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)
THURSDAY, JUNE 2, 1994
Afternoon Sitting
Volume 16, Number 1
[ Page 11347 ]
The House met at 2:05 p.m.
Hon. B. Barlee: I would like members of the House to greet a school class from Okanagan Falls, which is often considered the centre of the Okanagan -- or at least was at one time. They are here to look at how the Legislature works. Welcome to the nice city of Victoria.
The Speaker: Before we proceed, hon. members, the Chair would like to make a brief statement on a matter I think you will find of interest.
As you know, some changes have been in progress with respect to expediting our work and improving on expenditures, etc. As members may have noticed at the start of this session, the publications of the House, including bills, Orders of the Day, Votes and Proceedings and Hansard, were changed in size. I am pleased to advise that the simple change to a standard paper size has resulted in a dramatic decrease in the amount of printed material without changing the content. It was achieved through cooperation with the House, the Queen's Printer and legislative counsel.
A further change as to the content is being made beginning today. On Tuesday and Thursday when the House sits twice, the afternoon printing of the order paper will no longer contain notices of motion and written questions to avoid unnecessary duplication. Instead, notices of motion and written questions will be incorporated by reference to the morning order paper. This initiative will reduce today's afternoon order paper by 15 pages and our printing requirements by approximately 21,000 pages a week, with corresponding cost benefits.
I would like to thank all members of the House for their cooperation in implementing this major improvement.
APPEAL PROCESS FOR MOTOR CARRIER COMMISSION DECISIONS
Hon. A. Edwards: I rise to make a ministerial statement. I rise to respond to questions that were raised yesterday, both inside and outside this assembly, respecting a decision that I made on an appeal of a Motor Carrier Commission decision. As a member of a committee to hear appeals pursuant to section 52 of the Motor Carrier Act, I have heard a total of 34 appeals. I have allowed 16 appeals and denied 18. In the two-day period of February 16 and 17, 1994, I heard seven appeals under section 52, one of which was application No. 1365-91, Kimber Cabs Ltd. I would like to inform the assembly of the information I had before me in respect of the appeal of Motor Carrier Commission order 2-93.
Later today I will seek leave of the House to table the following documents: volumes 1 and 2 of the hearing brief of October 20, 1992, which were submitted by Kimber Cabs Ltd. to the Motor Carrier Commission; order 2-93 of the Motor Carrier Commission by Chairman Donald Johannessen, who heard the original application on January 5, 1993; notice of appeal by Kimber Cabs Ltd. by way of a letter to the Attorney General dated January 27, 1993; the appellant's hearing brief and a summary thereof submitted by Kimber Cabs Ltd. on February 16, 1993; and a hearing brief filed by Richmond Cabs dated February 16, 1993.
In attendance at the hearing were representatives of Kimber Cabs and a member of the B.C. Paraplegic Association who appeared in support of the appellant. Also attending were counsel and co-counsel for the appellants, a representative of Richmond Cabs and that intervener's counsel. At the hearing I received legal advice from counsel to the cabinet committee from the Ministry of Attorney General. To my recollection, that hearing took approximately two hours. It was electronically recorded by M. McEachern and Associates Ltd. and subsequently transcribed. I have that transcription available for the House as well, hon. Speaker.
I provided the standard instructions on the proceedings to the appellant applicants and the objectors. I was there to hear submissions from a person or persons who believed themselves to be aggrieved by refusal to grant the licence under the act. I was there to hear submissions that might show that the commission had, in its decision, misinterpreted the act or misunderstood or not given proper consideration to the facts before it. The appellant applicant's case was put forward, then that of the objectors, and, according to practice, the appellant applicants were given a brief opportunity to respond.
I considered representations that the commission had not recognized the need for additional taxi service to the disabled citizens of Richmond and for competition in the provision of those services. I noted exhibits including letters from 175 individuals, 474 signatures on two petitions, a letter from the City of Richmond, and 86 private firms and seven community organizations -- all in support of improved and additional taxi service for the disabled. I concluded that it was in the public interest to approve the expansion of taxi services to the disabled residents of Richmond. It's a decision that I support, and it is a decision that supports increased services to the disabled. I stand by that decision.
[2:15]
In reaching my decision on the appeal, I read the materials submitted and heard what was alleged by the parties who were present at the hearing. I carefully weighed all the information which was properly before me, and on that basis I decided that the appeal should be allowed and that the decision of the Motor Carrier Commission made on January 5 should be reversed. If any of the parties who objected to the original application or appeared at the appeal consider, on their review of the transcript or for any other reason, that I did not properly exercise my jurisdiction, they can seek to have the decision reviewed by the B.C. Supreme Court under the Judicial Review Procedure Act.
G. Farrell-Collins: The facts stated by the Minister of Energy, Mines and Petroleum Resources have quite clearly been available. In fact, the opposition made them available to the media yesterday. All I can say is that the people this government appointed to hear appeals at the Motor Carrier Commission were quite clear and unequivocal in their decision. Those members of that Motor Carrier Commission, which is chaired by the campaign manager of the member for Saanich South, stated in their decision:
"There is no compelling evidence presented to the commission to indicate that there is a need for additional taxi licences in the city of Richmond. While the commission recognizes that the applicant is purporting to offer a fleet of wheelchair-accessible taxis, it is the commission's view that this is not economically possible, and that in very short order the applicant would be asking the commission for an amendment to its operating authority in order to operate taxis which are not wheelchair-accessible. This application should have been framed in the terms of a 'normal' taxicab operation providing some vehicles for the disabled.
"There are too many taxicabs operating in the Richmond area, and adding more taxis to the area in these economic times could lead to bankruptcies of the existing companies.
[ Page 11348 ]
"While the commission recognizes that Richmond Cabs is the only cab company in Richmond, and the commission does not view monopolies as the preferred way, it cannot see any advantage at this time to bring another company in, and is of the opinion that Richmond Cabs has not abused its monopoly position but has gone out and purchased and is operating wheelchair-accessible vehicles, and in the opinion of the commission, these vehicles are superior to those which are being operated by Kimber.
"The commission recognizes the desire of Mr. Kimber to have a taxi company of the nature of Kimber, but considering the testimony of Wayne French of Ottawa" -- which I would advise other members of this House to review -- "this is not a problem which can be solved by one taxi company. It is a problem which must be dealt with by the Motor Carrier Commission, the B.C. Transit Commission and the taxi industry as a whole."
It goes on to state that the evidence Kimber had as to the reliability of Richmond Cabs was not helpful to the commission. I think that the logic behind the decisions of the Motor Carrier Commission, which deals with these everyday, day in and day out, should be allowed to stand. This minister has gone out of her way to find other reasons -- in the last 24 hours, I might add -- to justify her decision.
Interjections.
The Speaker: Order, please.
J. Weisgerber: I was disappointed that the minister decided not to provide members of the opposition with a copy of her statement before coming to the House. A practice has developed in this Legislature over the last while to present copies of ministerial statements.
Also, it was pretty obvious yesterday that the minister didn't have the faintest idea why she had made the decision. When asked, she said something to the effect that: "Gosh, I can't remember much about it, except that Mr. Gill is a friend of Mr. Clark's." I guess that was the one thing that stuck in her mind. We now have a government in damage control. As long as all members recognize that, then I expect this material will be considered in that vein.
APPEAL PROCESS FOR MOTOR CARRIER COMMISSION DECISIONS
M. de Jong: Yesterday the Premier categorically stated that cabinet-level appeals are independent and not reviewed by cabinet. The transcript of the appeal proceedings referred to by the Minister of Energy states that she said at that appeal: "Once I have reached my decision, I will send it to cabinet for consideration." The statements contradict one another entirely. Would the Minister of Energy tell the people of British Columbia who was telling the truth about cabinet's involvement in the MCC appeal process -- her or the Premier?
The Speaker: Before I recognize the minister, I should state that when the member poses a question which suggests that someone may not be telling the truth, it's very close to suggesting that someone is making an improper statement. If the member was requesting the proper interpretation of the facts, that would certainly be in order.
Hon. A. Edwards: What in fact happened was that I read a standard statement, which we regularly do read, that has been prepared by the Attorney General. That statement says that when I reach a decision it is not a binding decision until it is approved by cabinet. That is correct. It says it's not binding until cabinet approves it in an order-in-council. That is certainly true, because the decision of the member of cabinet who does the appeals goes through the order-in-council process. And that's exactly what happens. Nevertheless, there is no review by cabinet of that decision.
The Speaker: The hon. member has a supplemental?
M. de Jong: I take it, from the response, that the minister does not deny she told the litigants in the process that her decision would be sent to cabinet for consideration. That's what it says. The Motor Carrier Commission spent three days hearing evidence and submissions from live witnesses before deciding to deny the Kimber application. The minister in her statement indicates that she heard submissions for two hours only, and on the basis of those two hours of submissions decided to overturn the decision. She's offered no justification. What valid justification can the minister offer for overturning the Motor Carrier Commission's decision on this matter and awarding this licence in favour of her NDP friend?
Hon. A. Edwards: I did hear the appeal. I did hear the appellants and the objectors who came to the appeal. I am the only one who heard that appeal. I am not willing to accept the assumption underlying the question, which is that at any time two hours won't beat three days. That's all you're saying to me. I was at the appeal, I heard the submissions, I properly considered them, and I came to a decision by which I will stand.
The Speaker: Final supplemental, hon. member.
M. de Jong: Implicit in the minister's response is a suggestion that she was in a better position to render a decision on this than the commission that heard three days of evidence from live witnesses. The commission said in their decision that this was a sham application designed to acquire some advantage over competitors. The minister says she was in a better position to determine that issue than the commission. What valid justification can she offer to the people of British Columbia so they know that NDP friends aren't getting preferential treatment at the cabinet level?
Hon. A. Edwards: The appeal process is there to give the appellants the opportunity to appeal. They can appeal; they can say they do not like that decision and then make a case....
Interjections.
The Speaker: Order, please. Members who pose questions should allow the minister to respond.
Hon. A. Edwards: The appellants have the opportunity to make their case based on the limited purview that someone who hears an appeal has. The people who responded to that appeal had the opportunity to make their case. In this case, it was my decision....
Interjections.
The Speaker: Order, please.
Hon. A. Edwards: It was my decision....
[ Page 11349 ]
M. de Jong: Based on what?
The Speaker: Order, please. Will the minister please take her seat. Hon. members, it is clearly out of order for members to speak from their seats. Members know this, and if they are not satisfied with responses to questions, that is their prerogative; but they do not have the right under our standing orders to interject from their seats when a minister is attempting to respond. I would appreciate your courtesy with regard to this. Would the hon. minister please conclude her statement.
Hon. A. Edwards: As I said, what I heard at the two-hour hearing where I was hearing an appeal -- not the whole case; I heard the appeal.... I'm sure that you, as a lawyer, are aware of some of the procedures that happen. The appeal procedure is a different procedure. I heard representations from the City of Richmond and various representations from the disabled. My decision was a decision that supports access to cabs for the disabled in Richmond, and it increases competition in Richmond. That is the essence of what the decision does, and that was my decision.
G. Farrell-Collins: What this side of the House is trying to determine and what that minister has failed to say yet is why she decided against the clear, logical decisions put out in the recommendations of the Motor Carrier Commission.
Interjections.
The Speaker: Order, please.
G. Farrell-Collins: On average, the time between an appeal and the decision coming forward is about two to four weeks. Indeed, in her decision -- in the transcript -- the minister said she would take four weeks to make this decision. In fact, it took over three months before this decision came forward. Can the minister tell us why it took three times the normal and standard length of time in these hearings? Why did this case take three months?
Hon. A. Edwards: I did my part in the process. I sat at the hearing. I reached a decision based on the facts and other representations made at the hearing. Having made my decision, I had no control over the process it went back into.
The Speaker: Supplemental, hon. member.
G. Farrell-Collins: We have talked to the order-in-council people. We've been informed that the transcript of this cabinet decision or appeal was ordered on March 1, two weeks after the hearing, and that it's unusual for the order-in-council to have to request such transcripts. Can the minister tell us if she requested that this transcript be made?
Hon. A. Edwards: I did my part in the process. I sit as the cabinet member who does the appeal. When I make my decision, I assume that the normal process will proceed. And it went into the normal process.
The Speaker: Final supplemental, hon. member.
G. Farrell-Collins: I find it very interesting that this minister isn't the one who ordered the transcript. Perhaps the Premier can inform us who in the government of British Columbia -- aside from the single person, according to him, who can make that decision -- would need to order that transcript. Who else in his government would have a need to order a transcript they would have nothing to do with?
Hon. M. Harcourt: I don't have that information handy today, but I can certainly get the House that information.
BCTF ROLE IN SURREY ALTERNATIVE SCHOOL ISSUE
L. Fox: My question this afternoon is to the Minister of Education. Last week the Surrey School Board voted to give parents a real choice in their public school system with the back-to-basics alternative school. But now the Surrey Teachers' Association is attempting to intimidate teachers who may want to work there. Does the minister agree that all school boards have the legal right to pursue this option, and if so, what steps has he taken to guarantee that no teacher applying for work in that new school will be subject to disciplinary action by the BCTF?
Hon. A. Charbonneau: Matters of education in the Surrey School District are, first and foremost, the responsibility of that school board. As long as the proposed school meets all of the tests under the School Act, as long as it teaches the provincial curriculum and any other courses approved by the province, and as long as it is in all other respects a proper public institution, I trust that the school board in Surrey will make the right decisions.
The Speaker: Supplemental, hon. member.
L. Fox: It's our belief that alternative schools should be introduced on a voluntary basis in response to parents' demands for a greater choice in the public school system. Is the minister prepared to tell the BCTF to cool its jets and stop threatening teachers who want to work in this Surrey school, or is he saying that the BCTF is within its mandate to use coercion to prevent alternative schools within the school system?
Hon. A. Charbonneau: The member opposite should practise reading his questions once or twice before entering the House; it might make matters go more smoothly.
The relationship between teachers and the Surrey School Board is a matter to be resolved between those parties in that jurisdiction.
The Speaker: The final supplemental, hon. member.
L. Fox: Taxpayers who feel that the current system is not meeting their demands for their children and who cannot afford to send their children to the private system are looking for a statement from the minister. Will the minister stand up in this House today and make the statement that he supports public control of our school system through elected trustees, or is he going to turn that control over to the BCTF?
[2:30]
Hon. A. Charbonneau: I am a proponent of publicly funded and publicly administered education in British Columbia.
APPEAL PROCESS FOR MOTOR CARRIER COMMISSION DECISIONS
W. Hurd: In second reading of the Cabinet Appeals Abolition Act, the Attorney General stated: "...decisions that are made by commissions or by administrative decision-
[ Page 11350 ]
makers are made with due process. Within cabinet there is no due process; it is a political decision behind closed doors." Given the comments of the Attorney General in the House, how could he put his signature to cabinet order 698, being a political decision made behind closed doors on the issue of Kimber Cabs and the appeal from the Motor Carrier Commission?
Hon. C. Gabelmann: My comments in the House during debate on the amendments which were designed to eliminate cabinet appeals were based on the history of political decisions in this province. This cabinet has been meticulous and scrupulous in avoiding any of that kind of history.
Interjections.
The Speaker: Order, please.
Hon. C. Gabelmann: Let me say it again. This cabinet has been meticulous and scrupulous in ensuring that that kind of political interference or lack of process did not continue. In fact, proper processes under the law as it exists have been followed.
The Speaker: Supplemental, hon. member.
W. Hurd: This is clearly the Knight Street Pub case on wheels.
Mr. Speaker, the provisions....
Interjections.
The Speaker: Order, please.
W. Hurd: The provisions abolishing cabinet appeals from decisions of the Motor Carrier Commission passed this House but have never been proclaimed. Can the Attorney General explain to this House what the inordinate delay has been, and whether this government recognizes the fact that there is a perception out there that it's simply waiting until all its party friends are rewarded?
Hon. C. Gabelmann: That is an outrageous assertion and is completely wrong. When I had the responsibility for the Motor Carrier Act, I introduced amendments, which were passed by this Legislature, that set up an appeal process. The minister responsible for the Motor Carrier Act is now the Minister of Transportation and Highways. When she assumed responsibility for that portfolio last September, she decided that she wanted to introduce a different appeal process -- non-cabinet, but different from the one this House had adopted. The minister, who is not here today, will be able to answer questions about that issue in this Legislature in due course, this month.
The Speaker: Hon. members, the bell terminates question period.
G. Wilson: I rise on a motion of privilege on matters of importance to the people of this province and to the constituents of my riding.
We are being denied our privileges by virtue of the fact that the government, contrary to the stated intention of the House Leader, is holding two critical debates concurrently. This situation is contrary to the statement to the House of the Government House Leader on April 6, 1994: "Estimates which are deemed to be...important to the opposition for scrutiny will be held in this chamber, if they so desire. We certainly have no intention of changing that."
To date, the government has introduced a series of controversial bills for debate that members of the Alliance are compelled to canvass at the same time that Finance estimates are proceeding in Committee A. Notwithstanding the fact that the official opposition and other opposition parties do not deem the Finance estimates to be important enough to be read in this House, which is the first time in the history of this province that that is so, the estimates of the people of this province.... In light of the fact that the Finance minister is also responsible for the implementation of the Korbin commission, which is relevant to the bills that are under debate and represents a complete restructuring of the public service, we deem it important to have access to that debate.
When I raised a similar point of privilege previously, the matter was raised in principle, and the Speaker ruled that if a specific circumstance led to the appearance of a member's rights being breached, the Speaker would reconsider the circumstances surrounding Committees A and B. In light of that fact, the Alliance members are the only members who stood in opposition to Bills 22 and 23.
I ask that the Speaker find that the concurrent debates breach the privilege of this member, as I cannot be in this chamber to effectively debate Bills 22 and 23 in committee stage and at the same time have an opportunity to debate the most important set of estimates, that of the Minister of Finance. I would ask that the Speaker determine if a prima facie breach of privilege exists and therefore entertain a motion that the Finance estimates be moved to Committee B and not be held concurrent with the debate on legislation before the members in order to preserve the privileges of this member and to protect the interests of the public.
Hon. G. Clark: I'd like to briefly respond to the leader of the fifth party in the House. I endeavour as House Leader, obviously, to accommodate all members of all political parties. The member has not raised with me this matter with respect to a bill standing in the name of the Minister of Skills, Training and Labour and the Ministry of Finance estimates. It hadn't occurred to many members of the House that there was an obvious overlap. If the members from time to time do have an overlap, we try to accommodate. Although it's more difficult with more parties and more members, and in June with night sittings, we try to accommodate so that people feel they can participate in all debates. Before a privilege motion be found, I would encourage the member to canvass with the Government House Leader, and we'll try to accommodate his wishes as best we can.
F. Gingell: I believe that it is important that the needs of all members be taken into account in our scheduling. I understand and appreciate the concerns of the member for Powell River-Sunshine Coast.
Just to set the record straight, I would like to state that the Finance ministry estimates were held in this chamber in the first year, and in the second year were in fact held in Committee A. I find Committee A most acceptable, because we tend to deal with some technical matters. Deputy ministers are allowed to respond, which is appropriate in many of these rather complex matters.
I do support the position of the member and would hope that we can find some sensible solution to this dilemma.
[ Page 11351 ]
The Speaker: I thank all members for their submissions. The Chair will undertake to review the matter and report back as soon as possible.
Hon. G. Clark: I say this with great trepidation. I call Committee of Supply A, the Ministry of Finance estimates. In the main House, I call committee on Bill 22.
COLLEGE AND INSTITUTE AMENDMENT ACT, 1994
The House in committee on Bill 22; D. Lovick in the chair.
Hon. G. Clark: Hon. Chair, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; D. Lovick in the chair.
The committee, having reported progress, was granted leave to sit again.
Hon. G. Clark: I call committee on Bill 39.
SKILLS, TRAINING AND LABOUR STATUTES AMENDMENT ACT, 1994
The House in committee on Bill 39; D. Lovick in the chair.
Sections 1 to 9 inclusive approved.
On section 10.
L. Hanson: It appears that the section would repeal a $15 fine and put in place a $2,000 fine or imprisonment for up to six months for someone who practises hairdressing without a licence. I haven't heard of any huge scandals or problems in the province with this causing great harm to our society, our justice system, or anything else. Maybe the minister can give us some idea why what appears to be a substantial change to the act is necessary.
Hon. D. Miller: I appreciate the member's concern, but let me assure you that we are not changing the rules, and we have not determined that those who practise hairdressing without the appropriate licence have committed some heinous crime. All we are doing is removing the $15 fine, which has not been adjusted since the 1930s. Rather than prescribing the penalties in the act, we are simply making the penalties reference the Offence Act, and that's the range. It is quite normal to have quite a degree of latitude with respect to what might be an appropriate fine under the Offence Act, even though the upper limit.... I think one can look at other situations around the province where there are requirements for licences and offences that are subject to the Offence Act, but it doesn't automatically.... No one should assume that practising hairdressing without a licence has become a capital offence.
L. Hanson: I'm not going to belabour this point. I understand the minister's concern for conformity, but by the same token this almost seems a bit ridiculous. I'd like to get some indication of how many times the $15 fine might have been applied.
Hon. D. Miller: The issue of the appropriate penalty would be determined by the courts. I think there's some legitimate debate here, whether or not one would want to continue. As a previous member of government, the member knows that the difficulty with prescribing the fine in legislation is that any adjustments -- and there should be reasonable adjustments from time to time -- require amendments that have to be debated in this House; in other words, they require legislation versus the system that simply lists infractions but leaves the job of determining an appropriate penalty under the Offence Act to the courts.
It is common practice in most legislation, and I would hope that the member would agree that having an act that has not been looked at with respect to these fines since the thirties.... It doesn't make a lot of sense for us to take 50 or 60 years to update these on a regular basis. There's nothing nefarious here. I don't know how often the thing was used. Quite frankly, I would suggest that with such a low fine, it was probably never pursued. Why would you want to spend the time and effort to pursue someone who committed an infraction under the act for $15? It would cost you more than you would recover through the fine. This is very practical, and as I say, it's not nefarious in the least.
Section 10 approved.
On section 11.
L. Reid: I'm referring to the Pension Benefits Standards Act. For clarification, perhaps we can have some sense of the costs that will result from the changes indicated under section 11(8)(b). Any change to a benefit obviously has an attendant cost. Could the minister perhaps reflect on that?
Hon. D. Miller: There really is no cost issue. Let me take a stab at it. I apologize; I'm doing this without having the appropriate staff here, but I think I'm reasonably conversant with the issue. In second reading, I think I explained the issue that had arisen as a result of the Khol case. In other words, where the Pension Benefits Standards Act and the public pension.... What's the correct name of the act? Where those applied, it was clear, in our view, that the Pension Benefits Standards Act applied to public sector pension plans.
The Pension Benefits Standards Act says that where the spouse.... Let me give you the history of the Khol case and then come back to the explanation. In the Khol case, the deceased had previously been married. About 20 or 30 years previous, the spouse had disappeared and could not be found. The individual who held the pension died, and the surviving dependents then applied to be the beneficiaries of the pension plan. The courts, in our view -- and I don't know if I'm in error here; I'll apologize in advance -- incorrectly determined that they could not allow the survivors to collect the pension because the deceased person had been married, even though the whereabouts of the spouse wasn't known. The survivors were denied benefits under the plan.
Clearly, that is not our intention under the Pension Benefits Standards Act. To correct that problem, we are making an amendment to make it very clear that the Pension Benefits Standards Act applies to public plans, so that in the case I've described, the survivors would not have encountered the difficulty they had in receiving the benefit that is rightly theirs from the deceased member's pension plan. That's the fundamental issue at stake with respect to the amendment. There's no cost, as such, to the public. In my
[ Page 11352 ]
view, it's simply correcting a deficiency that could potentially deprive survivors -- in very narrow cases, nonetheless some -- of benefits they would otherwise be entitled to.
L. Reid: I thank the minister for his comments, and I appreciate his flexibility in going forward without appropriate staff in place. Certainly I trust that he has given us the correct information, and I accept that.
Sections 11 to 13 inclusive approved.
On section 14.
L. Reid: Section 14 repeals section 57 of the Pension Benefits Standards Act and replaces it with the requirement that the employer pay the costs of winding up a pension plan if the employer remains in operation after the plan winds up. Could you give me some background on that?
Hon. D. Miller: I can't cite an actual case, but I'll give you the theory. As most members are aware, there has been a significant change in the Pension Benefits Standards Act -- for the better. Quite frankly, we've come into the twentieth century with respect to regulating pension plans. The fundamental issue is that we want members of pension plans to have the security of knowing that those plans will be funded, so that in the event that an employer goes out of business, they would still collect their entitlement to that particular plan.
We had a recent case involving the Westar plan, which I think is still subject to some final completion. Nonetheless, for illustrative purposes, in that particular case the company wound up its operations. I won't go into the history of that and BCRIC and all the rest of it. Suffice it to say, they wound up their operations with a fund that could not continue to pay, either to the existing retirees or to those who would retire in the future, the benefit level that had been negotiated, because there simply wasn't enough money in the plan.
That is why the Pension Benefits Standards Act has brought in a new regime that requires, over a reasonable period of time, all pension plans to pass what is called a solvency test. Very roughly speaking, the solvency test is: if everything stopped today, could all those people who are already in retirement and those who have benefits coming at various stages over the next number of years collect what they are due from the plan?
[3:00]
What we're saying here is that where a plan winds up, but the employer -- for whatever reason; and I'd like to give you a real instance, but I just can't think of one at the moment -- still remains in business, we think it's unfair for the costs of winding up the plan, which often involves the courts and lawyers and all that, to be borne by the plan members. Instead, they should be borne by that employer who continues to operate in business. That, I think, is a very fair and reasonable approach rather than saddling those individuals, who will suffer -- as in the case, for example, of Westar. For people already on pension to have a 24 percent cut, I think it was, is pretty heavy. We think the costs of winding up should be more properly carried by the employer if that employer continues in business.
L. Reid: From the minister's comments, am I to understand that winding up simply means securing the appropriate dollars, to have them in place for when person X is eligible to collect them?
[F. Garden in the chair.]
Hon. D. Miller: No, the windup is a culminating event that normally would be, for example, a court order or an agreement through a bankruptcy firm, or whatever the term is -- specialists who come in to wind up the affairs of companies that have gone under. So there are clearly additional costs; legal costs are involved. There is a moment in time when an order or direction is issued that would determine what the benefits might be for those who are already retired and for those who may retire in the future. It's not an thing that keeps going on for years; it really is to do the work to wind things down.
L. Reid: I appreciate the minister's patience on this question, because this is certainly not my field of expertise in any way, shape or form. I simply want to have the minister confirm that if "Person X" were to retire at 40, and the pension plan was to be wound up based on the employer paying the costs of that, that person would indeed still have a secure pension 15 years down the road, or whenever it happens to be. Is that what I am to understand from the minister's comments?
Hon. D. Miller: With the arrival of my assistant deputy minister, I received some new information that doesn't retract a lot of what I've said, but it does indicate that this section deals with those instances where there has been a voluntary windup -- in other words, where, presumably under agreement, there has been a windup of an existing plan but that employer continues in business, it simply obliges the employer, not the plan members, to bear the cost associated with winding the plan up.
L. Reid: I appreciate the minister's comment. Once "Plan A" is wound up, as an example, the person still has some eligibility and some security around receiving a pension at a later date. This is simply the technical financial management of the plan.
Hon. D. Miller: That is correct.
L. Hanson: I found the minister's answer regarding this section interesting. If a pension plan is terminated and the sponsoring employer continues or intends to continue in operation, the expenses incurred to wind up the plan must be paid by the employer. On the surface, with a quick analysis, it would seem to make some sense; but I suspect that under some circumstances.... I don't know which ones would cause this circumstance, but let me give you another circumstance. What if the pension plan is wound up at the request of the employees? If the employer were prepared to continue with their contribution to the pension plan, why would they be required to fund the termination?
Hon. D. Miller: I can't really foresee where that might take place. I'm not saying it wouldn't. Presumably, that would be by agreement. In other words, there would be an agreement between the employer and the employees with respect to costs associated with windup. Section 57(1), says:
"Subject to subsection (2), if a pension plan is terminated and the plan does not provide for payment of the expenses incurred to wind up the plan, the superintendent may, in writing, permit to be paid out of the plan, in priority to benefits, those expenses of winding up that the superintendent considers reasonable in the circumstances."
That would be covered by that section.
L. Hanson: Subsection (2) seems to say that in any case where a pension plan is terminated, the employer -- if he
[ Page 11353 ]
continues in business -- has to pay the windup costs. I recognize that, in subsection (1), "if a pension plan is terminated and the plan does not provide for payment of the expenses incurred to wind up the plan" -- I suspect that may be the original formation of the plan they're talking about, or the bylaws of the plan or whatever you might call them -- the rules of the plan could say that, in some circumstances, if the plan is terminated it can be paid out of the plan. The second subsection seems to say if there isn't anything there and the employer continues in business, he has no choice. That's the end of the game and it must happen.
Hon. D. Miller: I'm now surrounded by good advice from people who are much more informed on pension plans than myself, and that's as it should be.
Really, a couple of scenarios could take place. If the plan does not provide for payment -- in other words, if there has been no agreement on who would pay for the expenses of windup -- then the superintendent may permit the windup costs to be paid out of the plan. But if a pension plan is terminated and the sponsoring employer continues in business, then we think it's right and proper that that employer have the expense of winding up the plan. I don't think there's a contradiction at all in that respect.
One presumes that in the former case they're mostly involuntary -- maybe it's the Westar example, under 57(1). I'm trying to construct a theoretical situation. I assume if Westar had stayed in business.... It wasn't voluntary, but I don't have any real examples to illustrate that point where an employer stays in business but wants to wind up a plan for whatever reasons -- moving into another business or something else. I think it's quite reasonable. On an involuntary basis -- and I suggest that is really the bulk of what we're talking about -- there is an opportunity for the expenses to be covered by the money in the plan. But where an employer continues in business, that employer has the obligation of the windup costs.
L. Hanson: I don't want to belabour the point, but I suppose we don't want to get back to Bill 22 too fast. In any case, it appears to me that the way this is written it does provide some bias in one direction. But I respect where that might come from philosophically. In any case, I'll accept that explanation.
V. Anderson: Talking about the winding up of plans, I would like to ask the minister: is there any protection here for companies that go bankrupt? I know companies in other provinces are required to hold their pension plan in a trust account outside the company. If they go bankrupt, those funds aren't taken by other people, so there's nothing left for the pensioners. Is there any provision for those plans to be held outside the company in a trust account, so they and therefore the pensioners are protected against the bankruptcy?
Hon. D. Miller: I'm advised that pension plans are a trust fund and employees are protected. The difficulty arises with the issue I cited in the Westar case, where the company wound up, albeit on an involuntary basis, and the pension fund did not contain sufficient money to continue the benefits as per the agreement.
V. Anderson: To follow up on that, if I understand the direction of the discussion, is it the minister's intention that the solvency of those funds would be maintained, so that they would be protected? And is that protection unique to this province? Will they be maintained up to the amount of that protection, whether inside or outside the company?
Hon. D. Miller: That is the case.
L. Reid: Probably two questions back, we were chatting about the costs of winding up a pension plan, and you were making a case that it should be borne by the employer. In that pensions are created in this province on a cost-shared basis, is there any indication as to why it would not be possible in some circumstances to share the cost of winding up a pension plan between the employee and the employer?
Hon. D. Miller: The act is clear. It says that if there has not been a provision to wind up a plan, the costs are taken from the fund and the employees pay for it. There's an old labour theory that money contributed to pensions is unpaid wages. I'm not going to promulgate that at this point, but....
L. Reid: You're wiser?
Hon. D. Miller: Well, I may be wise, maybe not. Nonetheless, it is a benefit. It clearly is money that is not received in the direct form of wages. And there is an infinite variety of pension plans -- some that require employee contributions, some that don't. I don't think that because employees may be required in some instances to be contributors to a pension plan, it automatically follows that they would have the obligation to pay part of the windup costs on the shutdown of a pension plan. I don't think it follows at all. In fact, I would argue very strongly that that not be the case.
In practicality, most of the time that we're talking about plans winding up, we're talking about businesses that are shutting down. I say again that the employees include those who already are retired. How would you like to be on pension after working 30 years in the forest industry -- not a great pension -- and have something like this happen? They'll say: "Well, sorry, the result of this is that we're going to cut your pension by 24 percent." It's not very attractive, is it? You don't have an opportunity to make that up anywhere. I don't necessarily see that we need to impose any greater obligation on the beneficiaries of the plan.
L. Reid: Hon. minister, not to belabour the point, I was simply asking if the option existed, not that it should be all one way or all the other way. Will your interpretation of this legislation allow that an option may indeed be practicable at some point? Without asking the minister to make hypothetical considerations, can he see, as it stands, whether an option would be possible?
Hon. D. Miller: I believe that is the case.
Sections 14 to 16 inclusive approved.
Title approved.
Hon. D. Miller: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; D. Lovick in the chair.
[3:15]
[ Page 11354 ]
Bill 39, Skills Training and Labour Statutes Amendment Act, 1994, reported complete without amendment, read a third time and passed.
Hon. D. Miller: I call committee on Bill 13.
WORKERS COMPENSATION AMENDMENT ACT, 1994
The House in committee on Bill 13; F. Garden in the chair.
On section 1.
A. Warnke: I just want to get a quick clarification. Sections 1(c) through (g) make reference to medical.... Let's take section 1(c), for example: "...by striking out 'medical aid' wherever it appears and substituting 'health care'." Just by way of a very quick clarification, by making that adjustment, health care would include medical aid, would it not?
Hon. D. Miller: Yes, I think health care is simply a broader term.
Sections 1 and 2 approved.
On section 3.
G. Farrell-Collins: Perhaps the minister can give us an explanation as to why this request is made by the Workers' Compensation Board. There has to be a reason for it, I assume. Can you just let us know what that reasoning is?
Hon. D. Miller: I apologize. I've made a significant adjustment to my schedule, having come prepared to do Bills 22 and 23 in sequence. I have not consulted with staff, nor do I have staff on standby with respect to these. I'll go from my best memory, which is a little dated at this point.
Currently, as I understand it, the regulations are made by government. This simply gives the board the flexibility to make regulations respecting the matters listed in (a), (b) and (c). I think that's only right and proper, given the changes that are taking place and the need to give the board the ability to make changes, rather than have those come back through government. So it's conferring the power on the board.
G. Farrell-Collins: Perhaps the minister could enlighten me. There are obviously a number of things that the board makes regulations on and a number of things that the government makes regulations on. I understand that the minister is at a bit of a disadvantage. Does he have any idea, though, of the reasoning for this decision and these issues coming to the board? Is there an administrative reason or just a general policy reason for that?
Hon. D. Miller: The member is right. All members are aware of the significant change made a few short years ago to administer the WCB system through an appointed board of governors drawn from the labour community, the employer community and public interest governors. These requests for change, of course, have come from the board of governors. It's my view that they in fact have the expertise. We could continue to go through the process where the board would have to come to government and say: "You make the regulatory changes." But in matters that affect rights, benefits and entitlements to workers, it seems to me to be fit and proper -- given that we've got that governing structure -- that the board have the flexibility to make regulations dealing with the issues that are listed.
G. Farrell-Collins: There has been talk out there among the various interested parties in the Workers' Compensation Board that a great deal of policy being set by the Workers' Compensation Board seems to be coming from the appeals commission, and that policy is being made that way rather than a policy decision being made, implemented and then the appeals commissioner adjudicating on that. I've certainly heard a number of comments in that regard. I'm wondering if this request came from the appeals commissioner through to the board, or is it a general administrative change to try to make things clearer or simpler. What's the rationale for this very specific request? It's not a whole series of regulations that they'd like to be responsible for; it's one in particular. Perhaps it was an oversight some time in the past and just needs to be rectified. I don't know that, and I'm just trying to determine from the minister the intent of bringing forth this one. What was the impetus for this decision and request coming forward? Does he have any background on that, particularly with regard to the appeals commissioner?
Hon. D. Miller: Before I respond, I would ask the indulgence of the Chair to have the ability to propose an amendment. I had intended to have a proposed amendment to the bill. Clearly, I did not anticipate that we would be debating in committee at this stage.
Interjection.
Hon. D. Miller: I don't want to stand it down, because there may be some issues.... I'm not sure where we might go next, given that we've adjusted this schedule significantly for the benefit of other members.
Interjection.
Hon. D. Miller: All I'm asking is for the Chair to say that I will be proposing an amendment and reserving the right to come back to the particular section -- if that's agreeable to other members of the House.
Interjection.
Hon. D. Miller: No, maybe not on this section. I'm not exactly certain of the section at this point.
The Chair: Okay, it seems that we have a consensus on this particular action requested by the minister.
Hon. D. Miller: Just in response to the question, I don't think it's true that the appeal board sets policy or that matters of appeal set policy. Certainly they determine issues of precedence over time, but ultimately the system is run by a board of governors. I think that people who have the interests of the system at heart and are cognizant of the pressures that exist on the Workers' Compensation Board.... There are cost issues and emerging issues that, I think, are quite challenging for the board -- such as stress and questions about what should rightfully be considered, not necessarily injuries but more under the heading of occupational diseases. There are some very significant challenges for that group of individuals, and I compliment them on trying to deal with those in a good way.
[ Page 11355 ]
The policy is made by the board. Clearly, as with any operation that is a creature of government, from time to time the government will reserve the right to make the changes that it feels are in the public interest. I don't think members would quarrel with that premise at all.
The Chair: Members, we'll go through the sections and deal with them in the normal manner, and we'll vote later. You raise the questions, and then we'll go through the voting procedures at the appropriate time. At this point we're still asking questions on section 3, I presume.
Interjections.
The Chair: Could we have order for the questioner, please. Go ahead, member.
A. Warnke: I just want to raise this with the minister. At second reading there was some discussion as to how this section will affect those who have been disabled as a result of hearing loss. Rather than asking one question after another, I want to point out to the minister -- just to make this definitive, I suppose -- that subsection (b) reads "the percentages of disability." Technically speaking, it's very general -- disability to what? -- when it's interjected between (a) and (c), which refer to "hearing loss." I'm assuming that (b) could read "the percentages of this disability," if it refers specifically to hearing loss. I'm not sure about that. The minister might want to respond to it. Do "the percentages of disability" refer to hearing loss exclusively or to disability in general?
Hon. D. Miller: The issue is (b). I think your question was whether (b) refers to disabilities in general or is specific to hearing. The answer is it's specific to hearing.
The Chair: Before I recognize the member once more, we can now get back to the regular procedure. We have the amendments lined up in the order that they shall appear. So we'll deal with each section now and finish the questions and put the question to the House. The member continues.
A. Warnke: Thank you, hon. Chair. It's good to see normalcy return.
I thank the minister for that clarification. It's a very minor one. Nonetheless, I would also like to hear from the minister about the impact this particular section will have on those who make claims on the basis of hearing loss. There's the whole question of what is defined as a range of hearing loss. If the minister recalls, there was some discussion on this side that hearing loss may actually vary according to age. As a matter of fact, it does for one age group of the working population, and that may include some people who have retired or who can no longer work. There's a large blip in the population. There must be some data on that somewhere.
Of course, it raises the matter that outside of that bulge in the population that suffers from hearing loss, there are succeeding generations which may have worn ear protection and all the rest of it. The fact is that we want some sort of definition as to what constitutes the range of hearing loss. Mind you, I would accept it if the minister wants to propose that while this needs some further clarification, we could just pass regulations on it. That would be an acceptable answer, as far as I'm concerned.
[3:30]
I just want to have some sense of the impact of proposing section 3. What sort of impact will it have on those who suffer from hearing loss? Who would it likely include now that it did not include before? Then there's another point -- while I'm on it, I'll get it all out of my system. There was a point raised by the member for Surrey-Cloverdale as to the specific impact of tinnitus as suffered in the workplace. I'm wondering if the minister might comment on those.
Hon. D. Miller: I didn't respond to that last night. I was a bit intrigued about what I perceived to be a small dichotomy in position. On the one hand, arguing about.... I believe that same member used hyperbole in describing the position of the costs at the board. In fact, as I recall, the specific word he used in question period last week was that costs are "skyrocketing." I was a bit intrigued by his plea that we expand the system and accept more people with hearing loss. In discussion last night with one of my staff we concluded that it would probably add about 17 to 20 percent to the cost structure of the WCB if we followed that member's advice -- that very member who appeared to be chastising the government over skyrocketing costs.
To answer the question with respect to the issue, there is no difference between the system now and what is proposed, except that the board has the regulation. They are in the best position to deal with changes in technology, measurability and the rest of it. All of us, I presume, suffer some hearing loss. I notice that myself occasionally -- not just when I'm trying to listen to members of the opposition or the Chair. A formula and test are applied that are designed to separate normal hearing loss from loss that might be attributable to working in a very loud industrial workplace. So there is a formula and there are tables that we use.
Sections 3 and 4 approved.
On section 5.
L. Hanson: Section 5 deals with the ability of the board to enter into agreements with other authorities for the administration of claims that may have originated in other provinces. It seems to me that because British Columbia is such a wonderful place to live, our in-migration is much larger than our out-migration. While section 2(b) provides for payment -- which I would imagine deals with the authority, because of a reciprocal agreement, to pay in the correct jurisdiction costs that might be incurred in another jurisdiction; and I suppose that you could interpret it to say that it would allow administrative costs -- it would seem to me that it would be well to point out that that should be recoverable or may be recoverable by that interjurisdictional agreement.
That's why I proposed the motion I filed with the Clerk, and I would make that motion at this time. It would simply add words in section 2(b) so that it says: "...provide for payment to the appropriate authority of Canada or a province for compensation, rehabilitation costs, administration costs and/or health care costs paid by it." So it would be permissive, but not demanding.
On the amendment.
Hon. D. Miller: With respect, I'm going to oppose it, and I will try and offer an explanation that might be acceptable to the member.
Generally, administrative costs are captured in every system, and are difficult to isolate. I don't know that this would be practical or workable. We do have arrangements with the other systems to recapture those kinds of costs. I don't think that adding the words "administrative costs" is
[ Page 11356 ]
going to assist the board. It may be there and simply not.... As words, it's not going to have any real meaning or impact. With all due respect, I think I appreciate the member's concern. There has been concern about administrative costs, although I must say that despite the concern.... I note that some auditors' reports were undertaken that described some concern of the two large national auditing firms that looked at the WCB. One noted the increase in administrative costs between 1987 and 1991 -- not with alarm, but nonetheless noting that in that period there had been an increase in administrative costs.
Members may be pleased to know that the board has budgeted zero for increase in administrative costs in 1994-95, and that our administrative costs.... You could use a number of statistical approaches to determine how your organization is functioning. Administrative costs in our system are relative to a number of different factors: the total assessments taken in a year, the number of applications for claims and the number of individuals served. When we measure our administrative costs in relation to those separate functions we find that our administrative costs are down. They may be up in terms of total dollars, but measured against what the system is delivering, our administrative costs are down. Those are statistics; I am not manufacturing them, and I don't propose to get into an extensive debate here; it may be more appropriate for estimates debate. Nonetheless, those statistical measurements are available, and I'll be pleased to deal with that more fully in estimates.
In this case the section allows the board to enter into an agreement to make an arrangement with Canada, a province or the appropriate authority to provide for compensation. Section 8.1(1)(b) provides for "administrative co-operation and assistance between jurisdictions in all matters...." That again covers the issue of administrative costs. I think the issue is well covered in the wording that exists in the proposed amendment.
L. Hanson: I appreciate the minister's enthusiasm about the administrative process within the WCB, but that is far from what I'm talking about. I'm talking about the ability of the WCB to enter into reciprocal agreements with other agencies in Canada to cover administrative costs. I recognize that there are some unwritten agreements in place that have a surcharge on the actual cost of rehabilitation and the cost of compensation that covers administrative charges. But as the minister himself has presented an amendment, surely this amendment could be accepted on the basis that it just makes good common sense and points out to the board that it may be part of the agreement. I think it would make good sense to the board and the other agencies. I know the minister is reluctant to agree to amendments, but this would just seem to make good sense.
Hon. D. Miller: The member is correct; I do have a reluctance. If it were my view that the amendment contributed to the section -- and I say this with all due respect -- I don't think I would have that reluctance. I'm not saying that instinctively or simply because it's the government's piece of legislation. I don't operate on that basis. It's not an issue that I have had an opportunity to canvass. I'm advised that it's not necessary. I would be happy to ask the board to explore the issue, and if there were reasonable grounds -- if there were issues that were not being dealt with through the interjurisdictional agreements that the board enters into -- I'd be quite prepared to seek change in the future. I don't think that is the case, and I don't wish at all to turn the amendment down simply because it was proposed by the opposition. But I'm not convinced that the amendment is required. On that basis, it's clearly prudent of me to say that I would prefer that we not proceed with the member's amendment. I'm not loath to discuss the topic subsequently in more depth in meetings with the board or in whichever fashion the member might choose.
L. Hanson: Just one final comment. I suspect during estimates that we will probably get into some in-depth discussion of administrative processes at the WCB, but that really doesn't have anything to do with the amendment. I suggest to the minister that a whole bunch of things in this act are not necessary if push comes to shove. The fact is that a lot of things in there show that the government would approve of the WCB entering into these sorts of things. That's fair and a good reason to include this section within the act, but I'm not going to unduly delay the proceedings of committee stage simply because of that. I think it's poor judgment if it isn't accepted, that's all.
Hon. D. Miller: I appreciate what the member has said. I am going to stick to the position that I've enunciated, but I am prepared to explore that further and will specifically ask for more advice with respect to what the member is talking about -- I'd be happy to.
The member made quite a statement. As the former minister responsible for the Workers' Compensation Board, he has indicated that all kinds of things in the act are unnecessary. I haven't been here as long as he was in his past life, but he may indeed....
L. Hanson: I was talking about Bill 13.
Hon. D. Miller: Oh, I thought you were talking about the Workers Compensation Act. I'm sorry.
I regretfully decline the amendment, hon. Chair.
L. Reid: I'm speaking to the amendment. The minister rose and, as the Blues will attest, said it was not possible to isolate the administrative costs. Then he proceeded to go through and isolate the administrative costs as per his recollection of the two audits that have been performed on the WCB. If it is indeed possible, it certainly flaws his argument that he could not support this amendment. I know it is possible to isolate the administrative costs of the WCB, and I would trust -- based on this new revelation from the minister -- that he could support this amendment because, as the member has said, it makes good sense. It does not detract from what this minister hopes to do and, in fact, supports his earlier contention. When something comes around full circle and puts you in a positive light, it seems to me that it makes good sense to accept that.
Hon. D. Miller: I don't think I really said that. Let me try to give a broader explanation.
L. Reid: The Blues will show it.
Hon. D. Miller: Well, the Blues will show that I said what I said. I'm not retracting one word of that. But let me try to explain more fully, perhaps, what I did say. I talked about the issue of administrative cost and the question of how one measures the efficiency of an organization. Clearly, I said that administrative cost is an issue that's been raised.
We can look at the total administrative costs of the entire organization. And we can measure those costs against
[ Page 11357 ]
delivery. What are the outputs? What do we expect out of the organization? Is the administrative cost of delivering a specific output, whether it's -- and I cited some statistics last night -- the number of first aid courses put on, the field visits inspectors carry out...? There are a number of functions or outputs of any organization. It's always prudent that we measure our total administrative costs against those kinds of outputs.
What I said with respect to the difficulty in determining administrative cost was on the basis of individuals. If the member is suggesting.... We would certainly drive administrative costs up dramatically if I had to set up, or ask the board to set up, a branch within the organization to try to isolate in every case, with every injury claim or application, the administrative cost incurred with every application. Clearly we'd have to have taken leave of our senses if we wanted to pursue that. It doesn't make any sense. You need to measure outputs on a broader basis.
I don't think I said anything contradictory at all. I hope the member understands the explanation I'm trying to give now. It's quite a rational one that I think any manager would support, regardless of whether you're talking about a public body or, indeed, a private one.
[3:45]
Not to pick on any member, but I notice there's a member on the opposite side who has a store, a retail outlet. Is it prudent, hon. member, that you specifically isolate the administrative cost of every function carried on in that outlet? I don't think so. But you know what your total administrative costs are. And you can deduce, based on a number of factors that might be appropriate for a retail outlet, how many items of whatever it is you sold and what your overhead cost was. You can isolate your overheads, your fixed costs, your rents, your taxes, your salaries, etc.
So really I don't think I've said anything contradictory at all. As I say, I think any manager I've ever talked to, whether in the private or public sector, would agree with what I'm saying now.
G. Farrell-Collins: I have two points. First of all, in support of the amendment, the minister should be aware that when you don't measure something you'll never get there. If you don't set it up -- this is something you need to measure -- and you don't actually do the measuring in management, you won't ever achieve it, because there's no reason to achieve it.
In many cases I think that's what has happened, throughout not just the Workers' Compensation Board but many large organizations -- certainly large private sector corporations and even public sector organizations; the management structures and the measurement and management accounting tools aren't there. Indeed, a report -- several reports, actually -- on B.C. Transit said that the management accounting figures aren't there. You can't control costs. You can't try to make a corporation or organization more efficient, because no management accounting principles are in place that allow managers to make decisions with that information. That's a choice the minister can choose to make: to say this is not a significant amount of money and the money invested in trying to achieve that by assigning administrative costs to the various sectors, or even the various numbers within that group of injured workers who come from elsewhere, is not something that makes fiscal sense. He can make that claim. That's fine. He has to live by it, because of the numbers that he is going to have to look at. That's one aspect.
The other aspect is that the minister should be aware that while there are some informal processes in place to assign administrative costs -- from what I understood him and the member for Okanagan-Vernon, the former minister, to say -- when there's interprovincial allocation of resources in an informal way, administrative costs are taken into account as part of the process. By leaving it out of this section, the minister may be deliberately, in fact, prohibiting.... He may end up saying to those administrators: "Gee, we can't allow for it because the minister didn't say it. He specifically mentioned compensation, rehabilitation and health care costs, but he makes no reference whatsoever to administration costs. Therefore we're not allowed to do that, because the act does not allow us to do it."
I think there's some wisdom in the member's amendment. There's certainly no downside. All it does is instil in the act the authority to account for those costs in an interprovincial agreement -- much like he has for the compensation, rehabilitation and health care costs. I think it would be wise. The minister may choose not to do it, but I think it makes the legislation stronger and the system better. I don't see any real downside in putting the amendment in. I don't see what the risk is in doing that.
Hon. D. Miller: I don't agree with the member. I think the trick in operating an efficient organization is your ability to measure your output. Quite often, and quite frankly, the challenge is determining just what the output is. What do you expect out of any given system? I think when you're talking about administrative efficiency, it needs a little more careful insight or look than.... I think I'm essentially correct. Using the WCB language, your cost per individual that you serve goes down, then one can conclude that it may be a statistical measure of efficiency.
I would also say that the wording being proposed may in fact be a handicap for British Columbia. I'll read it with the inclusion of the proposed amendment. First, section 8.1(1) says: "The board may enter into an agreement or make an arrangement with Canada, a province...." Then section 8.1(2) says: "An agreement or arrangement...may" -- and it has two sections there -- "(a) waive or modify a residence or exposure requirement...or (b) provide for payment to" -- not from, to -- "the appropriate authority of Canada or a province for compensation, rehabilitation costs, administration costs, or health care costs paid by it."
It seems to me that the intent of this wording is to impose an obligation on British Columbia that may not be reciprocal for Canada or those other jurisdictions that are mentioned in the act. On that point alone, it would seem to me -- and I know the members are concerned about costs -- that perhaps an abundance of caution might lead them to the conclusion that it might be rather foolish to include that in our act, when we have no guarantee that it would be contained in acts across the country. In fact, other provinces might point to our act and say: "Ante up; we want our administrative costs." Does that argument have some ring that might convince the members to abandon the amendment?
G. Farrell-Collins: Thank you, hon. minister. Then perhaps the minister, using his own argument, would agree that by putting this act in place, we are doing the same thing with health care and rehabilitation costs that he just said in relation to administrative costs. If the minister is going to make the argument that including administrative costs in here obliges B.C. to pay, with no provision for other jurisdictions, in their acts, to pay B.C., then the act and that section are fundamentally flawed. Using the minister's logic, there is no provision to allow those other jurisdictions to pay
[ Page 11358 ]
funds to British Columbia for rehabilitation costs or health care costs. So either there's an error in the minister's logic or there's an error in the bill.
Hon. D. Miller: Perhaps we got off to a bad start in terms of not having the staff available when we initially started this debate, trying to play catch-up.
As I understand it, previous agreements with other jurisdictions have only dealt with silicosis. This section is intended to allow a broadening of the agreements across the country. I will read from one such agreement. This is entitled "Interjurisdictional Agreement on Workers' Compensation," and it's an agreement that has been accepted by all of the provinces. Article 7.5 says:
"Where the statutory authority in the jurisdiction in which a claim is made prohibits or does not authorize the board to pay the full cost of the claim for the nature and degree of disability resulting from the occupational exposure, the boards in each of the jurisdictions in which the worker had such exposure employment shall reach an accord under which the beneficiary will be compensated fully in one of the following ways....
"...each board shall open a file and provide direct to the beneficiary benefits proportionate to the extent of exposure in its jurisdiction and according to the statutory authority or policy in its jurisdiction, and shall also pay a share of any health care or rehabilitation costs which shall be initially paid by the board in the jurisdiction of residence, based on the statutory authority or policy of that jurisdiction."
These are broad agreements between the systems that essentially allow workers who may have been injured in one province and move into another jurisdiction.... It allows flexibility between the boards across this country to make the kinds of arrangements that don't saddle British Columbia in this case. The member talked about British Columbia's position as one where there's been an in-migration.
It seems to me that we are belabouring the point. The section is broad enough to allow the board to enter into the kinds of agreements that are good for British Columbia and that allow us to recapture payment for workers who may now reside in British Columbia but received an injury and established a claim in other provinces. It's as simple as that.
We are starting to repeat ourselves on this proposed amendment. I repeat, with all due respect, that I don't think it's prudent for me to entertain it.
The Chair: Taking into consideration the point about repetition, the Chair now recognizes the member for Okanagan-Vernon.
L. Hanson: With regard to your remarks about repetition, I suspect that all members of the House fall into that trap from time to time. But when statements are made by the minister in response to questions -- I think the member's right -- it's only fair to be able to respond to those statements.
[D. Lovick in the chair.]
The minister made a number of comments to the effect that it was a question of efficiency. I'm not sure how he related that.... Maybe it was that British Columbia is very efficient and the other provinces are not, and therefore any reciprocal agreement that included administrative costs might come out to our detriment.
The minister says it's difficult to measure the administrative costs of a claim. I wouldn't argue that, and I don't think anybody would. But I point out to the minister that the section is simply permissive. It's not mandatory: it doesn't say "shall" enter into an agreement, simply that they may. If the workers' compensation boards in various jurisdictions see a great difficulty in entering into an agreement that includes these as they are amended because it's permissive, they probably won't enter into it. I'm just saying that it's good to point out in the legislation that enables them to enter into these agreements that they could consider all of the costs when they enter into them.
I won't add anything else.
Amendment negatived on division.
[4:00]
Hon. A. Edwards tabled documents referred to earlier in the day.
Sections 5 to 7 inclusive approved.
On section 8.
G. Farrell-Collins: I'm just slowing it up a bit. I know the minister has an amendment outstanding on this section, so I'll yield to the minister.
Hon. D. Miller: Hon. Chair, do you want a motion to move the amendment standing in my name?
The Chair: The amendment as circulated is moved, then.
On the amendment.
G. Farrell-Collins: I assumed the minister was going to make some comments to justify the amendment, and I'd be glad to hear those.
Hon. D. Miller: The section goes to the issue we talked about, which is the ability to file a claim for an occupational disease within three years of the link between the disease and the workplace being discovered. I think the wording simply clarifies the basis upon which that claim can be made.
G. Farrell-Collins: Very enlightening. I guess I'll have to ask for a bit more clarification. There obviously seems to be a shift in the intent of that section. Originally, it said when the employee became aware of the link. Now the amendment says when the board recognizes the link, which is substantially more restrictive -- which is fine. I was wondering if the minister can give us the rationale for that change.
Hon. D. Miller: The wording came from the governors. I guess the shift in emphasis is essentially giving the board the power to make a determination as to when the worker.... It's the board making the determination with respect to the link, rather than when the worker became aware of the link between the disease and the workplace. It really puts the determination with the board.
G. Farrell-Collins: I guess there is no reason. I was wondering what the justification or the reasoning is. I know what it does. I was wondering what the reasoning for the change was. Was it to try to clean it up, to make it tighter? What was the rationale for the change from having the onus on the employee, or their dependent in the event of death, to become aware of the link between the workplace and the disease, to the new system provided by this amendment, under which the link between the disease and the workplace
[ Page 11359 ]
is made by the board? There's a difference there, which the minister has enunciated. I'm just wondering: why the change? Obviously, in the first draft, the intent was to leave that up to the worker or their dependent to decide. In the second case, it's the board that decides.
Hon. D. Miller: The advice from the governors is that the change would give more certainty to the worker and would reduce the amount of time that might be involved in establishing a claim under this section.
G. Farrell-Collins: The section as it presently stands in the bill, section 3.2(b) and (c), refers to the worker and the worker's dependent in the event of death. I assume that the dependent isn't included in the amendment, because the section, as it states in the bill, is with regard to the knowledge of the link coming forward. I assume, however, that under the new section, the dependents would still be entitled to those benefits if they filed a claim within that three-year period.
Hon. D. Miller: Yes, the intention is clear that the dependent, in the case of a worker who is deceased, can make that claim.
A. Warnke: I want to explore with the minister one aspect that was also raised in second reading. Before the amendment that the minister has proposed was put forward here, the original bill did read: "...the application is filed within 3 years after the worker, or the worker's dependant if the worker has died, became aware of the available medical or scientific evidence...." As a matter of fact, some of us on this side were saying that maybe three years is a quibble that we could have. Now, with the proposed amendment before us, it makes it very clear that instead it reads: "...3 years after the date sufficient medical or scientific evidence as determined by the board became available to the board."
I want to explore with the minister here how that is defined. Is that in terms of some explicit statement made by the board, or whatever? Maybe that could be clarified.
Hon. D. Miller: The board will have to make policy decisions with respect to that.
It's very difficult to stand up -- and I don't have a situation.... The one that's been given most often to me by workers is the situation that developed in the Alcan smelter, where there clearly was a direct link established with respect to some of the bladder cancers. At the time, that wasn't known. As we improve our ability to monitor, measure and determine that these links can be made.... I assume that silicosis at one point was not connected to working in mines.
Nonetheless, the board really has the final word with respect to establishing some set of criteria -- some test, if you like -- that needs to be passed with respect to accepting that link.
A. Warnke: Thanks to the minister for that. But then I suppose there is some concern here that, without some sort of precise date in mind as to when the board might put that forward, in fact.... It's very unclear. It may somewhat raise the suspicion that the board could put forward the suggestion: "Okay, under these conditions, this is when a date will be determined." We hope that would occur.
The problem is that there is still enough ambiguity here that it suggests the question: is three years sufficient? I guess I'm quibbling a bit here, too, as to whether three years could be extended beyond that somehow. As we are in a very complicated industrial setting and environment these days, sometimes three years is not sufficient. Perhaps some other criterion or some sort of extension of the three years could be applied. I don't know. I just would like to seek that out with the minister.
Hon. D. Miller: Just to clarify this subsection, either the individual claimant or his or her survivor has three years to file a claim after the point at which the link has been established. Clearly, I don't think we'd want to maintain an open-ended-forever kind of system. Three years is a reasonable period of time. It doesn't go to the amount of time that might be required for that link to be established; it could be ten years. But once it has been, then people have an opportunity -- and I think three years is reasonable -- to go back and make those claims.
G. Farrell-Collins: Obviously, when this type of amendment is put in, there comes a moral obligation -- on the part of the Workers' Compensation Board, anyway -- to go to some lengths to advise people when that decision has been made. Would physicians who deal with these people on an ongoing basis be receiving notice of a change in WCB policy that a new occupational disease or a new link with the workplace has been recognized? Then the physicians -- the GPs and specialists out there -- who see somebody coming to them with a specific illness or occupational disease can say: "Hey, I just got this notice. We think this has been caused by the workplace." The doctor may well know that ahead of time, but he or she now would be aware that the Workers' Compensation Board is recognizing the link and offering compensation for that. Really, that's the line of communication that takes place between the physician and the injured worker. Is there going to be some undertaking on the part of the Workers' Compensation Board to make physicians, GPs and specialists aware when decisions are made with regard to the link between an occupational disease and the workplace?
Hon. D. Miller: There are processes in place now, through standing committees, to do that.
Amendment approved.
Section 8 as amended approved.
Section 9 approved.
Title approved.
Hon. D. Miller: I move the committee rise and report the bill complete with amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 13, Workers Compensation Amendment Act, 1994, reported complete with amendment.
[4:15]
The Speaker: When shall the bill be read a third time?
Hon. D. Miller: With leave of the House now, Mr. Speaker.
Leave granted.
[ Page 11360 ]
Bill 13, Workers Compensation Amendment Act, 1994, read a third time and passed.
D. Lovick: Before we call committee, I wonder whether I might have leave to make a brief introduction.
Leave granted.
D. Lovick: Mr. Speaker, on your behalf, I'd like to extend a welcome to a group of students from the state of Washington who are visiting us today. I'm sorry to report that I don't have the details with me, except to say that they're with Ms. Teague, and I believe the school is Fernwood School in Bothell, Washington. Is that correct? In any event, we have a group of students from Washington. I hope my colleagues in the House will help me make them welcome.
Hon. D. Miller: I call committee on Bill 22.
COLLEGE AND INSTITUTE AMENDMENT ACT, 1994
(continued)
The House in committee on Bill 22; D. Lovick in the chair.
On section 3, section 8.
Hon. D. Miller: Mr. Chairman, I advise the committee that I will be proposing an amendment, perhaps when we complete this section, relative to the issue raised by the member from Kelowna with respect to the use of the word "principal." So I advise the members that I will be doing that subsequently.
G. Wilson: I wonder if the minister might discuss the question -- and I recognize the language is very similar to the existing act -- of the minister's powers with respect to the objectives of a provincial institute. This reads: "...perform other functions designated by the minister under section 2(2)." Yet if you look at section 2(2) in the act, it says the minister may designate "technical, vocational, artistic and other post secondary education or training for which instruction shall be given at a Provincial institute...." The question is: given that we are now moving to a new classification system, is the objective of this to move provincial institutes more directly into apprenticeship-type programs? And can the minister tell us whether those apprenticeship-type programs are linked to employers' obligations for training, in the context of new government policies and legislation that promote the development of these kinds of apprenticeship and skills training programs?
Hon. D. Miller: There is really no change from the existing act.
C. Tanner: When the minister stood up just a few minutes ago, he mentioned an amendment. I wasn't sure whether the amendment is coming in on what I'm calling section 8 or in the succeeding section.
Interjection.
The Chair: Does that clarify, member? Okay.
Section 3, section 8 approved.
On section 3, section 9.
C. Tanner: I sat here patiently all morning waiting for this section to come up, because in my view this is the nub of the changes in this bill. To date, we have had community colleges, and it seems to me we're now getting colleges that are going to be orchestrated by their boards. The boards are of a far different composition than they were up to now. That has some concern for me, and the minister said this morning a number of times that he wanted to hear our concerns. My concern is primarily with this section and from here on. The changes made in section 9 and succeeding sections, particularly section 11, are very far-reaching and, in my view, an enormous change in the way boards are going to be run and community colleges are going to be organized. What adds to my concern is one that has been expressed by the community college in a constituency adjacent to mine. What adds to that concern is the recent example in Montreal at Concordia University of a report which says that universities don't as a policy -- and that particular one is a policy across the province -- look after themselves very well. They don't administer themselves well, because by the very nature of the people who are involved in universities, they don't get training in administration. That gives me some concern too.
In this particular case we are making a radical change to the board. There are eight voting members, as I understand it, four of whom are going to be members of the faculty, the staff or the student body. Of the eight voting members, with the president and the chair of the education council not voting, you have a position where the staff has equal weight on the board with those members appointed to protect the community's interest. To start with, would the minister tell us how he came to the decision to split the board fifty-fifty between those people employed or taught at the school and those people who are representing what, in my view, is the community's interest?
Hon. D. Miller: It's not split fifty-fifty.
C. Tanner: As I read section 9, it says that a board is composed of eight or more persons appointed by the Lieutenant-Governor-in-Council. Then it says that two of those will be students, one will be a member of the faculty and one will be a person who is in staff support -- that's four.
Hon. D. Miller: If there is some confusion, the persons listed below (a) are in addition to the eight.
C. Tanner: If that's the case, that does away with one of my reservations. On the other hand, I still wonder about a board composed of people who have an interest which is different than the community's -- it's their own. While I know there are other instances where this happens, and since I understand that the minister has met with an association of community college presidents and board members who expressed this view to him, would the minister be good enough to give us his interpretation of how the board is going to work when people are incorporated into decisions which affect themselves?
Hon. D. Miller: One should at least give credit to.... We don't name individuals in the legislation; we describe the places those people come from. All of us should assume that those people are vitally interested in education and in their communities. Certainly that was what I was hearing from the leader of the third, fourth or fifth party this morning. We wouldn't want to prejudice our opinion or anyone's opinion
[ Page 11361 ]
of those individuals, whether they be the students on that campus or the person from the support staff. I think that quite often they all have the same interests -- as we find in this chamber. We sometimes don't see it, but we probably have a lot of the same interests too.
In dealing with issues earlier today, I indicated that the board has an obligation to pass bylaws dealing with issues where a conflict may arise, as university boards do now. University boards have student and faculty representatives. The faculty are not represented by the same organization as the college faculty; they're tenured. Nonetheless, they are faculty, and through their association they negotiate with the university administration for salaries and those types of things. Where there is a conflict, those members would have to absent themselves from decisions that have a direct bearing on their particular circumstance, as one of your members absented himself last night, I believe -- although unnecessarily, I think -- from a debate on community colleges simply because he is probably on a leave of absence or is a teacher or whatever in a community college. I think that's quite foolish.
What it says is.... I don't see the member for Powell River-Sunshine Coast absenting himself, and neither do I think he should. He's got something to contribute; he comes out of the system. I think the member from Richmond should take part in the debate as well. I don't think you can perceive it as a conflict. Where there's a direct interest for an individual.... Where you're voting, for example, on whether or not to offer a particular salary package to support staff, then clearly in the case where a support staff person is a member of the board, that person absents himself. That's very clear. There will be bylaws brought down by the institution that will clearly spell those things out.
C. Tanner: Could the minister tell us whether he did in fact meet with an association of community college boards? Could he tell us what opinions and advice they offered, and what reservations they had concerning this section?
Hon. D. Miller: We have met on many occasions. I attended a delightful lunch out in Surrey shortly after I was sworn in as minister. The association is called the Advanced Education Council of British Columbia. I had several meetings with them and some very fruitful discussions. As a result of those and of the advice we've received from the Advanced Education Council, individual board members, board chairs, presidents and faculty, we put together this legislation.
C. Tanner: If the Advanced Education Council is the same group that I'm thinking of, the advice I have had from some members of that group is that in their discussions with the minister, they asked him to refrain from putting anybody on the committee who was a member of the faculty, the staff or the student body. I think the suggestion they made was that they should be on an advisory committee. They had no problem with that, but they didn't want them on the board committee. Isn't that in fact the case? It is, certainly, with the presidents' group.
Hon. D. Miller: No, I think the member is in error. I'm not going to suggest that everything is always sweetness and light, and in fact I indicated quite clearly this morning that there are a variety of opinions on the makeup of the board. In fact, let me say that with respect to the board, I think there was probably no disagreement about the addition of the staff or faculty. If there's an area of disagreement that the member might wish to canvass, it's with regard to the education councils, which is in a subsequent section of the bill.
[4:30]
C. Tanner: Community colleges were set up specifically for the community. They've been reasonably successful in filling a need that has existed between high schools and universities; they've filled the need very well. But surely the emphasis was on community, and if you take away the ability of the community to control them at the board level, you are changing the structure of the community college. I know you had that discussion this morning with another member, but it was from a different point of view, not the point of view that I'm coming from. I'm saying that I don't think that there should be staff on those boards, and I'm not even convinced that there should be students. But if there should be students, there should be some conditions imposed on those people being elected. Because, if you look at them, three of those four people on that board -- one of them with no vote -- will probably change every year. Consequently, you're going to get a succession of fairly green participants in those decisions. I don't think that's necessarily a healthy thing.
Hon. D. Miller: I must say that I am somewhat surprised. Is the member also in favour of removing faculty and student representation from university boards, where they have been for many years?
C. Tanner: It's for you to propose and for me to oppose. It's not my decision what's happening on university boards; that's the status quo. I'm asking the minister why he would make a change in community colleges when, in my view, it's in opposition to what they were set up for in the first place.
Hon. D. Miller: It's not in opposition. Two-thirds of the members are community representatives. They serve their communities well. The boards accept the changes being proposed. In fact, some do it by practice right now. There really is no contention, hon. member. With all due respect, two-thirds of the board, as I indicated previously, are appointments of the Lieutenant-Governor-in-Council -- people from the faculty who presumably....
C. Serwa: Look after self-interest.
Hon. D. Miller: When that member for Okanagan West gets up, we can predict what he's going to talk about. Right now I'm addressing the interests of the member for Saanich North and the Islands.
As I said earlier, I think we should give some credit and assume that students who attend an institution actually have an interest in the institution, and that faculty and support staff who work in an institution actually have an interest. They probably live in those communities. I don't think that the member is on the right track. Perhaps we might have a more appropriate debate on the education council.
C. Tanner: The minister has been too involved and is too old a hand at the negotiating game not to know that it would be a real advantage to him if he sat on the decision-making body that was going to give him his salary. When he was involved in the business of negotiating with his company, he didn't sit on both sides of the fence. He knows very well that's the case.
In this case I'm not just talking about salaries. I'm talking about hiring practices; I'm talking about working conditions; I'm talking about the circumstances of the community
[ Page 11362 ]
college in general. The employees who are beneficiaries of those discussions can sit in on them and have an ability to influence the decisions. From my point of view, that is not a safe way to proceed in our society today.
The minister is saying categorically that I don't trust faculty and students. That has nothing to do with my feelings about faculty, students or staff. That is not a condition which is current in today's society, with the major exception of the universities. That has been the way it is in some universities for some time. It still isn't a reason to do that to the junior colleges. That's why I'm saying to the minister that this is a very big change which is not supported, in my understanding, by a goodly number of people within those institutions.
Hon. D. Miller: I do beg to differ. I don't think the member accurately portrays the feeling. I've indicated that in some of the institutions they have already had a longstanding practice of having faculty, staff and students attend the board. It's a long-established principle in our universities that faculty and student representation is on the board.
I think the member is out of step with the changes that have taken place in our society. If anything, there is an attempt to be more inclusive with respect to decision-making, and I agree with that. That is true whether we talk about broad issues of land use and the attempt through the CORE process to bring often disparate elements together.... Clearly, the trend is toward inclusion, not exclusion, and I certainly think that's the right trend. I would hate to try to turn the clock back to one where we tended to separate people.
I think it's somewhat offensive to suggest that a staff member, faculty member or support-staff member does not have the objectivity or the best interests of the institution at heart when it comes to decisions a board might make with respect to course offerings or anything else. I think they would be offended by that characterization. I'm sure the member didn't mean to suggest that, but I just think that you've got to give people a little more credit, hon. member, than you appear to want to do in your remarks here.
C. Tanner: That's great stuff, Mr. Minister -- stop putting words in my mouth. I didn't say half the things you said, and I have as much respect for students, faculty and staff as you do.
All I'm saying is that they've got a conflict of interest in this circumstance, and it's going to be apparent. A lot of the decisions made in those facilities are going to affect them, their pocketbooks and their livelihoods. If the minister was consistent, it seems to me he should also be appointing a member from the Ministry of Education to sit on this board. You're letting it hang out there, and you want staff, faculty and students on it. Why not put the province's interest in it too, in order to be consistent, and appoint somebody from the Ministry of Education?
Hon. D. Miller: If I did that, the member for Powell River-Sunshine Coast would take strong exception and accuse me of enforcing the heavy hand of the state, and no doubt the member from the Okanagan would see it as a communist plot.
C. Tanner: You've got to wonder who's writing the legislation around here. Is it the ideologues over there, or the odds and sods of members on this side? Come on, Mr. Minister, don't try to slough it off with an explanation like that. Why haven't you appointed somebody from the Ministry of Education or your ministry to the board?
Hon. D. Miller: It's not in the current act. All we're doing is adding the additions contained in the amendments.
G. Wilson: I find it interesting that the discussion has now come around to this question of perceived conflict. My guess is -- and I think if the minister was to be really honest -- he doesn't really....
Hon. D. Miller: Point of order, hon. Chair. Even if the member doesn't think so, I think the rules of the House prescribe that he must assume that I am always honest -- and in fact I am.
The Chair: Point noted, and I'm sure the member would accept that and proceed accordingly.
G. Wilson: I certainly don't mean to impugn the reputation of this minister in any way, although I do find it interesting how sensitive he becomes when I start to talk about Bill 78, which was introduced and passed last year -- the Public Sector Employers Act, which allows for the establishment of employers' associations.
The Chair: The Chair too is sensitive, given that we are on Bill 22. I would just draw your attention to that, hon. member.
G. Wilson: Thank you, hon. Chair, but that's the reason it isn't going to matter if faculty sit on these boards. These boards aren't going to be negotiating collective agreements for the colleges as they do right now, because they're going to set up an employers' council just like they have done in the move to provincewide bargaining for teachers. My guess is that this employers' council is going to negotiate a provincewide collective agreement. I think that they are going to move toward CIEA being the bargaining agent for the faculty and that they will come up with something for the staff. That's my guess as to how that's going to work, and that's why it doesn't matter. I don't think there's a question of conflict of interest; my guess is that that's the way we are headed.
The question is: why do we have more than five appointed? The current act says you have five members appointed by the government. Now the government is going to add three more. This was the government that put education caps on administrative expenditures in K to 12, but it is increasing the number of board members appointed by government -- and that's as a minimum. In the current act it's five or more; in this one it's eight or more. Why are we appointing more government people on the board when we're supposed to be reducing administrative costs?
Hon. D. Miller: I don't have the list in front of me, but some of the institutions have quite large boards. In fact, I have been paring them down so that we will have the ratio prescribed in the act.
G. Wilson: With respect to section 6, the existing act says that the board "shall consist of 5 or more members appointed by the Lieutenant Governor in Council." This act says that the board is composed of "8 or more persons appointed by the Lieutenant Governor in Council." Whatever the "more" has become, the fact is that the minimum prescribed in the act is less under the existing legislation than under the
[ Page 11363 ]
proposed legislation. My question is: why would you increase the minimums if we're trying to keep the administrative costs down?
Hon. D. Miller: It has to do with math.
G. Wilson: I'd be delighted to see if it has to do with math or if it has to do with arithmetic, which might be two entirely different things here. Nevertheless, if one person is from the faculty of that institution, two are students and one is a support-staff person -- which is presumably to add some parity to the discussions of the board -- given that they are each going to be voting members, we have to ask ourselves whether those boards are going to be engaging in discussions on matters, which the member from Saanich was just alluding to, that put members in a conflict of interest.
As the president of a faculty association, I sat on a board. I stopped going to it after about nine months because there was no purpose in being there. The reason was that anything of any substance was dealt with in what they called an in camera session, where the faculty were booted out -- and rightly so, because we would have been in a conflict of interest.
[4:45]
What has changed in this structure here? We've got a larger minimum; we've got faculty, staff and students included; we've got a president; we've got a new chair of an education council; and we've got mandates by legislation that the board has to consult with a new middle-level advisory council. Now that there is a mandated purpose for this board, is the faculty who are going to be attending the board on a regular basis going to receive the same remuneration as members who are appointed by government? Will there be any remuneration provided for faculty members who sit on this board?
Hon. D. Miller: There's no remuneration, hon. Chair.
G. Wilson: Is it intended that faculty or staff members who are appointed to the college board will receive, as is customary in many colleges, workload reduction in anticipation of the work they are going to be doing on these prescribed administrative boards?
Hon. D. Miller: I don't anticipate that to be the case. There may be occasions when the board will meet during hours when the faculty member -- if it is a faculty member; it's not necessarily -- may be required for other duties, in which case I'm sure some arrangement will be made. There's no remuneration, nor is there an intent that the workload would be reduced.
G. Wilson: We're going to have a bigger board. It is now going to be defined in the legislation by what the prescribed minimums are -- which is a much larger board. One of the people is going to be the chair of this education council. Yet the president and chair of the council don't have voting rights on this board, as it's constituted. If this board is established to provide some level of equity, even though the appointed members are still in the majority, can the minister tell us why he would preclude the president or chair of the education council from being voting members of the board?
Hon. D. Miller: We may get into a useful discussion on the education council, but we don't necessarily think that they should add a vote to the issue. The education council is set up for a particular purpose, which is to deal with the issues, and we'll get into that during that discussion. The president is an employee of the board in the broadest sense and typically does not vote.
G. Wilson: That brings us to exactly the point we were trying to get to. Both the staff and faculty members sitting on that board are employees of the board. They are given voting weight. Why not the president? Why would you exclude the administrator? If we don't want to get into it now, we can discuss it under section 11.2, which deals primarily with voting rights. It seems to me that the composition of the board in terms of voting versus non-voting is important. You say that you don't give the president the vote because he is an employee of the board; so are the faculty and staff.
Hon. D. Miller: It's amazing the number of board members I've run into who have suggested that the president controls everything without the vote. Nonetheless, it's not a deviation from the current practice.
G. Wilson: It is a substantial deviation. The minimum is increased from five to eight. You've now added a voting faculty, a voting staff and two students who have votes. All of that is a deviation from the current practice. You provide a president the opportunity to sit on the board. That president is the same person required, later on in this act, to attend this new middle-management advisory talk-shop, and you've forced the chair of that talk-shop to sit on this board. But you haven't given the weight to those two individuals' vote. The question is: why would you make those distinctions? Why would you discriminate against those two positions on the board? What is the functional reason for increasing the size of the board, making it more unwieldy and more difficult to get full attendance?
Having been around for a long time, I know that it is often difficult to get full attendance at board meetings, because people who are appointed have full-time occupations elsewhere. Many of them have to come from distant areas, because in some instances the college regions are very large. Why would you make the board more complex and less efficient by this structure and, in so doing, remove the vote of the president, who presumably is the chief administrative officer of the college? I would think that person, above all, would want to have a vote, if you want to have the college itself better directing the board, rather than the board directing the college.
Hon. D. Miller: The member has not listened to my last answer. My last answer was in direct response to a question that he posed, and I indicated that there had been no change. The presidents currently do not have the vote; under this arrangement, they don't have the vote either, so there's been no change.
Secondly, dealing with the issue of expanding the board, the current act provides for five or more. I've indicated that there's a range of numbers around this province. In some cases, there were 17 people on the board. Now we've reduced it. We've obviously increased the minimum with respect to the ratio between community members and those other members listed under this section, so that we maintain a ratio of at least two-thirds to one-third, to deal with the issues that have been raised by yourself and other members of this House about community representation. There's a sound rationale for constructing it in that fashion, and it's not creating an unwieldy bureaucracy. Quite frankly, Mr. Chairman, we're going around in circles listening to that member repeat himself over and over and over again.
[ Page 11364 ]
G. Wilson: The repetition becomes less necessary if answers are given in the first instance. The question is: if we're going to have more community input, why is it that this minister has broken what I understand was a direct promise to the public in the last election by not having this board elected by members of the community? Why wouldn't you have a community-elected board? Why a government-appointed board? If you're interested in having the community determine the direction of the college, which is supposedly their college, why would you not have an elected board?
Hon. D. Miller: The member's dealing in hypotheses that have nothing to do with the legislation.
C. Tanner: Just to go back and elaborate on some of the questions being asked by the member for Powell River-Sunshine Coast....
Interjection.
C. Tanner: No, thank you.
As I understand it, there are a minimum of 14 members on this board, two of whom have no vote. Can any one of the 14 be elected chair of the board?
Hon. D. Miller: The voting members, hon. Chair.
L. Reid: I will certainly apologize in advance if this has been canvassed in my absence. The minister speaks of community representation. I would ask the minister to walk us through the appointment process for a single member. Section 9(1)(a) says, I understand, "8 or more persons appointed by the Lieutenant Governor in Council." Would you, as minister, receive the recommendations to initiate the process? Or does it go to cabinet or for individual college submissions?
Hon. D. Miller: We use very sound judgment.
L. Reid: The question, if I might simplify it for the minister, was the process. The person's name will be put forward somewhere as a possible recommendation. I am interested in the actual process. Do you receive the name as minister? Does the name go to the ministry? Does it go to the cabinet at large? Let's work through (a) as an example. How are those eight names initiated into the process, and what is the process? Do you collect 30 names and, by elimination, reduce them to eight? How are you going to arrive at those eight appointed persons?
Hon. D. Miller: I use my best judgment.
L. Reid: I appreciate that the minister possesses some judgment around this issue. I simply want to know what the framework for decision-making will be. What guidelines will he use to exercise his best possible judgment?
Hon. D. Miller: We solicit names. We receive names; quite often people forward their names as an expression of interest. I have encouraged all of the board chairs -- the presidents, for example -- not just at colleges but also at universities, to offer suggestions about people who may be interested in serving. We try to reflect the communities that the institutions serve. In other words, it's important that there be geographic representation and representation of interested communities that might exist -- the business community, the labour community and others. I don't want to suggest that any of the board members.... By and large, I think the voluntary board members across this province are doing a very good job of serving their communities and the institutions that serve their communities.
L. Reid: I understand the minister's comments on criteria, whether it be gender, geography or experience. My question specifically is: when you said "we receive," are you suggesting you as a minister receive; the Ministry of Skills, Training and Labour receives; or the cabinet table receives? Who is the recipient of those recommendations for those eight appointees?
Hon. D. Miller: Look, the names eventually all come to me, no matter how they may have been obtained. It may be from members. If the members opposite have names they want to put forward, they should come to me and give me the names. At the end of the day, I make an informed decision, after talking to the institutions and others, about who I think.... The Lieutenant-Governor-in-Council makes appointments in a variety of circumstances. This is just one of them. Why we need to explore the precise nature of the communication I have with every individual who may want to talk about being on a board or getting a name.... Hon. Chair, what can I say? Why are we doing this? If the member has names she wants to give me, I'd be happy to take them, look at them and see if they do in fact meet my very high standards.
L. Reid: I think that against the minister's better judgment he may have inadvertently answered the question. If he is the recipient of those names, then indeed he is advising British Columbia as a whole that he will receive recommendations for those positions. That was the question. It didn't need to be beaten to death by the minister in four tries. It was a very straightforward question. I thank him for that answer.
C. Tanner: With your indulgence, hon. Chair, unfortunately I have to leave the debate. I know the minister's going to miss me, but I have to go in the next ten or 15 minutes. I'm asking for a response from the minister on a specific question which appears later on in the bill. There are no transitional clauses in this bill. Would the minister give this House the assurance that when he makes those appointments to the new boards in the future, he will keep some of the members of the old boards so we don't have a brand-new set of board members right across the province?
Interjection.
G. Wilson: Notwithstanding the rather cavalier response from the minister, it is indeed germane to this bill, because one of the charges I would make against this government with respect to these amendments to the College and Institute Act is that it is in fact centralizing authority and power, and diminishing or reducing the amount of academic freedom that currently exists in the colleges. One of the areas the minister could defend in this bill is in section 3, subsection 9(1)(a), with respect to the appointment of board members. It is indeed germane to this bill that the government has decided that they will keep the power to make appointments to the boards in the hands of one minister rather than putting the decision-making into the community, so they could provide -- as we would hope they might do with other boards, as they do now with school boards; we would like to see hospital boards have that as
[ Page 11365 ]
well -- an opportunity to elect people from the community. They would like to direct the educational services to the students these colleges serve rather than have them dictated from the minister. Can the minister tell us why this government has chosen not to go to elected boards but to stay with appointed boards?
Hon. D. Miller: I don't wish to canvass the issue too broadly. One of the principal reasons is that there's been absolutely no demand from the institutions or board members themselves -- many of whom were not appointed by this administration but by the previous one -- to go to a system of election. It may be a point of debate.
I suggest it's not the point of debate here and now. It's a broader topic with respect to whether, in a variety of circumstances, these boards, hospital boards or other boards should be determined through a process of election or a process of appointment. The fact is that we have not chosen to proceed to an election system, but to maintain the system and the act as currently constituted. As such, I submit that it would be inappropriate to open up a broader debate, when in fact there's no change. Under this piece of legislation, we have simply added additional members to the board who represent other interests.
The Chair: Before I recognize any members, I just caution one and all of my colleagues that this a relatively straightforward section. It has been canvassed at some length now, and I am beginning to detect some repetition and tedium. I therefore ask members to focus very clearly on new information they are attempting to elicit in their questions. Otherwise, I suggest we should be moving on fairly quickly.
[5:00]
G. Wilson: Could you tell us why the Justice Institute of British Columbia has a different board composition than the colleges and institutes, simply so that can go on the record?
Hon. D. Miller: It's essentially a different operation, not like a community college or police academy. They purchase services and there's no faculty, so it's a completely different operation.
G. Wilson: I have just two more questions on this section. They have to do with the role elected faculty will play on a board. The reason I raise it now -- and I will raise it again when we talk about terms of office -- is that there seems to be a differential term of office for those who are elected students and faculty, in terms of a three-year term. One could argue that in a two-year institution it's clear that a student would be elected to the board for one year, because it's a two-year institution -- although in reality many students are enrolled part-time and stay at an institution for a lot longer than that. But it would appear that by setting a three-year term you are eliminating the possibility for those faculty who may be under temporary status -- and that's a very significant proportion of the faculty in any association in any college -- to have an opportunity to serve on the board. If that is not the intention, could the minister say so?
If that is the case, is it possible that later on the minister might want to entertain the notion that the terms of office may be staggered? This would allow temporary faculty, who are a very large component of instructors and who are under collective agreements classified as temporary instructors, to have equal weight with those who may be employed full-time.
Hon. D. Miller: Certainly members who are temporary could be elected and then step down. And nothing precludes those who have been elected from continuing to run for election and serve subsequent terms on any board.
R. Chisholm: I ask leave to make an introduction.
Leave granted.
R. Chisholm: I'm making an introduction for the Speaker. Today we have with us Ms. J. Meyburg, 48 grade 7 students and 16 adults who are visiting the precincts to see how democracy works. Hopefully we're giving them a fine show. These are not all the members. We have another House operating at the same time, and other members are out doing business for the people of British Columbia. Would the House make them most welcome.
G. Wilson: My last question is really just to get clarification, because I didn't hear the minister's response clearly. Given that either support staff, faculty or indeed students are voting members of the board, it is presumably possible that any one from those three categories could be elected and serve as chair of the board. Is my understanding correct?
Hon. D. Miller: Any voting member.
C. Serwa: Hon. Chair, before I start on the questions that I have for you.... I may tend to try your patience, but hopefully you'll be tolerant enough to give me the opportunity to pursue the line of questioning. I don't perceive this section as innocuous or straightforward. I have concerns and questions because of the manner in which the minister has responded and the relatively weak defence for the inclusion of this particular section. I've listened to the debate as it has gone on and on.
One of the things that I've heard so often in this Legislature is that if it ain't broke don't fix it. Would the minister please advise me why we have to have more government appointees to the board, and why he believes that two students, a member of the support staff and a faculty member should be elected to the board? I ask this question in all genuineness, because mechanisms are inherent in the college administration system that allow students and certainly allow support staff and faculty members to bring their matters directly to the board through the president of the organization. It appears to me that this tends to expose those individuals to a continuous conflict of interest. That's my specific concern. Perhaps the minister could advise me of the rationale for the establishment of section 3, section 9.
Hon. D. Miller: It was asked for by the institutions.
C. Serwa: Again, I hope that the public is being made aware through Hansard and this televised broadcast that this very serious matter on the future of our college and university system is being played so lightly, so fast and so loose by the supposedly competent Minister of Skills, Training and Labour. I have a great deal of difficulty in this Legislature having those casual, disinterested one-liners thrown back at members of the opposition who are vitally concerned -- and rightfully so -- about the future of education. It's not simply training or the development of skills but education in British Columbia.
[ Page 11366 ]
The reality is simply this. We've seen it in hospital boards, and we've seen it in teachers' associations, with their organizations and their involvement. The fact of the matter is that those individuals are part of the operation of the system. The colleges are responsible to their communities and collectively to the people of the province as a whole. What the minister is doing with this section is putting the foxes in to tend the chickens. That's what I'm vitally concerned about. There is no necessity for this. I don't think anyone out there likes that very much at all. It is not practical or possible. This is a thinly veiled, bald and barefaced attempt to pervert the college and university system to the whims and wiles of the government, organized labour and the NDP cause. That's my sincere concern about this. The government appointees that the minister wants will be chosen from activists who are not representative of an objective outlook. There will be activists representative of selfishness and greed. That's my concern, and its a legitimate concern. The board has....
I note that the minister is going to stand up and deliver another one-liner.
Hon. D. Miller: Well, I don't want to waste too many lines on the spurious nonsense I'm hearing from this member. The member appears to have as his underlying theme the idea that everybody operates from some base motive, that the only thing that drives people is some base motive connected to greed and self-interest. How utterly disappointing to have a member of this House stand up in 1994 and talk the kind of language that I'm hearing from the member for Okanagan West. It is really too much to take.
Does the member have any understanding and appreciation of the history of education, not just in this country but in other countries? Does the member have any understanding and appreciation that educators really have responded to a higher calling and are vitally interested in what they do? Teachers may be interested, as that member probably is, in how much they take home at the end of the day. But clearly they have the ability as individuals to be concerned about education and those whom they teach.
This member likes to go to the bottom of the barrel every time. I suppose there's very little I can do to prevent him from standing up and ranting on. But it is quite offensive to listen to that member's characterization of everybody -- but presumably not someone that he prefers -- as having only one motive: complete and utter self-interest. That defies an honourable history and tradition that is in place, particularly in our universities, has existed for hundreds of years and exists today.
In fundamental ways this bill is not too dissimilar to the system that has existed in our universities for a long period of time. When that member was a member of cabinet in the last administration he had an opportunity to give vent to those feelings, which come from who knows where. He did nothing; he never made a single speech. I've watched him. I've been in the House as long as that member. Not once did he make a speech decrying the fact that faculty sit on the boards of universities. Not once did he make a speech decrying the fact that students are represented on the boards of universities. But now he thinks he can stand up in this debate -- for some political gain, no doubt -- and decry a bill that purports to set up a system that, while not exactly duplicating the university model, at least bears some resemblance to it. It is, again, as many of the comments have been, a little mystifying. If it's just politics, then let's tell everybody that you're just playing politics. If you're serious, hon. member, then I suggest that it's not me who should be concerned about what the record in Hansard is; in fact, it is you.
C. Serwa: That was a very interesting little bit of dialogue. The minister can be very comfortable in recognizing that an old catskinner is talking to a millwright, and perhaps we can forget a lot of the rhetoric.
My fears and concerns have been justified. Experience and history have shown precisely what I have said will come true. We can see that. We can see the activists in the teaching profession, who are members of your party and the BCTF. They talk education and cry out about the needs of students, but when it actually gets down to the bare bones, they're talking wages and working conditions. There is a mechanism that can handle that. I don't expect anything different from individuals. I know people. I know what their responsibility is to their constituency, and I understand that. But there is a mechanism already in place.
I also know and understand that when you have large boards -- and that's my particular concern -- they become dominated by a small section of three or four vocal or active board members who have their own agenda and who can monopolize or hamstring the board's deliberations. The individuals the minister is proposing in section 9 have a vested interest in that.
The minister has waxed eloquently about the fact that universities have this situation in hand. But the colleges were conceived under a different concept, and they were meant to have more of a community influence in them. That is the reason for the difference. I have no difficulty with the way the university boards are organized or run. They have produced splendid, well-educated individuals over a number of years, and I'm very happy about that. But I'm very concerned about this movement away from communities having the opportunity to have influence. The communities and the individuals in them are paying the bills. It seems to me that the communities should have a continuing and strong voice in the direction of the colleges.
[5:15]
We all have concerns about those who have a vested interest in the system, but there's no concern here for, let's say, the business community, which has expectations and needs for a certain type of student, depending on the way the world advances. There's no provision for incorporating those individuals, but we incorporate students who already have a mechanism through which to approach the president of the university, who is a full-time employee. As I've said, we already have that mechanism for all the others you're wanting to put on the board. I say that you're putting those individuals in a conflict, and you're hamstringing the board. The board has been doing an excellent job of producing the individuals in the vocational area with the skills and training required in British Columbia, but, more importantly, of continuing to provide a quality education to the students. You're wanting to destroy that, and I'm saying that's wrong.
Hon. D. Miller: It sounds pretty nonsensical to me. I can get a list for the member of all the people from the business community that I've appointed to boards in this province, if that would help him. I doubt it would.
The member spoke of his fear. I think his words went something like this: in any large organization, a small group tends to take control and take over and somehow weave their magic and plot. All I would note is that they've managed to solve that problem in the Social Credit caucus. In fact, they're now down to two. I would suggest that they will soon be down to one, and that member's problems will be solved.
[ Page 11367 ]
The Chair: May I suggest, as I did a few moments ago, that we have canvassed section 9 at some length. Because the member for Okanagan West has not participated, I'm going to allow a little more time, but I do want to suggest to him that I think we have heard most of the arguments, on both sides, many times over. However, in fairness, please continue, member.
C. Serwa: I thank the Chair for the Chair's understanding, tolerance and latitude. I sincerely appreciate it. From my perspective, hon. Chair, the reason for the persistence is the very importance of this issue for the future of our college system, and the fact that I do not feel that the responses the minister has been giving are based to any extent on the questions. He's not even consulting with staff members, who I presume are here as knowledgable support staff. He is simply just bantering back and forth and having a lot of fun and jokes about it. But this is a serious and important matter.
I have some research on the one question, with respect, and the reality is that group psychologists have found that committees of more than eight persons, in practice, are dominated by subgroups of no more than three or four individuals in their own separate, informal strategy meetings. This is a fact; it is not conjecture on my part. This is my particular concern, and the one-liners are not going to satisfy my concern, nor will they satisfy the public out there.
Section 3, section 9 approved on the following division:
|
YEAS -- 28 |
||
|
Priddy |
Edwards |
Cashore |
|
Charbonneau |
Garden |
Hammell |
|
B. Jones |
Lortie |
Giesbrecht |
|
Miller |
Cull |
Gabelmann |
|
Clark |
Ramsey |
Pullinger |
|
Evans |
Conroy |
Streifel |
|
Simpson |
Sawicki |
Jackson |
|
Krog |
Brewin |
Copping |
|
Schreck |
Lali |
Hartley |
| Boone | ||
|
NAYS -- 17 |
||
|
Wilson |
Serwa |
Hanson |
|
Weisgerber |
Stephens |
Gingell |
|
Hurd |
Farrell-Collins |
Dalton |
|
Chisholm |
Jarvis |
Anderson |
|
K. Jones |
M. de Jong |
Symons |
|
Fox |
|
H. De Jong |
Hon. D. Miller: Hon. Chair, I move the committee rise, report progress and ask leave to sit again.
The House resumed; the Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
Hon. G. Clark: I rise to ask leave to move the following motion:
"Be it resolved that this House, mindful of the need to encourage tolerance of all religious faiths, congratulates all branches of the Royal Canadian Legion that allow entry to members of every religious faith, regardless of belief or dress, and calls upon all other branches to follow this example."
Leave not granted.
G. Farrell-Collins: I rise to ask leave to table the following motion:
"Be it resolved that this House, mindful of the need to encourage tolerance of all religious faiths, congratulates all branches of the Royal Canadian Legion that allow entry to members of every religious faith, regardless of belief or dress, and calls upon all other branches to follow this example."
[5:30]
The Speaker: Hon. members, I think there is a need to revisit the process that took place recently. It was my impression that the minister initially.... Is the hon. member for Fort Langley-Aldergrove seeking leave to table or to move the motion?
G. Farrell-Collins: To move.
The Speaker: Then his situation is identical to that of the minister. He is asking leave to move the motion, and leave is required. Shall leave be granted?
Leave granted.
The Speaker: The motion is now before us.
Hon. G. Clark: It must be me, hon. Speaker.
ROYAL CANADIAN LEGION POLICY ON RELIGIOUS HEADGEAR
Hon. G. Clark: I rise to speak very briefly to the motion moved now by the House Leader for the Liberal Party. I'm rising because obviously the motion that I moved was identical and did not receive leave from all members of the House, which is disappointing to me. Maybe there's hope for a coalition yet over there.
I don't want to make light of this very important matter. I do want to make the point that in canvassing members of the House, there has been wide support, from almost all members. That is exemplified by the fact that an identical motion was moved by the House Leader for the Liberal Party.
I think it's important in matters like this that they not be perceived to be -- because they are not, in my view -- partisan issues. They are issues of human rights, tolerance and respect for individuals, which surely transcend partisan politics. Of course, I was disappointed that leave wasn't granted to mine, but I am glad that the motion is before us today.
This motion is phrased very carefully to say that there are many, many Legions in Canada and in British Columbia that allow members of all faiths, regardless of costume and dress, free entry into Legions and participation in Legion affairs. Many Legions do that now quietly, without any fanfare, because it isn't a political matter. Unfortunately, some Legions have chosen, frankly, an inappropriate approach to this question and have taken it upon themselves to bar individuals because of their dress -- in the case of the Surrey Legion, because of individuals wearing turbans.
This motion does not condemn all members of the Legion. It does not condemn all branches of the Legion. It is specifically designed to say that there are many Legion members appalled by some Legions who have taken certain actions. Many Legion branches have very progressive policies and do practise tolerance, but there are some that do
[ Page 11368 ]
not. This simply urges those that do not to follow the excellent example of many of the Legion branches which practise the kind of tolerance we all expect in Canada and in British Columbia.
I just have a brief comment on the issue of allowing turbaned Sikhs entrance into Legions. I'm of a younger generation, and it is puzzling for me how, with fighting allies in the effort of the war, there was never any question about whether someone wore a turban or other dress in fighting for the things we all believe in. It's puzzling to me that those same individuals, decorated war veterans who happen to wear a turban, are somehow barred from entrance into some Legions in Canada. It's puzzling and very sad.
I think it's important for legislators of all political parties to, not in a shrill way but in a reserved and respectful way, express our views on this question, to take a leadership position on this question. It is by no means uncontroversial, but it's important for legislators of all parties to come together in times like this and simply say that those Legions which do practise religious tolerance should be commended. Those that do not should really think again and follow the examples of their brothers and sisters in Legions around Canada and around the world that don't look at what someone is wearing, that actually practise the kind of tolerance toward religion and dress that I think exemplifies what is best about our country, Canada.
I hope all members will think about this and pass this motion unanimously.
The Speaker: Before recognizing the mover of the motion, I should point out to hon. members that we turned things around. The mover perhaps should have spoken first. I notice another member seeking to speak. I will recognize the hon. member for Fort Langley-Aldergrove as the mover, followed by the hon. member for Cowichan-Ladysmith.
G. Farrell-Collins: I want to thank the Minister of Employment and Investment for moving the motion initially. I can't say how pleased I am that on its second motion it was accepted and allowed to be brought forward to the House. I hope that the sober second thought that went on in that millisecond between the first and second attempts is indicative of the type of sober second thought that we'll see over time with the other Legions around this country.
I always consider it a great honour when I'm invited to the Legion in Aldergrove. I feel a great duty of thanks and respect to the people who put their lives at risk in a number of different very difficult conflicts in the world, who fought for the right of people to elect representatives to come to Houses like this and to speak on their behalf. I'm always mindful of that when I go there.
Probably every member in this House has a relative -- a grandfather, a mother, an aunt or an uncle -- who participated in one of the many conflicts, for whom we give credit and remembrance come November every year. I know we can all relate, in some capacity, to the effort they put in on our behalf: the selfless determination and giving of themselves, and their lives in many cases, to defend the rights we all respect but sometimes take for granted.
I've also had the honour -- and I do consider it an honour -- to meet the gentleman from Surrey who we've seen in the paper and on television over the last few days, who was a colonel in the army during the Second World War. I think he, among others, has given a great deal of service not just to his country but to all countries, to all free people in the world. I certainly considered it an honour to have had the opportunity to meet him. I respect him a great deal for continuing the fight he started some 50 years ago or more. To this day he continues to fight for his rights and for those of his people and individual citizens of all countries and all faiths and religious beliefs. I give him a great deal of credit for keeping this on the public agenda and trying to deal with these concerns.
Perhaps as part of a younger generation who wasn't there to see those conflicts, I find it difficult to understand the reasons given for barring these members from the Legions. I grew up in a very multicultural community. It wasn't as multicultural as the one I live in now, but it was certainly very multicultural. I went to school with children of all faiths, religions and beliefs and grew to respect those beliefs and those people. It's incumbent upon all of us, whenever possible, to speak out strongly to encourage and congratulate those people who are tolerant of other beliefs and to encourage those who have yet to come to understand how important it is that those people and their faiths be accepted. We should encourage people to take that extra step and be more open-minded and tolerant.
As a Canadian, I like to think that one of the defining features of my country is that we're tolerant. We're not 100 percent tolerant yet. We're not even close to 100 percent, but we're trying. I'm going to do everything I can, as many members of this House are going to do. I hope that members in this chamber from all political parties -- the independents included -- will contribute to this debate and give their thoughts, encouragements and congratulations to those Legions that invite members of all faiths to celebrate the trials and tribulations that they've gone through together. Let's respect each other and encourage those who have yet to come to that point to do so as soon as they possibly can, and I would suggest immediately.
The Speaker: Obviously there are a number of people who wish to speak on the motion. I would advise members that the proper procedure should be for the member for Fort Langley-Aldergrove, as the mover, to close the debate at the end. If the member is available at the end of this debate, I would ask him to take his place and call for the question. If he's not here, then there's nothing we can do about that.
J. Pullinger: I rise to speak in favour of the motion before us. Before I do, I want to say that I regret the necessity to have this motion, as I'm sure all members of this House do. Let me remind everybody that the motion before us is one about applauding those Legions in this province and this country who have taken the progressive and necessary step of welcoming people of all faiths. It is also a commentary in opposition to those Legions who have not yet taken that step and of encouragement for them to do so. Unfortunately, one of the Socred members refused to let the government motion stand, so we are debating an opposition motion. I am pleased that the Liberals put it forward so that we have this opportunity.
I believe this is a very important motion that goes well beyond partisan politics. What we are dealing with today is not the issue of whether Sikhs should be allowed into Legions. What is at the basis of this discussion and this motion is the fundamental principle of freedom of religion in this country. When any organization bans people because they have headgear on, and when we have in this country many religions -- be it Sikh, Muslim or Jewish -- whose religion requires that headdress, then we are banning people on the basis of their religion. That cannot and must not happen in this country.
[ Page 11369 ]
Freedom of religion in this country is central to who we are as a country. It's central to our democracy, and I think that sometimes gets lost in this debate. It's important that we, as legislators and individually, and this Legislature stand and very clearly say that it is not acceptable to deny people full participation in this country on the basis of their religion. I certainly add my voice to all of those others who are congratulating, applauding and encouraging those Legion branches that allow everyone to participate, as they ought to. But I also want to add my voice to encourage those who have not yet taken that step to do so, because the principle at the bottom of all of this is too important to allow those other kinds of policies to stand.
Our country is based not only on freedom of religion but on tolerance. Canada has often been named as one of the best countries in the world to live in, and one of the fundamental principles, one of the things that we have accepted well in this country, is the principle of tolerance towards one another. It's my hope that we can go beyond tolerance, move to something like celebration of difference, and learn from each other. Sadly, in recent years, perhaps because of some of the economic upheavals that this country has been going through, we seem to be moving away from that. What we're hearing recently certainly would appear to support that.
In this country we started with first nations -- a multitude of diversity. We tend to cast first nations as one and the same. They're not. We have 11 different language groups on the coast, and 11 of the 13 in the country are just on the coast of this province. And in that 11, each one represents many different cultures and many different languages. The history of this country has been wave after wave of immigrants from all over the world. We have had people from every part of the world -- from the Orient, from India, from Europe -- and in my view that's what makes this country rich.
[5:45]
To see what's happening, to see this debate and to see some acceptance of barring people on the basis of headgear, which equals barring them on the basis of their religion, cuts against what I hold most dear in this country.
Again, in closing, I want to say that I strongly urge those Legion branches that have not yet recognized it that we're talking about tolerance, we're talking about freedom of religion, we're talking about what makes this country great -- all of those things that they fought for. I want to encourage them to remember this, to recognize that that's the issue we're dealing with and to do what I know the other branches want them to do, what all of us want them to do and what most people want them to do. That is to end the policy that discriminates on the basis of religion and move forward to make our country just a little bit better, by providing the tolerance, the acceptance and the freedoms that we all hold so dear.
J. Weisgerber: It's a pleasure for me to rise and support the motion. It's a serious motion, one that I believe was put forward in good faith by the government and which was supported and indeed put forward for a second time by the official opposition. It's clear to me that we should support these kinds of motions, that we should support the positive action taken by many Legions around this country. Indeed, the Minister of Women's Equality will know that as early as last December we wrote to the national headquarters of the Canadian Legion organization. We said that we thought this issue was important enough that it shouldn't be up to each individual Legion; that there are some standards an organization like the Canadian Legion should simply put down as a basis for membership in that organization for any one of the individual Legions.
Religious tolerance is one of those fundamentals that this country is built on. Religious freedom, racial tolerance and a recognition of the diversity of ethnic backgrounds has to be an issue that speaks to everyone in this Legislature. I believe there can't be anybody in this House who hasn't had, in this great province and great country, very positive and influential examples in their lives of the different approach that Canada and Canadians take to bringing people from around the world into a province and a country, making what I believe to be the greatest country on earth. I believe that the fundamental difference between Canada and any other country is this willingness of Canadians, this basic concept of tolerance and welcoming of differences, rather than bringing people to a common denominator.
Mr. Speaker, it's a pleasure for me, on behalf of the caucus.... And that's not to suggest that I would in any way discourage any other member of the caucus from standing and joining in. But I'm not sure how long this debate is to go on, and I want you and all members to know that the Reform caucus supports this motion.
V. Anderson: I stand with respect and humility to support the motion which is now before us. Our own caucus took a very similar action yesterday in a news release, so I can indicate on their behalf that this is an action that we very much support.
It is unfortunate that this needs to be done, as others have mentioned, but having done interfaith work on a full-time basis for 11 years, I am very much aware of the inability of all of us, at one time or another, to understand the faith positions of other people. So I speak with a great deal of humility, because in supporting those Legions which have taken this stand I respect them, but I also have to acknowledge that this does not mean lack of respect for people who are struggling with different positions. It's not that I agree with them, but I still must respect the circumstances that lead them to their particular decision and action.
I would trust and hope they might change, but I'm also very aware that there is probably not one of us, in the ordinary activities of our daily life, who has not ignored, overlooked or been unaware of the religious practices and customs of other people, and of their special holidays, days, language and expressions. We also have been guilty -- probably unconsciously so, but guilty nevertheless -- of similar kinds of actions. If we would learn to respect the decisions of other people, particularly those who might disagree with our own position, we must do so recognizing that we and those who differ from us have yet to learn, in many ways, to grow together.
I speak with humility in heartily supporting this motion, because it is very positively put and is not attempting, in my understanding, to say that we are the righteous ones and others who take a different position are the unrighteous. It's simply to say we believe, out of our own faith and value system, that that kind of respect must be accorded in this particular circumstance to all persons.
I'm very much aware of the value of the Legion movement over the generations. My father was a very active member and earned in his own right the ability to be so. Though not a Legion member, I've had the opportunity to be a chaplain within the Legion and to share with them the reality of the experiences through which these men and women went that gave them the initial right to be members. That's a life-and-death reality for men and women who were
[ Page 11370 ]
prepared to give their very lives -- and many of them did so -- in order that they might fight for freedom for all people and for a free world wherever we live.
On this day we have to remember and respect all of those who were willing to make that sacrifice, even if they may not be making the same decision that we affirm at this particular moment. So in humility I support the motion and encourage others to do likewise. But do it in a positive manner, so that we might continue to grow in understanding, appreciation and respect for our different faith positions.
Hon. M. Sihota: In a few days, on June 6, we will be celebrating the fiftieth anniversary of D-Day. That occasion reminds us of many who made the ultimate sacrifice so that the freedoms that we enjoy in this country would flourish -- freedoms that we take for granted in so many ways in terms of speech, but also freedoms with regard to religion. Some who participated in that war to end all wars were people of the Jewish and Sikh faiths. From my readings, I know that those of the Sikh faith played an exemplary role in standing up for those freedoms that I referred to a moment ago. Many of them were involved in that war. Many of them were decorated, and they were decorated with their turbans on. Many of them had the privilege to meet Her Majesty, and they met her with their turbans on. Many of them had occasion to celebrate in messes with their colleagues the successes of those days, and they celebrated with their turbans on. Some tragically made the ultimate sacrifice and died, and they died with their turbans on. They died with respect and dignity, and they moved to another world that is predicated on the values of their religion.
I have the privilege of representing the riding of Esquimalt-Metchosin, and we have a remarkable military tradition in my constituency. One-third of my constituents are members of the military. We have Legions in my constituency, and I have been known to frequent the Legion in Esquimalt. When this issue first came to the fore several months ago, I was proud of the approach taken by my Legion in Esquimalt. Because I haven't had the opportunity to do so, today I want to congratulate them for their openness, tolerance, understanding, acceptance and support. The motion that is before members today is to recognize the kind of genuine understandings that flowed from Legions such as the Legion in Esquimalt.
The events of the past few days have saddened me. I am personally hurt and troubled by some of the statements and opinions that have been expressed. As a member of a particular faith I have had to struggle with some of the reactions -- believing in the values that I do -- that have been articulated by many. It seems to me that if there is a benefit in the events that have occurred, it lies in the fact that it gives us cause for reflection and the opportunity to renew a debate which must be had in this country of ours -- a debate which, in my view, must conclude with a confirmation of our commitment to religious tolerance, religious freedom, human rights and multiculturalism.
By putting this issue before the House today, I think all parties are acknowledging the need for us as elected members of this Legislature to confirm our commitment to the acknowledgment of human rights, multiculturalism and those religious freedoms referred to earlier. That is all I want to say with regard to this matter.
Given the hour, I move adjournment of the debate until later today.
Motion approved.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. G. Clark: I move the House, at its rising, stand recessed until 6:35 p.m.
Motion approved.
The House recessed at 5:59 p.m.
The House resumed at 6:37 p.m.
Hon. G. Clark: I call Committee of Supply in Section A, the Ministry of Finance and Corporate Relations. In the House, I call continued debate on the motion moved by the House Leader of the Opposition.
ROYAL CANADIAN LEGION POLICY ON RELIGIOUS HEADGEAR
(continued)
H. Lali: I rise in support of the motion before us. As a member of the Sikh community, I want to state that I'm proud to be a Canadian. I was born and raised in India, in Punjab, and I came to this country in 1966. I'm just as proud of my Sikh heritage as I am of my Canadian heritage.
I want to start by congratulating all those Legions in the country that have shown tolerance by accepting people who have religious headgear into their Legions. I have several Legions in my constituency. I know that the Legion in Merritt was one of the first to drop their headgear policy and welcome Sikhs into the Legion there. There might be others in my riding, but unfortunately I am not aware of that.
Being a member of the Sikh community, my father had a turban his entire life. He was 83 when he passed away, and he lived in Canada for almost 20 years of his life. Although I don't wear a turban, I have very strong feelings with respect to the issue that has been before us.
One thing that has been lacking in the opposition to the wearing of turbans that has come from segments of the community is knowledge of the history behind the religious symbolism of the turban and what it really means for a Sikh to wear a turban. For a Sikh, the highest symbol of honour and respect is to wear a turban. I know the hon. Minister Responsible for Human Rights and Multiculturalism, who spoke before me, touched upon a couple of aspects of the importance of the turban, not the least of which is that when Sikhs fought in battle -- they have fought alongside many people during both world wars -- not only were they proud to serve in the military with a turban on, but when they died, they were proud to have worn a turban. When they received their many Victoria Crosses as members of the British Indian Army, and when they went to see the Queen, they had their turbans on.
There are some other examples. When a Sikh gets married, the wearing of a turban in front of the Sikh holy book is absolutely essential. It is a very high symbol of respect and honour. When a Sikh dies, as a part of the rituals that take place after the body is bathed and clothed, a turban is placed upon the head before the cremation takes place. As well, during the baptism ceremony when a Sikh takes on the traditional five K symbols, the placing of the turban on the head is the ultimate show of respect and honour for a Sikh.
You will find that throughout history there have been quite a few religious leaders -- not just in the Indian subcontinent but throughout the Middle East and other parts of the world -- who wore turbans to show the respect it
[ Page 11371 ]
denoted. You will find many depictions of even the prophets of the Sikh religion, the Sufi saints and those in the Bhakti movement -- the Bhaktas were the keepers of the holy tradition -- wearing turbans as well. I just want to point out that even within the literature of southern Asia you will find that when two individuals became very close friends, in order to show their loyalty, honour, respect and love for each other, the ultimate symbol was for them to exchange turbans. That was the highest sign of the respect and loyalty they felt for each other. There are countless ceremonies. For instance, when you attend a funeral of a person, to show your respect, you cover your head with a cloth. For Sikhs, that is often done by wearing a turban.
I think that a lot of people in our society -- especially the older generation -- don't understand the importance of a turban in the Sikh religion. When a traditional Sikh wears a turban, that carries with it strong discipline, and they have to follow a code of conduct and a code of ethics when they participate in everyday life in society.
In the 1840s, when the British took over the Punjab, where the Sikhs had their own nation-state set up, the British realized the importance of the turban and actually promoted turban-wearing Sikhs into positions, not only in the civil service but especially in the army. There was a very popular tradition, even among the Hindus who lived in the Punjab. If they wanted to gain access to military positions, they would have their eldest son become a baptized Sikh. It was considered a great honour for those members of the Hindu community to become traditional Sikhs. The British saw that, and they saw, as I mentioned earlier, that traditional Sikhs who wore the turbans carried with them strong discipline and a code of conduct and a code of ethics. That actually made them very good and disciplined soldiers in the field of battle, instilling a feeling of bravery.
[6:45]
I am in no way trying to glorify militarism or a militaristic spirit. Having been a student of history -- and I continue to be -- and having done a fair amount of reading on the Sikh religion and history, I feel that I'm somewhat qualified to give some information not only on the history of the turban but also on the history of the Sikhs, and what importance that has in the daily life of a Sikh. The martial spirit was a part of that, because at the time that Sikhism was flourishing, India was ruled by Mogul rulers -- invaders who had control of the nation for 500 or 600 years -- and a lot of atrocities were committed. At times those atrocities reached genocidal proportions, and the Sikhs were in the middle and at the forefront of fighting the tyranny and intolerance of those foreign rulers at the time, and they wore their turbans with pride.
Not the least part of the religion was that these people who had taken on a Sikh faith would fight on behalf of the poor, the disadvantaged, the elderly, children, women and any other disadvantaged group within society, and at the same time would try to overthrow those rulers so that a sympathetic, more tolerant system of government could be placed in the country. They made a lot of sacrifices on behalf of the people of north India in order to free that part of the country from foreign rule.
In the first 40 or 50 years under the British there was quite a bit of cooperation between the British rulers and the Sikh people in the Punjab. But when that relationship began to sour and the Indian nationalist movement took hold and fervour within the country as India began its own age of enlightenment, due to the introduction of western education, the Sikhs were there right at the forefront whenever they felt that the British themselves were doing an injustice -- if they felt they were preaching one thing and doing another. So when Indians felt that they had to have control of their own destiny, to free the country of foreign rule, the Sikhs were right there at the forefront making all sorts of sacrifices on behalf of Indians.
Indeed, during that period there were two world wars -- not Indian wars, not Punjabi wars, not Sikh wars -- which Sikhs joined on behalf of the British Empire because they had a strong sense of loyalty. Even though they felt that the British occupiers were committing injustices in India, they felt that the tyranny and the racism and the bigotry being perpetrated in other parts of the world by Hitler, by Mussolini and by Tojo and his warlords was a bigger danger to mankind than the injustices being inflicted upon Indians in India by the British.
They joined hands with the British, and indeed Canadians were a part of that army of the British Empire which fought to overthrow bigotry and racism and all the other negative things that went along with those two wars. In the First World War itself, the British Indian Army consisted of one million men and women. Half of those people who enlisted on behalf of the British Indian Army were Sikhs, who fought alongside the British, the Americans and other troops from the British Empire and the Allies. They fought alongside Canadians in those trenches, so they could overthrow the tyranny and oppression that were being perpetrated upon not just British subjects but Europeans, Jews, East Asians and other people in the world. They died fighting with their turbans on, alongside those Canadians who would later go on to form the Legions.
During the Second World War, relations between the British rulers and their Indian subjects were probably at their lowest in the 200 years since the British went into India. Even during those years, 1939 to 1945, the Sikhs in particular -- Indians in general, but the Sikhs in particular -- who formed at that time almost 55 percent of the British Indian Army, were able to put aside their differences, their anger and any other negative feelings they may have had toward the British. They were able to join the British Indian Army in record numbers and fight another foreign war on behalf of the British.
They fought alongside Canadians and other Empire troops in Mesopotamia. They fought alongside them in the trenches in North Africa, in Sicily, in Italy, and also in France and in other theatres of the war. They helped to defend the British, alongside Canadians in Hong Kong, and in every other theatre of the war. They were there alongside those same Legionnaires who are trying to keep them out of those Legions right now. They fought alongside them, yet how many of those Legionnaires and how many of those veterans would have said to the Sikhs then: "I don't want you to fight alongside me. I don't want you to die for me because you've got your turban on. I want you to go outside and take your turban off, and then you're worthy of dying." If those turbaned Sikhs could die on behalf of the British Empire and Canada in the foreign wars, lay down their lives and spill their blood in those trenches, then they're good enough to go into those Legions with their turbans on.
There is a very fundamental idea here that those who wish to keep the Sikhs, Jews and other people who wear religious headgear out are missing, and that is that we all joined our shoulders together. We all joined our hands together to fight racism, bigotry, ignorance and all those things. Yet those same things are now preventing those very people who fought for freedom from entering those various Legions in Canada with their religious headgear on. This is something very fundamental that people have to reflect on.
[ Page 11372 ]
We are fast becoming an international community. We have international cooperation, not just in trade. We have all sorts of organizations set up for various types of international cooperation. What happens on one side of the world affects us here; what happens here affects people on the other side of the world. Indeed, many people's livelihoods depend on decisions that are often made in other parts of the world.
I want to point out that there's a very large task before us as Canadians in the years and indeed the decades ahead: we have to educate ourselves not only on the similarities we have with other peoples in the world but also on the differences we have. Only through education will we be able to free ourselves from some of the injustices taking place. When you hear examples of a lot of these Legions where Sikhs and Jews are not allowed with their religious headgear on....
Then you hear of instances.... I'm going to give you two instances, not the least of which is the Surrey Newton Legion, where I've learned that they had a cowboy day when people were allowed to go in with their Stetsons on, because the Legion made an exception to the rule. And at the Calgary Stampede.... I understand that there are Legions in Alberta which made an exception to allow people to come into the Legions with their Stetsons on. Yet when somebody wants to go in with a turban or the Jewish cap on, they're told no. I wonder why.
Might it have something to do with the colour of the person trying to enter the Legion? Might it be that they would allow a person to make an allowance on one person's behalf, and on another's to say: "No, we can't change our tradition"? I sure don't see too many Indo-Canadians or Sikhs who wear cowboy hats or, at the same time, too many European-Canadians who wear turbans. If that was the case, I wonder what the decisions of some of those Legions would be in those instances. The very root of the problem is intolerance, which is based upon ignorance and not knowing the fundamental importance of the religious headgear that various groups like to wear.
In closing, I'd just like to say a few words in Punjabi. I know members of some of the Sikh community are listening to the debate taking place.
The following section was spoken in Punjabi -- The accents are not available for the bulletin board -- Please see printed version for accents to Punjabi language
Jo bhī m�r� Hindustani, Punjabi, y�n Sikh bīr at� bhein� sund� hong� main sāriy�n noon kehn� chauhnda h�n k� Sikh�n n� bahut Qurbāniyan kītīyan hun.
Sikh�n n� Itīhās wich Dhakk� at� Zulam baroudh bahut jung larh� hun. Aaj Canada d� Legion� wich bhī dhakkā ho rihā hai. Sānoon is dhak� de baroudh bhi larhnāchahīdā hai.
Mainoon yakīn hai ke is dhak� noon asīn mukā sakd� hān.
In closing, I want to thank you for allowing me this opportunity to join the other members in debate. I hope to see a future for this country -- if not in my lifetime, then indeed in my children's lifetime -- when this society can be free of intolerance, which far too often brings people from different cultures and ethnic backgrounds into opposing positions.
L. Krog: I know that many members wish to speak tonight on this motion, and I will be very brief. When I went to school in this province, I read books that talked about this nation being one where religious tolerance existed, where we didn't discriminate on the basis of religion, creed or colour -- and I believed it. I think any reasonable, right-thinking Canadian would believe it. Quite frankly, that in 1994 we should be here at all, spending time in this Legislature debating this motion, is an incredibly sad commentary on the actions and beliefs of some Canadians.
Frankly, if we were to look at the necessity for this motion -- the actions of some members of some Legions in supporting a policy that has essentially banned, if you will, Sikhs and Muslims and Jews from entering their premises -- through the eyes of children, we would think that doing that and having to debate that was simply nothing more or less than silly. That we should have to spend any time thinking of this in 1994 is silly.
I would plead with the members of the Legion in this country and this province who have some difficulty with this to try to step back and look with some objectivity at what they're asking when they insist that headgear, part of the faith of those who would wish to enter, be removed. Is it so important in this nation, when there are so many problems of such importance to face and deal with, that we should be concerned that someone would wear a turban, a skullcap or any kind of a headdress into a Legion?
It is my sincere hope that Legions across this province will simply quietly set about, if they haven't already done so -- frankly, like the Legion in Parksville itself -- having a meeting and deciding quite candidly that it really doesn't matter, and it's not an issue. It is a silly issue that anyone would take time, raise concern and raise their voices in opposition to the presence in a Legion of those who simply have to, want to and wish to wear headgear that signifies their religious faith. I hope those voices will disappear and simply quietly leave the public view, so we may never have to debate or speak to a motion of this nature again in this Legislature.
[7:00]
It is an embarrassment that we should have to spend any time discussing this tonight. It is an embarrassment for British Columbia and this country that some delegates to that Legion convention have done this. I hope they will think carefully about what they have suggested. I hope Legion members who have opposed the admission of Jews, Sikhs, Muslims and whoever will sit back quietly and realize what I said earlier: to bar the doorway to their fellow Canadians is simply silly.
L. Stephens: It's a pleasure to rise in support of this motion and congratulate all branches of the Royal Canadian Legion that allow entry to members of every religious faith, regardless of their belief or dress, and remind all of us to be mindful of the multicultural society in which we all now live. We need to demonstrate the acceptance of all religious faiths, regardless of belief. The key word is "acceptance." Tolerance, to me, means to put up with, and acceptance means to embrace different beliefs and the multicultural society.
Support for and commitment to human rights has been demonstrated by many organizations in our community. The Royal Canadian Legion has had a long and honourable history as the defender of our freedom. I would strongly encourage those branches of the Legion that presently do not recognize the changing times to follow the example of those branches that do. So I support this motion and encourage all members of the House to do so.
B. Simpson: I'm honoured to speak in support of the motion. Listening to members of all the parties speaking in favour of it makes me proud of being a member of this Legislative Assembly. This unanimous agreement on such a crucial subject gives me hope that indeed this august chamber will serve as a beacon of hope in the fight against bigotry.
The decision of 2,000 out of 2,500 Legion delegates to reject a proposed national bylaw that would have allowed Sikhs and Jews and others to wear religious headgear at all
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Legion branches is to be deplored by all Canadians who believe that we're all equal before God. As a member of the Jewish faith, it is totally incomprehensible to me that members of my community who are Orthodox and wear skullcaps could not enter certain Legion branches, nor could my close friends in the Sikh and Muslim community. If you draw this decision of the Legion to its logical conclusion, the Pope himself could not visit these branches because he would be wearing religious headgear. However, it would be foolish to condemn the entire Legion. In fact, in Vancouver South, the Legion has no such prohibition, and I'm proud to go into that Legion. Those branches that have rejected this bigotry will lead the way in fighting against the bigotry in the branches of the Legion that practise it.
Last week I was in the Philippines. I went to the war memorial in Manila, and throughout the memorial, I saw over 100,000 gravesites. I got out of the van and I looked at some of those graves -- the names of Jones, Jackson, Cohen, McDonald, Johal, Singh. These brave men fought against bigotry and tyranny; they died together and were buried together. They are the great martyrs of our century. They gave their lives so future generations could have a life free from the scourge of Naziism. These martyrs made it possible for us to live in peace in this great multicultural society. No one asked them what religion they were when they were prepared to make the ultimate sacrifice.
Let us hope that this sad chapter in Legion history will fade into history and that the younger generation of Legion members will lead the fight against bigotry and make possible a society characterized by tolerance and cooperation.
M. de Jong: I also rise in support of the motion that is before this House. I'm proud to count myself a member of the Canadian Forces Reserve and very recently a member of the Royal Canadian Legion. I'm mindful of the traditions of that organization. I'm mindful of the contributions and sacrifices made by many of the members of the Royal Canadian Legion in the service of their country. I'm proud that the Legion in my part of the province, which I am a member of, has chosen to adopt, like many other Legions, an open-door policy and welcome all people -- men and women -- including those who for religious purposes choose to wear headgear. I am saddened, however, as members have previously articulated, that the need still exists for this motion to come before this House, in that there are, sadly, branches within the Legion that have not seen fit to adopt a similar approach and open their doors to all men and women.
Other members have expressed their sentiments in different ways, but when you get down to it the argument is the same. The decision not to allow turban-wearing Sikhs or members of the Jewish faith wearing skullcaps entry into a Legion is just wrong. It's founded on faulty logic. It's founded on a misinterpretation of history and tradition. One members speaking to the motion correctly pointed out that the tradition the Royal Canadian Legion has adopted is founded on the earlier tradition of officers' messes, where headgear is removed upon entering the mess. The source of that tradition, the messes themselves, allow Sikhs to enter with their turbans on. The logic these otherwise heroic individuals that are members of the Legion have adopted in support of their discriminatory practice is ill-founded, ill-conceived and no longer exists.
I want to make another point. I heard comments from members of the Legion who adopted the approach of: "Well, it's my club. Let me do and act as I see fit. If I go to the gurdwara, to their club, I'll conduct myself as I am asked." It's trite to compare a house of religious worship to a social club, and that really is what these individuals who purport to adopt that line of thinking are doing. The gurdwara, the Sikh temple, is not a club. This is not some right of a club that men adopt the turban -- we've heard at length from the member for Yale-Lillooet about the logic behind, and the reason for, the turban -- so that again represents an ill-conceived argument and insupportable logic.
There are those who might wonder why members of the Sikh community remain vigilant against these sorts of actions that arise disturbingly from time to time. As I listened to the presentations that were made at the Legion convention, and some of the other comments from other members of the Legion, I was mindful.... Remember that it was not that long ago that a boat called the Komagata Maru arrived off the shores of Vancouver laden with passengers from India -- members of the British Empire -- who also wore turbans. On that day, it wasn't a case of being denied entry to a Legion, they were denied entry to a country. They were denied entry to Canada because they were different. The principles, I'm sorry to say, are the same. They're equally reprehensible today. Perhaps the scale has dropped dramatically. The hurt that is felt remains the same, if not heightened.
I'm proud that the Legion in Abbotsford has chosen an open-door policy. I hope, as other members have expressed, that members of Legions across the country will see the wisdom in adopting such an approach, and will recognize that it's more important what's in a person's heart and head than what's on that person's head. Presumably, as time passes -- hopefully not much time -- our colleagues and members of Legions across the country will see the wisdom in that and open their doors as well.
T. Perry: I'll be very brief. I will be supporting the resolution enthusiastically. I principally want to thank the member for Yale-Lillooet for a very rare experience in the Legislature -- an informative speech which taught me something I didn't know. It's not that there aren't many things I don't know; it's that there are very few informative speeches in this chamber. Perhaps if there were more like his, I would spend more time listening in here. It shows that there is life for backbenchers after all and a time and a purpose to everything under heaven. What I like about this motion is that it encourages the Legion to think again. Probably the best thing that all of us could do is simply sit down, pass it and urge the hon. Speaker to send a copy of the remarks of the member for Yale-Lillooet to all the Legions in B.C.
I've been intrigued with why the issue is so emotional every time it comes up in the newspapers. I don't know the people involved, but I don't think the Canadian Legion members who get so upset about turbans are bad people. I doubt if most of them are racists. I think they probably just don't understand the turban, and had they been able to listen to the member for Yale-Lillooet, as we did, they would have a much more profound understanding -- just as one does when one enters a Jewish temple and is asked to put on a yarmulke, or skullcap, and asks questions about what the cap represents. I can't claim to be much more familiar with the full meaning of that tradition than I was with that of the turban.
[7:15]
I always look at this issue and wonder what my veteran relatives think about it. My late father was a veteran of the United States Army and participated in the invasion of Normandy that's being celebrated as we speak. My
[ Page 11374 ]
father-in-law was a foot soldier in the first waves of that invasion, was captured by the Germans and survived a German concentration camp in a Czech coalmine. Neither of them liked to talk about the war. They weren't the Legion type who would want to relive their memories. Both of them wanted to forget them as fast as they could. My father subsequently met many black veterans in the United States who had fought alongside white soldiers in the American army and who were subsequently discriminated against. He used to feel the same kind of revulsion for that that the member for Yale-Lillooet alluded to in describing how a Sikh veteran must feel when excluded arbitrarily.
My father-in-law, who is still alive, survived capture in the heat of battle in Normandy. He was raised in a Protestant, white part of southern Ontario, and in those days a Sikh probably would have been about as unheard of as an elephant. A curiosity in people would have found it so unusual to see a Sikh that they might have flocked just to find out what this person was. But they certainly had no understanding and they probably had their share of ingrained prejudice. By meeting such people, I think that my father-in-law took an open attitude towards them, despite his cultural heritage, which might have led him to be afraid. He learned that they were similar to the other people he met, both during and after the war, and he was even able to forgive his German captors. He realized that even the German soldiers who captured him and the German people who surrounded him during his forced march across Europe had most of the same humanity and had not intended him the suffering he had experienced or that he witnessed in others.
[7:15]
As the member for Parksville-Qualicum said, why do people find this such a big issue? If they read the remarks of our colleague the member for Yale-Lillooet, they will be asking themselves the same question and will follow the example of those Legions who have welcomed Sikh veterans, turbans and all, into their Legions. I look forward to voting yes to this motion.
G. Wilson: I think all that needs to be said has been said on this question. I stand only to put on record that members of the Alliance are strongly in favour of this motion. We hope that Royal Canadian Legions will reconsider their position. We hope there will come a time when this question is not raised -- either by the Royal Canadian Legion or with respect to the uniform of any federal bureau, branch or police force in this country.
F. Jackson: As a member of the Legislature, as an ex-member of the Armed Forces and as a member of the Royal Canadian Legion, I rise to speak in favour of this motion. I spent five years in the service of Her Majesty, and because of the unquestioned discipline in that organization I did have some problems with commissioned officers, non-commissioned officers and sometimes with my fellow enlisted men. But never in five years did any of these problems have anything to do with race, colour or religion. For five years I shared a room with a minimum of four men, and up to 20, who were from countries in the Commonwealth. They were of all colours and all religious denominations. In the five years I never saw any problems relating to religion or race.
I was well aware of the hats-off policy, because, of course, you never went in a mess hall without taking your hat off, nor did you go into the social clubs on the air bases, which were run by the Navy, Army and Air Force Institute, the Salvation Army or the Malcolm Club. Again, it was hats-off there, but there were never any problems with that issue. People who had some reason for wearing a headdress came into those establishments, and in the five years that I was in the service, I never saw any problems because of that. Therefore it's reasonably easy for me to stand here today and support this motion, which supports the Legions around the province and the country that have, in their wisdom, decided that there will be no discrimination on the basis of race, religion or colour.
K. Jones: I proudly rise to speak in this short debate on a very important issue:
"Be it resolved that this House, mindful of the need to encourage tolerance of all religious faiths, congratulates all branches of the Royal Canadian Legion that allow entry to members of every religious faith, regardless of belief or dress, and calls upon all other branches to follow this example."
This, to me, is something that is fundamental. My main reason for being in the political process and for serving the community is to take an active part in the defence of the freedoms we were so graciously given and that were protected after the wars on our planet. People who are now members of the Legion, and others, stood in a time of crisis to protect our basic freedoms: the freedom from want, the freedom from fear and the freedom of religion. This matter is a question of freedom of religion.
There is no place for intolerance in our country. Wherever we see it, all British Columbians and Canadians should stand up against it and not permit it to be tolerated. They should not turn a blind eye but should challenge any act of intolerance. Failure to act means that you are accepting the removal of someone else's freedom. The protection of freedoms is a basic premise that we all stand for and is the basis for our government, and that's the reason we have the type of country and communities we have and the type of society that people throughout the world are striving for. The only way that you can have it and maintain it is to defend it. You don't necessarily have to defend it by arms, but you have to defend it by your support of people: by changing their views when they become intolerant of others; by assisting those who have difficulties in understanding that some people are different from themselves but are no different in their hearts -- that we are all equals and must treat each other as brothers and sisters, fathers and mothers, father to child, mother to child. We should show the love we have instead of the hatred that sometimes gets engendered. There is no place for hatred on our earth today, no place for us to stand by and tolerate it at any time.
For that reason I'm very pleased to stand and indicate my vote in support of this motion. Hopefully some day we will not have to have this type of motion in our democracy of Canada and British Columbia.
S. Hammell: I rise to support the motion that encourages more Legions to open their doors to all veterans. It's ironic to note that the genesis of the Legion, the military, provides a turban as part of their military issue if it is requested by a person of the Sikh faith. The military also permits the wearing of the turban in canteens and messes around this country.
Obviously not only Canadian soldiers wear the turban, but also members of the military who are visiting us from other countries. One can imagine the scene of a turbaned military officer from another country -- perhaps a Commonwealth country -- being turned away from one of our messes. It's quite unimaginable. But we know there were veterans turned away from some of our Legions. Lt.-Col. Pritam Singh Jauhal was one of those veterans and a member
[ Page 11375 ]
of my constituency. He served during World War II in North Africa under Field Marshal Montgomery. He retired as a lieutenant with 13 medals and close to 39 years of war and peace service. He is now 73. He offered a hand in friendship when he went to the Legion, and I can imagine that he was afraid. I understand that our world is changing and that others are also afraid, but we all need to reach out to each other as he did, because we can only go forward with the change that comes to this country.
Veterans of all religious faiths fought together, died together and are buried together in many cases; they should be able to drink together. I salute those Legions that have welcomed all veterans, regardless of their religious beliefs.
C. Serwa: Last year the Social Credit caucus sent a letter on this very subject to the head office of the Royal Canadian Legion, requesting that they give consideration to the specific matter brought forward in this motion. We have indicated our support for this.
I'm going to say this from the honest recognition that not one of us has been immune to racial persecution or racism, perhaps religious persecution or cultural persecution. My own ethnic background is Ukrainian. When we sit in this room discussing this matter, which has racial overtones, I sincerely and genuinely hope that it is not racial overtones that have instituted the policy of the Royal Canadian Legion.
I want the members in this Legislative Assembly to mindful that in the 1930s the Ukrainian people suffered a form of genocide. Some ten million people lost their lives through a forced starvation and planned genocide by the Soviet Union. So I'm not unfamiliar with that.
[7:30]
At the time of the first migration of Ukrainians into Canada, they came to Canada on Austro-Hungarian passports. That was the reality. It was part of the Austro-Hungarian empire. In 1902, in the first wave of immigration, my grandparents on both sides came to Canada. I'm the third generation in Canada and the second generation born in Canada. At the outbreak of the First World War, those individuals of Ukrainian extraction who had come to Canada on Austro-Hungarian passports went into concentration camps, in Alberta and other places, and a number lost their lives. So I'm no stranger to racism, and it has nothing necessarily to do with colour, either.
I learned to speak English when I was five years old and started school. Like many other Ukrainians, I was called a variety of names, and they were not really polite names. So I address this issue with understanding and empathy for the individuals, in this case the Sikh members of our great Canadian community. I fully and completely understand them. To a degree, I also understand those older members of the Royal Canadian Legion who believe that keeping your cap on is a sign of disrespect to those who fought for the rights and freedoms that we have. Right or wrong, that's what they believe.
My colleagues in this room are giving a sense of direction in this motion by encouraging all the Royal Canadian Legions to modify their position and accept what we believe is right. Virtually every speaker, in a unanimous fashion, supports this concept. So the best thing and the strongest thing that we can possibly do is to encourage a mitigation.
Canada stands tall in the world today. Yes, we can look at ourselves and pick out all sorts of flaws. But look at Canada and understand that it is truly the world's first international country of every race, religion and colour, living together in harmony and making this wonderful country the place of freedom and opportunity that it is. It's something very powerful. It is something that we can improve, and the recommendation of this motion is a positive way of improving it. I wish the motion had referred specifically to religious dress code requirements. I think that would have enhanced the motion and focused more on the issue. Nevertheless, I and my colleague in the Social Credit caucus support the motion put forward.
B. Jones: We have had a lengthy and eloquent debate. I want to applaud all members of this House who have made a contribution to this debate, and particularly my colleague and friend, the member for Okanagan West, who has just spoken. I think the decision to support this motion was a little more troubling for him than most, but I'm very pleased that he's willing to do that.
We're saddened by the fact that this debate has to happen in this House. Nevertheless, we are facing an important moment in history. If we ask ourselves why this moment has happened, it is because members who served in the military and wore turbans at that time have come to this country, have wanted to participate in the culture of this country and have wanted, on Remembrance Day in particular, to participate in the activities of the Royal Canadian Legion. I don't think any of those things are easy -- to participate in the Armed Forces, or in 1994 to go to a Royal Canadian Legion wearing a turban and make the symbolic gesture to reach out your hand as a member of the Indo-Canadian community and say: "I want to participate with you and celebrate the memory of this most poignant period in our history." That was not an easy decision for those members of the Indo-Canadian community. There was an arm outstretched, and there were a few unfortunate instances -- instances that I hope will not be repeated -- where that outstretched arm was rejected.
It's a very positive motion, and I think we all care very deeply about this issue of racism. This motion says that that outstretched arm is a missed opportunity, a tremendous opportunity for members of the Legion to accept that outstretched arm and to recognize the positive experiences those members have to share with members of the Indo-Canadian community. I hope that the people in this beautiful province are listening to the very positive words expressed in this motion that say: reach out, accept that outstretched arm from the Indo-Canadian community and recognize the valuable contributions and the commonality that that outstretched arm shared. I am very pleased that all members have spoken so eloquently on this important motion.
Hon. P. Priddy: I rise to support this motion. I do so with some pride, but with some sadness. I am proud that members of this Legislature are prepared to speak to this motion and to support it. But I also stand to support it with sadness, because of the fact that it is here at all. I am surprised -- perhaps I should not be -- that we are needing to deal with this motion today. We have heard from a number of our colleagues about the history of Jews and Sikhs who have worn their religious headgear in all parts of their lives, including as members of the armed forces throughout this world. As one colleague pointed out, this is not only an issue of whether veterans are welcomed into their Legions wearing yarmulkes and turbans but also a broader issue of religious freedom, and that is correct.
I find it somewhat interesting, particularly as the Minister of Women's Equality, that people at the Legion in my community who wear turbans may not enter. The people in my community who are veterans and wear a yarmulke are not welcome. But women, for whom there is a social history
[ Page 11376 ]
of wearing head covering, are welcome. While I, of course, always value and cherish the history and experiences of women, I find it very puzzling that such a regulation, as I understand it, would be in place.
We've heard about the history, but I think it's important -- certainly it is for me, for I was at the Legion in Newton on November 11 -- to know that it is not only about the facts of how many veterans have fought in the wars. It's not only the facts about how many veterans who wore turbans and yarmulkes died beside their comrades in the wars. You see, it's about feelings, and nowhere are those feelings expressed more than on the faces of the people I saw in my community last November 11. That's why I am saddened today.
I'm saddened because in my community, as I expect is the case in other communities throughout this province, Legions are a valuable and participating part of the community. Looking at it from the perspective of the Ministry of Women's Equality, Legions, and particulary the women in Legions, do a lot of advocacy work for benefits and supports that widows of war veterans might need. They are valuable contributions to the community. It is sad, and I am saddened. In some way, I now feel that I am denied having that community strength as part of my life because many people who are my friends, neighbours and colleagues are not able to go there. Therefore neither am I. The Legion plays a valuable part in the community, but because of the position they have taken, many people will feel that access is denied to them.
I'm saddened when I remember the faces of the people -- whom I talked with and knew -- who went, having been invited through two newspaper invitations on that day. I recall the face of the 92-year-old Sikh veteran who, every year for the last seven years, had his son drive him to the Legion on Remembrance Day so he could join. Every year on Remembrance Day, he went away saddened and disappointed that his history, his contribution and his potential membership had been rejected again. I remember the face of that 92-year-old veteran as he left, again having had his contribution not valued.
As I walked in that parade, I remember the faces of the children and grandchildren of those Sikh veterans, whose fathers and grandfathers had never felt welcome there before but who marched that year in the parade because they had been invited. As those children and grandchildren ran along beside the parade taking pictures of their fathers and grandfathers wearing their uniforms, their medals and their turbans, you could see the pride in their faces. We have pictures of that pride. I also remember the faces of those family members as they stood with their cameras and their pride, watching their fathers and grandfathers being turned away at the door of the Legion. I watched what happened to that pride and that joy when they thought they would be included this year and were not.
I remember the faces of the Brownies, Cubs, and Beavers and all those children in our community who take part in Remembrance Day celebrations every year -- as we want them to do, because it's important that we acknowledge and remember, and it's important for the Legions, that are important parts of our community, that those children be there. I watched the faces of those children as they were going into the Legion -- watching what was happening, watching as the crowd at the door got bigger and bigger, and watching as those veterans who wore their turbans first asked and then questioned why they were being turned away. What I saw in the faces of those young children was dismay, confusion and lack of understanding of why these same people who had marched in the parade and laid a wreath with them were now not able to go inside with them. What kind of model was that? What kind of message was that to those children?
I also watched the faces of two people who have been very much part of the discussion about this: Mr. Jauhal, who my colleague for Surrey-Green Timbers referred to; and Mr. Minhas, who is a resident in my constituency. We've spoken with those gentlemen on an ongoing basis. When we spoke through our office yesterday with Mr. Minhas, I'm not sure there were words to describe his feelings. As the time had gone on since November, those veterans really believed and trusted that when this meeting happened in Calgary, veterans across the country would indeed recognize their contribution and welcome them -- not only into selected Legions but into all Legions. I watched their faces as they saw their trust and belief in our country, and in what people would do about welcoming and including them, destroyed. So for me, it is about the faces of the families and of the veterans that I remember -- and that I will always remember.
[7:45]
I do rise to support the motion, acknowledging for those Legions who have made veterans welcome that that is a very good model for their communities, for children and for all veterans. But as we try to remember, we must learn from our past in order to build for our future. I am uncertain at this stage whether we have learned well from our past about these issues. I hope that this motion today and those Legion members who are speaking out, saying, "Veterans who wear turbans and veterans who wear yarmulkes are welcome in our Legion," are putting in place the building blocks for the future in our communities throughout British Columbia. So I rise to support the motion.
H. De Jong: It gives me great pleasure to rise and support the motion in this debate. When motions like this come forward, there's always a thought, at least in my mind, as to whether there's anything more behind the motion than what it actually says. However, I believe, given the timing of this debate and the circumstances in which this motion came forward -- particularly in light of the D-Day celebration or recognition or commemoration, whatever we may call it, that's going to be held in Europe this coming week. I believe it's very appropriate that we have this debate.
If I recall correctly, it was back in 1943 when an order came from the German authorities that everyone between the ages of 18 and 36 had to go to work camps in Germany. It was at that time that the underground activities started very strongly in the Netherlands. We were hiding as many of these young folks as we possibly could on farms and homes everywhere. Just prior to that, the Jewish community were all to be gathered in the concentration camps in Germany and elsewhere, and we all know what happened to them. We had a house at the back of our farm. We were hiding eight Jews in there, and we had about three people who were in hiding on our farm as such. It was in the early days of 1944, about May 10, a very cold Saturday evening, when the house at the back of our farm was raided by the German people, and all of those eight Jews were taken to the concentration camps and on from there. Only one returned.
As various decrees came from the German authorities during those hectic days, because that was the time when it was most crucial, there was a general strike in the Netherlands that lasted about ten days. Everyone was on strike. There was nothing moving. Schools were closed -- everything. Churches were not even open, either. It was on a Sunday when a decree came down that if everything was not back in running order on the Monday morning, then the authorities would take the strongest measures, and we had a
[ Page 11377 ]
pretty good idea what those strongest measures would be. I had three brothers and a couple of sisters at that time, and it happened to be that day that we were having some fun around the house, in the farmyard. We had made ourselves a football -- hard as a rock, but that was all we could make -- and this thing happened to go through the living-room window. I suppose it couldn't have happened at a worse time. My father came out and said to us: "Well, I can see that you boys want to entertain yourselves, and you're doing a good job at it, but please, don't disturb me any more than you have to." That's about the only time I recall seeing my father with tears in his eyes.
It was that kind of fear that was in the hearts and minds of the people in the Netherlands those days. I can assure you, hon. Speaker, that even though I'm only one of the Dutch people who will speak on this, perhaps -- I'm not sure whether my colleague or others have spoken -- the fact remains that the freedom given to us by the Allied forces, for which thousands have died, will never be forgotten and will always be appreciated.
It was on the day of liberation -- April 17, 1945, for us -- that we were finally freed. One of the fellows who was in hiding at one of the neighbours' farms -- where they had a radio yet, because most of the radios had been taken away as well -- came over and told us we were now free. He said: "We're going to eat orange carrots today." This may not strike too much of a tune here, but orange was the colour of the Netherlands' pride, you might say. So we knew what had happened at that time when he mentioned that: we were free.
Now, to take in context what is happening in the Canadian Legions -- for which I've always had the highest respect, and still have -- I find it hard to believe that those people, who have fought together on the front lines for the freedom of the entire world, would take exception to the kind of headgear worn at the various festivities. Even though, as I understand, the Legionnaires' custom was that you would remove your headgear when you passed by the picture of the Queen, or whatever dignitary had to be greeted that way, I have great difficulty in accepting that.
About three months after our liberation, one of our cousins from Trail visited us. He had landed in Normandy on the second day of the invasion as one of a group of eight men, and within 24 hours he was the only one left. That should strike a chord with us today as we debate this motion.
There's been a lot of blood shed for freedom and unity. I hope that unity, that was with the Allied forces in determination to provide freedom for all, will be maintained and perhaps resurrected with the Legionnaires and the Legion throughout the country. I must say, further, that most of those who fought for our freedom, particularly for the area where we lived, were French-Canadians. In that respect also, I feel we ought to approach the issue of the unity of Canada in a very tender way.
The Speaker: Hon. members, with your indulgence, the Chair would like to transgress somewhat the usual procedure and simply state that I am quite privileged and honoured to have been in the chair during this debate. As most of you know, if I weren't in the chair, I would have participated in it.
I will just say for the record that there is always some danger of setting bad precedents in the House, and I may be treading very close to doing that, even at this moment. But perhaps it is of special significance that this debate was permitted, because technically it was not in order. In terms of the procedures in this House, only a government member may move a motion out of order. Since the Government House Leader's motion received a nay, his request to move the motion was denied; therefore the matter should have ended. Due to an error on the part of the Chair in not enforcing the rules, the opposition member's motion was permitted, and for that I am eternally grateful. But don't use it on me later as a precedent having been set.
[8:00]
I would like to read the motion again, calling the question by the hon. member for Fort Langley-Aldergrove: "Be it resolved that this House, mindful of the need to encourage tolerance of all religious faiths, congratulates all branches of the Royal Canadian Legion that allow entry to members of every religious faith, regardless of belief or dress, and calls upon all other branches to follow this example."
Motion approved unanimously on division.
Hon. G. Clark: I hope we have similar occasions for unanimous votes in the House. It was an important debate tonight, hon. Speaker. However, we have to move to more mundane questions. I call committee stage of Bill 41.
COMMUNITY FINANCIAL SERVICES ACT
The House in committee on Bill 41; D. Lovick in the chair.
On section 1.
Hon. G. Clark: As is customary, Mr. Chair -- not that I want to take up much time -- I'll just introduce the people in the House today with me. Mark Lofthouse is a director in the Ministry of Employment and Investment. Jim Green and Monica Hay have been working on this particular project on behalf of the government for some time, so they're here in the House with me today.
G. Wilson: On section 1 on definitions, we note with interest the definition of the term "entity," which is an important term because it applies later on in the act to the provision of guarantees. Interestingly enough, it includes "a corporation, trust, partnership, aboriginal organization, fund or other unincorporated association or organization" and the Crown in right of Canada or a Crown agency. Recognizing that the term "entity" has been introduced as broadly as possible for the purpose of the provision of those guarantees, can the minister tell us what is not included in that term and whether or not that term would specifically apply to private pension funds?
Hon. G. Clark: As I understand it, it does not apply to individuals. "Entity" means anything except an individual. The member is quite correct; this definition clearly includes private sector as well as public sector pension funds. Those would be under the definition of "entity."
G. Wilson: Does the term "aboriginal organization" strictly mean one that is defined under other statutes, such as first nations or aboriginal governments? Could it involve aboriginal organizations such as the UNN and unaffiliated organizations that are constituted for the purpose of delivering social programs or other kinds of things?
Hon. G. Clark: We haven't defined it strictly. In other words, it's not like a definition under the Financial Institutions Act. This is a new section. By way of explanation, we have had about 14 or 15 meetings in the downtown eastside with between 60 and 100 citizens, most of whom
[ Page 11378 ]
were from the area. The people in the community were adamant that in doing business this bank recognize that aboriginal members are a large percentage of the population in the community. They specifically asked that we put this in, even though it's probably not strictly necessary because "entity" is a broad definition.
They wanted it recognized in the definitions section, because they believe that many aboriginal groups like the United Native Nations or the Union of B.C. Indian Chiefs may wish to put some money on deposit here. After all, the proceeds are going to a cause which will aid members of the aboriginal community, although they're not on reserves. So this came from the grass roots up. I happily put it in here, of course, to recognize that. It's not defined in any particular way to be more than that. Not to get into a tautological definition, but an aboriginal organization is simply that.
G. Wilson: The reason there is some concern is that this entity, as it's defined later in the act, has very real significance with respect to the provision of $2 million guarantees to those that are prescribed as such by government, by the minister. It becomes important that it not be exclusionary, and it becomes very important that it has some consistency in the legislation, or it is presumably going to be subject to some kind of legal challenge. That would cause me some concern in terms of the legalities of the drafting of this legislation.
I don't find too much comfort around the notion that this is not defined. If it was an aboriginal organization, as defined by some criteria, I would have more comfort. If you're going to give that guarantee to certain investors, and if you provide a set of criteria that those investors have to follow, one could accept that that's going to be fairly applied to all applicants who may wish that guarantee. If, on the other hand, you exclude some and include others, my guess is -- although it's not likely to occur unless there's default -- that in the instance that there is a default or there is some real value to being one of those who is included, this section could be subject to a legal challenge.
Hon. G. Clark: I want to be clear about this. In a way, this is somewhat exclusionary. The Montgomery report said that we should give a guarantee for deposits, to get the deposit base up. I probably shouldn't say this, but the Ministry of Finance and the Minister of Finance said: "Wait a minute here, we can't give an unlimited guarantee. There are potential problems with the other banking institutions and credit unions." They're overstated, in my view. I think we could have done that, and once we got to $100 million, then fine. But the Ministry of Finance and the Minister of Finance said: "Wait a minute, we want some control over this, so we are not going to give a guarantee on deposits for anybody." Sure, up to $2 million for public agencies, but anybody else has to apply to the Minister of Finance. We would have to say to the Minister of Finance: "The IWA pension fund would like to put money in. Would you please prescribe the IWA pension plan as an entity for the purposes of this act?" We hope that we would be acceptable. The United Native Nations may say: "We'll put $500,000 on deposit if we have the guarantee." We would have to go and make the case to the Ministry of Finance. The reason for that is that we want to give people comfort that we're not interested here in $500 million on deposit in some big institution. We really would like to get $80 million to $100 million on deposit, because then we don't need any taxpayer subsidy. That's a sort of base. The Ministry of Finance wants some control over the deposits.
[8:15]
Not everybody will qualify for the deposit guarantee. They will have to be bona fide people whom the Ministry of Finance has some comfort in, in the sense of major players, broadly speaking. Again, I guess there are two ways of doing this. You can simply say an unlimited guarantee, as the consultant recommended, or you can say no guarantee, which would mean ongoing subsidies from the taxpayers. Or you would find some way to give some comfort, some guarantees, to get the deposit base up faster but not allow it to be wide open. That's what we've tried to do here.
I'll be quite forthright in saying that I certainly understand the position of the Ministry of Finance, and I'm actually quite sympathetic to them, but on the other hand, if we're really trying to make sure this becomes a successful institution that doesn't require an ongoing subsidy, we really would like to get the deposits up quickly, from large institutions, pension funds, etc. The easier way to do that is to simply say that everybody's deposits are guaranteed. We were not successful in that argument. The Ministry of Finance is going to limit that guarantee, even though there isn't much exposure, so as to make sure that the government, if you will, the Ministry of Finance, makes sure that the deposit guarantee that is provided is limited and that they have control over how much it is. That does potentially lead to some inequities, if you will, which we'll have to deal with.
Frankly, it's going to be very hard to get lots of money on deposit here. We may not achieve the $100 million; we may not achieve $50 million. I think it will be extremely difficult. I'm not worried about turning people down, because I think it will be very challenging to convince them, even with the guarantee, to put money on deposit. This isn't a sophisticated agency where we are going to be providing something like a term deposit interest rate. Large institutions and large pension funds are more interested in active money management. We're really asking them to put.... Hopefully, if it's a huge corporation or a huge pension fund, we can convince them to put half a million dollars or something in here at a commercial rate, because they know they're contributing to the community and to its economic development.
We don't think that there's going to be a mad rush to deposit in this institution. We've got this deposit guarantee to try to convince people to help us start it out, and we think it will be in their interest. But it isn't going to be universal. We'll have to be very careful how we handle that. I appreciate the line of questioning; I understand the concern. In my judgment, it's so far from being a problem that I don't think it is. If it is, we'll have to deal with it, frankly. But I think taxpayers and members of the opposition have said to go carefully on this. Lots of people have been concerned about this. This is our way of limiting that concern.
G. Wilson: In light of that, does the term "fund" imply that the fund could then be defined in $2 million blocks? I think you're right; I think you're going to have a hard time attracting the money you need, anyway. I don't want to necessarily drag on this all night. The concern that has been expressed is that if you have funds that are established in $2 million blocks, by virtue of the fact that you could invest 10 or 20 of those blocks, you'd have a 100 percent guarantee on those funds if you were a single entity investing in those blocks.
That's why I'm curious to know why "fund" stands alone -- because it's not "and"; it's a "...fund or other unincorporated association or organization...." Those seem to be covered as one group in the way that it reads in the definition: "...aboriginal organization, fund or other
[ Page 11379 ]
unincorporated association or organization...." They seem to be linked. The question is: why? Is it to attract a fund from an organization that might, in fact, allow for $2 million block investments, and therefore get 100 percent government guarantee on the moneys on deposit?
Hon. G. Clark: I'm not quite sure; I think the definition is just to be inclusive. It says "fund or other unincorporated association or organization." I'm just reminded that this is language from the Financial Institutions Act, so we've simply limited.... The only difference between this and the Financial Institutions Act is that we've added the words "aboriginal organization" as a result of feedback from the community. I could try and answer the specific question, but this is sort of boilerplate financial institutions language.
J. Weisgerber: I kind of anticipated that we might get into the depth of debate that we're now in somewhere later on in the bill, when we get talking about who can qualify and what the guarantees are going to be. Seeing as we're in it, it appears -- from what one is able to gather from reading the bill and listening to the debate -- that anyone other than an individual that the Lieutenant-Governor-in-Council decides is going to be an entity is, in fact, going to be one. In other words, the cabinet can simply sit and decide who they're going to provide with a guarantee and who they aren't, without any criteria at all. Indeed, this says that the Minister of Finance or cabinet will simply decide who they want to give a guarantee to and will exclude those that they don't. There's no rationale at all for doing it, except that an individual would be limited and an entity would not. If the minister is prepared to concede that, then I think it might be wise for us to move on and get into the meatier parts of the bill.
Hon. G. Clark: First of all, it's only a deposit guarantee. But the member is quite correct: the Minister of Finance will determine whether an entity qualifies for the deposit guarantee. Within this definition, the terms "trust," "partnership," "fund" and "Crown agency" are lifted from the Financial Institutions Act. "Aboriginal organization" was added. The determination of whether a deposit guarantee will be provided will be made by the Ministry of Finance. This is designed specifically to give comfort to those who are concerned about the liability, if you will, of the Crown. So the Ministry of Finance is saying it will determine how many guarantees are afforded, so that the aggregate amount doesn't exceed the intended $100 million. As I said, I'll get into it later. But it is going to be extremely difficult to convince people to deposit money here. In any event, we're not likely to be concerned about turning people away from the deposit guarantee, because it's going to be extremely challenging to try to convince large players, hopefully with a social conscience -- churches and others -- to put some money on deposit here because it's aiding something which is contributing value to the community.
J. Weisgerber: Again, we're talking about the definition of the word "entity." We keep going off into who's going to loan the money and whether the guarantee is going to attract funds or not. Here we have a definition that encompasses everybody, in fact, and isn't restrictive in any way at all, except to say that individuals fall into one class, everybody else falls into another and the Minister of Finance decides who they're going to accept deposits from or provide guarantees to.
G. Wilson: Before I move from this definitions section, one of the things the bill does that is a little unusual -- and I think the minister will agree -- is provide a definition of community, by virtue of the fact that there is a prescribed geographical area in which this financial institution is designed to meet the needs of a particular constituency. The definition is interesting in that the community is those persons who "share and promote the principles, goals and purposes of the corporation." It also suggests that the community is those people who "are in a state of suffering, neglect or poverty...." The conjunction is "or." Certainly I've looked at both the Financial Institutions Act and the Financial Administration Act, and I think the minister will agree that that's somewhat unusual.
Hon. G. Clark: Yes, it's definitely a unique section. This was written by the people right off the floor of the bank building and by people in the community. The concern of the people in the community, as I understand it -- although I wasn't at the meeting -- is that they want to make sure that this is not a welfare bank and that people can put money on deposit in this bank even if they're not on welfare. So the people of the community suggested that we have a broader definition of community so that we do not have the stigmatization that might exist otherwise. In some respects the definitions section -- at least this one, I think -- is probably not absolutely necessary to the functioning of the bill. It was a statement, almost a principle, that we want the bank to serve the broader community, not just welfare recipients, so that people can feel comfortable putting money in the bank on deposit. That was what was requested by the community, and I'm delighted to put it forward.
G. Wilson: I'm pleased to hear that response, because the concern was that the title of the bill -- Community Financial Services Act -- implied the establishment of a new corporation which was going to be set up to manage this bank, and that the term "community" implied membership. Because of the way credit unions are chartered, clearly there is a membership requirement, and one has to buy shares in them and so on. What was of some concern here is that we not create an entity similar to that, because it would be contradictory to some of the other clauses that are found later in the act. That's what I'm trying to determine: that we're not trying to determine, either by geographical location by residence or by some other form of prescribed membership, that there is a membership for which there is eligibility to become a participant or not, or that there is an exclusion, which would be even worse by virtue of that definition.
Hon. G. Clark: No, there's no membership, but remember that later on in the act you'll find that depositors will be allowed to vote on certain things.
Interjection.
Hon. G. Clark: Anybody can deposit; anybody can vote. Anybody who's a depositor can therefore vote. That's correct.
F. Gingell: It seems to me, from all the discussion that's gone on and the discussion we had in second reading of this bill, that the people who really are going to be served in this community are the people who perhaps aren't being served by government as well as they should be. Had the government thought about other means of serving these
[ Page 11380 ]
needs, which we all agree are important and need to be dealt with, perhaps there would be no need for us to go through this exercise. We'll get into that, I'm sure, later on in the evening.
It seems to me that the crux of this whole matter is that if the government were to agree to do some things, such as put in an electronic transfer system or make a minor subsidy to the Bank of Montreal on Carrall Street -- they've got things -- this underservice by existing financial institutions wouldn't be the case. There is a need for them to have a bank account and some identification and to not have to cash their cheque and stuff it in their pocket; to be able to get a bank draft to pay their landlord or help make some other arrangement; to be able to get $20 or $10 a day -- or whatever the appropriate amount is -- out of the bank. Then they wouldn't be underserved. If you'd looked after the service, we wouldn't have the need for the bill and the exposure the taxpayers have.
I have said before in second reading debate that I don't think the guarantees are the issue, but let us not for one moment suggest that there isn't a risk. Because unless you are giving something which is the guarantee, you can't get the deposits at 65, 75 or 55 points, or whatever the market demands. It is that 65 points, or whatever the amount finally is, that measures the risk, and 65 or 75 points are much more important when interest rates are in single digits than when they're in double digits.
[8:30]
I know I'm not going to win this battle, but I would love to have had the opportunity to sit down with the people who were with you earlier and talk to the institutions in a manner that would have encouraged them to cooperate rather than, as I have the suspicion it's been: "Will you look after these people? No? Then we're going to go off and set up our own institution."
Hon. G. Clark: It's a bit off the topic, but let me just say that I do want to give the member some comfort again, if I can. This is not something that we just designed here. We went to the banks. Arn van Iersel, who is the director of banking in the Ministry of Finance and who deals with the banks all the time, went and canvassed the banks. Let me be clear about this. They did not want a subsidy to deal with this problem; they did not want to be involved in servicing the client. I'm not saying we could not have arm-twisted or tried to deal with it, but we would have had to subsidize, and they really don't want to do it.
Second, it would be more expensive than this, because we would have ongoing annual subsidy appropriations. This is intended to be something which does not require annual subsidies. I grant the member that there is some risk associated with the guarantee. It's very small, but there's definitely a risk, and I've never said there hasn't been. If you manage money, even buying mortgage portfolios, there is some risk associated with it. The market values that risk at 65 basis points, or whatever it is. That's quite correct. It's very little risk, but there is a risk.
Finally, the banks weren't really interested in it. The credit unions weren't interested, even though we talked to them a lot about trying to do things. That is not to say that we couldn't maybe have arm-twisted them into it, but they weren't really interested in helping to deal with this question.
We tried to design something with the people of the community that was a little different. It's a bit of a hybrid, a bit more like a credit union. Depositors can have seats on the board, vote for people on the board and vote for an advisory group to advise the board members. We are building something which is more than just providing the normal banking services. That would be very hard to do, because they don't want to do it, because of the cost of subsidy, etc. We're trying to build one that is more sensitive to the needs of the community, that treats people with respect, that can act with training funds, perhaps, to train people, and all the other things that I've talked about at length in second reading.
We have canvassed all of those options, and they were not interested. Could we have paid them more and tried to arm-twist them to do it? Maybe. They certainly weren't particularly keen. In fact, they were very supportive of our initiative, because they are delighted that someone is trying to deal with this, since not cost-effective for the banks. When we finally made that decision, they were not interested. We talked to all the credit unions; there wasn't any interest there. We worked hard and spent a year doing that. We asked: "Well, what could we do?" Then we designed something which was quite different. We believe that it limits taxpayers' risk, allows for something more creative and gives people more input into the operations of the bank.
The Chair: Just before I recognize somebody, I think both the question and the minister's response are pushing the envelope rather to extremes. We have had a second reading debate. We are now talking very specifically about definitions. Perhaps under section 4 we may well be able to raise some of the matters that are being canvassed now, but I would suggest that we would all be better served if we focus on the definitions, get through section 1, and then see where we go from there.
Having said that, and offering a very gentle caveat in caution, I recognize the member for Peace River South.
J. Weisgerber: I am so tempted to get into second reading debate. I am feeling somewhat disadvantaged now, everyone having taken their kick and then the decision that it's time to move on to definitions. But I was sitting here, in this case agreeing with the Chair through both of the comments, so I'm going to forgo the temptation and in fact move to the definition of "Vancouver inner city."
In reading schedule 1, it seemed to my somewhat unpractised eye that the definition of the area described sounded very much like that represented by the Premier and two cabinet ministers, one of whom is here preparing the bill. Would the minister confirm that the boundaries outlined in schedule 1 are identical to the three constituencies represented by the Premier, the Minister of Employment and Investment and the Minister of Social Services?
Hon. G. Clark: No, and I want to be clear about this. The boundaries are the DERA boundaries -- Downtown Eastside Residents' Association -- plus the Downtown Granville Tenants' Association boundaries. This is designed to give comfort to members of the opposition, and mostly to the banks, that we are not interested in having these all over the province. We don't need this. This is designed to give people comfort that we are not going to build all kinds of branches. There is only going to be one branch, possibly something in the downtown south area. That's why it's here. Whose boundaries are they? Just so we're clear, I believe the majority of the boundaries are in the Speaker's riding; some, although less, are in the Premier's riding; and some are in the riding of the Minister of Social Services. None of them are in my riding -- although, prior to the last election, the part that is now in the Minister of Social Services' riding was my
[ Page 11381 ]
constituency. Unfortunately, they're a long way from my present constituency.
V. Anderson: This is related to the last question on the "Vancouver inner city" definition, by schedule, and then refers back to the relationship between it and "community." On the one hand, the "community" definition could apply to Victoria and many of the needs here in the community of Victoria, which are equally great.
Interjection.
V. Anderson: That's partly it, yes. But I'm wondering: is the definition of Vancouver inner city meant to put a limitation on the definition of community? Are they counterproductive and do they relate to each other in a very specific way? And what is the relationship to people outside the boundaries in the lower mainland -- from the other ridings around and about, and from New Westminster and Burnaby -- people who might want to participate and can come in by SkyTrain? What's the relationship to these other communities?
Hon. G. Clark: Just so we're clear, the boundaries are, as I said, to give comfort to everybody that there are not going to be lots of these around. There are geographical boundaries to where the bank will be. Secondly, later on in the bill you'll see that five out of seven members elected to the advisory council must live in the described area.
But who can bank there? Someone living in Victoria can deposit money in this institution. I guess the member is probably not surprised that many people from all around the province are writing me, saying that they think this is a great idea and would like to put $1,000 on deposit there, just to show that we're using the money for something constructive. This allows that.
Realistically, people are not going to drive in from Coquitlam to do their everyday banking. This is not going to provide all the banking services wanted by most people -- certainly those with money or income -- but they certainly can choose to do so from time to time. I don't mind saying to members that I might put money on deposit there -- not that I have very much money -- and I hope other people do as well.
Interjection.
Hon. G. Clark: Yes, I can put money on deposit there. Anybody can, and they can vote. But five out of seven advisory members must live in the prescribed area, and the bank cannot open a branch outside that prescribed area. That's the distinction between the two. So community is broadly defined to allow people who want to support this initiative to put money on deposit.
V. Anderson: Many of the people who won't drive will probably hitchhike in from the outlying areas to be able to be members. They'll hitchhike in and hitchhike out again to be part of it.
The other part of the definition.... I know we'll be discussing purpose when we come to section 4. But in the definition section, in (c) under "community," it says: persons who "share and promote the principles, goals and purposes of the corporation." Purpose is defined later on. We're assuming we know what the principles and goals are. Does the minister want to clarify? What we're discovering is that this can be very broad, or it can be very narrow and specific. As the geographical area is narrow, are the principles and goals also narrower than we're assuming by this? What's the meaning of principles and goals? If it had said "purpose," then I'd understand, because it's defined later on. But just as background, what's meant here by principles and goals?
Hon. G. Clark: I guess it's a fair point that we haven't specifically defined the principles and goals but we have defined purposes. That's what the member said. I hope members can get a sense of what I'm saying the principles and goals are. They are to provide banking services in dignity to the people in the downtown east side. It's not to provide banking.... The principles and goals are more narrow, if you will.
But people from anywhere in British Columbia who choose to support those principles and goals can put money on deposit here. It's not a threat to anybody's deposit base. It's not going to be practical for anybody -- although I know the member knows, because he worked down there, that lower-income people do come from all over the lower mainland to the Carnegie Centre. It's run by low-income people, and they want to participate in something run by and for people with low income. There's a possibility that low-income people could come from around the lower mainland to try to do their banking services in this bank.
We have to be careful not to overstate it. It is only a bank. It's not going to solve all kinds of problems. It's not a revolutionary thing. People aren't going to be hitchhiking all the way across town just to go into the bank. I just can't believe they will. I can see them going to Carnegie Centre, because it's a leisure activity and their friends are there. But I don't think this is going to attract the same kind of interest. Maybe we should be so lucky; it would be quite exciting. I'm quite excited by it. But I don't know whether even I would choose to go and bank there. It's not convenient for any of those who already have a bank account and bank services.
G. Wilson: I gather the minister is not a great player of Monopoly, or he'd know the significance of holding onto the bank.
I have a question with respect to unaffiliated directors. I'm not trying to be clever; I just don't understand. Given the Financial Institutions Act's definition of an unaffiliated director, which is primarily in relation to a trust company or an insurance company, and given that at least four of your directors have to be these unaffiliated directors, as stated in the section to follow, how do you interpret the words in the Financial Institutions Act that say that one can't be an officer or employee of the company or an affiliate of it? Would that preclude anybody who has money on deposit from being an unaffiliated director? I wonder if it would preclude members of the Crown or the cabinet, who may have an affiliation by virtue of their legislative authority over the bank, given that it's a Crown corporation.
Interjection.
G. Wilson: No, I'm not asking if you're going to be on it, because I already know you're not -- at least I've been told you're not. I just wonder if that term "unaffiliated" is going to be an impediment, and I wonder why you would tie that to the Financial Institutions Act. What was the advice on that?
Hon. G. Clark: As you know -- and this is a matter of some debate, actually -- I wanted this to be regulated by the Financial Institutions Commission, FICOM. And that was a debate. If you want it to be regulated like a bank, to give
[ Page 11382 ]
people comfort that this is not just some social agency and that you actually want it to make money, or at least not lose money, then there are some FICOM rules. The same rules that exist for trust companies and credit unions exist here.
[8:45]
For our purposes, I'll just read what that means. "Unaffiliated director" has the same meaning as in the Financial Institutions Act, which is for credit unions and trust companies, and which includes a director who is not: (1) an employee of the corporation; (2) a significant borrower from the corporation, or a director, senior officer or owner of 10 percent or more of the shares of a significant borrower of the corporation; (3) a borrower from the corporation under a loan that's not in good standing, or a director, senior officer or owner of 10 percent or more of shares of an entity that's not in good standing from their borrowing; (4) a spouse of the individual just described above; (5) a relative of an individual just described, or an individual who has been an officer-employee of the corporation within two years before becoming a director of one of those corporations that are in default.
So as I recall, at least four of the directors must be unaffiliated directors. That simply means that you can't have a significant borrower as a director. You can't have what's in the rules I've just described. I think they're prudent rules, which exist in financial institutions legislation. They apply to all trust companies and credit unions in the province and, for that reason, we wanted to apply the same kinds of rules here. So we have done so.
G. Wilson: In addition to what the minister has just read out, it states that you cannot be an affiliate of it, and that's not defined within the act. If you're a substantive depositor but don't have share equity, will that then preclude you from being a director of the company?
Hon. G. Clark: No, as a matter of fact, in most trust companies, the larger you are as a depositor, the more likely you're going to be on the board. This allows the same thing. We, the Lieutenant-Governor-in-Council, could put large depositors on the board. As a matter of fact, now that you mention it, the South Shore Bank has at least one Catholic nun on the board. If we had large deposits from the Catholic Church or the United Church, which we hope we will, although we've had no contact with them -- I'm hoping that the member across the way can be of some assistance -- it would be quite appropriate to have a representative from the church on the board. That would help the purposes of the agency and, if they're large depositors, give some comfort to the church members. That option is not precluded by this. I haven't given any thought to it, but these are the same rules that apply to trust companies or credit unions.
G. Wilson: Just to close off that thought, if you can attract large amounts of union pension investment, it would likewise be appropriate to have either union agents or affiliates as directors to direct investment opportunities. Is that correct?
Hon. G. Clark: Yes, that's correct. They are certainly not precluded from going on the board.
Section 1 approved.
On section 2.
F. Gingell: I'd like to carry on the discussion that the member for Powell River-Sunshine Coast had, which fits right into section 2. If there are going to be 11 directors, and four of them are going to be unaffiliated directors....
Hon. G. Clark: They're all going to be unaffiliated.
F. Gingell: I was surprised that there wasn't a restriction on the number of employees of the bank who could be directors. I think the member has something. Employees are considered to be affiliated and not unaffiliated. So there isn't any ban on the number of employees who could be directors, other than that it couldn't be more than seven.
Hon. G. Clark: That's correct.
F. Gingell: Of course it's seven, because the three individuals nominated as directors by the advisory council could in fact be employees. Do you not think that it would be sensible to have a limitation? I appreciate that all 11 of them have to be appointed by the Lieutenant-Governor-in-Council. But who knows what the next Lieutenant-Governor-in-Council will do? It would seem to be a sensible idea to ensure that from a board of 11 we're going to have four who are unaffiliated. We're going to allow the group of members or depositors to select three. There are going to be four more. One would almost read from that that the four may well be employees.
From my business years, I have a little bit of reticence about employees being on the board. I appreciate that it's probably appropriate for the chief executive officer to be there, but you'll have a big struggle with me to convince me that a second one should be there -- because then you get into all these conflicts of who's with whom. If you have a nice, clean set of circumstances, employees can, of course, always attend board meetings as resources. But in the end, when you come down to making the important policy decisions, and the board will.... With this particular bank there will be a lot of important things to be done. I'll be interested in your response.
Hon. G. Clark: I'm reasonably sympathetic to the points the member makes, but I don't see why we have to.... I'm not in favour of changing legislation to prohibit it. I just think those are decisions made by the Lieutenant-Governor-in-Council. At this point I haven't actually given much thought to it. In fact, in other instances I've been inclined to not put even the chief executive officer on the board. Probably in this case you can make an argument, but I'm not inclined at this point to put employees on the board.
I don't see a need in legislation to prohibit employees, other than the four that are automatically prohibited and the three that are elected -- which I don't believe are likely to be employees. I'd be very surprised at that. So of the remaining, I don't see why we'd need to fetter that any further. It's a decision made by government. But from a policy perspective, I'm quite sympathetic to the member's position.
F. Gingell: Later on in section 2(6), it says that the corporation may pay a director, a "prescribed allowance for reasonable travelling...." I looked through here to find out who prescribes. I got down to section 32, and it talks about the power to make regulations: "The Lieutenant Governor in Council may make regulations...." The Lieutenant-Governor-in-Council is specifically dealt with under 2(6)(b), where they set directors' remuneration. So obviously, "prescribed" doesn't mean prescribed by the Lieutenant-Governor-in-Council; otherwise you wouldn't have dealt with it.... So who is it prescribed by?
[ Page 11383 ]
Hon. G. Clark: It's the same as any other government corporation: the Lieutenant-Governor-in-Council. I want to give you some comfort that this would be very modest indeed. The community itself, I can tell you, would not tolerate big fat directors' fees.
Jim Green from DERA is sitting next to me. Up until last year, as I'm sure the member for Vancouver-Langara knows, his income was $32,000 a year, full-time, working in the downtown east side. That's because the community there expects people who are working down there to not be remunerated. That's actually an interesting debate.
It's the Lieutenant-Governor-in-Council, the same as with any other board or Crown agency that we establish. The community will have a significant say in that and, as I said earlier, the community would be extremely prudent on this question, in my judgment.
G. Wilson: I'll just pick up on the questions that were being advanced by the member for Delta South, the opposition Finance critic. My understanding from the meetings that I've had with members in the community there, with DERA and with other groups, is that there was a real sense, when this initiative was being advanced, that there was going to be a great deal of community control over the directors, the appointment of directors, the direction the bank was going to take and the policies that would flow from that. The reality of what this language would suggest is that this is very quickly going to change with respect to the establishment of this corporation. Within the first few years of its mandate it is going to have to demonstrate a financial viability that is going to make it worthwhile. The minister talks about the comfort to other financial institutions. Of all the members of the banks and the credit unions that I have talked with, which is a number, most of them think you're going to have a hard time just staying afloat, let alone making any money.
Section 2(3) says that the Lieutenant Governor in Council may appoint.... It doesn't say that the Lieutenant-Governor-in-Council will appoint a director as chair of the board. And they may designate a director as chief executive officer and another individual as president of the corporation. Is it the intention of this act that there will be autonomy within this institution to set its own terms of reference with respect to the directors and the appointment of the chief executive officer? It doesn't say that the Lieutenant-Governor-in-Council will do this. This is not a cabinet order; this is a discretionary clause.
Hon. G. Clark: I'm tempted to say that the member can't argue against himself. He seems to be arguing that there should be more local control, more autonomy. At the same time, members -- maybe not this member -- are arguing that this is a government agency that's.... It's one or the other. What we have tried to do here, and that's maybe why there's this discussion.... As the owner and guarantor, the government has a major stake in this. We have to try to make this work. We want lots of meaningful input from the community. So we're trying to marry the needs, interests and demands of the community with the absolute requirement of the Crown or the government to try to protect any investment that the taxpayers make in this venture. That's where we get into trying to marry those. In my judgment, the community has been very cooperative in that, because they understand the need of the government to try to make money -- and we've been very clear about this.
We intend that the Lieutenant-Governor-in-Council will appoint the board, with the exception of the three that are elected. The Lieutenant-Governor-in-Council will appoint the chief executive officer and the chair of the board. It will fail if we simply drop someone in from Toronto as the chief executive officer. What we are going to do is engage in a process with the community. They will be involved in the interviews, discussions or hiring. But let's be clear: at the end of the day the decision lies with the government on this question, because we are the ones.... I'm in here debating this; members opposite have a criticism to the extent there is some -- and I guess there was lots from the opposition. It's because they are concerned -- I think properly, in a way -- about making sure this is a fiscally prudent thing to do and it's not a waste of money. So we're balancing it. I know that I am accountable in the House. Members have said it very clearly, and we are very conscious of that. This has to be a fiscally conservative operation. At the same time, we are going to work with the community.
Why do I think that can happen? I want to make this point because I know there is concern about it. The Four Sisters Co-op is the largest co-op, I believe, in Vancouver; it is a huge co-op. It is run entirely by the people who live there, and they are low-income people. I have a lot of faith in the ability of the people down there to work with us in finding that balance. I suspect that there will be tension from time to time; it's not going to be easy. But I have a lot of faith in the people in the community down there working with the government -- that we will be able to run this in a conservative and professional way but still deal with the needs of the community. I don't minimize the challenge before us, and I never have. Notwithstanding my enthusiasm about this, it's a challenge.
G. Wilson: On this point in section 2 with respect to the establishment of this corporation, the minister's remarks point out that the minister has got himself on the horns of a dilemma in a sense, because the community fully expects that they're going to have a great deal of input, control and direction. They fully expect they are, and if they don't, there are going to be some problems. It might be the case, with respect to the setting up of these directors and the chief executive officer, that this institution, which has to succeed by making profit.... It has to make money to stay afloat. It must do so; it must make prudent investments; it must not waver from the strict lines of that mandate. So it may be that by hiring the very best chief executive officer with many years of experience in banking, you may succeed at doing that but alienate the community.
[9:00]
By involving the community, however, we may redirect the approach this financial institution is taking. Given that it's not just the government that will have invested in this, that it will be taxpayers who are on the hook for the guarantees, we may find ourselves in a situation where we have created an ongoing need for revenue in setting up this corporation. The community may not see the desirability of having to make hard decisions on investments in order to generate profit as readily as somebody who may be in a bank. Let's face it: banks are the biggest profiteers in the country.
Hon. G. Clark: I just want to say very clearly -- with the meetings in the downtown east side -- that the member's absolutely incorrect. I want to make this clear. The people of the community know that this has to work, and they are tougher there than people in a lot of places I've been. There's a lot of middle-class perspective. They whine and they want service. These people know that they have got to make this work. I said that before. People said the same thing about the
[ Page 11384 ]
Four Sisters Co-op. They said: "They'll never be able to run it. The people don't have the skills to run it." That's real pressure in some ways, because they have a payroll to meet. They have to make it go, and they do it.
I'm not trying to minimize the challenge of making money. Forget about the community. It's tough to make money in some respects. The margins are very thin. The big banks make a lot of money, and the credit unions are operating very well, but it's a challenge. I don't want to overstate the risk, either. This is a regulated financial institution. We can't just say: "The community wants to do something crazy. Let's go do it. It's going to lose money; they're going to be too soft" -- or something like that. There are tough rules governing institutions, and this follows them. This will follow the tough financial institution rules in the province. It will be run prudently. I have faith that the community understands that. I don't minimize at all the potential for some tension between those two issues, but I really wouldn't overstate it. All the people I met are very tough, and they're very hardheaded about this. They want it to work. They've worked with us on the legislation, and we've been consistent with that. I've been very impressed with the community's desire to try to make this work.
F. Gingell: This brings me to the other subject that I wanted to discuss under subsection (9). Under the regulatory regime in British Columbia, we have the Financial Institutions Commission, which reports to the Minister of Finance. It is a child of the provincial government and clearly acts in the role of looking after the government's responsibilities to protect British Columbians and other people who invest money in our institutions. I wouldn't like to suggest anything about the fox and the hen house, but you know what I mean. You're looking at a set of circumstances where a regulatory body that reports to the provincial government is going to be regulating another provincially owned institution that's obviously a favourite child of this government. Did you give any thought to trying to find some other body to regulate them?
Hon. G. Clark: Actually the real debate -- the internal debate, if you will -- was whether it would be Treasury Board or FICOM. Many people asked: "Why should we have it regulated by someone else? We own it, so we're responsible." The government owns it, if you will. Some people argued fairly aggressively that they should be scrutinized by Treasury Board, and that should be the control agency; it should have to report its business plan to Treasury Board. Frankly, I argued no -- and that's the argument that prevailed. We want to give comfort to people that there's some arm's-length scrutiny, that it's dealt with the same way as other institutions and that it has the same liquidity and equity rules, etc. So we decided to allow it to be regulated by FICOM.
Remember that although FICOM is a government regulatory agency, paid for by the provincial government, it has its own board of directors. Dale Parker, a noted former banker, is still the chair, as I understand it, but only as a volunteer or part-time chair; he's no longer paid. It has a very good board of directors -- appointed by the government, admittedly. It recovers its full costs now in cost recovery from the institutions. This institution, unfortunately, will pay a fee as part of that audit approach by FICOM. It is an arm's-length regulatory agency, and it's not going to be cowed by the provincial government. We moved it farther out than Treasury Board, to a more businesslike approach.
I don't know if the member has any suggestions about anybody else who could do it. The member is suggesting that maybe the federal banking people could do it. I don't think that was something we considered. After we pass this legislation, I'd be happy to pursue that. I don't think the federal regulatory authorities would be interested in this pretty tiny institution, relative to the banks they regulate, but we could discuss it with them if that gives the member more comfort. I have complete confidence -- and I think the member does as well -- that the FICOM regulators and FICOM board are going to treat this the same way they treat other institutions. That's in the act. They are required to, and they will.
V. Anderson: I have a number of questions on section 2. We talked about the advisory council having five of the seven from the inner city. But as I read this, there's no indication that any of the directors need be from the inner city. Some of the ones that come from the advisory council are likely to be from the inner city, but there's no direct requirement for that. I can see no direct requirement regarding residence of the directors, nor do I see a term of office for them.
Hon. G. Clark: As I understand it, the advisory body is elected by the depositors -- and the member is correct that five out of seven must be from the inner city -- and they determine the three that go on the board of directors. The member is correct that they do not have to be -- therefore, there is no guarantee, I guess, that three people will be -- from the downtown east side. I have just been advised that in the community meetings, we gave the choice of how we would choose the people to the community. They suggested that they were more comfortable simply with that advisory group making the decision. They're elected by the deposit base, and five of them have to be from the community, so we acceded to their wishes. I suspect, and I think the member would agree, that in all likelihood certainly some of the three will be from the community, but the member is correct that they don't have to be.
V. Anderson: Technically, and theoretically, there could be three from the inner city and the other eight could be from outside the inner city, depending how the appointments go, because they're all confirmed or nominated by the Lieutenant-Governor-in-Council.
If I read this right, and I just want to check, the Lieutenant-Governor-in-Council can appoint the chair of the board, which is one position, and the chief executive officer -- and they could be separate people or one person could hold both positions -- and the president and the chief operating officer, who again could be separate people. There could be four different possible designations there out of the 11, so there could be four positions.... I'm not quite sure from how it reads whether the individual who is the president needs to be a director. It depends how you read it. Neither the president nor the chief operating officer necessarily need to be directors, if I understand it right. So there are 11 directors plus a president -- and possibly plus a chief operating officer. I hear that that's right. So you could actually end up with 13. If the president and the chief operating officer are outside of the 11, are they voting members of the board? If they were original directors they would be voting members; if they were not part of the 11, then they'd be non-voting members.
The other question you might respond to in that regard is that I don't see a term of office for the directors. Are they without term and at the will of...? Where does that term of
[ Page 11385 ]
office show up? I've tried to find it. It may be there, but I haven't quite found it yet.
Hon. G. Clark: In my explanatory notes it's under section 2(4), but I'm looking in the actual section and it's under section 2(1): "There is established a corporation...11 individuals appointed for a term of 2 years by the Lieutenant Governor in Council."
V. Anderson: I have another question. Section 2(6)(b) says: "...if the director is not a member of the Legislative Assembly or a public servant...." Is there an assumption here that there is likely to be -- I know there can be -- a Member of the Legislative Assembly or a public servant appointed as a director of the board. Otherwise, I'm wondering why it's there.
Hon. G. Clark: We have a practice of having MLAs on every Crown corporation board. I haven't actually given any thought to this; frankly, I don't think there will be any on this board, but I guess there could be. The Lieutenant-Governor-in-Council and the cabinet haven't considered this, but I would like there to be a public servant on the board -- the director of banking for the Ministry of Finance, the deputy minister to the Minister of Finance, the deputy minister to the Minister of Employment and Investment or someone like that. So if I have my way -- this is up to cabinet, the Lieutenant-Governor-in-Council -- I would like to see a senior public servant on the board of the bank, at least in the early days as we establish it. That would be my preference. But no decision has been made on that, and this is permissive. It may or may not be, and there may or may not be an MLA on the board. Those are options, and we haven't contemplated them. I'm just giving you my own personal preference.
Section 2 approved.
On section 3.
F. Gingell: This gives us an opportunity to discuss what I think perhaps the cost of this bank is. I'd like to suggest to the minister -- as I did in second reading debate, but I didn't have an opportunity to do it in quite as direct a manner -- that this is going to cost the taxpayers of British Columbia $1 million a year. I think that's what the number is.
It consists of two amounts. First, you're going to put up $6 million. The province is going to borrow every single additional dollar they spend, invest or whatever. They're going to borrow. They're probably going to pay about 9 percent for it, or 8.5 or whatever. But let's just say it's 8.25 percent; that's $500,000. Then your own projections suggested that you're going to lose $500,000 the first year. As I've said before, and as your investment.... I'm not exactly sure what Mr. Green's official status is, except that he works for your ministry, as we discussed on the radio.
[9:15]
I think you can drive a truck through those projections. There just isn't any way that.... I'll make sure I've got the right example, the one with half a million dollars. There isn't any way that you're going to have legal fees of $2,000. The audit, inspection and FICOM say $5,000. All these expenses are really low. They're going to be higher, believe me. The way you can save it is to do what I think you should do, and I'm going to make that plea again.
The issue under section 2(9) is who should regulate this. There are some other alternatives. If you've got $1 million to spend every year, surely we can find someone who will do it for one-third of that or one-quarter of it -- CCEC....
Interjection.
F. Gingell: Well, they're talking about the.... Oh, I'm sorry -- through the Chair.
It really is a million-dollar-a-year bill. I just feel certain that there are other ways of doing it, particularly if the Ministry of Employment and Investment drags the Ministry of Social Services and the Ministry of Finance screaming and kicking into the latter part of the twentieth century, and we do such things as electronic funds transfer. We have such things as identicards that clearly could work out.
One of the things I mentioned before.... They talk about the banks making these exorbitant profits. This may surprise you, Mr. Chairman, but one of their major revenue sources is that they're going to charge $30, I think, for photograph ID that's only going to cost them $5. Well, talk about profiteering. But what I'd like to do at this moment in time, if I can, is to see if the minister does agree and accept that it really is an annual cost of $1 million, at least in the first couple of years.
The Chair: May I just offer a caution before the minister responds with alacrity to the last question -- or statement. We're perilously close to being miles away from what section 3 is really about. Indeed, I even heard lines that I've heard before in second reading, so I would offer that caution to all members.
Hon. G. Clark: I don't know where the member gets the numbers from. The member is correct that there is a report, the Ross Montgomery report, and it projects that it will lose $1 million over five years. We understand that when we start this up, we'll lose money. If the member is saying that that's inaccurate, that we're going to lose more than that, that's certainly an opinion the member can hold. But I don't know why he would think we're going to lose $1 million a year; it's $1 million over five years, and then the projection is that we'll break even.
As the member knows, because he's looked at the Montgomery report probably closer than I have, it's predicated upon getting a deposit base. If we aren't successful in getting the deposit base, then it's going to be difficult to break even and we'll lose money. That's the challenge, and that's why we provide the deposit guarantee, which the members opposite are criticizing.
It seems to me that we're trying to ensure that this does start to break even, and that requires getting significant deposits. Again, I don't diminish what others members have said -- the member for Powell River-Sunshine Coast, in particular. It is going to be extremely challenging to get the deposits, even with the guarantee. That means there is some risk.
I don't want to get into second reading debate, but we are losing a couple of million dollars a year in stolen cheques in the downtown east side alone. We are putting people in jail in the downtown east side. We are costing a lot of money because of social problems and other things in the downtown east side alone. We would have to spend considerable money subsidizing a bank to do this service. Yes, there is some risk. I'm not diminishing that.
[J. Pullinger in the chair.]
[ Page 11386 ]
The professionals we engaged said that it was possible this could lose $400,000 the first year, $272,000 in the second year, $141,000 in the third year and $14,000 in the fourth year, until it breaks even. That's what the professionals said to us. There are some assumptions in there that are challengeable, which make it more risky, but we think it's certainly worth doing and doable, and we do believe that there are some significant cost savings on the other side in Social Services and elsewhere.
That's the business plan. It's not a frivolous one; it's a real one. The member did say that we planned to charge an enormous amount for photo identification. The business plan said that, but it hasn't been accepted by us, and I don't think we're likely to do that. It does mention that as a source of revenue. We're spending millions of dollars of taxpayers' money for Money Marts to provide services. Hopefully, some of that's diverted through service charges in the corporation, and that will help pay for the operating costs of this thing. We're going to work very conservatively to deal with that.
I want to just comment on one last point that the member made. The $5 million capital investment in this corporation cannot be spent. FICOM regulations require an equity infusion of $5 million. One can argue intellectually that there's lost interest on it.
Interjection.
Hon. G. Clark: Well, one can argue that there are forgone interest payments on it, and I understand that, but the capital cannot be spent. So we expect, if we work well at this and it works, that the taxpayers will receive a return on their investment and equity. We're not simply giving away money. There's an operating loss, which we anticipate, like any new business over the course of a few years; and then we expect, once we build the business up, that it will break even and not be an operating subsidy to the taxpayers. That's what we're hoping for; that's what we're going to work towards; that's what the community believes in; that's what we're going to work hard to accomplish. It's going to be a challenge, but it's a challenge worth taking because of the costs that are already borne by the taxpayer in a variety of manners in this community.
F. Gingell: Certainly the difference between the $400,000 shown here and the $1 million I speak of is the interest on the $6 million that you're going to borrow, because borrow it you must.
The second item, as we know, is that the government intends to invest $5 million in the purchase of shares to start with. We keep talking about $6 million, because I've heard somewhere that there's another million dollars being put up as start-up funds. That is not accounted for in this bill, so I would be interested to know under what authority it is going to be disbursed. Is it going to be disbursed to the bank corporation, or does it have to be disbursed to some other group first to enable them to get the bank corporation up and running? Do they expect it all to be spent? I want to know exactly what that million dollars is.
Hon. G. Clark: The member is correct that we announced that there would be $1 million dollars from the B.C. 21 special account expensed in this budget year. So the $5 million is a financing transaction. It's a share investment, the same as the investment at the Canadian Western Bank. The taxpayers are insulated. That's an equity investment. The $1 million will be accounted for in this fiscal year. That's for two things, I guess: working capital and start-up costs. There are some modest renovations as well as working capital. It will go to the corporation, and we anticipate that it will sustain the corporation for probably the first year or so of losses, as well as start-up and working capital. So we give the money to the corporation and it's expensed this year; there's nothing hidden. It's expensed this year, and that gets the corporation up and running and it moves forward.
G. Wilson: Was the $1 million that was advanced out of B.C. 21 used for the purchase of the building and the property? Or is that additional money into the bank? What's the status of the ownership of that building?
Hon. G. Clark: B.C. Housing Management Corporation purchased the building. I think it was about $900,000. They are anticipating putting some housing above it for youth. That's what they are doing with the detailed architectural work now. We will be paying market rent to B.C. Housing for the commercial space that we will be renting. If we don't achieve a good rent agreement from them, then the bank won't be at Hastings and Main and we will rent it from somebody else in this geographical area.
G. Wilson: I notice that under "authorized capital," section 3(3) refers to section 37 of the Financial Administration Act, and the Minister of Finance and Corporate Relations subscribing for not more than five million shares. Section 37 of the Financial Administration Act expressly exempts sections 32 and 36 from that. I wonder if it's anticipated that notwithstanding share capital that the province is buying into, the province itself may be a depositor in this bank.
Hon. G. Clark: The province could be a depositor in the bank. I don't believe that's anticipated, although it's not a bad idea in the sense that the province has constant short-term deposits in terms of their orderly money management, but I haven't had any discussions with the Ministry of Finance about that.
F. Gingell: Before the minister gets any thoughts in his mind on this subject, Bill 44, which is in front of the House, is giving a little more freedom to the provincial government to make investments of various funds. It allows the chief financial officer and the government to make investments as would a prudent person. I'd like to suggest to you that the lower rate of interest that this bank is going to pay is because these deposits will have a government guarantee. No prudent investor would take a lower rate of return for their own guarantee of their own deposit.
G. Wilson: I echo the comments from the member for Delta South. One of the reasons I raised it was that under the exemption in section 36, clearly the government is not precluded from being a depositor in the bank. Given the fact that there may be difficulty in the first year attracting sufficient capital, there may even be a temptation, I would suggest, that the government....
[9:30]
This raises another point of concern which I would like the minister to clarify on the record so that I can take it to those who have come to me with this concern. It has to do with external sources of funding that would come into the bank that originate from government-owned activity. In particular, they're concerned with three different sources. One would be government-owned, subsidized housing that might be generating money through B.C. Housing, which
[ Page 11387 ]
would then be on deposit because of the proximity of those projects to the bank. The second is with respect to the proposed portside development and subsequent casino, if that should happen. The third has to do with the movement of public pensions into the bank as a matter of course, in terms of the investment from the government. I wonder if the minister would want to comment on those three.
Hon. G. Clark: None of this has really been canvassed yet, but on the housing questions, I think that's quite possible. Four Sisters Co-op, for example, may put money on deposit there, and indirectly that may be government money. Housing agencies may put money in short-term deposits for development purposes. I don't have any problem with that; in fact, I might encourage it.
With regard to Seaport, there is absolutely no connection between the proposed casino project and this institution -- none whatsoever. It's not contemplated, not connected, not possible -- or not likely.
An Hon. Member: It's possible.
Hon. G. Clark: Sorry. It's possible, but would it qualify as a prescribed entity? No, I don't think it would. But I suppose you don't have to have a guarantee to put money on deposit here, and we hope that other people will.
There are the public pension funds. Governance changes at public pension funds. At least we've been trying to pursue that, to put in more than just advisory groups from the pensioners and from the public employees. For example, I wouldn't have any objection, once there was a reasonable governance relationship, if the people on the board of directors of a public pension fund wanted to put some money on deposit here, because it's a social purpose, paying a commercial rate of interest. I don't have any problem with that.
We have no precommitment to funnel all kinds of public sector pension money or government money into this bank. But I don't want to say that I'll not be knocking on the doors of the teachers' or college employees' pension funds and saying that we think this is a good idea, that it's guaranteed and a good investment. It shows faith in some economic development activity or social purposes in the downtown east side. I don't have any problem with doing that, and may well do it. But we haven't asked them, and they haven't offered. No one has done that. There is no preconceived decision to do that. We're trying to change the public sector pension funds somewhat -- or at least, there has been a process underway. I haven't been there for a few months so I don't know what's happening in that respect.
On the housing side, there may be opportunities for some deposits to flow through the bank. Again, I would probably encourage that in a modest way.
V. Anderson: I thought I heard the minister say that they had already selected a building and a location. Is that true? Am I correct in that?
Hon. G. Clark: We are sort of 90 percent there. We wanted it at Hastings and Main, and the people want it there. We are using it for public meetings and community groups. It has a certain legacy in the community, and it really makes sense.
I was quite serious, actually, that we have to negotiate a lease arrangement with B.C. Housing. Some of the early numbers they suggested -- the market rent for this property -- I'm shocked by, because it's been empty for a long time. I don't think there is a big market, and they are expecting a large rent. We are not bound by Hastings and Main; we are bound by the geographical region that is in the act.
The community has passed a motion that it should be within five blocks of Hastings and Main. As the member knows, if he has been down there lately, there are a lot of vacant buildings on Hastings Street. In fact, it's quite a concern that I have personally. Woodward's is vacant. So there are lots of options. Frankly, what I hope will happen is that we will canvass those other options, get very good prices for rent and then go to B.C. Housing and say: "This is the market rent, and we think this is what we should pay for it." We're practically there, and that's where it will be. But we have a bit of negotiating to do with B.C. Housing on what the market rent is for that building.
J. Weisgerber: Listening to the minister's response on the rent issue, I'm curious to know what prompted B.C. Housing to buy the building in the first place?
Interjection.
Hon. G. Clark: No, it's the price for B.C. Housing.
I guess the member is correct. When we were looking at housing opportunities, I asked the Ministry of Finance -- as I do all the time -- to do an appraisal. B.C. Housing, with the appraisal, received the property at $150,000 less than the appraised value. So they got a very good price, and that's why they bought it. We wouldn't have bought it otherwise.
Interjection.
Hon. G. Clark: B.C. Housing has a pretty large portfolio.
Secondly, we looked at the opportunity for some youth housing in the downtown east side. But the member is correct. Right from the beginning, when we were reviewing this property, it was part of the.... This was over two years of looking at an opportunity for banking services, so we looked at that as a possibility. When we were negotiating with credit unions and others, we were trying to convince them that they would open a branch in what was the vacant bank building, or that they would work with us on providing some contracted service there or we would set up an institution and contract back to them. Those were all the things we looked at, and we did look at it with respect to that site initially. Also, in all seriousness, we are not wedded and have no contractual commitment to do that. B.C. Housing is the landlord, and they will expect a market rent for it.
J. Weisgerber: Come on. Let's tell it the way it is. The government sent the B.C. Housing corporation out to buy the bank site. They've gone into this business plan, and now they find that when they do the business plan it can't stand the rent that the purchase price would demand. So the government is going to play around and say to the B.C. Housing corporation: "You've got the bank now, fellas. Either give it to us at a reduced rent, or we're going to move on down the street."
Any other entity of government that sets out with BCBC, or whatever, selects a site, has the corporation purchase it, and pays on the basis of the investment, not on what the street market is. If you look at any of the ministry rents, they're not done on what the market rents are; they're based on what BCBC paid for the building and what their costs are. I think the minister is being less than honest or being less than straightforward in this whole process. I can't imagine that the B.C. Housing corporation would have purchased this building for any other purpose than the one we're
[ Page 11388 ]
talking about now. In fairness to the taxpayers, I think the bank should pay the rent based on the purchase price, and the government should build that into their projections for the expenses of the bank.
Hon. G. Clark: No, the member is incorrect. B.C. Housing would not have bought that if they weren't going to build housing on the site. The member should know that the price of the land is also determined in no insignificant way by the cash flow that the property can throw off. That's why the price of the land is lower than the assessed value -- it's hard to rent in that part of the downtown east side. You're saying that because they paid $900,000, or a little less than that, for the property, they have to cover the mortgage on that. Believe me, you're quite correct. They will. They are building housing above it, and they can rent it out to any other government agency, to the private sector or to this banking institution.
The member is correct. We would like that site, we expect that site, and we will pay a market rent for it. At the same time, it doesn't make sense to pay an inflated rent because they feel we're captive and we would like to be there. There's a little bit of tension, but we'll work it out. I'm sure we'll be located at Main and Hastings, and there will be a nice, interesting housing development above that heritage building. That's what we're working on, and we're working very closely with them.
Section 3 approved.
On section 4.
F. Gingell: Section 4 states: "...and to provide a full range of financial and related services to, members of the community." It doesn't talk about demand; it just talks about the offer. Any comments on that?
The Chair: The member continues.
F. Gingell: What I was saying was that the legislation is going to require the bank to offer a full range of financial services to its customers. An interesting question is: how many customers is it going to have? It talks about a full range. I don't know how many of them will have insurance policies, or whatever banks can and can't do -- the various offerings that banks make now. It seems to me that this section of the act talks about the provision of services rather than about meeting the demands of the customers.
Hon. G. Clark: I think there's a certain amount of semantics, though, in that. The purpose of the corporation is to provide a range of services to members of the community. It's not going to provide services if they're not wanted by the community. In other words, you're asking me to address the demand side. If the demand isn't there, then the services aren't going to be provided. I guess if the member wants to quibble, there is an assumption here that there's a demand for services in the downtown east side. The whole legislation is predicated on an assumption that there is a requirement or demand for services which aren't being filled by the private marketplace. That's the assumption behind the bill. Therefore, it seems to me self-evident. The purpose is: "...to encourage and facilitate the use of savings institutions by, and to provide a full range of financial and related services to, members of the community." We're filling a vacuum, a void. We're providing a service, where there is a demand. I didn't think it was necessary in the purpose section to enunciate any further that we're meeting a demand, if you will. I think it's self-evident.
F. Gingell: Yes, there is a quibble there. That's a very good way to describe it. The reason I make the quibble, of course, is that I come back all the time to really thinking about what services are needed to fulfil the need. That's where we differ. I see the need, I think, as much more clearly defined. I would like to see it served in the simplest, most effective, most efficient and most cost-effective way possible.
I had meant, actually, to ask earlier on -- and this perhaps isn't the right spot, but fortunately the Chair is giving us a lot of latitude -- whether, in the process of your discussions in the community with the banks and the credit unions, you actually went and offered to pay CCEC or a credit union or the banks a subsidy, the way you pay the Bank of Commerce a subsidy up in Atlin. Did you get down to negotiating and asking: "How much subsidy would you require -- or could we just add it to each welfare cheque -- to provide this service?"
Hon. G. Clark: The answer is yes. We asked: "What would it take for you to provide these services? How much money? How many people would you need?" We asked it explicitly. We were asking for responses, and we went out and we met people. We clearly asked what it would take. I personally had discussions with several credit unions. I didn't have discussions with all the banks, so I can't speak for all of them. The Gulf and Fraser credit union was very sympathetic. They thought about it, and they said: "We only have two branches. We don't want to open another branch; it stretches our management capability. We'll work with you, we'll help you, we'll put some people in there for you. We can sort of lend-lease you some people, and we'll work with you to try to set it up, but we just don't want to do it, even with a subsidy and everything else." They simply didn't want to detract from their corp -- they're obviously a corp business -- and their membership and everything else. I'm sympathetic to them. They were very good, but they didn't want it.
[9:45]
The Vancouver City Savings Credit Union offered $60,000 in training and technology. They've actually offered to assist us. We've had good support in that respect, and that's what's sort of ironic here. The banks and the credit unions really have been very supportive of this initiative. We talked to them about what it would take for them to provide this, and they all said they really didn't want to get into this business. They didn't want to get into what they felt was a kind of social welfare thing, because it would pollute their business or their members wouldn't like it, and that kind of stuff. And the banks certainly aren't interested in that business. Instead -- and I think this is positive -- the Royal Bank across the street, the Bank of Montreal down the street, Gulf and Fraser, which is nearby, and VanCity have all said they'll help us. VanCity has actually said they'll give us some training money and technology. Gulf and Fraser almost said that; they didn't say they'd give us money, but they said they'd work with us on a volunteer basis. The CEO of the credit union was, when we announced we were going ahead with this, very supportive. The bank across the street hasn't come quite that far, but they have been very supportive of it; so has the Bank of Montreal. So they are quite keen on this, and that's what I keep coming back to with the member.
Maybe I'm being defensive, but we did not set out to do this. We set out to provide services. We canvassed all of the agencies. We asked: "What will it take to do this? Give us a proposal; we're interested." We talked about every possible
[ Page 11389 ]
ramification of contracting services. At one point I said to several credit union people: "What if the government of B.C. put $50 million on deposit in your credit union? We'll put it in there; you pay us the commercial rate, and then you do this." I was throwing out all kinds of ideas.
Nobody came forward with any creative ideas, except that we had some little bits of interest here and there. When the credit unions actually said to us that we should set up our own institution, that's when we decided we were going to have to do that. The Ministry of Finance struggled with this, because they are pretty conservative about all this stuff. So we asked: "How are we going to set up this institution?" And we went through this whole process.
I think we've come up with a good one, and I must say that even the most conservative of the staff people that have worked on this have been quite excited by this process, as well as all the credit unions, banks, etc. -- and we have all the letters. They have some reservations and some concerns about some aspects of it, but in general they have been very supportive. They were trying to work with us and make offers to us about how we might do that. CCEC and VanCity offered to advise us on how to set something up, and on and on.
The exact $2 million guarantee was never discussed. In fact, in the report we had mentioned an unlimited guarantee. That was a result, if you will, of internal government negotiations about how we might accomplish this goal without opening up complete guarantees, etc.
That's the background, members. We were very explicit with as many people as we could be about our desire for them to make us an offer, make us a suggestion. And we didn't receive any.
The Chair: Before I recognize the member, I ask all members to please stick to the section we're discussing, which is section 4.
G. Wilson: Having canvassed most of the credit unions and banks, I'll attest to the fact that they don't want to do it. You're right. They certainly weren't keen to do it or to engage in it. I don't know; most of them thought the government was going to lose a pack of money in it. That's one of the reasons they didn't want to get into it. They didn't see it as a viable service financially. Socially it's very viable, but financially not good.
With respect to section 4, I come back to the related-services section that the member for Delta South was alluding to. I have two very specific questions. Firstly, is related services going to include insurance? Secondly -- and I just need to ask this to cross-reference what I asked earlier -- is the community referred to in section 4 the community that's defined in the definitions?
Hon. G. Clark: In section 4, you ask if the community is defined. That's what the definition is. The definition section defines what's in the bill, so that's correct.
It will not be providing insurance services. I don't believe it's possible. As members know, there's a private member's bill before the House on credit unions providing insurance services. If they can't, this cannot provide insurance services -- except for the grandfathered credit union.
J. Weisgerber: I too am interested in the related services and the definition of community. We understand from the discussions that have gone on that we're going to have a bank here with $100 million in deposit -- or at least a bank whose objective is to have $100 million in deposits. Particularly in second reading, we've heard the minister talk about the need of the community, as defined in this section, as being the need for a place to cash a cheque, open an account and carry on personal banking. All of us know that you don't need $100 million on deposit in order to perform those kinds of services in that very limited geographic area. It appears pretty obvious to me that the related service needed by that the community as defined in this section is housing.
I see the person there smile rather broadly. I think the fact of the matter is that we have a financial institution that has been created in order to put money into housing in the lower downtown east side. If the minister disagrees with that assumption, I would like him to sketch for me the profile of borrowers, which they obviously have identified, of this $100 million. What's the profile of the borrowers?
Interjection.
J. Weisgerber: The borrowers. If you take money in an account on deposit and guarantee it, you must have some customers in mind. You have to lend it to somebody. According to your definition, you're to provide financial and related services to members of the community. The definitions section says the community is "those persons who (a) are underserviced by existing financial institutions, (b) are in a state of suffering, neglect or poverty, or (c) share and promote the principles, goals and purposes of the corporation."
I suggest to you that the overwhelming financial need -- and related services need -- of the community as defined is housing. I'm not at this point being critical of the idea, but my assumption is that the $100 million is going to be loaned primarily for housing. If the minister has a profile of borrowers who have been identified that contradicts or confirms that, I would be very much interested to hear it.
Hon. G. Clark: Let me deal with the first question. These are just some examples of the range of services the community needs: learning how to fill in your GST rebate form -- we may have to put on a course, which is a service we'd provide; learning how to work and open a chequing account; and learning how to manage a very small amount of money. We may, I suspect, put on a course or two for board members, particularly for members who are from the community.
There has been an expressed desire to put on a course about how to do a direct deposit to your landlord. So it may be, through electronic transfer, that they could have their rent automatically deducted from their account. I see the member for Vancouver-Langara nodding his head. Those are the kinds of services that are being contemplated.
I want to give members as much comfort as I can that this is not to provide housing, although it's a nice idea. The business plan does not contemplate any of that. I don't know if that member has the business plan, but they have to provide it. There is no lending for housing or investment for housing in the business plan for the five years that we have here. The member is correct in saying that it's not precluded, but it's not in the business plan, and we're not planning to do it.
The member is correct about the borrowing profile. What are we going to do with the $100 million? The business plan suggests that the most conservative investment, which makes a fairly small spread of 60 to 80 basis points, is to buy pooled mortgage funds. So our intention -- and I'm not the expert in this, but this is what the business plan contemplates, and what I would support -- is that the chief
[ Page 11390 ]
executive officer or the financial officer of this institution make the money work by taking the money in deposits, paying a commercial rate and then, in turn, buying pooled mortgage funds. It is not for individual lending to this or that institution or individual, but simply buying CMHC-backed, pooled mortgage funds, of which I'm told -- and I may be incorrect -- that there's about $12 billion in British Columbia.
So if we were wildly successful and achieved $100 million in deposits and put all of it into a variety of pooled mortgage funds, that would be extremely conservative. That's what the business plan contemplates. It would have no impact on the existing financial institutions, because the pool is so large that this would be a very small amount. In fact, we'd be buying pooled funds from credit unions and banks. That is entirely what is contemplated in this business plan.
I fret about this, but as we get more advanced three or four years along, if we are successful, then I think there is an opportunity for what is commonly called peer group lending and small loans. I have made this case about an individual I met in the downtown east side who wanted to get a job as a courier. He wanted to buy a bicycle for $300 and couldn't do it. Lending $300 for someone to buy a bicycle to get a job as a courier is a good idea. Banks don't do it; credit unions don't do it. Some very good agencies are actually starting up and doing that. We're not interested in competing with them, but I'm just saying that that kind of thing may be contemplated. It's not in the business plan. It is not contemplated for the first few years, but I'm very sympathetic to trying to get into that, and so is the community, in a very modest way.
I also want to make the point that with respect to housing, it isn't in the business plan and we're not planning to do it, but I'm very interested in developers or non-profit associations, etc. If they're building housing, there's often a case for some lending associated with that, such as short-term building loans and putting money on deposit to draw down over the course of a building cycle. That's pretty safe. It's CMHC-backed; it's a government building.
[10:00]
It may be a business opportunity for this bank to make some more revenue, to make that $100 million work a bit more, if you will. Because, as all the bankers are telling me -- and lots of them are now coming to offer me advice -- the secret to banking is that as soon as you receive a deposit, you have to make it work. You have to get it out and make it work, and that's the challenge, of course. That's the problem with people who have social service cheques. They are very small amounts of money, and they go to zero very quickly. So you can't make it work, because it's gone. You have all the costs of handling the money and everything else, and you can't get any revenue out of it. That's the challenge we face. Our bank, the bankers and the advisers we've had have suggested that the most conservative, the safest and the best way to do it is the pooled mortgage funds.
I wonder if members could shake their heads one way or the other as to whether we could have this section before we move on, or whether we....
Interjections.
Hon. G. Clark: Can we complete this section, and then adjourn the House?
Interjection.
Hon. G. Clark: Thanks.
J. Weisgerber: Just to complete my thoughts on section 4, I don't see anything in this bill that would stop the bank directors from deciding that they don't like the business plan and that they want to move rather quickly into investing in low-rental housing in the neighbourhood. Perhaps the minister can tell me what other kinds of constraints there would be on the lending direction and policies of the bank that would be outside of the Financial Institutions Act, or if, indeed, the only guiding principle would be the same guiding principle that allowed other financial institutions in this province to get into trouble.
Hon. G. Clark: I think we can give the member comfort on this. The business plan has to be annually reviewed and approved by Treasury Board. In all seriousness, this thing is really tightly controlled. The overall guiding regulatory authority is FICOM, and on top of that the business plan has to be approved annually by Treasury Board.
Could Treasury Board decide to do what the member suggests? The answer is yes. The community may decide they want to go into low-income housing, and the community has agreed that their right to advise, etc., on what they want to do is fettered by Treasury Board. Treasury Board is the approving agency of the business plan. So there are two controls to give members comfort on this.
I've been asked by the member for Powell River-Sunshine Coast to introduce my staff again. I did that already, but I will again: Mark Lofthouse, a director in the Ministry of Employment and Investment; and Jim Green and Monica Hay, community development workers with the Ministry of Employment and Investment.
V. Anderson: I don't want to take long, but it seems to me that the crux of what the minister has been saying under this act that I want him to clarify.... It seems to me, from what I hear and know of the people from the downtown area, that when the financial people are talking about banking they're talking in big bucks. That's one type of discussion. Many of the people downtown are talking about $50 and $100 and about the possibility, as the minister has indicated, of learning how to bank and of having somebody at the cashier counter who can take time so that you can sign your name with an X, because you don't have a signature and you can't read and you can't write -- you can't even read what's on the cheque.
There are all these kinds of services that the normal banks aren't in a position to offer because they're doing a cash-flow-through of customers. Instead of a customer coming in and taking ten minutes to do simple banking, maybe a customer is taking a half hour to do simple banking -- because there are a whole lot of other things. If I understand it, it's not only the financial services but the type of services which enable people to begin to use financial services and to find simple answers to simple questions -- even to know, when they come in to cash their GAIN cheque and have to sign it, what is it they're signing. There's all that kind of explanation.
If I'm right, it's that kind of service that is meant when I hear the people downtown saying that this is a bank that will have time, patience, interest and understanding and will treat them with dignity. But I also hear them saying -- and I wasn't sure that the minister was responding in this area -- that if aboriginal people wanted to work in their lending circles, there would be some source of support, not somewhere down the road but now.
If a person -- as young people are trying to do in the downtown core right now -- is trying to set up a craft
[ Page 11391 ]
business cooperatively, there should be some support in getting supplies, backing and some very limited form of credit to get them underway. These are the kinds of expectations that I hear there, and I'm sure there's a difference in the expectations of the community and what we've been discussing most of the day today. I'm wondering about the mixture of those two sets of expectations.
Hon. G. Clark: I don't doubt that the member.... There are some expectations, but I've been impressed that the community has really been pretty hardheaded about their expectations. We've been pretty serious about it, and we want this to work. Their expectations may be high, but they know there are some challenges.
We can begin immediately to work towards working with aboriginal lending circles, but I have to say, candidly, that we're not in a position, a year or so into this, to be doing that. Even though I'm very sympathetic to it, this has to be managed very carefully in the early days, to try to get it up and running in order to provide those financial services. So, unfortunately, that may not be meeting their expectations, but we've been very upfront about it, and we have to work on this over time.
I just want to make the one last point for members opposite that this institution will be more regulated than any bank, credit union or trust company in British Columbia. This is the most regulated financial institution of any kind in British Columbia as a result of this legislation.
Section 4 approved.
Hon. G. Clark: I move the committee rise, report speedy progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported resolutions on the estimates of the Ministry of Finance and Corporate Relations and progress on the estimates of the Ministry of Education, was granted leave to sit again.
Hon. G. Clark: By agreement, the summaries of the Ministry of Finance will be at another time, and we have yet to do the summaries of the Ministry of Social Services.
Hon. G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 10:07 p.m.
The House in Committee of Supply A; G. Brewin in the chair.
The committee met at 2:50 p.m.
ESTIMATES: MINISTRY OF FINANCE AND CORPORATE RELATIONS
(continued)
On vote 33: minister's office, $342,581 (continued).
F. Gingell: A news item by Steve Weatherbe -- I'm not sure if it was published as a story -- dealt with long-term sick leave within the BCGEU. Sterling news services have learned that provincial employees are claiming long-term sick leave at over twice the rate experienced by comparable private companies. The extra absenteeism costs the taxpayers over $9 million a year. Our rate is 245 percent more than the rate we looked at in large private companies. I wonder if the minister could comment on this.
Hon. E. Cull: Yes, the figure of 245 percent is correct. It was one of the concerns that we addressed successfully at the negotiating table this year with the B.C. Government Employees' Union. We have a memorandum of understanding -- I believe it is in the agreement -- which establishes that a study will be done to address the issues of the overutilization or inappropriate utilization of our sick leave plans. Some work has been done to identify what problems caused this excessive use.
A lot of it has to do with being able to find appropriate ways to move people back to work -- perhaps not back to the jobs they were doing, but to jobs that won't cause them to become ill or to be re-injured. We're committed to addressing this problem.
It was encouraging, on getting back the reports from the negotiators at the table, that on presenting these figures to the union, they also were concerned and desire to work cooperatively with the government to try to bring these figures more into line with the average in a similar kind of workplace.
F. Gingell: So you're at the point where there's a memorandum of understanding that a study will be done. Has that study commenced yet?
Hon. E. Cull: Just before I answer this question, I was remiss not to introduce at the start the new staff who have joined me for this part of the estimates debate. We have Jo Surich, who is the commissioner of PSERC, and Doug Mikasko, who is also with PSERC.
We've done two things in the agreement that already start to address the issue. We changed the definition of disability so we could bring people back to work sooner. We also have increased the powers of the rehab committee to try to get people back to work more quickly. The study has started, and all the unions in the public service are involved in it with the government now.
F. Gingell: I recognize the problems of dealing with your own employees and setting up appeal boards that have to deal with people who are working in the same environment. I know from my own experience in business that the growth of the insurance industry in this field has happened because of the need to separate them and have a nice, clear distinction. It is terribly difficult to be seen as hardhearted with your own employees. That's why, to a great extent,
[ Page 11392 ]
corporations insure these costs with third parties. In effect, you go and hire a bad guy to act for you. In many company-funded benefit plans -- for instance, dental plans, eyeglass benefit plans and benefit plans that deal with short-term disability -- corporations, having insured the long-term disability with a third-party carrier, use an independent third party to administer or to rule on and deal with these proposals.
My reaction to being told that our costs are 245 percent or whatever of what one would expect is that the first thing is to go to an outside carrier, that that would be the appropriate way to handle it. Has that been considered? I'd also appreciate your responding to the issue not of having a third-party carrier but of using a third party to deal with these matters.
Hon. E. Cull: Actually, we do that. Great-West Life is the insurer we use with respect to our long-term disability plan, and that organization determines eligibility as to whether you qualify to be on LTD. The short-term plan is administered internally, but the long-term plan goes through Great-West Life.
F. Gingell: Does Great-West Life just administer it for you with you paying the cost, or do you actually pay them an insurance premium and they pay the cost?
Hon. E. Cull: We pay the cost and an administration fee as opposed to simply purchasing insurance.
F. Gingell: So you have hired the bad guy, but he's not been bad enough for you. With the depth of experience you have in that ministry, I wonder whether you have come to any conclusions about separately administering the short-term and the long-term. Surely there must be a relationship between how easy it is to get on short-term and how long the short-term is. There are a number of people who aren't back to work by the end of their short-term and are in the process of applying for long-term.
Hon. E. Cull: Clearly, there is a relationship between the two plans. From what we know now, I suspect that the short-term plan is too long.
[3:00]
In collective bargaining this time we established first a recognition on the part of both the employer and the union that the system needs improvement and we need to reduce costs. That was wholeheartedly embraced by both parties at the table. Second, we acknowledged that, while a simple short-term or long-term sickness plan may look after the needs of employees who, for whatever reason, are unable to work for a period, it is not proactive enough in getting people back into work. That's where we're going to put most of our energy. If we can get the plans to work better, we can get people to return to work earlier and stay there instead of injuring themselves and going on the plan again. That's the most effective way of bringing down the costs.
In general discussions that I've had with staff and union members, there have been lots of ideas about how we can achieve this. It doesn't make any sense to return people to the job and not change what created the problem in the first place. We have not viewed the system as proactively as we could. The study will look at the plan to see whether it should have a bad guy and whether the bad guy has been bad enough. All the issues you have raised are part of what we want to review in cooperation with our employees so that together we can come up with a plan that is cost-effective for taxpayers and effective for employees.
F. Gingell: The next step in the process is one of the most important ones, which is the process of appeal of those decisions. I understand that it goes to a joint union-employer board. One of the problems of being government is that although the employers are management, we're all employers -- and we're all workers, too. There aren't nice, clear distinctions where it is literally a matter of someone representing the interests of the shareholders, although one presumes government does. What has really happened historically is that the success rate of appeals to that board is phenomenal. It is unbelievably high. If you appeal, you win. Could you comment on that?
Hon. E. Cull: I wonder if the member could just repeat the last part of his question. I'm sorry, I didn't catch it.
F. Gingell: Yes. As I understand it, the record is basically that if you appeal, you win. There is a far greater percentage of successful appeals than you'll ever find in any other circumstances.
Hon. E. Cull: It's interesting. The first remarks the member made were about us all being employees and about whether the system is looking out for the shareholder, or the taxpayer in this case. I smiled a bit as he was saying that, because having been at one time in my now-distant past a member of the B.C. Government Employees' Union, I can assure you that the members of the union didn't think it was a very easy process to deal with both short-term and long-term sickness and disability plans. In fact, they saw the folks at what used to be called GPSD as being a rather hard-nosed and mean lot when it came to negotiating any of these things. The commissioner says they still are.
There is an appeal process, however, and it is one of the areas we're looking at as part of this review. We're not entirely satisfied with the way the appeal process is working, and we will be looking at the appropriateness of the appeal, how the appeals are heard and on what basis they're heard as part of our overall review.
I might finally say, though, that there are many people who are looking at the cost of the plan because the costs are charged back to the ministries. And if the ministries don't have that money in their budgets -- if they've exceeded what they thought was going to be their budget -- they end up having to find it in other places. So there is an incentive from the ministry level on up to try to keep the costs down.
We think that we could do it better than we have, not by exerting pressure on managers either to disallow or to get people back to work earlier, but to change the whole system so it works better. And that, I think, will address the concern you raised about how can we do this when we're all employees and employers together, trying to develop cooperative relationships in our workplace instead of adversarial ones.
F. Gingell: I wonder if the minister has any statistics on the number of appeals that have been allowed after an appeal has been filed; many of them, of course, may have been allowed prior to being heard. If it's possible to get a statistic on that, I think it will give me and the committee a better feeling for the degree of unusual success that this news story suggested.
Hon. E. Cull: I'm not in a position to have those figures here today, but I'd be happy to ask my staff to see if they can put them together and then provide them to the members.
[ Page 11393 ]
F. Gingell: Does the appeal board deal only with the ministries or also with Crown corporations?
Hon. E. Cull: PSERC generally applies only to the direct public service -- to government employees. However, we do provide services to B.C. Systems Corporation, B.C. Buildings Corporation and B.C. Ferries on a service-contract basis. We provide those services to those three Crown corporations; the others would have their own human resources and labour relations organizations.
F. Gingell: This problem was described in the article as "chronic absenteeism." I wonder if you could advise how those Crown corps -- Ferries, Buildings and Systems, I think you said -- and Crown agencies compare to the ministries statistically, and whether there's any big variation among different ministries statistically. There seems to be a greater problem in the Ministry of Health than in Finance, of course.
Hon. E. Cull: With respect to the three Crown corporations I mentioned, B.C. Buildings Corporation is higher in absenteeism than the general public service, but the Systems Corporation and the Ferry Corporation are both very low. That may be somewhat due to the nature of the business, being quite different from governmentwide business or the Buildings Corporation.
Within the government itself, the highest absences tend to be in areas like Corrections or Riverview Hospital -- institutions, as I think the member can appreciate, that would have either potential for injury in the nature of the work or incredibly high stress levels, which could also affect illness.
F. Gingell: A quick technical question: in the STIIP, the short-term illness and injury plan, you pay 75 percent of the salary. Is that taxable?
Hon. E. Cull: Yes, it is.
G. Wilson: I'm going to try to be as specific and direct as possible so that I can get back into debate on bills before the House. I'm specifically interested in how this ministry functions with respect to implementation of the Korbin commission recommendations and, in particular, the establishment of public sector employers' associations. That's where I want to focus my questions.
The act as passed indicates that among other public sector employers who are subjected to this legislation, school boards and school trustees as defined under the School Act are included, as are institutions under the College and Institute Act. The B.C. Institute of Technology and the Open Learning Agency would be part of that. Could the minister tell us to what extent the ministry is directing the establishment of the employers associations that will be required by this statute over the administration of the collective bargaining process in those three particular groups?
Hon. E. Cull: The Public Sector Employers Act has created the Public Sector Employers' Council, which I chair, and I think the member is aware of its composition. There is also a secretariat that has been established to support the Public Sector Employers' Council. Linda Baker is the head of that organization, and she has a small staff supporting her in doing this.
The secretariat is providing staff support to each of the various employer associations as it gets up and running -- helping it form its bylaws and helping the appropriate ministry identify an interim board to get enough things up and running. We can then get the employers association designated under the Society Act and the like.
[3:15]
The process of establishing the employers councils has varied a bit as we've moved into it. The first one to be established was the Health Employers' Association, which started when I was the Minister of Health. We actually moved ahead of Judi Korbin. You may recall that in her interim report, she recommended the amalgamation of the main bargaining agents in health into one health employers' association. We started doing that before the Public Sector Employers Act was passed in the House, because the employers' associations themselves thought it was a good idea and decided to move in that direction. The Ministry of Health had a strong lead role with the Ministry of Finance in establishing that organization. The education employers' council was established in similar fashion, with the Ministry of Education having considerable input. Lynn Smith from UBC was hired in both cases to facilitate the process and to try to get an employers' association established. Other employers' associations have been simpler to put together. The university is one, for example. The four university presidents sat down and sorted it out; they didn't need an awful lot of assistance because there were only four of them, and they were already in the habit of working and talking with one another through a council that they had established. I'm less familiar with the details of how the college one was established, but support staff of the PSEC secretariat again provided the assistance.
G. Wilson: I'm curious to know what the ongoing relationship will be between the council and these various associations. It would appear that these associations are moving more and more toward the position of centralized, provincewide bargaining. I think that's a fair assessment to make, certainly within education. This is a departure from past traditions. I wonder to what extent the council is going to be charged with directing the associations through these secretariats that are providing assistance.
Hon. E. Cull: The act provides for the creation of the six employer associations. The head or the person designated by each employer association sits on the council, plus a number of cabinet ministers who are designated under the act. So we have a full council there. If you give me a minute, I'm sure somebody can find out exactly which cabinet positions are on the council so that I don't have to do it totally from memory.
The council has very specific responsibilities. One responsibility it does not have is directing how bargaining will take place. The council develops mandates for bargaining, and it develops human resources policy, such as the executive compensation policy we have been working on, which the Premier announced a few months back. But it does not set the way that bargaining will take place. The employers' association may be the bargaining agent for a particular sector, and it may not be.
In the case of the health sector, the HEABC is the bargaining agent. It's the amalgamation of the old Health Labour Relations Association and CCERA, the Continuing Care Employee Relations Association, if I've got the right words. You know who CCERA is, so I don't really need go through the acronym. They have always bargained in that fashion. But colleges will continue to bargain with their own unions. The employer association will not take on bargaining authority unless the employers decide to do that. If the
[ Page 11394 ]
employers in the colleges, Crowns or anywhere there are multiple employers in the association decided to form a single bargaining agent, they could do so under the laws that apply, but the act itself does not stipulate that.
In the case of teachers, as you know, we'll have a full opportunity to debate this when the bill is called for second reading and committee stage. The government decided that the system wasn't working, and it brought in a bill to create a bargaining agent for teachers at the provincial level, but it is not directed by the council or by the employers' association. In this case, the government has designated the employers' association to take on that function.
G. Wilson: That clarifies some of what I'm trying to get a handle on. With respect to colleges and BCIT, the employers' council, as it is being constituted, is mandated -- as I read this legislation -- to look after matters of collective bargaining. Whether or not they're the bargaining agent, they are the agency that is mandated to provide that direction. With respect to that, working conditions, salaries and so on are a key component. I assume that what the government is attempting to accomplish with the establishment of these associations in the first place is some kind of direction and control over the financing of public institutions. I think that's the bottom line of what's being attempted, and the minister can correct me if I'm wrong.
I don't want to get into legislation that needs to be debated in another forum, but in light of the clear movement toward provincewide bargaining and a provincewide employers' association in the educational sector, from kindergarten to grade 12, surely that is the first step toward the establishment of a provincewide agency for employees in the college sector. I wonder if the minister could tell us what discussions, if any, are ongoing, whether or not there's been a cost-benefit analysis done, what the cost savings to the public will be with respect to provincewide bargaining in the teachers' case, whether that decision has been taken under her ministerial jurisdiction and whether a similar cost-benefit analysis has been done on the question of colleges.
Hon. E. Cull: Just for the record, the legislation that is before the House does not bring in provincewide bargaining in the education sector; it only brings it in for teachers in the education sector. The non-teaching component remains as it is, so the implication that the member is drawing from that legislation -- that it is the first step of an overall government policy to move towards provincewide bargaining in all parts of the public sector -- is incorrect. There is no intention to do so. If there had been an intention to do so, I think we would have addressed all parts of the educational sector at once, not just teachers. As you have noted, we will be debating this in the chamber, and we'll get into the reasons why we've taken that step with teachers when we get into Bill 52, the Public Education Labour Relations Act. There has been no costing with respect to other parts, because there's no interest or intent in moving in that direction for other parts of the public sector.
G. Wilson: I'll just ask this last question and yield. Under Korbin, the clear intention is that there's going to be a greater fairness in terms of compensation. I think that one of the things that was established was that there was to be an opportunity for employees to have better access to employers through some kind of coordinated consultation on matters of workload and working conditions. I think that was a stated objective.
Another was that there was to be some kind of benefit to the public by establishing this commission in the manner it was set up and by centralizing authority into the hands of this ministry and this minister, and I think the council clearly provides that level of authority. Whether it's exercised or not is another question, and it may be exercised differently by this minister than by some future minister. In the projections in these financial estimates, can the minister tell us what the projected savings is this year of moving toward that direction? How do those figures compare with the implementation of this program over previous years?
Hon. E. Cull: The member is correct that the intent of implementing the Public Sector Employers' Council and the associations is to improve fairness for employees. It's also to improve consistency across the public sector, and I'll give you one example to illustrate what I mean. When I was the Minister of Health it always used to amaze me that the Deputy Minister of Health, for example, was paid, in some cases, 60 percent of what a senior hospital administrator would make, when the Deputy Minister of Health might have a budget of $6 billion versus several hundred million dollars in one of our larger hospitals. That's the kind of question we have to deal with. Our executive compensation varies across the public sector around a norm, and it varies across the public sector even for positions that are highly unionized, which you'd think would be more standard, such as nursing. So the idea of trying to provide greater consistency across the public sector is also a key objective of implementing the Korbin commission.
The other -- perhaps the one that goes nearest to the heart of your question -- is the whole matter of accountability. The way the system has worked up to now in terms of financial accountability is that for the most part, with the exception of direct government service and to a lesser extent the Crown corporations, third parties have negotiated contracts in good faith with their employees and then hoped that their budgets would cover them. What that does is either it puts incredible pressure on the organization -- whether it's a school district, a college, a long-term care facility or any other part -- to trim its services to fit the budget it gets through the budgeting process or, conversely, it puts pressure back on the government to fund whatever is negotiated by a party over which we've had no control.
What the Public Sector Employers' Council will do, which I submit will save us significant money over the long term, is establish bargaining mandates that all employers in the public sector will be aware of and will be using when they go to the negotiating table so that Treasury Board is aware in advance of their starting position, at least, when they try to settle a contract.
Beyond that, what we're doing right now with executive compensation is going to have a significant impact. We have frozen all executive compensation and asked each employers' association to come up with a fully costed-in set of benefits so that you can see the true compensation for anyone -- whether it's the head of B.C. Hydro, a deputy minister or the CEO of a long-term care facility -- and set some standards about what is allowed and what isn't.
Clearly, some of the things we learned as a result of the audit of the HLRA had a lot of people in the general public believing there was compensation beyond what we consider to be reasonable or normal or acceptable. By standardizing that to the extent that it's possible -- and it won't be absolutely identical right across the public sector because the jobs aren't identical, and the markets that those people are
[ Page 11395 ]
hired in are not identical -- we will have more accountability, and that will save us more money.
Going back to the compensation guidelines -- the mandates that are going to be established for bargaining -- one of the other things we're doing is taking a fully costed-in approach to any settlement. We all know that you can report settlements in different ways that appear to hide their costs. You can give benefits in kind as opposed to salary increases -- for example, increasing vacations or bumping up the amount of dental plan coverage. It tends to understate the cost of a settlement if you only report the wage increase that's been given. Some employers and unions have back-end-loaded contracts, which again tend to understate the cost of a contract.
We are going to be dealing with the public sector in a way that fully costs out everything. If you get another day's vacation, that gets costed out; if you can get your eyeglasses replaced more often or covered at a higher amount in your extended medical benefits, then that will become part of it. So we can truly compare -- at least across the public sector -- apples to apples as opposed to the kind of odd system we've had in the past. By improving accountability and improving reporting on contract settlements, we will be able to control and, I think, improve cost-effectiveness.
G. Wilson: I have a very brief last question that stems out of that answer. Surely, then, that's likely to drive costs up, not down. If I followed your response carefully, if you're going to look at consistency across the board, I would assume that in a manner similar to... Let's use teachers as an example, or any other public sector group. Health workers would be a useful group to look at, one the minister is more familiar with than I. If you're going to cost in benefits, surely what that would do is force you to make an adjustment. Agents that have bargained on behalf of employees in the past have been prepared to take compensation in the form of a benefit as opposed to a real wage as part of an overall packet to get by stalemates in negotiation.
[3:30]
As someone who has been a negotiator at the table, I have seen that the flexibility of the benefits portion of any wage negotiation is critical in the final analysis. It's an opportunity to take to members a packet that bypasses what would otherwise be seen as a dispute that you can't resolve. It seems that what you're saying is you're going to lump it together so that it's reported as a single dollar figure. That would work against cost savings; in fact, it would drive the thing up.
Hon. E. Cull: On the contrary, what will work in favour of cost savings is good negotiations, but that's sometimes misrepresented in the reporting. I wouldn't go so far as to say misrepresentation, because it's not always deliberate. When settlements are reported in different ways, sometimes you can't tell what they cost.
Using our own employees as an example, if you settle a contract with a zero wage increase with a week's increase in vacation, you've added 2 percent to the contract. If you report only that it's a zero percent wage increase, and somebody else in another union has given no improvement in vacation benefits but has bumped up wages 2 percent, you could look on the face of it and say: "That union or that employee group got 2 percent, and this group got zero; therefore they did better." In fact, by comparing costs, you could see the group that didn't take it in wages but took it in benefits got the same as the group that took it in cash with no improvement in benefits. It's a way of truly comparing what we are paying our employees.
The same applies to executive compensation. For example, a CEO decides to take a lower salary, but then gets a car and additional benefits. If you compare only the salaries, you're not really comparing everything that's valuable there. You have to know what other benefits there are. Whether it's a Crown corporation, a long-term care facility or the government, you pay for those services whether you give them in direct salary cost or in other benefits. So what we want to know -- certainly what I want to know as the Minister of Finance and chair of Treasury Board -- is what the inclusive cost of the settlement is going be, not just what the wages are going to go up by.
D. Mitchell: The minister will recall that March 22, the day she tabled her budget in the Legislature, coincided with a significant increase in the bank rate in Canada, signalling a period of volatility in interest rates in our country. The day following the budget presentation, I asked the minister a question in the House about the impact of interest rates on the provincial budget. At that time the minister indicated that everything was under control, and she expressed supreme confidence that the forecast in her budget would be fine over the course of time.
When she addressed the Vancouver Board of Trade a week later, the message was a little different. She said, and I quote from the Province of March 31:
"If our estimates in last week's budget on revenue and economic growth are wrong and our revenue isn't realized, the commitment has been made that we will reduce spending to come in on our deficit target. We will not increase taxes or let the deficit grow."
I wonder how the minister feels now about the interest rate forecast by her budget, now that we have more than two months of experience into the fiscal year. Is the Ministry of Finance preparing any spending cuts across government as a result of interest rate volatility, which has trended upwards during that period of time?
Hon. E. Cull: No, we haven't prepared any spending cuts. However, I do stand by the statement that you've read from the news report. In fact, that statement is contained in the budget itself. It is the commitment of the government that if for any reason we find our revenues do meet our projection, we will attempt to deal with it entirely through savings cuts. The only exception would be if between now and next March 31, the federal government brings in a minibudget or makes some change where there is a major off-loading of costs. There is in the order of several hundreds of millions of dollars not received from the federal government that might not, late in the year, be able to be contained within our budget.
But at this point I see no problems with respect to the interest rate increases. Certainly it has somewhat increased our costs of borrowing. But on the other hand, the lower Canadian dollar has worked to our advantage in the economy in that our exports are up, and therefore the revenues from that are offsetting the additional costs. Through our econometric model, we have done an analysis of various interest rate impacts on our forecast, and with the dollar falling we find that for the most part the impact is very negligible. Nonetheless, being a conservative Finance minister, I will continue to monitor the impact as closely as I can.
D. Mitchell: An initiative that the minister brought forward late last year through the B.C. Securities Commission was disclosure of executive salaries. The top five executives in publicly traded companies in British
[ Page 11396 ]
Columbia will now have their salaries routinely disclosed. This is a reform that other jurisdictions have implemented in recent years, and it's one that, quite frankly, I support. I think shareholders and companies have a right to know what their employees are earning.
I wonder if the minister can tell us why the same standard does not apply in the public sector. Why is it so difficult to find out what senior managers earn in the public sector of our province -- broadly defined -- not just in line ministries, but in various agencies, Crown corporations, commissions, etc.? Why does it take freedom-of-information inquiries or brown envelopes leaked to opposition members to find out what managers in the public sector are earning?
Hon. E. Cull: In the public service all of those salaries are reported. I think the member is aware of that. Every employee of the direct government service earning over $50,000, if I'm correct, is reported, so there's no problem with that.
The other problem, of course, is with the public sector at large trying to find out what superintendents of school districts or heads of Crown corporations make. Under the work that PSEC is doing right now, we are looking at the very thing you're requesting -- disclosure -- as one of the options for managing executive compensation. I tend to agree with the member's suggestion that it should not be difficult to get that. When I was a school board trustee, I recall trying to get information on what other similar-sized districts paid their staff so that we could do some cost comparisons, and I couldn't even get that as a trustee. In the public sector, I think the public does have a right to know what people are being paid, and we will be looking at that very carefully as one of the things we could bring in to shed a bit more light on that area.
D. Mitchell: I wonder if the minister, just to take this one step further, could indicate whether or not PSEC is looking at the possibility of perhaps a single registry of some kind, where taxpayers or any interested member of the public could find out what a senior manager in the broadly defined public sector would be earning -- something that simple. Is that what's being contemplated?
Hon. E. Cull: I don't know the exact details of what we're looking at right now, but that's a good suggestion. I'll make sure that the people who are working on it receive that suggestion so they can consider it.
D. Mitchell: One topic that was briefly canvassed yesterday in estimates with a question by the member for Delta South was the employee suggestion program. I'd like to ask the minister a question about the employee suggestion program across government, not just within the Ministry of Finance. It strikes me that this is a valuable program, but it might be a bit too timid and have too many restrictions on it. Maybe it needs to be opened up a little.
For instance, I note that management has significant influence on any suggestions coming forward, and there could be a potential conflict there. If an employee comes forward with a suggestion that might have an impact on his or her department or agency, that suggestion will not go forward unless management in that agency or department approves it. That has caused some frustration with this program in individual employees.
Furthermore, any suggestion that may result in the elimination of a job is considered dangerous and counterproductive, and it's hard to save money in government if it won't possibly or potentially result in a reduction in staffing.
One other problem with the employee suggestion program is that it does not apply outside of the public service; it does not include Crown corporations or other agencies. I wonder if the minister might indicate whether or not any thought has been given to expanding the employee suggestion program to include other agencies of government, in particular Crown corporations.
Hon. E. Cull: A number of Crown corporations operate their own suggestion programs or have similar initiatives. For example, I am aware that B.C. Rail has one.
The philosophy of the employee suggestion program is to try to get a hearing for every idea that comes forward. Recently we've rejuvenated the program with a bigger, more visible image in the ministries, with some very good proactive work being done under the employee suggestion program mandate.
Mentors have been set up, so not only do you rely on the ministry or the employee to come up with an idea, but there is actually somebody identified in different parts of government who will encourage people to come forward with their ideas and be proactive in providing information to employees. When someone says, "Gee, I don't know whether this is really the kind of thing I should put forward," they'll get the encouragement and support needed in putting together the proposal.
We've simplified the application form incredibly; it used to be quite complicated. I've compared the two forms. The present one requires only your name, where you work and your suggestion, as opposed to all kinds of hoops that you used to have to jump through to bring in a suggestion.
I think it's a very valuable program. Anything we can do to encourage more employees to come up with ideas is valuable. In that regard, I would mention that in the contract we've just negotiated with the B.C. Government Employees' Union, one of the memorandums of understanding is to work together with the union to come up with ideas to save the government and, more importantly, the taxpayers money.
It's been my experience, both as somebody who has worked in government and as a minister in the last three years, that's it's usually the people in the front lines who know where the waste is and where money can be saved. But no one ever asks them -- at least that's what they will usually tell you, and that's certainly what I used to feel. You could never get the ideas attended to by people who could really make a difference. We have engaged a process with our own employees to encourage them to start to look at areas of waste in government or at areas where we could save money, and to come forward and offer up those savings without the fear that they're going to lose their jobs, or that their managers will be angry because they've done someone else out of a job by deciding a whole branch could be downsized or reorganized.
D. Mitchell: I'd like to encourage the minister to light a fire under employees who really do want to bring forward constructive suggestions. Why is $25,000 the maximum payment for an individual or a group of employees who come forward with a suggestion that will be implemented under the employee suggestion program? Also, why is it necessary for the minister herself to approve any award over $5,000? Why are these controls necessary?
[ Page 11397 ]
Hon. E. Cull: The $25,000 limit is simply a judgment of where you're going to draw the line. If you're going to draw it somewhere, $25,000 is the place that line has been drawn. The reason the Ministry of Finance gets involved with larger awards is to ensure there is consistency across government with respect to the evaluation of those larger awards.
D. Mitchell: One concern that has been raised about the ESP is its financial accountability. In particular, there have been charges that the program's proclaimed savings are not always realized. Does the ministry have a program in place to audit any suggested changes that are implemented as a result of this program in order to ensure that those savings are in fact realized?
[3:45]
Just one other comment on this. The minister has suggested a mentor program be implemented. Has any thought been given to allowing mentors from outside government to help with or adjudicate suggestions that are coming forward? In other words, is it possible that independent outside bodies could be used to judge the merits of suggestions coming forward rather than managers within government possibly being in a conflict of interest while adjudicating these suggestions?
Hon. E. Cull: I'm not certain to what extent there is follow-up with respect to the savings. I do know that in the evaluation of the suggestions there is fairly rigorous work done to ensure that the savings are real and not simply imaginary or wishful thinking. Unfortunately, I can't confirm to what extent ministries then go back to check and quantify that the savings took place.
I take exception to your suggestion that managers are in a conflict of interest. I personally was involved with three awards because they were significant in my own ministry, and I took the opportunity to personally meet with the employees and provide them with their cheques and awards. I asked each one of them what they had done to improve the operations, and some of the things suggested were very technical. They're very much related to the internal workings of the government, and I'm not sure that we would add a lot of value by having someone who was unfamiliar with the workings of a government agency provide an opinion as to whether it was valuable or not. We might lose a lot of good suggestions simply because it may not seem that significant to someone else to move from a form that's laid out this way to a form that's laid out that way. But it could make a lot of difference to the way people are able to do their jobs.
I think the suggestion that there be some external review of government efficiency from time to time or that we use external consultants to determine whether we can make cost savings is a valuable one. We do that from time to time. When we want to look at whether a particular operation of government is cost-effective, we have a number of internal options to us, but we can also use external consultants or external management advisers. I think that has merit, and I would certainly encourage it in my own management capacity. I would encourage other ministers to do that as well, when it is appropriate to have someone else come in with a very cold outside look at what we're doing.
D. Mitchell: If the minister is going to engage any outside expertise in a review of the ESP, I hope she would be willing to share the results with members. Likewise, she may want to consider encouraging the auditor general to do a review or an audit of the employee suggestion program at some point.
I wonder if I could ask the minister a question that I've been encouraged to ask her by her colleague, the Minister of Government Services. It relates to a special program the government has initiated for employees wishing to volunteer, so-called, for the Commonwealth Games. The Minister of Government Services couldn't answer my questions on this -- not all of them -- and he suggested that I raise them with the Minister of Finance.
Apparently employees of the government, members of the public service, have been invited to volunteer with pay during their summer holidays for the Commonwealth Games. To my knowledge, about 125 have been approved so far for this perk, I might call it. I'm not sure how the minister would describe it. This is at a time when thousands and thousands of Victoria and Vancouver Island residents have come forward wishing to volunteer for the Games, and many of them have been turned away. Can the minister describe how this program was created and how employees are actually chosen to receive this perk?
Hon. E. Cull: The government has responded to a request from the Commonwealth Games Society to participate in what is called a corporate match of volunteer time. Other corporations in the city of Victoria have been participating in this particular program.
The program provides up to a maximum of eight days' leave, provided that the employee has first of all donated eight days of his or her vacation time. The employee must give up eight days of vacation, and if they do that to volunteer, then we will match those days, up to eight. To qualify, they have to provide their employer with verification of their official status as confirmed volunteers with the Commonwealth Games, and they must be scheduled to volunteer by the Commonwealth Games Society. You have to be accepted as a volunteer, and you also have to have verification that you've been scheduled for so many hours or days.
No leaves have to be granted; it's not a right of employees. It's an option that employees can exercise at the discretion of management, and no leaves will be granted unless the operational requirements of the organization can first be met. If there is any problem created by that individual being absent for any of that time, then the approval will not be given. If it would require backfilling of that individual, the approval will not be given because ministries will not be funded to do that. The decisions that are made rest with each ministry, but the government was asked by the Commonwealth Games to participate in the corporate match program as part of our overall contribution of government supporting the Games, and we've done so in this fashion.
D. Mitchell: Could the minister agree to provide a list of all the employees who will be participating under this match program? Could she also provide to the committee a cost to the taxpayers and government for this benefit to the Commonwealth Games Society?
Hon. E. Cull: It would be very difficult for me to provide you with a list of the names, but I could certainly provide you with the final number of individuals participating. You are right: 125 is the number we currently have. Until everybody is scheduled, we won't know whether the full 125 have actually been scheduled to volunteer and therefore have taken off time to do so, or whether they would use any of the corporate match time to do it. There will be no replacement hiring for these individuals, so there will be no additional cost to government for providing this.
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D. Mitchell: Just for clarification, I understand that, according to the minister, the employees are being allowed to volunteer with pay for eight days each. These are normally holidays, but government employees are paid for holiday days. Unless I'm misunderstanding it, there must surely be some additional cost to the government for this program.
Hon. E. Cull: Say a volunteer decides to do this and is scheduled for four days of volunteer activity. Pick a number. Two of those days must be vacation days, so they take their vacation. Employees can do whatever they like on their vacations, and they do receive pay while they're on vacation, of course. The other two days would be paid leave of absence, in that they would not be at work but would be paid, and that would be the corporate match. The additional cost to government would occur only if there were costs over and above the salary that would be incurred for that employee if they were at work.
If they were at work for four days, they get four days' pay. If they are on vacation for four days, they get four days' pay. If they go into the Commonwealth Games program and take two days of vacation and two days of the corporate match, they get four days' pay. There is no additional cost to government.
The only additional cost that would arise is if on the two days that the person was away on the Commonwealth Games corporate match, the ministry decided it had to hire a replacement person to assume that person's responsibilities, and the ministries have been instructed not to do that. They can approve leaves only when there are no operational requirements that would have to be backfilled.
D. Mitchell: This information certainly doesn't jibe with the information the Minister of Government Services has provided the House. He certainly implied that there would be some extra costs. I suppose we'll have to wait until after the program is completed to fully assess it.
Why does the minister indicate to the committee that it would not be possible to provide a list of names of government employees who would be participating in this program?
Hon. E. Cull: I would imagine -- and I'm certainly not an expert on this -- that it would be a question of privacy for those individuals. I would not be in a position to indicate who had participated in the Commonwealth Games as a volunteer and who hadn't. But beyond that, it would be somewhat difficult to pull all the names together, because it will be done on a ministry-by-ministry basis.
I would be quite happy to determine the number of individuals who will apply for the corporate match, because our leave management program will, of course, have to deal with that aspect of it.
D. Mitchell: Perhaps I could move on. I'm not going to belabour this question today; perhaps on another occasion we might pursue this.
The budget the minister tabled in the House indicated that the government was interested in increasing and enhancing the accountability of Crown corporations, particularly with respect to the taxes they pay. I think property taxes were mentioned. That raises the issue of B.C. Rail, a Crown corporation I'm interested in. Could the minister tell us what specific initiatives so far have flowed from the budget that will meet the commitment and the goal that was outlined, which I am referring to?
Hon. E. Cull: The provision in the budget that I believe the member is talking about is the grants in lieu of property taxes. That commitment was made in the budget as a result of the longstanding requests that have been made by the municipalities of Saanich, Oak Bay, Burnaby -- and soon Prince George -- with respect to grants paid by the universities within their borders. Clearly, as a member representing two of those communities and the University of Victoria, I am very familiar with the additional costs that have been borne by those municipalities. In my prebudget discussions I received representation from the Union of B.C. Municipalities about not only the issue of universities but the larger issue of grants in lieu of taxes.
[D. Schreck in the chair.]
B.C. Rail is not part of the consideration there. What we are looking at primarily are those unique institutions like universities, but potentially some of the other provincially owned institutions that generate a cost on the municipalities. I don't want to get into this at any length. But to use the University of Victoria example, which is the one I know best, 15,000 people are at UVic every day -- at least Monday to Friday -- and have created incredible pressures in those two municipalities for sewer, water, roads, fire and police. The benefits of the university are much broader than just Oak Bay and Saanich municipalities, and they have been asking for a little bit of equity with respect to the cost versus the benefit distribution.
As for the Parliament Buildings that we're in right now, we do pay a grant in lieu of taxes to the city of Victoria, recognizing the cost of providing services to this building and its employees. It's on that basis that I committed through the budget to take a look at the whole question of grants in lieu of taxes. We have done some preliminary work on it, and it's not completed. When we have finished our work, we will start to see within the constraints of the budget to what extent we can implement it.
D. Mitchell: I have just one final question to clarify, and I thank the minister for her answer. Am I to understand that at the moment no specific work is going on in the area of grants in lieu of taxes for Crown corporations, such as B.C. Rail?
Hon. E. Cull: Not with respect to the comments that were made in the budget. You linked it back to the budget that I presented. There may be work taking place through the Crown corporations secretariat, but I regret I'm not the minister responsible for that, so I can't respond on that. I can only respond to the comments that were in the budget.
J. Weisgerber: When the government set out to eliminate or at least severely reduce the number of independent contractors working within government, it approached that on a number of fronts. One involved Judi Korbin in the Korbin report; and following that, something that has come to be known as Korbinization.
The other thing that became obvious was that the Premier and the government were portraying these employees as being illegally hired. As their reference for that, the government used a ruling from Revenue Canada indicating that the contractual arrangement with these contractors was indeed an illegal arrangement.
In February I wrote to the Public Service Commission asking for a copy of this ruling from Revenue Canada. The minister might remember that I didn't get what I had asked for; instead I received a wealth of information about
[ Page 11399 ]
individuals which was clearly inappropriate to have been released.
[4:00]
Unfortunately, my original request got lost in that process. Instead, there was great deal of debate around the information that was released. I expect that the temptation exists again today. Putting aside the peripheral issue, could the minister tell me what steps have been taken both within her ministry and within government to ensure that the kind of information that was provided to me in response to this question -- which I'd never asked for -- wouldn't be released in the future practice? What steps have been taken to ensure that the privacy of individual British Columbians won't be violated as they were in March?
Hon. E. Cull: As I think I said at the time, and certainly a day or two ago when we were talking about the introduction of freedom-of-information and privacy legislation in this province, it's a bit of a learning curve for our employees. Some of them are not used to the procedures, because they don't handle these requests on a regular basis. Sometimes the first request can give somebody a lot of trouble; I'm not sure exactly who -- the minister, the employees or the people involved.
We have identified within PSERC an individual who is responsible for handling FOI requests, so we have an expert resident to provide advice and, more importantly, to monitor in depth the decisions made by the employees who are receiving the requests. We have also done follow-up educational work within the commission to ensure that our employees are more appropriately informed about the legislation.
Within the Ministry of Finance there is a designated FOI person. As a result of the unfortunate incident you've just referred to, we have ensured that procedures within the ministry are tighter. We've gone back and made sure that people do understand the law. We've always had an FOI person in the ministry, but we've strengthened the relationship. If individuals have any doubt as to what they should release, they can be advised by people who have greater expertise about the legislation.
J. Weisgerber: I'm sure that situation exists. The core issue in my request was to find the document that the Premier, government officials and ministers regularly refer to as a ruling from Revenue Canada indicating that the working relationship between the independent contractors and the government is illegal. The clear message I got with this bundle of personal information was that there was no decision. There had indeed been a series of queries from Revenue Canada on specific issues, but Revenue Canada had never made a ruling or a statement, or at least the government was not prepared to provide me with any ruling on the question of the relationship between contractors and the government, except with regard to specific individuals.
What I'm trying to determine is whether or not there is more than this information that was sent to me on a dozen or 15 individual files. Are those what the government and the Premier have been referring to as the decisions from Revenue Canada? The ones I saw covered a whole range of issues; they were here, there and everywhere. There was not even a common trend to the information that I received. Personally, I wouldn't ever interpret that as a decision from Revenue Canada on a whole group of employees. Does the minister have more than what they were able to provide me in March?
Hon. E. Cull: What you received is a sample of a very large file of ongoing queries from the federal government with respect to the status of employees. There were many discussions between my staff and federal officials with respect to specific cases. We would not know whether any individual had been assessed a tax as a result of those inquiries. That would not be a matter the federal government would share with us, for obvious reasons.
What we established through the course of the Korbin commission was that there were essentially three categories of contract employees. Some of those contract employees were individuals who had only one contract with one ministry. It was an ongoing and full-time contract. The individual came to work, sat at a ministry desk, used a ministry phone, often had a ministry credit card, had ministry support staff and all the rest, and essentially acted as an employee.
As a former government employee, I have firsthand knowledge of this. When the former government froze the Ministry of Municipal Affairs FTEs in the Islands Trust, the Islands Trust needed some secretaries, so they hired them from one of the temporary agencies. Some of those individuals were there for a number of years and, I must say, were being paid significantly less than they would have been paid as regular public service employees. Unfortunately, the Islands Trust was paying more on those contracts than they would have paid if they had had those individuals simply there as employees. The perversion of the system in those days did some very strange things.
There were lots of other reasons, though, why ministries would hire people on personal service contracts. Those are the ones that Revenue Canada began to question us about, because they had concerns that they would not qualify as a contractor under those circumstances. That is one category of employee.
Another category of employee was those people who might have had more than one contract, or might not have been coming in and using the government office in the way that I've just described. When we reviewed them, we determined that we could provide the services cheaper in-house by hiring people. There was a need for ongoing work there year in and year out, and we could get a better value for the taxpayer. That was another category of employees.
The third category of contracts that we reviewed were legitimate contractors in that the work they did was what you would expect to hire on contract. It was unique; it was periodic. It was something that happened at one point in time that was going to have a short life span and then go away -- the type of thing we would expect to see as a contract.
During the course of events leading up to Judi Korbin's work, there were a lot of grievances brought by the union with respect to various contractors, as to whether they were employees or not. We lost a lot of arbitrations on this case, because the arbitrators agreed with the employees -- or with the union, in this case -- that they were in fact employees.
J. Weisgerber: What we've heard from the minister are arguments about the economics of the various types of contractors. If the government had come forward, saying it could prove that there were more cost-effective ways to deal with staff requirements than the independent contractors it employed, or saying it didn't believe as a government that these were the most cost-effective ways, then I think there could have been a dialogue. That dialogue would have said that you were ignoring the issues of separation that are
[ Page 11400 ]
avoided by contractual arrangements, when someone may come into the service, work for a year or even two and sit at a desk doing a specific task.
With all respect, my questions are not on whether having the independent contractors was an economic advantage or disadvantage to the government. My questions are, and have been since February, about the government routinely and repeatedly referring to a warning that Revenue Canada issued to the province regarding individual contractors. I wrote to the minister through PSERC, asking for a copy of the warning that the government continues to refer to, but I didn't get back a copy of it.
It appears that no generic warning has ever been issued, and that Revenue Canada and other agencies have written to the province regarding a number of issues involving contractors. I got more information than I needed about those contractors and their relationship with the government. What I was seeking was a copy of the warning that the Premier and the government routinely refer to, and to date, I still haven't received one.
If none exists, and if the minister would simply say she never received a warning but had received a number of correspondence issues on specific individuals, I would accept that. I would certainly be even more inclined to challenge future comments about warnings received from Revenue Canada concerning the relationship with individual contractors.
If we can -- and it's kind of a role reversal -- I'm asking that we focus more on the question. I can appreciate that normally it's the minister requesting the opposition member to focus the questions. But the questions are pretty clear: does or does not any directive or warning...? And if they came in from Revenue Canada in the quantities we are being led to believe they did, surely to goodness Revenue Canada would make a ruling, not related to an individual, and would write to the province to say they are aware of this practice and here's what's wrong with it.
That would be a pretty standard response. I think it would be the kind of response this government would expect to give in a similarly related subject -- dealing with municipal government, for example.
Hon. E. Cull: I don't disagree with the last point, that this might be the way that I or the government might like to respond, but unfortunately, that's not the way Revenue Canada responded to us. During the 1980s, Revenue Canada did repeatedly advise individual ministries that they weren't complying with federal regulations in individual cases, but they didn't make a ruling or send a generic letter. They didn't tell us to cease and desist.
In the Korbin commission's report on the public service, volume 1, it states:
"Determination of the appropriate status of contractors is a question of law. Some of the tests used to evaluate bona fide employee status include: being compensated through the government's payroll, having the use of a government office, having the use of government equipment, using government business cards."
This status under law is what led to the arbitrations.
If the member is asking me if I have a ruling from Revenue Canada that I can give him, the answer is no. But my concerns as the Minister of Finance and those of the government have got as much to do with cost, fairness and equity as they do with a ruling from Revenue Canada. The member has focused on that particular aspect of the statements that other cabinet members have made in this regard, but I can tell him as the minister responsible -- and maybe even more importantly, as the Minister of Finance -- that my concern is cost.
[4:15]
Having gone through those contracts, I can tell you that we are now getting better value for our dollars and that those employees are costing us less overall, as a result of having determined who should really be on contract and who should really be part of the public service.
J. Weisgerber: I would suggest that if those economic arguments were as compelling as the minister would like me to believe, then the government wouldn't have had to resort to trotting out, time and again, this bogeyman of Revenue Canada, when none existed. Unless the minister wants to move on to debating the cost-effectiveness of individual contractors versus employees, I suspect that we will at least agree there is no ruling that in any way broadly deals with the legality or illegality of contractors working for government.
F. Gingell: To pick up on one matter that came up, earlier in these estimates I asked how many employees you had within your staff to look after the issues of freedom of information and privacy. Somewhere in my book I wrote down one and a half. By the sound of it, I've just heard that there's another one. If you look at all of the people that report to you, including any Crown corporations and any commissions, such as Superannuation, can you tell me if that number is greater than one and a half?
Hon. E. Cull: The confusion is that the answer of one and a half FTEs relates to people whose full-time job is to deal with FOI. The person who has been assigned in PSERC to look at FOI issues is not on that full-time; it's just that one person has been designated to have FOI as part of their responsibilities within all of their other duties. I believe the Lottery Corporation has done the same. There will be staff designated in various parts of the ministry who have some responsibility with respect to freedom of information, but it would be as part of their overall duties. They are not specifically FOI staff.
F. Gingell: I was trying to get some kind of feel for what FOI is costing us globally. I think the number is huge, but I'm not sure of that. So when you said one and one half, I said maybe somewhere between $100,000 and $120,000 for the Ministry of Finance. But when you start thinking about the additional resources that are being used in the total scheme of things, does the minister have any idea of the total cost that's a little bit here, a little bit there and a little bit somewhere else? And are you planning on trying to find some means of measuring it?
Hon. E. Cull: It would be very difficult to determine that. For example, you can determine the costs that would be attached to employing a program manager. If that program manager happens to handle part of a FOI request in the course of his or her duties, I don't know how I would apportion that out, unless I looked at the hourly rates and started charging it off against accounts. It would be impossible to tell and, of course, it would vary. You could get ten requests in the course of a year going into our revenues branch, then next year have none and have everything else over in PSERC, and it would be very difficult to be able to even guesstimate the cost there. I think the best indicator would be the additional full-time staff that we have to employ to look after this matter. The answer I gave you the
[ Page 11401 ]
other day indicates the extent to which we actually have that dedicated staff working on it.
R. Chisholm: Hon. minister, I've got a couple of questions pertaining to agriculture specifically. As you know, the BCFA recently voted down the ALR because the agriculture industry is not in that healthy a position due to the returns they're getting off the farms. As a matter of fact, the average income is $37,000 on the average farm, compared with $42,000 for the average family. About 58 percent or $21,251 of farm family income is earned off the farm, and this subsidizes the farm. With the BCFA voting down the ALR that this government has a policy of maintaining, are there any ideas in the future of reducing the taxes on farmland to make the ALR more palatable to the agriculture industry and more than just a custodian of the green spaces in this province?
The Chair: Hon. members, a five-minute recess is declared at the request of a member and in order to give the minister time to contemplate this dubious question of future policy.
The committee recessed at 4:21 p.m.
The committee resumed at 4:29 p.m.
Hon. E. Cull: Before the break the member was asking about any proposed changes to taxes in the event of changes to the agricultural land reserve. Obviously I can't comment on that as it would certainly be, as the Chair has already indicated, a matter of future policy. If there are changes to the agricultural land reserve, we'll certainly look at the tax implications at that time.
[4:30]
R. Chisholm: I was just hoping and fishing a little bit there. I foresee a problem in that area and hope that the government is listening.
On the same subject of the economic situation of agriculture and farms, we are not in a very competitive situation on gasoline taxes, for instance, with respect to the state of Washington or Alberta. We don't seem to be competitive in a lot of these areas. Are there any ongoing studies or negotiations between you and the Minister of Agriculture to see a reduction in the input costs on these farms, which would assist in their survival and the overall picture for agriculture in this province?
Hon. E. Cull: I've been in discussions with the Minister of Agriculture about a lot of these comparative and competitive issues. We do monitor our neighbours of Washington and Alberta across all of our taxes, not just those that would affect agriculture. We'll continue to do that, but there are many factors that have to be considered. You can't simply compare a tax and say that it needs to be adjusted, without looking at all of the other inputs that would affect any particular business.
R. Chisholm: My last question in this area concerns interprovincial barriers. I realize there are ongoing discussions. Is there going to be a reduction in these? Are you backing reductions in these barriers that would assist this industry?
The Chair: The Chair cautions all members that the only questions in order in these estimates are on those matters that fall within the administrative responsibility of the minister. Within those narrow confines, the hon. minister continues.
Hon. E. Cull: I would be straying beyond my ministerial responsibilities to discuss agriculture and interprovincial trade barriers. I'm sure the member will put those questions to the minister responsible when we get to his estimates.
K. Jones: I'm changing the subject to the area of the B.C. Lottery Corporation. Does if the minister have appropriate people here for that, or would she like to have it taken up at some later time?
Hon. E. Cull: I don't have any staff here, but I am reasonably well briefed on the Lottery Corporation. We will attempt your questions, and if you get into areas that I'm not familiar with, then we'll have staff here at the next opportunity.
K. Jones: Were any changes planned in the role or in the activities of the B.C. Lottery Corporation in the past year, or have any been planned for the current fiscal year?
Hon. E. Cull: As the member knows, right now gaming is under review by the minister responsible, the Minister of Government Services, and the Lottery Corporation has been asked to make no significant changes to its operation in terms of expanding gaming or moving into any new areas that would be beyond its current scope.
I'm being somewhat careful with my words, because obviously they may change a lottery product from one type of game to another, but it would still be the same type of gaming product. They are making adjustments all the time with individual lottery products. But regarding some of the plans they have developed over the last year with respect to electronic bingo, electronic gaming, Club Keno, and the like, all of those expansions are on hold until a decision is made on gaming. Once this has been done, they will either proceed or not proceed, based on the decisions made by the government.
K. Jones: Going back to the first part of the question, were there any significant changes in the role or in the activities over the past year? Since we haven't got the annual report for 1993-94, in preparing for this year I'd like to ask some questions with regard to the fiscal year 1993-94.
Hon. E. Cull: I don't believe so, but then I'm not absolutely certain when Starship Bingo started. If it was within the last 12 months, that would not have been there, but I'm sure the member is aware of the Starship Bingo pilot project. It seems to me that that's more than 12 months old; so in the last 12 months, in the 1993-94 fiscal year, I'm not aware of any changes.
K. Jones: I believe Starship Bingo has been in operation for about four or five years.
A statement was made by the minister with regard to the professional basketball franchise in British Columbia, and I believe there was to be a change of the sports lottery program at some time. Could the minister tell us when that was to come into effect and how much difference in money it would constitute for the Lottery Corporation?
Hon. E. Cull: We have a memorandum of understanding with the owners of the new NBA franchise that when the NBA actually comes to Vancouver, it will be removed from
[ Page 11402 ]
the sports lottery ticket. The owners will then pay us an amount each year, which is, I believe, $500,000 a year for five years -- equivalent to the amount of revenue we were raising on that portion of the sports lottery ticket. They have, if you like, provided us with cash to have themselves removed from the game.
K. Jones: Just to clarify, are you saying this arrangement means that the basketball portion of the sports lottery will continue right up to the date the new Vancouver basketball club will start operations? Is that the date this comes into effect? Do you start a five-year paid plan from then on?
Hon. E. Cull: I don't have the agreement here with me. There is a trigger point that is a little more precise than the first basketball game, but I can assure the member that it hasn't been implemented yet. The memorandum of understanding is triggered by the start of basketball in Vancouver. I can't recall whether it's a specific date before the first game or a specific contractual arrangement.
K. Jones: I think the minister has an indication of some difference in revenues to the Lottery Corporation and also a difference in revenues, ultimately, to the province at that point. Could the minister tell us what that difference would be, first of all?
Hon. E. Cull: It's estimated at $2.5 million, which is why we have asked for $500,000 for five years.
K. Jones: Is that $2.5 million projected every year, or is it projected over the five-year period?
Hon. E. Cull: Over the five-year period; it's about $500,000 a year. The reason we selected five years, on the advice of the Lottery Corporation, is that within five years they expect that product to be significantly changed, and projections beyond that would not be meaningful in any way.
K. Jones: Does that mean that after the five-year period the Lottery Corporation would not be allowed to go into basketball or any other basketball-oriented gaming process as a condition of this agreement?
Hon. E. Cull: They would not be able to have NBA basketball as part of their products, but as you will learn if you talk to the people at the Lottery Corporation, all lottery games have a limited shelf life. I guess people become tired of them after a while, so products come and go all the time. They have to change their products to keep the interest of the players involved in them. They anticipate that in five years this particular sports lotto would not be in the form we now know it, so a new product will come into place.
F. Gingell: Cockfighting is coming back.
K. Jones: As my colleague said, maybe cockfighting or something like that by that time. I hope that we don't get into that sort of thing, but....
Hon. E. Cull: The agriculture people wouldn't like it.
K. Jones: Yes, we'd have problems with our agricultural area and many other people, I think. Could you tell us whether this particular change will occur within the current fiscal year, and has that been taken into consideration in your budget?
Hon. E. Cull: I'm sorry?
K. Jones: Since this agreement on basketball is coming into effect shortly, have you determined whether it will be in this fiscal year, and have you taken that into consideration in your budget?
Hon. E. Cull: It's not clear yet whether it will be this fiscal year or next; it will depend on the date we were just talking about with respect to the agreement we have with the NBA owner -- the trigger point for taking the NBA off the sports lotto. And that will depend on when the franchise actually becomes established in Vancouver. Because we don't know that date, it's difficult to predict whether it will be in this fiscal year or next.
K. Jones: Could the minister give us the 1993-94 revenues and expenditures and the advertising expenses for the Lottery Corporation to fiscal year-end March 31, 1994?
Hon. E. Cull: I don't have the gross figures here; I don't have the annual report with me. As the member is aware, the net revenues to the province are about $220 million. The member has the annual report for 1993-94.
Interjection.
Hon. E. Cull: Sorry, it's the 1992-93 report that you've got.
K. Jones: I have the 1992-93 budget, which was tabled in the House in April of this year. However, I was asking questions relating directly to the 1993-94 fiscal year on which your present budget is based. You're projecting from the 1993-94 budget to make the 1994-95 budget that we're working on at the present time.
Hon. E. Cull: These are not the gross revenues; these are our net revenues to the province. Contributions from government agencies shown in the 1994-95 estimates total $230 million in revenue, which we divide. Half goes to health care and the rest goes into general revenue.
K. Jones: Could you also tell us what the total gross revenues, expenditures and advertising figures of the Lottery Corporation were for that same period?
Hon. E. Cull: I wasn't anticipating questions on lotteries this afternoon, but I have asked that the figures be sent in to me; I expect to receive them shortly. If the member wants to continue with his questions, I'll provide him with the information as soon as I receive it.
[4:45]
K. Jones: I'll be happy to have that information later.
I'd like to ask you about another aspect of this year's budgets, hon. minister. Could you could tell us the amount of dollars spent on sales incentives? Could you also tell us the status of current major sales incentives that the Lottery Corporation is using?
Hon. E. Cull: Is the member referring to the boxes at GM Place when he asks about current sales incentives?
[ Page 11403 ]
K. Jones: Yes, that's one of the items. Perhaps there are some others that you could provide details about. I'm asking about any of the major sales incentives.
Hon. E. Cull: The member is aware that I've asked the Lottery Corporation to review the boxes at GM Place and B.C. Place as sales incentives; they have, and they have decided to discontinue them.
Interjection.
K. Jones: On what date will these be discontinued? Have they been discontinued?
Hon. E. Cull: The GM Place box has been discontinued already. It was a decision they had made which had not yet been implemented. I'm not sure at which point they will be selling the B.C. Place box, but they have made the decision to sell it as soon as it is practical to do so.
K. Jones: Could the minister tell us what the total loss would be to the Lottery Corporation, having made the decision to cancel the GM Place box?
Hon. E. Cull: I'm told there is no loss at all.
K. Jones: Could the minster tell us how much revenue is expected to be gained from the sale of the B.C. Place box?
Hon. E. Cull: I don't have that figure.
K. Jones: Would it be possible to acquire that for presentation to us in the near future? I have a yes commitment from the minister, for the record.
I'd like to ask whether the minister has been briefed on the status of the electronic gaming terminals used by the Lottery Corporation.
Hon. E. Cull: I'm not sure what the member is referring to. If he's referring to the video lottery terminals, there are none legally in place in terms of gaming terminals in British Columbia.
The Chair: The Chair cautions all members, recognizing that the Lottery Corporation does fall within these estimates, that going beyond the scope of what falls within this administrative responsibility would be out of order.
K. Jones: I'm not quite sure what you were indicating, hon. Chair, but I'll try to consider whatever it was.
With regard to electronic gaming terminals, which, as you have indicated, cover electronic bingo, electronic keno, electronic slot machines, electronic poker machines or any other types of electronic gaming machines, the Lottery Corporation has already designed and built some machines of this type. They have demonstrated them to the public already, and they were very seriously prepared to move into that business a year and a half ago. Could the minister tell us how many machines in this category are currently in the hands of the Lottery Corporation or on order by the Lottery Corporation?
Hon. E. Cull: I'm aware of the fact that they have a number of demonstration machines. In fact, I've had a chance to look at them in their Kamloops office. I don't know how many they have in total, but it would be a very small number. They would not have any on order, or certainly should not have any on order, because the decision to expand into electronic gaming has not been made by the government. The Lottery Corporation knows that and knows there is certainly no guarantee that there will be a decision to expand into that area of gaming.
K. Jones: Has the minister looked into the possibility that there are machines in storage at the present time or that orders are there, pending an agreement in regard to this? Could the minister, if she doesn't have the answer, obtain that answer and report back to us as soon as possible?
Hon. E. Cull: As I said, I'm certainly not aware that they have ordered anything on spec, as you might put it. I certainly think it would be inappropriate for the corporation to have done so when there has been no decision by the government to make a move in that direction.
K. Jones: Has the minister any knowledge of the Lottery Corporation entering into tentative agreements, pending legislative changes, with regard to gaming equipment? Is the minister aware of any agreements that have been made under the current legislation that allow video bingos to be expanded beyond Starship Bingo?
[H. Giesbrecht in the chair.]
Hon. E. Cull: No, I'm not aware of any such arrangements in British Columbia at all.
K. Jones: Is the minister aware that video bingo is legal in British Columbia at the present time?
Hon. E. Cull: I'm aware of the pilot project that is happening with Starship Bingo, but there are no expansions that I'm aware of.
K. Jones: That wasn't exactly the question I was asking. I was asking if the minister was aware that video bingo was legal in British Columbia.
Hon. E. Cull: I am aware of the amendment that was made in 1993 that allows the Lottery Corporation to enter into agreements regarding lotteries conducted on behalf of the government. As far as I know, there is only the Starship Bingo electronic bingo pilot project. It remains in that category, as it has for a number of years, until a decision has been made as a result of the gaming study, which is underway right now and is not due to conclude until the fall.
K. Jones: Could the minister tell us how many applications are in the hands of the Lottery Corporation with regard to video bingo operations, and how many electronic units would be involved in each of those applications?
Hon. E. Cull: I'm not aware of any applications in the hands of the Lottery Corporation. As it is right now, there is only the one bingo and there has been no decision to expand. Until that decision has been made, it would be inappropriate to obtain, collect and start to review applications.
K. Jones: I have spoken to people who have actually made application and, according to them in the middle of last summer, were within two weeks of having an application approved. Perhaps you should check back with the Lottery Corporation and verify whether they are holding any
[ Page 11404 ]
applications. I believe they are holding applications pending the decision on gaming.
I also believe that they are holding applications made by hoteliers, Legions, social clubs and various other organizations -- including some charitable organizations -- for slot machines or video gaming machines on the assumption that there will be a government decision to allow those. These people want to get to the very front of the lineup that's already building to have those facilities. There seems to be unclear direction from the government as to which way the people of British Columbia want the whole issue of gambling to go. Perhaps the minister would like a little time to get further information in that regard.
Hon. E. Cull: I don't require further information. The events that the member is referring to from last summer predate my responsibility for the Lottery Corporation, so I wouldn't have personal knowledge of them. More importantly, they also predate the government's decision to impose a freeze on all expansion of electronic gaming until the minister responsible has completed the gaming study being conducted.
The Lottery Corporation tends to be entrepreneurial. They are the operating arm of government with respect to lotteries in British Columbia, and they have been keen not only to maintain their revenue but also to expand that revenue on behalf of taxpayers. So they've come forward with a number of ideas to expand gaming, at least over the three years that I have been a cabinet minister. For policy reasons the government has not acted on them and it has now rolled all these initiatives together into a gaming study, of which the member is quite aware.
There is no confusion on the part of the Lottery Corporation with respect to their role in gaming. I have met with them, as has my parliamentary secretary, who has special responsibility for the Lottery Corporation and has made it very clear to them that the government will set gaming policy and the Lottery Corporation will carry out that policy.
If they have received applications, I can't stop people from sending them in. I can't stop groups from suggesting that they should receive permission to operate various types of electronic gaming. Those types of applications will come forward, no matter what the government's policy is, while that is still under review. But I think everyone in the province now knows that there will be no decision on expanding electronic gaming until the studies have been completed. None of these initiatives are going to be implemented until a decision has been made, no matter how far they have gone within the corporation.
K. Jones: Does that mean that the minister has directed the chairman of the board and the chief executive officers of the Lottery Corporation to return all applications with an instruction that the government is reviewing the whole aspect of gaming and will therefore not be receiving any applications?
Hon. E. Cull: No, I haven't dealt with it in that type of detail. I simply met with the Lottery Corporation and explained to them the gaming policy and said that no decisions will be made on gaming expansion. When I first met with them last September, after being appointed the minister responsible for the Lottery Corporation, they brought me all the areas where they wished to expand gaming and asked for a government decision. The decision that I've given to them, on behalf of the government, is that they will have to wait for the gaming study to be concluded. We will not make any decisions with respect to Club Keno, VLTs or electronic bingo.
[5:00]
K. Jones: In order to make it an even playing field pending a decision, it would only be proper if all current applications were returned and not considered. Only applications that followed a government decision should be considered so that everyone has the same starting point. Right now, it looks like certain people have a definite advantage over others because their applications happen to be sitting in the hands of the Lottery Corporation. Maybe their proposal is even favoured by the Lottery Corporation or because of some policy decision that's already been made by the board pending the government decision. Could the minister address that problem?
Hon. E. Cull: I think that's a fair point. If there are applications on hand, everyone should have a fair or level playing field, as the member has put it. But you're making an assumption here that gaming will be expanded and those applications will therefore be at the head of the queue. There may be a decision not to expand gaming in those areas. However, I will ensure that the Lottery Corporation does not favour any applications that may be on hand right now, in the event that any decision is made to expand gaming.
K. Jones: I'd like to recall a little of my knowledge of history. I believe there was a Senator, a person who was, I think at the time, U.S. representative -- or in that capacity in some way -- to Great Britain, who, finding that Prohibition was coming to an end, made sure there were quite a few shipments of medicinal liquor shipped from Scotland and stockpiled in warehouses in the United States in appropriate places. When the end of Prohibition finally came about, he was the first one out with the market product, selling the finest Scotch in the world. He made big bucks. I think his son went on to become a President of the United States; you may be familiar with the person.
I am concerned that certain people who may have contacts at the head of the Lottery Corporation or who may have friends in government may be getting special privileges by having their applications considered first or by having their particular terminal determined as the only one that could be utilized in the province because the decision was made by the Lottery Corporation to have only that one terminal design, thereby freezing out all other people who are manufacturers of terminals or of games.
They're already being stopped from going into facilities when they have non-gaming aspects to their operation, such as a non-payout electronic game that is being stopped from being in the same location where the Lottery Corporation has a breakopen lottery facility. That type of discrimination determining, in fact, a cartel or a monopoly being held by the Lottery Corporation is not what's providing an open and free opportunity for all people to compete and to have a fair opportunity in business in this province in the lottery or in the gaming areas. Could the minister tell us what policies and changes she is going to make -- or is making or has made -- with regard to controlling that situation and in taking back control from the Lottery Corporation in the direction they've already gone?
Hon. E. Cull: I'll remind the hon. member that the Lottery Corporation is a Crown corporation and is the agent of government with respect to the operating of lotteries. Lotteries are not a free and open and competitive business;
[ Page 11405 ]
in fact, only governments can conduct them. We do that through the Lottery Corporation.
Any equipment the Lottery Corporation buys will be done through the regular practices of tendering and of requesting the proposals for particular types of software and the like. That is standard practice and will be followed.
I sense from the member's questioning that he is operating on the assumption the study will conclude that gaming will be expanded. I'm not operating under that assumption; therefore I am not making plans, and I'm not instructing the Lottery Corporation to make plans to be ready for expanded gaming when in fact there is a review underway which may, at the end, conclude that there should be no expansion. The reason the Lottery Corporation will not place its products or its machines into establishments which have what are known as "grey machines" -- the VLTs, which are not doing pay-outs -- is that far too many of them are being used illegally and have created serious problems in other provinces. At this point, this is one way for the Lottery Corporation to ensure that its machines are not put in places where there is illegal gaming.
K. Jones: I would like to correct any misconception that the minister is trying to imply -- that we are assuming there will be gaming. This is not the position of our caucus. We say that the whole issue has to be decided by the people, and that there should be an open and independent hearing to measure the public's opinion in public.
In order to do that, all the current actions taken by the Lottery Corporation in regard to preparing for video lotteries and video bingos have to be put to a stop if you're going to allow people who are in business in our communities the opportunity to bid on a tendered product. Right now the Lottery Corporation has determined what product they're going to be promoting, and that has been purposely excluded. When people have submitted equipment for testing purposes, they won't even take them. They have already decided which machine will get the nod going into this, even though no decision has been made to go into expanded gaming. That's what I'm asking. What action has the minister taken to stop this so that everybody can have a full, open, tendered opportunity if a decision is made to allow further gaming?
Hon. E. Cull: I think I just answered that. I said all contracts, equipment and software purchased by the Lottery Corporation will be purchased following normal business practices of tender and competitive bidding.
K. Jones: How can that possibly be when the Lottery Corporation has already chosen a product and is already advertising to everybody that this is the product it wants? You, hon. minister, are going to have to direct them to dispose of that, cancel any tentative agreements they have and put this thing out to an open, tendered, properly determined process so that everybody has a fair opportunity to bid on these. That will require direction from you, not just acquiesence that will allow the Lottery Corporation to continue what it's already doing.
Hon. E. Cull: That's correct. And if the government makes a decision to expand gaming, that will be done.
K. Jones: We're talking about in the meantime, not waiting till then. Right now these people are taking advantage of that opportunity while others are being blocked. What are you doing to help give an opportunity to local business people to have at least a fair playing field in order to move into that field if it is chosen by the people of British Columbia to do so?
The Chair: The Chair cautions all members about rules on repetitious and tedious debate. Continuing to explore this fascinating topic, the hon. minister.
Hon. E. Cull: That introduction has almost wiped the question out of my mind.
It would be inappropriate for me to go out and encourage businesses to submit proposals or tenders for something the government has yet to make a decision on. In the event that the government decides to expand gaming, then I can assure the member that those who may have speculated, as his historical figure did, will not have any advantage over those who waited till the government has made an appropriate policy decision to enter into the competition or tendering process.
K. Jones: Is there any process presently in place that registers equipment suppliers in the gaming area?
Hon. E. Cull: I'm not aware of whether there is or not.
K. Jones: Could the minister look into that and report back to us as to whether there is such an action occurring? Could the minister tell us what studies have been done in the past three years for the B.C. Lottery Corporation? That could be on behalf of or by the B.C. Lottery Corporation.
Hon. E. Cull: There would be many studies that the Lottery Corporation has undertaken. I would not be able to list them all in this debate, but I will ask the Lottery Corporation to prepare a list of such studies and make it available to the member.
K. Jones: Could the minister give us details of the Angus Reid study undertaken by the Lottery Corporation?
Hon. E. Cull: It was a survey done of gaming behaviour and attitudes toward gaming, and I believe that the member has a copy of the report.
K. Jones: I'm afraid the member doesn't recall having a copy of the report. Could the minister provide a copy of it?
Hon. E. Cull: I stand corrected. I was under the impression that that report had been released, but I have been reminded by my staff that, because it applies to the gaming study that is underway, it will have to wait until the gaming study is completed before it can be released.
K. Jones: Could the minister tell us why she is able to hide behind a study that is supposed to be developing public information in order to avoid bringing forward a document done on behalf of the taxpayers of British Columbia to help them determine the degree to which there are detrimental factors in gaming? Shouldn't that be out in the public milieu so that the public can use it to bring forward comments based on the information available? That would assist them in making their decisions as to what type of gaming, if any, there should be in British Columbia.
Hon. E. Cull: I think the member is aware that all government polling is made available through the Freedom of Information and Protection of Privacy Act, provided that
[ Page 11406 ]
the cabinet decisions have been made. Otherwise, the act requires that the material be held until the decision has been made. The decision hasn't been made, and the act applies.
K. Jones: Could the minister tell us whether there was a study on gaming done by Dr. Volberg for the Lottery Corporation?
Hon. E. Cull: Sorry, I don't recall that name.
K. Jones: Could the minister check the records of the Lottery Corporation and tell us whether Dr. Volberg has been contracted to do any work for the Lottery Corporation in the last year?
[5:15]
Hon. E. Cull: Yes, I will pass that question on.
K. Jones: Could the minister give us a date when we will receive that information?
Hon. E. Cull: I will provide it as soon as possible.
K. Jones: Could the minister tell us whether she could obtain that information for us within the next two weeks?
Hon. E. Cull: I can tell the member that I will relay the question to the Lottery Corporation tomorrow. I can't confirm when I would have an answer from them.
K. Jones: Could the minister tell us how many litigation cases the Lottery Corporation has had during the past three years and the last fiscal year?
Hon. E. Cull: I don't have that information. I'm not aware of the number of cases of litigation against the corporation.
K. Jones: Could you provide us with a list of the number of litigation cases and the parties who have entered into litigation with the Lottery Corporation during the last three years?
Hon. E. Cull: I'll make that information available subject to the Freedom of Information and Protection of Privacy Act.
K. Jones: Could the minister tell us, now that there is no longer legal action with regard to offshore lottery ticket sales, why the strong legislation was brought in last year to stop this action in British Columbia, which affected the employment of quite a few people in the province?
The Chair: Hon. members, the subjects in this area that are in order are those matters falling under the Lottery Corporation, which are part of these ministerial estimates. Unless someone can explain otherwise, the Chair interprets that question as not falling within this minister's administrative responsibility, and it would be out of order.
K. Jones: The Lottery Corporation has been an active party in offshore lottery sales for many years -- in fact, right from the beginning, I believe. There is a direct connection, and it has been a function up until the legislation was brought in. Now that there is no matter of litigation, there appears to be a question of whether that type of legislation is still required.
The Chair: Within the scope of the estimates, hon. minister.
Hon. E. Cull: My understanding is that we were offside a number of other jurisdictions, but the member will appreciate that this is a matter that was canvassed last year during the legislation. I'm not fully briefed on the impact, and since there are a number of items that I've agreed to get back to the member on, I'll make sure that is included in the material that goes to him.
K. Jones: Unfortunately, hon. minister, that information was not canvassed last year, because it was not within the area that we were asked to be involved in at that time. I just want to let the minister know that the issue of offshore lotteries sales was not a question we could have discussed in last year's estimates. It was not canvassed at that time -- at the request of the Attorney General, mind you. Since that time we've had indications that action that had been contemplated has not transpired, and there appears to be no further action to be proceeded with. I'd like the minister to confirm whether or not the Lottery Corporation is involved, or, with the changing situation, whether that legislation needs to be withdrawn to allow the marketplace to continue in that area.
The Chair: Hon. members, by the standing orders the committee stands recessed until following the division.
Hon. E. Cull: I could answer that question, and we will be done with lotteries. Let me answer the question.
The Chair: All right -- if this is the last question and it will convenience the committee. We have two minutes to get into the House.
Hon. E. Cull: The codes of conduct of international associations of government lotteries preclude the reselling of tickets, and B.C.'s practice was offside, as I just said. In August 1993 an amendment was made to the Lottery Corporation Act making reselling an offence punishable by a fine of up to $100,000. I don't know any reason why we would change that. The circumstances, as I'm aware, have not changed.
The committee recessed at 5:22 p.m.
The committee resumed at 5:35 p.m.
[G. Brewin in the chair.]
F. Gingell: I have a series of question on PSERC issues. I didn't listen all the time because I was in and out. If the questions have been asked, by all means be very brief and tell me to read Hansard.
Last year we saw the introduction of Bill 66, which enshrined both the merit principle and employment equity objectives in the hiring processes for the public service. Can the minister advise us how the government has changed its hiring policy to respond to these legislative changes?
Hon. E. Cull: It's not our hiring practices that have changed but our recruitment practices. The merit principle continues to be the basis for hiring, but what we are attempting to do through our employment equity initiative is to remove those barriers that prevent people from even getting to the interview or getting considered for the job. There have been changes made with respect to our recruitment practice at ministry level, and we've established
[ Page 11407 ]
rules with respect to the restricted competitions that have been put in place.
F. Gingell: You make that sound almost as if you will reduce the requirements of the job to fit the candidates that are there. I said hiring and you said: "No, it's not hiring; it's focused on recruitment." That makes it sound like the ministry is proactive in going out to look for people and then ensuring that they fit the model or criteria for the job.
Hon. E. Cull: We don't tailor the job to fit the individuals. We want to have the best-qualified individuals to do the jobs, and each job is evaluated to determine what qualifications the person must have to satisfactorily fill that job.
However, having said that, the history of the development of qualifications and of hiring practices has built into it qualifications which, if you really had a good look at them, you would determine were not essential to doing the job and in fact have created barriers to certain individuals to even being considered for the job. We've moved to a system that we refer to as KSA -- knowledge, skills and ability -- which tries to evaluate people's attributes for doing the job in a number of categories not simply putting in something that says you need a master's degree in science and ten years experience. That is one way of screening people for a job, but that might eliminate an applicant who could be just as qualified and perhaps is even a better match for doing the job. But that one criterion may eliminate them.
I pick on that one because it's easy to describe, but essentially what we're trying to do is ensure that we haven't, over the years, systemically built barriers into our hiring practices that get in the way of equal opportunity for all the people in the province. Clearly we have built them in not only in the public service but right throughout hiring. We're looking at them systematically and ensuring ourselves that if there are going to be qualifications set out precisely, those qualifications are real and match the needs of the job.
F. Gingell: When you started off the previous answer, you started off saying, I think, that you are going to ensure that you have.... I'm not sure whether it was the best-qualified person for the job, but you indicated that there was a qualification evaluation.
What I hear you saying now is that the qualifications are going to be tailored to that job and to that job only, and all those people who meet those qualifications will be considered. Then in the end you'll make your decisions based on someone's subjective evaluation of how well that person will perform that responsibility. What I hear you say is that we're re-evaluating only the precondition education and experience qualifications. Is that correct?
Hon. E. Cull: I don't think what you're describing is exactly what I'm intending to describe, but we're not far apart. Let me briefly go over the answers again. The merit principle is what determines who gets hired in the end. We want to have people who are qualified to do the job; we want to try to get the best-qualified person. However, we know from much research that the best person doesn't always get the job. We have created systemic barriers in our hiring practices that eliminate some very qualified people from even getting into the process of submitting their application, having their application considered and making it through the panel interview. What we are trying to do is eliminate discriminatory barriers and ensure that we have a system that encourages all British Columbians, no matter their gender, ethnic background, race or disabilities -- physical and otherwise. If they are qualified to do the job, it should be assured that they have the chance to be considered. If they are as qualified as any other applicant, they should have an opportunity to be hired.
We are doing a number of things. We are reviewing our qualifications to make sure that we don't have artificial barriers built in. If we're looking for experience, we should describe that appropriately, not use some artificial surrogate for experience, which may have crept in and which would apply to only a very small minority of people who could apply for the job. We're also changing the way our panels are composed so that panels are not composed of all men or all white men -- all those other groups are not even represented in the panel process.
[5:45]
We are also making it easier for individuals to apply for government jobs. We're looking at the possibility of being able to submit your application in shopping malls or through the motor vehicle branch or directly to the PSERC office, as opposed to having to know where every job is in a ministry and applying directly there.
So it's a multifaceted, not a single, approach, and it's intended to try to ensure that our system is fair and open to people in the province, as opposed to the kind of system that has built up. The public service is not the only one that has this history of hiring practices; it's very common throughout all parts of the corporate and public sectors.
F. Gingell: Do you think it's working?
Hon. E. Cull: It's too soon to tell. I think the member is aware that we have done a survey of our employees, which gives us a baseline -- or a snapshot, if you like -- of what ministries have right now in terms of their employment profiles. We can compare that employment profile to the population overall, and with this baseline, we will be able to go back after a period of time and review progress. All ministries are required to develop employment equity plans so that they can be thinking proactively about how they're going to achieve employment equity goals.
F. Gingell: You have actually answered my next question. So you have taken one snapshot, but I presume that you haven't taken a second one yet. When do you anticipate taking that snapshot? Will it become a regular exercise -- once a year, every two years or every five years -- and will there be a public reporting process for it?
Hon. E. Cull: The first snapshot, as I've referred to it, won't be completed until probably the middle of this month. What we're hoping to do then is to be able to maintain the information through B.C. Stats as employees enter and leave the public service, almost on an ongoing basis, so that we can keep up to date almost continuously on it. I would certainly want to make the information public, because I think it's important that we know how we're doing and whether we're achieving our goal of having closer representation to the B.C. public. When we get the first snapshot in, the most interesting thing will be to see how far we are toward achieving that right now.
I know we have made progress in the last number of years. If I go back to when I started as an employee of this government in 1976, I know that the number of women in management positions has increased somewhat, and it will be interesting for us to see exactly how our employment profile matches the public profile overall.
[ Page 11408 ]
F. Gingell: Will you be breaking any human rights legislation by keeping these records?
Hon. E. Cull: It's a voluntary declaration that's involved, and the reason B.C. Stats is involved is to keep it separate from the commission so that there is no violation of human rights legislation.
F. Gingell: If a substantial number of employees decide not to respond, the whole exercise is going to be difficult to follow through on. Have you done anything yet? It's now eight or nine months since all this was discussed and set up. Has anything been done that gives you assurances you will have meaningful statistics?
Hon. E. Cull: The response rate to the survey has been excellent. Seventy-five percent of the employees have responded to the survey, so that's an indication. We would have loved to receive 100 percent, but obviously we weren't going to get all employees to respond.
The other thing that has been helpful for me is the complaints that we've had from individual employees. Surprisingly, there have been very few. We have done educational work within the ministries and we have had promotional material to explain what it is we're doing. By and large, I'd have to say that once that is explained to people, they are satisfied and some become quite enthusiastic about the project.
I have noticed the Chair trying to draw my attention to the time. Since we do have to report out, I will move that the committee rise, report remarkable progress and ask leave to sit again -- very soon I hope.
Motion approved.
The committee rose at 5:51 p.m.
The committee met at 6:47 p.m.
[G. Brewin in the chair.]
ESTIMATES: MINISTRY OF FINANCE AND CORPORATE RELATIONS
(continued)
On vote 33: minister's office, $342,581 (continued).
F. Gingell: The Korbin commission advocated an overhaul to the Public Service Commission so that workers who had been unsuccessful in a competition would be better able to appeal. Could the minister tell us how this is being achieved?
Hon. E. Cull: The change that was made to the appeals process limited it to in-service applicants; this will speed up the process considerably. Members of the public still have the right to inquire as to the successful applicant.
F. Gingell: This is a subject that I don't know a lot about. Are you saying that when a position is filled, only the in-service people are advised, not all the people who applied?
Hon. E. Cull: All applicants are advised that a position has been filled. The appeal process was changed some years ago -- I can't remember when -- from an in-service process to one that allowed out-of-service applicants to appeal, as well. This was not successful; it caused many delays in the process and created incredible uncertainty for those who had won competitions while they went through appeals. As a result of the Korbin commission's work, changes have been made to bring it back to an in-service appeal process that gives members of public who are not in-service the right of inquiry.
F. Gingell: The reason I asked the question and showed my ignorance was the phrase that you just used again -- to write for an inquiry.
Hon. E. Cull: At this point in the estimates I guess all our ears are getting a little fuzzy in terms of hearing. While the out-of-service applicants cannot officially appeal a decision to not give them the job, they do have the right to enquire as to the successful candidate.
F. Gingell: They would have been already advised who the successful candidate is; you said that everyone is advised.
Hon. E. Cull: To clarify, they would be advised that there was a successful candidate and that it wasn't them; they wouldn't know who it was. They can inquire about the qualifications that led to the successful candidate getting the job instead of them.
F. Gingell: The newly created Public Service Appeal Board is chaired by Joy Leach. Could the minister tell us what selection process was used to choose Ms. Leach?
Hon. E. Cull: I'm afraid I can't give you much information on that. The deputy minister to the Premier, who is responsible for all of the public service, was involved in selecting the candidate, so my participation was as a cabinet member when it came forward for an order-in-council.
F. Gingell: How will the role of the chair of the Public Service Appeal Board differ from the role of the chair of the former Public Service Commission, other than the fact that its scope has been reduced?
Hon. E. Cull: As I understand the old system, if someone appealed, the appeal board did not have the ability to overturn a panel and appoint somebody if they felt a candidate had been unfairly treated. All they could do was refer it back to the deputy or the ministry and say: "This has been unfair. You have to re-panel." In some cases the competition would be cancelled at that point, and there would be no recourse. What this does is make the system fair and expand the powers of the appeal board. If the appeal board concludes that a competition is unfair, it can actually appoint a candidate to the position.
F. Gingell: That is a very dramatic change. It allows some independent body to determine who your employees are. Concerning the appeal process and the issues that are dealt with by the appeal board, we were speaking before the break about ensuring that you have realistic criteria. Are unsuccessful applicants able to appeal a decision on the basis of merit?
Hon. E. Cull: The only basis it could be appealed on would be that their qualifications or knowledge, and their experience, ability and skills, were greater than the applicant hired.
[ Page 11409 ]
F. Gingell: I've been involved, as all of you have, in these problems of deciding on A or B for a particular job. When you have people with very similar qualifications, in the end you feel your tummy and pick the one you want. The government here has a definitive policy on the basis of employment equity. Will the fact that someone comes from a minority group and feels that they had equivalent qualifications be a basis for appeal?
Hon. E. Cull: This goes back to the discussion we had about employment equity. The criteria for hiring continues to be merit. If somebody from one of the designated employment equity-seeking groups feels aggrieved and launches an appeal, the basis for the appeal will still be whether they had the knowledge, skills and ability to perform the job and whether, in comparison to the person who was successful, they had a higher level of knowledge, skills and ability and should therefore have had a higher rating overall in the competition than they received. Because they were a minority group or they were female is not part of the consideration; you can't appeal on that basis.
F. Gingell: It's often hard to define exactly what merit is. It's hard to make up a list, but I guess there is a list from what you have said. Does belonging to a minority group or being of a different colour or of a different cultural background appear on that merit listing?
Hon. E. Cull: Absolutely not, if I understood what you said. Did you say that ethnicity or colour or gender would appear on the list? No. I'm disturbed by your question, because I feel that I haven't been able to explain well enough what we're attempting with our employment equity program.
People are hired on the basis of merit -- that is, on the basis of their skills, knowledge and ability. The other things that are considered would be their performance if they had been hired by the public service already and they had a track record, and their number of years of employment. All those things are weighted and ranked in an interview, and the candidate with the highest score is the one that is successful at the end.
It would be absolutely inappropriate to give people points in the rating system because of their gender, their ethnicity, their ability or disability. That is not what employment equity is about. What employment equity is about is ensuring that people who are in equity-seeking groups get the opportunity to be in the process, to put an application in, to have their application considered, to be at a panel and to be judged fairly by a panel.
F. Gingell: Thank you. Had the answer been anything different, I was coming back to the question I asked you originally on whether or not this was against human rights legislation.
How have the recommendations of the Korbin commission impacted on the ability of the government to hire either contract or auxiliary employees? Both these categories of employees were ones which both your government and the commission were highly critical of.
Hon. E. Cull: I'm trying to interpret the member's question. Has there been any restriction on our ability to hire contractors in those cases where we determined there was abuse of the contract system? I hope that no new instances of that are occurring. I would like to say that I know there aren't, but I'm not absolutely certain that all ministries are avoiding the use of contracts where it would be inappropriate to do so. There is now a more rigorous process ensuring that a contractor is hired in an appropriate situation. It must be cost effective, and the job must lend itself to contract.
[7:00]
The questions of the member for Peace River South indicate that he thinks the government was putting most of its emphasis on the legality under Revenue Canada's jurisdiction. From my perspective, the concerns about using the contractor system are to make sure that we treat our employees fairly, and spend taxpayers' dollars wisely and in using the contractor system, that we don't violate those two objectives.
F. Gingell: While the NDP and this minister may be holding a tough line on this topic, the facts speak for themselves. The Ministry of Environment hires friends of the NDP as shadow contract employees in an effort to keep them out of the government telephone book. How can the minister allow the hiring of individuals like Jas Manak and Gerry Scott when she knows that this is in direct contravention of the spirit of the Korbin commission? You can take the last piece; that seems to be against the intent of the Korbin commission.
Hon. E. Cull: I was going to ask for the author of that question, since the member looked distinctly uncomfortable while reading it out.
I don't know the employment status of the two individuals that were named at the end. I believe they are auxiliaries, not contractors; I would have to check that for you.
F. Gingell: Can you quickly describe to me the difference between an auxiliary employees and a contractor?
Hon. E. Cull: Auxiliary employees are like regular employees, but their work is not expected to be of an ongoing nature. However, they are paid through the payroll and have taxes, UIC, CPP and all the rest deducted. They are covered under the collective agreement and receive benefits in accordance with it. A contractor is considered to be self-employed and is paid an amount of money for the service provided. There is no UIC or Canada Pension or any sort of employer-employee relation with a contractor.
F. Gingell: The Korbin commission recommended that the new public service body be responsible for the development and implementation of government personnel policy. Could the minister advise what actions have been taken to further this goal?
Hon. E. Cull: That question strikes me as one of those you get in question period, where you know you could stand on your feet for about an hour and give answers, so I'll try to be very brief on it.
We have been trying to deal with all the Korbin recommendations with respect to employee development, career paths, training and all the other aspects. Clearly, with the Public Service Employee Relations Commission being established in its new format only last fall, we're in the early stages of implementing those recommendations. Also, as I've already mentioned, we have the BCGEU contract, which requires us to do some cooperative work with our BCGEU employees around government service.
But over a year ago, we also had a conference about revitalizing the public service with our employees including
[ Page 11410 ]
management, PEA, BCGEU and BCNU and all of our employees that are in various union and non-union organizations in the government. A lot of work has been done on that in order to establish a new relationship. We're in the process of developing a strategy that will carry it forward in the years ahead so that we can move to a truly professional public service that works in cooperation with the government as its employer.
F. Gingell: Has your professional human resources group ever had concerns about, done any work on or looked at the issue of the amount of time that government employees spend in staff meetings? I ask that not so much about the senior portions of the ministry but because, when dealing in constituency work and phoning into the Ministry of Health or a whole series of other ministries, there's an unbelievably large number of people who are away at staff meetings -- far, far more than I have ever experienced in any other scenario.
Hon. E. Cull: Maybe they don't want to return your calls.
F. Gingell: I wonder whether your professional group has looked at that issue and if there are any guidelines set down across the ministry about the appropriate amount of time to be spent in these endeavours.
Hon. E. Cull: That kind of review hasn't been done through PSERC, but I know ministries and branches within ministries are constantly examining the amount of time people spend in meetings in order to find more effective ways of doing business. I think all of us have had the experience of spending far too much of our working time in meetings and not enough time in the other activities that are essential to our jobs. The particular nature of some jobs in government -- and you indicated Health and Social Services -- dictates that a lot of time will be spent in discussion with other employees, client groups or other ministries, because the nature of the work they do is to work with others to resolve problems. Of course, a lot of that takes place through meetings. But I think it's common sense that most organizations try to limit the amount of time that staff have to spend in unproductive meetings.
F. Gingell: I guess I'm the one of little faith.
Some criticisms and thoughts in the Korbin commission report dealt with the issue of consulting and contracting those areas. A lot of it is done through the B.C. Purchasing Commission, which was seen to bring some sense of order and process to it. The Korbin commission seemed to criticize this kind of arrangement the government enters into to provide services for lack of definitive guidelines. Can you advise the committee if anything has been done to deal with the concerns that the Korbin commission expressed in this regard?
Hon. E. Cull: I'm not absolutely clear on the question being asked, but the contract review process that was part of Korbin determined the types of legitimate jobs that contractors would do, as opposed to jobs that could be better performed by public service employees. That distinction has already been made. If you're asking about the letting of individual contracts and what the process is there, the vast majority are done through RFPs, although some will be done directly by hiring a contractor who has already worked for the ministry, one with experience who has the track record and who they know can come on to do the job very quickly and then complete it, as opposed to hiring an entirely new firm or individual to do the work.
F. Gingell: I'm thinking about contractors for commercial work and contractors for consulting work. If you were to build a building, put an addition onto a building or make some alterations within a building, is there a clearly established set of criteria that would have to be met to avoid the tendering process?
Hon. E. Cull: I'm afraid we have strayed beyond the Ministry of Finance purview in this regard. This would be Purchasing Commission policy. I'm advised by my staff that if you're asking about construction projects.... Could you nod or shake your head?
F. Gingell: Well, I did, but if you insist, I will think of some type of contract on a commercial....
The Chair: Excuse me, hon. members, this gets a little complicated.
Hon. E. Cull: I'll take my seat, hon. Chair, because I thought this might be a simple yes-or-no answer.
F. Gingell: I did refer to something that B.C. Buildings Corporation would perhaps take on. I appreciate that this doesn't come under your purview, but I'm sure there are all sorts of contracts the Ministry of Finance gives out, such as the kind of thing we were discussing about the evaluation of our performance in the use of derivatives and the actuarial evaluations of pension funds. The earlier response was that the B.C. Purchasing Commission does have a process. You do get into processes where there are requests for proposals, and there are open tenders, of course. Then there's phoning up Charlie, who did it for you last time, and getting him to come in and do it again. I wonder if there are any criteria that apply to these particular matters.
Hon. E. Cull: The Purchasing Commission sets the rules for all contracts, and there are certain limits over which you have to go into tendering and all of that, but it's the Purchasing Commission that does this. I am unfortunately not qualified to answer in terms of their requirements and qualifications, except to assure you I'm confident that my staff follows the rules that have been set down by the Purchasing Commission.
F. Gingell: The Korbin commission report brought up a whole series of issues. We tend to think of them as needing to be dealt with here because the commission focused on personnel issues, which come under your jurisdiction. If I'm off base, I'm sure you will let me know.
The Korbin commission said that these rules and evaluations about the letting of contracts and how these things are handled should apply to the Crown corporations in the same way they apply to the ministries. Can you advise me if any rules have been brought in to deal with that?
Hon. E. Cull: I think I can clarify it. The Korbin commission was commissioned by the former Minister of Finance, and many of the recommendations, because they are related to human resources or labour relations, fall under my purview. Like many reports, the Korbin commission made recommendations which affected other parts of government, including Crown corporations, and I'm afraid
[ Page 11411 ]
I'm not able to answer on behalf of the minister responsible for the Crown corporations secretariat.
[7:15]
F. Gingell: Does the minister have a Crown corporation? Yes, the B.C. Lottery Corporation. How could I forget?
Have these criteria and proposals that the B.C. Purchasing Commission set up and you follow within your ministry been regulated into B.C. Lottery Corporation and any other Crown corporations you happen to be responsible for?
Hon. E. Cull: I don't believe so. The Purchasing Commission wouldn't have a role to play there. The member does ask a good question with respect to the Lottery Corporation and whether it has implemented any of the recommendations that would apply to it as a Crown corporation. I'm afraid I don't have the answer.
F. Gingell: I wasn't thinking that the Purchasing Commission has done anything more than say that this is a sensible, businesslike way of accomplishing these things and that we should all follow these rules so we won't get into trouble. The question was really whether those kinds of recommendations have gone into all the Crown corporations. As I said, the only one I can think of is the Lottery Corporation. I presume they're going to get a phone call tomorrow.
In the end it is your ministry, through its treasury function, that pays and records every contract entered into by every ministry. Is there a central registry of contracts entered into by the government with a cross-ministry...?
Hon. E. Cull: I believe the public accounts have the amounts paid to all contractors, so that is where you would see that list. The member would be very familiar with the public accounts, so he must be asking for something different.
F. Gingell: Yes. The public accounts just record the amount that was paid to people within this category, and it's all old. The most recent is for the year ending March 31, 1993, and that's over a year ago. Is there a central registry that keeps a record of any contractual obligations entered into between the government and a counterparty -- along with ballpark numbers and a rough description of services to be rendered and goods to be acquired?
Hon. E. Cull: As a rule, the contracts are kept in the ministry, but all contracts are reported through the OCG, so in that sense there is a central registry of contracts. However, I don't believe the OCG would actually have a copy of every contract on hand, for that would totally plug up the system.
F. Gingell: I was wondering if the government was of the opinion that accountability and open government required there to be some place -- it might be computerized -- where citizens could come, feed in some data, see what contracts covered a particular subject matter, see what contracts were in place with a particular supplier and have some reference number by which they would be able to go and get more detailed information.
Hon. E. Cull: It's an interesting idea. We don't have anything like that. Obviously there would be a cost involved in putting something like that together, but it might also have some benefits in terms of information to the public. Undoubtedly, there would be privacy aspects that would have to be looked at in creating such a registry, but I acknowledge that there may be some interest in such a registry.
F. Gingell: Dealing with the Public Sector Employers' Council or PSEC, there is a budget for it in your estimates: $2.5 million for salaries, operating costs, etc. Then there are all the costs that have to be paid for the constituent employers' associations. Can you advise me if this $2.5 million is intended to fund them, or will they have to fund them themselves? Where does that money come from?
Hon. E. Cull: The employers' associations are not funded under the PSEC budget that's in the estimates. They are funded by the employers themselves through fees or direct contributions. In some cases, there may be funds made available through the grants that ministries give to the bodies that would be part of the employers' association. That would be in ministry budgets, and I am not aware of whether ministries have made those decisions and, if so, to what extent they would have provided that money. But essentially it is the employers' association representing the school boards, the colleges, universities or community service organizations.
F. Gingell: Going back to the time when this year's budget was being developed, you didn't send a memorandum around to the Ministry of Health, the Ministry of Education and other affected ministries that give grants to organizations that become part of the employers groups, saying: "Our PSEC budget will not include any funding for the employers' side of this process. Be sure that you include additional funds this year in your grants to universities, colleges, school boards, hospitals or whatever to enable them to pay their costs."
Hon. E. Cull: We didn't send out a letter, because it was well understood by the employers' associations that the PSEC budget wasn't intended to cover them and that the employers themselves would be responsible for funding their organization. The other reason we didn't do it is because each employers' association is a little different. The Health Employers' Association of B.C., for example, was formed by combining the HLRA, CCERA and Pricare, all of which had budgets and were collecting dues from their members, and those budgets were sufficient when amalgamated together to cover HEABC. The existing structure and funding for the University Presidents' Council is anticipated to be adequate to meet the cost of their new employers' association. It was essentially the same group rolled over, and each of them is a bit different, depending on the circumstances.
F. Gingell: I'm not quite sure how I should put this question. There is clearly a fear out there -- and there's always fear when something is new and nobody knows exactly how it's all going to work. Employee bargaining is going to take place under this new umbrella organization, and the individual organizations are going to be responsible for finding the costs of the settlements in their budgets. Is there any policy, arrangement or agreement that labour rate changes will be reflected in the budgets? The circumstances are particularly difficult when a labour contract doesn't have the same dates as the financial year for which the grants are being paid.
Hon. E. Cull: The member was absent when the member for Powell River-Sunshine Coast asked these same questions,
[ Page 11412 ]
and rather than tell him to go and read the Blues, I will quickly summarize what I said.
The Public Sector Employers' Council, which is composed of cabinet members and representatives from each of the six employers' associations, does not bargain on behalf of any of the employers' associations. The employers' associations are also not the bargaining agents for their respective members, with the exception of the education employers' council, which has been designated as the employers' bargaining agent for teachers only through a separate piece of legislation now before the House. So individual school districts, for example, will still bargain with their non-teaching staff, as they always have, whether it's with CUPE, the IWA, the UFCW or any of the other unions that are out there representing the non-instructional staff. College boards will negotiate with their colleges; universities will negotiate with their university faculty and non-faculty support unions.
People tend to think that the employers' association is intended to be the bargaining agent; that is not the case. What the employers' associations do, as part of PSEC, is to develop negotiating mandates so that there is consistency across the public sector and the mandates are within the ability of the government to pay. Cabinet of course has had its representation there at PSEC in terms of setting those mandates in the first place. That means there will be a much closer relationship between the contracts that are negotiated and the government, which is ultimately responsible for paying it by putting the money into the budget.
As it is right now, third parties negotiate contracts and they either hope that their budgets are going to cover it or they come back and apply pressure on us to make sure that their budgets cover it. The government is not accountable because it has not had any part in negotiating the contract, and that's where all the problems arise that you've alluded.
F. Gingell: Which employers' associations are now fully operational?
Hon. E. Cull: My commissioner from PSERC also reminded me the HEABC is the bargaining agent for the health sector. I'd forgotten that, because it wasn't a change. Health has always had a centralized, provincewide bargaining agent through either HLRA or CCERA. The HEABC continues in that fashion, so it's HEABC -- and the education employers' association for teachers. HEABC is fully operational. I believe education has an interim board right now, but they are operational. The colleges are, I believe, because I've seen their bylaws. And so is the community services sector, which is still organizing itself and obtaining members. I think there are something like 1,800 employers in that sector. They have an interim council, but they are far from being established as a result of the need to organize their members. Of the other two, PSERC is already fully operational, and so, I believe, is the one for Crown corporations.
[7:30]
F. Gingell: Some of them, though, at this moment, have people that the government rather than the organizations have nominated to represent employer organizations. Is that not so? That is a temporary arrangement, one would think. I happened to look at one that goes back to my to old days at Douglas and Kwantlen Colleges, and there is the ex-president of the faculty association appointed by the government to represent the employer, which I thought was an interesting twist. Does the government check people's backgrounds in making these appointments?
Hon. E. Cull: Yes, we do. I'm not sure who the member is talking about in this case. There's a bit of a chicken-and-egg problem. The employers' council can't be established until certain things are done. It needs to be formed so that you can have the vote to have members on it. However, how can it be formed if there is no vote by the members? There is a problem. We have appointed interim councils. There was an interim council for those which now have permanent councils. Education, for example, has an interim council and therefore will have to have an election to involve the members once they're fully operational.
F. Gingell: Do you have a target date to have everything organized and running?
Hon. E. Cull: No, we don't. If the employers' associations themselves are working toward a target date, I'm not aware of it. We're trying to advance it as quickly as we can. However, the Public Sector Employers' Council is operational. We've now had two meetings with the interim boards, and we'll be having our third meeting next week.
F. Gingell: Are pension and retirement policies subjects for the council and the employers' associations? Are pay equity and employment equity subjects for the council and the employers' associations?
Hon. E. Cull: I think the answer is no, yes and maybe -- no to pensions, yes to pay equity, and it's conceivable that employment equity could be a discussion that the Public Sector Employers' Council would engage in.
F. Gingell: I have come to the end of issues that deal with PSEC and PSERC. Maybe they would stay; perhaps we're not going to be much longer, anyway.
I noticed in the paper the other day that the Ministry of Finance is looking for two persons for director of operations, internal audit branch. Are these additional positions or are they replacing people?
Hon. E. Cull: The two positions advertised were new a year ago. These positions are now being refilled as a result of personnel changes within the internal audit branch.
F. Gingell: I'm going to this list, for which I thank you, of the 1993 suggestions awards. There's one that popped out at me. One of your employees in Finance and Corporate Relations came up with a new and improved record of time-recording and reduced the number of forms that were used from five sheets to one. That frees up a thousand additional auditing hours each year. I looked at the numbers, and they estimated that in the first year the one-time savings were $445,000, which works out to $440 an hour. It says underneath there that $410,000 of it is revenue, so it's the $35,060 that is the cost of those 1,056 hours. That $35,000 additional resource that's going to be put into auditing in the revenue group in Vancouver is anticipated to produce additional revenues of $410,000. That's quite impressive.
Do you keep statistics on the number of dollars per hour that the auditors in your revenue division "earn," if I can use that word?
Hon. E. Cull: That's a question I have asked my deputy several times. I want to know how many auditors we have to hire before I can eliminate the deficit entirely. I'm sure there's an answer there at some point.
[ Page 11413 ]
At the margin, we keep track of how much additional money that hiring one additional auditor will obtain for us in revenue. It's about $400,000 -- quite a significant amount of money.
F. Gingell: You're saying that it's roughly $400,000 per auditor. What you're suggesting here is in fact substantially more than $400,000 an auditor, unless you're expecting your auditors to get in only 1,056 chargeable hours a year, and I'm sure that is not the case.
I'm sure the ministry must recognize that there's some end point. Has the ministry done any studies, although I hate to use that word, or has it thought about and looked into the issues of the different types of revenues it is responsible for collecting, and the winnings in focusing more on one form of revenue than another? Do you find it more profitable in consumer taxation -- you don't do income taxation -- than in royalties, stumpage areas and those kinds of things?
Hon. E. Cull: Was the member asking whether we know which tax generates the most or which audited area generates the most?
F. Gingell: Audited area.
Hon. E. Cull: Yes, we do know which areas are the most productive, and we move our auditors around accordingly to make sure they generate the maximum amount of additional revenue.
F. Gingell: There's been some discussion going on about the role of the Ministry of Finance in the area of value-for-money audits. I appreciate that Sunny Mathieson's group, which I think is called the internal audit department, really focuses more on the areas of problems that appear and then running in quickly and finding out what is going on. Has there been any decision to get the internal audit department of the Ministry of Finance into value-for-money audits in the fashion envisaged by the CCAF rules?
Hon. E. Cull: We have two auditing groups, if you like. The OCG -- the internal audit group that you've just mentioned -- does value-for-money audits. In fact, they don't go in to do quick fixes; they follow strict procedures and take a considerable amount of time going exhaustively through all the records needed to determine what's happening in a particular area of government.
We have also had a program evaluation function in Treasury Board, which has been more of a quick go in and have a look kind of thing to try to sort out whether we're getting our money's worth and whether money is being spent appropriately. What I've asked this year, as part of my budget in the Ministry of Finance, is that we reorganize that group and create a little more depth in terms of the audits they do, so they're not as superficial. I don't mean that in a derogatory sense but in terms of the amount of time they can spend on them and how deep they can go. We want to tie that back into the budget process so that as we're preparing our budget for '95-96, we can zero in on those parts of government we suspect have some room for cost-savings and do a more timely and efficient review of their operation.
The internal audit is very good and very thorough, but not timely. The program evaluation unit we've had in Treasury Board up until now has been timely but not in-depth enough. I'm trying to expand that group somewhat and give it better terms of reference so they can do the job we need as part of the budgeting process.
F. Gingell: Do you intend to bring those two separate groups into one organization so that there's a greater ability for cross-fertilization?
Hon. E. Cull: I'm not going to integrate them, but they do work very closely together for precisely the reason you note.
K. Jones: Just a quick one, hon. minister. On March 23, I sent a formal request to Government Services under freedom of information for all studies and reviews done on government air services within the last two years. On April 20, I received a letter stating that this request had been split between your ministry and the Ministry of Health. On April 25, I received from your ministry an acknowledgment that they had received this request and that they would have a response by May 22. To date, I have not received any response to that request.
[7:45]
Is it your perception of freedom of information that delays in the 30-day limit that was originally established for replies to questions should be extended and extended by passing the information from ministry to ministry, or is there going to be some way that your ministry will resolve this so that in future -- I know you're not able to do it now -- this type of request to freedom of information will go through the process within the original 30-day time limit?
Hon. E. Cull: I can't speak on behalf of the overall policy of freedom of information, but I would say that when my ministry receives a request, we should not, except in unusual circumstances, exceed the 30 days. I think the delay here has been partly caused by having sent the request to the wrong ministry. You would not know that, and we can't deal with time delays that are beyond our control. I will have my staff make a note of it, since May 22 was the deadline, and ask them to get you the answer as quickly as possible, starting tomorrow morning when we're back in working hours again.
K. Jones: I'd like to really emphasize to the minister that it's a maximum of 30 days, not that everything should be answered by 30 days. Things should be answered as expediently as possible. I'm sure it would take only a few hours to determine what reports had been done in that area, because reports are fairly substantial. Therefore I would hope that something would be done to resolve this bottleneck in your ministry in dealing with freedom of information so as to get those answers out to people within a day or two rather than going something like 35 or 40 days.
The Chair: Shall vote 33 pass?
F. Gingell: I opened up the government telephone book, and you know it's a very good place to see how you're organized. I got last year's and counted the staff, and really it's a little more meaningful than just gross numbers.
The number of people in your program evaluation branch actually listed under that heading in the Treasury Board section, I think, has gone from one in last year's phone book to six in this year's. Is that the result of a definitive decision or just due to some reallocation of people?
Hon. E. Cull: The increase in staff came in the '93-94 budget.
[ Page 11414 ]
F. Gingell: How does the program evaluation branch differ from the quantitative analysis branch?
Hon. E. Cull: It's completely separate. There's no relationship between the functions. The quantitative analysis branch runs the econometric model for the ministry.
F. Gingell: Communications were up from five people to eight people in the book -- my hand shook as I wrote the numbers down. Does the minister have an explanation for that?
Hon. E. Cull: Actually I was hoping the member would notice the absence of a director of communications and help me in my lobbying efforts to get that job filled. I've been crying about that for a while, but we have seven people, not eight.
The group is responsible for 1,600 employees in the ministry, plus they have responsibilities for all the other pieces: PSERC, PSEC and the Superannuation Commission. In a sense, everybody is served by this group, except the Lottery Corporation. They are responsible for publications and the budget, of course, which is a considerable communications effort -- as you can see every year -- involving putting together all the documents and tables and responding to media requests and all the rest. It's a fairly lean shop.
F. Gingell: So the responsibilities of this group are communicating both internally and externally.
There's an item on page 125, immediately under provincial treasury operations. It says: "Less transfer from vote 34," which is ministry operations. I can't find anything in there that this covers; I can't find anything in the descriptions that tells me what it is. I've searched high and low.
Hon. E. Cull: It's for the cost of administration. The ministry reimburses the special account for the old BCEC-BCDC loan administration program.
F. Gingell: BCEC...?
Hon. E. Cull: It's the B.C. Development Corporation -- the old Enterprise Corporation, which had a bunch of these old loans that are still out there.
F. Gingell: The tax collection commissions are anticipated to pay out 12.5 percent more this year than last year, but collections of the tax are only going to be up 7.5 percent. What caused that?
Hon. E. Cull: We raised the commissions this year -- that's the reason. The difference is the increase in commissions we've paid to the small businesses who raised this during the prebudget consultations. You'll find the section on page 54 in the budget speech.
F. Gingell: At the front of the budget book, on page 5 in the revenues section, there's an item called "Other miscellaneous." It's immediately before the government transfers. It's on page 5 below "Miscellaneous," which is estimated at $168 million. They had estimated for 1993-94 at $39 million, and it came in at $62 million. However, you have reduced your estimated revenues for "Other miscellaneous" this year down to $47.5 million. I wonder what it is.
Hon. E. Cull: I will confirm the details, but I believe that is a one-time repayment of a loan that affected last year's revenues and made that difference.
F. Gingell: This means that the loan was written off in some prior period. I recognize that the important function of these financial statements is consistency and ensuring that we all know what were looking at. Would it be appropriate to suggest to you that the recovery of past write-offs should be shown as a separate item in the financial statements?
The total public sector benefit costs -- pensions, WCB, UIC and the whole ball of wax is up by $35 million over the previous year. It's exactly 12.5 percent. Can the minister tell me how much of that was caused by an increase in costs and how much was caused by an increase in staff?
Hon. E. Cull: About half of it would be additional employees, contractor conversions and increased wages. The other half would be UI premium increases, WCB extended health care benefits, and the like.
F. Gingell: I take it there's no increase whatsoever in the size of the bureaucracy this year. The minister said conversions, rather than increases.
Hon. E. Cull: No, I did give an indication that the first 50 percent included contractor conversions, which would probably be the largest portion of it, and additional employees.
F. Gingell: Every year, we look at the FTE summary at the back of the budget estimates table to see how we reconcile the number of FTEs from this year to the next. We ask questions about FTEs every year in estimates, and we keep hearing about shadow employees and people who were there but not counted. Have we now gotten to the point where everyone's counted and no one can ever use this excuse again?
Hon. E. Cull: I certainly hope so. The page that the member's looking at, page 252 in the estimates, shows the 1993-94 authorized FTEs. This is a result of the true accounting system. It's counted all the contractors and all the people who were not counted before because of the way legislation was written. Previous legislation excluded little groups here and there. You can see why we said last year that when we changed the FTE system we'd create a baseline that made sense. We've done that, so from this point on the member will be able to mark it forward and see what's going on. I will note, though, that the increase in FTEs from 1993-94 to 1994-95 is about 1 percent.
F. Gingell: I would like to move to the provincial home acquisition fund. I was wondering if the minister could tell me the total outstanding dollar value of those mortgages as of March 31, 1994.
Hon. E. Cull: I'll refer the member to page 135 of the estimates book, which the member is looking at. He will see that our estimate of outstanding mortgages for 1993-94 is $481,997,467.
[8:00]
F. Gingell: I'm going to go and spend some time with the comptroller general again. You're telling me that the balance in this special account represents the outstanding principal of the mortgages that are out there?
[ Page 11415 ]
Hon. E. Cull: My staff member just said oops. Obviously he didn't understand the first question when he gave me the answer. I don't have the amount of the total outstanding principal of the mortgages, but we can get that for you.
F. Gingell: That's not the number that you.... I accept that you've said that you don't have it, but I'm really surprised. This is a major contingent liability of the provincial government, isn't it?
Hon. E. Cull: It is certainly a liability....
F. Gingell: Contingent only.
Hon. E. Cull: I'm getting some conflicting information here as to which program you're asking about, and since we've just had a call for a vote in the House, perhaps you can clarify that. We're going to get that done.
The Chair: We'll take a recess now, members of the committee, until the vote is done, and then we will return.
The committee recessed at 8:01 p.m.
The committee resumed at 8:11 p.m.
[H. Giesbrecht in the chair.]
F. Gingell: Hon. Chair, through you to the minister, perhaps what I will do is have a discussion with her officials on some of these issues. They're obviously not going to make any difference to the estimates, but it's interesting to have them.
I would like to go to the land tax deferment account. Can you first of all give me the amount of money that was paid out on behalf of older-property taxpayers in this province for '93-94?
Hon. E. Cull: For '93-94, the actual that was paid out was $12.68 million.
F. Gingell: Received?
Hon. E. Cull: Let me correct that: the $12.68 million was a deferral. Received was virtually the same -- $12.63 million.
F. Gingell: It is something new to have been in balance for one year, isn't it? In the normal course of events, one's had a series of higher payments out than receipts in as one builds up these balances. Can the minister please advise me what is the total amount outstanding at March 31, 1994?
Hon. E. Cull: I don't have that figure, but the member is correct. It is unusual that it would be this close a balance. We had actually budgeted for about a $2.5 million difference between deferrals and repayments, and it wasn't realized this year. We ended up with a much closer balance.
With respect to the total outstanding deferrals, I will get that number for the member.
F. Gingell: You will note that for 1994-95, you anticipate disbursements of $12 million, which is roughly the same amount as last year. But under receipts, you estimate $5 million, which is only two-thirds of the amount that you estimated last year, and that was way out of line. You were way out. Can you tell me if anything unusual happened to cause this anomaly?
Hon. E. Cull: It's a very difficult program in which to be able to predict exactly what's going to happen, how many people will come in and how many people will start repaying each year. As you've pointed out, we weren't accurate last year. We've made our best attempt at trying to predict where we think it will go this year, but we won't know until we come to the end of the fiscal year whether we were accurate or not.
F. Gingell: I'd like to thank the minister for the open and interesting discussions we've had. I'm quite prepared for her to call the vote.
Vote 33 approved.
Vote 34: ministry operation, $73,658,885 -- approved.
[8:15]
Vote 35: pensions administration, $10 -- approved.
Vote 59: management of public funds and debt, $981 million -- approved.
On vote 60: contingencies (all ministries) and new programs, $45 million.
F. Gingell: I had forgotten about the contingency matter. As items come up that haven't been originally budgeted for, would you charge them to this vote until it's used up and then go into special warrants? How do you deal with the practicality of this contingency matter?
Hon. E. Cull: Generally, we're very mean in Treasury Board, and we insist that the ministries go back and try and find the money within their existing budgets. Being a little more serious, contingencies are just one of the things we would look at if we had some unexpected expenditures come up, and we would seriously look to try to find ways of accommodating those expenditures within existing budgets before moving to contingencies. Obviously contingencies are there because you can't anticipate and fund all possibilities.
F. Gingell: In no way do I think you shouldn't have one. From memory, the contingency advance last year was $60 million. Can you advise me how that was used up or whether anything was in fact paid out from that vote?
Hon. E. Cull: Last year the contingencies were $30 million, not $60 million; this year the figure is $45 million.
I can give you some indication of some expenditures that were covered under contingencies: Public Sector Employers' Council and PSERC, which were not contemplated when the budgets were drawn up; some additional costs related to the South Moresby compensation; Government Services; the Trade Development Corporation foreign exchange, for example; some changes to Bill 67 under Housing and Recreation, which had to be funded; and a wage parity plan for child care workers that was also funded out of contingencies.
F. Gingell: Would the minister be willing to allow me to have a copy of that schedule?
Hon. E. Cull: The list that I'm looking at is still a preliminary one. As soon as the year is closed off, we could do that.
Vote 60 approved.
[ Page 11416 ]
Vote 61: corporate accounting system, $5,614,000 -- approved.
Vote 62: public sector and public service human resource management, $12,513,000 -- approved.
Hon. E. Cull: That being the last vote, I thank my critic for his courteous questions and his patience with me and my staff as we struggled to pull all the information together that he has requested. We will certainly follow through on the commitments that I've made to provide you with information we didn't have here with us today.
D. Schreck: Hon. Chair, I move that the committee recess for five minutes while we change to the Ministry of Education and allow the critic and minister to take their seats.
Motion approved.
The committee recessed at 8:21 p.m.
The committee resumed at 8:25 p.m.
D. Schreck: As we finish Finance estimates and move to Education, I move that the committee report resolutions.
Motion approved.
ESTIMATES: MINISTRY OF EDUCATION
On vote 21: minister's office, $410,000.
Hon. A. Charbonneau: Starting off, I thought I would say a few words about some objectives I'm sure everyone -- government and opposition -- support, and it is the general objective of maintaining a publicly administered, publicly funded education system in British Columbia. We have four main challenges with respect to meeting that objective: to maintain or improve quality; to increase the relevance of education in the K-to-12 sector, particularly in the secondary portion of K to 12; to increase the accountability of the system in the broadest sense, and I'll come back to detail that in a few moments; and, last but not least, to contain the costs associated with the system.
To put some of this in perspective, we should talk about the size of the system we have, because it is indeed very large: about 1,700 schools; 35,000 to 40,000 teachers; about 25,000 support staff; 75 districts; a budget of about $3.5 billion; and, most important of all, about 550,000 to 570,000 students.
How are we going to respond to the challenges that I've listed, and what has this government done about meeting those challenges? With respect to quality, a paper called Improving the Quality of Education in British Columbia was issued last October. It addressed some very fundamental issues -- raising standards, accountability and relevance, and improving reporting. It was quite well received around the province as defining a step in the correct direction for education. In late November or early December we issued the final draft of the intermediate and graduation document for the period of comment which ended at the end of April. The documents will be finalized by the end of June, implemented on a voluntary basis in September 1994, and on a mandatory basis by September 1995.
In the process of the Improving the Quality of Education document, we addressed another important area. That is reflected in the intermediate and graduation documents on the modified primary program increasing the emphasis not only on the old basics -- language arts, math and science -- but the new basics as well. These are computer literacy, technology literacy, teamwork and problem-solving. Our young men and women need those skills if they're going to get on well in the world.
[8:30]
This leads us to the second point of the challenges of relevance. We have a very good system for preparing young men and women for college or university. It could do better, but by and large our K-to-12 system does a good job. However, for the 20 to 30 percent -- and the statistics are not clear -- of those who drop out or do not graduate with a Dogwood Certificate, the system has not done as well as it could have. For the 40 or 50 percent who wish to leave grade 12 with a Dogwood and go directly to employment, I don't think we do as good a job as we could there, either. It's partly the relevance issue. We have such a concentration on the academic side that we forget the applied side. The young men and women who leave with their Dogwoods need to have applied skills, knowledge and information that they can use and apply directly in the world of work. We can certainly stand some improvement in this area.
We're working on a number of initiatives now that are all wrapped up with skills but also on some initiatives outside of skills that will address these areas, linking the place of study to the place of work. I think it is particularly important that we do that so that young men and women can see firsthand how their knowledge will be applied when they take a job. They'll have a better appreciation for why they're studying communications or English or geometry or mathematics or physics. They'll have a better idea, knowing that when they come back into the classroom after some work experience, having seen the relevance, they will apply themselves to their studies with a bit more interest and vigour.
We have a particular challenge facing us with respect to relevance in the onset of the information era. The rate of change in education in the past has for the most part been steadily accelerating from decade to decade. But we've entered a period in which the rate of change is going to be so dramatic that if we cannot figure out how to make this huge system more responsive, we will fail our students in the public system. We will fail to do our job. In my view, we have just begun to see the impact of the information era and information technology. We have just begun to get a glimmer of how effective simulation software, virtual reality software and multimedia software can be in education. And let me be clear: this is not just the application of technology for technology's sake; this is the application of technology for learning, and it is just as applicable to fine arts as it is to mathematics, to science or to a pre-apprenticeship program. We are facing a daunting challenge across the board -- in preparing our staff, equipping our facilities, preparing curricula -- to keep up with the information era.
Accountability was the third challenge, and I want to stress that in my view accountability is a two-way street for all the partners involved in education. It's a two-way street with students. In my view we should expect more of students; we should let them know that we expect them to excel. Their families should expect them to excel. Their families should expect them to respect their schools, teachers and principals. That is an accountability from the student. To the student we are accountable for providing a high-quality, complete education and a set of relevant skills that enable them to choose further academic work or further vocation studies, or to go directly to the workplace.
[ Page 11417 ]
We can accomplish some of that accountability to students, I believe, with letter grades -- not at an early age in primaries; that's not suitable. The application of evaluation testing and reporting the results of those tests help make students accountable, particularly in the late intermediate and graduate levels.
We are accountable to parents because they, along with all taxpayers, are paying the bill. It is the future of their children that we hold in our hands. Surely we are accountable to parents to give their children a relevant education and to encourage them to strive and succeed. To make sure that parents are kept well informed, we have made changes in the reporting system. To let parents know how their child is faring, we have made changes with respect to letter grades.
We have extended mandatory accreditation to all schools, and the results of those accreditation team studies will be public information. It is my intention that the accreditation system itself shall be changed, such that we will not just have people from inside the system carrying out the accreditation; our partners in education from outside the system will also be on those accreditation teams.
I've often asked if the cost of accreditation is worth it. I'm not certain of the figure, but it might cost $50,000 or $60,000 for the accreditation of an elementary school once every six years, so perhaps it costs as much as $10,000 per year. Is it worth it? Absolutely -- every cent. It brings new focus back to the school and keeps everyone having anything to do with that school -- parents, administrators, teachers and students -- aware of what the mission is.
We have a responsibility to the community at large....Well, let me go back to parents for a moment and talk about their accountability to the schools. We have our accountability; parents have theirs. Parents should ensure that their children do the work that needs to be done. Parents should impart good citizenship habits to their children and call them into accountability. Parents should buy into and participate in the system as much as possible. We invite them in. We have them on committees, and that is the way it should be. Every school should be a welcome place for parents. That is part of our accountability to them. They're taking up the invitation and coming into the school; they're helping the system, their children and the school. That's part of their accountability to us.
We are accountable to the taxpayer because, obviously, that's where the money comes from. We are accountable to the taxpayers to see that we're spending their money wisely and that there is value for their money. As I see it, they are accountable to us and to the system, in that they should not begrudge fair, reasonable taxes that support a good-quality comprehensive education system. Again, our accountability to the taxpayers is to provide value; their accountability to the system is to fund it at a fair level.
We are also participating in evaluations on an ongoing basis not only of individual students, but of the system. We are doing this through standardized testing -- provincial, national and international. I believe testing of that nature is an integral part of the system and necessary to maintain accountability. We will continue to participate at the national level in appropriate testing programs with all the ministers of education. Standard indicators of achievement are being developed in partnership with the Council of Ministers of Education. We will continue to belong to that, as well.
The responsibility to contain costs was my fourth item; surely that is a major accountability. I have taken several steps. I have capped total administration costs and insisted that all school districts report the same classifications of expenses across the province, so we can get a better idea of where administrative expenses are in line and where they are out of line. We are in the process of instituting provincewide bargaining and considering year-round schooling, which are other ways of containing costs. I am not ignoring the possibility of increased and more frequent use of standards and design to decrease the costs on our capital side.
Containment of costs is important if we're going to retain the system. At the same time it is a priority of this government to fund education at a proper level. We have said at the outset, in opposition, in the election and subsequently, that education and health care are our highest priorities. We have put funding where our commitments are. Thus, over three budgets, British Columbia has increased education funding about 16 or 17 percent; there is a 4 percent increase this year. Compared to every other jurisdiction in Canada, that is a very good level of funding.
We only have to look next door to see a system that is reeling under cuts that could total over 20 percent over the next two years. That system proposes to charge poor families $800 for a child to go to kindergarten. In every other province, education funds are frozen or reduced. In B.C. we have put our funds where our commitments are, and we have increased funding to education.
We have implemented a school meals program. This year we have implemented a new major initiative to assist in the area of severe behaviour disturbances in our schools, which is a major problem for learners, teachers and parents. The amount of $30 million will not solve all the problems, but it will permit initiatives and programs that will help in that direction.
As an anti-poverty initiative, we have increased the funding for inner city schools to $5 million. We have increased funding to training teachers and staff in the methods of instruction of special needs children.
[8:45]
Is it enough? It's never quite enough, given the size of the system and the complexity of the problems. Society and parents have looked to the education system to solve many problems that in years past the family or other social institutions helped solve. Nonetheless, the public system must meet the challenge.
While we are well along the way of funding the public education system at a decent level, at the same time we are containing and preventing runaway costs. With all the steps we have taken in those four areas, I then contend that we are on the right path to not only preserve but improve publicly funded and publicly administered education in B.C.
Let me touch for a moment on the capital side. This year we have announced a capital program of about $339 million. It is part of the expenditures of the largest school construction program the province has ever seen. In the last two years and the coming year, we will have expended about $1.3 billion on schools mainly to provide new spaces. The pressures are enormous. We are running increases of around 2 percent per year in enrolment; we have a net increase of 12,000 to 14,000 students per year -- 12,000 students is roughly 30 new schools. At today's costs, between elementary schools at perhaps $4 million or $5 million and secondary schools at anywhere from $20 million to $30 million, an average of $8 million might not be far off. That's nearly a quarter of a billion dollars that we could use for new capacity just to offset the anticipated increase in enrolment for this year.
Let's not forget that we have 1,700 schools. They're growing older, and good management would call for a replacement of roughly 2 percent of stock per year, assuming about a 50-year life. We should probably be replacing in the
[ Page 11418 ]
order of 30 to 35 schools; that's a demand for perhaps another quarter of a billion dollars. Beyond that, we have needs for major renovations, major rehabilitations, some additions and some upgrading. So it's not difficult to understand that the total requests from the 75 school boards for capital projects were about $1.1 billion -- a sum of money that simply could not be met this year.
Of course, we build our schools with debt financing, and the government is under considerable pressure -- as members opposite appreciate and remind us -- to contain the tax-supported public debt of the province. Yet we build our schools, universities, hospitals and courthouses with debt financing. If we are going to meet the needs of a growing population -- 12,000 additional students -- we need to build, which means we need to borrow. It is a sensible way to do it as well. Borrowing and repaying over a 20- to 30-year period is the most sensible way of constructing and providing schools for our burgeoning communities.
When talking of debt and the magnitude of debt, I think the members opposite should always keep in mind that we are meeting the needs of the most valuable of our citizens when we build schools. We are meeting our own future needs when we build schools. The $339 million that we will borrow this year should not be criticized; I wish we could have borrowed more, frankly. I could have used an additional $200 million and not wasted one cent of it. Why? Well, things fell behind a long way in the mid-eighties when capital investment in schools fell to as low as $25 million for an entire year and averaged a meagre $50 million approximately for five years. At a time when enrolment was holding or declining, it was a golden opportunity to renovate and replace schools. Though the overall enrolment was declining, there were even districts in the mid-eighties where enrolment was rapidly increasing and schools should have been built. But the system fell four years behind in a five-year period, and we are still struggling with the consequences of that lack of foresight by a previous government.
Before closing off, after speaking of debt and other such mundane things, I feel it is only proper to do a bit of communal bragging for all of us in opposition and government. While we criticize and look for ways to improve and make it more relevant, and accountable, increase quality and contain costs while we do all of that, let's recognize that we have a pretty darned good system. We have thousands and thousands of excellent teachers who give their all every day. We have thousands of administrators, principals, vice-principals, superintendents, assistant superintendents and others who make great efforts. We have 75 boards that give a lot of time and effort. We have parents that dig in and work. Parent advisory councils in school after school volunteer great amounts of time and then go out to try to raise a little extra money. And we've got students, some of the best in Canada. Tens of thousands of success stories could be told every year about our students. We must never forget that.
I'd like to share with you a few of my own experiences from the past eight or nine months, because they have touched me deeply, and I'll remember them forever. I've made an effort to get out into as many districts as possible. I haven't counted them, but there must be 30 or 35. I must have been in 120, 130 or 140 schools and maybe 500 classrooms. I've met with teachers in almost every school, and parent advisory committees and boards of trustees in almost every district.
Some remarkable things are occurring out there, and I should at least tell you about a few of them. At Naramata Elementary School, a small school under construction and expansion, the principal arranged for two or three grade 5 and grade 6 students to escort me and explain to me how everything about their school was being enlarged and improved. They hauled me from place to place -- down to the equipment room and over to some other place to show me where the television cables were running, and they introduced me to workmen who were putting up ceiling tiles. It was an incredible experience. The principal was wise to let those students be the tour guides.
At Okanagan Mission a few weeks ago, I sat with 15, 16 or 18 secondary students and talked about their work experience and job-shadowing, and listened to how those students had found success. It came in different ways. Some students went out and worked in an accounting office, and they discovered they really enjoyed it and that's what they want to do. A young woman went into an elementary school and discovered that she really wanted to be an elementary school teacher. A young man shared that he went off to be a heavy-duty mechanic and discovered that that wasn't what he wanted to do, and he thought that was very valuable. Some had experiences with an engineering firm, a testing firm and a forestry operation -- all of them, success stories, and young men and women who could express themselves quite well.
I had a marvellous hour or so at an elementary school in Armstrong, one of a couple of schools in Armstrong that I looked at. There was an elementary class using computers and networks and communications to keep track on a day-to-day basis in real time of an expedition going from Yellowknife to Tuktoyaktuk and at the same time tracking a herd of caribou in the Northwest Territories and half a dozen or so polar bears out on the ice between Baffin Island and Greenland. Every day through the SchoolNet system they received information with respect to the location of all these things, such as the animals from radio transmitters on their collars, obviously. They received actual reports sent back by the expedition members themselves, including the dog-of-the-day award. They carefully got their maps out for me and showed me the plot. This week they were here and this week they were there, and they had it drawn up all the way through the Northwest Territories, with comments. They were conversing about that via computer with students in other parts of the country and the world.
At a Rossland secondary school, I remember eight or ten secondary students, most of them in grade 12, asking me an incredible series of questions they'd had time to think up. They were as good or better questions than any of us have ever been asked by a member of the media. They were perceptive questions and right to the heart of the issue.
In Kimberley, I saw a demonstration by a band class in an elementary school, grades 4 and 5, that would knock your socks off. They were playing rock and roll, and it was just magic.
I remember an afternoon in Admiral Seymour School in Vancouver, in a difficult area with 80 to 85 percent ESL, poverty levels probably at the 50 percent level, high numbers of refugee families and high levels of refugee families that were illiterate in their own language, with a schoolground where needles and used condoms had to be cleared off in the morning, and the occasional person sleeping here or there. But in the midst of that was a magic school with a breakfast program, a junior kindergarten program, a lunch program and a staff of loving, protective and good teachers and administrators. I saw 200 or 300 eminently happy young men and women. They not only received education, but they also
[ Page 11419 ]
received security and safety and love while they were at it. Let's not ever forget that our system provides that as well.
L. Stephens: I want to thank the minister for his remarks this evening, and welcome the minister's staff and thank them for the help that I'm sure they will be making available to us as we work our way through these estimates. This is my first set of Education estimates, and I'm looking forward to this exercise.
We will be discussing a number of issues around relevancy in education in today's world, which the minister has identified as being one of the topics of discussion, and a serious one that needs to be addressed.
The minister also alluded to provincewide bargaining, which is before the House in the form of a bill. I would like to say that I commend the minister and this government for bringing forward this legislation. It's legislation that the opposition supports and would like to have seen hand in hand with the essential service designation. However, that will probably be left for another government to do.
[9:00]
We're going to be discussing the cost of the education system in British Columbia, and we're going to be talking about some of the social problems we see in our schools, which the minister has identified as well, such as violence and poverty issues. We're going to be talking about some of the choices for students and parents that we need to expand upon, and we're going to look at the governance of the education system and whether or not it needs some restructuring. My view is that it does. I think we need to make some fundamental decisions on what kind of an education we need for today's society, and I believe the system must fit the students, not the other way around.
We really have to look at our graduation program and make sure that it is relevant to today's world and that it meets business and labour expectations for employees and the needs of those students going on to the post-secondary level. It's important that all our graduating students are numerate and literate, are able to communicate verbally and in writing, to problem-solve, and to think, and are computer literate. If we graduate students with these skills, they will be able to continue on to the post-secondary institutions or go right into the workforce. In order to do this, I think we have to make some fundamental changes to the graduation program as well as to the intermediate program. The minister has talked about the need to make those changes in the graduation program, that there is a proposal that will be finalized by the end of this month and that there have been a number of initiatives started through the Skills Now program. We will be interested to see just how relevant those programs are to today's work world and to the kinds of skills students need to proceed on to the post-secondary level.
In the applied sciences, I have to say I agree with the minister when he talks about the need for students to have those applied skills as well. It's extremely important that we focus on the trades and technical programs at the high school level before grade 11. I would suggest that we go back to the grade 9 level and start to introduce the kinds of programs that are needed to bring our children to the level they need to go on to post-secondary or out into the workforce.
Some of the other issues we're going to be talking about are the funding formula, independent schools, standards and assessments, programs in curriculum, capital projects, minority language rights, aboriginal students, special needs students and the accountability of the system. We are also going to be talking about the desire for apprenticeships, trades and technical and vocational programs, which I talked about a bit earlier.
It's important that we devise the grad program to bridge the K-to-12 system with the post-secondary system and that we support the publicly funded public education system. I have heard the minister make this statement before, and I agree with him that it is important that we continue to provide a publicly funded public education system. I am not a supporter of the voucher system, nor is the Liberal Party. I believe that the kinds of changes that people are looking for can be found within the public school system. There are a number of alternative schools that can provide the choice, and that is something I want to explore a little further with the minister.
We have to define more clearly the role of government, school boards and parents, and the ministry has to define the responsibilities and authority of the education partners. The government has to clearly define the core programs, the standards and the assessments, and the government also has to clearly define the capital projects funding levels and the overall educational strategy for the province.
We need to look at tougher academic curricula, better-trained teachers, better testing methods, improved and literate textbooks, clear public accountability, greater community involvement in the education system and better linkages to the employment skills and to the post-secondary institutions that I talked about earlier.
All this must be done together, and I think previous reforms have failed because of attempts at tinkering and because they were tackled in isolation from other areas. Instead of an overall comprehensive approach, there have been ad hoc attempts that have tended to make matters worse instead of better, in my view. We need to consider what is best for our teachers, students and parents, as well as what is affordable for the taxpayers.
Some of these changes could be in the form of the multi-track or year-round schooling the minister spoke of earlier, and that conversation is out around the educational community. There are models I know the minister is aware of, including one in Williams Lake which I'm sure he is very familiar with. We will be pursuing that a bit later to find out whether there are some additional pilot projects that might be coming forward in that area.
Site-based management is the ability of local schools to determine their school budgets as well as where the services are needed by the teachers and students at that school. They make the determinations. In the Langley School District, somewhat down that same road, we have principals who are the team leaders in the school, and that works very well for us. I know there are other districts that aren't quite as fortunate, but it works for us, and it could be expanded to other districts as well.
There should be a choice in the style of educational delivery, provided that equity is maintained. Technology could be used to address many of the education delivery needs, and we need local control, accountability, flexibility and choice in our schools, with school principals having more authority to determine the direction of each individual school.
Community schools should be designed to be multi-use schools. It really doesn't make any sense for school buildings to sit empty for two months of the year at tremendous capital cost. We have to involve industry in participating in the education system as well. We have to form strategic partnerships with industry to assist in the cost of educating the students. Concerning the costs that the minister is talking about -- and I think we all share the view -- I suggest that the pit is not bottomless. We do have to make some choices,
[ Page 11420 ]
and there are responsibilities for other members of society to assist us in the delivery of these educational services.
There are examples and models of these partnerships, and I visited one in the Edmonds school district in Washington State. They have a freestanding technology centre that's funded by industry, labour and the government. Industry provides the building, technology, equipment and instructors to teach the students the most advanced methods on the most advanced equipment. Because of the way technology changes today, with rapid new development, it's very difficult for schools to stay current with the latest technology that our students need to function in today's world.
We also have to involve parents in the education of their children to a much greater degree than we do now. I would like to see parent centres in local schools. This would be a specific room belonging to parents, where they would be free to come and go, and to support and encourage one another, and where they would have the opportunity to attend their child's classroom and assist the teacher in whatever way would be in the best interests of their child. This would serve a number of purposes. It would assist the teacher, and the quality of the teaching would improve. The children would feel more secure, and I think it would also alleviate some of the violence we're seeing in the schools, which seems to be increasing. It would provide help and support to those parents who may not be as strong in the supports for their children as they would like to be or have the capability to do. Most people would agree that there are a number of benefits to involving parents. The question has always been: how do you do that? How do we get parents involved other than on hot dog days? If we give them room to manage and devise their programs for the kinds of service and support they give to the educational system, they will obtain ownership from that process. That has been one of the motivating factors for many people to be more actively involved.
Local schools should have the ability to manage their own budgets and purchasing. Site-based management and common goals for education in developing the indicators to assess their achievement are key elements to improving the system. Such standards must ensure international competitiveness. Test results must be used to identify the most successful learning strategies. Success in education will depend on the choices made by government; I suggest that the fair-wage policy should be exempt from school construction. There needs to be a firm commitment to establish new school facilities and to eliminate as many portables as possible. We need to find innovative and creative ways to deliver quality education in the province.
I would like to begin the questioning of the Education estimates with the funding formula. When the funding allocations were announced, the technical distribution report provided some idea about changing the formula. Would the minister indicate what type of funding formula he thinks may be suitable for the school system? Will some, all or none of those recommendations be implemented?
Hon. A. Charbonneau: First, let me correct an oversight. I was so ready to get this process finished so we can all get back to our regular lives that I neglected to introduce my staff: my deputy minister, Cynthia Morton; my assistant deputy minister, Anne McFarlane; Rick Connolly from facilities; to lend a hand on finance, Joan Axford; on budget, Pat Brown.
Now I will address your question. One of the first things that I decided, upon being given responsibility for this ministry, was that the fiscal framework was impenetrable. It seemed unnecessarily complicated. I was told again and again by trustees, ex-trustees and teachers that they couldn't understand it or explain it to the public. My response was: why do we have it that way? The technical distribution group looked into it to see if changes could be made within the existing structure. I received the report but decided that approach was only tinkering with the system. It was in effect putting a blessing on some things that I thought were inappropriate. I received the report but shelved it.
The technical distribution report pointed out that some districts, particularly those suffering tremendous growth and urban problems, were not being treated fairly. So I established an urban growth fund, and I included community schools as a signal that I think they are a good idea. That was about $8 million. That fund was distributed to those schools and districts that met a growth test or a community school test. That left the other districts whole -- nothing was taken from them -- and it helped to at least offset the additional costs related to the high-growth districts.
[9:15]
I intend to have a very small task force look into that and make recommendations back to me with respect to a much simpler distribution formula that would replace the fiscal framework. It will not be a needs-based formula, because we all know we can never meet the total need. It will be a fair distribution system, and it will be an understandable distribution system. I cannot go past that at this point, because I have not yet received even a preliminary reports, nor has the task force itself been struck, but I intend to do that in the not too distant future.
L. Stephens: First of all, two other reports were done as well. One was the education finance advisory committee, which reported out in December 1993. The other was the financial reporting and accountability committee, which reported out in January 1994. Was there nothing in any of these three reports that was of help to the minister to come forward with a different solution? What would be the mandate of this new committee that is going to be struck? What is the composition of it? What are the terms of their reporting out?
Hon. A. Charbonneau: Bill 10 went through the House recently -- at least second reading stage did. Much of the content of Bill 10 came from the work of one of the committees. As well, the suggestion that special needs funding be targeted was an outcome.
You suggested that a new committee would be struck, and I want to be clear on this. One thing I felt about education was that we had perhaps too many committees, which were too large and went on for too long. So I'm going to strike a very small task force of one, two or three people. They will go out and do a specific task for me, which is to recommend a new distribution system, and then it will expire at that point in time. That is the intent.
L. Stephens: I will again ask if the minister can be a bit more specific as to when this task force may be struck, what its mandate would be and when it would be reporting out. What kind of time line would you put on it? Six months? Three months?
Hon. A. Charbonneau: Some preliminary work is being done right now, and there will be some consultation over the summer. Some of the work will be done in-house with one person -- possibly two -- external to the system for some
[ Page 11421 ]
fresh input from outside the system. I want it to report out by fall of this year.
L. Stephens: If it's reporting out by fall, does the minister have a time line for when he would like to have the new formula implemented? For the '96-97 school year or the '97-98 school year?
Hon. A. Charbonneau: We're much faster than that. I want to have it in place for the '95-96 budget process.
L. Stephens: Could the minister indicate the cost of the technical distribution report, the financial reporting accountability committee report and the education finance advisory committee report?
C. Morton: My understanding is that the total cost for all three....
The Chair: Excuse me. The deputy minister may answer, but the custom is that we have to stand to be recognized.
C. Morton: Oh, excuse me.
My understanding is that the total cost for all three committee processes was approximately $130,000.
L. Stephens: Some of the positive aspects of the report were the recommendations that the funding be much simpler and the formula be much simpler, the adoption of incremental funding and the recognition of more realistic administration costs. We've talked about the administration costs and updating the cost factors. So would the minister share with the committee whether or not those four areas will be specifically looked at by his task force?
Hon. A. Charbonneau: The new system will cover all those areas.
L. Stephens: A number of value-for-money audits have been done in other ministries, and there was one done in the Ministry of Education for administration costs. Would the minister agree that value-for-money audits are desirable for the school districts in order to provide some accountability and determine whether or not what is going into the system is coming out in a way that is measurable, is accountable and is meeting the objectives of the ministry?
Also, it's my understanding that the mechanisms previously in place were very deficient. I know the minister has made changes to the accounting procedures used by the districts, but I would like the minister to expand on the new accounting manual -- what it purports to do, what the minister expects it to do and whether there is a mechanism in place to evaluate the desired outcomes.
Hon. A. Charbonneau: The auditor general did a value-for-money audit of the purchasing departments of five districts and has not yet issued a report; it's expected shortly. I look forward to seeing it, because I think that carefully designed, carefully carried out value-for-money audits are appropriate in many instances.
With respect to the accounting manual, upon asking for an accounting of how much each district was expending on administration, I discovered enormous variation across the system. If you were to have notionally plotted a graph comparing size of district to percentage of budget spent on administration, it would have looked more like a scatter graph than a relationship. This caused me some concern.
Upon inquiry, I found that districts were reporting costs erratically; they were coding the costs. I'm not standing here faulting them for that. It was a case where the system, over a period of time, had drifted to the point where it didn't matter a great deal exactly how the costs were coded. They were done; they were reported, but it was only the totals that mattered. I think it's the subtotals that matter, and I wanted to know what they were. So we put out an accounting manual calling for every district to report in the same manner. We've gone through a draft or two of it, and the budgets that have just been built in the 75 districts have been built and coded in accordance with that. All the bugs are not out of the system. I'm not satisfied yet with the accounting manual, but what we have is something better than what we had. We're now going to be able to compare much more closely. We're going to be into more of an apples and apples. It may not yet be a McIntosh versus a McIntosh; we may have Granny Smiths versus McIntoshes. We've got to work on this a bit more.
[9:30]
The intention is to allow the minister to look at the data and draw conclusions as to who is doing the most cost-effective job of managing and which district has discovered how to do something best. Then I want that best practice defined and used across the system to the greatest degree possible. It comes back to the containment of costs. If we're going to maintain the system, one of the elements is to contain the costs. And if we're going to contain the costs, we have to look at administrative costs. Across business it has not been uncommon to see a considerable reduction of middle management with the advent of computers and software of ever-greater power. I suspect that we can accomplish some slimming down of the system in the same way, and I want to do this very carefully and thoughtfully, and consult as it is done. But the objective is clear: I want to have consistent reporting, and I want to have reduced administrative costs.
L. Stephens: I have one more question before I yield to the member for North Vancouver-Lonsdale. To follow along with the new accounting manual here, the coding in the functions the minister refers to has traditionally been quite fluid in how costs were allocated within those functions. The ability to determine whether or not districts are providing the funding in the areas that the ministry would like to see them do so has perhaps been limited for the ministry to make that designation.
With the new accounting manual, which attempts to bring some kind of order and consistency to reporting, and with the ability to compare district costs, what mechanism is there within this manual to determine whether the desired outcomes that I assume the ministry must have are happening? What will determine whether the desired results vis-a-vis the school districts and the services they provide and the programs they deliver are occurring? Firstly, what is there that the ministry can measure to determine if ministry objectives are being reached? Secondly, will there be public reporting of those outcomes of each district?
Hon. A. Charbonneau: Bill 10 specifies that the independent auditor of the school district audits the books and checks that coding. That is then reported back and is public information. In addition to that, we can do spot checks if there's a feeling that we ought to be concerned or if somebody identifies a concern. As well, several districts have invited in an administrative review team to assist them in the process, and I continue to make those teams available.
[ Page 11422 ]
D. Schreck: I'd like to thank the official opposition Education critic for interrupting her flow of questions so that I might enter this debate. I also appreciate that we've reached the customary time in the evening for adjournment. However, as I am representing the province next week in internal trade negotiations in New Brunswick, I'm concerned that these estimates might conclude before I return. Therefore I'd like to put one question to the minister before the customary motion for leave to sit again.
The questioning started this evening on the topic of the technical distribution report. While I am extremely appreciative of the minister's work and the direction that he has set, I also appreciate that just a few weeks ago the minister met with the chair of the board of trustees of School District 44, Pat Heal, accompanied by the superintendent and the secretary-treasurer. I was privileged to attend that meeting. There were some agreements that I think the delegation did not expect, which will allow them to ease some of their budgeting problems. A lot more would certainly be welcome. Notwithstanding my respect for the job the minister is doing, my foremost obligation is to the people who elected me. The technical distribution report says that if it were implemented, School District 44 would get another $1.5 million this year. As I'm sure other North Shore MLAs have, I have received letters from constituents -- some of them use language I can't use here -- that essentially ask: why are we being beaten out of our $1.5 million? I am putting this question to the minister in what limited time remains: why is North Vancouver being beaten out of its $1.5 million?
Hon. A. Charbonneau: I had a momentary flashback that involved an interchange, but that's another issue. I realize that a number of districts did not meet the cutoff built into the growth fund, hence they did not receive moneys that they might have otherwise received had I carried through with the recommendations of the technical distribution report. I can only say, at this point in time, that in the new distribution system that will be developed, the needs of your district will be met in a better way, because part of the purpose of going to a new distribution system is to give a present-day update of those costs. The district, I guess, was helped to at least some degree by the $180,000 extra funding that was provided due to the efforts of the member.
D. Schreck: I realize that talking about the Westview interchange is out of order in these estimates. I'll put pressure on government in other quarters for that project that's needed for the North Shore. I want to let this minister know that in his new capacity he is also going to be hearing from me and, I'm sure, the other members from the North Shore as we pressure for that $1.5 million. He's going to have to either convince us that the report was technically flawed or come across with cash.
With that being said, hon. Chair, I know we would enjoy these estimates going on later this evening, but we also have an expectation of an adjournment time. Therefore I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 9:38 p.m.
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