed by the government of British Columbia, not some fly-by-night VSE company. This is being managed by a government operation, which will minimize the risk. On top of that, because we want to have deposits make a rate of return so that we can cross-subsidize what is otherwise not economic, it's in our interest to make sure that the $10 million, $100 million or $200 million which we manage to get on deposits -- we hope from pension funds, corporations and churches -- is managed prudently, because we need that revenue to make sure that we subsidize the other services.

Yes, there is risk. We are doing everything we can to minimize it, but there is a small amount of risk. It's a risk worth taking, in our view. It's a risk worth taking if we're setting up an institution where people will help themselves, where government is helping people help themselves. Government is setting up an institution which we hope will go on; which will, for a change, give some dignity to the people in the downtown east side; which will give them access to banking services that everybody in this chamber takes for granted; and which will give them institutional access to the policies and procedures of this bank.

[5:15]

This is, I believe, a very creative, unique solution to a serious problem. It is not a panacea. It is not going to solve alcoholism, drug dependency or serious problems in the downtown east side. It is a small step forward in trying to revitalize and bring some economic stability to the community, to change the dependency and create an institution which gives them some hope that things are changing and that government is listening. I ask all members to support this bill.

I now move second reading of the bill.

Motion approved on the following division:

[ Page 11134 ]

Bill 41, Community Financial Services Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Clark: I call committee on Bill 14.

BUDGET MEASURES IMPLEMENTATION ACT, 1994
(continued)

The House in committee on Bill 14; D. Lovick in the chair.

On section 9 (continued).

L. Fox: I listened with a lot of attention to the discussion this morning; however, I did miss the first part of it. So if in asking the question I am covering something which the minister already covered, I would gladly research the Blues with respect to that.

With respect to section 9, in years past -- I recall when I was on the school board -- we used to fund special education based on proven need within the district. That act changed to the point where we now fund special education based on a percentage of the block funding. It appears as though this change was necessary because the Minister of Education tried to look after complaints that money allotted to special education in some districts was not being spent on special education. His authority to do that was challenged by the BCSTA, as I understand it. So now we see this come forward, which gives the minister that authority.

[N. Lortie in the chair.]

I guess the question I have is: why would we not go back to a process for funding special education based on need in respective districts, which would therefore give the ministry some authority over how that money is spent? Why would we not go back to special education funding based on needs in respective districts rather than giving the minister the authority that section 9 gives him?

Hon. E. Cull: The funding for special education is provided by both of the methods you have indicated. In fact, the majority of special education funding is based on need -- on the number of children in that category who require services or special education -- and there is a dollar amount attached per child in the school system.

With the high-incidence, low-cost special education programs, which is the label you may be familiar with, those ones are. It's very difficult to count the children, because there is such a high incidence of it. Those programs are based on a percentage of enrolment in the district that tries to approximate what the impact in the district will be. I'm as familiar as you are with the arguments that school districts have made as to whether or not that meets their needs. In some cases it does, in some cases it doesn't, but it's probably the only practical way to deal with the high incidence of special needs children.

L. Fox: Yes, it's my understanding that the funding is applied on the basis of those two methods. That's more a justification of how they've expended the money than of how they get funded.

There are a couple of other concerns. I've spoken with the school districts within my riding, specifically the Prince George School District, which has, I'm sure the minister will be aware -- and certainly the government should be aware -- one of the best special ed programs in British Columbia. They presently spend about $2 million more in special ed than the grants received. They have a couple of very legitimate concerns, I believe, that will flow out of this clause. The first one would be that there would be more administrative time spent trying to justify that they have legitimately spent those dollars on special ed programs. It would require a lot more time spent on justifying programs, which would take away from the ability to deliver the service. Has the minister looked at that or had discussions with the Minister of Education with respect to how much administrative time would be required to comply with section 9?

Hon. E. Cull: I'm not going to speak about specific districts here. I know members may want to use them for illustration purposes, but I'll just talk provincewide. Provincewide, districts are spending $42 million more than the target, according to their budgets submitted this year. In fact, boards have made decisions to allocate more money than they were required to under the target. That varies, of course, from district to district. I'm sure you can receive the information on your own district directly from the Ministry of Education.

[5:30]

There would be very little administrative cost involved on the district's part. They simply have to do this as part of preparing their budgets. They have information through the accounting manual on what is considered for special education and on administrative caps, and it's simply a matter of adding up the budget items and comparing it to the target in their budget letter.

L. Fox: That begs the question then: if there's $48 million more than allocated to special ed being spent by all the districts in the province, why the need for section 9 of this particular act, which gives the minister authority to dictate to the boards? The boards have already proven that they, through local autonomy, have seen need beyond what the province funds and have reacted to that need without the minister telling them. Why, then, do we even have section 9 in this act?

Hon. E. Cull: This member may recall that the party he used to belong to actually amended the legislation a couple of years ago to require districts to spend no less -- I think that's what it said at the time. They couldn't spend less on special education in a following fiscal year than they'd spent in the previous year. That was creating problems in districts. In cases where districts had been putting additional funding in, above and beyond what the ministry had provided, they were unable to provide any flexibility when they came to more difficult and challenging budgets. It also didn't allow them to respond to changes in their enrolment.

There was a report produced in December 1993 by the Education Finance Advisory Committee, which looked at the whole question of education finance. If you'd care to have a look at page 15 of that, one of the first recommendations is incremental targeting for special programs. It is a direct recommendation from the Education Finance Advisory Committee to do this. The fact that districts are spending more than is targeted this year is, I think, a good thing. However, if you look across all the districts, you'll see that not all of them are spending more than was targeted. That hasn't been the case in the past in all districts.

L. Fox: I appreciate the minister's answer. I guess we can go on to look at some other concerns. It seems to me that 

[ Page 11135 ]

with the flexibility provided in the legislation in the past, individual districts could not spend less on special education. They had the ability to look at special education needs within their districts and put emphasis where they believed it should be. That kind of management is now going to be taken away from them. One of the concerns is that because of the funding mechanism, we could actually be looking at labelling students within our system. We presently mainstream most special ed students. Let's look at ESL, for instance. We could be labelling ESL students to the point that in order to justify the funding spent, we would literally have to have separate ESL physical education classes. I can see that that could happen in order to justify that they've spent those dollars on ESL students.

We could look at another issue that I think we're all very concerned about, and that's funding for severe behaviour problems. As I understand it, that's section 116 in the funding formula. We presently have the ability to use funding for severe behaviour problems in the mainstream classroom. But with this kind of target funding, in a large school you could end up setting up a separate classroom for students with severe behaviour problems, thereby putting a stigma on those students when they really don't need that. Those are some of the concerns that parents, teachers and trustees have about this particular clause. I'd be interested in the minister's response to that.

Hon. E. Cull: This legislation will prevent the exact example that you've used, although ESL isn't a special education program. If it was, what you've just walked us through in terms of your concerns is a pretty good example of what we don't want to see happen and what can't happen under this existing program. You can't take special education students and put them into a PE class or music class, or buy basketballs that they're going to use, and call that a special education program, and then say that that is how you have spent the special education money. In fact, the way the act is set up, it will prevent that from happening. Unfortunately, in some districts that was happening in the past. Some districts said: "We have spent all the special education money you've given us."

All students are funded first for a regular program. It doesn't matter whether you fit into a special education category or not, you are funded for your regular program, you're funded for PE, you're funded to be in the class and you are funded for your share of equipment in the school. I will read out the programs that are targeted under this legislation so that we will have them in the record: learning assistance, special health, severe behaviour, high-incidence increment -- I'm not quite sure what that means, but I'm sure the staff can help me -- high-incidence job training, low-incidence increment, low-incidence job training, dependent increment, gifted, hospital-home-bound, and some funding for identification and planning. Those programs are already funded through the block funding. Through the methods that the ministry uses to determine how much money a district will get -- the funding formula, not the spending formula -- that money is already generated according to district enrolment.

This says that children who fit into those categories and who would be taking those programs are entitled to get the dollars that the taxpayers, through the budget process, have decided should go into those programs. Those dollars have to be spent on those programs; they can't be spent on physical education, basketballs, class trips or anything else. It has to be spent on that programming, because we expect all of those other things, like PE and other aspects of education, to be funded through the regular education funding that all children get.

L. Fox: Am I to understand that severe-behaviour funding is not part of the special ed?

Hon. E. Cull: It is. I know I read the list off very quickly; you can have the list. Just to clarify this, those are all the programs that are categorized as special education, but they are not individually targeted. The district will have some children who are in the severe-behaviour category -- program 116. Other children will be in the gifted category, and others will be in different places. That will generate the funding that will go to the district for special education. Enrolment generates the funding, and the funding in total will be earmarked under this legislation. So there is flexibility within the programs, but for special education overall, you can't spend less than the amount set by the target in the legislation.

L. Fox: As I understand it, in all of those you listed, there is some flexibility for school boards to look at the need within those respective categories and to be flexible about how they spend money. Thank you for that clarification. The minister would be well aware that in some cases the allotment for severe-behaviour students is about $6,000 a student; in some cases $20,000 to $30,000 per student is spent. That flexibility has to be there in order for them to meet the requirements of the respective students.

Let's go to the aboriginal part of this for a moment, because this section covers that as well. It is my understanding, particularly in the administration costs, that some schools within the same school districts -- as I'm sure the minister will understand -- have a different ratio of aboriginal students. Because the funding was flexible in the past, in some cases they were able to use some of that aboriginal funding in order to justify a vice-principal, for instance, because there were a higher number of aboriginals in that school, and special needs were created by that. That administrator would be able to deal with that without targeting or segregating those children, and all of a sudden saying: "Well, this is a high-percentage native school, so we have extra dollars here." They were able to make those decisions consciously as a school board to meet the administrative demands of that school because of the special needs. Is that flexibility still going to be there, or is it going to be a lot more refined than that?

Hon. E. Cull: Aboriginal support services are still a component of the overall aboriginal programs that are dealt with in the legislation, so yes, that flexibility is still there. It's still considered to be part of the appropriate area that you could spend the money on. But I think you should be aware that last year the boards -- all 75 of them -- collectively spent $3 million less on aboriginal programs than they received from the ministry. The bands themselves forcefully brought that to the attention of the government as a considerable concern on their part, because they knew that the government had provided the money and created a priority around that issue. But they were also aware of cases where they were not receiving it all, and that the boards had collectively underspent on that. This year, as a result of the target that has been set, they will be $3.5 million over the targeted amount. They'll be spending all of the money that is assigned for aboriginal programs, plus some more.

[ Page 11136 ]

L. Fox: I guess I have to question the minister with respect to that underfunding last year. Could it not have been that some of these expenditures were seen as not going directly into aboriginal...? In the case I just outlined, where a vice-principal was assigned to a particular school but not charged directly to aboriginal funding -- for the purpose of not wanting to create a special image that that school was aboriginal-based -- could that not have been part of the problem, and part of why fewer dollars were spent than the allotted amount?

Hon. E. Cull: The aboriginal education funds are for incremental costs for additional programming, not the regular programming needed in a school that might, for whatever purposes, decide it needed an additional administrator, more administrative time or more clerical time, or in a school district that needed special curriculum development that might not be common across the district. The school districts are provided, through the block funding formula, with money to run the schools and provide education for all children, regardless of whether they would benefit or are participating in any additional programming. Where we have targeted money to aboriginal programming, we want to make sure that that money is in fact going to aboriginal programming and is not being used in a general way which may, yes, benefit aboriginal students -- that it is going beyond simply benefiting students and is being used for a more generic purpose throughout the district.

[5:45]

School districts have to make difficult decisions about budgeting, and I can understand how those kinds of decisions get made from year to year. But the very clear message that we've had from first nations is that if we are going to provide money for aboriginal programming in public schools, then they want to make sure that it's tied to those programs.

L. Fox: Just one final comment. I guess I'm very sensitive to the trustees' concern and the school boards' concern about labelling students and having groups of students labelled, whether as aboriginal students, special ed students or severe-behaviour students. I think school boards want to have a very mainstream type of education program and want to be able to give students the more appropriate right that they do have to equal education.

That being said, I guess there's only one other observation that I have. It concerns me when I see the move towards provincial bargaining, which is taking away from the autonomy of local school boards. We see this as a bit of a removal, once again chipping away at the autonomy of local school boards. I begin to wonder at what point we are going to lose those very dedicated individuals who spend a lot of time and effort trying to promote the best possible education for their respective districts, always trying to balance the desirable with the affordable. At what point are people going to lose interest in being a school trustee, when we keep eroding the autonomy of a trustee? I think that's something we should all be cognizant of, because they play a very important role in society and in our educational program.

Hon. E. Cull: I know that wasn't a question, but I just want to comment on it and confirm that our government's belief about school trustees is the same. They are a very valuable and dedicated lot. When I was a school trustee, I never participated in any bargaining, and I still found enough work to keep me busy. When they were recruiting me to run for the school board, I think someone told me three meetings a month, and it turned out to be closer to three meetings a week. I think all of us who've served on school boards probably got the same pitch in the early days when we were a bit naive about what was involved.

Clearly the change in bargaining -- which we'll debate when that piece of legislation is introduced later in this session -- is a very small part of the overall responsibilities of school trustees. I think there is no shortage of important work for trustees to do: setting educational and personnel policy; dealing with the facilities problems, which are a major headache for most school boards; and dealing with issues that come up about students and principals and all the rest of that. It's a tough job, and there's a lot of work there. I don't think these small changes in accountability have in any way taken away from the important work the trustees do.

S. O'Neill: I ask leave to make an introduction.

Leave granted.

S. O'Neill: Somewhere in the precincts today are 12 students from the Sequim Middle School of Sequim, Washington. On behalf of the Speaker, would the House please make them welcome.

C. Serwa: I have just a few short questions for the minister. The money that we're looking at -- are these funds that are flowing from the federal government for the education of status native students, or is this in addition to the flow of federal dollars that are going to the provincial treasury and are dedicated for the education of status students?

Hon. E. Cull: Unfortunately, I'm not sure I've got a clear answer here, although I do have some assistance from the Ministry of Education staff. It appears that some of the money may be coming from the federal government, in that we provide the service and then we're reimbursed. I think that's a question, in terms of the details of what money goes in and out from the federal government, that you might want to canvass in their estimates.

C. Serwa: It was my understanding that the normal equivalent of block funding was transmitted to the Ministry of Education from the federal government. In this particular case, I was wondering whether you were looking at the allocation of those federal dollars, or whether you're looking at the injection of provincial tax dollars dedicated for aboriginal studies.

Hon. E. Cull: The funding from the federal government would be for the entire education of the status Indian student, not for aboriginal education as we define it in this legislation or in the block funding. That money is essentially revenue that comes to the province to pay for a federal responsibility and is much like other transfer payments where we provide the service and bill the federal government, or they pay a portion of it.

Sections 9 and 10 approved.

On section 11.

L. Fox: Just a point of clarification. This is a section that allows the minister to withhold money. One has to wonder whether that's after the fact. If money has been spent, and the minister doesn't totally agree, what triggers this? What's the 

[ Page 11137 ]

mechanism? At what point does the money get withheld? Is it in the future year's budget or in this year's budget?

Hon. E. Cull: The school districts submit their budgets in the spring for the following year, September to June. The decision of the minister would be triggered by the submission of the budget in the spring, so it would be before any money had been transferred or spent.

Section 11 approved.

On section 12.

J. Weisgerber: My questions on section 12 relate to the cancellation of a perpetual fund. In the early sections of this act we saw the cancellation, effectively, of the B.C. Endowment Fund, formerly known as the privatization benefits fund. That section effectively cancelled a $600 million fund.

After a ministerial statement earlier today we talked about the government's borrowing. We know that the government was able to reduce its borrowing, in the case of the cancellation of the B.C. Endowment Fund, to the tune of about $600 million. I suspect, although I don't know, that the B.C. Cultural Fund being abolished under section 12 didn't have those kinds of dollars in it. I'm wondering, first, if the minister will clarify for me the amount of money that was involved in that fund, and second, if the minister can give us a sense of whether it is a policy and philosophical direction of government to systematically do away with perpetual funds, to take the money and use it to reduce government's borrowing around the province.

Hon. E. Cull: The member will know and recall, as he was part of the Social Credit government, that there were all kinds of special accounts in the consolidated revenue fund. Labelling something a special account gives the group that has some attachment to that account the belief that it is like a bank account with money in it that you can go and make deposits to and withdrawals from, when in fact it's not. It's simply a notional amount inside the consolidated revenue fund and is really very meaningless. Notionally, there was $23 million in this account, but it was all part of the consolidated revenue fund. If you were to take that $23 million out, it would have to come out of the deficit or the CRF. It was like all of those special accounts.

Yes, there has been a policy to drastically reduce the number of special accounts, because we don't think it is a smart policy to have accounts that are, in a sense, only envelopes within the consolidated revenue fund and are not really meaningful separate accounts. The B.C. Endowment Fund is, of course, different. As you've indicated, the B.C. Endowment Fund actually has real assets of over $750 million. In that case, it is a significantly different account.

J. Weisgerber: Without wanting to go back to the B.C. Endowment Fund, it was performing very well as a fund and was providing some significant revenues to government.

The purpose for the creation of most of these funds, as I understand it, was to guarantee particular functions or groups with a basis for income. I think of the First Citizens' Fund, which is and has always been dedicated to providing a base -- $25 million -- for aboriginal economic development that guarantees aboriginal people an income for a particular purpose. I wonder if the minister could tell me what the particular purpose of the British Columbia Cultural Fund was and whether or not any groups were depending on the interest generated by that fund, nominal or otherwise.

Hon. E. Cull: The main reason for dealing with the cultural special account in this respect is that it was not generating consistent, predictable and dependable revenue for the cultural community, as the other special accounts weren't. You can create the accounts, but if they are not really separate bank accounts, if they aren't being kept separate from consolidated revenue, and if your revenues go down or your spending goes up -- as it did during the late 1980s at the rate of 12 percent a year in overall government spending....

One of the ways the government dealt with that was to make budgetary decisions on cultural activities and programs and other parts of government that didn't reflect what the rate of return on that account would be, because the pool of money was one pool of money and the budget decisions were weighing off all the priorities. In fact, you could end up with some pretty nonsensical decisions if you ended up with so many special accounts that you generated a revenue flow coming out of those special accounts that left you with an inadequate amount of money to do other things which might be of an even higher priority.

We have taken the amount of money that was in the 1993-94 budget and put it directly into their programs -- they have about a $1.5 million increase in spending this year in the cultural programs vote -- to ensure that there is some predictability through the budget process. I think you end up with a more predictable set of funding for those programs by doing away with the notion of special accounts, which were misleading to the groups out there and were not tied into the reality of the budget decisions that have been made over many years.

J. Weisgerber: I'm not sure that either of us is going to change the other's mind, but let me tell you that if I were the recipient of the benefits of a fund from government, I would feel more comfortable about the predictability of funds coming to my organization than I would be about the vagaries of the budget processes and the various agendas that drive government.

[6:00]

Indeed, in the cultural community we have seen a group that for many years thought they could depend on lottery funds and believed there was a reasonable expectation for them to look to B.C. Lottery funding for a whole range of issues. That has disappeared. Now the $20 million fund has also disappeared. Whether there is a marginal increase or decrease in the budget allocation this year, I would submit that it is less dependable and that organizations can take less assurance from being put into the budgeting process than they would from knowing that there was at least some assurance flowing out of a perpetual fund created in government.

As I said earlier, I'm not sure that either of us is going to be able to win this argument, but I think it's worth putting on the table. I think there are strong fundamental arguments to be made for perpetual, specified funds, because they provide some continuity of revenue to organizations which might otherwise not have a particularly strong spokesperson within government.

Hon. E. Cull: The member, having been part of a former government, should know that spending from the special accounts has always been a budgetary decision. There isn't a formula that says there is a special account that earns a 

[ Page 11138 ]

certain rate of interest, and then all that money automatically goes to items that the special account was established for. Your government, in setting up the special accounts, always made a....

Interjection.

Hon. E. Cull: It's confusing. The Liberal Finance critic is saying that it wasn't his government, but I still see this member as having been part of a former government, so he does have some knowledge of the internal workings of the budgetary process.

It has always been a budgetary decision. I don't see a lot of comfort in being a member of the cultural community and knowing that I'm going to get something from a fund when the amount of money that's really in the account is zero. It's not very comforting. The budgeting process is probably a lot more comfortable in that respect.

Noting that the hour has actually gone beyond....

F. Gingell: Finish it.

Hon. E. Cull: We can finish this one? I'll sit down because I'm getting encouraging signs.

J. Weisgerber: At the risk of prolonging things, let me just say that the fund I'm most familiar with is the First Citizens' Fund. That fund earned revenue, and it wasn't always spent. The revenue earned in a fiscal year wasn't necessarily exactly the amount spent. There wasn't always a draw on the fund, but money was accumulated within the fund. I hope it is still accumulated and is there for the benefit of aboriginal people wanting to move forward. I assume that other funds are dealt with in the same way. Perhaps I will have to go back to the minister's estimates in order to follow this assault on funds, to make sure that funds like the First Citizens' Fund are not being threatened by a government that has a zeal for getting rid of perpetual funds -- "perpetual" becoming a word that now seems to reflect anything but perpetuity. Indeed, we've lost more perpetual funds in the last three months than I would care to think about.

F. Gingell: In what I hope are the dying moments of the discussion of Bill 14, I would like to say that, personally, I have found the special accounts to be confusing and difficult to understand. All these envelopes of money were empty when you opened them up, and did create unrealistic expectations. Had the previous administration been a little more financially cognizant of all these matters, perhaps the funds would have been there rather than the puffery. I encourage the government to get rid of special funds and special accounts in order to make the accounting of the receipt and expenditure of the funds of the taxpayers of British Columbia as simple and as easily understood as possible by the citizens that pay all the costs.

C. Serwa: I have several questions on this area. The B.C. Cultural Fund, the former Endowment Fund, stood at what figure? Was it $750 million?

Interjection.

C. Serwa: The value of this $600 million fund that was left by the former government and was being transferred to this fund.

Hon. E. Cull: We're talking about the B.C. Endowment Fund. That's not the subject of this section or in fact of even.... I can't remember if it was earlier on in the act. The B.C. Endowment Fund is not the subject of this section.

C. Serwa: I thought that this was the new name for that fund; I apologize for that.

Moving away from special funds, I have a question on the statements of the minister. Am I to assume, for example, that the habitat enhancement fund will be abolished -- it has a specific purpose and a specific source of income -- as well as the first nations' special fund?

Hon. E. Cull: All of the special accounts have been reviewed, but that particular fund, as with the first nations' fund that was mentioned earlier, is continuing.

Sections 12 to 14 inclusive approved.

On section 15.

Hon. E. Cull: I move the amendment to section 15 standing in my name on the order paper.

[SECTION 15, by adding the following subsection:

(3.1) Sections 9 to 11 are deemed to have come into force on March 10, 1994 and are retroactive to the extent necessary to give them effect on and after that date.]

On the amendment.

Hon. E. Cull: It adds subsection (3.1) to section 15 of the bill and ensures that the changes to the School Act are effectively retroactive to March 10, 1994. These are the ones that we just spent an hour or so debating, and that's because the minister made the announcement on March 10. Budgets were, of course, completed in the interim, but they've all complied with the legislation, and this is neatly tying it all off.

C. Serwa: In folding up the perpetual funds, am I to understand that the money is being transferred directly into the consolidated revenue account?

Hon. E. Cull: The member may have tuned out for a few minutes during the debate. There isn't any money in the special accounts. They are just notional accounts within consolidated revenue. They are not separate bank accounts with money in them; they never have been. The only difference.... Perhaps you got a little confused with the name of the account a minute ago. The member for Peace River South indicated that the B.C. Endowment Fund had money in it. That is a very different account, and it does have real funds in it.

Amendment approved.

Section 15 as amended approved.

Title approved.

Hon. E. Cull: I move the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; the Speaker in the chair.

[ Page 11139 ]

Bill 14, Budget Measures Implementation Act, 1994, reported complete with amendment to be considered at the next sitting of the House after today.

Committee A, having reported progress, was granted leave to sit again.

Hon. E. Cull moved adjournment of the House.

Motion approved.

The House adjourned at 6:10 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The House in Committee of Supply A; G. Brewin in the chair.

The committee met at 2:49 p.m.

ESTIMATES: MINISTRY OF SOCIAL SERVICES
(continued)

On vote 53: minister's office, $392,165 (continued).

R. Neufeld: I have a number of broad-ranging questions that you've probably already touched on in some areas. I guess that's one of the difficulties of having more than one officially recognized party in the House. I'll try not to be too technical. I have some things that I want to canvass across all areas in your ministry.

I'd like to start off with the supported child care or the special needs day care. I understand there is a project in place in Kelowna now. Maybe the minister could explain how it's going. Does the minister intend to expand it, and if so, to where?

Hon. J. MacPhail: We have a supported child care program across the province. I understand the member wants to talk specifically about Kelowna; perhaps I could have more details about what he would like to explore. Is it the general program that he wishes to speak about?

R. Neufeld: It's a general program. I have your letter here regarding Kelowna; I think it's called "Update No. 3." There are some questions in there. For instance, it says:

"The program is funded by the Ministry of Social Services. For the past year or so, parents have been asked to contribute to the cost by paying the basic cost of space. About half of the parents are currently doing this on a voluntary basis."

I would like a general overview of what you're doing, where you plan on going and how well it's doing.

Hon. J. MacPhail: Okay. I thought it might be the overall program you were interested in.

Our ministry has been responsible for the special needs day care of children in the province for years. Our government has put forward its intention to consolidate commitments to the child day care system under the leadership of the Ministry of Women's Equality. All aspects of the government's funding to day care are being reviewed to ensure that they support the goals of quality, availability and affordability. So that means special needs day care, which is a supported child care program of our ministry, will be transferred to the Ministry of Women's Equality.

It has not taken place yet -- and for good reason. This is a report released last December by the government under the auspices of the Minister of Women's Equality and me. It recommended significant changes to the special needs day care program be implemented over the coming two to three years. Some changes would result in children being served in community child care settings rather than block-funded special needs spaces, which is the way it occurs now. A day care will get funding for a space for a special needs child. Child care programs would be established to provide training, support and extra staffing for community child care. For lack of a better term -- one that we've used for our older kids -- we would "mainstream" our children by putting them into community settings rather than attending to their needs separately. However, this is just a report. There were 3,000 copies distributed and presentations have been held throughout the province upon request of the report.

We've had a lot of feedback, both personally and through the ministry. The feedback reflects wide acceptance of the philosophy of integration and inclusion which is envisioned in the report. The vision is also based on the belief that all families must have the same child care choices within their communities regardless of the needs of their children. The report says that the principles which should govern the program fall into three areas: family-centred approach, shared responsibility and individual planning for children. Staff of the Ministry of Social Services and Women's Equality are now working together to develop a process and structure for our government's response to that report and for its potential implementation. The staff will present a draft response in June to the Minister of Women's Equality and me. After that there will be a formal government response to the report.

R. Neufeld: You say the special needs day care will be transferred over time to the Ministry of Women's Equality. Can you tell me how much your ministry expends now on day care, and is it the plan to transfer all of that to the Ministry of Women's Equality? And how many dollars being transferred to Women's Equality would that amount to in this coming year?

Hon. J. MacPhail: That's part of the Ministry of Women's Equality budget. The day care subsidy for 1994-95 transferred from us was $98,701,000; there is also more money transferred from our ministry in terms of supported child care needs. It's listed as part of a $63,583,103 amount, but all of that hasn't come over from our ministry; at least one-third is for special needs day care.

R. Neufeld: Would it then be approximately $128 million? Am I understanding you correctly? You said about one-third of $98 million, which would be about $30 million. Is that correct?

Hon. J. MacPhail: Actually it's $98 million plus at least $24 million plus a bit of an increase for special needs day care. You see, there's also been a reorganization within the Ministry of Women's Equality around child care, so....

R. Neufeld: Okay, that's what I figured it was; I just wanted to confirm. I assume, then, that in the minister's 

[ Page 11140 ]

budget she had a $172 million increase in her budget from 1993-94 to 1994-95. If you add what's being transferred out, I would assume that you're having about a $300 million increase in your budget.

[3:00]

Hon. J. MacPhail: No, that's not accurate. I can give you the exact figures. The restated estimates listed in the blue book already took into account program transfers, so there has been an overall increase of $85 million in our budget.

R. Neufeld: Going by the budget manual produced by your government, not by the estimates, because they don't show the right figures, it's $2,563,500,000 for the 1993-94 estimates. An estimated cost of $2,735,981,000 is shown for 1994-95. I rounded the figure to $2.736 billion. Unless my calculator didn't work correctly, I think the difference is equivalent to about $172 million.

Hon. J. MacPhail: Why don't you and I work from the same document? At the top of page 201 of the estimates, on the left-hand side, our restated estimates are $2,650,532,000. Our estimate for 1994-95, on the right-hand side of that page, is $2,735,981,000. That's a difference of $85,450,000.

R. Neufeld: I don't want to belabour this, but -- and my help just went for the budget manual -- if I remember correctly, it was stated that you underexpended your ministry last year by about $87 million. Really, the $2.6 billion should have been minus $87 million. That's where I came up with the $172 million increase, which equates to what you have in your budget manual -- an increase of 6.7 percent. That 6.7 percent, or $172 million, is not out of the estimates but right out of the budget manual. Are you telling me that this is incorrect or the budget document is incorrect?

Hon. J. MacPhail: No, I'm not suggesting that you are incorrect or whatever. I was trying to deal with the specifics of the case. It is true that we underexpended last year, and there is a potential that we'll underexpend this year as well.

R. Neufeld: I don't mean it in a derogatory way that you've underexpended your budget. You should be commended for that. I'm saying that the corrected amount that your ministry would have spent last year should be $2.563 billion.

Hon. J. MacPhail: There's no dispute with what the hon. member is saying, except for the fact that to put it in the context of estimates doesn't.... The estimate process is on budget estimates, and the restated estimates are according to the blue book. But the point is well taken. In terms of dollars out the door from our ministry to British Columbians, there was an $87 million underexpenditure last year. Our budget this year -- not taking into account that $87 million underexpenditure -- is $85.5 million greater, so the combination of the two is as you stated. Did you say $167 million?

R. Neufeld: No, I said $172 million.

Hon. J. MacPhail: Isn't 85.5 plus 87 total 167?

Interjection.

Hon. J. MacPhail: Oh, 172. I apologize for my math -- and I'm an economist.

R. Neufeld: In the previous year, 1993-94, those expenditures for day care and special needs day care that are being transferred to Women's Equality were out of that year's budget. When you bring that forward, obviously you don't have that built-in expenditure. What you're transferring over to Women's Equality is another $122 million.

Hon. J. MacPhail: No. In this process it's important the books reflect that you compare apples to apples. So the restated estimates restate the 1993-94 estimates as if those programs had been transferred as of April 1, 1993. That's so that we can compare the 1994-95 estimates to 1993-94 estimates, but you have to compare them with the restated estimates. In the transfer, the funds appear as if they were already gone for the whole of last year -- in both budget and expenditures. So we're able to compare apples to apples. I think right now the member is trying to compare apples to oranges; that is, the orange had an extra section of day care in it. However, that's not the case. That section had been removed previously under the restated estimates.

R. Neufeld: I could be beating a dead horse here. I assume $87 million was underspent by your ministry. Earlier you told me about $122 million that is being transferred to Women's Equality. Those numbers are a long way apart. Are there other reasons for those not being the same? If it's stated in the estimates that way, then really the reduction is $122 million, give or take a few. That's how much it should be, and not the $87 million that you have in the budget book.

Hon. J. MacPhail: Let me start from the top with the figures we're dealing with. The '93-94 restated estimates for the $2.650 billion, in the book on page 201, already have the day care programs and the Skills, Training and Labour transfer taken away from them. When you're looking at what occurred last year compared to this year, day care and skills training are not factors, because we deducted them from the previous year and they are not part of this year. That's what the restated estimates are. The $87 million underexpenditure comes largely out of underexpenditure and income assistance.

R. Neufeld: The $2.650 billion has the removal of all the transfers to Women's Equality and to Skills, Training and Labour. Is that correct?

Hon. J. MacPhail: Yes.

R. Neufeld: I'll let that go, and maybe I'll talk to your staff a bit more about it rather than deal with it here.

Let me move to day care and schools. We have day care in the high schools. Is that under your ministry? Is that also being transferred? Whose responsibility is it? Is it the Education minister's responsibility?

Hon. J. MacPhail: We fund some day care for teen parents in schools. I don't know whether all the school day care is funded by us; you'll have to seek that information elsewhere. Funding comes under concrete support services in our budget.

R. Neufeld: I want to move from there to a program that will get people off welfare and into the workforce. I think everyone is very interested in this.

I have a number of news releases. One dates back to 1992 when the previous minister stated that $17 million would be added to her ministry that year to put about 25,000 more 

[ Page 11141 ]

people into the workforce. Another news release dated June 2, 1993 -- before your time as minister -- is about getting people into the workforce.

Some of the items you talked about were wage subsidy programs involving the private sector, such as B.C.'s employment opportunity program and the community tourism employment training program. Could the minister tell us how successful these were last year? I guess I'm going back too far to ask the minister if the figure of 25,000 jobs is correct. But how many jobs did we really create in the past year, and what are we looking forward to in the coming year?

The Chair: Hon. member, could you connect that to the budget? It sounds like another ministry, or it may not be directly involved.

R. Neufeld: It's from the Ministry of Social Services, and it has to do with expenditure of funds out of the ministry. I would assume it has something to do with the budget.

Hon. J. MacPhail: I don't want to give away the present I gave to the member for Vancouver-Langara, but if you have the "Routes to Independence," could you hold the book up? It's okay if you don't have it. This analysis is in the book. I'd be more than happy to provide a copy to the member for Peace River North. Not to belabour the point, but all of that has been transferred to the Ministry of Skills, Training and Labour, and there will be lots of opportunity in his upcoming estimates to explore the actual results of the program.

R. Neufeld: Thank you, I will get the book.

Another interesting issue took place last year. Before the NDP came into government, I believe that mothers on social assistance had to look for work when their youngest child reached six months. The previous minister changed the age limit to 19. Subsequently the limit became 12 years of age. Could the minister provide me with the rationale for going from six months to 19 years to 12 years of age? What success have these changes had?

[3:15]

Hon. J. MacPhail: When we first came into government, we removed the provision under the GAIN Act that required people to seek work. It wasn't as if we increased it so they could stay home till their children reached the age of 19, but that was the effect. In other words, it wasn't permissive, but in the absence of any specific age limit for children, the regulations were interpreted to mean that if you had a dependent child under the age of 19, you were not required to look for work.

In the last two and a half years of government our experience has shown us that women -- and 90 percent of single parents are women -- were becoming concerned about what was, in essence, a 20-year removal from the workforce. That concern was perpetuated by the fact that of all the training and employment support programs we had to offer, our staff would give priority to those who were actually required to seek work and become re-employed. That's not to say that many single parents with kids under 19 didn't take up those programs when they were available in the community, but it wasn't, if you like, their right to have access to that training.

We had quite a bit of discussion about this, and we received recommendations from many women's groups and individual clients that there should be a change in this area. After careful consideration, we chose the age limit of 12 -- that's the youngest child, at the age of 12 -- because that's when a child can look after himself or herself for the period of time between school and the parent's return. There's not a legal requirement for day care.

The single-parent caseload is increasing in British Columbia due to changing family circumstances; it increased by 12 percent over last year. Now, though, 35 percent of the participants in employment and training programs offered by the ministry are single parents. Single parents represent 52 percent of the income assistance recipients who take advantage of the enhanced earnings exemptions, which means they're out there in the workforce. The single parents who are currently involved in employment training are among the most highly motivated and successful of all our clients in the attempt to move from welfare to work. Of course, the change does not alter the benefit rate for single parents in any way.

I'd like to provide the hon. member with a booklet called "Routes to Independence: The Effectiveness of Employment and Training Programs for Income Assistance Recipients in British Columbia." We're all going to be reading it over the coming days.

R. Neufeld: First your government increased the age from six months to 19 years of age, then you reduced it from 19 to 12 years. You stated that this was done because you had some input from outside sources, and you felt that at 12 years of age children could stay at home on their own between their return from school and their parents' return from work. That's assuming that all parents are employed full-time. You know, for a parent to come home at five or six o'clock, he or she would have to be on full-time employment, so I still can't rationalize your decision to place the limit at 12 years. I'm not trying to be hard on youngsters or working mothers; that's not my idea. But I've known quite a few mothers with young children in the workforce who get pregnant, get leave and then usually have to come back to work soon after they've had their child. Sometimes they return to the workforce within six months. That is, I think, a negotiated item in the average union contract. These women have asked me -- and rightfully so -- why they have to go back to work when their children reach six months of age when others get to wait till their youngest is 12 years of age. Somehow I have to rationalize that to those women who are out in the workforce.

Hon. J. MacPhail: I think the hon. member has done a good job of highlighting that fine line between the working poor and people who are now on income support. I recognize that there are needs on both sides. Our ministry encourages all single parents to take training and get back to work, regardless of how old their kids are. However, what happens is that there's a bigger incentive when their kids are 12, because now they have to look for work if they want their benefits to be supported.

The encouragement works in so many cases. As I said, single parents are our greatest success stories. One of the reasons, though, that we didn't move to an even younger age limit was that we wanted to make sure when we tell single parents we'll assist them to get back into the workforce -- remember, they don't have any other support in the home -- that our day care provisions are in place and that there are adequate child care provisions. We're working on that; pre- and post-child care is part of our B.C. 21 program being implemented this year. We've increased the number of child care spaces, etc. Any initiatives in our Skills Now program, which will be targeted to income assistance recipients, will 

[ Page 11142 ]

take into account the need for day care, and there's provision of money in that area as well.

R. Neufeld: I appreciate the answer.

I want to put on the record and relay to the minister some information from a lady in my constituency; it's information from the ministry. This is a mother with three children who is on social assistance. The social assistance that's available plus child tax benefits, GST reimbursements and the income exempt amount that she can make comes to about $1,800 per month; this is what a mother with three children would receive. If you multiply that by 12, it comes to around $22,000. Someone in the workforce would have to earn somewhere in the neighbourhood of $28,000 to bring home $22,000 a year. On top of that, the person on social assistance receives extra money for school or medical expenses and for dental, eyewear and day care expenses. All of that would be added on top, which would be a fairly substantial amount. I think you could add another few thousand dollars onto the $28,000.

I have people, including single mothers, in my constituency -- and certainly you have people in yours -- who are surviving on that salary. I know a lot of young people out in the workforce who can't afford to go to the dentist unless they're in a program. People have written to me saying they've put off having a family because they can't afford it until later, until they save some money. They don't mean to be mean-spirited, and I'm not trying to be mean-spirited. I'm trying to bring it to the minister's attention that we could be paying a mother with three children $30,000 or more through social assistance, if you add on all the benefits. And we have quite a few single moms -- in fact, probably within government, right here in this building -- who don't make that kind of money. How do we rationalize that to people?

Hon. J. MacPhail: The member raises a very good point. In my constituency, I know there's that dilemma between the working poor and those who are on income assistance. There's no question that the disincentives built into the system create friction between those who are in the work-force and those who are not. Our government has gone some way to try to lower that disincentive and, in fact, incorporate an incentive by increasing the earnings exemption so that people on income assistance will get a job and become part of the workforce. That was where we increased it from $100 to $200 for a single mom, so she can now keep $200 of earnings. That's an incentive, so that it makes sense for the working poor to get and keep jobs, we've increased the minimum wage as well.

That doesn't go all the way to answering the root of the problem you have so aptly raised. I have addressed this before, but I certainly don't mind doing it again. The Premier's Forum on New Opportunities for Working and Living, which was announced in the throne speech, will be up and running in the very near future, certainly by summertime. That's a forum where the Premier will bring together clients, advocates, business people, labour people, academics and politicians, and they will put their heads together to resolve some of these problems. One that you have identified is how to break down those disincentives so that it's better to have people back in the workforce. Most of the people I meet want to be back in the workforce because there's a dignity and a feeling of contribution that come with working. I don't dispute your figures at all, and that is exactly the kind of issue we'll be examining.

R. Neufeld: I agree with the minister that people feel much better about themselves if they have a job, and if they feel they're independent and earning their way. It's normal in any human being that we would rather be out there -- at least most of us. There are some who don't want to and probably never will, but generally speaking, most people I talk to do want to work; there's no doubt about it.

The one suggestion I have is the possibility of allowing those people to earn more money. To offset that, you would then of course have to lower the amount that was available to them. As I understand it, before we had the child tax benefit and the GST -- the child tax benefit actually increased quite substantially what a person could take -- the family allowance was subtracted from the amount they received. You could allow people on social assistance to make $500. Two hundred dollars a month -- well, really, $200 is $200. It doesn't take long to earn $200, and maybe those people would be better served if they were allowed to make $400 or $500 a month, with reduced benefits from social assistance. Would that be a possibility?

Hon. J. MacPhail: I hope the member will join us during the forum discussions so we can explore these issues, because there has been a lot of discussion about increasing the earnings exemption. There is some resistance in certain parts of the province, as well as in the academic and advocacy worlds, to increasing the earnings exemption. The theory is that it allows employers to pay lesser wages for real jobs. That's the other side of the discussion, but that's what we need to explore more fully.

[3:30]

We didn't just increase the exemption to $200. It's a flat-rate exemption of $200, and then one also gets to keep 25 percent of earnings over and above that $200. That's a better incentive, but this whole area is on the table for exploration.

R. Neufeld: I look forward to taking part in the forum. I'll go to my next issue, concerning native bands retaking control of the child welfare program. I know the minister sent out a number of news releases throughout the year, and I received some from the previous minister. To start with I want to say that I think it's a good program and that it should have probably happened a long time ago. Could the minister briefly update me on how successful it's been so far? I don't expect her to talk about every band in British Columbia because there are a lot, but what plans are projected for the year to achieve this goal?

Hon. J. MacPhail: The initiative for transferring our responsibility arose from the aboriginal community panel report Liberating Our Children, Liberating Our Nations, which we released in December 1992. I'm sure the hon. member is well aware of it. In that report aboriginal people expressed a determination to reclaim their right to care for their own children through treaty negotiations with the province.

With a view to aboriginal people attaining this goal, the implementation and consultation processes are well underway. There are two treaty policy tables, one with the Union of B.C. Indian Chiefs and the other with the First Nations Summit, where government-to-government negotiations are taking place. The assuming of child welfare responsibility is on both tables. In addition, we're committed to the transfer of provincial child welfare authority to aboriginal interests based on mutually agreed on standards and principles, which will ensure that the well-being of families and children is preserved. We've signed seven formal child and family service agreements with first nations peoples. These agreements are precursors to any final treaties and 

[ Page 11143 ]

constitutions negotiated by the bands. We've entered into a number of contracts with aboriginal and Metis associations for off-reserve delivery of non-mandated programs -- for instance, family support programs. These contracts are with organizations such as the Louis Riel Metis Association and the Native Courtworker and Counselling Association of B.C.

We also fund a few initiatives that are directly related to aboriginal child welfare. A couple are the aboriginal group home operated by the Ayas Men Men child welfare program of the Squamish nation and the aboriginal family support program in downtown Vancouver, which is a unit staffed by aboriginals for aboriginals. We also fund the aboriginal family and children's services unit in Vancouver. In this budget we've increased our budget for services to aboriginals by 14 percent.

R. Neufeld: When we move the responsibility for child welfare to the reserve, is that still a cost to the province? Does it become a federal government responsibility, or is there a cost-sharing arrangement in place? Could the minister tell me exactly how that works?

Hon. J. MacPhail: There are three different ways funding occurs. For instance, with the Nuu-chah-nulth nation, the agreement is with our ministry, but the delivery of child welfare services is totally funded by the federal government. The issue of who pays when the programs are transferred to a first nation under the treaty negotiations will be decided by all three levels of government. We also have regular, ongoing negotiations with the federal government on transfer of funds from the federal government to us. Specific services that we provide on reserve are their responsibility; they're held accountable for funding them. Those discussions continue regularly; in fact, we're in the midst of them right now.

R. Neufeld: I assume there's a 14 percent increase in attaining the goal of moving those children back into the control of the local bands on different reserves; they then become the responsibility of the federal government. There will obviously be a cost-saving to the province. Am I correct in that assumption?

Hon. J. MacPhail: From a taxpayer's point of view, it will be decided in the future where the savings lie. The federal government already pays us for on-reserve provision of services. We are in negotiations to make sure that they pay the full cost and meet their obligation in that area.

In the future, where services are transferred by treaty and responsibility is transferred by treaty negotiations, part of the negotiations will be the issue of who pays. So I expect that it would be safe to predict that there will be a rearrangement of payment. I can't predict yet whether or not that will mean a saving to our ministry.

R. Neufeld: At present, the federal government reimburses the province for expenditures that you make on reserve. I'm going to be hypothetical here; actually it's not hypothetical. I shouldn't say that; a social worker told me this. So an on-reserve person would be able to acquire some funds by going to a neighbouring community. If they expended all those funds, they could go to the social assistance office and receive money again and, in most cases, then go back to the reserve. This is done more often than not. The money received by that person on reserve is reimbursed to the province, but the province expends the money when that person goes to the social assistance office in town. Would that be correct?

Hon. J. MacPhail: The federal government is responsible for income assistance for welfare payments on reserve, and we are responsible for payments of welfare off reserve. The determination of who is responsible for what depends on a person's residence. If a person is claiming to live in two places and collecting in two places, that should be referred to the fraud investigation unit. In fact, many of those issues have been referred to that unit. This is part of the discussion you missed earlier, but it's worth repeating. We are in the process of seeking tape-matching arrangements with the federal government on several levels, one of which would include determining the amount of duplicate assistance that may be occurring in this area.

R. Neufeld: So if someone who is living on reserve out of town receives their social assistance or assistance of any kind on reserve from the band, they really should not be able to go into any of the 144 offices and receive money. They should have to get back to their original reserve. Am I correct in saying that?

Hon. J. MacPhail: Yes, you are correct, in that I suspect it would be impossible for people to claim that they live in two places at once. You are only eligible for assistance according to the address at which you live. You can't have two addresses without there being some major problem.

R. Neufeld: I'll bring forward to the minister some of those issues specific to my constituency that were brought to my attention.

I believe the pickup of cheques was initiated by you in Vancouver to start with, and now you're doing it in Kelowna and Prince George. Are you just going to arbitrarily pick places around the province? Are you going to leave out some places in the province? Or are you going to try to hit almost every office in British Columbia with this plan?

Hon. J. MacPhail: We will ask every region to implement this tool over the next 12 months.

R. Neufeld: Actually, I want to commend the minister on that; that was a good move. I know it does have a bit of a downside to it, but obviously the cost-saving over the year is probably going to be substantial, and it will really help in a lot of ways you can't measure. One is fraud investigation, which won't have to happen. It's pretty hypothetical to say: "Well, this is how much we would have saved on fraud identification." It is a good program, and I hope we keep it up.

I want to deal a little with a few fraud items, and then basically I'm done. I listened to some of your response yesterday, on your January 20 news release about computer identification of individuals. I have one thing to add to that, and after I'm done maybe the minister can respond to it. There's such a thing as a retinal scan. I have a bit of trouble with fingerprinting, to be perfectly honest, but retinal scanning, where you can stand in front of the camera.... And apparently all eyes are different. It's something like fingerprinting, but it's not as demeaning, I guess you could say.

The mandatory job search report cards, which have been re-initiated by the ministry -- I believe the previous minister.... In fact, I remember her....

[ Page 11144 ]

The Chair: Hon. members, a division has been called.

The committee recessed at 3:44 p.m.

The committee resumed at 3:58 p.m.

R. Neufeld: I had started with some of the programs on fraud, had talked a bit about retinal scans and wanted to go to the other topic. I was actually on mandatory job search report cards for single employables and childless couples. I reiterate that the previous minister had removed the mandatory job search, and it has been re-initiated either by the previous minister just recently or by yourself.

I'd like the minister to explain the change there a bit also, the same as the age limits. As I told her before, I listened to her explain many of the other ones. Other than that, I'd like her comments on the new policy for lost and stolen cheques and how well it's working. That is where the second loss or theft automatically means rent will be paid directly to landlords, and vouchers will be issued instead of cash. Has that has been a substantial saving? Is it working?

Hon. J. MacPhail: The issue of positive identification, which is the technological category the retinal scan is included in, is one that we're reviewing. We have been approached by companies that provide retinal scan technology, so it is being considered as part of a larger review and investigation around positive identification. I said yesterday that we're examining positive identification to ensure that whatever system is in place is cost-effective, fair and efficient. We're doing a wide review of that issue.

On the job search report cards, in February 25,000 employable singles and employable childless couples were required to do the mandatory job search report cards. We are now in the process of analyzing those report cards to give us a specific statistical analysis. There is a lot of anecdotal information about contact -- the requirement of filling out the report card and then of talking with your financial assistance worker about it. That assisted greatly in ensuring that clients knew where work was available, how to search for that work and about any new employment and training opportunities that may have become available since the last time they had been in the office. The anecdotal evidence is that it was very effective in ensuring accurate information on the clients and in getting clients referred to the proper resources to assist them in getting back into the workforce. I'll have further statistical analysis for the hon. member in the near future.

[4:00]

The lost and stolen cheque policy was implemented on April 1, 1994, so statistical information is not available. As soon as it becomes available, we'll share that with the hon. member.

I also want to bring to the member's attention another aspect of this policy that wasn't announced at the time but is proving to be very effective. A screening tool developed with the police is used during the investigation of a lost or stolen cheque. It's there to make sure we're doing the best job possible to screen out the fraudulent from the real in these claims. The tool is being tested in Prince George, Vancouver and Victoria. We're doing our final review with the police on the success of that screening tool, and we estimate we'll be able to introduce it provincewide at the end of June.

R. Neufeld: I take it that a copy of the report for the job search will be made available to me or to the MLAs. I hope it will be.

Does the minister have any idea of when she sees something like the positive ID program coming about? Will we be seeing something in place by the next fiscal year or sooner, or is it too difficult to determine a time?

Hon. J. MacPhail: That's a policy item that's before cabinet now, so I can't give you any more information than that.

R. Neufeld: We definitely can't get that through freedom-of-information processes, can we?

I want to talk to the minister about a family in Fort St. John -- and that's all I'll say about the family, but it may come to the minister's mind -- who had a male in his twenties. As far as his parents were concerned, he was defrauding the system, and yet income assistance was still made available to him. The minister did send me a response, but to be honest, it was pretty generic. It really didn't address the problem of fraud in the system. In this case, we have parents who are probably very close to their children -- I know the family -- and who have brought this to my attention and, through me, to the attention of the minister. Single employable men are still the largest group within the category of social assistance recipients. Here we have one who is obviously still on the system, and we can't deal with it. It's frustrating for that family to see what's going on. They would really like it dealt with. Maybe it has been dealt with and I'm a little behind times here -- I'm not sure. The minister may be able to tell me.

Those kinds of issues really undermine the purpose of social assistance. I would hope that we could deal with the issues that parents and family members bring forward. This is not a dysfunctional family. They've obviously had problems with one of their children; that can happen to any of us. They would really like to see something done, and they don't mean you have to hang him, or tar and feather him, or anything like that. Something should be done so that person doesn't continue on the system. If we allow it, I guess you can almost say that it becomes natural for them to continue on the system, and they could end up staying on social assistance all their lives; yet they're single, employable and in good health. Is there some way we can deal with these issues?

I also wrote the minister about another issue. This case did not involve a family member, but a person who lived close to a family that was receiving social assistance. In this situation, the ministry did respond by having a fraud investigator get hold of that person, and we appreciate that. The lady said, however, that after 20 minutes of talking to the fraud investigator she wondered why she'd even brought it up. Every time she informed the investigator that these people were defrauding the social assistance system, and every time she laid out an issue concerning something that was wrong, the investigator had some reason why it couldn't be dealt with.

I'm not trying to sound tough or anything like that, but somehow I think the minister knows.... I'm going to go back to when she was appointed minister, and to when she said she was going to get tough on fraud in social assistance. I'm not saying that it's an easy thing to do, or that I would do it much differently, but there has to be something that we can do, Madam Minister, to put some faith back into the system. I tell you right now that the general public out there doesn't have much faith in it. The system doesn't rightly deserve that lack of faith in all cases. The system is there because we need it for those who find themselves in difficult positions, but if we continue to broad-brush everyone the same and not deal 

[ Page 11145 ]

with those who are defrauding the system, we're never going to get anywhere. We're just continually going into a deep hole.

Maybe the minister can respond to those two situations. I don't know whether she's aware of them, or if her staff has made her aware of those two situations in my constituency that are obvious fraud and that we can't seem to deal with. If we can't deal with it under the existing system, how are we going to change it so that we can deal with it?

Hon. J. MacPhail: The hon. member is quite right that when I was given the assignment of the Ministry of Social Services by the Premier, I said I would have zero tolerance for abuse of the income assistance system because I wanted to ensure that every single dollar of taxpayer money went to those who were truly in need. I'm a little dismayed that the member's confidence is not being restored in the system, so I want to go through some stuff with him to assist in that area. I am aware of the two letters that the hon. member wrote to me and of my replies, and of course, he has already indicated in one case that an investigation followed up. I am unable to discuss the specifics in this forum, but I would be more than happy to follow up privately on the disappointment in those two cases. Let's see if we can figure out what went wrong -- or indeed what went right, but there might be disagreement about what is right in this case.

I reported earlier in the estimates that the number of fraud investigations has doubled, that our number of cases going to court is up by 80 percent, that our convictions are up by 40 percent and that our taxpayers' dollars saved are up substantially -- a huge increase. That's because we've invested more. We have finally listened to the recommendations of the various reports that have come out over the past decade or so. We've implemented lots of those recommendations, some of which we've discussed here today and some yesterday in terms of us beefing up our compliance and enforcement division. We have an additional 28 FTEs going directly into fraud investigation, and that's having results. For every dollar we invest in salary and benefits to fraud investigation, we get back $4. The only reason for us doing that is to ensure that those who are living in poverty and in terrible circumstances get the amount of money that they truly deserve.

I'm much more hopeful about the integrity of our system being restored. There's no question that it was under attack and that the confidence in the public's mind around this had almost been destroyed. I think a lot of that destruction of confidence came on the basis of perpetuation of myth by various sources.

R. Neufeld: The Liberals being one. [Laughter.]

Hon. J. MacPhail: Let the record show that I didn't laugh.

It has been very tough on those truly in need out there to have to suffer the slings and arrows. However, the response from the public to me recently has been: "Good on you." We are feeling more confident. There's still a lot more work to be done, and we continue to do it. We will continue to restore that confidence until there's as little fraud as one can possibly sustain in a financial system.

R. Neufeld: I'm certainly not trying to make light or to make the minister feel she's not doing a good job or isn't sincere in what she's doing -- or the people who work in social assistance. They're sincere and very good people. We should be proud of the people who work in that ministry, because they do a good job -- and they have a difficult job. I feel for them. In my statement I certainly wasn't trying to, shall I say, put anyone or the system down. I'm trying to be constructive as to where we can try to get the faith back into the system that should be there. I don't know how long it hasn't been there, and I'm not trying to say it's been a decade, two decades, five years, two years or whatever. It's something that has to be done and should cross all party lines. It doesn't matter who is there; it's a difficult position. I appreciate that. I will take the minister up on her invitation to meet privately concerning those two people and a couple of others. It will be easier to deal with it privately.

[4:15]

I have a few more questions. I want to deal with income assistance recipients who are moving from other provinces to British Columbia. I understand we track them to a certain extent; I don't know how much. Maybe the minister could tell me: do we actually track them when they come here? Do we find out whether they've been on social assistance in another province? If so, because of what's taken place in Alberta, can you tell me approximately how many income assistance people have entered British Columbia from Alberta and are on our system now? Alberta reduced its rates last October or November, and a number of people have come from that province.

Hon. J. MacPhail: Yes, we have been tracking in-migration for the past several months, at least since the government of Alberta announced its policy changes and rate cuts. Of the current income assistance caseload, 9 percent is comprised of recent migrants to British Columbia, but this proportion has remained unchanged over the past year. Currently there are 16,251 income assistance cases that are recent in-migrants. That definition says that they have arrived in British Columbia within the 12 months prior to their cases being opened. According to the ongoing monthly survey of new entrants to basic income assistance, the percentage of in-migrants coming from Alberta is about 28 percent of that caseload; so the proportion is 28 percent of 9 percent. The number of in-migrants from Alberta has remained fairly constant over the eight-month period covered by the survey. From August 1993 to March 1994, there was an average of 654 new income assistance cases per month from Alberta.

I want to give some more information on that. The average time that two-thirds of them stay on income assistance is approximately four months. It is clear that most, if not all, are coming here looking for work and thought that they might be able to find work immediately. That has not been the case; they need the stopgap measure of income assistance until they get work.

R. Neufeld: Can those people who migrate to British Columbia or to any other province collect social assistance or benefits of any kind immediately upon arrival if they've left a job in the province they were in? If they were on social assistance on the province they were in, can they come to British Columbia and collect? Is that correct?

Hon. J. MacPhail: Part of the Canada Assistance Plan, which is an agreement between all provinces, territories and the federal government, says that you have to be eligible for basic needs being met in the province in which you reside. So if a person has a residence in British Columbia, whether they've lived there for one day or ten years, under the Canada Assistance Plan they are eligible to apply for income assistance. Let me reassure you, though, that we have instituted a tape-matching agreement with Alberta, Saskatchewan and Manitoba -- and we are in talks with 

[ Page 11146 ]

other provinces, particularly Ontario. We are doing our best to end the duplicate claim scenario across the country. The fact that a person receives a cheque from both provinces in the same month doesn't necessarily mean there's fraud; the individual could have left one province for another part way through the month, for example. But we now have the tape-matching agreements, which are already up and running in Alberta.

R. Neufeld: According to a news release, a national review of social safety nets has been demanded by the minister. I don't agree with what Alberta did. Reducing the rates resulted in claimants moving to British Columbia. That doesn't mean that I agree with the rates we pay here. When the minister goes to the national review, I hope she will place on the agenda something that will address the situation, so that people who abandon their social safety net systems in Saskatchewan, Manitoba or P.E.I. to come to British Columbia on the whim that they may have a job will be prevented from collecting social assistance for a certain period of time -- say, 30 or 60 days. I think the minister said that these people usually stay on social assistance for three to four months before finding work. Perhaps the home provinces of those who come to look for jobs in British Columbia should either reimburse British Columbia or pay the claimants directly. It may be hard to do.

I know that under the present system we can't do this, but with such differences in social assistance and because British Columbia draws people not only for work but for our weather and our beautiful province, maybe we could try to convince the federal government and the other provinces to change the system. Perhaps the minister has already tried to get the government to effect a change. Could she tell me if this possibility might become a reality?

I've had people come to my office, because Fort St. John was busy last year. We had the lowest unemployment rate in British Columbia and, in fact, in western Canada. Quite a number of people quit jobs elsewhere. For example, a fellow quit a job at McDonald's in Saskatchewan and came to British Columbia for work. He didn't have any money. The government of British Columbia bought him a pair of boots, a hardhat and clothes so he could work in the bush, because he came with nothing. Unfortunately, this is only one of many similar cases. Is there some way we can deal with these situations? Is the minister already working on something?

Hon. J. MacPhail: It's a difficult dilemma in a federal system, where some social programs are provincial responsibilities, yet we're a federal unit. There are going to be frictions among various jurisdictions.

I would like to point out a couple of historical facts. The Canada Assistance Plan was an agreement that arose as a result of experiencing difficulties along the lines the hon. member outlined. The system used to be that when a person arrived from another city or province, the cost for his or her support was charged back to the respective jurisdiction. It was a nightmare. Finally, the provinces, the territories and the federal government got together and said: "Look, a Canadian is a Canadian is a Canadian, and we will cost-share through federal transfer payments the cost of giving people support no matter where they live." So I suspect if it were proposed, although some provinces may.... No; I don't think other provinces would propose this. But I suspect that a system where there has to be a residential requirement before one is eligible to collect would not meet with success at the federal table because of its failure beforehand.

Look, we have such a vibrant economy. There are lifestyle issues here, but there are lifestyle issues elsewhere in the country that have their own particular attraction. People come here because we have a strong economy; there's no question about that. Two-thirds of all the jobs last year, you know, were created in this province. People want to work. I always think it's ironic when the myth is perpetuated that people are lazy and don't want to work, yet that's why people come here. It's because they want to work, and they do end up working. It's wonderful.

Back in the early eighties when we went through our last recession, I was responsible for thousands of tradespeople through the union I worked for. It was devastating during that time. Tradespeople had to leave their families and their houses behind in British Columbia and work in Ontario, because there were no jobs here. During that period, Ontario's income assistance was under incredible pressure from in-migration. That's the nature of our economy and the regional strengths of our Canadian economy. Overlying that, of course, is the fact that we have some real structural problems in the Canadian economy that mean more people may be leaving their homes -- for instance, Newfoundland -- forever and moving to where there are jobs in which they can sustain their family.

Everything is on the table at the national income security review -- everything. Our government is taking an extremely strong position and saying: "Don't penalize us because we're doing so well." And they are penalizing us by this federal off-loading onto British Columbia in particular. We have said: "We want to cooperate with you. We want to ensure that we have a stronger social safety net and that we also believe in Canada. But don't make all those factors work against British Columbia." We'll try to approach it in an innovative way so that all those needs are met.

R. Neufeld: I appreciate what the minister said. You're a Canadian; it doesn't matter what province you're from.

The off-loading by the federal government, of course, is not new. It didn't start when your government came into power; we've had this problem for quite a while. Maybe that's why I'm saying that we have to relook at some of the programs we have, such as a Canadian is a Canadian is a Canadian.

Maybe at one time it worked well. Maybe it was a nightmare at that time to bill back and forth. But in today's world with today's computerization and technology, and the way British Columbia is compared to the rest of Canada, things have changed. Times have changed, and maybe we have to relook at some of those issues and deal with them in a way that's a lot more fair for British Columbia.

I'm not sure whether this next question really falls within your jurisdiction. It is in regard to deadbeat dads -- I think that's the term used -- who are not paying their support payments. It could be under the AG's ministry, I'm not sure. I notice that in Ontario they started a program a while ago. We already have a system in place in British Columbia that tries to garnishee wages and that kind of thing. Do we look at social benefits also? Ontario does. I'm not sure whether British Columbia does. If some young man on social assistance hasn't been paying his child support -- and it's mostly males who don't pay the child support -- do we go after the social assistance also?

Hon. J. MacPhail: The whole issue of support and deadbeat dads is under the jurisdiction of the Attorney General, but I certainly don't mind discussing it here. We have family maintenance workers in our ministry who assist 

[ Page 11147 ]

mainly women to get the support payments they deserve and certainly their kids deserve. Our family maintenance workers work closely with the family maintenance enforcement program, although it's run by the AG.

To answer you, currently there is no provision to attach social assistance payments to a court order for support payments.

[4:30]

R. Neufeld: I wonder if that isn't an area we should be looking at. Obviously, if we don't, we're paying that father social assistance and, on top of that, very likely paying social assistance to the mother and children. Is there a possibility that we could look into what Ontario is doing and see whether it would be applicable in British Columbia?

Hon. J. MacPhail: Yes, we will look at the Ontario situation, and we have had an initial look already. My understanding is that the Ontario program attaches payments to federal programs such as UI and income tax, etc. But there is a difference with income assistance, because the income assistance program is a payer of last resort; it is there only to meet basic needs. I don't think any province today attaches garnishment to an income assistance payment. That would defeat the purpose of the whole system, which is to be a payer of last resort for basic needs.

R. Neufeld: That could be. The information I have states social benefits...which could be UI or income tax returns -- I'm not sure. I assume that social benefits would mean the whole menu of items, including social assistance. It would also, I think, encourage some of those young employable males to get off their duffs and get to work, which most of them should be doing. There are jobs, and I think a lot of them can go to work.

I have another question about people on social assistance who own their own homes. As the minister stated, a lot of those people need social assistance for only a short time; they're not usually longtime users of social assistance. We have seniors in British Columbia who own their own homes and cannot pay their taxes. There's a deferment program in place through which they can defer their taxes, and, in the event they pass on, their property is sold and those taxes remitted to the city and to the government -- whomever would have received those taxes.

Is there some way that these people who own their own homes...?. Some of them have some pretty nice homes, and I don't want to say that they shouldn't receive a benefit if they fall on hard times. What I am saying is that there could be a lien put against that property, much as in the deferment program, which would be paid back to the Crown when that property was sold. Is there any possibility of that?

Hon. J. MacPhail: I answered this question in the House last week. Perhaps the member was absent, so let me just run through it again.

Under the Canada Assistance Plan, a principal residence is an allowed exemption, and all provinces have chosen to include the primary residence as an exempt asset. If we were to in any way put a lien against a home to force an income assistance recipient to pay back a basic benefit, that would violate the CAP agreement, and we would jeopardize the more than $880 million we expect to receive this year under CAP. Believe you me, we have a federal government that's ensuring compliance with all federal-provincial agreements.

You have quite rightly captured the fact that income assistance recipients are there for a very short period of time. It is not legitimate to say that seniors who can't pay their taxes can defer them and then pay back when they sell their house. Income assistance recipients who have a mortgage pay their property taxes. They are responsible for that. They are responsible for all payments associated with their house. They get the equivalent of a shelter allowance, and they can apply it to a mortgage -- that's all. However, there is no exemption for income assistance recipients in the way they pay their mortgage or their taxes. In the same way that people on WCB, seniors' pension or unemployment insurance are responsible for their mortgage and their taxes, so are income assistance recipients.

R. Neufeld: I appreciate what you're saying, but I reiterate that many seniors in this province are on the tax deferral program for different reasons. I'm not sure all of these reasons are that they can't afford to pay the taxes, but I'm sure most of them are. What I'm saying is that the seniors of the province of British Columbia have to do that to be able to maintain their home.

Regarding the minister's agenda, when you're talking about changes that should happen in the national program, maybe some of these have to be looked at again today. Maybe it fit a long time ago; but as we change, maybe some of these things have to change. I'm not trying to be hard on people, but I am saying that there is another segment out there that we have to be cognizant of. There are cases of young working mothers, like I talked about earlier, who are just making it, but who are feeling hard-pressed because some people can go on social assistance. There are seniors who have to defer their taxes so that they can make ends meet. We probably have seniors in the province of British Columbia who live in more substandard housing than we have in our jails. That's unfortunate. Something is going wrong, and it has to be dealt with. I'm not saying that people in our jails should be living in tents or anything like that. I am saying that some of these things have to be looked at. A good place to look at them is when you meet with your counterparts in the federal government to deal with CAP and our whole social safety net system.

I have some other questions to ask later, but I have to study my information first. So I'll leave it to the Liberal critic.

V. Anderson: I want to follow up on some comments the minister made in response to the other member here. The minister talked about the new screening tool that the police and the ministry are using. Is she able to tell us what kind of tool that might be?

Hon. J. MacPhail: It's a tool that helps the FAW to look for inconsistencies in statements as they proceed to collect information around the loss or theft.

V. Anderson: The minister commented on the number of people who in-migrate to the province from Alberta. Have we been able to keep any record of the number of people who are out-migrating, so we have both a gross and a net number of people? There are people going, as she indicated, in another direction. Is the 9 percent that she gave a gross or a net amount? I think it's important that we make that distinction.

Hon. J. MacPhail: That's a good point; there is travel both ways. We don't actually do exit surveys when people leave income assistance. It's a point well taken. I think the overall in-migration to British Columbia is a substantial net figure just generally, not from an income assistance point of view.

[ Page 11148 ]

V. Anderson: I think it's important that we always put that in context so that when we say things, people understand that it's not taking into account the others who are moving from here to Alberta or to other places in Canada. That shift is going on all the time across Canada.

As we're going into checking between provinces and the computer systems that are working, is there a base at which we are now able to check on the transfer of persons? If somebody moves here from another province that we're in relationship with, can our computers simply advise that we've taken that person on and vice versa so that we can have a quick check on who's moving one way or the other?

Hon. J. MacPhail: No, unfortunately there is no integration of our active systems. One of the reasons is that we are substantially further ahead than other provinces in our computerization, so that's just not possible at this time.

V. Anderson: Another comment the minister made with regard to family maintenance was that the kids deserve the maintenance. One of the realities is that a good deal of family maintenance doesn't add anything to the children. They still get only $100 of the family maintenance, whereas families that are working are able to keep at least $200. Could the minister indicate whether there will be some changes so that families will be able to keep more of their family maintenance? I agree wholeheartedly that it belongs to the kids, and I've maintained for a long time that the government taking this back defeats the incentive for family maintenance.

Hon. J. MacPhail: Actually, we are the only province in Canada that allows the mom and the kids to keep some of the family maintenance. Of course, the $200 for people with dependents is part of the flat-rate exemption. Other provinces simply don't do this. The logic behind that is that we are the payer of last resort, therefore any income from other sources has to be calculated. Our government actually did increase that exemption as well.

V. Anderson: I'm not sure about the last comment. Did the government increase it to beyond $100?

Hon. J. MacPhail: I'm sorry, I made an error. No, we didn't. I apologize for that.

V. Anderson: I'll be glad to hold you to your previous comments.

I want to move to the White Paper we've heard so much about, The First Step, the report of the minister's Advisory Council on Income Assistance.

In another regard, as I think I've commented before, the aboriginal people, when I met with them, discussed this as a "white paper" and how it completely, from their point of view, missed out on responding to their issues that had come up in the previous study.

There are some specifics recommendations here. I'm looking at the executive summary, and I want to highlight these.

One is not right here in the executive summary, but I want to highlight it because it has been raised with me again and again. Many of the low-income people receiving their cheques have a problem with the cheque coming on the fourth Wednesday of every month, particularly in the five-week months. They have consistently asked over a good many years whether this could be paid three days before the end of the month on a regular basis, which would make it much more consistent. It would do away with the five-week month and make it much easier for them if they received it on the same basis, even at Christmas. I know this has been under study and consideration. One of people's priorities is that cheques could come at that time in order to get away from the inadequate cycle we've been in for some time.

Hon. J. MacPhail: We are trying to meet some of the concerns and solve some of the problems that this potential solution is trying to address. It is definitely a systems issue to make that change, and at this stage of the game, the cost to change the system is quite prohibitive. We're trying to approach potential solutions from another angle.

[4:45]

We know that most of our clients want to be paid monthly and that they want time before the end of the month to bank, so that's why we chose the fourth Wednesday. If clients wish to have smaller payments made more regularly, however -- weekly or whatever -- we are more and more able to accommodate them on that basis.

We are also involved in looking at electronic funds transfer for clients, so the actual cheque issue day becomes a non-issue. The reason our clients tend to want monthly payments, in some cases -- and you're not disagreeing with that -- is to accommodate bulk buying.

V. Anderson: I appreciate that. Could you explain for me and others who can't understand the computer systems today: if it is now done through a system every four weeks, why it can't be done on the other basis? Just saying that it's too difficult, with all the computer whizzes around the world today, doesn't explain why this is so difficult at this time. It's important that people understand what the problem is and get some clarity on it, because otherwise it's being interpreted as the stubbornness of the bureaucracy.

Hon. J. MacPhail: Let me make sure that I get you more information on this, and I'll take an initial crack at it. The program we have in place and have paid for runs 220,000 cheques per month, and it's a really expensive operation. I visited the site a few months ago, and it's unbelievable how massive it is. It's as complex as any major banking system. The program now is that it's the fourth Wednesday of each month. Literally, that's the program. We would have to change the entire program, and that would cost millions of dollars. That's why we're trying to see whether there are other solutions available. I will try to get you more information on that as well.

V. Anderson: If we can find a volunteer computer whiz in one of the high schools who can help us revamp the program, we'll let you know. That's probably where we'll find someone who would like to take it on as a project to show us how it can be done.

I would like to go briefly through the recommendations in the report, which the minister says are generally in the process of being implemented, and get some indication of where some of these stand at this point. The first one is that the GAIN rate should be increased by $75 per case. As the minister is aware, whether you take the 1970 figures or the 1982 figures, income assistance has continued below the cost of living and the normal increase in wages.

Hon. J. MacPhail: There's no question that this is a major issue. We are struggling to ensure that we are actually meeting our requirements and providing for the basic needs of families. This, of course, has to be done within the context of the financial constraints under which we find ourselves. 

[ Page 11149 ]

It's another reason why I don't have any problem with tackling the issue of fraud and abuse: so that the funds can actually go to the people who deserve them.

The recommendation of the council would mean an increase of approximately $180 million per year in the income assistance budget. Over the last 14 months we have increased the rates twice. In February 1993 we raised the support rates by 3 percent, and in March we raised the support rates by 4 percent. That represents an overall rate increase of approximately 3.5 percent over those two years.

There are other issues coming into play now in terms of what money is available to families who require income support. There have been changes to the child tax benefit; the GST has come into effect; there have been changes to CPP, OAS and UI, etc. It's time to have a review of the income security system and of the rates, as well. But I believe there are other ways of approaching this issue. From our clients and their advocates, I hear over and over again that the biggest single issue facing poor people is inadequate housing. We, as a government, must address that issue, too. Some interesting initiatives around that are well on the way.

The other issue that parents talked to us about is transportation. They were specifically concerned about the inadequacy of public transportation, and how that affects people who can't provide their own cars.

Lastly, the biggest indicator of poverty is health or vice versa; the biggest indicator of a healthy child is whether the child is poor. We're trying to address this issue by not cutting funding to that area, either.

V. Anderson: I appreciate your answers concerning the other areas you've referred to in that discussion. My next question might help somewhat to ensure that the money saved through the fraud investigations will go directly into increasing payments to people who are receiving social assistance from the ministry. Would it be fair to ask if the savings will be transferred directly, and not just eaten up by bureaucracy?

Hon. J. MacPhail: I can guarantee that it won't be eaten up by bureaucracy. In our ministry, we've got the leanest, meanest bureaucracy going. I would like to say that I will do everything possible to advocate among my cabinet colleagues that the money goes to people on income assistance. At the end of the day, budget decisions aren't made by me, but that's my position.

V. Anderson: We appreciate your position. Other people can support you and give you help in that regard.

I wouldn't want to take your statement that you have a mean system out of context, though sometimes when I look at the joke book, of which you're very much aware, it supports that it's a mean system. I'm hoping the ministry -- I know we've mentioned this before -- is going through that and using it as part of the training process. It is a book that I think every person in the system should read, and every person on the front line should be there. It's The British Columbia Welfare Joke Book: Or, It's Not Really Funny, But If I Don't Laugh, I'll Cry! These are actual instances of people who have been on welfare and of their interactions with the welfare offices -- which are unbelievable, to say the least. Everyone should read it. It would sensitize them. It should be part of the training process of every front-line worker who's dealing with clients. It would help them to understand clearly, because they're not exaggeration; they're actual factual cases. At present the second book is in compilation with the ones that didn't get into this one. These are also things that have happened within the last couple of years. They're not away back; they're reflecting on the present system at the moment.

Regarding the advisory council, which I hope is very helpful to the minister, I'm getting some feedback and frustration. The Kamloops anti-poverty group has given up on the advisory council, I hear, and has withdrawn their support of it because they just haven't been happy with it. Even in the church we have people withdrawing periodically because they're not happy with the minister, and they go to another place. So I understand that does happen. But it usually signifies that there's also a concern that needs to be dealt with. I understand it's maybe because of that or for some reason that the number on the advisory council.... There were four people representing low income, and I understand that there are only two at the present time. I'm wondering if that's accurate. Or is it simply that two are to be replaced from the low-income group at the present time?

Hon. J. MacPhail: I might also want to answer the hon. member's point about service quality and the joke book. It's a legitimate concern on our part, too. Of course, the advisory council made recommendations on service quality.

I'm pleased to be able to inform the House that we have now added a very specific service quality component to our core training. In fact, the last core training that took place was a full week just on service quality. So that's good news. I'm hopeful that as we train more and more, the joke book will become smaller and smaller; that can be a good indicator.

We had over 150 -- I think almost 170 -- applications for the appointments this past spring to the Advisory Council on Income Assistance. No, it is not true that there are now only two people who are advocates on income assistance. The people who were replaced on the advisory council were replaced with like interests.

V. Anderson: Perhaps in the core training program we may be able to take some lessons from the SuperHost program, which has been run by business organizations for people dealing with tourists and others. There might be something there, because in business for some time they have been training people in how to deal with customers who come into the stores and businesses.

In many ways, if we dealt with people with the same quality of respect as we do when they are trying to buy our goods, we would treat them in a different capacity. In that regard, I was commenting to one of the groups that was concerned about dignity and what our position would be as far as opposition. I said my personal position is that the person should get the same kind of respect as if they had gone to a lawyer for a consultation. They should get private, personal, individual treatment rather than having to be dealt with in public at a front counter. I think there's much to do in how we set up our offices. The other day I heard the minister say that changes were taking place in how people were dealt with and in the public way they have had to bare their lives to whoever happened to be in the waiting room. I hope that will be taken into account.

[5:00]

We've already discussed the maintenance exemption for spouses or the children's exemption, whichever the case may be. This question has to do with both the spousal exemption and the $200 work exemption. At present, if you have one child, you get $100 or $200, as the case may be. If you have five children, you still get $100 or $200, as the case may be. Is there some way to take into account in both these areas that the size of the family indicates extra costs and extra needs? If 

[ Page 11150 ]

we're to treat people with equity rather than with equality, we need to treat them differently and acknowledge the size of their responsibilities by not using the flat rate but one that takes into account the size of the family and perhaps allows an extra $50 for each child in that family.

Hon. J. MacPhail: Again, this is a difficult issue because to increase the exemption would be a major cost to the system. Is that the best way to get at the root of the problem -- for instance, eradicating child poverty? There are so many parents who don't have any access whatsoever to child support payments.

To give a bit of history on why that exemption is there, in the old days -- you know, around your time, Richard....

R. Neufeld: You're a little older than me; be careful about that.

The Chair: No personal comments; no personal names.

Hon. J. MacPhail: It was an incentive to defray the cost of getting a court order. It was a very expensive process to go to court, etc. We actually do that for clients now. It's a great service. We encourage women to go to court and get the orders, and we assist them to the very end. Anyway, these are the factors we take into consideration when we examine all these issues.

The Chair: Do you think at some point we should discuss ageism? The hon. member continues.

V. Anderson: I read an article on ageism just this week.

Another recommendation that has been put forth is that the separate shelter and support allowances should be done away with, and there should be one payment to cover both. That has come across fairly strongly from a number of groups -- handicapped as well as low-income groups -- and it came out very strongly in the report, The First Step. Could the minister comment on the process of integrating those two payments in order to allow the people to take care of it themselves?

Hon. J. MacPhail: The Canada Assistance Plan requires that one variable be designated in the assistance payment. Our variable is shelter. However, my view is that all of the Canada Assistance Plan and all the regulations -- the meaningful ones and the meaningless ones -- are on the table for renegotiation as part of the national income security review.

V. Anderson: For the benefit of myself and others, could you explain a bit what they mean by one variable and what other variables other places might be using? Is there a choice between variables? As long as it's there, people might prefer if they understood the reason for this.

Hon. J. MacPhail: Because the requirement under the Canada Assistance Plan is to meet basic needs -- that is its definition -- there has to be an indication in that of a variable, which is a basic need. Every province has chosen shelter as that variable because it's definable. You can determine a basic need, depending on how many dependents you have or if you're a single person. So that is an indicator of basic need. It's called a variable because theoretically that basic need varies according to your circumstances.

V. Anderson: I'm tempted to go through the recommendations in "Realizing the Vision." However, I think we've touched on most of those one way or another in the process.

Since we need to keep in mind the concerns about poverty, I want to comment.... The minister is very aware of the insert in the Vancouver Sun on children of poverty. It is a very damning situation. I wonder if the ministry attempted any response to this article on behalf of the government. It's very encouraging that people are aware of poverty and this article has come forward. It seems to me that the government needs to respond to this kind of situation not as a defence, but in recognition that it's there and that it's not being ignored. In response to that particular article, I'm asking if the minister has any program or PR people or some way of highlighting that this is a reality, and inviting the people of the province to participate in how this reality is to be overcome. In the long run, their support of any changes will be necessary in moving ahead.

Hon. J. MacPhail: As a matter of fact, I talked with the reporter afterward to commend both reporters and to make a general comment that I agree with the thrust of the series. However, I also suggest -- and this was not the intent of the reporters on the series -- that we can't let people off the hook by thinking that individual charity to a couple of families will resolve the issue of child poverty. There are systemic barriers; poor kids always have poor moms. As soon as we can deal with the poverty of the mom or the parents, then the children are raised out of poverty as well.

It's a very serious issue. There are 110,000 children in this province who reside in poverty or are on income assistance. Part of the Premier's forum will have a specific problem to address regarding the eradication of child poverty. I anticipate that as part of that forum there will be a working document that outlines the dilemma, the serious nature of the problem and potential solutions for the forum's consideration. So we'll be able to make it available at that time.

V. Anderson: I have a variety of concerns that are perhaps unconnected, which I want to raise at this point and get them out of the way. One of the recommendations in a couple of reports has been our language, which is important. It's always important how we continue to word our phrases. I was going to chide the minister, hon. Chair, for talking about poor moms. I think what she means is moms who live in economic poverty; they're not necessarily poor in any other sense. We get in the habit of using jargon, but if we're going to change attitudes and give respect to people, the same as we have with people with other challenges or physical handicaps, I think we have to change the way we talk about them and get rid of cliches. We have to change the way we talk about economic poverty, because that's how images change over a period of time. In that regard, I'm wondering if the minister supports the move a number of people have brought forward -- that the Human Rights Act and other acts should include a clause which prevents discrimination on the basis of the source of one's income.

Hon. J. MacPhail: I absolutely accept the hon. member's advice on language. In fact, that was what I meant -- moms who live in economic poverty -- and I'll keep that in mind in the future.

Actually, the Minister of Housing tabled legislation today that addresses the issue around shelter so that a landlord would not be able to discriminate on the basis of source of lawful income. I support that. It's easily identifiable, and it 

[ Page 11151 ]

will be a good signal to perhaps proceed further down the road on that matter.

V. Anderson: Following that up, one of the requirements for many people who are receiving shelter allowance and damage deposit allowance is that they get a written comment indicating to the landlord that they are on welfare. That has become a problem because it designates their source of income and gives the opportunity.... Is there some way of that being altered so that respect and privacy are reflected?

Hon. J. MacPhail: Yes, and in fact we have put into place procedures to deal with that exact issue. There is no exchange between our ministry and the landlord until at least two weeks after the client has taken residence. There is no opportunity for the landlord to be aware of the source of income until after the rental agreement is complete and enforced.

V. Anderson: But once they know, that does enable them to give notice. They might continue that month and then find a reason to give notice. That could be a problem, so I just highlight that as something to follow up.

I know that technically, under the regulations, they might be able to take the landlord to a tribunal, but that's not the easiest thing to do when you're in economic poverty unless you've got a lot of backbone -- more than some people in any circumstances might have. Do you want to comment on that?

Hon. J. MacPhail: Well, in fact, we have done due diligence around this issue to protect clients, and the new Residential Tenancy Act will protect them even further if discrimination occurs after the tenant has occupied the residence. There are provisions within the act. It's actually a very exciting new approach to the landlord-tenant relation-ship. It's a consumer protection act, not a rent control act. There are protections all the way through, including allowance for non-payment if you don't have the income.

V. Anderson: Another concern I found in these recommendations is around language, and I noticed that at one point the minister responded to this automatically. We tend to use the terms "people in care" or "child in care" or "youth in care." The name of the act is the Child, Family and Community Services Act, and that's the -- dare I say it? -- paternal image we've carried over from past generations in my era. I can say that honestly, being proud of my age.

The concern is that the term be dropped and that we use terms like "support" so that people are recognized. They're not being cared for. It's part of the old terminology, and I think it's important and significant that we begin to change and get more positive terminology, even within the act's statement. This has been raised in some of these reports, and when we don't respond, it indicates that we haven't read the report or that we haven't taken seriously the comments people have given us. I know this is a serious matter. It may not seem significant to some, but saying that you're in care of the government because you are receiving a government service would be like saying that you're in care when you buy a hunting licence or a dog licence. It's a service that the government is providing; it's not that they are caring for you. We need to say that it's a service, not that people are in care. Can some thought be given to shifting the terminology to make it more positive and supportive?

Hon. J. MacPhail: We can certainly discuss that when we're discussing the new legislation. There have been substantial language changes in the new acts. But just to remind the member, there is a guardianship relationship at that point. I appreciate your point; we should not be paternalistic in the way we deliver services. I accept that, and the new act incorporates that spirit. But in actual fact, there is a legal guardianship arrangement with us as the parent.

V. Anderson: We'll discuss that further in the debate on the particular act, but it comes into other terminology without us being aware of it. So I'll just highlight it outside of that act. I wasn't thinking of only that particular act at this point.

Another area that has come to my attention, particularly in tribunals, concerns people who are on a Canada disability pension. When they apply for some help under the provincial social services system, either for a dietary or health program or for a bus pass, what is the relationship between the support they get under the Canada disability program and what's available under provincial social services? In some offices the impression is given that if you are on one, you are automatically excluded from the other. Can the relationship between these programs be made clear?

[5:15]

Just recently I had a case where it took many months and a lot of frustration for a young gentleman to discover that there were options available to him. He inquired about them not being available to him and went through a lot of frustration before it was resolved.

Hon. J. MacPhail: Hon. Chair, I'll answer this question, and then perhaps we should adjourn for a vote.

The rules around that are very clear. If the member's point is that we're not making that clear enough to the clients, we can certainly take that up as part of our service quality core training. But the rules are very clear: it's unearned income, and if you're on CPP, you're not eligible for income assistance, because the disability pension benefits are greater.

I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 5:17 p.m.

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