1994 Legislative Session: 3rd Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
WEDNESDAY, JUNE 1, 1994
Afternoon Sitting
Volume 15, Number 24
[ Page 11255 ]
The House met at 2:08 p.m.
Prayers.
Hon. M. Harcourt: I would like members of the Legislature to express a very warm welcome to some very special guests that we have in the members' gallery today. We have His Excellency James Blanchard, who is the Ambassador of the United States of America to Canada. He is accompanied by his wife, Janet, and by the excellent consul general, who is seated with them, Michael Gallagher. I'm sure you're aware that the ambassador comes with a very finely tuned interest in politics, as the ex-Governor of the state of Michigan -- a very successful Governor in the state of Michigan. I have met with the ambassador, had a very good meeting with him and look forward to meeting with our special guests later on today. Would you give a very warm welcome to the United States Ambassador.
I have also the pleasure of introducing a visitor from the Prairies -- from Manitoba -- Marianne Cerilli, who is the New Democrat Environment critic from the Manitoba legislature. She is not looking for a job at all. Possibly she is here to prepare for her new job as the Environment minister in Manitoba in the upcoming election. Actually -- to make that very explicit, because I don't want the opposition to misunderstand why Ms. Cerilli is here -- she is here in British Columbia attending the Women and Sustainable Development conference in Vancouver. Would you please welcome her.
V. Anderson: I would ask the House to join me in making welcome Yoseph Thomson, who is visiting with us. Yoseph has a strong interest in politics. He's director of development for Lubavitch, the central organization for Jewish education in British Columbia. Would the House help me make him welcome.
D. Lovick: On your behalf, Mr. Speaker, I'd like to make two introductions. The first is two groups of students visiting us today from the state of Washington -- or "Warshington," as it's pronounced in parts of eastern Washington. The first group is from Sequim -- or "Squim" -- Middle School, and the second is from Chimacum Elementary School, accompanied by their teachers, Mr. Chin and Mr. Putaansuu, respectively. I would ask my colleagues to please join me in making them welcome.
The second introduction, Mr. Speaker, again on your behalf, is of two gentlemen: Mr. Cliff Stright, the managing director of SHL Systemhouse Inc.; and Mr. Gordon Oppen, the branch manager for SHL Computer Innovations. I would ask my colleagues to make them welcome, please.
W. Hartley: We have some visitors in the gallery today whom I am introducing on behalf of my colleague from Mission-Kent. Sixty students from Albert McMahon Elementary School in Mission are here with their teachers, Mr. Kore and Ms. Rossdeutscher. Please make them welcome.
PETROLEUM CORPORATION REPEAL ACT
Hon. A. Edwards presented a message from His Honour the Lieutenant-Governor: a bill intituled Petroleum Corporation Repeal Act.
Hon. A. Edwards: I am pleased to introduce Bill 42, which deals with the windup of B.C. Petroleum Corporation and its subsidiary, B.C. Petroleum (Kitimat) Ltd. The winding up of B.C. Petroleum Corporation and its subsidiary is consistent with government's commitment to streamline the public service. The bill ensures that the B.C. Petroleum Corporation and its subsidiary will be wound up in a manner which allows administrative functions of B.C. Petroleum Corporation to be transferred to my ministry. Moreover, the bill ensures that any contractual commitments of B.C. Petroleum Corporation or its subsidiary will continue to be honoured.
[2:15]
Bill 42 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
APPEAL PROCESS FOR MOTOR CARRIER COMMISSION DECISIONS
G. Campbell: My question is for the Premier. On July 12, 1993, the NDP government told the people of British Columbia that they have chosen to follow a course which ensures that never again will decision-making be subject to political whim without due process. The government went on to say that decisions that are made by commissions or administrative decision-makers are made with due process. Within cabinet there is no due process. It's a political decision behind closed doors.
The Speaker: Your question, hon. member.
G. Campbell: My question is to the Premier, hon. Speaker. On May 25, 1994, the Premier signed OIC No. 698, which overturned a recommendation of the Motor Carrier Commission and awarded 18 taxi licences at a value in excess of $1 million. Can the Premier tell this House whether he stands behind the closed-door political decision-making reflected in OIC No. 698?
Hon. M. Harcourt: I am disturbed by a pattern that seems to be emerging from the opposition of making allegations that they do not substantiate. In some cases they are vexatious and malicious. This House should be used very carefully. I say that with some due consideration.
The Leader of the Opposition has talked about a process for appeals from the Motor Carrier Commission. He should be aware that on October 27, 1993, an appeal board of three members of cabinet was established, with the ability of one member to hear appeals from the Motor Carrier Commission. I should let the....
Interjections.
The Speaker: Just a moment, hon. Premier.
Members, when questions addressing a complexity of issues are posed with lengthy preambles, they are allowed for the member to make a point. I think that a reasonable amount of time must also be allowed in response. I hope that members will appreciate the difficulty the Chair has in cutting a member off in the middle of a matter that requires explanation on both sides of the House.
Hon. Premier, please proceed and be as brief as possible.
[ Page 11256 ]
Hon. M. Harcourt: Hon. Speaker, I'm prepared to give some more detail to the House so that members are aware of this independent process where decisions are not reviewed by cabinet, where decisions that are made by the appeal to the cabinet minister are not able to be reviewed by cabinet and where decisions are signed without comment as an order-in-council without any review by cabinet.
The Speaker: Does the Leader of the Official Opposition have a supplemental question?
G. Campbell: The unfortunate pattern that is emerging is of a government that says one thing out of office and does something that's the exact opposite when they're in office. OIC No. 698 overturns both the Motor Carrier Commission decision and the recommendations of the B.C. Supreme Court. It provides 18 taxi licences at a value of over $1 million over the recommendations of those independent administrative bodies. Can the Premier explain the decision by cabinet to interfere in the Motor Carrier Commission's decision and to grant the licences to a good friend of the NDP?
Hon. M. Harcourt: As I said earlier, not only are the decisions of a single member of cabinet not interfered with, they are not reviewable by cabinet. The member should be aware that when that decision is made, the order-in-council is signed to technically confirm that decision -- without any comment, review or interference by cabinet, either in a collective decision or by any other member of cabinet.
The Speaker: The final supplemental, hon. member.
G. Campbell: I always understood that the minister was in cabinet, as has been pointed out.
However, the fact of the matter is that the NDP spoke out quite clearly against cabinet officer interference and political interference in the administrative process. Now the NDP seems to be quite comfortable in blatantly overturning official commission decisions to benefit their friends -- like Mr. Paul Gill, a longtime member of the NDP who told people that there would indeed be intervention by cabinet with regard to this decision. Once again, can the Premier explain why he signed the OIC that directly benefits his NDP friends?
Hon. M. Harcourt: This government has committed to removing appeals to cabinet from these independent bodies. In the vast majority of instances, that has been done.
In terms of the Motor Carrier Commission, that same ability to appeal to cabinet, which has happened under previous governments, will be removed very soon. In the meantime, as I have stated, an independent appeal process is in place until it can be replaced, where an individual member of cabinet hears the appeal and makes a decision. That decision cannot in any way be varied, interfered with or commented upon by cabinet, either collectively or individually. If members have any allegations, make those allegations -- and make them outside this chamber instead of hiding behind privilege.
W. Hurd: While in opposition, the NDP were rightly appalled by this type of political interference. On March 18, 1988, the now Minister of Employment and Investment complained of a cabinet approval overturning a commission decision. I quote from Hansard: "The potential for kickbacks" -- there's that word again, Mr. Speaker -- "is absolutely enormous and I think calls into question the decision-making we've seen from this government...."
Interjections.
The Speaker: Order, please.
W. Hurd: Mr Speaker, my question to the Minister of Employment and Investment is this: why is it wrong for the Socred cabinet to overturn a commission ruling for a friend, and perfectly acceptable for this government to do the same thing for an NDP friend?
Hon. G. Clark: Unlike the last 50 years in this province, we are bringing an end to cabinet appeals. In the meantime, there is a process which we are following. I want to be clear about this, because sleazy accusations from the opposition must be challenged. I want to make this challenge to the Leader of the Opposition: if he is saying there is political interference in this particular case, I challenge him to go to the conflict-of-interest commissioner and lay a charge. If it's against me and I am found innocent, he resigns his seat; if I am found guilty, I'll resign my seat.
The Speaker: The hon. member has a supplemental?
W. Hurd: Mr. Speaker, the minister...
Interjections.
The Speaker: Order, please, hon. members.
W. Hurd: ...had it right, back in 1988. There was lots of sleaze in the pages of Hansard in those days, let me tell you.
I have a photograph which identifies Mr. Paul Gill as a key fundraiser for the Minister of Employment and Investment. What confidence can the people of the province have in this government when an NDP fundraiser appears to be getting a million-dollar sweetheart deal from this cabinet behind closed doors?
Hon. G. Clark: I have been extremely clear on this question, hon. Speaker. The members of the opposition have stood in this House making one allegation after another this session, and every time they have been wrong -- every single time. They are standing in the House and trying to muckrake by saying that somehow there was some improper influence paid in this case. There was absolutely none. Ministers who hear appeals hear them in good faith, and decisions are made with no political interference. Dozens of decisions of the Motor Carrier Commission have been overturned. We believe it's more appropriate to remove this from cabinet ministers and move it into an independent tribunal. We are in the process of doing that.
In the meantime, if they have any evidence, other than sleaze and innuendo, that improper influence was used in this or any other case, I ask them to make it outside the House. I ask them to make it before the conflict-of-interest commissioner, because they know it's untrue. They know it's untrue because it is untrue.
The Speaker: Final supplemental, hon. member?
W. Hurd: My final question is to the Premier, and it's about ethics and accountability. Will the Premier assure...
Interjections.
[ Page 11257 ]
The Speaker: Order, please. Order, hon. members.
W. Hurd: ...the people of this province that not a dime will flow from Kimber Cabs or Mr. Gill to the governing party as a result of his cabinet's backroom end run on the Motor Carrier Commission in this province?
Hon. M. Harcourt: This is about ethics and accountability -- the ethics and accountability of this irresponsible opposition. That's what this is all about. They don't have the courage to make these statements outside, where they're not covered by privilege. They don't have the courage to go to the conflicts commissioner and accept the consequences of this untruth, this malicious, vexatious information, and the misuse of this House. That's what this is all about.
PUBLIC INFORMATION ABOUT FILING OF LAND CLAIMS
J. Weisgerber: A question to the Minister of Aboriginal Affairs. In filing land claims with the Treaty Commission, native bands are required to file a statement of claim which includes either a map or a legal description of the land being claimed. Can the minister confirm that to date there doesn't exist, either in the commission or in the ministry, a map which outlines all of the territory currently under claim through the Treaty Commission?
Hon. J. Cashore: The statements of claim that have been filed are next subject to the meetings that take place within 45 days. Following that, the chief negotiator on behalf of the province will be reporting to cabinet. Following the reporting to cabinet, information will be made available.
J. Weisgerber: Again to the minister: can the minister confirm that the claims filed and the statement of intent and the description of land claimed are indeed public information available to British Columbians who are interested? Can the minister further confirm that two bands have requested that their claims be kept confidential? Will the minister assure this House that in keeping with the intent of the Treaty Commission and the land claims process, all claim information will be made public?
Hon. J. Cashore: All information in keeping with the Treaty Commission process will be made available, in keeping with the decisions that were made and given the affirmation of the task force report. I have outlined the process in my previous answer. We are next awaiting the report of the chief negotiator to cabinet. Following that will be the following steps.
J. Weisgerber: For clarification, I have a question to the minister. Is the minister saying that land claims filed with the commission are going to be made available to the public, in keeping with the intent of the Treaty Commission office?
[2:30]
Hon. J. Cashore: The answer is yes. Everything that's in keeping with the terms and conditions of the Treaty Commission will be followed through on. We will be following through on the commitment we made when we set up the Treaty Commission.
The Speaker: The bell terminates question period.
Hon. G. Clark: I call Committee of Supply in Section A, the Ministry of Finance estimates. In the main House, I call second reading of Bill 43.
An Hon. Member: Why is it 43?
Hon. G. Clark: Oh, sorry. What is it?
Some Hon. Members: It's 22.
Hon. G. Clark: I'm sorry about that. There's been an agreement, as I understand it, that we start with the same minister, but Bill 22 first.
COLLEGE AND INSTITUTE AMENDMENT ACT, 1994
Hon. D. Miller: Bill 22 contains amendments to the College and Institute Act which will, first of all, give the university colleges and provincial institutes the power to grant baccalaureate degrees designated by the Lieutenant-Governor-in-Council. Secondly, it will change the composition of the boards of university colleges and institutes to include faculty, students and support staff, and finally, it will create a new body for institutional governance: the education council.
These amendments are mirrored by those contained in Bill 23, the Institute of Technology Amendment Act, 1994, which applies to the B.C. Institute of Technology. Giving university colleges and provincial institutes the power to grant baccalaureate degrees is an important element in accomplishing the goals of Skills Now. Skills Now is the government's plan to prepare more British Columbians with the skills needed for jobs in a changing economy. Under Skills Now, six post-secondary institutions will have a new mandate to grant degrees independently. These institutions formerly had the ability to grant degrees only in concert with one of our existing universities. The institutions that will now have that independence are Malaspina University College, Okanagan University College, University College of the Cariboo, University College of the Fraser Valley, Emily Carr College of Art and Design and the B.C. Institute of Technology. In speaking to all of these institutions, they are absolutely delighted to have finally been granted this kind of autonomy and independence with respect to degrees.
The focus of the degree programs offered by these institutions will be in applied arts, sciences and technologies. This new focus will provide students with greater skills leading to job opportunities. As I have had the opportunity over the last several weeks to sit down with some of the institutions and talk about their plans, it's very clear that their plans are quite far advanced. I sat down with some board members in administration in the Cariboo a few weeks ago and was quite intrigued by the work that they are doing in concert with local industry -- in using the facilities at the college to try to do some problem-solving, in one case with the forest products industry in developing technology and making that technology available to others in the industry. There is a real synergy and a growing relationship between these university colleges and local industry and labour in the community. It bodes very well, not only for these institutions that will now get degree-granting status but for others that might follow.
As I say, the focus of the degree programs will be in applied arts, applied sciences and technologies. When you
[ Page 11258 ]
look at the change that's taking place in our economy.... During question period yesterday I spoke about the difficulties of the structural unemployment that exists and advised that we don't see this as a panacea, but as something that will contribute in a meaningful way to issues of unemployment, particularly to issues of the individuals in our society who currently lack the skills to take advantage of some of the growth opportunities and jobs that are being created in this very tough and challenging economy.
Giving university colleges and institutes the power to grant degrees will also provide students with access to degree programs in various regions of British Columbia, enabling them to earn a degree closer to home. As a member who comes from a rural constituency, I think this is significant for those regions of the province that will be affected by degree-earning status.
Changing the composition of the boards of colleges, university colleges and institutes to include faculty, students and support staff will recognize the importance of their participation in board decision-making. Currently, boards are comprised entirely of community members appointed by the Lieutenant-Governor-in-Council. Including internal institution members on boards will also result in the implementation of one of the recommendations of the Carter committee on governance in colleges and institutes. This committee was established to review governance models for colleges and institutes.
These amendments also create a new body for institution governance -- the education council. This council will be composed of elected faculty, students and support staff as well as educational administrators appointed by the president of the institution. This body will have an advisory role to the board in the development of educational policy in its own powers in specified matters, and joint authority with the board on articulation and other agreed matters. The creation of the education council, which was also recommended by the Carter committee on governance, will enable faculty, students and support staff to participate formally and meaningfully in education decision-making in the institutions.
I talked earlier about the move to allow the autonomous right to grant degrees. Clearly we had to move as well in terms of ensuring that the degrees developed at those institutions met the test. In other words, they had to have credibility. We did not want to move to the traditional university governance model. We don't think it's appropriate at the university college level. We're looking at institutions that have much more of a focus in terms of the relevance of the course they are teaching, much more of a focus in terms of -- as we say -- teaching skills for the real world of work. Nonetheless, there needs to be a structure internal to the institution that would provide the kind of credibility that these degrees will obviously require. In having faculty involved in developing curricula, the education council will allow that kind of credibility to emerge.
The bill also contains several miscellaneous amendments.
I'll close by saying that I want to give particular credit to the Advanced Education Council of B.C. and to the College-Institute Educators' Association. I've had a very good relationship with both organizations. It has been a bit of a struggle on occasion to get some kind of consensus on the issues of governance. I want to credit both of those organizations with a great deal of maturity and flexibility. If the kind of maturity and flexibility that I saw displayed in the lead-up to presenting this legislation in the House today is any indication, then it is going to be a very positive and rewarding relationship at these degree-granting institutes, as well at the other community colleges that, while they don't have degree-granting at this point, clearly are entering into a bit of a new era with respect to a cooperative relationship. It's been a very good experience, and I look forward to debate on this and the subsequent bill, and to the remarks of the members opposite.
With that, I move that Bill 22 be now read a second time.
L. Reid: I'm indeed pleased to rise in debate on Bill 22, the College and Institute Amendment Act, 1994. As the minister stated, this act certainly now gives the minister the ability to require that university colleges and institutes grant baccalaureate degrees. This is a position that is supported by the official opposition.
We agree with the objectives of the college as stated in this particular piece of legislation, and I think we have some understanding of an expanded definition of education on this side of the House. We will see colleges and institutes in this province entering into a very different delivery system in the next number of years. We will see educational opportunities being dramatically different than what they are today in the province, in Canada and in many countries in the world.
We see an educational system that has grown and evolved and will continue to do so. I think the ability of colleges and institutes to rise to some of those expectations will indeed receive widespread support in the educational community.
We look beyond what the legislation says today and would take it to the next plane, if you will. We are going to look at an even greater, expanded definition of what it means to be educated, what it is to learn a living into the next decade and into the next century, as opposed to simply earning a living.
The expectation today seems to be that you go to work for someone. I think what you will see laced through both of these bills today, Bills 22 and 23, is the expectation that people will become their own employer. They will become more entrepreneurial in spirit, and they will hopefully take a lot of these issues into the workforce. I am trusting they will acquire some of the spirit of what it is to be educated in an expanded structural format, which I believe they will find at some of these colleges and institutes, now that they can give people something tangible when they leave.
I think that has always been an issue for educational opportunities in this province. We have often taken the hierarchical approach to education. Somehow we have always seen a university degree as having more value than a college diploma or certificate from an institute. I think we must understand, if we are truly to be educated, that all of those merits, if you will, have their place and have their framework well mapped out. For any society to be successful, it's going to have to be successful across the continuum, as opposed to being successful with the old approach to education, which was very hierarchical. I think that is a solid approach in terms of this piece of legislation and is something the opposition can support.
I would like to spend a few moments, if I might, adding to the official record the discussion from the Advanced Education Council of British Columbia on the role of boards and education councils and on where they see those parameters and where they see differences in terms of the minister's comments. For the Advanced Education Council of B.C., there are four basic principles on governance, as agreed to at the joint council meeting of December 1, 1993:
"1. Boards are responsible for representing the ownership of an institution. This responsibility must be held intact and, therefore, not shared. The boards are the ones that will be held accountable.
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"2. Boards have a responsibility to include consultative mechanisms in their decision-making processes; in particular, consultation with faculty on educational matters. In some institutions, this could be on an education council. However, education councils should not be legislated as a requirement for all institutions.
"3. Boards also have the responsibility to include the external community in the consultative process. Institutions should be free to develop their own mechanisms for doing so.
"4. Constituent representation on boards is acceptable as long as it constitutes a minority of the total board membership."
Again, that was agreed to at a joint council meeting on behalf of the Advanced Education Council. So they do have some issues surrounding this piece of legislation. They do have some concerns that I believe should be brought to the table in debate today.
[2:45]
To reiterate that point, a resolution from the Advanced Education Council's council of governors' meeting held Tuesday, February 9, 1994, states:
"Whereas the council of governors of the Advanced Education Council of British Columbia strongly endorses the ministry's goal of meeting community needs through increasing the flexibility and responsiveness of our institutions;
"And whereas each individual institution has a responsibility to reflect regional and cultural identity;
"And whereas the council of governors supports the inclusion of internal constituency representatives on boards of governors at each college, university college and provincial institute, except the Justice Institute;
"Be it resolved that the council of governors supports the concept of consultation within our institutions, while maintaining the boards' ultimate accountability and decision-making authority; the council does not support joint authority."
A resolution from the Advanced Education Council's chief executive officers' meeting held the next day, on Wednesday, February 10, 1994, states:
"Moved that the CCEO indicate strong support for constituency membership on the board, consisting of two faculty, two students, one support staff and ten or more members appointed by the Lieutenant-Governor. A quorum is to be 50 percent of the overall membership, which must include a majority of those members appointed from the external community.
"Moved that there shall be, for each college, university college and provincial institute, except the Justice Institute, an education council, the purpose of which is to advise the board on educational policy.
"Moved that, taking into account the program and geographical nature of the individual institution, the education council shall, as determined by bylaw, consist of not less than one-third faculty, with the balance to be made up of the students, alumni, administrators and support staff."
I read those recommendations and resolutions into the record because I think they add something that the minister perhaps did not touch on in the debate, in terms of his suggestion that there was some flexibility and responsiveness. Indeed there was, on the part of both organizations. I believe that this organization, the Advanced Education Council of B.C., has been very clear in their cautions around this legislation. I'm hoping their cautions can be debated at some length later on today.
We on the opposition side of the House certainly have some concerns as to whether or not any of these initiatives will result in better decision-making. Are we adding more people to the exercise, more bureaucratic overlay? Will it result in better education and better delivery systems for students in this province? I for one know that there are teachers, instructors, in this province who simply want to teach. They don't wish to be involved in all the other bureaucracies surrounding institutions. They went into the profession because they wanted to instruct students. Continuing to ask that additional work and time be spent on issues that take them away from their students is a concern for instructors in this province. We have to be cognizant of the fact that as we expand the job description, perhaps it's not always in the best interests of the students. That is a caution that I, as an instructor and as a teacher in this province, would bring forward. At the end of the day, there are some people who simply want to do the job they were hired to do.
If this is indeed the wish of the House, if this will somehow improve instruction and educational opportunities for students, I would ask that those issues come forward in debate. I look forward to the debate. I think the opposition needs to be convinced that this model is going to result in better educational opportunities.
In debate today I have shared the fact that there are some concerns from other institutions. The educational community is not strongly behind this legislation. There are aspects of the community that are supportive, as the minister stated. There are other groups that want to know whether or not it will result in a better education delivery system. That is the issue that we must grapple with in second reading debate, and we will grapple with it more intensely as we move into the committee process. There has to be some sense that once we leave this debate, we are clear as to who is responsible for educational decisions and that those decisions will be taken with the best interests of the students at heart.
A. Warnke: Rather than just withdraw from the chamber, I want to advise you, hon. Speaker, after seeking advice from different sources, that due to my serving in an administrative capacity, I believe there is a possible conflict of interest -- or certainly there is the prospect of a perception of conflict of interest. Therefore, hon. Speaker, I wish to record in the House that I feel quite compelled to withdraw from the chamber for the vote and the debate so as to avoid any prospect of influencing that vote.
A. Hagen: I want to speak briefly to Bill 22, the College and Institute Amendment Act, 1994.
First of all, I want to commend the minister and his staff for the process that preceded tabling this legislation in the Legislature. The consultation was intense and widespread.
With this bill, along with the legislation in Bill 23, the Institute of Technology Amendment Act, 1994, we are moving to add to the galaxy of services that some of our colleges can offer our students. I truly believe that the college system, which is getting close to offering a quarter of a century of service in our province, is still one of the most powerful post-secondary systems that we in British Columbia have developed. Legislation that enhances its responsiveness and its flexibility -- using the words of the member for Richmond East -- is entirely consistent with its mission. Its mission is one that has been made manifest through a consultative process that has involved communities, faculty, staff, students, boards of governors and the ministry.
The legislation that has come out of that consultation is very carefully designed to recognize that if we are to serve our students, we need to involve in very meaningful ways all of the people who work in those institutions to help in devising and responding to the educational needs of students. The concept of education advisory councils -- and
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of the powers they will hold, the checks and balances between their advice and powers, and the role of the policy-making body, the board of governors -- has been very carefully designed through a consultation process. In fact, a lot of the issues were thrashed out and dealt with before the legislation actually got to us.
This legislation, I believe, will provide us with tools for the Skills Now initiative and for the expansion of the number of seats for students. And I say to the minister and to the college and institute world that I hope it will, in fact, provide us with an increased panoply of tools to continue with the colleges' mission to regionally serve our post-secondary needs and be very responsive to the changing needs of students for their education, training and aspirations for the world of work.
That's a very large mandate, and no institution fills it better than our community colleges. I believe they are the basis, in fact, for much of the Skills Now initiative that the ministry announced in the last couple of weeks. This broadening of its mandate with respect to the degree-granting capacity and the setting up of new ways to deal with curriculum, standards, evaluation and service are all consistent with an education goal that has to serve a much larger, more diverse group of students and a much wider array of educational needs. The challenge will be to have a structure that allows for that creative and flexible approach to continue to be available in our community colleges. They form part of a triad of services for post-secondary education that is pivotal.
In my community, I've watched the balancing of academic goals, vocational and technical goals, partnerships with school districts, and working arrangements with the broader community emerge in the college system. That's true wherever I've been throughout the province. This legislation, I believe, provides tools for the community to respond.
We often talk of our fears about legislation, but I think we should see legislation as enabling and empowering people. We should trust people who attend institutions, who teach in them, who are the support staff and who take the policy and budgetary responsibilities of governance. We should trust those people to work out the tools, programs and services, within the good framework this legislation has provided for us, that will in fact enable us, by the year 2000, to see 50 percent of our population getting the four years of post-secondary education they need in order to be ready for jobs -- and probably by the year 2010, to see the 75 percent who need those post-secondary opportunities getting them.
This legislation is enabling and empowering. It has been developed in a consultative mode. It is a balanced piece of legislation. It puts the onus back on the institutions to work through many of the aspects of the bodies that are described -- the board of governors, the education advisory council and the players who make up that institution. And because of the basis on which it has evolved, I have a great deal of confidence that those who will work under this legislation will have a tool enabling them to continue with the mission and vision that was established in 1970, when the first of the community colleges was put in place -- one of the very first of which was in my community of New Westminster. Community colleges will continue to be the local and regional base for many people to find the appropriate kinds and lengths of courses they need for their post-secondary education.
I again commend the minister, his staff and the communities who have worked so diligently to bring before the House this session a document that I believe has very strong support.
T. Perry: I hadn't realized the bill would come up today, and if I had, I probably wouldn't have worn such a florid tie. I apologize to members for my unusual dress, but perhaps it will look good on television, anyway.
I think this is a good bill, and I'm going to vote for it. I regret there was some commotion going on in the hall after question period, and I didn't get to listen in full to the minister's speech. I apologize to him if I reiterate some of what he's already said.
[3:00]
I want to make a few comments about the genesis of this bill for several reasons. First of all, some members of the House may still remember that I was once the Minister of Advanced Education, Training and Technology. I can still remember the whole term and get it out properly. I was responsible for the establishment of a committee that was chaired by Mr. Ross Carter, a former principal of Vancouver Community College, and that represented students, institutional faculty and other support staff, administrators and board members throughout the province, to review the legislation on colleges and institutes. I met with that committee a number of times while I had the ministerial responsibility, and I weighed the issues carefully.
I think it's important to say on the public record -- for those people, like the students who have just joined us in the gallery, who wonder whether politicians ever carry out their promises -- that it was longstanding New Democratic Party policy that this reform of the College and Institute Act would be brought in. It goes back years, if not decades. In this case the government is following through on an election commitment that was, if I remember correctly, part of the 48-point plan. It was certainly put before the public. It was well-known policy, and now we're following through. So for those who care about such things, the government is keeping a promise that it made prior to an election. I think that's important; I think people do care about things like that. I'm glad the young students are with us today to see that, in fact, politicians sometimes do what they say they are going to do.
Much more important than that is to review some of the philosophic basis of these changes. As the minister when this process was begun in 1992, I found that it was almost impossible, even from the record of Hansard, to discern the intentions of the former NDP government in 1973-74, when similar reforms were made to the University Act. I looked through the records at the Legislative Library. I was privileged to have had as one of my professors at university Dr. Walter Young, who chaired a task force in 1973. Some of the other members may have known Walter Young who, tragically, died very early. His report is available and does not, in my opinion, fully explain why the government of that day made the reforms that it did to the University Act.
The legislative debate -- Hansard having been brought in by the NDP government of Dave Barrett for the first time in B.C. history -- regrettably does not enlighten us on why the government brought in those amendments. The minister of the day, Eileen Dailly, must have been preoccupied with something else, because her second reading speech was only a short paragraph.
The committee stage debate does not really describe much of what was going on, except that it features the former Liberal leader, Dr. Pat McGeer, arguing that it would be a frightening contamination of the boards to have students on them. One may or may not agree with Dr. McGeer. He certainly was clear and logical, and he had coherent ideas. In particular, he felt that you should never let
[ Page 11261 ]
students onto a board of a university because they were transient, they probably didn't know what was good for them anyway, and they wouldn't be around long enough to make much of a contribution. Perhaps there have been such board members occasionally; there certainly have been board members from other groups who fit that description as well. But at least you could tell what Dr. Pat McGeer was thinking.
It wasn't so easy to figure out what the government intended. Although the standard response of a lawyer is to say it doesn't matter what we say in the Legislature, the act tells us what the act is about; it speaks for itself. I see the Minister of Forests has now come into the chamber, and I believe he is one who, as a lawyer, argues that the act speaks for itself.
I note that the new freedom-of-information and protection-of-privacy commissioner, Mr. Flaherty, as recently as yesterday in a speech before the certified general accountants, which many of us heard, referred to the legislative debate to clarify the intention of the act. That commissioner specifically cited the comments of the Attorney General and others in the legislative debate, last year or the year before, in determining how he ought to interpret the Freedom of Information and Protection of Privacy Act.
So it is important for the record -- just in case anyone looks back on it in the future -- that we describe what we're trying to achieve here. I think it's important, because I wrestled with a lot myself as a legislator. Is the University Act itself perfect? Were the reforms of the 1970s to the University Act, bringing elected faculty, staff and students onto the board, necessarily good? I asked that question of many veteran board members of the universities and found a mixed response. Some of them saw conflict of interest. That principle of conflict of interest has arisen in the issue of who ought to belong to community health councils and regional health boards and who ought to be eligible for election to municipal councils or school boards. In the case of the universities, the Legislature deliberately decided to bring people onto the board who might be perceived to have a conflict of interest.
The usual answer of the experienced board member -- such as Mr. Ian Stewart, a prominent Liberal who was chair of the University of Victoria board for many years and who served and was reappointed under this government -- was that on balance those members elected from the faculty, students and staff contributed significantly to the deliberations of the boards. They were able to divorce themselves from their own conflicts of interest, exempt themselves from the discussion and absent themselves from the room, and yet contribute to the understanding of other board members by their intimate knowledge of the institution.
On balance, I accept that argument. Although, in these amendments to the College and Institute Act, one now brings onto the board people who might be perceived to have and certainly will have conflict from time to time -- be it over wage issues or their conception of education; and sometimes it's a narrower conception of training and education than the minister, members of the Legislature, people in the community or employers might wish to see -- I think they can segregate themselves from that conflict and step back when necessary. If they don't, the majority of the board will remain to dismiss them where necessary.
But they will be heard, right in the heart of the board. Occasionally they'll be able to point out, "Just a minute; what you're saying doesn't make sense from commonsense experience," just as the minister who is a journeyman millwright might occasionally be able to say: "Just a minute. Your proposal to put methanol into a diesel engine will not work; the engine will probably break down." Sometimes having that practical experience right inside the board is useful.
On balance, I think that's what we're trying to achieve. We want it to be clearly seen that members elected from students, staff and faculty ought to consider themselves not simply as the designated representatives of that interest group but as representatives who are responsible, just like other board members, to the whole of society and not exclusively to their local community -- be it Cariboo College, the College of New Caledonia or wherever. We want them to be responsible to all the people of British Columbia, every bit as much as the other board members.
Students have a very valuable role to contribute, and I think it is difficult for them sometimes because of the transient nature of their life, the demands on them and the fact that they are normally not as economically privileged as most of the other people. They're struggling to get by sometimes. It's very hard for them to contribute, but they can contribute an insight that nobody else can, which is sometimes invaluable. That's going to be constructive, and I think the Carter commission recognized that.
What about the education council? Is this a senate, and is the senate of the university the optimum solution to society's needs? Some of the leading educational minds in British Columbia participated in the Fraser Valley Committee on Post-Secondary Education, chaired by Margaret Neylan. It produced a very thoughtful report last year in July which said that in designing a model for governance for an institution -- such as, in this case, a new university proposed for the Fraser Valley -- one ought to consider the function and decide what one is trying to achieve before designing the governance model. That was a revolutionary idea for universities and colleges and not something that was ever sufficiently asked in the past. That report pointed out that one wants the institution to be increasingly responsive to the community.
Implicit in that report is the notion that the academic senates have failed us in some ways. They have been very important bulwarks against interference by the state in matters that are properly academic and within the purview of a university. They have guaranteed the credibility of a curriculum free from political and sectarian interference and from the interference of ideas like Nazism, fascism or frightening and dangerous political ideologies around the world. Unfortunately, that kind of senate was not effective in pre-Nazi Germany; it was not effective in communist Soviet Union. It's probably not effective in China these days, and it is one of the great traditions of our western universities.
However, there is also an isolationism within university senates, which are sometimes divorced from the realities of the outside world. Sometimes there is a notion that they are not accountable to the rest of the world, which is divorced from the fact of common-day reality that the rest of the world pays for the university. The money does not simply drop from heaven like manna inside the ivory gates of the university. I don't see the senate as an unmixed blessing. I see senates as sometimes having been insufficiently responsive to the community. The beauty of community colleges and institutes in our history in B.C. is that they were sometimes -- in fact, usually -- much more responsive than universities, although they were more subject to political interference at times. Sometimes a minister could interfere and perhaps suppress free dialogue more easily than one could in a university. Even they aren't immune from that.
[ Page 11262 ]
That leads us to the question: is the educational council a senate? I think not. There are important distinctions. Some very important and valid questions have been raised by board members -- those appointed by the previous government and by this government -- of varying political stripes, if any. Some of them don't have any stripes; they have spots or markings that are not discernable at all. They've raised good questions. To me, the answers to the questions are that this educational council has the right balance of power: the ability to raise tough questions and to advocate on behalf of students and academic and technical excellence, yet the board retains the central power to overrule it where necessary in the interests of society. I think it's important that that be said on the record, and I hope it will be debated at length in committee stage.
What about the degree-granting issue? To me, credentialism is the one question that arises. I think it's wonderful and long overdue that BCIT is granting degrees. The university colleges have shown in their own right over the last few years that they have the capability to do that, and the Emily Carr College of Art and Design -- happily, located in the great riding of Vancouver-Little Mountain -- is going to make a wonderful new contribution.
But I think we do have to ask: is this simply credentialism, making sure that a two-year or three-year program isn't good enough? Do they now have to have degrees, costing the public an additional $6,000 or $8,000 or $10,000 per year to churn out more students who have higher training, when in fact they would have been perfectly well trained or educated at the level they had already achieved? I don't think so. I think BCIT has led the way in this respect, in the technical area, by designing its degree programs specifically to encourage students who had already taken technical training, proven their ability to work in the employment world, and who knew what they wanted from their further education, to then come back to complete a degree. I think it's going to be efficient, useful to students and highly student-oriented -- a major advance.
[3:15]
So for all of those reasons, I think this is an excellent, very well-thought-out bill. There remain interesting questions to debate during committee stage. For the reasons I said at the beginning, I think it will be very healthy to have some of that debate on the record. Then board members, faculty, students, civil servants and even ministers will be able, five or ten years from now, to go back and look at what the House was trying to achieve and ask if they are achieving it. I really look forward to listening to part of that debate and to voting for this bill.
[N. Lortie in the chair.]
J. Dalton: I thought, as a veteran of both the oldest and newest college in the system -- that is, Langara -- that I should get to my feet and make a few comments and observations about Bill 22. I should tell the House that my perspective, of course, is somewhat tainted -- if that's the right term -- because I was at Langara since 1974. I should also tell the House that when I arrived at Langara, there was a strike, with a picket line around the campus. It was an interesting way to start, caused in part by bad labour relations. I can also tell the House that in the next year the president of Vancouver Community College -- as it then was; of course, it has shrunk since those days -- was canned.
I say these things because the faculty at Langara -- and it is still true today -- really was the guiding force behind the institution. I am not saying that there wasn't any management as such at Langara; obviously there was a principal. Now there's a president and a new board appointed to Langara. But the faculty has always had a history.... Quite frankly, that's why Langara is now an independent college; it was really faculty initiative that created that. As far as Langara was concerned, Vancouver Community College really didn't function very well over the years. The board never visited the campus.
So when we see an education council in this Bill 22, that's really in effect what Langara had since my days in '74, and long before that. The education council -- we actually called it an advisory council -- was made up primarily of faculty, and it worked. I'm not suggesting, however, that that is necessarily going to work for all models and all institutions, so I'm just going to give the minister a word of caution. My colleague from Richmond East read into the record the same caution that the Advanced Education Council has voiced. The board of a college, whether it be Langara or any other institution, is charged with the responsibility of management, and the board is accountable for management. The education council created in Bill 22 is primarily advisory in its capacity. Some decision-making processes can come out of the education council, but I would like this House to understand that ultimately it's the board's responsibility to manage and ensure that a college functions properly, and that when any issue comes up, whether it be good or bad, the board will be held accountable.
I caution the minister that the shared responsibility set out in Bill 22 between the education council.... To support this, I would point out that the council must advise the board and the board must seek the advice of the council. That's fine in print, but I'm not totally convinced that in every institution in this province, of which there are 18, it's necessarily going to work. It will work at Langara, because it has worked there for over 20 years. So when the Advanced Education Council sends out a caution on what's set out in this bill, I'm hoping that those words of caution will be heeded.
I have no trouble with the consultation process set out in Bill 22. It's long overdue that students should have more voice in the initiatives surrounding curriculum. Students should also have some opportunity to comment on tuition increases, for example. At the end of the day, it's the college board....
Interjection.
J. Dalton: Of course we know that they do. The former minister who spoke before me on this subject will fondly remember our visit from the Langara students a year or so ago.
Now the students have a more formal voice, and that's good. It's particularly good because we are moving more and more into four-year degree-granting institutions, not just the traditional two-year programs. So we don't have the same transient students that people would have considered traditionally within the college or even the university system. That's just a word of caution about the education council. I'm hoping that it will prove to be successful.
I would add one other thing with regard to the joint responsibility of the council and the board. We don't want to create institutions that are top-heavy with administration, decision-making bodies and committees, because that is not necessarily going to help the delivery process within the classroom and within the programs. We need administration, but we want it to be, relatively speaking, a lean and mean administration, not an overly cumbersome one. I'm not
[ Page 11263 ]
totally convinced that this process will not become too cumbersome in its nature.
I wanted to add to the record one other thing about the degree-granting process, which is certainly welcome. In large measure it's going to help the problem of access to our post-secondary institutions. It is also going to help many students from around the province who are almost compelled, in many cases, to come to the lower mainland for their education, whereas they should have the opportunity to remain in their own communities. This is going to help in that regard.
I want to point out that the minister and I have had some correspondence over the Capilano College situation. I thank the minister for his response to my letter with regard to Capilano College, which has put forward a very well-reasoned and well-intended proposal for degree-granting status within some of its programs. But Capilano College doesn't necessarily want to take on university college status. It certainly doesn't wish to have degree-granting status for all of its various programs and offerings on campus. What Capilano College does have in mind, as the minister knows -- and I'm hoping we'll be able to advance this concept one step further in subsequent legislation -- is being granted degree-granting status within its areas of expertise and specialty. I'm just hoping we'll be able to seize upon that initiative, and not just for Capilano College. I know my colleagues at Langara would be very supportive of a similar concept, and I'm sure every other institution in the province would be as well.
Those are my comments. They are not intended to discredit the concepts of Bill 22 or the initiative that is taken through it, but are words of caution from a wily old veteran of the system -- even though my experience is of only one college.
D. Lovick: I'm delighted to say a few words in this debate on second reading of Bill 22, the College and Institute Amendment Act, 1994.
I note my colleague from West Vancouver-Capilano referred to himself as a wily old veteran. If he is a wily old veteran, I suspect I must be a hoary old one, because my history goes back even further. It's rather like a Bryan Adams song. It was all about "the summer of '69," in the very early days of the college movement. I am feeling like a character from Margaret Laurence: I'm feeling pregnant with memory -- and of course that's all men can be pregnant with.
There is so much I would love to say, but I will restrain myself and talk about what I think are the two fundamental principles of this bill. The first one is what this bill demonstrates by conferring degree-granting ability to university colleges in the province. It demonstrates very clearly that the college as a concept, as an idea, has come of age. It's something that a lot of us who have been involved over the years knew was inevitable. It was only a matter of when that time would come -- and of when government would find the courage to introduce the enabling legislation, frankly. I'm delighted that this minister, his predecessor the member for Vancouver-Little Mountain -- who spoke earlier -- and this government have found that courage.
The second principle in the bill that I want to touch on very briefly is the whole area of shared decision-making. Let me deal with each of those, albeit briefly. When the college movement began, it was, to be quite blunt about it, a radical idea in this province. Indeed, many of us fell into the trap, for a short while at least, of saying that it was an American invention, and we were typically xenophobic and thereby apprehensive Canadians. We wondered whether this was a good thing. In fact, at the time I was one of those who was very concerned about Canada's future -- whether we would indeed have one, given the depredations by our neighbour to the south.
When we hired our first president, a man by the name of Dr. Carl Opgaard -- for whom I eventually came to have absolute, unaffected and complete respect and admiration -- I was one of those who wondered out loud about the advisability of that, saying: "Surely we in Canada can find somebody else to manage our institutions. After all, can't we grow our own?" The reality at the time, 1969, was that we in British Columbia and in Canada were simply unaware of the concept of community colleges; therefore we had to go looking for expertise and ability outside our borders.
We did so not only in terms of college administration -- and it seems amazing to say this today, in 1994 -- but also in terms of faculty. Indeed, when I was hired at Malaspina College in 1969, right out of graduate school, I was the token Canadian in the English department. My colleagues were American, British and Australian -- anything but Canadian. Happily, we've come a long way: we now grow our own. One of the points I want to make about the college movement is that we have also continued to maintain that kind of -- dare I say? -- cosmopolitan flavour. We still have a number of different cultures, backgrounds and disciplines embraced in that thing called the community college.
I am going to make a point in saying this; this isn't just indulgence in memory and nostalgia. I think that community colleges, almost by definition, have always been -- dare I say? -- somewhat more adventurous, exciting and stimulating in certain respects than their brother and sister institutions, the universities. Universities, because of their very size, tend to have to fight within, in a regular battle, the impulse to stultify and to become stodgy and small-c conservative. Colleges, as the new kid on the block, represented an ongoing and constant challenge to do it differently and to do it better.
I would like to say, now that I am not part of the college system.... I should perhaps have said that more emphatically in the beginning, because under standing order 18, of course, if one has any direct pecuniary interest in the college, one must declare it. I no longer have that direct pecuniary interest; I severed my connection with the college after my first five years as an MLA. Therefore I am free to speak -- and I will.
As I say, the college -- Malaspina in particular, although I'd be willing to make the same claim for others -- has a marvellous record of success. Quite frankly, we were producing students who were in many ways better equipped to go on to do good work at university and in their chosen careers than their counterparts at the universities. That happened because there was a sociological phenomenon going on in the late sixties and early seventies, when the colleges took off in this province. That phenomenon, as we all know, was the challenging of institutions: the suggestion that maybe institutions had become hidebound and restrictive and were too willing to become the defenders of the status quo rather than the challenge to the status quo.
Many of us who came from graduate school and went into the college movement -- perhaps it's a little inflated to put it in these terms -- truly believed that we were building the New Jerusalem. We were going to go out and change the world and make it better and happier. I suspect that the only difference in those of us who still believe that that's our mission is that we were a bit more naive and a little more bright-eyed and bushy-tailed, and willing to say so. Today I think we're all a little tentative about talking about that kind of
[ Page 11264 ]
idealism. But that's what kicked off the college movement in this province. It was wonderful; it was exciting. It was incredibly hard work in those early days.
[3:30]
It has grown and developed, and it has evolved. It has responded to changing circumstances and demands, and has done it wonderfully -- for two reasons. The first is that it has never forgotten its basic roots in community, and we owe this to our American friends who gave us the model. It has always been closely connected to community and has responded to the perceived needs of community. That's one of the exciting things about colleges. The other is that the college has always been a comprehensive model for education. In this province, it has always been a mixture of academic, technical and vocational, or what we in the trade refer to as career education. That mixture, that cross-fertilization, has also made it exciting and significant. That's certainly the case at Malaspina in Nanaimo, where I am from.
What has happened, though, is that we have acquired that stature, status and credibility to the point where becoming a degree-granting institution (a) was inevitable and (b) will be universally accepted and applauded. I don't think anybody is going to challenge the right of the colleges to confer degrees. They have earned that prerogative. They have earned that ability, and I for one am pleased to congratulate them on having done so.
The other point I want to make about the community college has to do with what I referred to earlier as the second principle enunciated in this bill -- namely, the idea of shared decision-making. We used to use a word at the college many years ago -- "collegiality." One of my colleagues, who is now an assistant dean or something at Malaspina, used to get more or less teased and laughed at every time he said: "Well, that's not very collegial; we should be doing this with more collegiality." Nobody, of course, knew what that meant. It essentially meant that you all had a chance to sit down and discuss the issues -- a fancy word for a nice concept. We laughed at the time when the word was used, because the college was anything but collegial in those days. Rather, we tended to be a hierarchical structure where some at the top told the rest of us at the bottom what was going on. Happily, this legislation changes that, and I for one think that is a wonderful idea.
What we're talking about is recognizing that the face of education has changed. It is no longer -- if it has ever been -- the case for a community college or a university college to deal with only a particular age group fresh out of high school. The changing demographics of the college population in the past 20 years or so has been to become a progressively older student body. In my experience, the best students in the college have inevitably been those who have been out doing something else -- whether that's raising children, working at other jobs or getting some other kind of education -- and then decided that they wanted to go to the college. They came there motivated and interested and, above all, with some life experience against which they could measure the theoretical stuff that people like me in the classrooms were talking about. It was a wonderful opportunity to teach people like that. You didn't have to worry -- as is so often the case in so much of what is called teaching today -- about whether your students really wanted to be there. You didn't have to worry very much about motivation, as the phrase goes. Rather, it was a simple matter for the instructor to say: "Look, students, I am prepared to give you all my time, energy and whatever expertise and ability I have, but you've got to want it, and you've got to be prepared to do your part." It was, if you like, an unstated contract between teacher and student, and that is the absolute best model -- the best possible environment -- for real education to occur.
I don't think that this bill has any kind of radical dimensions. Rather, it is truly an idea whose time has come -- echoing the phrase of Victor Hugo. But it's also a bill that people are understandably going to put some pressure on. I was pleased to hear my colleague from West Vancouver-Capilano make the point that there are no easy solutions in terms of college governance. It's not a matter of simply saying: "We'll let everybody have a part of the decision-making, and all our problems will be solved." The negotiations will still go on. I for one am looking forward to listening to committee-stage debate, because there may well be some legitimate questions about the governance model that's set out here.
I want to emphasize that this is good legislation. I hope that all members in this chamber are going to give it their enthusiastic support. I know that my colleagues in Nanaimo and at Malaspina College, as well the citizens of the community who have offered their support for Malaspina College for many years, are going to respond enthusiastically.
G. Wilson: Let me first get out of the way a concern with respect to matters of conflict of interest, certainly under standing order 18, because I'm currently on leave from a community college and there would be ample opportunity for me to speak if not to vote. Even under section 9 of the Members' Conflict of Interest Act, given that I would have or gain no pecuniary interest by the passage of this bill, it is clear that a conflict of interest does not occur for faculty members who may be on leave from community colleges. I've had an opportunity to briefly discuss this with both the Clerk and the commissioner. I just want that to be on the record. I don't believe a conflict exists. And I believe that's been decided by the member for West Vancouver-Capilano, who I know is out of the college system, as is the member for Nanaimo.
Let me start my discussion of Bill 22. The main question that needs to be asked of this is: why do we need this legislation? Secondly, what is this legislation going to accomplish that could not be done more effectively through providing greater autonomy to the colleges to sort themselves out and allow themselves to find the best way they can to manage the issues provided for under this bill?
To talk a bit about conflict of interest, if we can.... In the board composition -- with respect to faculty members, staff members or even students who are now going to sit on a board that is going to make decisions on things like faculty salaries, staff salaries and student fees -- by virtue of this bill you've got members sitting on that board who will have a right to vote on those three issues, which will clearly put them in conflict. Furthermore, if there is to be adequate and proper discussion of those issues, faculty are clearly going to have to absent themselves from that discussion. So would staff, because they are sister/brother unions at most colleges and usually are in direct support of each other with respect to the collective bargaining process. And the Canadian Federation of Students clearly is going to want to allow themselves to remain independent.
So this is really problematic, from a purely philosophical point of view and a point of principle. If you allow faculty members to sit on a board and give the faculty member, staff member or student the right to vote on the board, then presumably they must have a complete and equal opportunity to participate in all matters of deliberation that
[ Page 11265 ]
the board undertakes. And that puts them in a conflict of interest.
Save and except for this new creation, this educational council -- where they're now going to sit down and decide on their own what constitutes a conflict of interest for themselves, which in itself is unusual and unacceptable -- there's no provision in this legislation, with any degree of clarity in the language, as to how you're going to get around that conflict of interest. Clearly, you're going to end up with a board composed of members appointed by the council -- and I'm going to come to that. You're also going to have faculty members, staff and students who are going to have to be excluded from much of the deliberation of a board with respect to matters that are pecuniary and therefore have influence over faculty or staff collective agreements and student fees. That in itself is unworkable.
[D. Lovick in the chair.]
I've spent a long time in the college system myself. While the member for Nanaimo has me beat -- I didn't start there until the early 1970s -- I've also had the opportunity to act in a subadministrative capacity over the years. I had an opportunity to serve as president of the union, was involved in establishing the first collective agreement, have been involved as chief negotiator, and have been involved in the CIEA and in activities around provincial bargaining on a lot of matters. I have also had an opportunity, on the management side, to act in the establishment of a new college facility in Sechelt and in the setting-up of administrative structures to administer that facility. So I think I have a lot of knowledge about the inner workings of the college system. I'll tell you that this, in my judgment, is both unworkable and unnecessary.
It strikes me as passing strange, when there isn't enough money to put students in a classroom, that we're creating a middle-level bureaucracy in the college system that is going to cost more money. Faculty are not going to sit on this board if this education advisory council is going to be worth its salt unless they're released from some form of teaching. It will become the subject of collective bargaining negotiations as sure as we're all in this House speaking to this bill. In a similar manner, if somebody is going to be released to coordinate a discipline, if faculty are elected to sit on an educational council, they're going to be released from their instructional duties to do that -- and rightly so. The powers that you're granting to this educational council are fairly substantive. Therefore replacement faculty who will be brought in, albeit at a temporary level and therefore lower on a faculty wage scale, are going to increase, not decrease, the cost of delivery of education.
Furthermore, it sets up a middle-level bureaucracy that, if left unchecked and allowed to flourish and grow as bureaucracies tend to do, is going to become enormously problematic from a disciplinary point of view. I remember only too well years back, in the late seventies and early 1980s, when we moved to concepts called instructional boards within college systems, where we were funnelling curriculum materials and questions with respect to standards, grading, student appeals and curriculum variances as we moved into community educational programs. We developed a community development component of the community college. Those instructional boards were an enormous frustration to faculty who wanted to have the autonomy to set standards required for a degree that would eventually be granted in their discipline. For the life of me, I don't understand what we should be doing with four educational administrators appointed by the president, and four students or four support staff sitting there talking about the establishment of curricula criteria for a degree granted in the discipline of physics. The people who should be deciding those standards, and the people who do decide those standards in reality -- and I don't know who drafted this bill, but they clearly have not taken this into account -- are provincewide bodies of physicists. They sit there and determine on a provincewide basis what's necessary for introductory students and how those students are developed in terms of the curriculum that is established, so that transferability between colleges and universities is allowed and standards and grading are consistent. What we don't need is a middle-level bureaucracy that's going to further complicate this issue at a time when the dollars allocated for colleges are extremely scarce.
We've got individuals appointed to a board who are going to immediately put themselves in a conflict position on pecuniary matters when collective agreements are being discussed. There's no provision to deal with that. That original board is really going to be dealing with the mechanics of the operation of the college under the act that governs the colleges, and is therefore going to be in charge of distributing what limited funds may be available from the provincial government. Eight of those board members will be appointed by the Lieutenant-Governor-in-Council.
I guess this government has forgotten that when they ran for office, they promised they would move to elected boards; I guess they forgot that there was a commitment to the people who elected them to office to establish elected boards in this province. It didn't happen in the hospital board system and it hasn't happened in the college board system; we are now going to maintain appointed boards. We would argue that what we ought to be doing in principle is moving toward boards that are elected from within the community in which the community college is established and for which it provides. We would also say that the magnitude of the powers or the duties underneath this advisory role of the educational council is such that it is going to provide a middle level of bureaucracy that ultimately is going to be more frustrating than productive.
[3:45]
Let me tell you, the problem is that when you get into a downscaling, a downsizing of colleges, this is when the real conflict happens. In a period of growth, when many dollars are available to the colleges, and various disciplines are able to expand and introduce new courses and are able to put on courses that may not be part of a core curriculum, but in fact may be desirable additions to that curriculum, everybody seems to be happy. When dollars become scarce and dollars to the colleges diminish, we have to make hard educational decisions with respect to how we reduce the courses delivered, how we reduce the number of sections, and how we decide whether we're going with five first-year courses and only three second-year courses, or expanding to include an equal number of first- and second-year courses, and so on.
It's at a time when you're in that situation that the cancellation of courses and programs offered by the institute, the length of hours the institute will sit and the number of contact hours that a faculty member may have to be before a class are all matters that are clearly subject to collective agreements. They're matters that are governed by individual collective agreements with individual colleges. Clearly, the education council has a limited advisory capacity in the delivery of that, because it is something generally in the purview of the faculty associations and the duly nominated bargaining agent for that faculty association. So one has to wonder what we're trying to create
[ Page 11266 ]
here. My guess is that it's going to be a complex bureaucracy that is not necessarily effective.
Decisions concerning library and resource centres -- well, an advisory aspect can be provided. I remember sitting on just such an advisory review council at the college in which I served, where we were very concerned because there was a lack of resources to enable us to continue to expand the library facilities and library services that were necessary for the delivery of what we believed were adequate program support services to the faculty in those areas.
The point is that we could provide all the best advice in the world -- we had an enormously supportive administration and a reasonably supportive board -- but we couldn't act on that advice because we didn't have the money. Somebody had to make the decisions as to how that money was going to be applied. It couldn't be an educational advisory council, because the key component to how the money was delivered was the collective agreement. It was how much money, by law, the college had to put into faculty and staff salaries, and what costs there were in terms of the administration of the programs. All the advice in the world didn't do anything but frustrate those people who sat for hours and hours, deliberating on those necessary pedagogical issues and providing advice to a board that had its hands tied because it didn't have any money.
So let's not fool ourselves into thinking, when we set up this middle bureaucracy, that somehow we've created anything other than a middle bureaucracy. When you talk about powers with respect to the bylaws that you're going to provide for this education council, then I become really quite concerned. It says it's going to set criteria for academic standing, academic standards and the grading system by bylaw.
Curriculum, grading and standards should be set in a disciplinary way among members in a discipline on a provincewide basis so that there is a consistent standard provincewide. That's traditionally the way it's been done, through a provincewide process of articulation of new courses, which I'm sure, hon. Speaker -- and I welcome you back -- you're familiar with. Only when you have an accepted provincewide articulation standard and the flexibility for disciplines to alter and change curriculum as the demand requires and as the pedagogical questions demand they do are you going to have students properly served.
Many students come into the college system with a view to moving out of the system through transferring into other institutions, and the transferability of those programs is critical. So we have to consider what's meant when you talk about these bylaws and how they are going to be set. In committee stage we're going to have explore that in some detail, because that becomes quite problematic, in my judgment. I'm not sure that we want to remove the right of individuals within the disciplines to be able to make the kinds of changes that are necessary.
Within this proposition, we are moving to a joint approval process, and that is something else that we want to get into. It talks about curriculum evaluation with respect to a joint approval process. I think that begs the big question here: what are we going to do about the designation of institutions with respect to the kinds of degrees they are able to provide?
The member for West Vancouver-Capilano made reference to Capilano College, an institution that I have a great deal of familiarity with and understand well, as I do some others, because of my involvement with CIEA over the years. He said correctly that Capilano College may wish to give degrees only in specific programs. They may not wish to be a full degree-granting university, because they may decide as a university college that their resources will not be properly or wisely allocated, whereas certain specialized programs should be allowed to develop into a degree-granting process.
When they instituted an outstanding program on Southeast Asian studies, which was a postgraduate study program, it led the field not only in British Columbia but right across Canada with respect to cooperative education programming involving Southeast Asia and companies that worked in a co-op system. That was allowed and provided for because there was enormous flexibility in negotiations on funding to each of the community colleges in order to advance their strengths. They were able to make sure that their strengths were adequately and properly financed, and that they weren't going to be somehow in a detrimental position by virtue of the Lieutenant-Governor-in-Council granting certificates, diplomas, and baccalaureate and honorary degrees to a college, and giving it a particular classification that does not take into account that flexibility.
When we look at this legislation, it's not clear whether that flexibility is going to be there. We are concerned that that flexibility will indeed not be there. We are concerned that a great deal of pressure will be brought to bear by some institutions that get the ear of the government, and that by whatever process the government deems to be fair -- which may or may not appear fair within the community colleges themselves -- those degrees are going to be granted through a political and governmental decision rather than through a broader academic consideration of the regions within which those degrees are provided.
This becomes really problematic at a time when there are scarce funds going to the colleges. This government has patted itself on the back many times for setting up the University of Northern B.C. in Prince George. What a great idea it was! I, for one, think it's wonderful to have a university in the central part of British Columbia. As a geographer, I reject the notion that Prince George is north; it's just about geographic centre. Nevertheless, it's nice to have a university up there. But what was the cost, over the system, of implementing that? I don't believe we've ever seen hard data on that question.
If we start to establish these various degree-granting institutions, that means that from a limited pot of money we're going to have to designate certain percentages of those dollars on the basis of the classifications granted to those colleges. We may find ourselves in a situation where we have created many more institutions empowered to grant degrees than we can finance adequately. As a result, we will have created a problem with respect to escalating financing demands when there just isn't the money to supply that service.
So the provision of certificates, diplomas, baccalaureate and honorary degrees, and how those are going to be established, is a serious issue. With the modification of powers to the board that are outlined in this bill, we have to be extremely careful that we do not build in a bias or prejudice to the long-term survivability of some colleges by virtue of the fact that we have given greater discretionary powers to one group over another because of their classification or designation. Some colleges may not choose to go the full university degree-granting route. As Capilano College has, they might decide to go toward a very specific degree-granting program.
We have some serious problems with this bill. In his opening remarks the minister waxed eloquent about how the community college system is a wonderful system; how it
[ Page 11267 ]
provides education for British Columbians; and how we ought to protect, maintain and enhance it, and so on. There is no disagreement from this member or from any members of the Alliance that we need to do that. But the government could have made some very sound amendments to the act. As it is amended under Bill 23, the Institute and Technology Amendment Act, 1994.... In our judgment the act creates a middle bureaucracy within the college system that I'm not certain is going to be effective at delivering what it is intended to deliver.
Rather than this structure being established, we would like to have seen a board that was fully elected from the community -- elect the college boards. We then need to recognize that the formula funding system that finances community colleges does not work. The real issue is not whether you've got some kind of educational council that allows faculty, staff, students and so on to be involved, because this middle level of bureaucracy isn't going to address the real problem. The real problem is that we need a more equitable system of financing, and the formula funding system needs to go. It doesn't work. We have been saying it for the last little while as Alliance members, and before that for many years.
It's hard to believe that this government doesn't understand that formula funding doesn't work. It doesn't work in the college system, and the creation of an educational council isn't going to solve that. It doesn't work in K-to-12 in the primary and secondary educational system. The elimination of bargaining rights and the movement to provincewide bargaining is a complete breach of trust that this government has shown to the people of this province, because they campaigned against provincewide bargaining. That isn't going to solve that problem either. The problem is that bureaucracies don't solve bureaucratic problems; they create them.
If there is a problem in adequate and proper financing of education, then go to the problem -- that is, the formula funding that provides that educational financing. I see the minister is feeling a little uncomfortable about this, and so he should. This minister knows that the removal of bargaining rights of duly constituted bargaining agents in this province is not the way to go. It's amazing that in the case of this bill, this government, which prides itself on looking after the interests of unionized workers, doesn't have any problem designating a bargaining agent, removing local bargaining rights and moving toward a bureaucracy.
An Hon. Member: Hot air.
G. Wilson: We'll see, because this bill will create a new bureaucracy that is going to further move educational dollars out of delivery in the classroom, where they're needed, and toward more and more talkers, thinkers, writers and producers, who are going to give us a lot of advice. The colleges don't need advice. They need more money to the classroom. They need more research and development dollars. They need more money to the libraries and support services. They need better financing of classroom services so that they can put students who are turned away every year into the classroom. They don't need some educational council pontificating about why they can't get into class. They need the dollars to put them in class.
As much as this is lip service to a modification and change to the college system, it isn't going to do a darned thing to help the students of this province. It isn't going to do a darned thing to help the faculty who are trying to provide the best advanced education possible to those students. It isn't going to do a darn thing to help those colleges and institutions who are trying their best to work towards the advancement of sound educational development in this province so they can maximize the things they do best, provide degrees for those things and concentrate scarce moneys into them.
They don't need Bill 23. They need the formula funding system to be tossed out, four-year financing to be put in place, community-elected college boards to put back community control over the community college system, and adequate and proper financing for the classrooms so that students will have access to the education they need. Bill 23 speaks to none of it. In our judgement, while this may have some cosmetic effect, that's all it's going to provide. The college system is not going to be advanced, improved or better financed by it, and it is not going to provide for students.
I think it's customary that the Speaker, a neutral party, does not engage in a personal conversation when a member has the floor, is recognized in this chamber and is speaking on a bill. I think it is entirely out of order. Let me say that in terms of decorum....
When a bill being presented in this chamber tells us we need to look toward the proposition of providing better educational service to the people of this province, we would have liked to have seen a streamlining of funding into the educational system, greater degrees of community control and an opportunity for that money to find its way into the classroom and not into a middle level of bureaucracy. This is disappointing legislation, because we believed this was going to do something really tangible to support the delivery of that education. It's cosmetic, it's going to be unproductive, and in our judgement it will do nothing but further complicate the issues at the local level.
[4:00]
Put back into the disciplines the right for those disciplines to decide on curriculum and development. Provide the instructors with the level of funding that is required for them to put in place the kind of education that students will be able to access and develop with. Bill 23 doesn't do it, and to suggest that it does, I think, is to mislead the people of British Columbia, who are ultimately going to end up paying more for less.
L. Hanson: After listening to the various ex-faculty members speaking on the merits of the bill, I'm almost convinced it is a document that would be very difficult for anyone not to support.
Seriously, the bill does some very good things. The formalization or entrenchment of the degree-granting status of our various colleges is a very positive move. I think the ability for our colleges -- our community colleges, at least -- to now grant honorary degrees will give them an opportunity to recognize people in their communities who have contributed exceptionally to the community college. I think we all accept that the community college itself, as an entity or organization, has been a good addition to British Columbia. When we see the various communities and the pride they take in their local campuses, that in itself is good, as well as the results of having the opportunity of obtaining an education -- although in some cases the fields are a bit limited -- right within your own community. That is all absolutely excellent.
I know that during the committee stage the minister will convince us that this is not true, but the bill does create some concerns for us. It would appear, as the member for Powell River-Sunshine Coast mentioned, that there is going to be a considerable increase in the bureaucratic administration of
[ Page 11268 ]
community colleges. After the government made a number of promises during the election process, it would seem that they should be looking for ways to give students a break in their tuition and help students as much as possible. It would seem that this bill is going to increase the cost of administration, which naturally has to be passed on to the students in the form of tuition fees.
The conflict that might develop -- the member for Powell River-Sunshine Coast also mentioned it -- is that with faculty, support staff and students sitting on the board actually administering the business of the college, it could at times require them to absent themselves from the board. I suspect that quite often that may not be good for colleges. I think we would all defend the need for student input, the views of students, concerning their college and its management, as well as the views of the faculty and support staff. People on the receiving end of the education system, administrative staff and education providers have insights that may not be readily available to board members. I think that's good.
I'm waiting for the committee process, so the minister will be able to answer some questions on the relationship between various boards and the various representatives on those boards as it relates to possible conflicts of interest. It would seem in some cases that there is a joint responsibility for the education advisory council and the board that might lead to a little competition between the two, as opposed to going in the direction that they are both interested in going: toward the best management and the best education system that can be provided.
With those few remarks.... I don't want to prolong this debate. I hope there will be some consideration by members of the House that Bill 23 parallels Bill 22, and that most of the things that are said in general on second reading about one bill apply to the other one. We probably don't need to have that repeated. I'm sure the members will use their own good judgment. I look forward to the item-by-item analysis of the bill when we come to committee stage.
We support the bill in second reading now, but we may not support every item during committee stage, because there are some real concerns. As I said, it's mainly the appearance that there is a huge increase in bureaucracy and a huge increase in the complication of the system that we have in place to run our colleges. If anything, we've had that demonstrated in our health care system. To put a huge change in without really having it well planned and well tried out before we put it in place could create so much confusion that you harm the system. I know that is not the intention of the minister or what is intended with this act.
With that, I look forward to committee stage.
J. Tyabji: Obviously my comments will be a little shorter because my colleague has spoken to this, and he has had a broad wealth of experience in the college system. I'd like to get some comments on record, being one of the members here who has a university college in their riding. After reading Bills 22 and 23 -- particularly Bill 22 -- a number of things can come up in committee stage about all the provisions and about some of the concerns that have been raised by instructors regarding the discretionary powers that will be given to cabinet to start to direct advanced education.
The biggest problem I have is in terms of the education council, which I see as both unnecessary and expensive. Having gone through the college and university system in British Columbia, I see two parts of the advanced education system in the province that are prohibitive to students: the inability to get into classes, because there's such a high demand for them; and the costs once you get there. Those include student fees and the costs you pay toward tuition, which is your contribution to financing the classes. When I see the way the education council is constructed, very little thought has been given to how much this is going to cost and how effective it's going to be in meeting the two most prohibitive barriers to students.
As a member of this House, I would assume that the objective of our colleges and universities is to invest in the education of the next generation, who will be contributing to our communities, economy and social structure through their employment and payment of taxes, and in that way helping to finance the social safety net. We must recognize that the most important part of our advanced education system is to ensure that as many individuals as possible who choose to receive advanced education have the opportunity to do so. If that opportunity will be restricted by their ability to get into classes or by the costs associated with those classes, then that should clearly be the first thing that we as members of this assembly address in trying to promote advanced education for our young people.
I'm not even sure which problems this was meant to address, because it doesn't seem to me that there is anything the education council does that a properly constructed board can't do. In addition to having the board as constructed in this bill -- not elected by general election and by a membership -- we have a closed board and an education council. In addition to the education council being unnecessary, the way it's constructed, there will be 20 voting members and probably two non-voting members; and then, under section 11.4(3), the number of voting members may be increased for a one-year period, and those one-year periods could be concurrent. So you could actually have an unlimited number of voting members added for one year -- provided the majority of the council agrees -- with the one-year terms running concurrently. I don't see anything in the bill to prohibit the one-year terms running concurrently. So you really have 20 to 22 people, to an unlimited number, on a council empowered with the most incredibly large mandate for advising the board, and there's no specification as to how that advice is going to be given. Is it going to be through written memos? If it's a written memo, who is empowered to do that? That's not specified. Is it going to be advice in the form of joint meetings between the board and the council? That's not specified either.
It seems to me to be a very cumbersome and unnecessary body to have. Under the powers and duties of the boards, we see that the minister has greater power to establish committees, or at least takes precedence, under section 12, to establish committees and have powers in addition to the powers of the board in order to direct education, even to the extent of directing the curriculum of classes at colleges and universities. I don't understand how this council -- which is composed of administrators elected by administrators, in addition to the faculty members and students -- can possibly be expert enough to be directing the curriculum of the professors teaching classes. To me, that is unnecessary. It's going to be expensive and it's going to be unwieldy. It's an unfortunate addition to the post-secondary structures of the province.
Rather than having something like this diverting funds that should be going directly into increasing opportunities for our young people, we should have that money available for classes and allow the people who are experts in their fields to direct the curriculum, obviously with the approval of the board and in consultation with the ministry. As the Alliance leader said, with provincial guidelines, provincial
[ Page 11269 ]
standards and students having greater opportunity to access their classrooms, the most constructive recommendations to the minister would be to leave aside the education council and, instead, put the money that would have been allocated for that into tuition reductions.
[4:15]
If this government wants to be re-elected, they would have every post-secondary student in the province willing to vote for them if they could bring tuition fees down. In fact, if we graph the increase in tuition fees over the last ten years, it's startling how the increase prohibits students and young people from entering our post-secondary institutions. This bill puts into place in these very institutions a very expensive talk shop, to obfuscate and provide memos and advice to a board that could probably get the job down without them.
With that, I would like to say that I'm strongly in opposition to this bill and to Bill 23. I'm sure the minister will entertain us with his closing remarks, but the bottom line is that students need more opportunities; and this council, although maybe well-intentioned, is totally against the objectives of what I would hope this government would have for the post-secondary institutions of the province.
Deputy Speaker: Seeing no further speakers, I call upon the Minister of Skills, Training and Labour, whose remarks will close debate.
Hon. D. Miller: I've sat and listened to most of the remarks made by members with respect to the bill. I appreciate what I think I hear is some level of support. Clearly there are some questions, which hopefully we can address at committee stage. I am somewhat concerned about the propensity for nitpicking. Let's talk about what this bill and the subsequent bill aim to do. I hope the comments of the Reform critic can be taken with respect to subsequent debate, but it's immaterial to me. It is very interesting to sit here and listen to people pontificate and nitpick, particularly people who are employed in the college system.
Let's talk about the state of the province. Let's talk about the 20 percent to 30 percent dropout rate in our high schools and the 70 percent of our high school graduates who don't go on to any post-secondary education whatsoever. From those people who have been in that system, we hear that they would just like to talk and that they're not interested in change. I wrote down what I determined were the criticisms of the member for Powell River-Sunshine Coast: no need, no money, no conflict, no change. Let's not change anything; let's just keep talking.
We are not content to just keep talking. We have allocated $200 million in new funding. We will increase the number of spaces in our universities and colleges by about 8,000 this fall. That isn't just talk; that is action. I listen to these members nitpick and pontificate; they talk about degrees, academic considerations, universities, senates and how long the education system.... If it were up to them, we would talk and talk, and we would never do a darn thing. That is not the objective of this government. We are not going to sit here and listen to fancy speeches from academics. We are going to take action to give real opportunity to young people in this province because, quite frankly, they haven't had it.
If the members had listened to my remarks.... We're moving to encourage educational institutes to give degrees and diplomas in areas where students can actually go out and find a job. Believe it or not, some people consider that to be heresy or interference with academic freedom. The very shame, the very thought, that we would actually educate someone so they could actually go out and find a job, it seems to me, is anathema to some people, particularly some people -- and you can see where my finger is pointing, hon. Speaker -- who come out of the education system.
I am just a working person who comes from a small town in this province. I don't have a degree. I'm very proud to be a certified tradesperson -- I'm a millwright by trade. I think I understand the value of saying to young people in our high schools that we want to try to help them and give them the right skills so they can actually find work.
J. Tyabji: Yes, at McDonald's.
Hon. D. Miller: The member says: "McDonald's." That's the very thing we're trying to avoid. Why do you think we put $200 million into training? Why do you think we have targeted the revitalization of the apprenticeship system? Why do you think we're not satisfied that an apprenticeship system that used to carry 20,000 people a year now carries only 14,000? We're determined to get that number up and reform some of these systems. We're not going to sit around here and debate endlessly in this kind of airy-fairy academic debate. We intend to move forward.
I can tell you that there is not -- nor will there ever be, in my experience -- universal acceptance or understanding of any notion of change. It's remarkable. In fact, one of the observations that has struck me most acutely in terms of being a member of government is that whenever you talk about change, there are lots of people who like to sit and talk; but the minute you actually propose to do something, they say: "Just a minute; this won't work." "Somebody might have to write memos," I hear the member from Kelowna say. "How is it going to work? Are people going to write memos, or are they going to telephone?" God, we could debate that for probably two or three weeks. In the meantime, nothing would happen. How many angels can dance on the head of the pin? Should we debate that for two or three weeks and do nothing? It has been my experience that whenever you attempt to make change, quite often those very people who like to sit and talk about change all of a sudden become the people who say: "Just a minute." They want to throw up the barricades and put up the roadblocks: "You can't do that. Heaven forbid, you're interfering with academic freedom."
My remarks in opening debate were that we consulted widely, and we didn't get absolute commitment to every word in this bill. I can bring the clippings to this House of what the presidents and board chairs of the university colleges and colleges in this province are saying. I read the clippings from Nanaimo, where President Rich Johnston was glowing and effusive in his praise of this government finally moving forward and dealing with these issues. Not every member of the AECBC was fully supportive of this, but we sat down together. When I sit in rooms with people like the AECBC, it's amazing that we can come to understandings. It's not as though we embrace everything that each other says, but we do come to understandings. And I'm very pleased that we've come to that understanding. There may be some who have some mild criticisms. But what's life without a little criticism?
I'm a bit disappointed in the Liberal critic. I'm somewhat puzzled, because one of the lessons you need to learn in making change is that you can't be one-sided. Yet when the member stood to speak about the bill she could quite clearly quote the Advanced Education Council, but not once did she mention CIEA -- the faculty members in this province. It's as though they are invisible. She can talk to six people who represent one side and be quite prepared to enter their comments into the record, but she's not prepared to go to the
[ Page 11270 ]
group that represents thousands of college faculty in this province, who are eager to get on with the challenge. She won't even mention them. If I had sent her to try to get a deal, we wouldn't have one. We wouldn't make any progress. There wouldn't be a bill, a skills package, new applied degrees at the college level or degree-granting status. In fact we wouldn't have apprentices in this province, because my hon. critic is on record as saying apprenticeships are outdated.
Interjection.
Hon. D. Miller: She corrects me, and I apologize. She didn't say they were outdated; she said apprenticeships are old thinking. I am glad she has clarified that. As I travel around the province I spend a lot of my time pondering with large groups of people about where the Liberals are coming from. I'm sure there's a rational explanation for their opposition to apprenticeships.
Interjection.
Hon. D. Miller: As disappointed as I am to have to relay that news to the House today, I have to advise you that it is true.
The notion of an education council -- the notion of people who have not been represented on the board -- does represent some challenge for those participants.
Interjection.
Hon. D. Miller: I'll be quite happy in my estimates to deal with the member for Powell River-Sunshine Coast when he wants to talk about money, because in fact there is money. We won't do it across the floor; we will try to do that in estimates. But there is money, regardless of what the member might say. I don't know where he thinks we're going to get our 8,100 new spaces from, but it's because we're supplying new money to the institutions. They are quite happy about that, and they are quite up to the challenge.
But the challenge also exists.... As I look at the colleges and institutes around the province, clearly there is a degree of difference among them. There are some that in fact have almost fulfilled some of the requirements of the legislation and don't see it as any challenge whatsoever. Their advice to me is: "We're doing that already. We don't fear and have no concern about this legislation. Let's go forward." Others are a little more hesitant.
All I can say is that I intend to work with the parties -- with the Advanced Education Council, the boards, the presidents and the faculty. My relationship with them has been very good, and we'll make this work. I'll tell you why: people are excited about the challenge. We're finally going to deal with....
Hon. Speaker, I've got to tell you I was astounded. I read in the newspaper last week or two weeks ago that a group of students who'd completed their academic liberal arts degrees at a university in British Columbia couldn't find work. They couldn't find a job. Not only that, I believe the federal government came in with a program -- with some of our tax dollars.... These students -- and I've all the respect in the world for them -- had spent four years at university. And the federal government had to come in with a program and spend some of your tax dollars to counsel these students on: (1) how to go out and find a job; and (2) where to look for a job.
I say to myself that if we can reform our system -- if we can talk to our community colleges in terms of the kinds of applied programs I'm talking about that meet the demands of industry -- and give opportunity to our young people, particularly those 70 percent who now don't go on to post-secondary, then I say that's a challenge all of us have to take up and that I am eager to get on with.
[4:30]
So I look forward to committee stage. I hope we don't do the academic dance -- you know, the pontificating and the endless debate -- because we want to get on with the job. People out there want us to get on with the job, and I hope we can do that quickly.
I think I've already moved second reading.
Motion approved on the following division:
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YEAS -- 52 |
||
|
Petter |
Marzari |
Pement |
|
Priddy |
Edwards |
Cashore |
|
Charbonneau |
O'Neill |
Garden |
|
Perry |
Hagen |
Dosanjh |
|
Hammell |
B. Jones |
Lortie |
|
Giesbrecht |
Miller |
Cull |
|
Gabelmann |
Clark |
MacPhail |
|
Ramsey |
Blencoe |
Janssen |
|
Evans |
Randall |
Beattie |
|
Simpson |
Jackson |
Kasper |
|
Krog |
Brewin |
Copping |
|
Schreck |
Lali |
Hartley |
|
Boone |
Neufeld |
Fox |
|
Symons |
K. Jones |
Anderson |
|
Jarvis |
Tanner |
Chisholm |
|
Dalton |
Reid |
Farrell-Collins |
|
Hurd |
Stephens |
Weisgerber |
| Hanson | ||
|
NAYS -- 2 |
||
|
Tyabji |
|
Wilson |
Bill 22, College and Institute Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. D. Miller: Hon. Speaker, I call second reading of Bill 23.
INSTITUTE OF TECHNOLOGY AMENDMENT ACT, 1994
Hon. D. Miller: Hon. Speaker, mindful of your comments and the comments of my hon. critic in the Reform Party, this bill really is a piece of mirror legislation to the previous piece of legislation. It's only that it impacts on the B.C. Institute of Technology. I'm quite prepared to test whether the members want to get into a substantive debate -- given that the issues are precisely the same as in the previous debate -- or let this bill proceed. But I won't bother to make lengthy opening remarks on this bill.
L. Reid: I'm pleased to rise in debate on Bill 23, the Institute of Technology Amendment Act, 1994. With reference to the minister's comments about my ability to meet and deal effectively with the College-Institute Educators' Association in this province, yes indeed, we have
[ Page 11271 ]
had a number of meetings surrounding both pieces of legislation, and yes indeed, the minister did present a serious case. But I do not believe he presented the Advanced Education Council of B.C.'s case fairly and adequately. That is the reason that I chose to enter their comments into debate, and I would do exactly the same for Bill 23.
I think the issues surrounding this particular piece of legislation need to be understood clearly. There are differing points of view on the governance of colleges and universities, particularly as they pertain to Bill 23 and the B.C. Institute of Technology. The ability of that institution to grant a four-year bachelor's degree is one that the official opposition supports. We believe strongly in diversifying educational opportunities in this province, and we will stand firmly behind the notion that not just universities should have the ability to provide a student with a degree after three to four years of instruction.
We have some concerns similar to ones raised earlier in debate on Bill 22: the governance structure of college boards, and the ability of the advisory council to enter into meaningful, substantive debate. Certainly it has always been understood that an advisory council has some powers, some ability to come together and mediate. This legislation is very prescriptive in that they must advise, and in that the other groups, if you will, must seek their advice. That's somewhat more prescriptive, and so much more directive, than a typical advisory group. It's simply not advisory in nature. It does not allow for advice to be sought and received; it demands that advice be sought and received. That's a very different entity for the delivery of educational advice, and instantly that causes some concern among members of the official opposition.
We don't have any issue, as I stated, with degree-granting status. We do have some issue with whether or not the Advanced Education Council of B.C. has been presented fairly in debate. Certainly Bill 23 speaks to joint authority. That is not the position of the Advanced Education Council of B.C. They speak specifically to the principles of governance.
Again, for the record, I would enter their statement into debate, because I believe it is incumbent upon members of the official opposition to present the side of the debate that has not been adequately represented today by the minister.
I'm referring specifically to the minutes of the joint council meeting of December 1, 1993, which states:
"1. Boards are responsible for representing the ownership of an institution. This responsibility must be held intact and, therefore, not shared. The boards are the ones that will be held accountable."
The official opposition understands and believes that statement.
"2. Boards have a responsibility to include consultative mechanisms in their decision-making processes; in particular, consultation with faculty on educational matters. In some institutions this could be on an education council...."
I draw members' attention back to section 3.5 of the bill, which states that it will be an entity that must seek and receive advice. That is not an option, which is certainly what the Advanced Education Council of British Columbia was asking for: the ability to choose whether or not to seek that advice. They make the case very plainly that an education council should not be legislated as a requirement for all institutions. The official opposition believes in some choices around these. If there are more prudent or effective decision-making mechanisms in place, legislating to overlay something on what may be a useful model currently in place is somewhat nonsensical.
"3. Boards also have a responsibility to include the external community in the consultative process. Institutions should be free to develop their own mechanisms for doing so. The official opposition stands behind that statement. We believe strongly that choice will yield the best educational opportunities for students in this province. Legislation is not necessarily the route to proceed with. "Constituent representation on boards is acceptable as long as it constitutes a minority of total board membership." They make some excellent points.
The resolutions passed by the board of governors of the Advanced Education Council of British Columbia on Tuesday, February 9, 1994, state:
"Whereas the council of governors of the AECBC strongly endorses the ministry's goal of meeting community needs through increasing the flexibility and responsiveness of our institutions; and
"Whereas each individual institution has a responsibility to reflect regional and cultural identity; and
"Whereas the council of governors supports the inclusion of internal constituency representatives on boards of governors at each college, university college and provincial institute...;
"Be it resolved that the council of governors supports the concept of consultation within our institutions while maintaining the boards' ultimate accountability and decision-making authority; the council does not support joint authority."
I make those points very clearly and quote them directly from the documents because Bill 23, the Institute of Technology Amendment Act, 1994, spends a great deal of time talking about joint authority and how those decisions are reached.
I come back to a point I made earlier in terms of whether or not changing the governance structure is going to have a positive impact on the education students will receive in this province. Will we be making a positive difference to students? If it's simply more bodies, or if the answer is simply to strike another committee to increase the bureaucratic overlay, it may not be in the best interests of students.
[4:45]
I would challenge the minister to convince the official opposition that this is a useful direction to take. It is not always the most feasible thing to simply add more bodies to a decision-making process. Sometimes that is not the route to go. Based on the consultations I've had, both with CIEA and with AECBC, there seems to be some necessity to improve decision-making. The official opposition is interested to know if this is the best approach. Is this the most prudent direction for this minister and this government to be taking colleges and institutes into the next decade and into the next century?
We on this side of the House have some understanding of the need for a diversified educational opportunity and the need to expand the definition of an education into the next century. Whether or not this bill adds to that or detracts from that has yet to be determined. I'm not clear as to the necessity for all the overlay that's allowed in this bill or whether or not we're streamlining the process and will be able to deliver a finer product as a result of this legislation. Unless this minister can convince not just the Members of the Legislative Assembly but students in British Columbia that this is indeed in their best interests.... We will be examining this particular bill in tremendous detail as we move into committee stage. As it stands, if it is not going to be part of a solution, it is simply going to enlarge the current problem around college and university governance. We are not prepared to see the problem expanded. We are hopefully going to see some improvement; we are hopefully
[ Page 11272 ]
going to see some streamlining of an educational delivery system in this province. We're not convinced today that either of these two bills moves us as far down the road as we would like to go.
In conclusion, we will support the ability of those institutions to grant degrees. We firmly support the need to diversify educational opportunity in this province. Whether or not the other aspects of the bill add to the exercise is yet to be determined. I await the minister's comments in his closing remarks.
G. Wilson: As the minister correctly says, Bill 23 is like Bill 22 -- more bureaucracy and an opportunity to burn the books and condemn the academics. The opportunity....
Hon. D. Miller: Point of order. This may be a personal matter, but I take deep offence. I have the utmost respect for academia and for literature, and to be characterized in any way that suggests I "burn the books" is highly offensive to me personally. I would simply ask the member to recognize that. He can accuse me of lots of things -- but never that.
Deputy Speaker: Minister, I'm sure the member meant no disrespect and therefore would happily withdraw to facilitate the proceedings of the House. I would ask him to do so.
G. Wilson: I withdraw. I clearly don't mean to impugn this minister in any way. I have a great deal of respect for this minister. I just don't happen to think he has brought in particularly good legislation, either in Bill 22 or Bill 23. Comments were made about academics, which, as an academic, I perhaps took the wrong way. We'll let Hansard sit, and those who wish to read it can make up their own minds.
The fact is that we have created a middle-level bureaucracy. The point of the Alliance.... The reason we voted against it and wanted to do it on division was that we wanted to demonstrate where the real opposition is at the moment in this province on these issues of bureaucracy, concentration of money into middle management and administration and removal of dollars from the classroom -- those kinds of things. We wanted to point out that there was a better way. The better way to do this would have been to bring in a bill that redirected dollars out of the complex bureaucracies, which are being created around the development of degree-granting and apprenticeship-type programs in both the institutes as well as the community colleges, and to funnel that money into the classrooms.
The minister made an interesting point in the debate on Bill 22, the companion legislation to this one. The minister suggested that we ought to be concentrating on apprentice-ship programs and getting people into educational programs so that they are able to realize real jobs. I don't take issue with that; I think that's absolutely true. The fact of rising unemployment for youth in the province is something that is of grave concern to all of us, I'm sure. I don't think any of us have an exclusive concern over that issue; all of us are very concerned about it. But the point made by the member for Richmond East is a correct one: in the strict terms of apprenticeship, it's a concept that we need to rethink. We have evolved in our industry and our technology, and I believe that is what the member for Richmond East was correctly saying. I would suggest that because this minister has indicated he has a great reverence for books, he might want to read Nuala Beck's book Shifting Gears. It's an excellent book...
Interjection.
G. Wilson: ...which the minister says is very supportive of these bills. I don't think it actually is. Perhaps I missed the footnote that talked about Bills 22 and 23.
What it does talk about in large measure is the need to shift into a new economy. We have to move into a new economic paradigm. We have to allow the youth of this province in particular -- but not only youth, because many people are having to come out of industry to retrain, and in that retraining take on new jobs, new skills and redirect themselves into new careers.... That is reflecting a very dramatic change in the manner in which people can expect long-term employment. We no longer have an economy that is strictly based on primary extractive industry and some basic secondary industry related to it. That's the point we were trying to get at under Bill 22, and that's the point we are trying to get at in Bill 23.
We can't restate this enough, and I don't intend to restate it any more than once in this debate, because I don't think that we want to necessarily go over old ground, but we have to get rid of formula funding. We have to change the system by which that money is put into the system. Like its companion bill, Bill 22, Bill 23 doesn't do any of that. Without repeating everything that we have said in debate before, we do not support this legislation. It creates middle-level bureaucracy, it redirects moneys out of the classroom, and it does not do anything about the number of students that can't get into the institutions. Contrary to what we've heard the minister say, it does not provide any concrete evidence that there are going to be opportunities for new program development that is going to be any more effective at getting young people to work than under the existing legislation.
We would like to see changes that do make a difference -- changes that reflect the new economic paradigm, changes that recognize that we have to get people into research and development in new communications and electronics technologies that allow us to get onto the cutting edge of industry rather than having to meet these challenges from behind. It's unfortunate that the government hasn't come up with some new and better ideas on how to do this.
It would appear that members of the Alliance are the only members of the House who don't support large educational bureaucracies. It's unfortunate that we are the only ones who don't vote in principle against boards that are not elected. We are the only ones who support elected community boards. We are the only ones who support removing the amount of bureaucracy in the education system. We are the only ones who seem to be supportive of a reform of the formula funding system and a better direction of moneys into programs that are going to be more effective in putting British Columbians to work.
Hopefully, in committee stage we will be able to explore this bill in much more detail.
J. Tyabji: I might have passed up on this opportunity to speak to this bill, because I'm as opposed to this bill as I was the previous one. But it was the minister's closing remarks on the previous bill....
Hon. D. Miller: I made you do it.
J. Tyabji: He made me do it; that's right.
[ Page 11273 ]
The only comment I have on his taking exception to the books-to-burn comment of the Alliance leader is that given the amount of money the education council is going to be gobbling up, I don't know if any books would be purchased so that anyone would even have to debate about burning in the first place. There's going to be a redirection of funds away from tools like that and toward this education council.
In speaking to the principle of this bill, I find it ironic and more than passing strange that the other opposition parties voted with the government on this. Especially having campaigned in the last election with some of the members of the Liberal caucus, I happen to know that the mandate delivered to the Liberal caucus was to campaign very specifically on elected boards. In fact, we took great exception to closed boards, like the existing college and hospital boards. We made that a plank in our platform, and had a very good public reception of that plank in the platform. I was canvassed on that at great length -- more particularly hospital boards, but also college boards -- on how the candidates in that election would be approaching the principle of democracy.
When there's an opportunity to vote against a bill that undermines a democratic principle such as general election of boards, I find it ironic that the Liberals and Reformers vote with the government and only the Alliance stands up in opposition to restriction of votes. I have a very strong aversion to closed democracy, closed systems, closed votes -- any kind of vote that would exclude people -- especially when we have members of the community who pay taxes to support that college, who send their children to that college, who live in the community where it operates, but do not have a vote for the board that governs the college.
I think the minister must have been reading Nuala Beck's book during the comments of the Alliance members on the previous bill. I bring it up here again because the minister's closing remarks are directly relevant to this bill. The minister said that in opposing this bill we are opposed to change, and that we like to talk about change but when he tries to introduce something that represents change, we're opposed. If anyone listened to what we said, we very specifically said that not only are we not opposed to change, but we recommended a solution in the last election. We continue to recommend the same solution, unlike some of our colleagues who campaigned on one solution and now support a different one -- or whatever it is they support. They tend to not usually tell us what they would do.
In this instance we provided a solution, and that is to reconstitute the existing board, give the votes to the general public and have the board make decisions that are directly relevant to the student, the faculty and the community. Community input is a very important concept for this government to get. I know this minister doesn't have a good grasp of it and I find that odd, because on his own evidence to this Legislature, he said he is a millwright. He comes from a community where he's been working in the community as a millwright, not as an academic. I'll take the snideness out of that remark -- because I was sitting here, and I heard the minister say "academic" with that snide tone. And that was when the book-burning comment came up. I'm sure the Speaker must have cringed at that reference to academics.
There was an opportunity to reconstitute the board and allow the money that is now going to go into the education council to go into classroom delivery. This minister stood up in this House and said that we only want to talk about change and not implement it. Not only did we give him the solution, we asked what this education council is going to do. It's going to talk; it's an expensive talk-shop to slow the process down and add more people to the process.
We're going to be committeed to death by the next election. We've got committees on CORE, forest renewal and advanced education. We're committeed to death. We've got travelling road shows for the select standing committees. This government, every time....
Interjection.
J. Tyabji: Travelling road show, yes. You know what? Those travelling road shows travel with per diems, budgets and you name it.
F. Garden: We're consulting the people.
G. Wilson: Insulting the people. Did he say "consulting" or "insulting"?
J. Tyabji: I hope the member for Cariboo North, who says the government's road shows travel the province insulting the people...
F. Garden: Consulting.
J. Tyabji: ...is going to get up and debate a little later, because I'm sure he doesn't want the record to show that they do that.
[5:00]
The minister said that all we want to do is talk. In fact, it's the contrary. We are opposed to this because we don't want to finance another expensive talk-shop. The minister, who sneered when he said the word "academics," is setting up a talk-shop of academics. That's what he's financing.
Interjection.
J. Tyabji: He says I'm still talking. I'm trying to talk some sense into him.
Interjection.
J. Tyabji: The minister says there is no hope of talking any sense into him, and I can appreciate that. Even if I stood on my feet for the next half hour, there's no hope of putting any sense in him.
I get very concerned that when this minister -- who is also overseeing the apprenticeship programs -- gets upset, the word "apprenticeship" comes out of his mouth. He starts talking about directing the post-secondary institutions and apprenticeships. I'm concerned, if the education council becomes a very expensive talk-shop, that when other people start to direct curriculum in the classroom that normally would be left to the expertise of the academics -- no snide remark -- who have studied to teach in that field and are now teaching in it, the word "apprenticeship" will start cropping up in physics and English literature classes.
Hon. D. Miller: It should.
J. Tyabji: The minister says that it should. I think that's very interesting. I wish we would hear more about that in the debate, because when we start to talk about the principles behind this debate, we're very concerned that money will be redirected from the tools for learning, the classrooms and the students and from areas where it could do some direct good, such as a decrease in tuition fees. This government should be increasing opportunities for students
[ Page 11274 ]
by going directly at tuition fees and the number of spaces in classrooms. This government should be less concerned with expensive talk-shops and more concerned with opportunities. Nothing in this bill gives hope for opportunities for young people.
Deputy Speaker: Excuse me, member. Would you take your seat for just a moment. I have listened quite patiently for some time now to a debate that, on the face of it, seems to have absolutely no relevance or reference whatsoever to the measure under consideration. The rule of second reading is, of course, to allow considerable latitude, and one wants to do so. But to talk about measures anticipated in other legislation coming before us seems to me questionable, to put it gently. I would ask the member to simply try and focus her remarks on what this bill is doing and resist thereby the temptation to talk about every other measure before us, please.
J. Tyabji: I was addressing the minister's closing remarks on a bill that's identical, when he brought up apprenticeship and started talking about opportunities. Recognizing the Speaker's ruling, and the latitude in second reading debate, I clearly felt that I should have been responding to that.
When we start to talk about what is best for the people of this province, we clearly don't want to restrict their ability to have input at the community level to their local advanced education institution. Clearly, we believe that the money currently budgeted to those institutions should be directed as much as possible to the direct delivery of that education. This education council -- and the current construction of the board, which is in this bill -- does not meet the needs of the people and of this province, and clearly does not meet the needs of the students. The students should be paramount in the construction of the system we would advocate for post-secondary education.
To that end, I look forward to the minister's closing comments. In my closing comments in the previous debate, I said that I expected his comments to be entertaining. I would hope that this time, while entertaining us, he restricts his comments more to what we have actually said than what he thinks we have said because he was busy reading a magazine article.
Deputy Speaker: Seeing no other speakers in their place, I call upon the Minister of Skills, Training and Labour to offer the closing comments on the debate.
Hon. D. Miller: If I listened too long to the members opposite, I might conclude that I am unable to read.
In closing debate, I will just touch on some of the issues that have been raised. I think it was the same author who was profiled in a story in the newspaper last week who suggested in her latest book that two provinces clearly stand out as having made the most significant progress in moving toward what I believe she described as the information age and the new technology. Those provinces are British Columbia and Quebec. I was heartened by that objective rating of British Columbia as being at the leading edge. I would think that the member for Powell River-Sunshine Coast, who talked about the need to be on the leading edge, would be somewhat warmed, as a former college instructor and a concerned British Columbian, about someone outside our borders actually giving us a reasonably good rating.
I must confess, though, that I was clearly puzzled, having read that article on, I think, Thursday morning, to pick up the newspaper later that day or the following day and read a report card issued by the Fraser Institute that, when it came to education and training, gave us an F. Here we have a noted, distinguished author outside our borders giving us top marks. And our own lovable Fraser Institute, those tax-funded.... I don't know. I don't want to be too disparaging. I suppose I should treat them kindness; after all, the taxpayers are paying for part of the bill. Nonetheless, our own dear Fraser Institute in their own unbiased way gave us an F. I leave it to you, Mr. Speaker and other members, to puzzle that one out. It's perhaps beyond my comprehension.
Dealing with the issues of governance, I've clearly stated there are some reasons why at the college level we need a governance structure related to their ability to be autonomous degree-grantors. We did not want to duplicate the senate model that exists at the university level. Nonetheless, there clearly needed to be a system in those university colleges and institutes that were going to be degree-granting and that would allow faculty involvement in terms of curricula, to ensure at the end of the day that when BCIT, the University College of the Cariboo, the University College of the Fraser Valley or Malaspina gave out a degree, that that degree had some currency, that it was recognized. It wouldn't be one of those degrees you send away for.
I think there used to be a member -- in fact, if I'm not mistaken, he occupied this chair a few years ago -- who had a degree that he got from.... He sent a letter, and someone mailed him the degree. He listed it on his CV. Clearly, we don't want to have cheap degrees in British Columbia. We want to have meaningful degrees. More particularly, we want to pursue with some vigour the establishment of more degree opportunities in the applied areas. There's a very sound reason.
Let me very briefly, not taking a lot of time, try to illustrate what I think the magnitude of the problem is. We've talked about it. There's a bit of a cultural dilemma, if you like, that I've observed all my life. Quite frankly, I don't understand those people who conclude quite wrongly that academia and a technical-vocational education are completely separate and that there's no way they could ever come together
I don't have an academic education; I consider myself to be academically inclined. I'm a tradesperson. I went through an apprenticeship. I've got the literacy skills and the ability to appreciate art and culture. I'm not holding myself up as virtuous. In my experience as a working person in this province, working in logging camps and in pulp mills, I've met thousands of people who are the same. There's no reason we should distinguish.
But let me go on, hon. Speaker, because I want to talk to you about some attitudes and why this bill, as one of the companion pieces of Skills Now, is so important.
I talked earlier about the dropout rate. We have 20 to 30 percent of our students drop out of school; they don't complete high school. Of the students who graduate, 70 percent don't graduate with the kind of skills that allow them to enter an admittedly very tough job market. They don't have the skills for employers -- and those are the ratings we get from employers -- that make these people attractive to hire. So they become second-class. They become the people who fail them at jobs. They become the people with whom, I suppose, the sort of nihilistic tendencies tend to grow and who increasingly become alienated from our society. Why? Because they don't have opportunity.
Now I want to tell you some real examples. I was in the Kitimat high school two weeks ago. They've developed two courses in the high school, Technology 11 and 12, that....
[ Page 11275 ]
Interjections.
Hon. D. Miller: Well, cheap shots from the peanut gallery over here, hon. Speaker.
They've developed programs for the very students I'm talking about. These are students that ordinarily would not take math or science on what used to be called the university program -- I'm not certain of what it is called now -- either through fear of their own inadequacy, lack of interest or whatever. These technology programs have been developed in a cooperative way in the community, through the cooperation of the school district and of the people in the system -- the faculty and administration. I know of a young fellow, a shop teacher, who I think is doing a great job. They have worked together and come up with these programs. They allow those students I referred to to learn math and science at a far greater level than they would ever learn, because they're learning in practical, applied ways.
Let me tell you of the opportunities that this creates for those students. Instead of coming out and hitting the brick wall of joblessness and no skills, those students now have a better opportunity. They can go to Northwest Community College in a technical area and get a technical diploma. They can exit that college and go into an apprenticeship, or they can go into an apprenticeship straight from high school, because they've got the skills that employers are looking for. They can come through an apprenticeship, having gotten a trades qualification, and go back into the college system and ultimately on to the new University of Northern British Columbia for an applied degree. It doesn't play favourites; it allows entry and exit at appropriate levels. It provides opportunity and provides for our institutions to train people in skills that will allow them, as individuals in our society, to take advantage of the economic opportunities that I took for granted and, I suspect, that many members of this House took for granted. Surely the goal is so obvious and worthwhile.
As someone who has led a pretty good life in this province, when I see those young people it pains me that we don't provide that opportunity. At the heart of this legislation is the change to degree-granting status for those university colleges and institutes that will allow the kinds of things I'm talking about.
With all due respect, I characterize the members' opposition as nitpicking. I'm not trying to be personal in that sense, but I suspect it really is. I think you can take any system in this province that governs any institution, whether it's this one or it's schools, or take any piece of paper and take issue with the model and say it won't work. But my experience tells me that if there is the will, the goodwill and the desire on the part of educators, administrators and the public -- we're talking about partnerships -- then this will work. And if the desire isn't there, you could write this in the best possible way and take all the advice, and it wouldn't work.
We have consulted. We have sat down with the Advanced Education Council; we have sat down with CIEA. I'll repeat that I support those organizations; in fact, I praise those organizations for their ability to be flexible and to give. Neither one got all it wanted, but they displayed the kind of flexibility and maturity that led me to say, in my remarks on the previous bill, that I think we've got the recipe for success. I am heartened when I go around this province and talk to educators and administrators and look at some of the work that's now starting to be done. I think it will get a tremendous boost from this legislation. I am heartened that we are on the right track.
[5:15]
I look forward to committee stage debate. Hopefully, we can allay some of the concerns -- and maybe we won't -- at committee stage. This bill is absolutely necessary as part of the Skills Now initiative, which I think is going to provide significant changes and new opportunities for young people in this province. With that, hon. Speaker, I move second reading.
Motion approved on division.
Bill 23, Institute of Technology Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. D. Miller: I call second reading of Bill 13.
WORKERS COMPENSATION AMENDMENT ACT, 1994
Hon. D. Miller: I move that Bill 13 be read for a second time.
With one exception, the amendments are technical and language changes to the statute, requested by the board of governors of the Workers' Compensation Board. As members may be aware, the Workers' Compensation Board is governed by a board that is drawn from the employer community, the labour community and the public at large. The amendments include a broader power for the Workers' Compensation Board to enter into agreements with boards in other provinces relating to compensation and rehabilitation of workers who move to or from another jurisdiction. One of the main objectives of the interjurisdictional agreement among Canadian WCBs is to deal with occupational disease claims by workers who are exposed in more than one province, or who move to or from B.C. before becoming ill. The WCB signed a new interjurisdictional agreement in 1993, but is unable to fully participate because the current statutory authority is too limited.
The one substantive change in the bill will allow the WCB to consider paying full compensation for late applications made by workers or their dependents for occupational disease claims in cases where scientific or medical evidence had been unavailable to link the disease to the workplace. Up until now, if a claim was filed more than three years after the worker's disablement or death from occupational disease, benefits were paid only from the date of application. This rule will continue to apply in the case of an application for compensation for disablement or death caused by a work injury. However, workers or their families may now be considered for full benefits if an occupational disease claim is made within three years after the worker or his or her dependents become aware of a link between the disease and the workplace.
This change will benefit workers who become ill or disabled but do not find out until years later that their disease was caused by something in the workplace. The medical or scientific knowledge may not have been available at the time the worker was diagnosed with a particular disease. The worker may have subsequently changed jobs several times, which can also make it difficult for the occupational origin of the disease to be identified by the worker's physician. By the time a medical link is made, it would be too late for the worker or his or her dependents to receive full compensation benefits, even if the claim is subsequently accepted. This bill allows for more flexibility
[ Page 11276 ]
for time limits and removes a restriction on paying full benefits for occupational disease, which many perceive to be unfair.
As well, this bill includes a technical change dealing with the reinstatement of spousal benefits that was passed in Bill 63 last year. Under Bill 63, spouses of deceased workers were eligible for benefits even if they married or entered into a new common-law relationship from April 17, 1985, onwards. Bill 13 allows a small group of spouses who had been married to workers who died before July 1, 1974, and who should have been covered by the amendment removing the remarriage restriction from 1985 onward, to receive their rightful benefits in the near future. No further substantive changes are being made to the system at this time.
I am aware that the Workers' Compensation board of governors is likely to be requesting further amendments to the act next year, and I will be asking the governors to consider whether there should be a complete rewrite of the act, including plainer language for many complex provisions, to be drafted tentatively for introduction in the 1996 session of the Legislature.
Hon. Speaker, I'll close my remarks and wait for opposition comment.
G. Farrell-Collins: I'm glad to stand up and speak to what's actually a fairly small bill -- about three pages' worth of some technical amendments, for the most part. I must say that the most important thing the minister said was about what might be coming in the future with the Workers' Compensation Board. I'm heartened to hear that perhaps we can turn that act, which is somewhat unmanageable for the injured workers, into something written in plain language that they can deal with. Certainly taking a fresh look at the Workers' Compensation Board, the act that governs it and the people who are involved in it is something that the opposition would support. I would encourage the minister to take those comments seriously and venture down that path as far as he possibly can.
The opposition -- in anticipation, I would say, of having to grapple with these problems ourselves in a couple of years, if we end up being on the other side of the House -- has started a process of asking an awful lot of questions about the Workers' Compensation Board: how it's working, where it's working well, where workers are being served properly, where employers are being served properly, and indeed, where the employees of the Workers' Compensation Board are being served properly and where they are not.
It's not too far a stretch to state that in many cases there are some serious problems with the Workers' Compensation Board. Many people on this side of the House have said, as have many members of the public -- we certainly didn't coin the phrase; they did -- that the Workers' Compensation Board is a mess. I would have hoped that this year, after two and a half years in government, the government would have come forth with some recommendations on how to try to clean things up there, make it more efficient, make the people who work there more productive and give them the opportunity to do what they want to do, which is to serve the injured workers and the employers of this province as best they possibly can. There are some people of great talent who work at the Workers' Compensation Board, and I don't think anybody gets into that field without having a desire to help people. I know they feel that their hands are being bound behind their backs by an administrative gridlock that has really almost brought the Workers' Compensation Board to a halt in many cases. It certainly has slowed down the process to a great extent.
I'm somewhat encouraged that the minister made reference to what may be coming in the future for the Workers Compensation Act, which will be written in fair language. In light of rewriting it, as the minister stated, perhaps there will even be a complete review of the legislation. I would ask the minister to not just go to the board of governors for that advice but to venture out himself and spend some time talking to injured workers, to employees of the Workers' Compensation Board and to employers themselves. That's what we're trying to do. We'll certainly be glad to pass that information on to the minister in the hope that he will give it credence and will listen to it. Perhaps those people have some ideas on some of the changes that can take place with the Workers' Compensation Board.
Heaven knows, it's a big task. There are certainly lots of opportunities and options that we can consider. I know that we're looking at them very seriously with an open mind, trying to find some solutions and see where there are common concerns and perhaps common solutions and suggestions. Hopefully the government can start to implement some of those. We certainly will do our best to implement them when we have the opportunity to do so two and a half years, two years, eighteen months or twelve months from now. Perhaps we can work together on this one. Perhaps we can try and relieve some of the pressure that our constituency assistants and MLAs feel in dealing with the many really tragic cases and situations that people have to deal with in this province.
With those words, I finish my comments and look forward to dealing with some of the technicalities of this fairly small bill in committee stage.
L. Hanson: The official opposition critic should probably wait for the election results before he makes those kinds of assumptions.
In any case, we have little difficulty supporting the principle of reaching an agreement with other WCB jurisdictions across Canada and, in fact, with Canada itself. I suppose that that has been working by mutual agreement among a number of boards across Canada, but there's certainly no harm in formalizing it or formalizing the process for what that agreement should include.
The concern we might have with both of the major issues of the bill is what cost effect that will have on the WCB and the employers, who are facing such tremendous increases already with different taxation measures. It is becoming more and more difficult to support the various agencies that call on the employer for their contributions.
While I see that the legislation does provide for an agreement that would address the costs of rehabilitation and compensation payments, I don't see anywhere where it addresses the administrative costs of doing that, particularly in the area of an agreement with other jurisdictions. British Columbia being such a popular province, our in-migration figures are quite outstanding. We hope during committee stage that the minister will address the problem of in-migration and the numbers that we have.
I hope the minister will give us some idea.... I hope the government and the WCB have given some thought to the implications of extending the three-year period for recognizing health problems caused by particular industries or particular exposures. I recognize the difficulty. I believe the minister said in his opening remarks that if new evidence was able to determine the cause of something that had happened in the past, that would be recognized for coverage by WCB regardless of when it happened.
[ Page 11277 ]
Other than those two concerns, we would support this bill, because it is a reasonable agreement to reach with other jurisdictions because of the mobility of Canadians -- in this case, mostly coming to British Columbia. I know that the minister will enlighten us when we get to committee stage.
L. Reid: I rise today in debate on Bill 13, Workers Compensation Amendment Act, 1994. I rise with some amount of frustration about the Workers' Compensation Board, and I'm sure that many MLAs in this chamber, if not all, have had frustrating experiences on behalf of their constituents in trying to find some responsiveness in the process.
A lot of individuals in this province believe that the system does not respond. It's not whether it responds favourably to their individual cases, it's that it does not respond. It does not respond in terms of returning phone calls. When people finally do get through they are asked to put their comments in writing yet again. There probably isn't a claimant out there who doesn't have many pieces of paper in their file, and the process just seems to become more extended over time. It's frustrating, because while all of this is going on, the claimant is focused on the appeal and claims process. The claimant is not focusing on rehabilitation and getting back to work. Everyone who comes has tremendous anguish about their families, mortgages and relationships. All of those things become secondary to the claims and appeal process, and I would submit that all of those personal family issues suffer as a result of the inability of this process to move more quickly and to be streamlined in the constituent's best interest. That is a huge concern for us.
We are all aware that claims are down at the WCB. There were 195,000 claims last year, yet service is not improving. Fewer people are being served, and they are being served less well. That's a consideration. The service is down, the costs are up and people are as frustrated, if not more so, with the continuing chaos in that organization.
[5:30]
We in the opposition have some real concerns about leadership in that organization. It seems very strange that ten months can elapse and a suitable president cannot be found. I know the calibre of some of the individuals on that shortlist; they could bring some definite leadership and long-term vision to that organization, and should be given the opportunity. To have each of them found lacking makes no sense. When this organization is in tremendous trouble and is not accountable.... This organization is not meeting the needs of workers in this province, it's costing a great deal of money every day, and it's returning less service to the people it was designed to serve. That's a huge concern. This bill does not get at that, but I trust that this government will attempt to get at that by moving very soon on the fact that the organization has been without leadership for ten months. That seems to me to be the very first step that needs to take place.
We have concerns about the overall governance structure at this province's Workers' Compensation Board. We have some questions we would pose to the minister about who represents non-union workers in this province. Who represents independent small business people in this province through the regulatory process of the WCB? That area has not been canvassed. It is an issue, because indeed we charge everyone, yet we return differing levels of service. The WCB takes its money in terms of employer assessments, yet representation is sadly lacking in at least those two categories. Certainly if you talk to individual constituents, they find the service lacking as well. That's another huge concern.
There is a tremendous disparity in this province, because the level of expertise brought to individual claims depends on where your claim happens to come up. Certainly that disparity is a concern. If this is a Workers' Compensation Board for British Columbia, surely workers who reside in different parts of the province can expect a decent level of service regardless of where they happen to reside. That's not the case. I'll make the case for Prince George. Their rate of return and ability to handle claims is much faster -- by days; by almost two weeks -- than in the lower mainland. That's a huge concern. When I spoke just this past Monday with individuals in that office, they certainly talked about having the ability to personalize their service, advocate on behalf of claimants and streamline the process for them. Those characteristics should not be evident in just one of the nine offices in the WCB organization. Indeed, there should be some consistency, some universality, around how that service is delivered and how it is received in all parts of the province.
I don't wish to see a system that's universally bad. I don't think there's much to be gained by suggesting that if you have a claim and you want it handled quickly, you should see one office rather than another. I think this is about returning some accountability to the process. I have tremendous empathy for the people who are actually working at the Richmond office of the WCB. I think it took tremendous courage for 600 of those 900 people to sign a petition saying that the system was simply not working. I think it's incumbent upon this government to put in leadership that will return a reasonable working environment, a decent job site, to them. After all, the WCB is all about reasonable working conditions.
If the folks who decree what is reasonable for other workers in the province are in an unreasonable working situation themselves, we've accomplished very little, if anything. I would suggest that we've accomplished nothing. Their best interests are not being served; they are in no position to serve the best interests of other British Columbians. British Columbians go to them with significant issues: personal health, income levels, rehabilitation and retraining. It's human nature to want to work and, typically, to want to work extremely hard. It's human nature to be interested in promoting personal wealth, to be interested in giving something back to your community. All of those focuses are lost if someone is having to haggle, if you will, with a huge bureaucracy that is somewhat unresponsive. Most constituents who have come to the panel that the opposition put together find the organization completely unresponsive. That is not something that I'm particularly proud of.
As a group of legislators, hopefully we can come together. I certainly support my colleague who spoke of a partnership across all parties to try to get a better handle on the WCB. There has to be a way to ensure that the worker is well served in this province.
The original intention of that organization, when it was created in 1917 -- it has a long, long history -- was to ensure opportunities for workers who were injured on the job site. Somehow it has become a massive conglomerate that's returning less service as opposed to more service. It's costing more, we're employing more bodies, and we're returning less service to the injured worker. That is a huge consideration.
The official opposition is interested in comments, concerns and possibly recommendations for how to revamp
[ Page 11278 ]
that organization. I would speak strongly to computerizing that organization in its entirety at the earliest opportunity. I can't imagine how we've come into 1994 still relying on paper files moving their way through an organization of that magnitude, which handles that volume of paper. I can tell you that I've had constituents in my office who were told that their file was lost and that they must start again. The frustration inherent in going forward and collecting all that material again is not in the best interest of an injured worker in this province. That's a huge concern.
I could touch on a number of issues today. The WCB will be asked to become involved in a number of policy decisions over the next number of years. I think we will see job sites become much more complex. I think we will see the assessment-reimbursement issue become much more open to debate. I think people in this province, particularly employers, are paying a great deal of money, and they are not always assured that their worker is getting the best possible service. Workers in this province are frustrated, but employers in this province are equally frustrated. A number of individuals, after they have been pushed through the keyhole backwards for two to three years, have said they could buy private insurance and do a better job for some of their workers. I have some sympathy for that position.
The solution is to ensure that the WCB is accountable. I would stand strongly in support of building and streamlining an organization that serves workers in this province. It's not the experience British Columbians have today. It's not the experience that I'm sure the majority of MLAs in this House have had with constituents, who come to them because they're absolutely flummoxed by the bureaucracy in place at the WCB and by the fact that it's very impersonal at the present time. People who have sustained worksite injuries or any type of injury are incredibly vulnerable. They don't want to be in an inhumane process or to be dehumanized even further. That is an issue this government must come to grips with. I trust that we will see some solid direction.
I hope the first move this government makes is to appoint -- or select, elect, or put in place, or whatever process suits the urgency of this matter -- a president for the Workers' Compensation Board in British Columbia. Being leaderless for ten months is not assisting that organization to make some decent decisions for workers in the province.
I think, quite honestly, that it's incumbent upon all of us to come to grips with the sensitivity around injured workers and the need to do something for injured workers in this province. We have suggested that the framework we currently call the WCB is in place. But I suggest to members today that the framework is not working and not responsive. Bill 13 will tinker with certain aspects -- housekeeping in a lot of respects -- but not the tangible issues surrounding what needs to happen at WCB.
I trust the minister will come back to this Legislature with some direction for that organization. It has a strong history and a very fine mandate. But there must be an ability to construct something useful and substantive from what's just written on paper. Right now the actions do not follow the words for a lot of workers in this province and that is a huge concern to members of the official opposition. If any of us have had dealings with injured workers or have been injured ourselves, we would find some real concerns. I have concerns that I am prepared to raise in committee stage on this bill. I trust that the minister will come back to the table with some direction for this organization.
G. Wilson: I rise to speak with qualified support for Bill 13, because I think what is intended here is going to improve the system. I don't wish to go on too long about this, because the workers' compensation question has already been effectively alluded to by the member for Richmond East.
We need to address and attack in legislation the fact that we have an authority that is quasi-judicial in its structure, nature and powers. To a large degree, it is a creature of the Legislative Assembly on the basis of its funding, yet it has no accountability to the elected members. As a result, this entity tends to have tremendous powers. It has quasi-judicial authority and has no connection to the democratically elected process that we engage in on a day-to-day basis here. I think that's what the member for Richmond East was alluding to, although to get to it is outside the mandate of Bill 13. We clearly have to address that question, because workers' compensation issues and those kinds of questions are perhaps among the most difficult for any elected member to deal with on a day-to-day-basis.
The reason that we can provide qualified support for this bill is that it does provide an opportunity for better service to workers who are providing essential services through arrangements in corresponding agencies elsewhere in Canada. I think that provision is very useful. However, I think the Reform member for Vernon asked the most salient question of the debate today: what is the cost of that going to be? How is that cost going to be managed? What kind of financing package is that likely to be, on a long-term basis, if the demographic projections that we are well aware of in this country continue? That demonstrates that there's going to be in-migration from people elsewhere and that we are likely going to have to pick up additional costs, as we have an aging population, many of whom spent most of their working life outside of British Columbia.
The Reform member for Vernon really hit the issue on the head -- no pun intended, speaking about workers' compensation and being hit on the head -- but clearly that is the key issue in debate of this bill. We need to address the broader issue of workers' compensation, which is largely a result of the manner in which the Workers' Compensation Board is constituted. The member for Richmond East correctly points out there is a lack of accountability, and that in large measure is the issue we have to deal with on a day-to-day basis.
I'm with the Reform member for Vernon. I don't think we necessarily want to have the presumption or arrogance to determine what the electorate is going to determine in the next election. But I do think we need to have a consistent review over the next number of years that is non-partisan in nature and includes all parties. We have to look at it with a view to providing the very best service we can to workers who are injured and therefore dependent on the system. As the member for Richmond East correctly points out, we all pay into the system, and yet there clearly is not an equitable pay-out. As a result of that, while Bill 13 very definitely moves toward trying to address some of those inconsistencies, the broader issue of workers' compensation, which is well-known and well-documented in this province, needs to be looked at.
[5:45]
From the Alliance point of view, we can support Bill 13. However, we wish to go on record as saying that what is desperately needed in this province is to increase accountability, and we can do that by bringing workers' compensation delivery under the legislative process. We have to get away from this quasi-judicial body that has no accountability to those people who are largely dependent upon it.
[ Page 11279 ]
With those words, the Alliance stands in conditional support of Bill 13. We do hope in committee stage to address one section. We have some concerns with respect to the application of the board under section 6. But beyond that, we can provide conditional support for this bill.
K. Jones: It's a pleasure to speak on Bill 13. In recognition of the need for changes to WCB legislation, this is only a pittance in terms of direction. But everything is worthwhile in this field. We have such a great mess in the WCB today, and so many areas need to be fixed up. I'm surprised that the minister didn't come forward with some really substantial legislative changes, because we're hearing about such a broad area that it needs to be addressed, through these hearings around the province. It's brought to our attention by injured workers, by the unions and by the employers. Everybody is concerned about the way things are going, and there's a real need for legislative changes.
Specifically with regard to this legislation, I'm pleased to see a modification in the area of hearing loss. But it's rather insufficient in that it doesn't recognize one of the major concerns for persons who have a certain degree of loss with tinnitus, which isn't well-known in the area of compensation. Nothing has yet been addressed by the Workers' Compensation Board in regard to this major debilitation of a person's hearing process. It not only affects their hearing but their whole lifestyle. It can lead to depression and difficulties with memory. It certainly interferes with hearing ability in certain ranges. People have the experience of a continuous sound in their head -- in one ear or the other, or both. It is not being addressed by the WCB, by ICBC, or by the medical profession in many cases, because most of them.... There hasn't been much done in the way of research or education. The serious area of health and safety is not adequate in the prevention of a major part of the injury that causes the symptom we know as tinnitus. These are things we'd like to see in any addition and modification to the bill addressing the area of hearing loss and injury to a person's ability to hear. I'd like the minister to take this legislation back and bring in constructive recognition of one of the major areas that is affecting people in our province.
By statistical records, tinnitus affects about 17 percent of the population. A major part of that is caused by high noise situations. Another cause is whiplash, or damage to the cervical area of the neck, which quite often occurs along with other more serious injuries to the back, neck or head that workers experience. This is something that doesn't just go away. This is something that comes on instantly and stays for the rest of the person's life. They don't have a way of getting rid of it.
There needs to be recognition and compensation for persons who experience that. There needs to be rehabilitation to help them deal with it. These things are not in place at the present time. That's one area we would certainly like to see added to this legislation. Any step that improves the Workers' Compensation Board is a good step, but we have to recognize that there are many areas that have to be dealt with.
Another one is the whole area of health and safety. The preventive process in the health care area is essential to reduce costs by reducing the number of injuries and the rehabilitation that's required. All of these are factors that will make it possible for us to both keep people healthier and reduce the whole assessment process. Therefore we really have to address the health and safety area. Bringing that area into legislation like this is what the minister should be doing. We certainly appeal to him to look at a much broader form of legislation, instead of only going partway in an area where it's very needed.
A. Warnke: I want to make a few comments on Bill 13. As my colleague the member for Surrey-Cloverdale pointed out, section 3 refers to the ranges of hearing loss as part of a disability, and so on. I think the member raises a good point, one of many points that could be raised. It is a point that exemplifies a particular problem, but not one that we have with the bill. As the minister pointed out, there are a number of minor adjustments that have to be made to the Workers Compensation Amendment Act.
L. Fox: Do you want to make the appropriate motion?
A. Warnke: Yes. Give me another minute, and I'll adjourn debate.
The minister put forward the Workers Compensation Amendment Act, 1994, as more or less a housekeeping act. There are many....
Interjection.
A. Warnke: Oh, I've got the whole 30 minutes. I see that I'm really encouraged to go at length. So with that in mind, I'll change my strategy at the last minute and move a motion to adjourn until the sitting later today.
A. Warnke moved adjournment of the debate.
Motion approved.
Committee of Supply A, having reported progress, was granted leave to sit again.
Deputy Speaker: When shall the committee sit again?
Hon. G. Clark: Later today.
Deputy Speaker: So ordered.
Hon. G. Clark: I move the House, at its rising, stand recessed until 6:35 p.m. this evening.
Motion approved.
The House recessed at 5:55 p.m.
The House resumed at 6:36 p.m.
[D. Lovick in the chair.]
Hon. G. Clark: I call Committee of Supply in Section A, the Ministry of Government Services and Ministry Responsible for Sports and Commonwealth Games. In the main House, I call continued debate on second reading of Bill 13.
WORKERS COMPENSATION AMENDMENT ACT, 1994
(continued)
A. Warnke: This is one time in this chamber I am tempted to refer to standing order 7(1), but I won't. I suppose that one reason is that I have a few things to say on Bill 13.
[ Page 11280 ]
Bill 13 is definitely one to support. That's not the problem. As the member for Richmond East pointed out, the problem is that when the title of the bill was brought before the chamber, we on this side expected something much more elaborate. The reason is that a number of complaints had been registered by the public in various offices with regard to problems in the Workers' Compensation Board and its administration. I gather they were not exclusive to the offices of the official opposition.
The problems facing the WCB have been expressed by employers and employees. Employees have pointed out that there are administrative cost increases on the one hand, yet they are not really impressed with the increased amount of benefits. It is very tempting to argue, and no doubt there are those who would argue: what seems to be the problem here? The WCB system in British Columbia has the highest benefits in Canada and, some can argue quite correctly, in North America. So what seems to be the problem here? As we hear submissions by the public on what seem to be the problems with the WCB, we are getting a clear impression that despite this claim, a number of people are still not receiving the benefits and are still not eligible for the benefits.
One example of that -- and this was where I adjourned -- is the reference in section 3 to hearing loss. My hon. colleague the member for Surrey-Cloverdale pointed out one particular problem with regard to hearing loss. But in a more general context, there was an expectation that the category of people who are affected by hearing loss -- and there's a lot of it -- would have been expanded in the bill before us.
Interestingly enough, some data points out that this is not a constant throughout the population. There are certain ages in the population that seem to have more difficulty with hearing loss than other ages. No doubt about it, this has something to do with the effort that has been taken to emphasize prevention in recent generations. I'm still impressed with the administration of the WCB for focusing in on prevention. Prevention is a cornerstone of controlling overall increases in the costs of claims. If you can prevent people from being injured -- or even more extreme than that, from dying on the job -- then obviously you lower the costs.
It's quite instructive that there seems to be one age category that has obviously not practised prevention of hearing impairment. They're more affected than other age groups. The emphasis on ear protection that we've seen in recent years is already beginning to pay off. As the people who wear ear protection age, it's noticeable that they do not suffer the same level of hearing impairment as those of other ages. Nonetheless, when you look at the people who have hearing loss, those in their fifties are extremely affected. We have had submissions -- and it's surprising that people who suffer hearing loss.... Because a large part of the population is affected, it has to reflect on what they've done on the worksite. Nonetheless, they are not receiving the full benefits that I believe they should be entitled to. That's just one example.
I'm not going to belabour that particular section of the bill. In general, it illustrates to me that it reflects a weakness, not of the bill but of a whole strategy that needs to be embarked on. I guess that we on this side of the House expected more than a housekeeping act. When we talk about the Workers Compensation Amendment Act, I would have assumed that it would have encompassed a lot of that.
To be fair, the minister did suggest in his opening remarks that we are going to redraft legislation down the line. In other words, he made it very clear that we can expect further legislation. This kind of legislation is obviously important. I'm glad, at least, that it was not ignored. I suppose one could have delayed it further. The last thing we want to suggest is that it should be delayed until there is a redraft of the legislation.
Nonetheless, the problems of the WCB have been growing for quite some time, and one can see a trend from 1988 to the present. I only have to focus on the problem of the unfunded liability. I know that the minister is quite capable of defending it -- as he did the other day, saying that the level of unfunded liability is not as great as in some other provinces. But the point is that since 1988 we have gone from a tremendous surplus to an ever-increasing, rapidly increasing financial problem with regard to unfunded liability. That is something that everyone -- employees, employers -- is addressing and that we have to do something about. The problems aren't new and haven't somehow just suddenly popped up in 1992 and 1993. Therefore this year, well, we'll put in some temporary measure that will bide us some time until we can draft comprehensive legislation.
[6:45]
The comprehensive legislation is essential and has to be introduced in this House as soon as possible, simply because -- along the lines of organization, personnel and finance structure -- the WCB has to undergo a tremendous, profound restructuring. Otherwise, we will find that a year from now we have a very serious problem with regard to the WCB. I'm sure the minister is aware of that. But I at least would like to make that point, to make it clear to the minister that a very serious problem has to be addressed here as soon as possible. That is really why we're quite disappointed that what has been brought forward is a housekeeping act rather than something considerably more comprehensive.
Also, very briefly, section 5 is long overdue. I have no problem with that. I do agree with one member.... I suppose that these days I shouldn't recognize contributions of other members from other political parties, but I will on this occasion. I thought the member for Okanagan-Vernon made a very sound point: with regard to section 8, we should extend the application beyond three years simply because of the kinds of injuries that do exist and are quite evident. They're complex injuries; they are not just losing a hand or a leg being injured or something like that. Given the nature of employment and what workers do these days, the job is complex. For example, certain kinds of hearing loss don't show up until years later, perhaps not until someone leaves the job. But in retrospect, beyond three years, we feel that person certainly is entitled to full benefits, because the injury did occur on the job. So I would concur with the remarks by the member for Okanagan-Vernon about section 8. I would encourage that application period to be extended.
In fact, there are a number of problems with the WCB. We have to make rehabilitation far more efficient than we have before. We must address the problems of cost and affordability. We must also increase accountability, and I want to focus in on that for a few minutes.
The increase in administrative costs has been quite profound. As a result, in these days of belt-tightening and competition for dollars, we have a very strange situation: administrators, on the one hand, and those who are making claims, on the other, are trying for the same dollars. Unfortunately, perhaps, as they compete for the same dollars, the employers who pay into this program are faced with increased costs.
So we get this interesting view from the employer side.... It's not that they're trying to shaft workers. As a matter of fact, what has most impressed me in hearing from employers is that they understand the need for the Workers' Compensation Board. They understand the need to promote
[ Page 11281 ]
prevention as a cornerstone in controlling health problems, injuries and that sort of thing. They want a healthy workforce. But by the same token, the employers are quite concerned that their contributions are increasing. If they're increasing to benefit injured workers, fine. Employers are saying they don't have a problem with that, for that should be part of the system. But employers do have a problem if the administrative costs are spiralling.
An Hon. Member: Call for a quorum.
A. Warnke: Hon. Speaker, I'm being encouraged.... We did start the debate with a few members, and I suppose everyone wants to hear me for some reason. Perhaps we could call for a quorum.
Interjections.
A. Warnke: I'm getting mixed signals, hon. Speaker. I'll leave it to your judgment.
Deputy Speaker: I have been reminded before, but it is not a discretionary call if somebody calls for a quorum. I note there are indeed fewer members than constitute a quorum. I have no choice in the matter; I will therefore ring the bells. But the member for Richmond-Steveston can certainly proceed in the interim.
A. Warnke: Where I left off is that the employers want to contribute and make sure that their contributions go to injured workers who make legitimate applications. Incidentally, there are plenty of employers who say that employees are not ripping off the system or anything like that. They feel quite legitimately that if administrative costs or claims costs go out of control, or if suddenly the caseload picks up.... Fortunately, the caseload itself hasn't picked up that dramatically, though it has increased. But if the caseload does begin to get larger and larger, there is this fear from the employer side: where, in all of this, might we find that cases are simply being processed? Given British Columbia's reputation for high claims, might we not find ourselves in a situation much like the Ministry of Social Services, where cases come in, they're processed and money is doled out? That is one thing the employers are quite concerned about, because employers do foot the bill with regard to benefits as well as administrative costs.
Along this line, I think it's extremely important that we begin to re-examine essentially where workers' compensation is going. I think it's extremely important, and we feel it's certainly timely on our side, to embark on a review panel throughout the province to get a sense of what seems to be the problem. We on this side of the House encourage the minister to proceed in addressing workers' compensation. Go beyond the amendment act, Bill 13, that has been presented here, and bring in a larger redraft of the legislation as soon as possible. The minister has committed to that, but we want to encourage the minister to bring that in as soon as possible, before the administration and personnel and other costs go completely out of control.
I'm tempted to rise above the din in the chamber, but at the same time, I would like to hear what some other members, in their wisdom, whether they are standing or sitting.... There seems to be a lot of standing going on.
L. Reid: Standing room only.
A. Warnke: Right.
I will wait to see what some other members say. I'm tempted to go into a Jay Leno routine, but I think I will avoid that for the time being.
Deputy Speaker: The member tempts the Speaker to wax humorous also and say: rising above the dean, dean, dean, but you're a better man than they are, Dean.
R. Chisholm: I rise in support of Bill 13. It is a housekeeping bill, and there are no great problems with Bill 13. But we do have problems with the WCB, and that is what I would like to address: a little bit of the WCB along with Bill 13.
The cost of the WCB, for instance.... We all pay into this system, but the WCB doesn't seem to be responding to the injured worker. This seems to be what we're hearing across the province. Bill 13 is basically a housekeeping bill, but the WCB itself, in a bigger context, is a problem.
We see that the WCB bureaucracy is growing more and more, and there are more and more outstanding cases. I know, just within my own constituency office, that we have dozens and dozens of WCB cases. I have one case right here, for instance, concerning a fellow by the name of Davis, and it has been going on since 1989. This has to be addressed.
Deputy Speaker: Excuse me. The minister rises on a point of order.
Hon. D. Miller: I really, sincerely have no wish to stifle debate. I appreciate that members are speaking about issues that go far beyond the extent of the bill. In fact, the member who is speaking now essentially stood up and supported the bill, and then he said he wanted to talk about other things. That's fair enough. I would ask the members, though, to bear in mind that there are some rough rules with respect to second reading.
Finally, having allowed that kind of latitude, hon. Speaker, I clearly will want to answer the issues that are raised by members of the opposition.
Deputy Speaker: I appreciate the point made by the minister, and his conclusion, I think, is correct. My sense of things is that the traditional practice and usage in this chamber is to allow wide-ranging second reading debate. As we all know, the basic rule of the House is that what is good for one side must, of necessity, be good for the other. So the minister's point is well taken and I will continue to allow that wide-ranging debate on the principles of Bill 13.
R. Chisholm: As I said, I'm in general support of Bill 13. But the WCB is still a problem; it seems to be growing and to be eating up a lot of resources. The bureaucracy is growing, yet care to injured employees is not.
Bill 13 is housekeeping. It's nice that we take care of some of the smaller problems of the WCB, but maybe we should take a look at some of the bigger ones. The particular case I was referring to before took four and a half years. That particular individual has gone through the whole spectrum of human emotions right through to the idea of committing suicide. I have written at least half a dozen letters since 1991. He has written to the ombudsman; he has written to the WCB -- and it goes on. He has written to the minister on a dozen occasions. They have admitted that there is a problem and that he has rights. They have said that he'll get his just due, but four and a half years later he has still not received it.
I'd like to quote one thing that he wrote to me. Since he put in this, it has been 1,226 days, and it has been 149 days --
[ Page 11282 ]
104 working days -- since a medical review panel certification. He says at the end of this letter:
"...please, I need your help; make it stop! How did these people get this powerful? How come they don't have to answer to anybody? What gives them the right to treat me and others in this situation like this? Who do they think they are? I am a real person with a real problem being caused by the WCB's inaction, and I respectfully demand a quick and fair resolution. I thank you, and look forward to hearing from you in the near future."
That is addressed to the minister. This is the plea of a man who's been going through this for four and half years, and this is one case.
[7:00]
I appreciate Bill 13 and I appreciate that the administration has to be rectified, but let's have a bigger look at this whole picture. There are a lot of people out there in British Columbia who have not been taken care of, who have been abused. I'm just suggesting to the minister that we put some accountability into the system. It's great to take care of the housekeeping every once in a while, but let's take a look at the big picture. After all, these are workers we're talking about -- they aren't the academics he was talking about in earlier bills -- and they have been hurt. They have justification; the certificates are there. Four and a half years later that man is still out in the wilderness. He was not helped by the previous government, nor this government. I would just hope that this minister and the WCB would start correcting some of these faults. Like I said, this is one case from my constituency. I can bring 20 cases in here; I can pile 100 on top of the minister's desk. Please take a look at the bigger picture.
I will support this bill, but I hope the minister will support us and the people of British Columbia by looking at the problems out there.
Deputy Speaker: Seeing no other speakers on Bill 13, I recognize the Minister of Skills, Training and Labour, whose comments will close debate.
Hon. D. Miller: I want to deal with some of the real and important issues raised in this debate. I want to start with a quote by my hon. Liberal critic from a "Provincial Affairs" broadcast on April 30, 1994: "B.C. Liberals believe that the Workers' Compensation Board should be insulated from political forces." My, my, my -- talk about hypocritical. They say that the system should be insulated from political forces. In all my life I have never heard so much political doubletalk on one of the really serious issues in our province.
Let's go back and look at some of the very spurious, hyperbolic, exaggerated and unfounded statements -- the typical kinds of statements we've come to expect from the Liberal opposition, who, despite the fact that they have a researcher who is funded by the taxpayers.... Actually, I think one of the researchers has some experience at the WCB, if I'm not mistaken; one of their staff members has some experience at the WCB. You would think they'd know better.
Let's go back to Hansard of just the other day. I wish the member for Surrey-Cloverdale was here, because I would like to see his reaction. He made the following statement in question period: "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." The member for Surrey-Cloverdale made a rank accusation against Mr. Dorsey, who works for the WCB, and intimated -- in fact, clearly stated -- that because Mr. Dorsey is doing double duty because we have not found a president and CEO, somehow he had some secret agenda that prevented the WCB from finding a new president and CEO. Maybe that....
Well, let me read it. I see the Liberal House Leader is shaking his head. Let me read Hansard. The member for Surrey-Cloverdale said: "The Deputy Premier must concede that the person responsible for finding a new president has no incentive to find a replacement." The facts are somewhat different. Mr. Dorsey is not a member of the search committee looking for a new president and CEO at the WCB. If the Liberal House Leader wants to continue the accusation that Mr. Dorsey is somehow frustrating the process of finding a new president....
G. Farrell-Collins: Read it again.
Hon. D. Miller: I'll read it again: "The Deputy Premier must concede that the person responsible...has no incentive to find a replacement." The quote is right here: "Mr. Dorsey clearly has no interest in finding a new president." If we got that kind of slanderous allegations from this Liberal opposition who want to walk both sides of the street, their heartfelt pleas for workers who are frustrated by the system -- and indeed there are workers frustrated....
G. Farrell-Collins: Take a grammar class.
Hon. D. Miller: To the leader of the Liberal opposition: I can read.
In defence of Mr. Dorsey let me give you a brief quote that came out of a story in the Vancouver Sun of May 27. The quote is from John Tanton, who is a partner in the executive-search firm of Tanton Mitchell Group Ltd.
Interjections.
Hon. D. Miller: They wanted to wander all over the map. Let me respond to some of the slanderous, sleazy allegations made by the Liberal opposition which typify....
Deputy Speaker: Excuse me, minister, but I have a point of order, I believe.
G. Farrell-Collins: Despite the erroneous comments being made by the minster, he is also insulting members of the opposition. I am taking offence to a number of the comments that he is making. If he wants to discuss the issue, that's fine, but I think he can do it without using those derogatory terms.
Deputy Speaker: Before we allow our emotions and feelings -- which are understandably supercharged about these matters -- to take over and cause some rancour to enter into this debate, I would just ask all members to please be guided by the spirit of moderation that always characterizes good debate. I hope that the minister would agree that if his comments gave offence he would be more than happy to withdraw those particular words.
Hon. D. Miller: If I have offended any members of the Liberal opposition, I certainly didn't have any intention of doing that. I am somewhat dismayed that there seems to be an unbridled licence to not only offend but condemn and attack -- without any justification -- people who provide, in my view, quite a valuable service. It's not just my view. Let me quote from Mr. Tanton, who is a partner in the executive-search firm of Tanton Mitchell Group Ltd. In terms of Mr. Dorsey's salary and the workload, he noted: "The
[ Page 11283 ]
province is getting" -- and pardon my language -- "one hell of a bargain with Jim Dorsey; there's not many people as altruistic. I'll bet he works 17 hours a day, six days a week." It goes on: "For his part, Dorsey simply said he is 'anxious...to find a new president....'"
Let's set the record straight with respect to the spurious allegations made by the member for Surrey-Cloverdale. Quite frankly, on an individual basis I would expect that somebody might have the integrity to actually write a short note to Mr. Dorsey and apologize. For someone who is working an enormous number of hours in one of the most important institutions in this province to be attacked in that kind of unfounded, underhanded, sleazy way is just a little bit too much.
Deputy Speaker: Excuse me, minister. Could I ask the member for Fort Langley-Aldergrove to please take his seat, too. We just had a brief discussion on points of order regarding the use of particular words that are obviously inflammatory and that provoke those kinds of reactions. I would caution the minister and all members to please refrain from that level of discourse. I don't think it helps debate. So would the minister continue and perhaps withdraw that term, please.
Hon. D. Miller: I'd be happy to withdraw that term.
Bearing in mind the comments of the member from Richmond with respect to people not playing politics with the WCB, what do the objective people in the country say with respect to British Columbia's WCB system? Let's talk about a quote from Les Taylor, an actuary with the Wyatt Co. He said that the attention given to B.C.'s unfunded liability is "a bit of scaremongering." Let's refer to a quote in the Globe and Mail from Ted Nixon, a principal of the Toronto-based employee benefits consulting firm William M. Mercer Ltd. Nixon suggested that Ontario try to emulate British Columbia, Saskatchewan and New Brunswick, which have made huge strides in getting rid of their unfunded liability.
The record is clear. I want to read into the record the funded position of those provinces in Canada that are led by Liberal governments, and I want to include Ontario in that, because unfunded liabilities didn't happen last week, last month or even last year. It took a conscious effort on the part of the previous Liberal government to drive the unfunded liability there to in excess of $11 billion.
Now we get the Liberals; they want to walk both sides of the street. They want to express their concern for injured workers, and I appreciate that concern. But on the other side, they're not really saying what their agenda is. Perhaps the agenda in Ontario is really the agenda of the Liberals in British Columbia. What have they proposed? The reason I draw that conclusion is very simply this: the Liberals in Ontario, in trying to make political Brownie points with respect to that huge problem they created at the WCB, distributed a questionnaire around the province of Ontario; they go out and play the very politics that the member from Richmond says shouldn't be played. Well, guess what. That very questionnaire that is being used in Ontario has been copied by the Liberals in British Columbia. It is the very questionnaire that is being used in Ontario that this group of Liberals in British Columbia has borrowed. I can only conclude that if they borrowed the questionnaire, they're going to borrow the policy.
Now let me tell you what the policy in Ontario is. The policy is that there will be no additional benefits to workers. "We will cap benefits to workers. Our target is to achieve" -- get this, Mr. Speaker; listen closely, because I want to compare two numbers.... The Liberal opposition wants to be government; the presumptuous House Leader of the Liberals assumes he's going to be government. Their target is to get to the point where the system is actually 75 percent funded by the year 2014. In British Columbia, we're 97 percent funded right now.
R. Neufeld: We were 110 percent before.
Hon. D. Miller: No. I'd like to deal very briefly with the members of the Reform Party, because although they're Reform now, it was not that long ago they were Social Credit, and who knows what they might be tomorrow. I'm telling you that it's the same gang. What did they do in 1986 and 1987? They took $114 million out of the WCB's surplus and gave it back to the employers of this province, and they are wondering today, a few short years later.... No wonder we have some modest difficulties. They took that money away from those very injured workers this group here is talking about. Let's have some consistency.
[7:15]
Let's talk about the funded position of British Columbia. British Columbia is at 97 percent. Alberta is at 71 percent. There's a good right-wing government. Not only that, if we borrowed Alberta's discount rate, which is 3.33 percent, we wouldn't have an unfunded liability. We would have a surplus. Saskatchewan, with an NDP government, actually has a surplus. Isn't that nice? Isn't that a good performance? Ontario....
Interjection.
Hon. D. Miller: Well, there it is. Saskatchewan is at 112 percent. These are the facts. An NDP government in a proud province in the Prairies has 112 percent funding in their WCB system. Let's look at Ontario. My goodness, Ontario, after however many years of a Liberal government, is 38 percent funded. If this gang got into power in this province, WCB would be down the tubes so damn quick you wouldn't be able to blink. These guys don't know what they want.
Let's continue across the country to those other enclaves of liberalism in this country. Let's look at the track record, because all we have got out of this gang is members pounding their desks. Quebec's been Liberal for a while, has it not? Guess how much they are funded. It's at 57 percent. It's better than Ontario, I'll grant you that. New Brunswick is doing a bit better at 72 percent, but unfortunately, we go to another Liberal enclave in Canada, Nova Scotia.... I know the interest is picking up over there. We should have a little lottery here. Who would guess what the funded position of the Nova Scotia WCB is? It's at 30 percent. Finally.... Quite frankly, I have some sympathy for Newfoundland, because there's a province that is really going through some pretty tough times. Far be it from me to attack a government in that position, but it's only 44 percent funded in Newfoundland.
Let's look at the objective record across this country where the Liberals are in power. There is one singular conclusion that we can draw: the worst thing that could ever happen to WCB in British Columbia is for that gang over there to get into power.
Let's look at some other objective statistics, not the kind of garbage we're getting from the Liberal opposition. The rate of return on investments from 1990 was 5.5 percent; it was up in 1993 to 7.5 percent. The number of inquiries are up; the number of industrial and survival first aid certifications are up; workplace visits are up; education presentations are up; the amount of penalties assessed are up. The fatality rate -- and this is something that I'm proud of and everybody
[ Page 11284 ]
should be proud of -- is down. Administrative costs of the WCB system are low, using any test you want to use, whether it's the total cost of the system for claims.... In fact, costs have decreased.
Finally, let's look at the assessment rates that I hear this uninformed and ill-informed gang talking about across the way. Let's look at them for '91 at least. These aren't current. I've got the current ones in my office, and I'll be happy to read those into the record during my estimates perhaps, when we can have a more fruitful discussion. Perhaps we can try to pin the Liberals down on what their position is, because for all the rhetoric and chatter we don't know what their position is. I think I do know what it is, but maybe we'll get into that kind of discussion in estimates.
[The Speaker in the chair.]
Let's look at the assessment rates in British Columbia compared to the rest of Canada. These are 1991 figures, and they've been updated by cents, quite frankly, not by dollars: in British Columbia, it was $1.93; in Alberta, it was $1.94; in Saskatchewan, that province that has 112 percent funding and a good NDP administration, it was $1.60; in Manitoba, it was $2.20; in Ontario, it was $3.18 -- that's the result of Liberals having been in power in Ontario.
Interjection.
Hon. D. Miller: Hon. Speaker, they had the floor; they wanted to talk about everything but the bill. Now it's my turn to talk about the Liberal position.
The assessment rate in Quebec was $2.32; in New Brunswick, it was $2.04; and in Newfoundland, it was $3. In every case where the Liberals are in power, the assessment rates on employers are significantly higher than they are in British Columbia. I say shame.
Interjection.
Hon. D. Miller: The member is talking about paying out claims. On the one hand, he's saying: "Cut costs." On the other hand, he's saying: "Increase claims." At least I know where Reform members stand. I know that their position is that we should reduce benefits. The leader of the Reform Party said that in a press release last week. He said that the benefits are too rich. I can understand that. I can have a clear discussion with Reformers because I know where they're coming from, but the Liberals never say where they're coming from. I'm willing to bet that when we get into our estimates they will never take a position on a substantive issue in the WCB. They want to run around this province. They want to appeal to injured workers who have some justifiable claims but who, for a variety of reasons, may not get through the screening -- because in some cases it is very difficult to attribute a current injury to an event in the workplace.
I've spent my life in the trade union movement, working in workplaces. I've taken up WCB claims. I'm currently not in a position to do that in my own constituency because of a prohibition that Mr. Hughes has imposed upon me because I'm the minister. I don't have the luxury that every other member of this assembly has. I can't pursue an individual's WCB claim in my own constituency. I don't like that, but that's the rule.
I have a long history of fighting workers' WCB claims in this province. I know why some workers don't get in and some do. Quite frankly, unless you can identify the particular injury as being caused in the workplace, sometimes the worker doesn't get a claim accepted. The reason for that is fairly simple: the system is not funded by the taxpayers; it's funded by an assessment of employers. On the face of it, it would be unfair to have a current employer pay for an injured worker unless you can substantiate that the injury occurred on the job. That's the basis of the system.
The system has indeed become more complicated -- as everything generally has in our society -- because of the changing nature of the workplace. You know, 70 years ago issues such as repetitive strain injury, the kind of stress that is caused in the workplace and the kind of disease that really is at the heart of this bill were unknown. So the system was generally simpler to administer. We had very large employers. The situation in some cases was very dangerous, quite frankly, but it was a simpler system in that respect. And it has become more complicated. Now we're dealing with the issue of ergonomics, and we're finding some resistance.
Nonetheless, the fundamental premise behind the WCB was, and continues to be, that workers gave up their right to sue their employers. If they thought the employer had contributed through negligence to their injury, prior to the WCB they had the right to sue their employer. The underlying principle behind the WCB is that workers gave up that right, in exchange for a system that would compensate them for either a short-term or a permanent disability -- or indeed for death, if that was the unfortunate circumstance. That's the underlying premise behind the WCB.
I venture to say that in any given year -- regardless of who is in power in this province -- you can go out around this province and find working people who feel frustrated and perhaps abused and who feel that the system is not serving their needs. That has less to do with who's in power than it has to do with the broader issues around the system. If the Liberals feel there's something to gain by playing the cheap political game of going out there and somehow trying to appeal to those people who feel frustrated by the system, but are not prepared to set down policy or take any substantive positions on what they would do if they were the government, I can only consider that to be cheap politics and, quite frankly, deceitful.
Interjections.
Hon. D. Miller: It is a bit much to listen to some of the raving incoherent ramblings I hear from members of the Liberal opposition with respect to the WCB and not to have these people actually take a position. You know, I understand politics fair enough. And we'll get out there and play some. Earlier in debate, the Liberal House Leader stood up and made what I consider to be a fundamental mistake of politicians. It was a Reform member who corrected him. He assumed, with all of the arrogance he could summon, that he and his party will be the government in this province. Well, I'll echo the caution that came from the Reform benches, because there are some experienced politicians over there. Never abuse the voters. Never assume anything, my friend, because the cheap politics that today you think are going to gain you something, will not. If you want to deal seriously with WCB issues, fair enough. If you want to play cheap politics, I'm not prepared to do it.
I look forward, although not with any sense of optimism, to this group of Liberals having the temerity -- and I could use another word -- to actually take a position. I don't think they have it in them. They will not take a position on the WCB. They will continue to turn around and try to exploit
[ Page 11285 ]
people who are disaffected by the system. I think I should leave it at that and move second reading of the bill.
Motion approved.
Bill 13, Workers Compensation Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
T. Perry: Hon. Speaker, I ask leave of the House to make an introduction, please.
Leave granted.
T. Perry: In the gallery are Dr. Bill Mackie, the foremost advocate of bicycle helmets for the protection of children in this province -- or I should say one of the foremost, in deference to his colleague from Coquitlam, and others; perhaps the foremost physician advocate for bicycle helmet protection. With him are two of his children, Drew and Vicky Mackie, who are enjoying the energetic debate from the minister and looking forward to seeing some further fireworks, perhaps even from the opposition. Would members of the House please join me in making them welcome.
R. Chisholm: I ask leave to table documents.
Leave granted.
R. Chisholm: I table three letters from Mr. Michael Davis addressed to this minister on his claim that has been outstanding for four and a half years.
Hon. D. Miller: Point of order. The legislation prohibits the minister from interfering in the processes in the WCB.
Interjections.
The Speaker: The next order of business, hon. Government House Leader.
Hon. D. Miller: I call second reading of Bill 39.
SKILLS, TRAINING AND LABOUR STATUTES AMENDMENT ACT, 1994
Hon. D. Miller: First of all, Bill 39 contains amendments to the Architects (Landscape) Act -- I had a mouthful when I tried to read this before, and I'll try to get through it now -- to include a nominee of the president of Kwantlen College on the board of examiners of the B.C. Society of Landscape Architects, as well as the president and past-president of the society. The amendment to include a nominee of the president of Kwantlen College is necessary now that the horticultural program is offered at Kwantlen College rather than at the B.C. Institute of Technology. Currently it is the president of BCIT who nominates one of the members of the board of examiners. The amendment to include the president and past-president of the society on the board of examiners will address the society's wish to have adequate representation from its board of directors on the board of examiners.
[7:30]
The second point is to make several miscellaneous amendments to the Engineers and Geoscientists Act. These amendments include clarifying that the Association of Professional Engineers and Geoscientists of B.C. has the power to pass a bylaw requiring the disclosure of the existence and the extent of liability insurance, as well as the disclosure of the non-existence of such insurance, which is currently provided in the act.
These amendments will also provide equitable treatment of both those who apply for membership and those who apply for licences to practise. The amendments extend the right of appeal to the Supreme Court, currently available to a person who has been refused membership in the association, to an out-of-province person who is refused a licence to practise on the same grounds -- namely, that the person is not of good character, or has been convicted of an offence which renders the person unsuitable for membership.
Third, amendments to the Hairdressers Act update the amount of registration fees and fines charged under the act. They remove the amount specified in the act for registration fees and provide that these fees may be prescribed by the Lieutenant-Governor-in-Council. This will allow for the fees to be kept current without the need for future legislative amendments. They also remove the amount of fines for offences under the act and provide for the application of the fines set out in the Offence Act. This will allow the courts to determine an appropriate penalty, remove the need for future legislative amendments relating to fine amounts and, with the increased maximum penalty, provide a greater deterrent to those who practise, or advertise to practise, without a licence.
As for the Pension Benefits Standards Act, the hon. members will know that the act has been in force since January 1, 1993, and that final regulations to the act took effect in February of this year. The pension benefits standards branch has been operating in Burnaby since last August and is currently analyzing the more than 800 pension plans which have been submitted for registration to date.
Members may recall that when the act was passed unanimously by the Legislature in 1991, the government of the day indicated that it was the intention that the legislation apply equally to private and public sector plans unless specifically exempted by regulation. The definition of "public sector pension plan" in the act specifically includes the four major public sector pension plans -- that is, college, municipal, public service and teachers. As well, the public sector plans have been specifically exempted from several sections of the act under schedule 1 of the regulations since January 1, 1993. However, due to possible confusion caused by a recent court decision, the intent of the present amendments is to clarify that the definitions and requirements of the Pension Benefits Standards Act are paramount with respect to regulation of public sector plans.
With respect to other pension amendments, I should first tell the House that to date, pension administrators and members do not appear to be experiencing many serious problems in interpreting and applying the act's minimum benefit standards. However, a number of pension administrators as well as pension members and their spouses have pointed out that the rules governing pre-retirement survivor benefits in section 34 of the act are unnecessarily restrictive and inflexible. This section currently requires that the surviving spouse of a deceased member receive the survivor benefit. The proposed amendment will allow a surviving spouse to waive the entitlement in favour of another designated beneficiary -- for example, the children of a first marriage, where the member has remarried. Providing this small added flexibility for the survivor makes the statute more responsive and is consistent with similar provisions in most other jurisdictions in Canada.
[ Page 11286 ]
As I indicated in introducing the bill, one of the other changes to section 34 is to correct a drafting oversight related to defined contribution plans. The amendment to section 34(3) will require at least 60 percent of the value of employer contributions to be included in the survivor benefit, which is similar to the requirement for defined benefit plans. I should add that the advisory council is going to be making recommendations for further changes to the act in 1995. I have been advised that they will be proposing that the 60 percent pre-survivor benefit requirement be raised to 100 percent for both defined benefit and defined contribution plans.
With one exception, I believe any questions members may have on the other minor changes in the bill could be dealt with in the section-by-section debate. The proposed change to section 57 regarding expenses on plan windup is a recommendation from the advisory council. The council is of the view that it is inappropriate for termination costs to be borne by the plan, and thus indirectly by the plan membership, when the sponsoring employer stays in business. The amendment makes these expenses a specific responsibility of the employer in such cases.
L. Reid: I'm pleased to rise in debate this evening, and I suggest to the minister that he indeed made a very detailed presentation of the basic tenets of the bill. The Liberal caucus will stand in support, and we look forward to this debate in committee. We do have some questions regarding a number of the sections; however, we will not impede the passage of this bill in second reading.
The Speaker: There being no further speakers, I ask the hon. member to conclude debate.
Hon. D. Miller: I move second reading of Bill 39.
Motion approved.
Bill 39, Skills, Training and Labour Statutes Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. D. Miller: Hon. Speaker, I call committee on Bill 8.
ACCOUNTANTS (MANAGEMENT) ACT
The House in committee on Bill 8; J. Beattie in the chair.
Sections 1 to 5 inclusive approved.
On section 6.
L. Reid: Section 6 refers to membership and classes of members: certified members, technologist members, student members, honorary members, and other classes of members. Our Finance critic has an interest in understanding the classifications and whether these definitions can be expanded. Is it possible to tie the classification through this process -- i.e., a certified member is a member who has passed the certification exam, and a technologist member is a member who has passed a technology exam? His contention is that it needs to be expanded for the rest of the bill to make sense to his fine, analytical, accountant's mind. Could the minister please respond?
Hon. D. Miller: Perhaps the hon. member might want to expand on her question; I'm not quite sure I understand it. This section lists the classes of members, and clearly they vary. Certified members are clearly different from student members. The difference is quite obvious, so I'm not quite certain I understand the question.
L. Reid: The question the hon. member for Delta South wished me to raise in debate -- and he has a burning issue surrounding this, so I trust we can resolve this before he returns -- is if it is possible in this particular piece of legislation to define who is a member of which category. He has asked if it's possible to tie a classification to what is listed here as the separate designations in subsections (1)(a) through (1)(e). I trust that clarifies it.
Hon. D. Miller: That would be done by the association. In fact, in subsection (1)(e) the association clearly has the ability to establish other classes of members by bylaw. By the way, this is consistent with the current act, so I don't think the section is any way limiting with respect to the various classes of members. It naturally follows that the definition of those particular classes is done by the association itself through bylaw.
Sections 6 to 10 inclusive approved.
On section 11.
L. Reid: Under section 11, the board conducts the business of the society and is composed of ten to 17 certified members. With the indulgence of the minister, could he indicate how many are currently in place and why indeed the bill is looking at a range of ten to 17?
Hon. D. Miller: I would want to do an absolute check, but I believe the number is 15. I'll certainly check, or have my officials check, and if I'm in error on that, I'll advise you. But that's the advice I am given, and certainly the number would allow a reasonable regional representation, given the size of the province.
Sections 11 to 17 inclusive approved.
On section 18.
L. Reid: Under the section which refers to investigation and practice review -- I'm speaking specifically to section 18(1) -- "An officer or committee of the society or a person designated by the board may...." Are we talking about designating all three of those chunks -- the officer, the committee and the society -- or does that power apply to just one of those segments of section 18(1)?
[7:45]
Hon. D. Miller: Again, I'm having some difficulty with the question.
L. Reid: So am I.
Hon. D. Miller: I suspect that's the case. If you want filler, fair enough, but it's pretty straightforward: "An officer or committee of the society or person designated by the board may...." Then it lists "investigate...conduct a practice review...." -- and so on. So I'm a bit mystified by your question.
Sections 18 to 22 inclusive approved.
[ Page 11287 ]
On section 23.
L. Reid: Section 23(1) refers to a "person aggrieved or adversely affected by a decision." Can the aggrieved person come forward as a society, or is it a personal designation of a single individual? That is our question.
Hon. D. Miller: Since the membership is of individuals, it would be an individual.
L. Reid: The hon. member for Delta South has a burning desire to know the definition of rule 49 and to know why it does not apply. Could you elucidate that for the House?
Hon. D. Miller: Rule 49 deals with appeals. Since this section sets out the process of appeal, rule 49 is unnecessary.
Sections 23 to 29 inclusive approved.
Title approved.
Hon. D. Miller: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; B. Jones in the chair.
Bill 8, Accountants (Management) Act, reported complete without amendment, read a third time and passed.
Hon. D. Miller: I call committee on Bill 37.
I was remiss in not introducing Stella Bailey from my ministry, who was in on the previous bill.
SKILLS DEVELOPMENT AND FAIR WAGE ACT
The House in committee on Bill 37; J. Beattie in the chair.
Hon. D. Miller: I would like to introduce on my immediate right Gary Martin, ADM of labour programs, and to his right, Judy Cavanagh, a policy specialist who will be assisting me in answering the penetrating questions from the opposition.
On section 1.
G. Farrell-Collins: I beg the minister's indulgence a bit. It's going to take a while to get to the actual question, because it's going to take a while to cipher through the definitions and how we actually get there.
In second reading I made note of a concern that I had with regard to section 16. I'm not going to discuss section 16; I'll just follow through the logic. Section 16 repeals some relatively innocuous clauses from a number of acts: the Hospital Act, the Municipal Act and the Vancouver Charter. In looking through those bills, the act appeals the provisions for a fair-wage clause in the Vancouver Charter, for example, which says that the Vancouver City Council shall pay a wage or remuneration rate generally accepted as current at the time. It sort of twigged my interest as to why that was being taken out. Obviously it was taken out because it was in conflict with something else.
In looking through the act and going through it to section 3, it stated in subsection (2~) that.... It's sort of a double negative, so I'll change it. It essentially says that this act applies to construction that the tendering agency estimates will require the expenditure of an amount of provincial money that is equal to or greater than the amount set out in the regulations. This is just section 3.
That brings me back to section 1, which is the area that I want to get into and the clause we are on. The definition in clause 3(2)(b) states: "Provincial money...." -- which obviously means that there is more to it than that. In the definitions section, section 1, we come to a definition of "Provincial money," and that's where the question comes in. It states that the Skills Development and Fair Wage Act essentially applies any time provincial money is expended in an amount equal to or greater than the amount prescribed. "Provincial money" is defined as a number of things. Under (b) it says: "...money paid by the government to a Crown agency or public institution."
One then has to go to the definition of "public institution" to find out what that is. Under "public institution," it states: "'Public institution' means a public institution as defined in the Municipal Finance Authority Act and includes the University of Northern British Columbia and a board or council as defined in the Health Authorities Act." The key there is the Municipal Finance Authority Act. If one goes to that bill, which was amended two years ago, it gives a long list of various agencies or things that can be considered public institutions. The first one is "a municipality or regional district," and there's the rub. In the past, my understanding of the first policy, and then the policy that subsequently followed it, was that it did not apply to municipal construction. Given that long, convoluted trail of definitions and explanations, does Bill 37, by its definitions and by the routing of the various sections, cause this Skills Development and Fair Wage Act to apply to municipal construction?
Hon. D. Miller: The very simple answer is yes, where provincial money is contributed, let's say, to a project undertaken by a municipality that is greater than the minimum threshold of $250,000. Where that does exist, the Skills Development and Fair Wage Act does apply.
G. Farrell-Collins: This is from March 30, 1992, so that would have been the first policy that the government brought in, not the amended policy. In this news release that they put out, dated March 30, 1992, it states: "Municipal governments will generally be unaffected by this policy except where a direct government contribution to a construction project is $500,000 or greater." We know that the threshold was lowered when the policy was amended. There are more clauses in here that I'd like to examine, but as far as this goes, is the minister saying that this act merely continues what's already in existence, or has there in effect been a change to the impact this will have on municipalities?
Hon. D. Miller: No, this act mirrors the policy that is still in force until this act is passed by the Legislature. Originally the threshold was $1.5 million, and that was subsequently reduced to $250,000. There's no inconsistency; it's just that the threshold amount has changed. I repeat, with some exceptions -- and there are some exceptions -- the act is really a mirror of policy that's been in place.
G. Farrell-Collins: So in cases where the municipal or regional government or council is involved in a construction project of their own -- to be honest, the vast majority of at least the medium or major construction projects would fall above the $250,000 level, and I guess if you're having a
[ Page 11288 ]
fifty-fifty split with the province, it's half a million dollars -- those would now fall under the Skills Development and Fair Wage Act. Is it correct that the act would apply to them?
Hon. D. Miller: They do right now under the policy. Therefore there will be no change when the legislation is passed.
G. Farrell-Collins: I haven't had a chance.... I've put in some calls to some of the labour relations people in various regional districts and municipal councils. Municipalities are a little different from regional districts, because they do a lot of construction in-house. They have their own people that do a lot of this stuff. How does this affect their collective agreements in a case where the fair-wage policy either exceeds or is essentially not identical to their collective agreement rates?
[8:00]
Hon. D. Miller: It depends on the size of the municipality.
I'm not certain that I buy your contention that projects in excess of the $250,000 amount aren't necessarily done by a municipality's own workforce. In any event, it does not affect that. If it's done by the municipality's workforce, then it doesn't apply.
The Chair: Hon. member, just so I'm clear to you, it seems to me that your question on the definition of provincial money has been answered. I'm wondering if you're not pursuing other parts of this bill in your line of questioning at this point. If you feel that you don't have an understanding of the definition, then I urge you to continue, but it seems clear to me.
G. Farrell-Collins: I'm certainly not trying to drag out this debate. This is probably one of the last places I'd choose to be this evening. It's one of the first nice nights we've had out there in a little while, so I'm certainly not trying to drag this out. I'm just trying to clarify what the application of the fair-wage act is going to be, particularly as it relates to provincial money. I'm on subsection (b), and I will be talking about subsection (c) of that in just a minute, so we'll probably be spending a little time on this.
I accept the minister's comment that this fair-wage act will not apply when municipalities or regional districts are doing projects in-house. If my understanding is correct, what the minister stated is that despite their cost, the fair-wage policy would not apply to projects done in-house, because they already have collective agreements with their employees.
Hon. D. Miller: I have confirmed that. If the member wants me to reconfirm it, I will.
G. Farrell-Collins: Nods aren't recorded in Hansard. I just wanted to make sure I had your comments, that's all.
The second section I wanted to look at is under "Provincial money," subsection (c). It says: "'Provincial money' means (c) money loaned to a Crown agency or public institution if the payment of all or part of the loan is guaranteed by the government." Often municipalities will go out and borrow money for capital projects. I'm not an expert on the municipal area, but perhaps the minister knows if those funds are guaranteed by the province, either directly or indirectly, such that this subsection would apply to them.
Hon. D. Miller: If I understand the sense of the question, they're not necessarily guaranteed. Subsection (c) is fairly clear: "...if the payment or all or part of the loan is guaranteed by the government." But it's not always the case that there would be a government guarantee.
G. Farrell-Collins: I guess that's my question, though. Are those funds...? You're saying not always; sometimes they may be guaranteed, and sometimes they may not be guaranteed. When a municipality borrows money, I would assume that the province is ultimately responsible for those debts, because a municipality exists under the Municipal Act -- unless there's some other thing, probably through the Municipal Finance Authority or something.
Hon. D. Miller: I think that's stretching it. Having been a member of a municipal council -- and I see some heads nodding over on the Reform benches -- I don't think that's the case. Municipalities and regional districts borrow money through the auspices of the Municipal Finance Authority, but they clearly have a responsibility to pay down those debts. Generally they are borrowed for significant projects -- in my own recollection, civic theatres, swimming pools, those kinds of things -- and over a fairly long period of time. But it's the responsibility of the municipality to repay any moneys borrowed in that manner.
L. Hanson: Far be it from me to be of any assistance, but if a municipality decides to build an arena, for example, and they go through a money bylaw to borrow the funds from the Municipal Finance Authority, they go and borrow it. Then if the municipality defaults, the liability falls onto the regional district. If the regional district defaults, then they are allowed to provide a tax assessment to all municipalities in the province to pay it back. So I think the interpretation wouldn't be that those are government-guaranteed funds.
Section 1 approved.
On section 2.
G. Farrell-Collins: This is the purposes section -- wonderful as they are. Can the minister tell us what portion or how much funding he sees going to skills training and development as a result of the fair-wage policy?
Hon. D. Miller: Perhaps the member might want to rephrase the question. I don't come prepared with financial statistics relative to expenditures, nor do I think it's necessarily germane to the bill. But the member might want to rephrase the question. Maybe I missed a nuance there.
G. Farrell-Collins: One of the main selling features of this bill, and indeed of the policy, according to the government, is that it is a skills development tool -- a way to ensure that people have an opportunity to develop the proper skills, resulting in a larger number of apprentices and a better-trained workforce. In looking through the act for ways that this would work, I find it difficult to see any section that deals with skills development. I see in the purposes section that it's one of the purposes, but I don't see any section in the act that would actually cause skills to be developed. So if this is where it is, the minister can comment on it.
Hon. D. Miller: I would have thought it was obvious, but perhaps it goes to the....
L. Reid: Assume nothing.
[ Page 11289 ]
Hon. D. Miller: No. But I was going to say that perhaps it goes to the fundamental misunderstanding that the Liberal opposition has about skills development. In that regard, I repeat the comments made by my hon. critic, the member for Richmond East, who said: "Apprenticeships are outdated."
I'd like to advise that there is a requirement in the act for people on the projects covered by the act to hold valid TQs -- in other words, tradespersons' certificates. They get those certificates by going through apprenticeship training. Not everyone, of course, who has a TQ in this province received their apprenticeship training in this province. And if the Liberal opposition ever came to power, we'd never see another apprentice; at least, that's the way I interpret her remarks. Be that as it may, I don't think we're in grave danger of that.
So the answer in that respect is reasonably obvious. Because it requires people on the job to have skills that have to be obtained through the apprenticeship system, there's an obvious building, if you like, of the skills pool.
G. Farrell-Collins: The minister is saying that, because you're forcing a certain ratio of apprenticeships versus journeymen on the job site and setting some strict numbers, that is going to promote skills development. Is the minister essentially saying that because of the strict numbers put in place, that in itself will promote skills development?
Hon. D. Miller: I thought my explanation was fairly clear, Mr. Chairman. The bill requires that the people who are employed on these projects and are listed hold valid trades qualification tickets. You can only obtain those valid trades qualification tickets by going through an apprenticeship program -- not in every case, because there are some minor variations with respect to some of the trades. Welding, for example, can be taken at a technical school -- although, interestingly enough, welding used to be an apprenticeship. Unfortunately, that system was lost. At one point I worked in a mill that I think turned out the last two people who went through a welding apprenticeship. They were top-notch welders and did a lot of the gas welding on boiler tubes.
Trades qualification is obtained through the kind of apprenticeship training that I've talked about, and therefore the requirement to have people with those skills means that we will be training those people -- hopefully as many as possible right here in British Columbia. As long as we're in power, I think that will be the case; but with your colleague from Richmond East, who clearly doesn't agree that apprenticeships are valid, we may see a loss of those skilled trades. Heaven forbid that we should ever allow the skills of our workforce to decline to the extent that may happen if we follow the Liberal philosophy.
G. Farrell-Collins: If I may say so, the minister has a tendency to interpret our comments liberally -- if I may use that word. He takes one comment and extrapolates it into a whole policy, and I think he should be careful in doing so.
Interjection.
G. Farrell-Collins: That's true.
Let me come back to the gist of the question. If I understand him correctly, I think the minister is saying that the economic analysis of this is that we require more skilled people to be on a job site than -- what, we're not sure -- contractors would normally use to achieve completion of a project; that the government requires a greater number of skilled people and apprentices on a job site; and that that is therefore going to create a greater demand. That's how it's enhancing skills training in the province. Is that correct? It's going to increase the demand.
Hon. D. Miller: Let me try to come at this in a slightly different way to illustrate the same point, and hopefully this third attempt will succeed.
There are not many trades that have mandatory certification in this province -- I apologize, I can't reel them off the top of my head -- but there are some. In other words, in some instances where people are practising a particular trade -- I'll use gas fitting as an example -- you are absolutely required to have that ticket before you can perform the functions of a gas fitter. It therefore follows that if that is a mandatory requirement, we would actually train people in this province. The normal method -- in fact, the preferred method, quite frankly -- is through the.... By the way, just as a little aside, I was quite pleased to read a want ad in my hometown newspaper last Friday from a major employer in the region, Skeena Cellulose, advertising for millwrights, instrument mechanics and one other trade, I think. It seems to belie the Liberal view that that's outmoded.
Nonetheless, let me go back to my illustration. Where those trades are mandatory -- in other words, you can't practise without having that journeyperson's ticket -- then it automatically follows, or it would seem to me preferable, that within the province we have a regime for training those people to perform those functions. I think the member would agree with that.
Now let's bring it back to this particular initiative. As we currently require in the policy, we are requiring in this legislation that people employed on the jobsites -- as listed in the regulations and in the list that the member no doubt has -- have valid trades qualification tickets. You can see the result of that would be that we would train those people in our province.
Through the apprenticeship training system, we not only would give those people the kinds of skills that benefit the public construction we're talking about -- ensuring that the quality of construction is first-rate and that we've got people on there with a high degree of skill -- but we would also give those individuals, those real British Columbians, the opportunity to acquire that trades qualification ticket, which improves their individual position. It means they generally earn better wage rates, they generally have a bit more freedom in terms of locating for employment and their odds of finding employment are better -- all of these benefits which I assume the members opposite would support and agree that we want to try to give our citizens.
[8:15]
Clearly the requirement to have people with these tickets on the jobsites is the lever, if you like, or the inducer, to the general training of people in the particular fields identified in the act. So have I got to the point? Good.
G. Farrell-Collins: In fact, that's the longest yes I've ever heard. That's essentially what I had asked: is the government trying to create the economic demand for these people and therefore increase the number of people? And is that essentially the skills development process in place here? I guess that's what it is. The government is trying to create a demand for the skilled people and hoping the process then will draw those people through and create skilled and trained workers at the end of it.
Can the minister tell me, then -- after having this policy in place for a little over two years now -- how many skilled tradespeople and trained apprentices have come about
[ Page 11290 ]
directly as a result of the preceding policy, which is now being incorporated into legislation?
Hon. D. Miller: Let me try to use one more analogy. In fact, I have a dental appointment next Monday. Because I may be a bit of a coward, when I go to a dentist I'm going to insist that that dentist have a certificate on the wall that says he or she graduated from a recognized university -- that they have the skills, so they don't inflict the kind of pain I normally anticipate when I go to the dentist. The member opposite probably has the same prerequisite before he goes to a dentist. You wouldn't want to go to someone who said: "Oh no, I kind of picked it up by watching. You know, I just hung around the office for a couple of years. I know what I'm doing, but I don't have that ticket on the wall. But no, no, don't worry. You can trust me."
As a result of society requiring people who practise dentistry or medicine to have those skills, guess what -- we've got a medical faculty at UBC. Guess what -- there are actually some proposals to expand dentistry in western Canada.
So does the member understand that when we require -- when we need, actually -- people with that level of skill, it does follow that because we require them we also have the obligation to train them? I don't know how much simpler an explanation I can offer. It's very difficult to get a precise breakdown, but I did indicate that I'm not happy about the total number of apprentices in this province. I think there are particular reasons for that, and I don't necessarily want to get into them right now. But there is an indication that there has been.... The total number of apprentices registered with the branch declined from January 1992 to January 1994. However, over the same period the number of registered apprentices in construction trades rose by 7 percent. I'm not going to say this is an absolute, but clearly, to the extent that these statistics are an indicator, it seems to me that there has been an increase in apprentices in the construction trades while we have seen a general decline in the number of apprentices across the board. One of the clear conclusions one could draw from that is that, yes, the policy has had an impact. But in terms of absolute detail, I think it would be very difficult to get into that.
I'm confident that the policy is the right one. I feel very strongly that we need to formalize training. Informal training is not good enough. When I started in the forest industry, it was quite common for people to have come through the informal training process, but it's not good enough any more. We need to have formal training for our tradespeople. These are highly skilled people. Some of these jobs have changed through the introduction of technology. These are very highly skilled British Columbians, and they deserve the opportunity to acquire these skills for their own benefit and for the benefit of the public construction projects that all of us as taxpayers pay for.
G. Farrell-Collins: The minister stated -- if I heard him correctly -- that the registered journeymen numbers...
Hon. D. Miller: Journeypersons.
G. Farrell-Collins: Journeypersons.
...have increased by 7 percent.
Hon. D. Miller: I didn't say that.
G. Farrell-Collins: Well, perhaps the minister can give us.... He didn't give us any numbers, either, on the percentage decrease in the apprentices who were registered between 1992 and 1994. He said there was a decrease, but he didn't give us the percentage figure. Could the minister give us a precise percentage and number for the decline in apprenticeships and registered apprentices, and for the increase in journeypersons, over the period of this policy, which was from March 30, 1992, until the present day?
Hon. D. Miller: The member has it wrong. I didn't say journeypersons; I said apprentices. Let me read the statistics again. I said there has been a decline in the total number of registered apprentices. In January 1992, there were 14,671 registered apprentices; in January 1994, there were 14,153 registered apprentices. But over that same period, the number of apprentices registered in the construction trades increased by 7 percent, from 7,558 to 8,106. Clearly we've got an increase there of more than 500 apprentices. Where there has been, in general terms, a decline in the number of apprentices, we have seen an increase in the number of apprentices in the construction trades. An obvious conclusion one could draw from that is that in fact the skills policy has worked with respect to apprenticeship training.
I just discovered this piece of paper from the Saturday, May 7, Richmond Review. I think it's worth quoting from, because there are diverse opinions on the relevancy of apprenticeships and whether they're good or bad. I referred to my hon. critic, who says in that paper.... How does this go now? She'd rather see money go into co-op programs than apprenticeship programs, which she called "outdated" because they train workers in "old technologies such as construction." I didn't know that construction was an old technology. I know it has been around for centuries, eons -- since the pyramids. But technology changes. Now we use computers and sophisticated machinery, where we once used levers. The principles haven't changed, quite frankly. Then she goes on to say that apprenticeship programs are in old technologies and they are not going to create new jobs in the new economy. We see an increase, albeit modest, in the number of apprentices in that old construction trade that is out of date. I would suggest that my Liberal critic, the member for Richmond East, is out of touch. I certainly hope that's not reflective of the rest of the Liberal caucus.
G. Farrell-Collins: We'll probably be up here for a couple hours so that you get it right. At the time the policy was implemented, and at the time the fair-wage policy was amended, the then minister -- not this minister -- was asked numerous times to bring forth any studies or analyses that had been done which would show that this policy was doing what was intended, that it was being implemented properly, that it was working and that there was some justification for it. We never did see anything. The minister alluded to some studies and reports that had been done. There was a report done by a group of academics, who stated that, to the best of their knowledge, very little planning went into this policy, and it was really just a political decision; there was really no rationale for a public policy decision to be made in this area in favour of a fair-wage policy. Perhaps the minister can tell us what justification -- what studies and analyses -- he used to come to the conclusion that this act was necessary.
Hon. D. Miller: As I recall the previous debate on the legislation, I made a prediction that we would never actually get the Liberals' position. My critic may feel inclined to advise the House and all British Columbians just where the Liberal caucus stands on this bill. Are they opposed to the concept of fair wages being paid to workers in this province?
[ Page 11291 ]
With all due respect, I really would like to hear an answer. It's not my job to question my critic; it's his job to question me. But if, in the interests of taking a position, my hon. friend would actually like to take one, I'd be delighted to hear what it is.
Let me deal with the Stanbury study and the issue of studies generally. You can probably get a study to tell you anything you want, quite frankly, and that's an endless merry-go-round. There are some issues here that go beyond simple costs. I think it really goes to our tradition. For example, I referred to the fact that in 1891 the House of Commons in Great Britain passed a resolution to bring in fair wages. I referred to the fact that in 1922 the Canadian cabinet did the same thing, and in 1930 the federal government enacted the Fair Wages and Eight-hour Day Act. I went on and talked about Quebec in 1914. I didn't actually say that, but I'll read that in: Quebec in 1914; Manitoba in 1916; Ontario in 1936; B.C. -- back in those days when there was some philosophy extant in the Social Credit government -- in 1951; and New Brunswick in 1952. In other words, legislatures and governments of the day -- and by the way, not New Democrat governments, or CCF for that matter -- enacted legislation that said that there will be a fair wage paid to the workers where we spend public money on construction projects.
I looked at the Stanbury study very closely. In fact, I had a meeting with.... Oh, he's a big, tall fellow with a beard; I think he's got a beard....
Interjection.
Hon. D. Miller: Oh, that's it -- Hochstein. I had a meeting with Mr. Hochstein and a couple of his cohorts. They came to talk to me about the study they had done -- the Stanbury study -- which, at its heart, was a treatise on the free market theory of economics. In addition to advocating that the state, whether that be a provincial or federal government, should not be in the business of prescribing these kinds of standards, they went far beyond the issue of fair wages. They talked about the trend in the sort of New Right to not interfere with the market. They pointed to some of the states in the U.S. I thought, in fact, that they used some bad examples. They quoted some examples that I thought were quite insulting. They said that fair wages were intended to deprive minorities of the opportunity to work. It was a bit of a foolish argument; nonetheless they tried it.
[8:30]
They pointed to some states in the U.S. and said: "There's where we should follow." I looked at those states and did a little comparative testing of those states that had abandoned the minimum wage, for example. As I said earlier in the debate on the College and Institute Act, I haven't been to university, so I applied some simple tests. I looked at the unemployment rates in those states where there is no minimum wage -- particularly in the youth core -- and I checked that against British Columbia. Lo and behold -- guess what I found. The theory that minimum wages cause unemployment didn't seem to hold much water. When you looked at it practically, our youth unemployment rate -- and it's not something I'm happy about, and nobody in this province should be happy about it, because it's pretty high -- was lower than all the states that had no minimum wage. So my simple conclusion was: who's zooming who? Where are these guys coming from?
As I said, I try to zero in on what I think the issues are and apply some simple tests. I was a bit intrigued. I think one of the gentlemen, by the way, was a part-time professor. I said: "What you guys are telling me is that you absolutely and fundamentally subscribe to the free market theory. Wages are simply a commodity in the marketplace." They said: "Absolutely." I said: "Good, because I'm thinking of taking away tenure at universities. I think those people should compete in the marketplace." I got a terrible reaction from this gentleman who had some passing acquaintance with professorships. He said: "That's not the same." I asked: "Why isn't it?"
Why is it that we are prepared to say to some in our society that it's okay for them to have a closed shop, but it's not okay for others? I'm a bit perplexed by what I think is contradictory thinking. It confuses me; I don't understand it.
But getting to your question, let me give you the reverse. Many studies have been conducted. In fact, if you want to read some studies, they are referred to in here. Bearing in mind that you pay for what you get, some studies done by the U.S. budget administration -- whatever the department is -- suggested that the increase in costs as a result of fair-wage policies was generally fairly minimal. I talked about those states that have abandoned the notion that we have a greater obligation to prescribe minimum standards or fair-wage laws. What really struck me was that in those states where those fair-wage laws had been eliminated, and you follow the theory backwards, the resultant savings on public construction costs turned out to be minimal, yet the drop in wage rates was significant. So the conclusion that you draw from that is quite simple: where contractors exist in that milieu, where they don't have an obligation to pay a fair wage and in times of high employment can exploit labour by driving the value of labour down, the public doesn't gain very significantly at all. But the individual contractor gains in a hugely significant way: that money goes into their pockets.
Those are some simple conclusions that I've drawn from reading this document, but I think they're pretty sound. I'll repeat my question. I think I know where the Reform Party stands, though I'm not quite sure I know where the Liberal Party stands. Are they fundamentally opposed to the notion that government should be involved in prescribing fair wages, minimum standards, minimum wages and all those kinds of things? Or do they simply say, and would say if they were the government: "Get out of the field"? They'd just abandon it?
G. Farrell-Collins: The only correct statement the minister made in his somewhat lengthy soliloquy was that he has drawn some very simple conclusions. He has drawn very simple conclusions from something that I would imagine is fairly complex economic data that I'm not sure he understands. My question to the minister is: what research has his ministry done? What sort of a study had his ministry done in making this decision? Quite clearly, it consisted of the minister looking at some numbers and making some very simple conclusions from those numbers. The minister can stand up and make those types of comments, but he should have something more to back it than anecdotal comments of his own that he's making up.
[D. Lovick in the chair.]
If the minister had been listening for the last two years -- I can give him a stack of press releases, and I will give him all sorts of copies from Hansard -- he would be very clear as to what the Liberal position is on the fair-wage policy. The fair-wage policy -- or government intervention in the construction industry to set arbitrary wage rates -- does not benefit anybody. We are opposed to the fair-wage policy of
[ Page 11292 ]
this government. He should know that. As a minister I would assume that he would know the position of the opposition on one of the major policy positions his government has taken in the field. And certainly, on the only piece of legislation in this area that he's brought in, I would assume he would at least know what the opposition's position is.
[D. Lovick in the chair.]
I would expect that the Minister of Labour has done as much preparation for this debate as he did in bringing the bill in and drafting the legislation. He doesn't really have a clue what the financial impact is of the fair-wage policy. He hasn't done any analysis; he doesn't know. I wish the minister would come clean like the minister before him did and say quite clearly: "This is just a political decision. We did it as a policy decision. We don't need to justify it with any sort of cost analysis, with any sort of reasoning or rationale. It was a political decision that we took. We did it, and there it is." That was what the Minister of Labour who preceded him said. I assume that he can be as forthright with us and make the same sort of statement. I would expect that from him.
Interjection.
G. Farrell-Collins: Well, I've told this minister, his government, the preceding minister and everybody else who cares to ask that the fair-wage policy as described by this government is something that the Liberal Party would do away with. I'd be glad to tell him that again. I don't know how many times he wants to hear it, but I'll tell him.
The minister uses the analogy that over history, dating back to 1891, there have been fair-wage acts or fair-wage legislation in place. That's true. In fact, as we mentioned earlier, clause 174 of the Vancouver Charter is a fair-wage clause. It states quite clearly, like all those other bills and other pieces of legislation before, that a city, province, country or government will generally pay wages not less than those accepted as current at the time. Those pieces of legislation did not bring in a scale that said these are the dollar figures that the government is going to set by regulation in an arbitrary way to determine what the rate of pay is going to be. Really, the government doesn't do that in any other area.
For the minister to compare this to minimum wage is ludicrous. Everybody knows what the minimum wage is for. The minimum wage is a social policy. This isn't a social policy; this is an economic policy. It's a political position that the government has taken with the fixed wage. It has nothing to do with the minimum wage policy that exists in virtually every jurisdiction in North America -- almost. For the minister to make that type of comparison is to be less than forthright. He's trying to take the public down a path into the dark that he knows is simply not factual. He's making those statements, and he should be careful when he does so.
What the minister is saying is that right now, two years later, the government still has no analysis to justify either the fair-wage policy or the fair-wage act and, in fact, they're doing it for political reasons as was stated earlier by the previous Minister of Labour. That's fine, just as long as they're willing to go out and tell people that.
There was a comment -- I don't have it here in front of me, but I'll be glad to get it in a few minutes -- made by the former Minister of Finance at the time the fair-wage policy came in. He was asked about the cost of the fair-wage policy. He said: "It's not going to cost us any more because we're going to keep the spending at the same level. We're just going to pay people more." He was then asked what the effect was going to be. If you're paying people more and not increasing the amount of money you're spending, then obviously something has to give. The minister finally agreed: "Well, I guess a few schools here and there won't be built. Or a few hospitals or a few improvements won't...."
Interjection.
G. Farrell-Collins: The wannabe but never-will-be minister over here is disagreeing with his Minister of Finance. The Minister of Finance said, quite clearly, that over time a number of schools won't be built, because of the fair-wage policy. I assume that that applies to the fair-wage act. When this minister and, indeed, every one of the 51 New Democrat members go back to their ridings and meet with the parent advisory committees of their school districts that are pressuring each and every one of them for increased capital construction in their school districts, I assume that they will advise those people of the fair-wage policy, the fair-wage act and the comments of the Minister of Finance, who stated that because of the fair-wage policy and this act, there are schools and hospitals that aren't going to be built, and students are going to be left in portables. I just hope the minister and all members of the New Democratic caucus are as forthright with parents and students in their constituencies in telling them what choices they've made. That's really what it is: a choice. The government has made a political decision, to quote the former Minister of Labour, to bring in the fair-wage act, and to quote the former Minister of Finance, that's going to have a direct impact on capital construction of schools in British Columbia. So I hope those members are as honest and forthright as the former Minister of Labour and the former Minister of Finance were when they made those comments, and will advise those parent groups that that's the case.
If the minister has any data, any study to prove that that's not the case, I'd like to see it. I know the minister is going to stand up and say that many of these projects have come in under budget.
An Hon. Member: Check with the Langley School District. The Langley School District says that the....
G. Farrell-Collins: Perhaps the member who is interjecting should phone the Langley School District and find out what they actually say before he interjects during the fair-wage debate. Ask them about their position on fair wages, and then come back to me.
The minister is going to stand up and say that these projects have come in on budget or under budget or, in some cases, over budget. But he hasn't informed people that when quantity surveyors do their estimates, they actually include a percentage for the fair-wage policy. They do all the calculations on what it's going to cost, and then they tack on a certain amount for the fair-wage policy -- now the fair-wage act. That's the dollar figure they go to tender with. That's the way the government is manipulating the books. I just wish they would be honest with the public and tell them that.
[8:45]
If the minister is saying that he has no studies or anything that can back this act up, then I'll just sit down and assume that the purpose of this act is political, to ensure that those people who support this government receive higher levels of income. The government takes an ideological position, and I can accept that. I don't agree with it, but I can accept it.
[ Page 11293 ]
Perhaps the minister should just say that, and we can move on.
Hon. D. Miller: There's that undercurrent of sleaze that we've come to expect from the Liberals. It seems to be all...
The Chair: Excuse me, minister.
Hon. D. Miller: ...they're capable of. They don't take positions on issues.
The Chair: Minister, I'm going to ask you to take your seat, please, and I'm going to ask the member for Fort Langley-Aldergrove to take his seat too, please.
We all know that expressions such as that are entirely out of order. Our purposes are not served one bit by using such language. I would ask members to please refrain. Will the minister please withdraw that comment.
Hon. D. Miller: Hon. Chair, I'll withdraw the comment.
The Chair: Thank you. Proceed.
G. Farrell-Collins: Hon. Chair....
Hon. D. Miller: I believe I have the floor.
The Chair: Yes. The minister, I believe, has the floor.
G. Farrell-Collins: Point of order.
The Chair: I thought the point of order had been dealt with. Perhaps on another point of order, the hon. member for Fort Langley-Aldergrove.
G. Farrell-Collins: Thank you, hon. Chair. I would ask the Chair's indulgence. That's the fourth time in the last hour, I think, that I've had the minister withdraw those same statements. I assume the Chair would find that the minister is doing that intentionally and would intercede without my having to interject.
The Chair: The member will note, I am sure, that I did intercede without your help. I certainly take your point. I am going to do whatever I can to ensure that the appropriate level of terminology and language is used here. I would ask all members to please recognize that nobody's interests are served by getting involved in a debate on points of order going back and forth from one side to the other.
J. Beattie: This is just to correct the record. I had the opportunity of being in the chair for the last hour. I know that earlier in the day the hon. member for Fort Langley-Aldergrove did have some altercation with the minister. However, since the House reconvened at 6:30, there have been no altercations and there has been no opportunity. I just want to clarify the record on that point.
The Chair: I appreciate your input. I would emphasize, however, that that is not technically a point of order. I would suggest that all of us would be better served if we let the debate unfold on the substance of the section rather than on points of order.
Hon. D. Miller: I would say that there's an easy way to stop this, but you know....
Interjection.
Hon. D. Miller: No, there's an easy way, and the member knows what I'm talking about. Certain statements will invite a response, and you'll get it from me every time.
Let's look at the record, because we've had some puffery from my hon. friend, the Labour critic. I think I've managed to get him on the record. It's pretty clear that he feels he has to satisfy some people. We know now that if the Liberals come to power in this province, the skills development and fair-wage policy and this act will be ripped up and thrown out -- and working people in this province can just say goodbye to coming to a Liberal government for any kind of protection. We now know that that is the case. I'm glad we have that on the record, because I think people need to know about that.
Let's deal with the real record here. Never mind the puffery we get. Let's talk first of all about.... I'm amazed at the number of projects; I've just been looking through a list here, and I'm staggered by the work that has been done in this province in a few short years. I look through my list of projects, and there are new schools and renovations -- total construction dollars. There are 73 projects ranging around this province. It's absolutely fantastic. The list of new schools, compared to the last government.... We know what these Liberals will do. I don't think they know what they're going to do, but I could make a pretty good guess.
I want to cite some numbers. Let's look at the pre-tender estimate.
G. Farrell-Collins: Here we go. I told you. You've fixed it ahead of time.
Hon. D. Miller: The member's mind is where it usually is, and I guess there's very little I can do about that. Maybe others will be the judge.
The total pre-tender estimate of all of this work was $1,127,922,554.18. It's breathtaking. It's a huge number with which to build new schools around this province, to renovate schools for British Columbia's students and to provide the kind of training we talked about earlier today. That was the pre-tender estimate. I'm now going to read -- again, it's a long number -- the total value, in other words, what it really cost. It's $1,110,461,976.37. It came in below the pre-tender estimate, despite this member over here. We know where he gets his marching orders. It's in the red book. This is the Liberal red book; it was written by some university professors for hire. We know where the Liberals get their advice; we know who they're taking orders from.
Let me quote from a manager, facilities branch, province of British Columbia, dated April 27, 1994.
Interjection.
Hon. D. Miller: With all due respect, it's not a he. That member has a tendency to assume that all the managers are male. Maybe his female colleagues need to be in this debate and enlighten that member somewhat.
Let me quote from this piece of information supplied by senior people in the ministry....
Interjection.
An Hon. Member: He doesn't like what you're saying.
Hon. D. Miller: No, he doesn't like it.
Let me read this:
[ Page 11294 ]
"Unit rates are an indicator of the cost of construction. Changes in annual unit rates take into consideration the actual costs of projects. Unit rates have remained constant over the period covered by the fair-wage policy" -- remained constant. "We have no evidence that fair wage is increasing costs and reducing the number of projects that can be supported by capital envelopes."
Hon. Chair, the evidence is real and tangible. I only assume that my friend, my Liberal colleague, has some ideological opposition that has got nothing to do with studies. It's ideology, pure and simple. If that ideology had been around.... If this member and his gang had been around in 1891, the House of Commons in the U.K. would have never passed fair wages. If this gang had been around in 1922 in the Canadian federal cabinet.... Was that a Liberal cabinet? Have the Liberals changed? For the worse? Yes. In 1922, if he had been a member of the Liberal cabinet, there would never have been a fair-wage policy order. If he had been a member of the House of Commons in 1930, there never would have been fair-wage legislation in this country. If he had been a Liberal member in any of these legislatures across the land, there never would have been the kind of protection that really is fundamental and has been around for over a hundred years.
What ever happened to the Liberal Party? Have they become so ideologically twisted because they've got a leader who's not really a Liberal? He's more right-wing than my friends in the Reform Party. Have they become so twisted and right-wing and captive of special moneyed interests that they're not prepared to stand up for average British Columbians in this province? I think it's a shame.
Why, even in the United States, even in Nevada, of all places.... I've never been in Nevada; I don't know the Governor. The Governor's name is Bob Miller, and he's a Democrat. That's not a New Democrat; that's a Democrat in the old U.S. tradition. Guess what he has issued. My goodness, that Governor of Nevada, that raving socialist, has issued an executive order directing state agencies to use project labour agreements on state public works projects. This man has actually ordered his state agencies to sit down with the construction trades in Nevada and come to project agreements, like for the Vancouver Island Highway. Guess why. Miller said that the project agreement, such as the one being used in the Boston Harbor cleanup project, "has proven to be of economic benefit to governments." The evidence is clear.
I guess at some point the member is seeking some comfort from studies. I predicted they'd use the dollar argument. If you recall my speech in second reading, I predicted the arguments of the opposition. They're so predictable. He's going to run around and claim: "Oh no, this is costing the taxpayers money; no schools are going to be built" -- and so on, despite the evidence. I predicted their arguments; they don't really have any. It's in line with the last debate on WCB -- a little healthy fear-mongering. "We'll avoid taking a position, and hopefully we'll slide under the door into power." And boy, it's a sad and sorry day when that happens in this province, because this is the original gang that doesn't know where they're going and what they stand for. They know they're opposed to everything we do, but that's not a good enough basis for having a political party. My friends in the Reform Party understand that. They have a basis for their policy. You guys haven't discovered one yet.
The Chair: Excuse me, members. Before I recognize the member for Fort Langley-Aldergrove, I would just like to point out to members that we're on section 2, purposes of the act. I entertained a very long speech ending with a question by the member for Fort Langley-Aldergrove. Similarly, I entertained a very long response ending with a declamation by the minister. It seems to me that we are wildly diverging from where we ought to be in committee stage debate. We have had second reading; we are now on section 2 of the act. I have given both sides roughly equal opportunity to state their respective ideological positions. It seems to me that we now ought to focus more specifically on the section -- i.e., the purposes of the act. I would therefore ask members to please comport themselves accordingly.
If I may, member for Fort Langley-Aldergrove, having said that, I think that in fairness I ought to entertain comments on this section from the member for Okanagan-Vernon for the third party, and then I will come back to you.
L. Hanson: I appreciate your bringing us back to the subject of section 2 of Bill 37, but I just can't let some of the remarks the minister made slip by. The minister suggested that in 1891, or whenever, there was a fair-wage act passed in Great Britain. There are a number of other acts passed, in Canada and the United States that have the same title -- fair wage act -- but any relation to the conditions of this act are remote, slim, nil, none and only in name. To suggest that that justifies this bill is totally ridiculous.
When the minister introduced Bill 37, he suggested there was a fair-wage policy in place, which we already knew, but that the policy wasn't working. That's why we have this legislation before us. I'd like to get back to the purposes of the act. Section 2(a) is to ensure skill development training in the construction industry. The minister quoted some figures about how many people are registered as apprentices in the construction trades. The minister also knows that people registered as apprentices have a formal education requirement as well as a practical experience requirement in order to attain their TQ certificate. I think it is most important to ask the minister if he has any studies or statistics that would tell us that the increase in the number of people registered as apprentices is due to the fair-wage policy. I suspect that there are an awful lot of apprentices who are looking for work to get in their technical hours, and that an awful lot of those apprenticeship registrations could be attributable to construction that is not under the fair-wage policy, because British Columbia -- no thanks to this government -- is a pretty active place as far as commerce is concerned. I suspect that if the minister did an in-depth analysis of how successful the fair-wage policy has been in increasing apprenticeship training for our young people, we might find a different story.
[9:00]
Certainly we are opposed to the fair-wage policy. We are not opposed to training young people for skills, apprenticeship or whatever. I'd like to know from the minister what justification he has for giving credit to the fair-wage policy for this increase in apprenticeship registration.
Hon. D. Miller: Very briefly, I think I was fairly temperate, not with respect to the comments I made to my Liberal critic but with respect to the statistics I cited on the number of registered apprentices declining between '92 and '94, but showing an increase in those apprentices registered in the construction trades. I did say, I believe, that one couldn't draw absolute conclusions from that. But it seems to me the trend is indicative. Where you get a 7 percent increase in apprentices in the construction trades and a decline in all others, then it's safe to conclude that the fair-wage policy has had some impact.
[ Page 11295 ]
I want to be clear. I don't think that this is or should be the only vehicle to induce training by apprenticeship. In fact, I feel very strongly that it's an area that's been sadly neglected. The last minister who paid it the attention it deserved was Mr. Heinrich of your former party. Through coercion, inducing and everything else, he managed to get the numbers up. I think all of us have kind of let the system down by not doing more. And we intend to do more. Clearly it's one of the major initiatives under the Skills Now package. I want to increase apprenticeships, do new apprenticeship occupations and all the rest of it.
I don't think I tried to state emphatically or conclusively that here was living proof embodying the support of the skills policy. And I appreciate the general support -- or at least the position the member appears to be taking -- that you're not fundamentally opposed to the notion of having this kind of policy.
G. Farrell-Collins: I have just a few comments. Then we can probably move on into the act. I stated earlier, and I think the minister understands, what's taken place with the pre-tender documents and the allotment that's made for the fair-wage policy on those documents. I have a number of those documents, which I'd be glad to show the minister. In fact, they've been raised in this House in question period. He can look through Hansard, or I'd be glad to get them to him if he likes.
Second, I have just a couple of comments in response. The minister made comments about Nevada and that the Governor of Nevada has just issued an executive directive setting up a sort of fair-wage policy or wage structure for projects. I don't think I need to remind the minister of who pulls the strings in the government in Nevada, of where those people come from and about some of their ties as they relate to the construction industry. I'll leave it at that. I think we certainly can move on.
The minister is aware of my position. He has been for some time -- at least, I hope he has; he says he hasn't. But certainly the other members have been. We've made ourselves quite clear. And we'll just have to move on to see what else the minister has to say.
Hon. D. Miller: I'm not quite sure I understood. Was the member suggesting that the Governor of Nevada is controlled by people in organized crime? If that's the case, I don't know. I'd hate to send those comments to the Governor. Without this member knowing anything about the Governor, the state or anything else, it's a bit of an insult, isn't it, to suggest that somehow a Governor of a U.S. state, simply because he issues a directive that they engage in project agreements -- the same project agreements they've entered into in Boston Harbor...? That this member has the....
I've been chastised for my reaction to some of the comments I've received from that member and members of his party. And I don't know how to take those kinds of comments. They seem to be quite.... I don't know. I'm a bit puzzled and perplexed. But if that's the tactic that's going to be employed by the Liberals, I guess that's the tactic that's going to be employed by the Liberals.
G. Wilson: I only have two questions specific to section 2. If they were canvassed before I was able to get back into the House, I apologize, and I'll read Hansard.
With respect to section 2(b), it says: "...to ensure high quality work standards on publicly funded construction projects by requiring that employees hold the appropriate qualifications." One of the difficulties is that when contracts are tendered and let, they are often sublet. While a list of subcontractors may be presented that may fulfil those qualifications, there doesn't seem to be a provision to make sure that when the work is actually done and construction completed, the list that was part of the original tender is the list that was used.
This is the subject of a private member's bill that I hope to table in the House in the next week or so. With respect to those lists, there is some concern that the lists that are a part of the tender are indeed the lists that are used, and that where local trades are a functional part of that list, those trades will get the benefit of the work, rather than have a tender issued on the basis of that list with local trades being given some opportunity, only to find that when construction commences, some of the subcontractors and subtrades brought in are not those that were part of the original tender. Can the minister comment on that?
Hon. D. Miller: A significant rationale in terms of this legislation is that we had some difficulty. I think that you always will with this kind of approach. I don't think that you can ever develop a foolproof system to ensure that people comply with the legislation or the policy. We do require statutory declarations on the part of the contractor. You will note that later in the bill. Through regulation, we are adding an enforcement provision that will allow the people in my ministry who will be enforcing the act to levy fines, the schedule of which must be approved by the courts. There is additional enforcement in there, but I suspect that enforcement is always an ongoing challenge. I would hope that contractors in this province would not knowingly make statutory declarations that are not true. We will do our best to monitor, to the extent that our people in the field can do that.
G. Wilson: I am fully aware of the content of both sections 6 and 7 of the act with respect to the provisions for statutory declarations. The reason I raise this under the purposes of the act is that those individuals involved in the industry who have read this act have questioned whether one of the stated purposes of introducing this act at this time is to provide the opportunity for local trades, that would only have an opportunity to be a subcontractor on those projects, to have some kind of inclusion in those contracts.
Let me raise a secondary issue that has to do with a project that is tendered in two parts with respect to construction. This is a sewer line, where one was tendered under fair wage and the other tender was not. The employees working on it have a variance in wage from $21 an hour to $10 an hour. I'm talking about the Lund sewer, and this is a very real problem. In those instances, it is argued that in order to facilitate cost savings on the second portion of the same project, but separately tendered, appropriate qualifications have not been considered. Subtrades have been brought in that don't meet the standards that would be the stated purposes of this act. Maybe the minister can comment on that.
Hon. D. Miller: First of all, was part of your question devoted to the issue of whether or not there should be a requirement for the employment of local people? That's not in the act, and certainly that's something for broader consideration. Clearly, we can do that, as we have in the Vancouver Island Highway agreement, in which we've made provision for additional apprenticeships, local hire and opportunities for equity groups. You'd have to sit down and
[ Page 11296 ]
negotiate those. I'm not certain we'd want to include that in fair-wage legislation.
Where people have knowledge that there has been abuse, by contract-splitting and those kinds of things, I would urge them to let people in the employment standards branch of my ministry know, and we will investigate. I did indicate in my last response that it's an ongoing challenge to police the act. Ultimately it requires contractors to be forthright in their statutory declarations.
G. Wilson: By way of this committee debate, let me just raise for your staff's attention the construction of the Lund sewer, tendered by Dayton and Knight. I'll just leave it at that, and we might talk about that elsewhere.
Section 2 approved.
On section 3.
L. Hanson: The criteria for the fair-wage policy are now set by an amount spelled out in the policy. I think the level is $250,000 of government funds. This section would allow that amount to be changed by regulation, which they can do now. I'd like the minister's comment on how he thinks the regulation might read. Is it going to be severely reduced from the threshold we see now, or is it going to be roughly what we experience right now?
Hon. D. Miller: We intend to maintain the current threshold.
Sections 3 and 4 approved.
On section 5.
L. Hanson: This is really the same question I asked on section 3. The wage level will now be set by regulation. Is it the minister's intention to set it at the same level that has been published with the fair-wage policy?
Hon. D. Miller: The answer is fundamentally yes. In other words, we're not proposing to increase wage rates currently in the schedule by 20 percent across the board. Unfortunately, I'm not in a position to give you a detailed answer at this point, but there may be some minor variation with respect to unticketed people. I think the answer you're seeking is yes. We don't intend to make any fundamental change to those wage schedules.
[9:15]
L. Hanson: For the purposes of clarification, the rate now is set at, I believe, about 10 or 15 percent less than the journeyman rate, and it's the minister's intention to follow that same policy with some minor variation.
Hon. D. Miller: That's correct, but I'm advised that it may be around the 22 percent range.
Section 5 approved.
On section 6.
G. Farrell-Collins: I notice that the government has gone to some length to ensure that this policy is followed. While I disagree with the policy in principle, once the government makes the political decision it's important that it be seen to apply fairly to all contractors and employees.
We're getting into a series of sections, right up to section 12, that fundamentally deal with the enforcement and administration of the act. Can the minister comment on whether or not he has any future plans to bring in some of the other provisions, whereby pay is withheld from a contractor until employment and pay levels have been proven to be at the fair-wage act rate?
Hon. D. Miller: I'm going to give a careful answer here. I have not engaged in any discussion within my ministry that contemplates further changes to the act. I also want to be clear that governments have the right to make changes to acts at any time the legislature is sitting, providing it can get it through the House. We have no current plans. I'm not trying to be coy about this, but I want to be clear. If amendments are proposed in subsequent years, I don't want someone to come back and say: "Well, you said you'd never change the act." We think we have some flexibility with respect to withholding in some situations where there has been non-payment of wages, but that doesn't require a legislative change.
G. Farrell-Collins: That's as fair an answer as we can get. It's straightforward. I was concerned because the provisions in section 6 deal with the withholding of initial payment until statutory declarations have been filed. I was wondering if the minister was looking at the other end, at the completion of a project, and using this as a means of enforcement. I was just seeing what the direction was of the government and the ministry. I'm pleased with the comments, and I think that's about the maximum we can hold the minister to.
R. Neufeld: I have a bit of a hypothetical question here. I maybe should have asked it under section 5. Presently, the government hires young people through agencies to do contract work. Are those agencies going to have to pay fair wages now to those people that they supply to government at certain periods of time? There are an awful lot of young people out there who are trying to develop their skills. They may already have tickets in some areas and are apprentices of sorts. But when they are hired through an agency, it usually takes a couple of dollars an hour or something off what government pays. Is government now going to make sure that those people are paid the fair wage?
Hon. D. Miller: The danger of engaging in hypothetical debate is that it's just that. If you can't illustrate the hypothesis with some actual event, then getting precise answers is somewhat difficult. Clearly the act doesn't apply to individuals who may be hired on a part-time basis. Given the nature of the contractual arrangement we have with government employees, I would think it highly unlikely that we would ever hire people -- of the nature you describe -- on a part-time or temporary basis who were outside the collective agreement we have with our employees. So I really think it's much too hypothetical for me to give you an answer. I don't know; maybe I've given you an answer that's good enough. It doesn't apply to individuals; its major impact is on the typical array of construction projects that are financed by government.
The only other circumstance I can recall where we did take some action -- and quite appropriately, I thought -- was when I was in the Forests ministry and the contract firefighters up in your region, I believe, were in our view not performing as well as the crews we employ directly. And to make matters worse, although the costs were about the same, we discovered to our dismay that the employees for the
[ Page 11297 ]
private sector were earning just the bare bones in terms of the minimum wage rate, yet the people who we employed were earning a decent wage. We took steps to rectify that, and I believe you supported that change at the time. But that's not really germane to this act.
G. Wilson: I raise a similar question to the one that I raised under the purposes of the act. Given the amount of obligation set out with respect to compliance with this act on matters of subcontractors, and so on, that are part of the construction, I wonder why some form of past performance bond would not have been included in this statutory declaration for us to look at. Why wouldn't that be part of a statutory declaration in this particular section?
Hon. D. Miller: Again, while I appreciate the nature of the question -- clearly it's an issue that has had some, albeit limited, debate -- I think it's more appropriate with respect to tender documents or tender policy than it is to the Skills Development and Fair Wage Act. If there were a contemplation.... I think there has been some discussion; I haven't followed it that closely. But some of the general issues that I know have been raised in general terms in the discussions that I've had have had to do with performance, with not necessarily accepting the lowest tender, and with looking at the ability to do the work. These tend to be difficult issues. It is unfortunate, because I know that they have a little broader scope in the private sector and, as a result, can get what they want more. The problem at the public level is that anytime there's a variance from a strict policy, you start to get allegations. There's no simple way around that.
I think governments should be trying to get the absolute best value for the money that they put out. Years and years ago I had some work in the Highways ministry. I know that on occasion, if they thought the tenders or bids received on particular projects were totally unreasonable, the ministry would actually do the work themselves. It kept people honest that way; a bit of honest brokering took place. The short answer is that I think it's probably more relevant to issues of tender documents and tender policy.
Sections 6 to 17 inclusive approved.
Title approved.
Hon. D. Miller: Hon. Chair, I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; D. Lovick in the chair.
Bill 37, Skills Development and Fair Wage Act, reported complete without amendment, read a third time and passed.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 9:32 p.m.
The House in Committee of Supply A; G. Brewin in the chair.
The committee met at 2:43 p.m.
ESTIMATES: MINISTRY OF FINANCE AND CORPORATE RELATIONS
(continued)
On vote 33: minister's office, $342,581 (continued).
Hon. E. Cull: I will introduce the two new staff members who have joined us: my deputy, Mike Costello, and our chief financial officer, Brian Mann. We also have with us Bruce Sampson and Doug Pearce, who are with provincial treasury.
F. Gingell: We spoke briefly at the end of last session on the government employee suggestion program. I understand that each ministry has its own small envelope, and you have the envelope for your ministry and for those suggestions that cut across ministry boundaries. Could you please advise me how much was awarded in 1993-94 in this program, and what you have budgeted for 1994-95?
Hon. E. Cull: Would the member please clarify if that is in our ministry or across government?
F. Gingell: The amount paid out through your budget. Actually, if you can split them, that would be fine. While they are getting that number, I wonder if the minister could give me some of the best examples of these suggestions last year.
[2:45]
Hon. E. Cull: As the member says, he has caught us a little short-handed here looking through our briefing books. I know that we have given out three awards recently in the ministry. There was one in our companies branch for an improvement in the way registries were done. I'm uncertain as to what the other two were; I need to find my notes. With respect to the exact amount in the ministry, you'll have to wait till we look that up. This isn't a figure I have at my fingertips, although I could provide it to the member. Overall, the program has generated significant savings to government -- last year in the order of $4 million.
F. Gingell: I would presume the order of magnitude of the awards made were substantially less than $4 million.
Hon. E. Cull: Yes. As the member is aware, the award is dependent on whether the saving is significant government-wide or just within an individual ministry or branch. Only a proportion of the savings are made available as payments to the person who made the suggestion. I understand that in 1993-94 the Ministry of Finance paid out $8,334 for projects that were within our ministry. Many times that amount of money will be saved by the ministry and a fraction of the money saved is then returned to the people who come up with these excellent cost-saving ideas.
[ Page 11298 ]
F. Gingell: I'd like to move on to treasury functions. There's been a significant increase in the use of derivatives and other products in order to manage the exposure to interest rates and foreign exchange risk. Could the minister please tell me the procedures for setting policies for the management of interest rates and foreign exchange risk, which parties are involved in drafting these policies, and who approves them?
Hon. E. Cull: I'll have my deputy answer that question.
The Chair: I recognize the deputy minister.
M. Costello: Within the Ministry of Finance there is a risk management committee which oversees the operations of provincial treasury with respect to the use of derivatives such as interest rate or currency swaps. This same committee reviews the borrowing program and strategies of the province on an ongoing basis. The committee is chaired by me, as Deputy Minister of Finance, and the committee's staff are from provincial treasury. The committee has been in place for approximately a year, and it formalizes what had been an ongoing process of approvals for the management of treasury.
F. Gingell: The people on this committee are involved in the process and draft the policy. Do the same people approve it, or does approval move up to Treasury Board?
M. Costello: As officials in the Ministry of Finance, we are fully accountable to the Minister of Finance. The Treasury Board's role with respect to treasury is more limited than it would be, for example, on the expenditure side of the budget. Our treasury operations clearly come under the Minister of Finance and the minister is obviously made aware of significant treasury policies as they apply -- for example, borrowing in a new market. But the day-to-day and month-to-month monitoring of those operations is done through the mechanism of this committee.
F. Gingell: I wasn't focusing so much on the monitoring as on the creation of a policy. What are the guidelines or rules for the committee staff who are also the people involved in the process on a day-to-day basis? My question is more focused toward whether this clearly enunciated -- I would hope -- policy, with a briefing attached to explain it, goes on for approval to you or to the minister or to cabinet?
M. Costello: The GIS management committee approves plans that are approved by the Minister of Finance -- for example, a quarterly or annual borrowing plan would be approved by the Minister of Finance. We obviously operate under the Financial Administration Act, so the committee would be concerned with putting in place policies as to which level of the organization can undertake specific transactions, to use an example. And we would be governed by the delegations pursuant to the Financial Administration Act as to which level within the ministry has the delegated authority to enter into a transaction on behalf of the Crown, for example.
F. Gingell: Recognizing that all these products are relatively new, and that they change and new products come out, could the minister tell me how often the existing policies are reviewed to ensure that they meet the changing criteria of the changing product offerings?
Hon. E. Cull: Obviously that's an ongoing process. My staff are constantly trying to stay abreast of what's happening in financial markets, looking at new products and looking at the best ways to invest taxpayers' money and also to raise money for capital spending and the operations of government. It's an ongoing process, one that I think our privy treasury performs particularly well.
F. Gingell: I wasn't intending in any way to criticize the performance. I'm trying to get a good feel for who makes the decisions and how those.... I mean, the decisions aren't really the day-to-day decisions on buy, sell, swap, cancel or renew; they are more decisions that set the parameters for what government believes is appropriate for this division to take part in, recognizing that things do change and that there is substantial exposure. I'm trying to get a feeling for who, in the end, puts on the good-housekeeping seal of approval: yes, you can do these operations within these parameters.
What you've said to me is that the risk management committee -- which is chaired by the deputy minister, who reports to you, the minister -- is doing that. If that is correct, I want the assurance that when those policies change because of changing circumstances within the market, there is a process that allows you to react quickly to marketplace realities.
Hon. E. Cull: The answer to the member's question is that it varies depending on the nature of the decision. In some cases, the minister would be involved in setting the policy direction. In other cases, it would be done through this risk management committee. In some cases, it would be done by individual financial analysts within the ministry who would be making decisions based on delegated authority.
Obviously, annual and quarterly plans are approved by the minister in making overall budget decisions. Policies are established that affect provincial treasury through the budgeting process. However, if we're looking at things like how much exposure we would have to a particular financial institution, that's not a decision I would make. Those kinds of decisions would be delegated down through the ministry; the appropriate level would be determined by the magnitude of the decision and the degree of risk that it entails.
F. Gingell: Do I take it that the policy or the agreed-upon plan authorizes the person to whom the authority has been delegated by name rather than by office and that there are monetary parameters around that delegation?
Hon. E. Cull: It would be by position and not by name. Yes, there are monetary limits placed on the delegated authority.
F. Gingell: I recognize that you're in a fairly young business with very few people who are knowledgeable in this area, and I'm sure that can cause you problems. Do you have any criterion that sets the level of experience or the period of time the individual has been with the ministry before responsibilities of this nature are delegated?
Hon. E. Cull: That type of qualification is reflected in our hiring criteria. We wouldn't hire somebody to be a senior financial analyst without the appropriate qualifications, and all of that would be reflected in the decisions made about placing people in particular positions.
F. Gingell: If I may give you a word of warning, there are lots of people out there who tell a very good story. Read the
[ Page 11299 ]
papers and see what's happened to many people who are dealing in these derivatives. I take it from what the minister said that there is a quarterly plan. Could the minister assure me that there is a complete and thorough evaluation of the results against the plan that is moved up through the levels of responsibility?
[3:00]
Hon. E. Cull: There's a very good external review of the actions of provincial treasury. With respect to our investment decisions, we have external managers. The auditor general, of course, will be reviewing our decisions as well. On the debt side, it's a bit newer, but we are moving to external review so that we have the ability to make sure that we are performing as well as we possibly can.
F. Gingell: I'm pleased to hear that. I presume that this will be a contracted arrangement done on a periodic and spot-check basis. I was wondering if you could tell me the frequency of the reviews and assure me that it is done by some external group on a regular basis.
M. Costello: I would like to elaborate on the minister's comments. With respect to our investment portfolio, there are external measurement firms that measure the performance of our investment portfolio for our various clients within the public sector, and those performance reports are made available to us and to our clients. On the debt side, to my knowledge there are no firms in the business of being external measurement firms for clients, but we are working with expertise in the private sector to develop a model which will evaluate the performance of our debt management activities. The preliminary results of that are actually referred to in one of the appendices of the March budget.
In terms of external review of transactions and authorities, we're entering into transactions, as the minister indicated. This is done on a day-to-day, week-to-week basis by the auditor general and by our own internal audit staff.
F. Gingell: Has the auditor general done a review of the debt management side of treasury?
Hon. E. Cull: The auditor general right now is in the process of doing a value-for-money audit of our debt management branch. But there have in the past been narrower audits and reviews of various parts of it. I don't know whether in the past there's ever been a more comprehensive one done, but one's being done right now.
F. Gingell: One reads the reports in the media about the disasters that have taken place. These have normally been the result of circumstances in which staff have not followed instructions, have had something go wrong, or in a small way have ignored their instructions in the belief that things were going to change and they would become heroes. I wonder if there has been any instance this year or last where debt management practices and decisions have not followed the established policies.
Hon. E. Cull: No.
F. Gingell: In dealing with the problems of staffing this division, has the ministry had any problems in finding people with the right level of qualifications? Can you advise me not the names but the numbers and the type of experience of people you have hired to manage this area?
Hon. E. Cull: As the member will appreciate, this is a highly specialized field. We are looking for the best people, and in the public service sometimes the salary rates make it very difficult to compete with the private sector in all categories. I believe we have been very fortunate in attracting highly qualified, very competent people. I think this is shown in the extremely good results from the performance of our provincial treasury, as the member himself has acknowledged. From time to time we do experience difficulties in filling particular positions, but overall I think we have been quite fortunate in finding good, qualified staff to perform the services to the province.
F. Gingell: I wonder if the minister could advise me how much money is in her 1994-95 budget to allow these risk management staff members on treasury side to attend courses, workshops and those kinds of developmental programs.
Hon. E. Cull: Staff training and the support of the professionals who work in the ministry is a critical aspect of our success. I'm sorry, but I don't have the exact budget for staff training and development within this particular branch. We allow our professional staff to attend national and international conferences so that they can keep abreast of what's happening in the field. We're very proactive in this regard. I mentioned a minute ago that public service salaries are sometimes not as competitive with the private sector as some would like, but one way we have been able to offset that to some extent is to ensure that we have good continuing education benefits.
F. Gingell: Staff training and development, in my mind, splits into two types: the things appropriate for senior staff to go to, such as conferences and places where they're going to get into good workshop environments to deal with these issues; and the ongoing night-school type of programs where staff can attend regularly or for concentrated courses. Have you been able to find any program offerings that are suitable for this particular area?
M. Costello: The professional staff in treasury avail themselves of a wide range of courses. In the investment branch, for example, quite a few staff are enrolled in the three-year Canadian securities course, and from time to time, staff in the debt management branch or the investment branch go to a very specialized course on the use of derivatives, for example, sponsored by agencies such as Euromoney. The financial institutions themselves frequently put on courses for their clients, of course, to inform them of new products. I should also add that among public sector investment and debt management professionals, there has been a number of symposiums and conferences put on among themselves -- that's more at the senior management level -- to inform themselves about capital markets and new techniques in the business. British Columbia was instrumental in beginning a program of western provinces exchanging information among treasury professionals, just to be sure that we're all on top of what's happening in the marketplace.
F. Gingell: Good. I'm pleased to hear that.
Perhaps the minister could advise me of the number of persons in the risk management area who are what you would call "senior" people, those who make decisions -- everybody but support staff -- and the amount of turnover you have experienced in the past couple of years.
[ Page 11300 ]
Hon. E. Cull: Risk management is something all our professionals do on a day-to-day basis, so there isn't a group that is established to do just that. In the debt management branch, there are ten, and in our investments branch, there are 18 professionals. The turnover I think you were inquiring about is a few a year; it's not particularly high.
F. Gingell: The area of risk in many of these products is not only in whether the market moves up or down or what side of the action you have as those market fluctuations take place. Perhaps the even larger risk is that of the financial competence or solidness of the counterparty. Could the minister please advise me what measures you use to measure the creditworthiness of these counterparties?
M. Costello: The provincial treasury and the Ministry of Finance spend a lot of time analyzing the creditworthiness of counterparties to financial transactions, such as interest rate swaps and the like. We have a group within treasury that evaluates the creditworthiness of the counterparties, and, of course, we rely heavily on the credit ratings that are provided by the four North American credit-rating agencies. There are rules that, by and large, counterparties to transactions have to be at least AA in their rating, roughly speaking. So we ensure, as best we can, that the counterparties have a sound financial base.
F. Gingell: I take it that outside the risk management group, another group approves a list of counterparties that you're willing to do business with.
M. Costello: There are a few people in the investment branch, and part of their job is to perform the analysis of the credit worthiness of financial institutions, for example, and actually set specific limits on the amount of deposits we will allow in financial institution A versus B. There are a few people in the investment branch who update that as required, or at least on a quarterly basis.
[3:15]
Within the provincial debt management branch, there are obviously people who keep an inventory of the financial institutions that are potential counterparties, and they pay heed not only to the investment branch analysis but to the credit rating provided by Moody's, Standard and Poor's and so forth.
F. Gingell: I'm wondering if the minister has considered allowing the development of a list approved specifically by the people in the investment branch who, I would presume, have no say or action in and are not part of the policy or management of the debt management branch, so that those two responsibilities are clearly separated.
Hon. E. Cull: I'm not really sure what the member is getting at with respect to this question. Is he suggesting some separation so that one branch makes a decision and another branch has some separation from that? I don't think that would work the way our provincial treasury is actually functioning -- everything inside is transparent, in any event.
F. Gingell: When one buys an interest rate swap or a currency swap, there's a party on the other side of that transaction which is normally a bank or a financial institution. Your investment branch has financial analysts who are able and competent to evaluate the creditworthiness of those concerns. They might be evaluating that for the purpose of determining whether or not you might put money on deposit there, but they have those skills in place.
An appropriate policy would be to have an approved list of counterparties prepared by people outside the debt management group. Their function would be to put their good-housekeeping seal of approval on the deal, and to say: "If you wish to make a deal with Chase Manhattan Bank, we're quite happy for you to do that up to, say, $100 million."
Hon. E. Cull: The concept of an approved list is there, as my deputy just explained. There are rules set with respect to the credit ratings and whom we do business with. I guess they are developed by somebody other than those doing the business, because we rely on the ratings from bond-rating agencies, like Moody's and Standard and Poor's. We do have a list that is developed with a set of criteria with respect to their rating. Having developed that list, when we're going to do a swap, we ask for competitive bids. So I think the elements of what you're asking for are there in the process that we have within provincial treasury. It's not quite the way that you have suggested it should be, but I think the aspects of what you're looking for are, in fact, there.
F. Gingell: I'd just like the assurance that the people that you will accept competitive bids from are only the people who are on that list, and you don't necessarily accept the best bid.
Hon. E. Cull: Yes, the companies that we would invite bids from are the ones that are on the list.
F. Gingell: In no way would I wish to impugn or say anything about the creditworthiness of our own province, as determined by the credit-rating agencies. But credit-rating agencies didn't find out about Metalgesellschaft until it was too late, and they probably didn't find out about Campeau and the Bronfmans until it was too late. I just want the assurance of the minister that the development of this list of approved counterparties relies much more heavily on a proactive approach from your staff than it does on reading the report of an eastern evaluation rating service.
Hon. E. Cull: I'm happy to confirm that that is, in fact, the case.
F. Gingell: When you're dealing with the interest rate and the exchange swaps that you have at any particular time, are there predetermined caps and floors on those contracts that cause you to fold them up when they hit either the cap or the floor?
Hon. E. Cull: Yes, there are targets set, and we would not do a swap unless we could achieve that target.
F. Gingell: When I was being briefed by your staff -- for which I thank you -- I was given a graph that deals with the province's debt maturities. It looks something like the coast mountain range with a whole bunch of prairie land afterwards. The coast range is relatively close; you have a great deal of debt falling due in 1995-96. I wonder if the minister could advise us what steps the ministry has taken to ensure that they can be refinanced as they fall due -- unless you're planning on retiring them, and I don't think that's the case.
Hon. E. Cull: The member's no doubt aware that we have sinking funds that assist us in retiring our debt. We attempt to level out the maturity so that we don't end up with an excessive amount of debt coming mature and needing
[ Page 11301 ]
refinancing in any given year. I can't put my fingers on the graph I see the member looking at, but I have seen it before. Certainly, if you compare it to what's happening with respect to overall Canadian debt, ours is a much flatter curve than that of, say, Canada itself. We attempt to manage it so that we avoid the risk of having too much coming due all in one year.
F. Gingell: So the difference between the dark and the light is sinking funds.
Hon. E. Cull: Yes, that is the case. In fact, if you look at the next ten years, I think the largest amount of debt that we have maturing is $1.2 billion in any given year.
F. Gingell: Would the minister make a commitment that under no circumstances, at no time, will that be added to?
Hon. E. Cull: Good joke!
F. Gingell: Well, I was serious, as a matter of fact.
In this past couple of months, we saw the announcement of the province entering into Eurofunds. Could the minister advise me, please, if all those borrowings are in your issues or are any of them in specific currencies or ECUs or whatever?
Hon. E. Cull: Before I move on to the question of the Euro issue, it's important I put on the record that those who are asking us not to add a penny to the debt are also asking us not to build any schools, hospitals, colleges, universities or make any other major capital investment in the next year. The member asked whether I would confirm that we would not add to the provincial debt; I laughed and he said it wasn't a joke. In a province like British Columbia, which is growing at the rate that it is, very few people would see that as a sensible public policy.
Regarding the Euro debt issue question, many currencies may be involved, but they are all hedged -- at least to date they've all been hedged -- in Canadian dollars.
F. Gingell: Have they all been hedged 100 percent?
Hon. E. Cull: To date there have been two such issues, and they have been hedged in Canadian dollars.
F. Gingell: Have they been hedged all the way to maturity?
Hon. E. Cull: Yes, they're fully hedged.
F. Gingell: I'd like to move on from management issues to investment issues. Perhaps a good way for the minister to start is by giving me an understanding of exactly how the ministry sees the role of the chief investment officer. I appreciate that a bill is in front of the House, but we are discussing investment practices. I need to know exactly how the creation of a chief investment officer, if that's the right term, will affect current processes and procedures.
Hon. E. Cull: Our chief investment officer takes his policy direction from the minister or from the managers of the various funds that he is responsible for investing. His fiduciary responsibility is ensure that we have the best rate of return possible on all funds. His responsibilities are carried out with that criterion in mind.
F. Gingell: As I understand it, the bill moves some responsibility and authority to this chief investment officer, which is a new title. Could you confirm that it is being created? How will this work from a practical viewpoint, and how will it change what is now in place?
[3:30]
Hon. E. Cull: Hon. Chair, I will take some direction from you on this. Perhaps the member doesn't intend to stray too far into legislation that is before the House; we will obviously have ample opportunity to debate it then. The title is new; however, the position is filled by Mr. Pearce. The procedures that we are putting into law are the procedures that we now have in practice in the ministry. We are going to put them into law to ensure that it's very clear where authority has to be delegated by me and where decisions that can be made by the minster to the chief investment officer have to be in writing. Those are all the types of things that Justice Seaton recommended to make it very clear to the public that there is an arm's-length relationship between the Minister of Finance and the day-to-day investment decisions of the provincial treasury investment branch.
The Chair: Hon. member, relating all questions to the budget is the purpose of our gathering today.
F. Gingell: Thank you. We are, as you appreciate, hon. Chair, dealing with the processes and procedures that will, in the year that the budget estimates cover, manage the investment of these funds. So I'd like to ask the next question.
There will be a change in this legislation to allow investments to be made in securities that don't meet the legislative criteria that are presently in place. I'm making an assumption that the legislated criteria presently in place are for pension and trust funds, and those deal with dividends paid over a certain number of years and a market price that is greater than a floor and traded on a particular stock exchange. So if there is going to be a change in that policy, and you're saying to me that we're bringing in practices that are happening right now, are you also saying that investments made by provincial trust funds in the past have not met the requirements of the...? I can't think of the name of the act, but it's those investments in which Canadian pension funds and life insurance companies are allowed to invest in.
Hon. E. Cull: Well, we are starting to stray into legislation, and we will talk about the prudent-person rule as opposed to the designated list of investments when we get to that amendment in the act.
Let me clarify. There has been no case in the past that I am aware of or my staff are aware of where we have not been within the rule of the various acts that govern pension plans and investments. But what we are doing in that piece of legislation -- and I stray a little here -- is providing a more modern rule, which has become standard throughout North America, I guess, but certainly across the country, with respect to investments. We are moving from an outdated list which no longer serves us in the 1990s.
F. Gingell: The answer is exactly what I was looking for: an assurance that to this moment in time, all the trust funds that are entrusted to your ministry's management have in fact met the requirements of the law, and such is the case.
I want to move on to the type of investment mix that is the present policy of the investment branch. Do you have any rules of thumb for maximums that set limits on investments
[ Page 11302 ]
in specific corporations in relation to the size of the total fund?
Hon. E. Cull: Could the member repeat the last part of his question? The first part was about the rules for the mix of investments, but I didn't quite catch the last part.
F. Gingell: It was actually only one question. Are there any rules dealing with the mix of the investments that limit the amount of investment from any of these funds in one specific company -- i.e., the percentage of that corporation that you might own or the percentage of the value of the fund that is invested in that one corporation?
Hon. E. Cull: Each trust fund has different roles with respect to asset classes and the percentage of each asset class that can be held in the fund. The only thing that I can think of in terms of a specific company would be the requirement under the Securities Act to report when more than 10 percent is acquired.
F. Gingell: I wasn't thinking of that so much as I wondered if there was an internal policy that said all British Columbia trust funds, when aggregated, won't own more than 5 percent of any corporation, whether it be Bell Canada or Alcan.
Hon. E. Cull: There isn't a policy or a rule on this matter, although I'm advised that my staff do monitor it and, as I said, as an operating behaviour, attempt to not get much beyond 5 or 10 percent, depending on the fund and the company. If you're looking for guidelines, rules or policies with respect to particular companies, there aren't any.
F. Gingell: When we come to the B.C. Endowment Fund, the privatization fund, its most significant investment, in my mind -- well, it was the largest one, but it was significant for other reasons, such as the relationship between the company and the province -- was the investment in Westcoast Energy. When the report was put out, all we saw was the current market value of the fund and the number of shares that were held at a particular date. From memory, I think it was something like September 30 or December 31, 1993.
Can you advise the committee, please, whether any Westcoast Transmission shares have been sold? I have the amount of the investment being reduced from the original acquisition, which, if I remember rightly, took place at the time Petro-Canada decided to liquidate that investment.
Hon. E. Cull: What's reported, as of September 30, is the most that we have owned. We did not sell any shares between an initial acquisition date and the reporting on September 30.
F. Gingell: Recognizing that the last chunk probably had to be acquired at one time, did the investment branch have any clear intention to move out some of that stock out but were unable to do so because it didn't reach their market expectations?
Hon. E. Cull: In response to my last answer, which was that we didn't sell any, I think the member was implying that we didn't sell it because we had difficulty selling it. In fact, the stock price, I understand, has gone up throughout the time that we've held that stock, and, in fact, that would give us a good reason for holding onto it as opposed to trying to sell it. I'm not aware of any plans or attempts to sell it or of any difficulties we had in doing so.
F. Gingell: Recognizing that this is the way life is -- everything that goes up usually comes down again -- the key is to hit it at the right spot. The reason I've focused on Westcoast Energy is that it is such a large investment in relation to the B.C. Endowment Fund. I'm not sure how much Westcoast Energy stock sits in the other trust funds you have. It's not only a large amount in relation to the variable fund, but it's also a fairly large portion of Westcoast Energy's total issue share capital. I was wondering if the minister could advise me whether or not any Westcoast Energy shares have been sold since that day.
Hon. E. Cull: I'm just going to take a minute to explain this. I can't answer that question; in fact, I don't know the answer. It would be inappropriate for me to know the answer. One of the things we have done as a result of trying to ensure that there is no cabinet involvement in these decisions is deal with the information with a six-month time delay. So I am aware of the status of the B.C. Endowment Fund, as all members are, as of September 30, 1993. When we get our next six-month report, we will then know what the time is going back another six months.
I want to be very clear to all members that I have been scrupulous in making sure that I am not aware of the day-to-day decisions of the fund, and it would be inappropriate for any member of cabinet to be in that position.
F. Gingell: I wasn't asking for the cabinet to be told; I was asking for me to be told.
Hon. E. Cull: There could be a leak.
F. Gingell: Not from me.
Some of your investment trust funds have December year-ends, and some have March year-ends. In the Public Accounts, which are the most recent public documents for details of these funds, some of the information is as late as December 31, 1992. I think the pool investment portfolios have March year-ends. I was wondering if the minister could advise me as to what the returns were in the pool investment funds and the various trust funds in 1993, or the year ended on March 31,1994, and how they compared to previous years.
[3:45]
Hon. E. Cull: Let me start by answering this with respect to the pension funds as a total and the endowment funds as well. According to the latest figures I have for the pension fund, the one-year rate of return is 9.2 percent, the two-year rate is 11 percent and the five-year rate of return is 12 percent. The Endowment Fund has a much shorter history, of course. The one-year rate of return is 17.7 percent and the two-year rate is 17.5 percent.
F. Gingell: Let us deal first with the pension funds. Was that 9.2 percent rate of return for the year ended December 31, 1993?
Hon. E. Cull: March 31, 1994.
F. Gingell: Can you tell me what the rate of return was for the year ended March 31, 1993?
[ Page 11303 ]
Hon. E. Cull: I unfortunately don't have that figure here with me. For two years, as I have just said, it was 11 percent, so the March 31, 1993, figure was obviously higher.
F. Gingell: I might suggest it was 12.8, when I think about it. Are the Endowment Fund numbers for March 31 year-ends?
Hon. E. Cull: Market value at March 31, 1994.
F. Gingell: The pooled funds are split among a whole bunch of separate trust funds. Can the minister advise me if these rates of return were the same for virtually all the trust funds? Were there any big winners and losers?
Hon. E. Cull: If you look at it over a longer period of time, the rates of return are very similar across all the pension plans. If you look at the five-year rate, it's almost bang on 12 percent for all the plans. If you look at the one-year rate of return on the plans, however, it varies, with everything from 14.6 percent for the teachers to 6.4 for the municipal. The difference there is the diversification of the investments: the fact that one is in equities and one isn't.
F. Gingell: In an earlier life I used to sit on the Teachers' Pension Board, and that body had absolutely no say in any of the investment decisions, or even policy. We were told, in fact, that it was none of our business. Has that now changed? Are bodies able to have input into the investment mix and the investment policy of the separate funds?
Hon. E. Cull: We have been talking to the various pension funds over the past year or so to put in place a new and more structured form of governance. There have been advisory boards all the way along, but we will be moving to formalize the management committees that have been struck in the last year through legislation during the session.
F. Gingell: I sympathize with your desire to change the investment criteria and legislation from lists approved for life insurance companies, etc., to that of a prudent investor, with the prudent proviso that it's better to be a pretty prudent investor.
Some studies must have been done -- or some thought given -- to anticipated additional rates of return that might be earned by these funds as a result of the policies that one anticipates being in place for this current fiscal year.
Hon. E. Cull: Over a period of time, adding equities to your investment portfolio probably adds about 2 percent, compared to simply having bonds in your investment portfolio. Because you've diversified, the risk also goes down as well. You not only get a better rate of return but you reduce your risk because you've been diversified.
F. Gingell: You're not in any way restricted from equities at this point, are you? I thought you were only restricted to equities that met a criterion.
Hon. E. Cull: Some public sector pension plans have moved into equities and some haven't. Obviously the municipal and public service plans have not yet done so, because plan members requested that before diversification took place, which was permitted as a result of the Pension Benefits Standards Act, the new governance system should also be in place. The other ones had equities and an amendment was made to legislation -- for teachers, I think -- to allow this some time ago. The two that still have to come in are municipal and public service.
F. Gingell: I presume the 16.4 percent rate of return, which I'm sure you've mentioned quite loudly, has been an incentive in this matter.
Does the provincial government presently have what we would call mortgage-backed securities, and does the ministry believe these to be a prudent investment?
Hon. E. Cull: I understand we have a very limited amount of CMHC mortgage-backed securities.
F. Gingell: A security that is backed by a mortgage is backed by a federal government guarantee, is it not?
Hon. E. Cull: Yes, that is the case.
F. Gingell: There is quite a large market now for mortgages that are put together in a marketable package with an active market attached. Does the provincial government consider them to be suitable securities to invest in?
Hon. E. Cull: That's something that we're looking at right now, but we haven't reached a conclusion as to whether it would be suitable or not.
F. Gingell: The next jump, of course, is into real estate. Does the ministry consider that real estate investments would be appropriate -- in a direct fashion rather than investing in a corporation that is real estate -backed?
Hon. E. Cull: Of our total $31 billion of investments, 1.6 percent is in Canadian commercial mortgages and in a pool of real estate with other pension funds.
F. Gingell: Has the government at any time considered selling B.C. Buildings Corporation to such a pooled investment fund?
Hon. E. Cull: Not that I'm aware of.
F. Gingell: I'm all through with treasury. Mr. Weisgerber advised me that he.... I have one last point while the comptroller general is here. When we publish the public accounts, could you ensure that the name of the organization is on the top of every sheet? Some of them are, and some of them aren't. The only one I can find is the Workers' Compensation Board. That's the one I got lost in the middle of.
[H. Giesbrecht in the chair.]
Hon. E. Cull: I didn't hear the end of the member's comments. Did he say that the member for Peace River South was also finished with treasury questions? If that's the case, I'll excuse my staff.
F. Gingell: Yes, unless you can think of any I could have asked.
Hon. E. Cull: Thank you.
F. Gingell: We're now on GASSP, the government accounting systems strategic project. Could the minister
[ Page 11304 ]
please commence by giving us a short briefing on where we are and how it's coming along?
Hon. E. Cull: I'm going to begin by advising the member that we have changed the name. I'm not sure whether that's because people didn't like GASSP or what, but it's now the corporate accounting system. I don't know whether we'll ever be able to get rid of the acronym since everybody has become so attached to it.
[4:00]
The new corporate accounting system is now implemented in the following offices or ministries: the office of comptroller general, the Ministry of Government Services, the Ministry of Skills, Training and Labour, the office of the Premier, the Ministry of Women's Equality, and the information and privacy commissioner's office. The Ministry of Health has implemented the general ledger module of the new program.
F. Gingell: So the first ones are fully complete?
Hon. E. Cull: Yes, they're fully on board.
We're about halfway through implementing the corporate accounting system for the AG. We expect that to be completed by the end of July.
F. Gingell: I must admit that I have a whole bunch of sympathy for trying to put such a program into place and having to move from the Dark Ages to what one hopes is a more enlightened age in one relatively quick step. I'm sure it's been a very painful exercise. Does the minister have the confidence, though, that what you're doing now -- which, as I understand it, is a 1980s design -- is really the system you would choose if you were to go into a selection process in 1994?
Hon. E. Cull: Yes, we do have the confidence that this particular system is the right one to be implementing now. The member is correct; it's been underway and in the developmental stage for a long time, but the company we're working with has been constantly moving with the times and making sure that the system is as up to date as possible.
F. Gingell: I've read a bit about this somewhere, but I don't for the moment remember who the company is that is acting as your consultant on this project and where they are located.
Hon. E. Cull: Walker Interactive Systems is the company that has developed the software, but we're doing this in partnership with B.C. Systems Corporation.
F. Gingell: In 1993-94 an amount was budgeted and shown as a separate item here.... I'm just looking for it.
Hon. E. Cull: I think it's at the very back.
F. Gingell: There we are, page 226. The estimates for 1993-94 were $5.8 million. I presume the reason I couldn't find that is that it's now called corporate accounting system. Could the minister please advise me of the amount that was, in fact, expended in 1993-94?
Hon. E. Cull: We spent about $5.2 million last year on it.
F. Gingell: I see that you have budgeted $5.6 million for 1994-95. When this $5.6 million has been spent, how much more do you think will be necessary to get the system in place -- not the operation of it but just getting it up and running?
Hon. E. Cull: We've just done a review, and we estimate it will be about $13 million after this year to complete the implementation.
F. Gingell: Has the CAS been put into any Crown corporations yet?
Hon. E. Cull: No, just the list that I read to the member a minute ago. Those are the only places it's been implemented so far.
F. Gingell: Recognizing that Crown corporations have needs too, has the development of acceptable and accurate accounting systems been left in the hands of the Crown corporations, or has your ministry, through the comptroller general's office, had any say in those matters?
Hon. E. Cull: The Crown corporations have different accounting systems and different rules, so the way we're using it in government would not be suitable for them. Our licence will allow the software to be used there, and I understand that, under their own accounting rules, some of them are using this software. But we're still in discussions with the Crowns as to how best to bring them into a system that gives us greater consistency.
F. Gingell: Yes, I can appreciate that you're going to keep the accounts differently; you're going to aggregate dollar amounts into different columns and treat them in different ways. But in the end the system is, as I understand it, a modern, efficient way of recognizing and coordinating your liabilities as they occur, paying your bills, recording your revenues as they accrue, recording them as they come in, and being able to have your fingers on all the strings in an up-to-date manner. That kind of accounting system is just as important for a Crown corporation as it is for the consolidated revenue fund, and there may be substantial savings in Crown corporations using the expertise that's being developed in your ministry rather than them going out and doing this on their own.
Hon. E. Cull: Clearly, the expertise that's being developed in our ministry will be shared with the Crown corporations. The comptroller general, in fact, will very soon be meeting with the Crowns to discuss this, but their accounting doesn't flow through our accounts. They are using the software -- or at least some of them are using the software -- so they're getting the benefit of the new system. But they're not integrated into the government's corporate accounting system because they don't flow through our accounts.
F. Gingell: We're spending around $5.5 million a year, and after March 31, 1995, you anticipate spending another $13 million or so. Is there in fact two and a half more years? Will we be looking to be complete at the end of 1997?
Hon. E. Cull: Yes, it's our aim to be complete in 1996-97.
F. Gingell: If I may, I'd like to move on to an issue that was raised by the auditor general's report, and it deals with the safeguarding of movable physical assets. The overall conclusion of the auditor general was that: "Government policies for safeguarding moveable physical assets were, in our opinion, not being adequately complied with for
[ Page 11305 ]
computer equipment and software, technical and office equipment, and furniture, as of November 1993." I was wondering what the minister's reaction is to that finding.
Hon. E. Cull: I'm pleased to receive the report. It provides us with some useful information that we're now going to review, and we'll also review our procedures with respect to safeguarding movable physical assets. I will remind the member that the report showed that 99 percent of the items in the sample were located, and that 95 percent of the sample were not only located but properly recorded. It shows that there is room for some improvement, and we will now look at our procedures to ensure that we make whatever necessary improvements can be made.
F. Gingell: The ministry's response in the auditor general's report said, in part: "Without the discipline of accounting control the necessary management control loses some of its immediacy." Is the minister now comfortable and content that all of the i's have been dotted, the t's have been crossed and the stable door has been closed shut?
[4:15]
Hon. E. Cull: I think that 99 percent of the assets being located is a pretty good track record although, as I said a minute ago, there is clearly room for some improvement, however small. We would be interested in doing whatever we can to improve on that. I think the member has to understand that with people moving about, assets will sometimes move with them from one work location to another, and the recording of that move may not be as timely as we would like. Those are the types of things we will look at to ensure that not only do we know where everything is, but that it has been properly reported and located.
F. Gingell: I'd like to suggest to the minister that the 99 percent recovery rate speaks for the honesty of employees and in no way speaks to the adequacy of the controls and the way in which they have been administered. That is what is at issue here. I would like to think the ministry has recognized that this really mustn't be delayed, and that it must be dealt with in an effective and efficient manner -- that truly the stable door has been closed.
Hon. E. Cull: I agree with the member that the 99 percent reflects the honesty of our employees, which I don't question, but the 95 percent not being relocated but reported does speak to the system. It shows there is a 5 percent area for improvement. We will see what improvements could be made in terms of reporting. As I review these procedures and look at what we might do, I will apply some cost benefits, because there are increasing costs as you close ever-smaller amounts of variation at the very end. We'll make sure that we do this in a very prudent financial manner.
F. Gingell: I must admit it's a couple weeks since I read the auditor's report, but dealing just with statistics is not a particularly good way. My memory of the report, which I don't have here, was that the 5 percent was in things that are easily movable and are considered to be valuable.
We look out the window, and the Douglas Building is still there; that hasn't moved, but.... I appreciate the minister's response with respect to cost benefit. Clearly you don't want to spend $100 worrying about a $5 item. I was hoping to hear that the new corporate accounting system is going to be a very real tool in ensuring that the most reasonable, sensible control of these assets is going to be assisted through this accounting system.
Hon. E. Cull: Yes, the corporate accounting system will assist in being a better tool than the ones in place right now. I think the amount of movable assets -- the Douglas Building doesn't count -- one might acquire or have as part of doing business in government, such as computers and other technical equipment, is a small percentage which has not been properly reported and will only be reported provided people use whatever system is available. A newer system may make it a bit faster or maybe even easier to use.
I'm sitting here feeling guilty, wondering whether or not my own dictaphone was reported when it was moved from Health to the Ministry of Finance. I can assure you it's still a movable physical asset in the public service, but if one fails to record its removal in the way that they should, it won't matter what kind of system we have in place.
F. Gingell: True enough. The only piece of equipment I have is a little dictaphone machine. If I could find someone who would take the dictation off it, that would help.
I'll move briefly to the treatment of unclaimed money. I do not want to usurp the role of the Public Accounts Committee in bringing up these questions, but it is an opportunity to have the minister hear them.
The ministry's response to the issue indicated that they appreciated the problem. They recognized that there are a lot of loose ends and that there will be a study on this matter. Has the study commenced and, if so, is it finished? Has the ministry followed through on its commitment?
Hon. E. Cull: No, we haven't yet done the study the member refers to. I refer to the auditor general's report, which gives a clean bill of health to the treasury. It says that moneys deposited in the treasury of the province have complied with the first sections of the Unclaimed Money Act, which relate to those moneys.
The concern raised by the auditor is about money received by companies or persons that are not monitor-enforced; there is no evidence of compliance with that part of the legislation. While we will look at this and see what actions can be taken, there is a limit to what we can do in terms of chasing down companies and ensuring that they do the work necessary in dealing with the unclaimed money.
F. Gingell: Although I can appreciate how difficult that project is, I have the feeling that the ministry hasn't been proactive in letting the world know that corporations have responsibilities with regard to these kinds of things. It's a difficult matter; I don't know how one would go about it. Spending gobs of money on advertising would yield relatively little return. Does the ministry have an action plan with regard to this, or will that be arrived at as a result of the study?
Hon. E. Cull: The member has clearly identified the problem. It is puzzling to determine what we could do to achieve benefits that would not be terrifically expensive in terms of the overall expenditure of public money. As I said, we are looking at it. The auditor general has raised the issue with us, and we will develop an action plan as a result of our study.
J. Weisgerber: I'm going to shift gears. First, I appreciate the memo I got yesterday from the minister outlining an agenda for topics to be dealt with. Today I want to talk about
[ Page 11306 ]
the collection of social services taxes. If we have time and there are not too many other issues to deal with, I have some questions around the issue of tobacco taxation, smuggling across the country and some implications of that.
Earlier this month the Dawson Creek Chamber of Commerce wrote to the minister regarding some serious concerns they have about the collection of social service tax or, more importantly, the lack of collection activities on a number of issues. With the minister's cooperation, perhaps we can deal with some of these problems now. Obviously this is not a new issue, but for communities located along the border, particularly along the Alberta-B.C. border, there are some rather unique issues that have existed over time, some of which appear to be becoming more serious problems with time.
The letter from the Dawson Creek Chamber of Commerce deals particularly with the challenges around building materials. They note that more and more of the homes and major structures in the area are coming in in the form of some prefabrication, that the buildings are coming in with a substantial amount of work done and that there doesn't appear to be any mechanism for collecting tax on these homes and other items that are being brought in piecemeal. There is a great deal of concern that the wholesalers and retailers of those products in British Columbia are suffering a serious loss of commercial activity as a result of the disparity that the 7 percent sales tax represents, and also that the province is losing significant amounts of money as a result of their failure to collect those taxes. The chamber goes on to outline to the minister some methods of improved collection. I wonder if the minister has had an opportunity to think about this letter and has some ideas or plans for dealing with what I think is a pretty serious problem.
Hon. E. Cull: I agree with the member that the issues he has raised on behalf of the chamber are important. The member will be aware that we have legislation in front of the House right now which deals with the ability to collect the provincial sales tax on building materials or other materials that come into the province for permanent use. That's dealing with one of the issues that occurs along the Alberta-B.C. border, both in the Kootenays and in the Peace area. Where non-residents may have property in British Columbia, they bring in the property and evade paying the tax that should be paid. One aspect of that is being addressed through legislation that's before the House.
I haven't had a chance to review the suggestions that have been made by the chamber of commerce. I know my consumer tax people will be taking a close look at them and providing me with a full answer so that I can get back to the chamber of commerce. We have more staff available to do auditing in the Kootenay and Peace areas than we have elsewhere in the province, and the building sites in particular are monitored by our staff. Additional resources have been applied to ensuring that appropriate taxes are paid. We want to make sure that businesses in those two parts of the province are not disadvantaged by people bringing material into the province and avoiding paying the tax that is legally required. So there is some increased enforcement, and we will be looking at the suggestions that have come forward from the chamber in more detail.
J. Weisgerber: I think the legislation that's before the House is important inasmuch as it deals with non-residents who own recreational or other property in British Columbia. I suspect that's a very small percentage of the items that come across the border into British Columbia without tax being paid. I suspect that, in the Peace and Kootenay areas and other parts of the province, that might represent at most 5 percent of the material that is brought in. The other 95 percent is brought in by British Columbia residents who go outside the province, purchase goods and bring them back.
[4:30]
The minister suggested that there was more than the standard number of enforcement officers in that area. I expect that has always been the case, but I wonder if the minister could clarify it for me. Is she suggesting that in the past year or two, or perhaps in the next year or two, there has been or is going to be some significant beefing-up of enforcement staff in the Peace and Kootenay areas?
Hon. E. Cull: I can't give the hon. member the specifics with respect to the last year or two, unfortunately. We have been increasing our overall tax audit staff, and this is an area of concern to the ministry. I would imagine that some additional resources have been put into those areas as a result of the overall increase in auditors who have been available to the ministry in the last couple of budgets. In this year's budget, in particular, there are 30 new tax auditors covered, and I imagine that some of them were going to that area. Unfortunately, I can't give numbers. We could probably get that for you a bit later.
I know from discussions I've had with our consumer tax people that they pay special attention to construction sites in particular. Tax auditors visit those sites to ensure that goods aren't coming in without the tax being paid, at least for commercial purposes. It's much more difficult with individuals who may go over the border to shop in Alberta and bring the material back with them. It's much more difficult to deal with individuals using materials for their own personal construction projects. I don't know what kind of success rate we have in dealing with that.
J. Weisgerber: I believe that the enforcement staff probably do a pretty good job of enforcement on commercial projects. Many of the large construction projects in the area are governmental in one form or another -- hospitals, schools, public buildings or the like -- and I believe the contracting process in itself pretty much ensures compliance on behalf of the contractor.
There is a whole range of issues that has been brought to the attention of the enforcement group. The standard response -- and I think it's legitimate -- has been that we simply don't have the staff to deal with these issues of residential construction. Indeed, the chamber of commerce points out that they believe the major problem in terms of construction materials lies in the area of new home construction.
The Chair: That is a division bell, so we'll have to recess and then reconvene at whatever time.
The committee recessed at 4:33 p.m.
The committee resumed at 4:44 p.m.
[H. Giesbrecht in the chair.]
J. Weisgerber: As I was suggesting, I think there are some serious concerns about the staff's ability to enforce tax issues on a whole range of questions. There are clear questions about the difficulties in collecting tax on residential construction. The chamber of commerce has suggested that one of the ways to do it may be to monitor permits through the regional district -- electrical permits, building permits
[ Page 11307 ]
and so on -- and have a tax inspector visit those sites near completion. They would sit down with the owner or the builder and simply ensure that the tax has been paid on the majority, if not all, of the material that's gone into the home. I suggest that's one way the government could start to have better enforcement. You are obviously going to need more staff, but I believe the return to the province would far outweigh the staff costs.
[4:45]
The chamber goes on to suggest that perhaps one of the other ways to deal with this would be to put in some kind of border checkpoints, perhaps in conjunction with provincial weigh scales near the borders, and those would require residents bringing in goods on which tax hasn't been paid to stop and report their purchases and arrange to pay tax on them.
The minister might like to comment on the staffing issue, the idea of visits to residential construction sites and the idea of either a checkpoint at the border or some form of spot-checking to encourage people to live up to the spirit of the law. There is legislation in place now which requires a resident going outside the province and purchasing taxable material to report that purchase to the ministry and pay tax on it. It's not a question of needing legislation but of enforcement and collection.
Hon. E. Cull: The member has suggested a number of different things, and I guess some of these, such as using electrical or building permits as a means of monitoring, are coming directly from the chamber of commerce. The problem is obviously one of having sufficient resources to be able to check every one of those.
Before I complete that answer, I will pause for a second to introduce Greg Reimer, who is with our consumer taxation branch. He has been giving me further information on this.
We do audits of Alberta suppliers of construction material. We can actually go in and audit them to find out whether they're selling to B.C. builders. In that case, based on the information we get there, we are then able to follow up and do audits of the projects in British Columbia. All B.C. contractors would be audited, so we would be aware of what they are doing if they're purchasing their material outside British Columbia.
As to the suggestion about doing inspections at the border, I think that probably wouldn't be constitutional. When we're talking about interprovincial trade barriers and all the rest, I really think that having a border check for construction material would not go over very well for most British Columbians. I will admit that we do not have the resources to be able to check each and every one of them, but within the limitation of our resources, the methods we are using to do this are probably the best and most cost-effective use of our staff resources.
I will repeat again that the letter the chamber of commerce sent me on May 10 is being reviewed right now. We will be providing a comprehensive response back to the chamber indicating what we are doing and what we can do to address this problem. We agree with them that it's a problem that's worth being taken quite seriously.
J. Weisgerber: First of all, I would say that my suspicion is that audits of the Alberta suppliers probably don't deal with sales to private individuals and that they in fact deal with sales to contractors, retailers or the like. And if that's not the case.... Perhaps I should hear the minister's answer on that before I jump too far ahead.
Hon. E. Cull: The audits would involve sales to individuals, but we obviously wouldn't follow up every sale. We would be looking for significant sales.
I appreciate that businesses in the Peace and the Kootenays are concerned about the general leakage of their sales across the border for very minor items that over time add up to a major loss of sales revenue to those particular businesses. We are able to look at individuals, and we do pay attention to significant sales where somebody is building a house or a major addition. That would be something that was captured.
J. Weisgerber: My suspicion is that the firms we audit in Alberta have applied for a B.C. social service tax number. Without them going through the process of applying for a B.C. tax number, I'm not sure we would have the ability to go in and make a cold call on an Alberta retailer and start an inspection process to see whether or not they're selling to B.C. residents. Before I make too many assumptions, I expect that the audits are done only when the Alberta wholesale or retail vendor has a B.C. sales tax number.
Hon. E. Cull: One of the other things we're able to do is check through the weigh scales to see what is coming across the border from Alberta suppliers, and we are able to follow it up that way. It doesn't necessarily have to be registered with a tax number. We can get it through other ways. So I think you're appreciating that there's a variety of techniques that my staff are using to cast their net as widely as possible.
The northern regional manager for the ministry in the consumer tax branch met with the chamber of commerce recently and asked them to provide us with further information, and we're still waiting for that information so that we can do some follow-ups, specifically based on the concerns raised by the chamber.
J. Weisgerber: I wouldn't want to suggest that there aren't efforts being made to collect tax, but I expect that the only people you're going to be able to identify through the weigh scales are shipments that come in, for example, in the Brick truck. Then you stop it and find out whether or not that truckload of goods is going to B.C. residences and whether or not taxes have been paid.
I'm not sure what happens when they have been stopped. I'm not sure whether the truck driver pays the tax, whether copies of his manifest are taken and letters written to the consignees of the material. Once you find a truckload of furniture, for example, I'm not quite sure how you deal with it from there.
Hon. E. Cull: With respect to shipments that are going through the weigh scales, we get the information from them and then follow up to the purchaser who would be receiving the goods. But the member is right. If an individual goes across the border, buys a stove to be installed in a building and brings it back in his pickup truck, we're not going to capture that. That's what I was referring to when I was talking about the leakage of sales that we can't capture, because individuals who move backward and forward across the border may be buying everything from light switches to large appliances. All those are lost sales to British Columbian businesses. In the Kootenays I think a shipment of about $10,000 worth of appliances came across the border, and we were able to obtain the information on that and then follow up. Clearly we don't catch them all, and the small ones, in particular, will go uncaptured, but I think
[ Page 11308 ]
we're doing the best job we possibly can within the resources we have to apply to the problem.
J. Weisgerber: At the risk of harrying this to death, it seems to me that there are a number of leakages. Common carriers cross the scales all the time. There could well be substantial amounts of furniture or equipment being shipped to someone that would never be captured. The point that I'd like to impress on the minister is that enforcement and prosecution in some cases might send a signal to people that this is not a legal practice and that it is not going to be ignored, and public notification would encourage voluntary compliance with the law as it exists.
Let me move on, because there are a couple of other areas in the Peace region and the Kootenays. The areas where there is the greatest abuse are with building supplies, furniture, appliances, electronic equipment, truck campers, ATVs, four-wheelers, skidoos and that kind of thing. As a matter of fact, for many years in Dawson Creek there was no one who sold boats, campers or ATVs, because nobody would buy them; they all simply drove across the border and collected them. I've felt for some time that there should be a licensing requirement for ATVs and truck campers consistent with the licensing required for holiday trailers, fifth-wheelers and the like, and that snowmobiles, ATVs and truck campers should be licensed, using just a small decal like you often see on Oregon vehicles. In order to get a licence, it would oblige the person to go in, as they do now with a car or boat, to report the purchase and pay the tax on it.
Hon. E. Cull: I'm laughing because I'm trying to remember which party the member represents. It's hard to imagine the Reform Party calling for more government registration and regulation in this respect, but I guess I will be surprised.
With respect to boat and aircraft registration, we have the ability to follow up and trace back the tax through information from the federal government. We can with anything that's registered. Whether we get into electronics, skidoos and all the other things, that's something we can look at. But we certainly don't have any plans to move into registering computers, stoves or the type of thing one would have to pay attention to if we were to capture all that stuff.
J. Weisgerber: The minister will find over the years that the Reform Party will surprise her from time to time. I think you'll find the Reform Party stands for everyone paying their fair share of taxes and for government doing what it should to collect them -- but we won't get too far astray into those kinds of debates.
The licensing that I'm suggesting would be consistent and reasonable. There are insurance requirements now, for example, on ATVs and skidoos. It would seem logical to have a one-time licence plate, as is used in other jurisdictions. It's not radically new; it's not an idea that the chamber of commerce or I dreamed up, and it's used in other jurisdictions. It would bring that fairly large group of merchandise on which tax isn't being paid into line with boats, airplanes, automobiles and trailers, where there is very good enforcement.
[5:00]
I put it forward as a suggestion. I happen to think it's a pretty good one, but if the minister doesn't like the idea, there are many other ways, including going out and auditing -- if the minister suggests that she has the authority -- retailers of those goods in Alberta. I'm not at all sure, unless the retailer of those goods has applied for a B.C. social service tax licence, that our auditors have any right at all to audit them.
Hon. E. Cull: Well, like the Reform Party, of course the government supports everybody paying their fair taxes and having taxes collected. But I was under the impression that the Reform Party was also calling for less government and certainly less people on the government payrolls, and to move into a registration system would require hiring additional people and adding to the provincial bureaucracy.
With respect to businesses in Alberta, we can audit them, provided they have some presence in B.C., and that presence can be as simple as having salespeople or delivery people in the province. If it was simply a store that provided no delivery service or sales service to the province, then we would not have the ability to do that type of audit. But if they have some presence in the province, then we are able to do so.
J. Weisgerber: Again, at the risk of beating this subject to death, I would suggest that most of the retailers of furniture, appliances, electronic equipment, ATVs and the like don't have a presence in British Columbia. As much as you'd like to think that you're able to go in and audit the people who are selling these, I suspect that the majority of vendors in Alberta are beyond the audit capability of your ministry.
If the politics of this debate cause the minister to reject some of the solutions put forward, I would encourage her to go to the chamber of commerce which, I can assure her, is apolitical. Even though they happen to be in the Peace region and folks there are often accused of having particular political leanings, this group is apolitical. I would encourage her to sit down with that group and explore some of these very real problems for retailers and small businesses in the Peace, which I believe extend into the Kootenays. It is costing those communities jobs and causing whole sectors of the economy to be vacant in some towns, and I think it's worth addressing some energy toward.
There is, however, another whole area that I think speaks to enforcement and that is bringing construction equipment into British Columbia for work on major projects. I know from experience that oil rigs, for example, are taxable. A drilling company bringing an oil rig into British Columbia pays social service tax on it and registers it; they have a number. There is at least a suspicion by many contractors in that part of the world that a lot of smaller equipment moves in and out across the border without paying taxes.
I wonder if the minister could tell me what the guidelines are for an out-of-province contractor vis-a-vis paying social service tax on the construction equipment they bring in for the project and intend to take back out with them.
Hon. E. Cull: I'm informed that we look at all construction projects of the type the member is referring to. In some parts of the province there may be an assumption that these companies are not paying tax on the construction equipment they bring in, but I'm informed that my staff look at every one of them. Many of them are registered in British Columbia, and, in fact, the tax is collected. We have a project that goes from Vancouver right to the Peace to ensure that those companies are captured.
J. Weisgerber: That's encouraging to hear. Could the minister tell me -- not necessarily to convince me but so that other contractors and individuals who share the concern I've expressed, which I hear time after time -- how someone would go about satisfying themselves that a company they
[ Page 11309 ]
had perhaps bid against and lost a contract to had in fact paid the taxes? Is there some registry that an unsuccessful bidder could go to to satisfy themselves that indeed all the appropriate taxes were being paid?
Hon. E. Cull: Anyone who wanted to follow up on that kind of information could call our Dawson Creek office, and they would be assured of the facts in the case.
Part of the difficulty that arises -- and it gets into the member's comment of a few minutes ago about greater enforcement and prosecution and publicity -- is that under the confidentiality provisions of the legislation we operate under, we can't say that company ABC has been assessed, was found to have not paid taxes and has now paid so much tax plus interest, plus penalty. We're not able to do that, but if someone wants to find out whether a particular company has been followed up on or not, that information could be obtained through the office.
D. Schreck: I'm tempted to say that I could nominate a couple of bureaucrats to stand on the Alberta-Peace border in the middle of February to perform these tasks, but that would probably be unfair to the people of the Peace. I have expressed in some correspondence with the minister my total frustration with the office of the superintendent of financial institutions. I'd like to say that the consumer alert from that office that crossed my desk dated May 27 does not make me any more joyful.
As former Minister of Health, the minister is probably well aware of the problem we face in this province with extra billing and opting out by doctors. It's my misfortune to have in my riding on the North Shore about half of the doctors in the entire province who are opting out or extra billing or both. In a letter dated November 18, 1993, Dr. Marc Boileau wrote to all of his patients. That letter included the following paragraph:
"Thirty-five physicians and myself have contracted with Western Pacific Assurance Ltd. to provide coverage for uninsured services, as set out in the enclosed brochure, at an annual fee of $90 per family or $50 per individual."
For those who are not familiar with MSP jargon, uninsured doesn't mean not insurable; it means not covered by the Medical Services Plan. It is common practice for insurers like CU&C, MSA, Great-West Life and other licensed health insurers to provide private health insurance for items that are not covered by MSP. Why anyone would want to do so is beyond me since these services are rarely, if ever, used and are customarily provided without charge. However, in the case of these 35 physicians on the North Shore, they appear to have chosen to use Western Pacific Assurance Ltd. in conjunction with their general campaign of harassing patients and trying to undermine the Medical Services Plan by letting these patients believe they needed the supplementary coverage because of some sort of shortfall in the Medical Services Plan. This harassment could easily have been stopped if the office of the superintendent of insurance in the office of the superintendent of financial institutions had merely ruled that this is a form of insurance and they had to become duly licensed. To offer the product under the name of a service contract without the misleading name of assurance or insurance would clearly have let the patients know that something was amiss, but that wasn't done. Instead, the office of the superintendent of financial institutions said that this product does not fall within the regulatory purview of that office. As a result, they were free to operate and to conduct what I would bluntly describe as a campaign of terror against my constituents and others on the North Shore.
In my correspondence of some months with that office, the superintendent of financial institutions finally admitted that a section of the act specifically forbids the use of the name "insurance" or "assurance." With some rather creative interpretation of that section -- creative, in my opinion, although extremely unfortunate is the way I would actually describe it -- the superintendent of financial institutions chose to give himself some discretion in that matter.
Section 31 of the Financial Institutions Act states in part:
"No person shall use any of the words...'insurance,' 'assurance' or 'insurer'...in a way likely to deceive or mislead the public about the ability of the person to undertake...insurance business, or give a false impression that the person is a trust company or insurance company."
In his wisdom, the superintendent chose to use the words, "likely to deceive," to give himself the discretionary ability to determine whether or not the use of those words was likely....
I find it absolutely astounding that this bureaucrat looks at a contract about which dozens of people to whom I've shown it say: "This is contracted insurance. It looks like any extended health plan I've ever looked at.... " And he gives himself the power to say: "Well, that's more like a warranty on a refrigerator." I say that that is an inappropriate use of discretion, where that discretion doesn't exist in the first place. I asked repeatedly for the superintendent of financial institutions to correct this error and in particular for the superintendent of financial institutions to require that Western Pacific Assurance Ltd. write to all its contract holders and advise them that it was not a duly licensed insurer. I also asked that the superintendent of financial institutions require Western Pacific Assurance Ltd. to post advertisements for all those people who were offered this product, were intimidated, felt that there was a major loophole in MSP but decided they were not going to choose the product.
The answer I got was: "Well, I can't really do that because I deemed in my discretion that they are not an insurer, and once I made that decision, even though I'm allowing them to misuse the name Assurance, I can't regulate them." This seems to me to be an ultimate catch-22. If the discretion is used properly in the first place, the regulatory powers exist; if the discretion is used inappropriately, then the regulator escapes all responsibility for the screw-up they've created in the first place.
Finally, last week, a consumer alert dated May 27 went out from that office. I put it to you that unless you knew the details I've just summarized, you would never know what this consumer alert was about. I say that is disgraceful. I believe that the superintendent should be reprimanded for this type of behaviour, that a proper consumer alert, naming Western Pacific Assurance Ltd., should be issued and that better supervision should be given on the arbitrary use of this discretionary power. I'd like to know what the minister's position is on this pathetic consumer alert notice.
Hon. E. Cull: As a former Minister of Health, I share a lot of the concern that the member has with respect to the services these doctors are purporting to offer to their patients. If you look at their brochures, some of the items that will be covered by this extra payment are indeed already covered under the Medical Services Plan and don't fall into the category of uninsured services. That's probably contrary to the Medical Services Act, and I know that the current Minister of Health will be looking into that.
But more importantly, there's an impression being left by these doctors that some services have been recently delisted or uninsured or whatever, when in fact that isn't the case.
[ Page 11310 ]
These services have never been covered by the Medical Services Plan here or probably anywhere else -- with some minor exceptions, and even those were removed from coverage some years ago.
[5:15]
With respect to the member who has attempted to raise this matter on behalf of his constituents in a very responsible manner, it's a question of whether we've got the right agency here. The first question comes down to whether this is insurance or not. Under the act, it appears that this is not insurance, but a future service contract. When I first looked at it, I asked: "What's the difference between this and what CU&C or MSA or anybody else who provides extended medical coverage does?" The answer is that there isn't much difference. Then I asked: "Well, isn't that insurance?" The answer to that question was no, that isn't insurance either, although those insurance companies choose not to use the exemption that applies under the Insurance Act, which would exempt these particular types of services from the coverage. They haven't done so, but anyone who wanted to set up would, in fact, become exempt under the Insurance Act, because they're not deemed to be insurance by the definitions that are provided in the act.
We have two somewhat old legal opinions from the Attorney General on this matter: one saying it is and one saying it isn't insurance. This certainly doesn't add to the clarity of the matter, although the more recent one says that it is a service contract, not insurance. As a result of the member raising this matter, what I have done is try to seek some clarity. Whether it's insurance or not, I believe consumers deserve to have some regulation and to know that they are being supervised, that they're not contravening any other acts, like the Medical Services Act, and that there is some consumer protection overall for people who might feel inclined to pay this additional amount of money on an annual basis to receive these services.
We have asked four ministries to come together, because it's not clear which of the four ministries should have responsibility. They are the superintendent of the Financial Institutions Commission, a representative from the Attorney General -- we've also asked the Attorney General to provide us with an up-to-date legal opinion on the matter -- the Ministry of Health and the Ministry of Housing, Recreation and Consumer Services.
In the past if you asked a ministry or a particular branch of a ministry if this was in their mandate, and it wasn't clear that it was in their mandate, the answer might come back that it isn't. In fact, the question that I think really needs to be asked is not if this is in the mandate of FICOM or anyone else, but whose mandate it is in and who is going to regulate it. The answer the Minister of Health and I have reached is that it should be regulated. The question that has not yet been answered is: who should regulate it, and how shall it be regulated?
As a result of the member for North Vancouver-Lonsdale raising this matter, the four ministries are going to put their heads together to determine exactly which act it should be regulated under and make a decision very soon, I hope, so that we can get on with providing the protection that is necessary for the residents of the North Shore, who are potentially being misled by the material that's being put out by the doctors in Western Pacific Assurance Ltd.
On the specific question about the alert, the member has a suggestion. I believe he wants the company specifically named. I'll have a look at that and see whether it's possible to make that change. If there are other suggestions he wants to make with respect to the alert, we can certainly take a closer look at them.
D. Schreck: I began with the suggestion that the bureaucrat who committed the offence should be posted on the Peace-Alberta border in the middle of February without a tent, and I still think some suitable reprimand should be issued.
I very much appreciate the comments of the minister and the recognition that there is a problem here. I am not at all convinced that the superintendent of financial institutions is aware that any error in judgment was ever made. At no point in six months of correspondence with this individual did I receive anything other than what I would characterize as the worst form of bureaucratic response.
I look at myself in the position of being an MLA and my experience of having managed the largest private health insurer in this province for nine and a half years, dealing in a regulating capacity with this entity of which I am fairly familiar, and now as an advocate for my constituents, and I ask: what chance does an individual constituent -- a 70-year-old woman being harassed by her physician who's opting out of extra billing and trying to intimidate her with this type of bogus insurance scheme -- have against a bureaucrat like that when I have the difficulties that I have? The attitude seems to be that the superintendent of financial institutions can do the big and glorious things like keeping trust companies from going under financially. However, when it comes to the intimidation of a 70-year-old woman who is being flogged a look-alike insurance product, that's a trivial matter and somebody else should worry about it.
A message has to get through to the corporate mind-set in government. It is not good enough to say that you can inappropriately use the name insurance, because that's the problem of some other part of the bureaucracy. As the bureaucracy plays hot-potato, my elderly constituent is even more frustrated than I am and thinks that government is out to get her. Her doctor says that he's opted out and she has to buy this insurance. Meanwhile, nobody in government will say what it is, and the superintendent of financial institutions ignores his regulatory responsibilities.
A whole lot more should be done. There should be an acknowledgement by the offending bureaucrat that this was handled incorrectly. If the offending bureaucrat gets away with arrogance, saying that it's somebody else's problem, then the next constituent who has this problem will be treated with the attitude that they are unimportant, but financial institutions are important. My constituents are a lot more important than the big-shot things this bureaucrat thinks he's responsible for.
Hon. E. Cull: I don't disagree with the importance the member has placed on this issue in his constituency with his constituents. As the minister, I am accountable; I don't think it does any good to go after particular public servants who do their very best. I am not speaking in defence of this particular public servant, but in defence of all of them. If they don't perform accordingly, then I'm the one who is responsible in this case. I accept full responsibility; I think that to this point I have acted appropriately with respect to pulling together the ministries and having them apply themselves to resolving the matter. We've given the direction that we want it regulated. We want them to sort out who and how, and come back to us with some suggestions immediately. However, we have to be very careful because there are many thousands of dedicated public servants who work on behalf of this government and who do not have a voice in this chamber. However, I have a voice, and I will take the responsibility for their actions.
[ Page 11311 ]
D. Schreck: I appreciate the minister pointing out the obvious: where responsibility ultimately ends in our parliamentary system. I also point out that officers who hold the rank of deputy minister can appear in this committee and speak, and that the Deputy Minister of Finance chairs FICOM and is aware of the situation. By no means should any of my remarks be taken as casting aspersions on the excellent reputations of tens of thousands of superb public servants. But I make no apologies for specifically criticizing this individual, with whom I was not even able to complete a sensible telephone conversation and with whom I have a half-inch of correspondence. In my opinion this is disgraceful. I am serving notice that I take the minister at her word and expect further action on this totally unacceptable notice and situation.
Hon. E. Cull: Just for the record, my deputy doesn't chair or sit on FICOM.
J. Weisgerber: To move on, back in February I read with some interest a press release sent out by the minister and the western finance ministers regarding tobacco smuggling and the efforts of this government and her ministry to curb what was, at that time, an anticipated rash of smuggling activities, given the variation of tobacco taxes in different jurisdictions.
Could the minister tell us whether the measures announced in February were successful and whether there continues to be a problem around tobacco smuggling from outside British Columbia?
Hon. E. Cull: I was very pleased to have the cooperation of the other three western provinces and the two territories in dealing with the tobacco smuggling issue in western Canada. I want to give a little bit of background to this before answering the question. When the provincial and federal finance ministers met in January, all but Quebec and perhaps one other were very clear and strong in their statements to the federal minister that we did not think a unilateral reduction of taxes by the federal government was the answer to the smuggling problem in Canada. We offered a number of other suggestions to the federal Finance minister which, unfortunately, he rejected. As a result, the federal government has now created a situation where an international smuggling problem has been converted into an interprovincial one. He has also set up a situation in Canada which is quite ludicrous. I believe we have six different federal taxes, depending on what province you're in. The tax rate isn't even consistent across the country, with respect to the federal government.
The province of British Columbia has felt very strongly that we should not drop the taxes here, because smoking is an incredible health hazard. We know there's a direct correlation between the price of cigarettes and the amount people will smoke, particularly young people, because cost is a barrier to teenagers and to young women, who are unfortunately the fastest-growing group of new smokers right now. We believe that keeping the cost of cigarettes high in that case would dissuade some from starting to smoke, thereby putting their health at risk and causing themselves considerable anguish over the years, as well as costing the taxpayers a lot of money because of the health costs associated with illnesses related to tobacco.
We knew, however, if all the other provinces followed the direction of the federal government, it would be very difficult for British Columbia to maintain this position. As a result, discussions got underway immediately with the western provinces to see if we would be able to take a united position, and we have. I'm very pleased with the support we've had from the other provinces, particularly from Manitoba, which, with respect to their border with Ontario, has had to bear some of the problems you've just described in Peace River.
The measures announced in February are still in place, and there have been some slight improvements since then. We've also received some cooperation from the federal government with respect to them reallocating resources from the international problem to the interprovincial one and having greater resources in western Canada. The results show that our taxes from tobacco are not slipping in any way. I believe in March, 1994 over March, 1993 they were actually up slightly, but we have not yet seen any reduction in our tobacco tax. That leads me to conclude that the measures we've put in place are, at least to this point, working reasonably effectively.
Recently there have been a number of fairly high-profile seizures of tobacco. This shows that through the cooperation of the RCMP and Canada Customs, we have been able to stop a certain amount of interprovincial smuggling.
J. Weisgerber: I thank the minister for her answer. I share her concerns over the effect of tobacco use on health care, health care costs and the well-being of British Columbians. I think it's appropriate that the government work in concert with other provincial governments to control smuggling, and I'm pleased with the answer I've received.
Given the hour, before we move into an area that I'm also interested in, regulation of the sale of tobacco on reserves, it would be an appropriate time to move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 5:30 p.m.
The committee met at 6:54 p.m.
[G. Brewin in the chair.]
ESTIMATES: MINISTRY OF GOVERNMENT SERVICES AND
MINISTRY RESPONSIBLE FOR SPORTS AND COMMONWEALTH GAMES
(continued)
On vote 39: minister's office, $350,717 (continued).
Hon. R. Blencoe: Before the member has any further questions, I have information that the member probably has forgotten he asked for -- various questions vis-a-vis total dollars of purchases by the purchasing branch on behalf of Crown corporations, dollar amounts of purchases by the purchasing branch from B.C. suppliers, and a number of other things the member asked about. I also have the number I referred to earlier concerning the transportation demand management policy -- the provincial policy I announced a few weeks ago.
K. Jones: Welcome back to the fun in Government Services. I think I'll start off, hon. minister, with the request I made on Friday for a copy of your org chart. I received a promise that it would be delivered that day, but it wasn't. I also had promises yesterday when I checked at your office and talked with your ministerial assistant. He gave me total assurances that I would have it later in the day. I checked
[ Page 11312 ]
again this morning, and I had assurances it would be coming right away. This is 7 o'clock at night, and I still haven't got a copy of the org chart that you had in your hand Friday. Could the minister tell us what the problem is?
Hon. R. Blencoe: No problem. If the member would like the chart, here's a copy.
K. Jones: Thank you, hon. minister. Hopefully, I'll have a chance to adjust my eyes so that I will be able see the fine print in this organizational chart. In the meantime, I'll work with the other one, and hopefully it will give us some guidance.
I'd like to continue where we left off, with purchasing, and hopefully we can move along quickly into archives, information systems, central statistics, Commonwealth Games, the communications branch and transportation management.
I'm just looking at the submissions you gave me. I wish I had had them a few minutes earlier so I could have had a chance to review them and give you better, more qualified questions.
[7:00]
I'd like to ask the minister if he could give us a quick look at the Buy Smart program. He had alluded to it earlier but had not gone into detail as to the current status of that program.
Hon. R. Blencoe: I can't refer to the exact Hansard pages, but we have covered that extensively. If I recall, you had some uncomplimentary remarks to make about Buy Smart. We have covered that extensively, and I refer you to Hansard.
K. Jones: I believe we went into the purchasing card aspect of that quite extensively, but we didn't get into the other aspects. Could the minister give us the status of the local minor purchase order form at the present time?
Hon. R. Blencoe: I will let the member know that I have answered that question, but I will answer it this time, once only. It is continuing its trial period as a model. In the fullness of time, we will look at it as a program across government, but we are test-running it. I have answered that a number of times already.
K. Jones: I'm sorry to hear the minister taking this approach, because I was hoping we could get some progress stats on it as to when the trial period would end. Is full or partial implementation not of the bank card process but of the local minor purchase order form included in the budget for this year?
The Chair: Hon. member, I think the minister indicated the nature of this response in the response he gave earlier. We remind you that you are repeating the questions. You might perhaps want to work on a different tack, unless the minister wishes to speak.
Hon. R. Blencoe: I'll just give a bit of information to the member. At the moment, the test run or trial period is slated to end in October, and we will be doing an assessment at that time. I think I shared that with the member some weeks ago.
K. Jones: Is the minister indicating that all these items under the Buy Smart trial are going to be finished in October, and that all these things will start being implemented at that point?
Hon. R. Blencoe: I have already indicated the timing of the card. We went into great detail about the other two items. We are still working on those. The timing is critical in getting the right program together. We have had extensive discussion of that issue. The purchase card trial run, which various ministries and Crown corporations are participating in, ends in October. We'll then assess it.
K. Jones: We'll leave that. It seems that's difficult to answer further.
Could the minister tell us what the role is of the executive director of the purchasing services branch?
Hon. R. Blencoe: That position is responsible for finance and administration.
K. Jones: Is that position responsible for finance and administration of your ministry?
Hon. R. Blencoe: That person is responsible for the Purchasing Commission. I believe you're still on the Purchasing Commission; I was answering as if we still were on that area. The person is also doing extensive work on trade negotiations and procurement policy which we are currently undergoing with Ottawa and all other provinces.
K. Jones: Does the person also have responsibility for travel and vehicle management services?
Hon. R. Blencoe: Yes.
K. Jones: Could the minister tell us in what capacity his responsibility is for those areas?
Hon. R. Blencoe: He oversees or is responsible for those areas.
K. Jones: Could the minister tell us exactly what vehicle management services does within the ministry?
Hon. R. Blencoe: I think the member is fairly versed in that. I think he's had a briefing, but very simply it manages the government vehicle needs. It does the purchases, orders and leases, if there are leases. It maintains a maintenance schedule. Basically, it manages the government's vehicle needs in a very efficient way.
K. Jones: Could the minister tell us what the process is to determine the vehicles for each area within government? I presume you're saying that all government vehicles are purchased through this vehicle management service.
Hon. R. Blencoe: They are responsible for ascertaining the various ministries' requirements and using their expertise to advise ministries in terms of vehicle needs which we can recommend to them. They're responsible for maintenance, fuel, ensuring invoices get paid and making sure that insurance is taken care of. Generally, they're responsible for government vehicles and for putting out orders for new ones.
I should tell you that there is work going on at this time on vehicle management in terms of looking at where we can further save and cut costs on the requirements we have for vehicles. That work is ongoing, and we fully expect that it will end up in considerable savings for taxpayers when we really take a look at some of the activities in vehicle management services.
[ Page 11313 ]
K. Jones: Could the minister tell us whether vehicle management services or travel services is responsible for the Travel Smart office?
Hon. R. Blencoe: Sorry, I didn't hear the first part of your question.
K. Jones: The question was whether the Travel Smart office was administered under vehicle management services or travel services. Maybe the minister would like to answer that further.
Hon. R. Blencoe: It's under travel services.
K. Jones: With regard to vehicle purchasing, could the minister tell us who determines the type of vehicle and the number of vehicles?
Hon. R. Blencoe: That's a combination of the staff of vehicle management services, in terms of their years of experience, and the type of machinery ministries require. It's a combination of what ministries perceive to be their needs and what vehicle management services think they can actually handle or do with. We are taking a look at vehicle management services in terms of getting more information from the various ministries concerning the number of cars actually needed. They perhaps don't always require certain types of cars. At the moment, we are looking at a number of ministries' car requirements, and already approximately 100 cars have been taken back. They were deemed to be underutilized, and we have removed them from the fleet.
We're moving more and more away from a tradition whereby vehicle management just takes the orders and does the technical ordering and monitoring and dealing with the distributers or suppliers. We're now moving into a process whereby we take a closer look at ministry requirements, and that's part of the review that's going on now in terms of a number of ministries.
K. Jones: What method does the ministry have through its purchasing policy to reduce the use of expensive vehicles such as Jeep Cherokees -- they seem to be an executive perk -- or the rather expensive passenger cars in last year's purchases for the vehicle fleet through the Purchasing Commission?
Hon. R. Blencoe: Those very things have been looked at, and this goes back to the question of us giving advice on whether they require certain types of vehicles. That is now being actively pursued. It is sometimes a subjective call, but we are trying to put more objectivity into the process. There's no question that certain ministries require the kinds of vehicles you are referring to -- Forests, for instance, or Environment. Some of the Lands and Parks people have to go into difficult terrain.
[7:15]
We have to be very careful. When I've been examining some of this stuff, I sort of look at it with a first glance, but when I look more closely at the kind of utilization and where they're going, I can assure you that those vehicles are justified. We are applying ourselves to the issue. Ninety underutilized vehicles were turned over for disposal to vehicle management services by March 31, 1994, producing a onetime saving of $1.35 million. The additional annual savings are estimated at $1.25 million. We are now in phase two of the review, to have been completed by May 31, 1994, and savings through vehicle elimination could be as high as $10 million, with additional savings of more than $2 million. We're basically looking at the B.C. fleet. This is an area in which we think there are considerable savings to be made.
K. Jones: It's good to see that there is real progress being made in this area. When you were looking closely at the various vehicles being purchased by various groups, were there any surprises for you?
Hon. R. Blencoe: I don't think there were any surprises. We are dealing with change, and sometimes change doesn't come easily when a system has been in place for a long time. We're moving to a new system, and I think everyone has accepted now that we're looking very closely at what various ministries have and what they're using. In the utilization area, we may have found that a certain number of cars were underutilized in terms of kilometres per year, but no, I don't think so. I think we knew that there were some savings to be made, and now we have to continue the agenda.
K. Jones: You really believe, then, that there was a real need for all the purchases that were made last year and that those types were needed for each of the areas? That's what you're saying when you say you weren't surprised by what was purchased. Is that what you were meaning to say?
Hon. R. Blencoe: No, hon. member. Obviously everything is on a continuum: analyses, policies and how they carry out their management change. The requirements are there, but we're paying a lot more attention to this area as we are to many areas in government. When we took a look at the fleet, we found that there were considerable savings to be made, and that's what we're pursuing.
K. Jones: You're saying that some policy changes that were done last year were perfectly appropriate for last year, and that the minister's and the ministry's decisions made last year were perfectly appropriate, but that you have found ways to save upwards of possibly $10 million this year. Would that indicate, perhaps, that the previous minister wasn't as diligent in doing the job of monitoring and keeping account of the factors of usage and that you're much better at doing this now?
Hon. R. Blencoe: The answer is no, hon. member.
K. Jones: Does no mean that the previous minister wasn't less competent than you or that you weren't as competent as the last minister, or what? I'm not quite sure what you were answering there.
R. Blencoe: Hon. member, I was answering your first question. I do not wish to reflect on the former minister -- and neither should you. The former minister was competent and did a good job.
K. Jones: You found real savings in this ministry. If there was a closer look at the purchases, I think there would probably be many more savings in this vehicle area. With regard to the vehicles, could you tell us how many are being purchased this year?
Hon. R. Blencoe: Yes. The 1993-94 total to February 28, 1994, is 994 vehicles purchased, for a total value of $16.6 million.
K. Jones: How many vehicles?
[ Page 11314 ]
Hon. R. Blencoe: The total is 994.
K. Jones: Could the minister tell us how many vehicles are proposed to be purchased during this fiscal year?
Hon. R. Blencoe: Vehicle management services requested the purchase of 850 replacement vehicles. Treasury Board has approved the purchase of 366 replacement vehicles, with a possibility of purchasing additional vehicles which would be justified on the terms of the utilization review. The simple answer, hon. member, is that we know we have permission for 366. We have up to a maximum of 850, but as I indicated to you, we are already taking a look at the requirements of some big ministries, including Social Services, Forestry and Transportation. I suspect that I'll be able to report to you in the estimates next year that we'll be significantly lower than 850.
K. Jones: Is the utilization review underway or is it completed now?
Hon. R. Blencoe: It's ongoing, but I'm told by staff that it's very close to completion.
K. Jones: Has the minister a completion date?
Hon. R. Blencoe: Let's allow a month, hon. member, and then it goes to Treasury Board for review. I'll then prepare and present a Treasury Board submission of our findings and our recommendations.
K. Jones: Earlier the minister referred to a policy change between the last ministry and the present one that has caused the reduction in the need for vehicles and has also brought savings of $1.3 million. Could the minister tell us what that policy change is and how it is stated?
Hon. R. Blencoe: I'll be clear about this. We're not in a policy shift; we're in an operational review, which is happening in many areas throughout government. This is one area; this ministry is not alone. The government is constantly looking at ways to improve a service and save the taxpayer money.
K. Jones: So the minister is saying that I may have misunderstood what he said earlier. I may not have heard correctly when he said there were policy and management changes that were making these savings possible. If that's not the case, then how are the people who are making decisions to order these vehicles able to know what to utilize as a guide in making these decisions? Does there not have to be some new policy direction in order to make these recognized changes and savings?
Hon. R. Blencoe: The reason we do operational reviews is so we can perhaps change policy. We currently have a significant operational review of vehicle management services. We've already eliminated 90 vehicles, and we're now looking to probably eliminate quite a few more. When we present our findings and our review to Treasury Board, there may very well be some change of policy. The five- or ten-page policy manual may be altered significantly; I can't tell at this time. But I can assure the hon. member that I will try to remember to send him a copy of the changed policies after we've finished our operational review.
K. Jones: Based on the figures you've given to us with regard to your projections for 850 replacement vehicles this year, do these figures include new vehicle purchases in addition to replacement vehicles, or are there additional vehicles above this 850 for replacement purposes?
Hon. R. Blencoe: The figure of 850 that I mentioned to you is the maximum this ministry has permission for, but it's obviously subject to the replacement review. When we've finished our review, we will be going back to Treasury Board -- with the report, I hope, that we have significantly reduced our requirements.
K. Jones: Let's just put all these figures together. You say you've eliminated 90 vehicles. You're only going to get 850 in total.
Hon. R. Blencoe: Maybe.
K. Jones: Maybe. Does that mean maybe 850 or less, or maybe 850 or more? We'll give you a chance to answer that in a moment. But just going over that, you've now got 90 vehicles removed; you're only planning for 850. That brings us up to 940, and last year you had 994 vehicles. Does that mean you are going to save roughly another 50 vehicles out of this, before you even get started with the operational review?
Hon. R. Blencoe: The operational review is ongoing. We have already, in our first go-round, eliminated 90 vehicles. Because we were in the midst of our review.... Under normal circumstances, if we weren't doing the review, and with some built-in expectations of reductions, we said up to 850. We have been given permission for 366, thus far, and we have not asked to go from 366 to 850 because that's the area we're reviewing. There may very well be an increase above 366, but I anticipate it will not go to the 850 level. That's what the review is about.
K. Jones: Could the minister then tell us where the 50-vehicle difference is between what was required last year and what you're projecting for this year, including the 90 already eliminated?
Hon. R. Blencoe: I'm not sure what the member is asking. Could you explain that to me, please?
K. Jones: The minister said that last year, up to February 1994, 994 vehicles were purchased. That doesn't include February, or perhaps March, so the figure could be even higher. Taking 90 vehicles away from that brings the figure down to about 900. You suggest that you'll require only 850 or fewer this year. That would indicate a 50-vehicle difference between last year's and this year's requirements. Where are those 50 vehicles?
Hon. R. Blencoe: Without going into.... I can send you the manual, but each vehicle and each ministry is looked at. We look at the life of the vehicle and whether it stays with us or goes somewhere else, or gets disposed of. In terms of purchases, the age of vehicles when they come in and how well they're doing, each year has a different figure.
[7:30]
You're right, we've only gone to 850 this year. After the staff did a study of all vehicles in the fleet, it was decided we don't need as many this year. But the bottom line in this discussion is that we expect, after our total review is finished, that we're going to have considerably more savings
[ Page 11315 ]
and will not require the upper limit of 850 vehicles, which I indicated to you.
K. Jones: Could the minister tell us whether there has been a reduction in the number of government employees from last year to this year?
Hon. R. Blencoe: I couldn't answer that question. You may wish to ask the Minister of Finance, who is responsible for PSERC. That would probably be the best place to get an answer to that question.
K. Jones: Okay. Thank you. My guesstimations were that there was actually an increase in the number of total employees, as I recall previously. Yet the number of vehicles has been reduced. What method is the minister using to bring about a reduction of the number of vehicles required, other than finding that some -- I think he identified 90 -- are underutilized? Are we going to have a lot of people waiting around for a vehicle because they don't have one in their operation?
Hon. R. Blencoe: No, no one is going to wait around. In terms of the review, basically it takes a look.... Go back to the very simple question: to some degree we are changing our methodology. It used to be that vehicle management took the orders and supplied what ministries required. We are now getting into a more disciplined approach: we look at what we think they need rather than what they think they want. We look at a number of utilization factors. Traditionally a certain department may have needed five vehicles. Can they do with three? We take a look at their operation, the travel time, the standards and the vehicles they use. Do they actually need a certain kind of vehicle, or could they do with an economy rather than a mid-range vehicle? All these things are being looked at very critically.
K. Jones: Could the minister tell us why, two and a half years into the mandate of this government -- and I would ask the previous government why they hadn't done this -- utilization studies haven't been done to identify this? Is it because they are out of control and that up until now there has been no purchasing policy for vehicles, and now you're working at developing them. Is there some problem? Was it that there wasn't enough guidance in the past, and now you're going to implement this guidance?
Hon. R. Blencoe: It's not my job to reflect on colleagues or past colleagues, so I won't do that; I will never do that. But I should let you know that the way government works is that things are fluid. Public servants always look for ways to make recommendations to those of us who make decisions concerning how to improve our service, standards, utilization and cost-effectiveness. That's ongoing. There was a utilization review approximately three years ago, so in terms of this area, it's always being looked at. I have to say, though, that in my perspective there is no question that there's a lot of room in this particular area, and in other areas, for more efficiencies and cost-savings -- and I've certainly given that instruction.
K. Jones: I'm really surprised there was a utilization review done three years ago, because there appears to be inadequate guidelines for the purchasing process today. You have to have another utilization review to bring in better guidelines because of the slipshod purchasing practices that we saw examples of this past year, when very expensive vehicles were purchased that were not necessary for the jobs they were being used for. Obviously, you can now recognize this, and I think all of us can recognize this. Is it that there wasn't any policy previously? Could the minister give us the purchasing policy that directed present and past purchasing decisions? I know that we don't have any new policy at present; you have already told us that it's still to come.
Hon. R. Blencoe: The answer to most of what you're asking is no, but what I will do is send you the GMOP policy on these areas. I don't think we have a book right now, but I will endeavour to get one for you. If you search your files, you may even find one. There is a detailed policy, and I've told you the policy in terms of.... An operational review is going on right now that may lead to changes in that policy. I've said that three times now, hon. member.
K. Jones: I'm looking through the GMOP policy here, and I'm just trying to find out where it specifically refers to the purchase of vehicles. I don't see any reference to vehicle purchasing in this GMOP of the Purchasing Commission. Perhaps the minister could give me some guidance on which part of the GMOP I should be looking at.
Hon. R. Blencoe: It appears you don't have the vehicle purchasing policy, but I'll endeavour to send it to you as quickly as I can.
K. Jones: If the minister would just give me an idea of which section to look in, then I'll look it up in my own copy of the GMOP. There is no necessity for him to send me a copy. I would like to know what section it's in, and then I'll have my assistant bring it in to me. Perhaps you could tell us what section of the purchasing policy for the Purchasing Commission it is found in.
Hon. R. Blencoe: We could just spin our wheels all night. I will endeavour to send you a very detailed vehicle purchase and replacement policy, and you can look at it to your heart's content.
K. Jones: As I said previously, it wasn't necessary for you to send me something. I could have my assistant bring it to us in a few minutes, if you'd just tell me what section it's in. I'm not sure that there is a policy, because you're not able to tell me what section to look for in the GMOP. I would presume that the minister, being familiar with his ministry, would know the GMOP inside out: all the guidelines and the policy, which is the minister's responsibility. The policy is the minister's responsibility, and he should be fairly familiar with all the details of the policy. That's what government is supposed to be operating on, at the political level. The administration will implement the policy, but the political people are supposed to know the policy. For one last time, does the minister have the section I can find the vehicle purchasing policies in?
Hon. R. Blencoe: It's a significant document, but I don't have it with me. I can assure the hon. member that I'm more interested in policy in terms of saving money rather than reading 5,001 clauses marked (a), (b) and (c). But I will endeavour to send you the policy. You can look at it and ask specific questions if you so desire.
K. Jones: I was just looking at the Purchasing Commission's general management operating policy. I would have thought it would be under strategies, where it
[ Page 11316 ]
talks about product standards and specifications and gives a three-line statement of the policy in that regard. It also talks about regional supplier development, seminars and trade shows, and the First Buy program. All these are in three-line statements, and they're quite easy to read and understand. For example, the First Buy program says: "Promoting economic growth by giving B.C. suppliers an important 'first sale' -- reference account and cash flow -- thus enabling the company to establish itself and make additional sales."
I would think that somewhere in here I would find the section that relates to all the ministries and the Crowns, and a three- or four-line statement that would say exactly what direction these people are supposed to be purchasing their vehicles under.
Hon. R. Blencoe: Hon. member, if you look closely at the policy you're citing, I think you will find that you're in the wrong section. You're looking at disposable assets; you've been asking me about replacement and buying of vehicles. I think you're in the wrong section.
K. Jones: I'm very sorry, hon. minister, but I'm not in the wrong section. There's nothing in this about disposal. If that were the case, it would be hard to believe that purchasing of environmentally sensitive products, the western provinces procurement agreement, the intergovernmental agreement on government procurement and developing B.C. content for major projects wouldn't be mentioned under disposal.
I'm afraid, hon. minister, that you're the one that's wrong. You made a guess and hoped to stab in the dark, but you missed. The fact is that I have the right document and you just don't know it.
L. Fox: I have listened to the discussion, and I want to find out a couple of things. It's my understanding that the description of the object that the Purchasing Commission goes out to purchase is designed primarily by the line ministry. In other words, if the Ministry of Forests requests 34 trucks, they decide what options and what specifications they want, come to the Purchasing Commission and you go out and seek the best deal. Is that not correct?
Hon. R. Blencoe: Yes, that's the way it's currently done. As I've already explained, the traditional way is that they look at their needs, come to vehicle management and say: "The Ministry of Forests needs 36 trucks. Please meet our need." We're now looking at our specifications, and rather than always meeting what they think are their needs, we're reviewing how we might view their needs and what they could do differently. We suspect that when we've finished our review -- and Forests is one of the ministries we're reviewing -- we're going to save millions of dollars in fleet costs. Their interpretation of needs has been the system. However, vehicle management is experienced in these areas, and we think there will be considerable savings by advising them about other kinds of opportunities.
[7:45]
L. Fox: What kind of authority does the Purchasing Commission have? Are the vehicles paid for out of the purchasing authority budget, the Ministry of Forests budget or the line ministry's budget?
Hon. R. Blencoe: That is a good question. They're paid for out of the working capital account. The Ministry of Forests gets a bill stating: "We've paid for 36 trucks out of the capital account; please pay us back out of your vehicle budget." The amount is paid back over a five-year period.
L. Fox: I want to clarify a point. It might be misconstrued because I'm a car dealer. The minister suggested: "If we purchase so-and-so from you...." I can assure you, hon. Chair, that while my dealership receives all the bidding forms, we have yet to bid on any -- because of the conflict. Obviously, hon. Chair, I had to rise to that statement.
In other words, you operate a fund for all the line ministries which use the vehicles that you purchase, lease or charge a user fee to the line ministry for. Is that correct?
Hon. R. Blencoe: I'm told that the technical term is a holding fee, hon. member. I'm told also that most of the line ministry vehicles are no longer leased; they're purchased. I believe considerable work was done some years ago, and it was determined that actual outright purchases were a better value for government. I suspect it was done under the former government's administration.
L. Fox: I have to be careful here, hon. Chair; I want to make it very clear that I'm looking at the province's interests and not at any particular car dealer's interests. Perhaps my experience allows me to look at these things more objectively in terms of saving money for the province.
Has the Purchasing Commission looked at the option of purchasing extended warranties along with those vehicles so that there isn't a maintenance cost? In fact, they may buy a warranty process which would stay in place. It's my understanding that the rule of thumb in a lot of regions of the province for removing those vehicles from service is 100,000 kilometres. Has the Purchasing Commission looked at the option of buying an extended warranty package when purchasing a vehicle?
Hon. R. Blencoe: The hon. member has had a lot more experience in this area than I've had, and he has interesting questions. I'm told that the extended warranty concept....We have now been joined by...
L. Fox: Another experienced member.
Hon. R. Blencoe: You may wish to bring it up; I won't.
I'm told the extended warranty concept was explored some time ago. It is offered by only one of the major suppliers, and it was determined that we should be doing our own prevention and proper maintenance programs. It is more cost-effective to do it ourselves. If there are some changes in that, we're obviously very open to taking a look at it, but I'm told it was decided that our own internal prevention program was more cost-effective.
L. Fox: I hesitate to get into that discussion at this point, but perhaps somewhere down the road we might get together to discuss that report.
As I understand it, the Purchasing Commission will own those vehicles, and you are now going through a process where you have a more direct say in the line ministries' purchases. I understood you to say a few answers back that you may downgrade a vehicle, or change and modify the specifications of a vehicle that is going to be purchased for the use of a particular line ministry. That suggests you will also be looking at the number of vehicles purchased and their use on a monthly basis. One of the areas where we have some savings to make is the sharing of vehicles versus every government employee having a vehicle at his or her disposal. When I go by a number of different ministry facilities throughout the province, I see a lot of vehicles and, in many cases, I see vehicles that don't seem to move from day to day.
[ Page 11317 ]
They are depreciating, and so forth. What kind of auditing process are you using with, let's just say, a Ministry of Forests office in Prince George to identify the needs of that particular ministry?
Hon. R. Blencoe: We have an annual review of utilization of vehicles now. Before you came in, I was talking about the current review of vehicle use and requirements within government. We fully expect to be announcing substantial cutbacks this year in vehicle requirements. In the areas you're talking about, for instance, sharing is very much a factor we're taking a look at. We're looking at all sorts of requirements. It goes back to the question of ministries having what they think their needs are.
Just to tell you quickly -- it's in Hansard -- we are looking at the five big ministries, I think it is, and they've made certain requests. We are now taking a look at those requests. We have permission to go to 850 new replacement vehicles this year, but we have gone to only 366 thus far because of this full review of these major ministries. We fully expect we won't go anywhere near 850 this year because of the work we're doing in taking a really critical look at those ministries and their requirements.
L. Fox: I have one other question with respect to the acquisition of vehicles. In the allocation of brands to certain regions, one of the problems the ministries have had, especially in the smaller rural communities of the province, is that they often acquire, let's say, a Ford vehicle for use in a community or region that has only a Dodge dealership. That requires the ministry to spend a whole day of an employee's time going to a neighbouring community to have work done on their vehicle.
So as part of this evaluation.... Houston is a good case in point. It has a fairly high volume of government vehicles in the Ministry of Forests, and it only has a GM dealership, yet the vehicles in place are largely Dodges and Fords. It doesn't make a lot of sense to me. I think that's one of the mistakes we've been making in purchasing an allocation of vehicles.
Hon. R. Blencoe: Yes.
L. Fox: I assume that we would still purchase the same number of vehicles based on price -- I hope based on the best price rather than on a specified product -- but that the allocation of those vehicles could reduce costs in the line ministry over the course of the five years they were in service.
Hon. R. Blencoe: I'm told, hon. member, that the issue you referred to in terms of dealerships in a community was an issue, although not a big one in terms of numbers. It has been corrected, and now there's a better....
Interjection.
Hon. R. Blencoe: Well, if you have information, hon. member, I'd be pleased to receive it, because I'm told we were well aware of the issue of trying to match up a community in terms of its dealerships. If it is an ongoing problem, you should let me know, and then we'll certainly look into it, absolutely.
L. Fox: I do know that the Ministry of Forests, for instance, has looked at moving vehicles around to try to do the best they can to deal with this, but you obviously have some people who have preferences for specific models: once they've had them, they won't give them up.
Hon. R. Blencoe: We're working on it.
L. Fox: And so that is an ongoing problem.
I'm not sure if this question was asked before, but can the minister give me specific numbers as to what the acquisition of vehicles will be for 1994?
Hon. R. Blencoe: I have given it, but I'll give it again. We have permission for up to 850. We've been approved for 366, and while the operational review is ongoing in the major ministries, we fully expect that we'll get nowhere near the 850 vehicles. We fully expect very shortly to be reporting substantial savings in terms of the fleet.
L. Fox: Can the minister tell me how many vehicles are going to be retired out of service? Or are these additional vehicles? How many are replacements?
Hon. R. Blencoe: I'm told that when I say 850 vehicles, the equation is 850 in, 850 out; it is replacement. So far, therefore, we've had 366 out and 366 new ones in. I'm told that's the system.
L. Fox: Then I guess that begs the question: are we going to just not purchase vehicles, or are we going to decrease the fleet and still not purchase vehicles? If you've purchased 360-odd, and done away with 360-odd, are we looking at a reduction from 850 to 360 -- reducing but replacing less? If we are going to look at the sharing of use and so on.... I guess the question would be: by the end of 1994, are we going to see the fleet decreased because of actions of the Purchasing Commission or are we going to see the fleet at relatively the same size?
Hon. R. Blencoe: We have replaced 366 because that is the bare minimum required. We have permission for 850 replacement vehicles under normal circumstances, if we weren't doing this utilization review and study of the major ministries. We fully expect that we may not require up to another 400 vehicles this year because of the work that's ongoing now. We have already reduced the fleet by 90 in the first small phase of this review, and that saved $1.35 million; they were underutilized.
[8:00]
L. Fox: I'm not sure I got the answer -- at least I haven't got it through my head if I received it. You said that you're persevering through the sharing of vehicles in your obligation toward saving costs to the taxpayer. That suggests to me that we're going to see a reduction in vehicles, but there is an identified need for 800-plus vehicles because of the aging of parts of the fleet. So I guess what I'm trying to ascertain is: are we going to see some of the older vehicles stay on? Or are they still going to be retired and not replaced?
Hon. R. Blencoe: I'm told that older vehicles are classified at about six to seven years old. The current policy is that the best of them are kept on to use in the summer months, instead of renting. There's a lot of activity in the summer by many ministries, and we use those older vehicles for government use. I think I've already let you know, hon. member, that if we find in our review that the maximum number of units is not required, we have a potential further
[ Page 11318 ]
saving of $10.85 million. That's the maximum amount of money.
L. Fox: I think I have the picture. In previous summers, particularly in the Forests ministry, they have leased for short periods of time a substantial number of vehicles -- I would say in the hundreds throughout British Columbia -- at a fairly high cost of between $800 and $1,000 a month. Is the minister telling me that perhaps that demand will be somewhat less, because these other vehicles are going to be available for summer use?
Hon. R. Blencoe: Yes, it could be. You're right, too, that there are seasonal requirements, particularly in the Ministry of Forests. I think a lot of it has to do with the heat and fire suppression issues. I'm told it is a substantial lease, but it's tendered, so we get the best value we can. It could very well be that many of the older vehicles that are currently underutilized could be utilized in that fashion. Part of the underutilization is because the 90 vehicles that went weren't getting 12,000 kilometres a year. Whether that's good economics in terms of identifying, say, 100 of those motor vehicles that could be kept for summer -- keep them in a compound somewhere and utilize them in the summertime -- we'd have to take a look at that. There could very well be certain vehicles that could be utilized in different ways.
L. Fox: I think there may be some opportunity to utilize an older vehicle. However, I think if the minister examined the use of those vehicles in the four summer months, he would find it is fairly severe. The cost of maintenance would jump substantially if an older vehicle was used to service that need. There may very well be cases where those vehicles might be utilized, particularly around the supervision of projects or collecting supplies and so on, where the use is a lot lighter than use in the bush. I leave it to those who are probably more qualified than I am to make those decisions.
I want to canvass some of the other purchasing. I'm pleased that the Purchasing Commission is looking at the vehicle cost issue and at ways and means of saving costs. I have made recommendations over the years to respective Ministers of Government Services on how they might save costs in that area; I'm pleased to hear that you're exploring some of them.
Over the course of the last two years, I've had very good service from the Purchasing Commission office in Kamloops. It has been very responsive to my constituency needs by sending out information to individuals who wanted to acquire markets in the province of British Columbia. Can you tell me how much purchasing of supplies we do from smaller businesses in rural parts of the province, if that's at all possible?
Hon. R. Blencoe: Are you asking about vehicles or purchasing in general?
L. Fox: No.
Hon. R. Blencoe: I don't have those figures -- if we have them -- at my fingertips. We have a gentleman in Kamloops, Jim Hunter, whose job is to supply products for government needs and to match these with what small businesses can provide. Mr. Hunter has done some good work in that area. He is a supply development officer. We have a number of these across the province.
Frankly, one of my priorities has been to be more aggressive in that area. There are good stories about how our development officers have found ways to bring smaller regional manufacturers and suppliers into the government purchasing field. We're always looking at where we can replace supplies we are getting from offshore or out of province; we have to be careful sometimes with the western corridor or those areas. For instance, we discovered that the parks department was purchasing garbage receptacles. They were being sent from Alberta, but the Alberta company was getting them from south of the line. We discovered a manufacturer in Kamloops, I believe, who can build them in Kamloops; that means a considerable number of jobs. Our supply development officers are thinking about where they can go. They move around the community to see what activities are going on, and they match up. There's another good example. There are lots of stories.
We could be more aggressive. The public sector in the province does about $3 billion worth of business a year. About 50 percent of that is out of the province or out of the country. There's a lot of room for improvement. I think one way is to have people out there in the field to find out what is available -- not necessarily to be manufactured now but to be created and remanufactured. Government needs should be met on spec. I'll see if we can find the percentage of our business that goes to British Columbia or Canada.
L. Fox: I'm pleased to hear, and was aware, that the ministry was doing its best to look for markets within British Columbia. As you've explained it, I guess we might best call it an import replacement program.
I don't know whether we can or cannot do it. Perhaps it may be done, and I just haven't come across it. Does the Purchasing Commission publish a list of the kinds of things it purchases with the approximate values paid so that individuals may see whether or not there's an opportunity...?
We see a lot of cement abutments, I think -- they're quite large -- along certain parts of the road. They're trucked from the south into the far regions of the north. Trucking costs must be phenomenal. I cannot for the life of me believe that we couldn't manufacture those somewhere in a northern community to meet the needs of northern British Columbia and save substantial trucking costs and therefore have a more cost-effective program. Does the commission produce a list of what it acquires, and is this list made available for public bidding?
Hon. R. Blencoe: There's lots of room for improvement. In the new year we're looking at an electronic tendering system, which we covered before -- I don't know if you were here -- whereby all those who are on the government system can find out what government requirements are. Right now, a flash-up in the morning on your computer will give you the day's requirements of government, in terms of supplies that are needed.
Let me give you another example where I think we are doing some really good work. I was in Kamloops a few months ago visiting a small manufacturer we had put together with B.C. Hydro. Hydro had been buying polyurethane -- not a very pleasant smell; you have to wear a mask when you go in -- for the covers of wires around their poles. Molds -- I can't remember the technical name -- go around the wires, and thousands of them are required.
If I recall, we were getting those supplies from somewhere in the Maritimes. Love it -- the Maritimes, but I think we've found a supplier here in British Columbia that could do it far more cost-effectively. My understanding is
[ Page 11319 ]
that that company now has brought on around five to ten new employees, because we had matched it up.
There's lots more -- a ton more -- we can do in that area. It needs people that are on the ground putting it together. One of the ways we have to do it is to get out there in those regions to every single person who is a potential supplier and who knows what our requirements are. Or we can put our specs on government needs. We are importing this particular thing -- coat racks, for example. I have used this story many times. Thousands of chrome coatracks -- we don't have any in here -- were purchased by government south of the line. One of our development officers was walking by a motorcycle manufacturing plant -- I think it was in Kamloops again -- and they were making handlebars.
C. Tanner: What's with you and Kamloops?
Hon. R. Blencoe: I did a lot of work in Kamloops very recently.
Anyway, he put this company together to suit our needs, and that company now manufactures those coat hangers here in British Columbia instead of in the United States. There's lots more to be done, and we're trying to move ahead as quickly as possible to make sure people know what we need so we can do more import replacement.
L. Fox: The minister talks about putting them on computers and making them available through the latest technology. That's all well and good and as it should be, but I suggest that many individuals looking for business opportunities don't have a computer and aren't hooked up anywhere. There may be some real advantages to putting that information out to the chambers of commerce for their information areas. Is that something...?
Hon. R. Blencoe: Yes, we've already considered that and have already had discussions with various chambers. I think it's a good idea. The point has been made by business, particularly small ones, that it may be a bit of a cost to them. They asked if it could be centralized -- say, having that information go to a chamber, where people could drop in and find out what's required. We're looking at that; it's a good idea.
L. Fox: I've almost wrapped up; in fact, that was going to be my last question. However, I see that the opposition critic has left.
Let me try to put together another issue with respect to computerization. I'm sure the Purchasing Commission must have an ongoing computer assessment group to assess the delivery versus the cost, and so on. It seems to me that around the buildings I see more and more computers going back and forth. What kind of costs do we have within the Purchasing Commission? What do we have within the Purchasing Commission for the acquisition of computers, or is that handled by the Purchasing Commission?
Hon. R. Blencoe: I just have some late-breaking news, hon. member, in terms of getting information out. I've really been very keen on getting this information on the points you've been making. We are holding supplier opportunity forums next month, where we will take a long list of what government requires -- all the things we're doing -- and match them up and talk. The supplier opportunity forums are particularly for the north and central part of the province -- your part of the world. We're going to Prince Rupert, Smithers, Williams Lake and Quesnel with our supplier opportunity forums, and we will be doing that very thing.
L. Fox: What about Prince George?
Hon. R. Blencoe: Hon. member, I will take a look at the needs of Prince George. We may have already done one in Prince George. We did one last fall, hon. member. I guess you weren't there.
[8:15]
L. Fox: In terms of the computers....
Hon. R. Blencoe: Computers is not an area that I know particularly well; I'm just trying to learn myself. I'm told, and I see, that technology changes so fast that they are indeed coming in and out all the time. Ministries make their own requirements known to us, and we do the purchasing for them. We have a very good system. We have saved millions of dollars in centralizing the Purchasing Commission. It's another area, of course, where because of galloping technology, we're having to learn a lot more in terms of what savings can be made with various companies.
We have improved -- and staff can correct me -- and we do have an asset disposal unit. If any member wishes to take a tour, I'll show it to you. It's a very active place here in Victoria where old computers....
Interjection.
Hon. R. Blencoe: You've been there? It's where computers are fixed up.
L. Fox: I think they're looking at Jack Kempf's motor home.
Hon. R. Blencoe: I'll resist that comment. As I say, that's where computers get fixed up. There's a good group of people trying to put them back onto the market so we can recoup some of our money.
C. Tanner: For the last two years that I've been sitting in on these examinations of this ministry's expenditures, I've heard these stories about a computer that is going to tell everybody who wants to sell something to the government what is required. Earlier in this session, I heard the hon. minister telling my fellow member here that the ministry was doing a pilot project. What exactly is happening? Two years ago it was in process; last year it was getting better; this year it's a pilot project. Is there any way that this computer system, with its information for the business community of this province on what's required by the government, is going to happen during your term of office?
Hon. R. Blencoe: Yes, it will happen in our term of office.
C. Tanner: Does the minister have an explanation as to why it has been so slow to date in coming forth?
Hon. R. Blencoe: When you're breaking new ground and leading the country, and you have a very large, ambitious and complex project, you want to make sure you do it right. If I recall, you were here when I answered those same questions for the hon. critic. The answer is that we want to get it right, and we're doing it right. It's a very complex project.
[ Page 11320 ]
C. Tanner: The minister should listen to the questions instead of pre-empting the answers. I asked him why, when I was here last time, I heard the same story told to my fellow member that I've heard for the past two years. It doesn't seem that there has been any progress made at all in this program of telling the world what you have to sell. I don't think it behooves the minister to say flippantly that if I were here last time, I had the answer. If I had the answer, I wouldn't be asking the question, would I?
Hon. R. Blencoe: We announced the card program in October or November of last year. It is now in its test run, and we hope to finalize that study in October. I talked about the program's other components when the hon. member was here. We are continuing to look at them and hope they'll be implemented in the very near future.
C. Tanner: The member for Prince George is asking the same sort of questions that the member for Surrey-Cloverdale was asking, which I've been asking for three years: how do people have access to what the government requires? Has the minister given any consideration to using this government's Ministry of Small Business offices, which have been dispersed around the province, for this information? Has there been any consideration given to letting them look for the opportunities that exist?
Hon. R. Blencoe: Yes, hon. member, and they do. They work with our supply development officers, and the hon. minister and I talk about those issues. We think we can combine very effectively, and it's already ongoing.
C. Tanner: Could the minister give us some examples of how they have been working? He was happy to give us examples just now about coat hangers. Does he have something a bit more specific on how this government's Small Business ministry works with his own ministry, which is so important? They should be very important to each other. Give us some examples of how they work.
Hon. R. Blencoe: I can't give the hon. member details about the Ministry of Small Business; he can talk to them about that. All I'm saying is that their staff and our staff work on these opportunities, and many of the things I've talked about were a result of cooperation in staff working together to find these programs. It's an ongoing sharing of information.
I'll be the first to admit that there are improvements to be made, and we're working on it. We are optimistic that we'll have the leading state-of-the-art program in the country in terms of supplier information, cataloguing and tendering. We continue to work on that.
K. Jones: Some $24 million, I believe, is set aside in the minister's budget for the Purchasing Commission's working capital account. Could the minister tell us who pays the interest on that working capital fund?
Hon. R. Blencoe: Are we back to vehicle management, hon. member?
K. Jones: No, we're on the Purchasing Commission's working capital fund.
Hon. R. Blencoe: It's 9 percent, hon. member, but I'm told it gets reviewed every fall and will be reviewed again this fall. It's based on prevalent rates.
K. Jones: The question was who pays the interest, but I got the interest rate instead. The interest rate is 9 percent on the money being borrowed. That money is not coming out of the budget as we see it, then. Is that correct?
Hon. R. Blencoe: The ministries pay that rate. I'm told the prime is around 6.5 percent right now, so by the time we look at it again we will be looking at about 7.5 percent if things stay the same.
K. Jones: Could the minister tell us who gets the difference between the 9 percent interest paid by the ministries and the going market rate for that money? I presume the money is not all coming upfront out of taxation and that it's being borrowed from the money market. Is that correct? Is it out of the money market?
Hon. R. Blencoe: I'm told it goes back into the consolidated revenue fund.
K. Jones: Could the minister show us where its return to the consolidated revenue fund is indicated in his budget? It is shown as a total expenditure of zero for the year. It doesn't show that there's any money being gained on it.
Hon. R. Blencoe: Hon. member, we have a considerable number of documents. Can the hon. member tell us exactly what portion he is citing and where he's getting his figures from?
K. Jones: It's page 78 of the Supplement to the Estimates: Fiscal Year Ending March 31, 1995 -- the basic, fundamental document of the estimates.
Hon. R. Blencoe: I have found the Purchasing Commission working capital page, which shows the total estimate for 1994-95 as $16.4 million. Is that the page the member is referring to?
K. Jones: No, I'm not aware of that. Do you have the supplement to the estimates, hon. minister? This is the working document of the budget that most estimates are being operated from. It's page 78, Ministry of Government Services, "Special Accounts." The second special account is the Purchasing Commission working capital account, with total recoveries of $24,473,435; total expenditure for the year is zero.
Hon. R. Blencoe: It's a very simple answer. It seems that it's a fully recoverable program; it's consolidated revenue back to consolidated revenue -- fully recoverable.
K. Jones: Just to clarify, you're saying that it's a fully recoverable program, and that all of this money is taken out of general revenues and is fully available throughout the year and none of it is borrowed. General revenues are fully available to that extent right at the beginning of the year as well as at the end of the year.
[8:30]
Hon. R. Blencoe: The provincial treasurer, the Minister of Finance, is responsible for the borrowing. It's part of the consolidated revenue fund, and, as I say, it's fully cost recoverable.
K. Jones: So just to clarify everything, we have the 9 percent interest that's paid by the ministries in addition to the $24 million plus; that money is made available.
[ Page 11321 ]
Interjection.
K. Jones: Thank you, the member for Saanich North and the Islands, for providing a copy of the estimates supplement to the minister's staff. It was just a matter of clarifying that.
To go back to where we were, the 9 percent interest is paid by all the ministries that are utilizing it, and that money is going back in addition to the actual expenditure of money in this fund, so that you're actually making a profit on it, are you, hon. minister?
Hon. R. Blencoe: Yes, if you consider one paying another.... It's all the same money; it's the consolidated revenue fund. But the answer, basically, hon. member -- to make you feel happy -- is yes.
K. Jones: Since the minister's so happy about the fact that he's making money in one part of his ministry, perhaps he could tell us how much money he plans to make this year and how much money was made last year.
Hon. R. Blencoe: It's not really a relevant question. The account is like a clearing account: it comes in, and it goes out. Again, if you want further explanation, I'm sure we can go through it in detail with you.
K. Jones: Actually, it's very relevant. In fact, it may be a great source of income for the ministry if it were to expand the size of its purchasing operations. The Purchasing Commission would be making that much more money; it's only doing about one-twelfth of the total purchasing for the government. If you were to expand that by 5 to 10 percent so that funds or purchases came through the Purchasing Commission instead of being purchased directly by a ministry or a Crown corporation, as are more than 85 percent of the purchases in the province, then you would have a great deal of additional revenue from that transfer of 9 percent over the market price into general revenues. Should we believe that we have a cash cow here that is being utilized to increase our general revenues?
Hon. R. Blencoe: I think I've explained fully how this system works, and I don't intend to say any more about it.
K. Jones: I think the minister just said, "I quit," mainly because he doesn't have the answer. He doesn't understand the ministry financially and therefore is unable to explain it. We'll go on to another subject. I think we've exhausted the minister's capability in that area.
The Chair: Hon. member, I think that is not required in any circumstances.
[D. Schreck in the chair.]
K. Jones: He's capable physically, hon. Chair.
Could the minister tell us again how the ministries are involved in the determination of type and model of the vehicles purchased each year? The Purchasing Commission has some say in that. Who has the final say in determining what vehicle goes to the ministries according to what they ordered? Do they get the same vehicles they ordered?
Hon. R. Blencoe: We work out a compromise. If we feel that the vehicle is beyond the requirements, we discuss it with them and arrange a compromise. They give us full information according to what they think they need, and we use the experience of vehicle management services over the years to find a compromise.
K. Jones: That sounds like a good Canadian answer. However, I don't know how you develop policy on that basis. Either one party or the other ultimately has to make the decision of what vehicle is purchased. Are you saying that the vehicle management section of the Purchasing Commission or the Purchasing Commission itself makes the final decision about what goes on that order to the supplier of the vehicle?
Hon. R. Blencoe: We look at program needs, utilization factors, standards and specifications. We lay it out before them. Then the ministry lays out what they think they require, and nine times out of ten, we usually find a good compromise. As I said two hours ago, we're doing an extensive review of utilization in all the major ministries, and we expect major savings in the months ahead.
K. Jones: I'm looking forward to those major savings, hon. minister. I hope you've got the means of developing accountability to show how you gain those savings because we're going to be ready to ask questions next time. Maybe there will be an opportunity for somebody else to ask those questions. However, I'm sure that questions will come up about what you've committed to and whether you've produced on it. That's the real test of your abilities. I certainly hope you're successful in it, because if you're successful, then the taxpayers will be successful.
There are several other areas in the Purchasing Commission at the moment. I see that we have members of your staff from the archives, so we'll move over to that area for now and allow them to go through fairly quickly and move on.
Hon. R. Blencoe: Can the Purchasing Commission staff, who have been on standby, go home to join their families now? Is that satisfactory?
K. Jones: Yes, if the minister can handle questions with regard to transportation demand management without the assistance of the staff. Maybe the persons who would be required for that could stay behind, because I do have some questions regarding that.
The Chair: Shall vote 39 pass?
K. Jones: Excuse me, hon. Chair. Have we got the archives people here now to answer? Okay, I just wanted to make sure that these were timely.
With regard to the archives area, could the minister give us an update on the current status of the archives and on what's happening with regard to this year's programs?
Hon. R. Blencoe: The archives is doing well; it's continuing its traditional role. If you have specific questions, I'll be pleased to answer them.
K. Jones: Could the minister tell us exactly what he plans to do with the money that is budgeted for the archives?
Hon. R. Blencoe: In 1993-94 the money was spent on destruction of valueless government records according to approved schedule, 31,000 cubic feet; research visits and inquiries, 10,500; and microfilming, 16,000 exposures.
[ Page 11322 ]
The priorities for 1994-95 are conservation policy and planning; improvements in governmentwide policies and standards for care of permanently valued records in government offices. It's no secret that we're working on legislation for next year in terms of archives and records management. We're looking at improving electronic records archives policy and control mechanisms. The work of the archives is well known and continues.
Does the member want staffing complements as well?
K. Jones: Yes.
Hon. R. Blencoe: There are 67 FTEs. We serve all government ministries and agencies; we do extensive research for the public and other community archives, and we run various programs and supply small grants to community archives across the province. Of course, these days we have significant work in terms of freedom of information, people accessing records and those kinds of issues.
K. Jones: Could the minister tell us how much of the budget allocated under community programs and services is actually allocated to the archives and records services?
Hon. R. Blencoe: This year we have an increase in the budget for the archives and records services, an area I'm pleased to report on because I think the work they do and the information they have to deal with is substantial, and there is considerable work to be done in terms of catch-up. In 1993-94 the budget was just over $5 million. For 1994-95 we have $5,277,000, which is an increase of $244,000, or 5 percent.
K. Jones: Does that also include additional FTEs from last year?
Hon. R. Blencoe: No.
K. Jones: The minister indicated there was a considerable amount of additional work as a result of freedom-of-information and protection-of-privacy demands, yet he's stating that there was no requirement for additional staff. Could the minister tell us how that extra workload was handled? Superhuman staff, I presume.
Hon. R. Blencoe: Indeed, hon. member, we gave them a task to meet the requirements with existing staff.
K. Jones: Could the minister tell us, then, what the extra $270,000 was required for?
Hon. R. Blencoe: There is an increase of $166,000 for records storage. I'm not quite sure what the details are on that, but we'll get that for the member. There's an increase of $25,000 for computers, as we had to replace Wang. More and more of the information at the archives is being put on computer, and we require an upgrade in that area. We've given them a small increase of $25,000 to continue that work. There's a basic salary increase of $126,000. Basically those are the increases, hon. member. There have been some reductions, of course, which balance it out to an increase of $244,000.
[8:45]
K. Jones: I presume that there were some classification increases for staff?
Hon. R. Blencoe: Yes.
K. Jones: Were there any additional expenses for senior management?
Hon. R. Blencoe: No.
K. Jones: During my last visit there was an indication that facility requirement changes were needed for archives. Have those been provided for in the budget this year?
Hon. R. Blencoe: If we had a wide-open chequebook, we could do all sorts of wonderful things at the archives. Maybe the hon. member could be more specific.
K. Jones: I understand there was a need for additional space and improvements to the facilities, so the records would be under less risk of water damage. Has that been corrected in this year's budget?
Hon. R. Blencoe: Part of the increase has to do with space, and contract space, for records storage. I've already included this as an increase of $166,000. There are all sorts of requirements on-site, and there is no question we could do with expansion. It's there to be done, and as we look at our budgets, we try to make improvements.
The encouraging thing, I think, for archives and for those who have a lot of time for archives and for historical significance -- and I'm one of them -- is that we have, in these very difficult times of budget cuts and dramatic deficit reduction, managed to increase this budget by 5 percent.
K. Jones: I'm also very interested in the preservation of our records and the wonderful artwork and prints and painting and audiovisual materials that are stored in that facility. I have concerns that they may not be kept in the kind of condition they need to be kept in because of lack of funding needed to improve the capital facility. What has the minister been doing about that? I presume, from the looks of the expenditure, that most of the money was spent for off-site records storage. Is all of the $166,000 for off-site storage?
Hon. R. Blencoe: Yes, you're right. I recognize that there is a requirement at the archives and records services. I've spent quite some time there with Mr. Bovey and his staff. I'm trying to address some of the issues. Small as that might be this year, there is considerable planning and work to be done in the future. I can't reflect, obviously, on future budgets or future policy.
One major area I hope to make accomplishments in this year, though, is that of giving archives and records services legislation that reflects modern times and reality. The current legislation is from 1936, so you can see that it does need some work. I've made the commitment to try to get it in for next session. Of course, there are always pressing priorities in terms of legislation, but I'm of the opinion that it's required, and we're working on that. I think it's significant because it hasn't been done since 1936 and hasn't been a particular priority.
K. Jones: Does that mean the minister will bring in legislation this fall to accommodate these needs? Will the minister bring this legislation in?
Hon. R. Blencoe: I'm sorry, hon. member. You know something that I don't -- that there's going to be a fall session. We're actually looking at this time next year.
[ Page 11323 ]
The Chair: The Chair cautions all hon. members that the need for future legislation is strictly out of order.
On matters relating to the estimates, the hon. member.
K. Jones: Thank you, hon. Chair. We're talking about this current budget year with regard to these items, and there's no talk about future....
The Chair: Order! Is the member attempting to challenge the Chair? That would be strictly out of order. The ruling is -- and the standing orders are clear -- that future legislation is not properly within the scope of estimates debate.
The hon. member continues.
K. Jones: The real question here is whether we're going to provide adequately for what is required today to preserve and protect the long-term heritage of British Columbia. The minister has had a good look at it. Could the minister tell me exactly how much money needs to be spent to make this facility secure and adequate in protecting this very valuable collection?
Hon. R. Blencoe: The archives and records services are secure. It is currently budgeted at $5.2 million, an increase of 5 percent over last year. I cannot give you a figure for what we might do in the future, but I recognize there's always room for improvement. The fact that I managed to achieve a 5 percent increase in this very difficult year is, I hope, a good sign for the future.
K. Jones: The minister has actually given us a figure for operating costs, but I'm talking about capital cost requirements. I see nothing in your budget this year for capital cost requirements to meet the needs that would be required for the full protection of these facilities. We have data facilities. We have a requirement to put facilities into protected backup locations. We have artwork -- or even the whole building -- that may not survive a major earthquake. What I'm asking is: what are the capital requirements to put this up to the full standard required to protect all these valuable documents, records and paintings, both atmospherically and from any other hazardous process?
Hon. R. Blencoe: The buildings are secure. We are maintaining the archives and records satisfactorily. Indeed, I think it's one of the best in the country. At this point in this budget, there are no capital projects predicted or laid out, but I cannot say that in the future there won't be, hon. member.
I reiterate that in a very tough budget year, we have managed to increase the budget 5 percent.
K. Jones: Could the minister tell us what disaster plan is in place for the archives?
Hon. R. Blencoe: I don't have it with me. I have seen it, but I can't recall it in detail. For each division within the archives and records service there's a detailed disaster plan. Again, like all the other information.... You may even have seen it, hon. member, but I will provide it to you; it is available.
K. Jones: Could the minister give us an idea of what would be done in this case if there were a major disaster? Is there a backup facility? Is there some place where the records are protected, either digitally or by microfiche or some other method, in some other location?
Hon. R. Blencoe: Hon. member, there is a substantial security vault -- I think you've probably even toured it -- which is fairly large and stores all sensitive microfilm material of government records going back to whenever. It is earthquake-proof to a level of 9.5.
K. Jones: That's good for that vault, but that vault is rather small in relation to all the storage in that building. What's going to happen to the rest of the files and records there? Has there been a full backup of all the facilities there in an off-site location? Are there records of the materials there in a data storage that is protected from an electronic disaster?
Hon. R. Blencoe: There is a scale of sensitivity and uniqueness, and there are secure off-site and on-site facilities in which we try to protect the most sensitive material. I have already mentioned the vault for microfilming. But what if...? This is an issue. There are many buildings, and we can't predict. We try to protect as much as possible the sensitive and special one-of-a-kind archival materials, like paintings. We try to provide available space for as much of that as we can.
K. Jones: I'll give you an example. The B.C. Systems Corporation has a data backup to its systems....
Hon. R. Blencoe: It has a vault off-site.
K. Jones: No, it is not a vault; it's an off-site data bank outside Victoria. What I have been asking is what provision has been made for the protection of those sensitive items by some copying method so that those documents would still be available if this place were wiped out.
[9:00]
Hon. R. Blencoe: The sensitive material that we deem requires protection is stored in the same building you referred to with B.C. Systems; it is same site.
K. Jones: I'm really shocked that that site would be the location for storing the archival backup information from here, because that site is also vulnerable if anything were to happen in the Victoria area. It would normally be the practice to have it in another location inside or outside the province. It may be that some people have even used facilities outside the province. I'm not encouraging that. I really hope we don't have data and other documentation outside the province because you sometimes lose control over it, but to have it in the same city definitely doesn't seem to be much of a backup.
Hon. R. Blencoe: I'm told that this building is extremely secure. It's one of the strongest buildings in the province, built on rock to anti-earthquake specifications, and it's the best that is available, hon. member.
K. Jones: Regarding the great demands that freedom-of-information and protection-of-privacy legislation has brought to the archival records, I'd like to ask the hon. minister just how much in the way of dollar costs has been allocated to recognize that. Is that an increase or a decrease from what you had projected last year?
Hon. R. Blencoe: We have, I'm told, 3.8 FTEs specifically relating to FOI in archives.
[ Page 11324 ]
K. Jones: Could the minister tell us the dollar cost allocated to the recognition of the demand being brought by FOI, and also whether that's an increase or a decrease over what was projected from last year?
Hon. R. Blencoe: The best we can determine for you in terms of FOI, hon. member, is that last year it was budgeted at $260,000, and we seem to have got it down this year to $246,000.
K. Jones: Does that mean that the minister is now projecting a reduced amount for this year's budget below $246,000, or is he actually expecting an increase in the demand for freedom-of-information services?
Hon. R. Blencoe: It all depends on the frivolous requests we get from the opposition, which test the limits of many. Hon. member, we fully expect some efficiencies and continue to make improvements, but we can never tell what requests are going to come in, obviously; it's an open system.
K. Jones: As the minister responsible for implementing the freedom-of-information program, I'm surprised to hear him state that he's willing to throw at somebody who wishes to make an application the accusation that their applications are mostly frivolous. I think the minister is stepping into the freedom-of-information commissioner's area and out of his own, which is that of trying to assist the various ministerial areas with the implementation of the program. I think he should be held accountable for that type of cheap shot. I certainly won't accept it myself on behalf of the official opposition. Our requests are well measured and certainly not frivolous.
On that note and at your request, hon. minister, I think we'll step down from archives and records. I think we've given that a good examination, and we'll move on to information systems branch.
The Chair: Shall vote 39 pass?
K. Jones: I wish the Chairman would not try to play games with the....
The Chair: Order! Challenging the Chair and making remarks deleterious to the Chair are strictly out of order. The member knows the standing orders, and if the member wishes to push those orders, the member knows the consequences of that. If the member wishes to continue the debate, the member will be recognized. Does the member wish to continue in debate? If so, the member is recognized.
K. Jones: I certainly will continue debate, and I will continue until we are completed. I was only giving the minister an opportunity to find the new section we were moving into, and I thought it was rather considerate on my part to try to give him those few minutes to do so.
Hon. minister, with regard to the information systems branch, could you tell us exactly what that particular branch is supposed to be doing? It's hard to tell just from information systems area what it is doing or whether it's necessary.
Hon. R. Blencoe: The hon. member is very welcome to have a briefing by ministry staff if he would like to know more about the information systems branch.
Let me tell you that the program objectives of the branch are to provide computer systems and telecommunications support to the various customers we have in order to support their business functions, to recommend policies and set standards for our computer systems and to provide cost-effective and reliable computer network and ministry-wide applications. There are 15 FTEs in this branch. Our partners or our customers are obviously ministry branches, private sector firms and the B.C. Systems Corporation.
[G. Brewin in the chair.]
Let me give you some of our outputs, hon. member -- good stuff. The number of computers supported, 472. As for the number of computer problems resolved, hotline calls and end-user support to February 28, 1994, we resolved 4,218 problems, hon. member. The number of computer change requests, 306. Our priorities for this year are, thank goodness, to convert Wang computer systems to new technology. How did we ever get Wang in the first place?
Interjection.
Hon. R. Blencoe: Former government, hon. member.
Priorities include planning and implementation for Wang systems conversion of network, databases and e-mail; develop funding model for information systems services; set ministry standards on the use of computer hardware and software; and provide training for ministry staff in the use of computer systems.
There is an interesting success story for you here, hon. member. We successfully coordinated the move between buildings of 150 computer devices for four major branches of the ministry and ensured operational status within 48 hours. That's quite an accomplishment. Hon. member, that is the basic description. If you have some specific questions, I'll be pleased to try to answer them.
K. Jones: Hon. Chair, welcome back -- very welcome indeed.
Could the minister tell us how much of his budget is allocated to this branch?
Hon. R. Blencoe: We've had a 14 percent reduction in this branch. Last year there was $2.2 million. We have it down to $1,892,000. That's a $313,000 reduction, hon. member.
K. Jones: Has the minister done an audit of this particular branch to determine whether the minister is actually getting value for money, and could he also indicate this branch's role in providing services to private sector companies?
Hon. R. Blencoe: We're in the process, hon. member. As a matter of fact, we're doing a complete review of the legislative precinct at this time.
K. Jones: You mentioned that you provide services to private sector organizations and to B.C. Systems Corporation. Could you tell us the ways the services of this branch are being provided to the private sector and to B.C. Systems?
Hon. R. Blencoe: We work mostly with B.C. Systems, but we have in the past worked with the private sector or used their services.
K. Jones: So you're saying that you utilize private sector services, and you don't provide private sector services?
[ Page 11325 ]
Hon. R. Blencoe: Right.
K. Jones: Okay, the statement you made earlier confused me.
Information systems in most operations are very hard to keep good control of. They can very rapidly become a very high expense item. The fact that you're dealing with support people and problems can engender a lot of work very rapidly, and there is difficulty controlling the demands there. What work has been done in controlling this, and what training -- either inside or outside this branch -- is there to reduce the amount of service or support time? A very large number of support problems is indicated, and perhaps many have been alleviated or eliminated had there been adequate training to start with.
[9:15]
Hon. R. Blencoe: You're correct. More training and better training will hopefully eliminate the emergency calls we have to answer. We continue improvements to training. When you bring in new systems as we've done here in the buildings, people have to be trained. While people are learning, mistakes are made and systems go down and up -- certainly mine does.
The current review is to develop a better business plan. We're looking at purchase standards and limits; we're defining new service models. Training is improving; we're learning every single day how to cut back on some of these problems. We have had 4,218 problems, but they were resolved, hon. member.
K. Jones: I hope they're resolved. Could the minister tell us exactly how many repeat support program problems he has had in this past year?
Hon. R. Blencoe: No.
K. Jones: Thank you, hon. minister, for your honesty. Believe me, most people don't have that answer. It was just a curve to see whether you were going to be straightforward in your answer.
Could this service be provided by B.C. Systems Corporation for all ministries throughout the province? That is really their forte. They provide systems support, implement new systems and networks and do mass purchasing of equipment. Could you tell us why you can justify this particular branch within your ministry, rather than having that contracted to your ministry by people who are experts and are able to be more flexible in their utilization by spreading their work throughout many ministries, rather than being restricted exclusively to your ministry?
Hon. R. Blencoe: We are always looking to see how we can improve this branch and other branches in the ministry. We currently do have some B.C. Systems staff, but one of this ministry's major mandates is information systems and services, so there's no question that we have developed some expertise internally. But we work with B.C. Systems -- no question -- and there may very well be more sharing and movement in those areas in the future.
But as you can tell, hon. member, we manage to keep up the excellent service and deal with 4,218 complaints, and we managed to reduce the budget by 14 percent.
Interjection.
Hon. R. Blencoe: You're such a positive fellow.
K. Jones: Hon. minister, you say you've got some B.C. Systems people on your staff. Are they secondments, are they contract people, are they working in this branch or are they working in other branches, and could you tell us which branches they're working in?
Hon. R. Blencoe: Four are directly seconded from B.C. Systems into this branch, and then we have a separate contract for staff to help us with the legislative precinct.
K. Jones: I'm sorry, I couldn't quite hear that.
Hon. R. Blencoe: We have four secondments from B.C. Systems specifically for the information systems branch within the ministry, and we also have a separate contract for the legislative precinct. We have secondments there. It's a contract with specific requirements. They don't allocate a specific number of FTEs, but they're available to help us with the difficulties and the challenges of servicing the legislative precinct.
K. Jones: With regard to these contracted people who are working in legislative precinct facilities, could the minister tell us how many there are, how much that's costing and where the money is coming from?
Hon. R. Blencoe: There is a fixed-price contract for information systems operating for the legislative precinct, and the budget is $1.7 million.
K. Jones: That's a servicing contract, is it? It's not including the equipment or anything like that.
Hon. R. Blencoe: It includes the equipment. It's amortized over three years.
K. Jones: Is that providing the entire re-equipping of the precinct with new computer systems? It's Macintosh, I think. The minister said Apple, did he? Is that only the government side of the process? That's not providing for any of the members on the opposition side or the other operating people such as the Speaker's office. Are they included in that?
Hon. R. Blencoe: No. We don't supply the areas that the Speaker controls in the budget which, of course, are the Legislative Library and the Liberal, Socred and Reform caucuses. We supply everybody other than the various caucuses and independent MLAs.
The Chair: It is my understanding, hon. member, that that would presumably come under vote 1, which is the Speaker and the Legislative Assembly. When we get to vote 1, those questions would be appropriate.
K. Jones: That's for the other....
The Chair: That's for the legislative precinct. It would be under vote 1.
K. Jones: I understand that the minister is talking about the $1.7 million that's in his budget for the contract work that's being dealt with. So I think it's within this vote, hon. Chair, with respect.
The Chair: Well, I was just underlining what the minister was saying in terms of where they go -- just to be clear.
[ Page 11326 ]
K. Jones: We're basically talking about $1.7 million for redoing the computer system for the NDP operations here. That's for computers and data links, including software, of course. But does that include maintenance contracts for that equipment this year? Or is that just a servicing contract that will still have an additional charge for maintenance purposes for the rest of this year?
Hon. R. Blencoe: It's an all-in package serving government, and it's a required service no matter who is in government, hon. member. It's a facilities management service that includes all maintenance and hardware -- the works.
K. Jones: Could the minister tell us what kind of software is being provided in that program?
Hon. R. Blencoe: Yes, it's Apple equipment and the software they provide.
K. Jones: I was trying to find out what kinds of services are provided as a result of having this equipment. What kinds of software packages are you now getting with this as a whole? Are you getting just a word processing opportunity? Do you have any other facilities -- for instance management programs, management systems or executive systems, or are spreadsheets and things like that involved?
Hon. R. Blencoe: Yes, yes, yes and yes.
K. Jones: We'll have to check that one out.
With regard to central statistics, I'd like the minister to clarify.... I presume central statistics is the polling process of the government. Or is that another segment?
Hon. R. Blencoe: There are no surveys or polls done there, hon. member.
K. Jones: Do central statistics look at statistics within the minister's area or beyond the minister's area?
Hon. R. Blencoe: If I ask the branch to do something, they will, of course, do it, but it is a governmentwide service that does a good job. It doesn't get a lot of recognition and isn't talked about a lot. There are some really good staff over there, and they should be recognized for their work. There are 5 FTEs. Sorry, I'm wrong: there are 28 FTEs in this branch. Mr. Barnard will think I've suddenly cut his budget.
Let me quickly tell you about the program objectives, hon. member. First, we provide information and analytical services to all government ministries. We coordinate statistical information activities within government and between the government of British Columbia and the federal government. We produce, sell and release statistical publications in print and electronic formats. If you ever go over there, hon. member, the staff will show you catalogues of various things they've done over the years. I think it's fascinating reading, hon. member -- probably because I'm a geographer and I like those kinds of things.
[9:30]
Our customers are government ministries, Statistics Canada, Crown corporations, public agencies, all levels of government, the business community, overseas investors and business immigrants. In terms of our outputs up to February 28, 1994, we had 18,000 statistical inquiries, 31 publications and releases, and 150 custom tabulations.
I'll give you our priorities for this year in a general sense. We want to enhance the level and quality of analytical services. We're going to do that by the redirection of existing resources from data production to analysis and the possible transfer of analytical resources from elsewhere in government to help us with that capacity. We want expansion and reorientation of data and dissemination activities, more aggressive marketing of existing products, good market research to identify needed new products and reassignment and retraining of staff to emphasize marketing and electronic dissemination.
A major area of priority for '94-95 is improved coordination of statistical activities within government. We're establishing statistical contracts in all ministries; we're bringing back the statistical advisory committee; and we're going to be doing far more statistical workshops and seminars throughout government as we move to more and more of an information society.
D. Schreck: Hon. Chair, I move that the committee rise, report remarkable progress and ask leave to sit again.
Motion approved.
The committee rose at 9:33 p.m.
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