1994 Legislative Session: 3rd Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
WEDNESDAY, JUNE 29, 1994
Afternoon Noon
Volume 17, Number 3
[ Page 12491 ]
The House met at 2:04 p.m.
A. Hagen: I'm happy to welcome my husband, John, to the precincts today, and I hope others will join me in that welcome.
G. Wilson: It's my pleasure to welcome to the gallery today two of my constituents from Powell River, Gladys Chavigny and Jenny Garden, who some members of this Legislature may know is the granddaughter of one of our illustrious members, my good friend from Cariboo North. May the House make them welcome, please.
D. Streifel: Around the precinct someplace today, maybe up in the gallery, is a very good friend of mine, a former colleague I worked with for years in the retail food business. As well, we were colleagues on staff with the United Food and Commercial Workers, Local 1518. Would the House please welcome Frank Pozzobon.
F. Garden: I'd like to thank my colleague from Powell River-Sunshine Coast for making the introduction of my granddaughter. Accompanying my granddaughter and her grandmother is my favourite sister-in-law from Dundee, Scotland. She's all the way over here visiting my wife, Margaret, who's her sister, and a son in Powell River. She was bragging the other night about the prowess of some famous athlete coming from Dundee to the Commonwealth Games next month. This is my favourite sister-in-law, so let's make Lexie welcome.
DOMESTIC VIOLENCE PREVENTION ACT
L. Stephens presented a bill intituled Domestic Violence Prevention Act.
L. Stephens: Three in ten women currently or previously married in Canada have experienced at least one incident of violence at the hands of a marital partner. In British Columbia, 36 percent of married women have experienced wife assault, and 48 percent of all female homicides are committed by their partners.
This bill will afford victims of violence greater access and protection, through the use of a justice of the peace for the removal of the offender from the home rather than the victims -- the children. This is a major innovation. In addition to removal of the offender, an emergency intervention order and a victim assistance order can provide for the comfort and safety of the victim and other family members who remain in the home.
In the judicial system, the onus will be on the respondent to demonstrate why such orders should not be put in place, and the focus will be on greater protection for the victim. Provisions for the respondent to be restrained, removed and/or to attend counselling or therapy are also provided.
Bill M217 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
LABOURERS' ADVANCEMENT FUND AND NDP ELECTION CAMPAIGN
G. Farrell-Collins: The Minister of Labour has caught my eye; he knows it's coming his way.
The opposition has heard, as has the rest of the province, that the government is announcing a major $800 million plan to rebuild the ferries. In the absence of the minister of special deals and campaign fundraising, will the Minister of Labour assure us that no money from this $800 million project will find its way back into NDP election coffers in the same way that it has on the Vancouver Island Highway project? Will the minister give us that agreement?
Hon. D. Miller: Indeed, all members on this side of the House are extremely proud of that announcement that was made today. It will not only see new ferry construction but new terminal construction here in British Columbia.
I can assure the hon. member that unlike the Liberal opposition that has criticized an agreement that provides jobs for British Columbians, this government will endeavour to ensure that all of those jobs go to British Columbia workers.
The Speaker: Supplemental, hon. member.
G. Farrell-Collins: I couldn't help but notice the testiness of the NDP when that question was raised. I think it's because they have something to hide. If I can paraphrase his colleague, I'd like to issue a challenge to the Minister of Labour. If labourers' advancement fund money has ever found its way into the federal or provincial NDP election campaigns, will he resign as minister? If they haven't, I'll resign as House Leader.
Hon. D. Miller: I can only say that when the member opposite offered to resign as House Leader, I noticed his colleagues applauding enthusiastically.
G. Campbell: It's not hard to see why the minister would slough that off with an excellent retort, I might say. But the fact of the matter is that we have documents today that show that the labourers' advancement fund has, in fact, contributed to the NDP nationally, as well as to individual candidates in the amount of hundreds of dollars. We had previously asked for a guarantee from this government that no advancement funds used and formulated in the Island Highway agreement would find their way back for political purposes. Will the minister commit today to rewrite the contract of the Island Highway to make sure that no public funds are finding their way back to the NDP through these advancement funds?
Hon. D. Miller: We on this side of the House see nothing wrong with an agreement that provides not only the much-needed construction of new highways on Vancouver Island but people on Vancouver Island with the opportunity to get those jobs -- unlike the Liberal opposition, which, if they were ever in power in this province, would scrap that agreement and see those jobs go to people who perhaps are non-British Columbians.
The Speaker: Supplemental, hon. member.
[ Page 12492 ]
G. Campbell: You can count on the fact that, should we ever form government, we will be sure that taxpayers get the best value for their investment.
The Premier said to this House and to the public: "The purpose for which the advancement funds have been allocated in the Island Highway agreement are not for political purposes." However, we know that $1,500 from the labourers' advancement fund has been contributed to the NDP. We know that hundreds of dollars have been contributed to individual NDP candidates. We are asking the minister to simply protect the taxpayer in order to be sure that their funds are not going for political purposes but are indeed going to enhance the infrastructure of the highway.
Hon. D. Miller: I can say that in my term in politics I have indeed personally received donations from working people, and it's no surprise that the Leader of the Opposition refused to disclose the corporate donors to his campaign. We on this side of the House are proud of the fact that ordinary working men and women in this province feel it's important to maintain this government and contribute to members on this side of the House.
REGISTRATION OF LOBBYISTS
R. Neufeld: My question is to the Attorney General. The federal government recently announced its registration requirements for lobbyists in Ottawa. Given the tremendous influence that certain special interest groups exercise over this government, will the Attorney General commit to implementing similar formal registration requirements for lobbyists at the provincial level?
Hon. C. Gabelmann: That's not an issue that I have under active consideration at this time.
The Speaker: Supplemental, hon. member?
R. Neufeld: Lobbying at the provincial level is not as organized as it is in Ottawa, but it is more secretive and every bit as influential. Why doesn't the government acknowledge the need for reform in this area and commit to a formal registration process for provincial lobbyists? Even if it didn't prevent lobbyists from having the inside edge with cabinet, surely a registration process would at least tell us who's on track.
[2:15]
Hon. C. Gabelmann: I think that issue needs to be considered by all members of the House; it's one that members of cabinet should consider as well. While it's not under active consideration at this time, I think it's an issue that deserves discussion.
SPOUSAL ASSAULT SENTENCING
L. Stephens: My question is also to the Attorney General.
Linda Williams was a mother of four when she was murdered during a domestic dispute in Surrey, and the terror and brutal fear suffered by Linda Williams in her own home at the hands of her husband has been trivialized by the province's judiciary. The man who killed Linda, her own husband, was sentenced to five years in prison. What is this minister doing when women such as Linda, brutally assaulted and killed by their spouses, are protected by token denunciations and atrocious sentencing?
Hon. C. Gabelmann: The member raises a general issue which I think merits the serious concern of all members of the House and all members of our society. I'm not going to make any comment about the particular sentence that was meted out in this case, other than to say that all of us consider wife-beating -- I was going to call it "spousal abuse," but what it really is is wife-beating -- to be a serious crime. It's one that I think our society needs to treat in a way that is far more dramatic than it does at the present time. I noticed that the member introduced a private member's bill today, which I've not yet had an opportunity to review, obviously. If it's modelled on the Saskatchewan legislation, then I would say to her that I'm very interested in looking at those kinds of initiatives, because I think we have to do a lot more in this province.
The Speaker: A supplemental, hon. member.
L. Stephens: This particular case has outraged a lot of women's groups in the province. The message the ministry seems to be sending to British Columbians is that it's cheaper to kill your wife than it is to get a divorce. All members should really be ashamed of this. I'd like the minister to commit the resources of his ministry today to reversing this light sentencing.
The Speaker: Hon. member, there was no question that I could detect in that.
RESTRUCTURING OF B.C. RAILWAYS
L. Hanson: My question is to the minister responsible for B.C. Rail. When in opposition, the NDP MLAs for Vancouver Island, who included the Attorney General, published a pamphlet on the E&N Railway. Those MLAs promised that under an NDP government, B.C. Rail would assume responsibility for operating the line -- both the passenger and freight services -- and passenger and freight services would be extended to Campbell River by 1994 and then beyond, while freight service would also be branched out to Port Alberni. Is the government still intending to fulfil this promise?
Hon. J. Pement: I'd like to say that with regard to any restructuring of railways within this province, provincial interests must be met. I have talked to the federal Minister of Transport, Doug Young, about these issues -- the E&N being one and the Skeena run being another -- and I said that we have a real concern about restructuring the railroad systems and that we must be active in any dialogue with regard to restructuring.
CPR LAND GRANTS
L. Hanson: So much for that promise, I guess.
Also, the New Democrats promised that the CPR and the federal government would be required to pay British Columbia back for their continued use of our forests and lands over the past 120 years. "They must either give back the huge tract of land that runs alongside the railway or at least provide compensation." If this is still government policy, what steps has the minister taken to have it fulfilled?
Hon. J. Pement: Again, with regard to any restructuring of railways, we are not going to have any situation where we allow the federal government to off-load onto our province and our taxpayers. We want a good service, and we want to be assured of a good service. I would say to the hon. member
[ Page 12493 ]
that we will be working with the federal government to ensure that our interests are looked after.
DOWNTOWN EAST SIDE COMMUNITY BANK
F. Gingell: My question is to the Minister of Social Services. We were shocked last week to discover that the head of the Downtown Eastside Residents' Association opposes the new community bank being financed by the NDP government for their longtime friend Jim Green. DERA is the largest organization, with years of experience in this neighbourhood. DERA could be one of the biggest depositors and supporters. Could this minister explain to this House why the minister who was responsible for this bill refused to sit down and talk to this minister's constituents at DERA?
Hon. J. MacPhail: In fact, hon. member, that is not the case. A public meeting called by DERA took place. There was wide community participation. In fact, there has been a series of community meetings. DERA is a longstanding community advocacy group that is to be well respected. It's one of several that exist on the downtown east side. In fact, the consultations included members from DERA. I would say that among my constituents, who will benefit from the bank, there is wide community support for the bank.
The Speaker: Supplemental, hon. member.
F. Gingell: I will ask my supplemental question of the minister who is responsible.
In announcing this bank, the minister stated that many downtown Vancouver residents do not have access to banking services. DERA says that isn't true. Could the minister please inform this House who he thinks is in a better position to understand this problem facing downtown eastside residents -- an organization that has been working on a daily basis to help those residents for many years, or the minister sitting here in Victoria?
Hon. G. Clark: I'm delighted to see the members opposite supporting the good work that DERA does in the community, but this government listens to the people of the community, not just to individual interest groups, friends, corporations or otherwise. We had 16 public meetings, with an average of 60 to 100 residents from the community -- not members of interest groups, not people with axes to grind, but people who live in the community coming in, designing the legislation and talking to the government about their lack of treatment by banks and credit unions, and about lack of access.
I know that the members opposite said that we didn't meet with DERA. That's not correct. Not only did I have staff meet with DERA, but I met with DERA in the community, in the bank building at a public meeting. They got up and walked out and said they did not want to discuss the bank's business with members of the community. And I'm saying that we'll have no closed-door, private meetings on this or on any other question.
Interjections.
Hon. G. Clark: I've been away for a couple of weeks, hon. Speaker.
The Speaker: Yes, that's quite satisfactory. Thank you, hon. member.
LAND CLAIMS NEGOTIATIONS
G. Wilson: The process of treaty negotiations is now entering a critical stage. There are some 40 first nations that are about to enter into negotiations with this province with respect to the resolution of land claims. Will the Attorney General today commit to table in this House the legal advice his ministry has provided the government with respect to the government position on title on land under negotiation?
Hon. C. Gabelmann: No, hon. Speaker.
The Speaker: The bell terminates question period, hon. members.
Hon. G. Clark tabled the financial statements of the British Columbia Educational Institutions Capital Financing Authority, in accordance with section 4(5) of the Educational Institution Capital Finance Act, for the year ended March 31, 1994.
Hon. D. Zirnhelt tabled the 1992-93 annual report of the Ministry of Agriculture, Fisheries and Food.
Hon. J. MacPhail: Hon. Speaker, I call Committee of Supply.
The House in Committee of Supply B; S. O'Neill in the chair.
ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT
(continued)
On vote 23: minister's office, $362,400 (continued).
Hon. G. Clark: I've been away, obviously, on business for the last ten days. I'm a bit tired, and I'm on Ottawa time, but we still have lots of time to debate these estimates. The order, I'm advised -- I hope opposition members have been informed of this, and I apologize for not being able to be in discussion with them -- is that we'll at least start with B.C. Ferries, then Transit and then Hydro. I assume there's been some discussion about what will go after that, so I just put that on the record for those of you who don't know. I haven't prepared any opening statement, but maybe I'll just do a brief one in general on the minister's....
Interjections.
Hon. G. Clark: Well, it's like when you do an arbitration or anything else. You've been through them. You can reserve your right to make an opening statement at any time. I thought I'd make my opening statement now.
First of all, let me say that we're very excited by the new ministry, which was created in September of last year. The new ministry includes B.C. Ferries, B.C. Transit, B.C. Hydro, the Transportation Financing Authority, B.C. Buildings Corporation, and most of the Economic Development ministry -- although not the Small Business component -- including the regional economic agencies. It also includes science and technology, which was moved over from the Ministry of Advanced Education, and the B.C. 21 initiative.
The B.C. 21 initiative really brings all of the pieces together. All capital planning for government, whether it comes through the Ministries of Education or Health, etc.,
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and Crown corporation capital is filtered through the B.C. 21 initiative, which tries to ensure that we're getting rational capital planning. That will save taxpayers' money, to try to achieve other social benefits, whether it's apprenticeships, employment equity or otherwise.
I want to make it clear that on the social capital side, which is education, health care, etc., the primary objective is program needs. It's not up to this ministry or this minister to talk about whether a particular school should be built or not; that's the Minister of Education's job; and this ministry does not influence or try to interfere in the decision of the minister or the ministry in dealing with the greatest-needed areas. It's obvious that in the area of education, for example, there's a significant capital envelope of some $500 million, the largest amounts of which are spent in Nanaimo, the Fraser Valley -- mostly Surrey, but some in Langley -- and also in the Kelowna area. That's quite obvious, because those are the principal growth areas in British Columbia.
[2:30]
What this ministry can do is try to ensure that the capital planning in the Ministries of Education and Health and in Crown corporations are meshed in a way that makes economic sense, so we're not doing courthouse and school construction and highway construction and university construction, etc., all at the same time. We want rational planning.
Our influence on the social capital side is really at the margins in terms of trying to move up or expedite projects where they make sense -- where they're needed and where there's a lack of economic activity -- and slow them down, at least marginally, in areas that may be overheated for a variety of other reasons. We haven't had a lot of overheating in British Columbia, but there are parts of British Columbia where it makes sense to do different schools at different times, and different hospitals in different areas. Obviously, the overwhelming and number one priority is whether or not the school, hospital or justice institution is required. That's up to the line ministries. This ministry, along with Treasury Board, simply reviews them in respect of overall capital planning, keeps a lid on the total amount of capital spending, and also tries to achieve other initiatives, whether it's apprenticeships or local hire or otherwise.
[W. Hartley in the chair.]
Earlier today we announced -- I can't resist, hon. Speaker -- the largest B.C. 21 initiative to date, which is the Ferry Corporation's ten-year capital plan. I think it's the first time ever that the Ferry Corporation has engaged, first of all, in strategic planning, and secondly, in a vision for where we want to see the Ferry Corporation go. There has been some excellent work in the past -- the Ferry Corporation is a world leader -- but we have some critical times coming up. Half of our fleet is around 25 years old, so there's a big capital bulge working through the system. If nothing were done, billions of dollars would have to be spent five to ten years from now. We wanted a rational way of dealing with that -- a way that's fiscally responsible.
At the same time, there are critical issues of transportation on the Island that have to be dealt with, like in Nanaimo, where there's tremendous congestion. There are several options. The old option would have been to build a big new facility at Departure Bay or Duke Point -- a huge new apparatus, with hundreds of millions of dollars in infrastructure requirements and bigger ships to deal with bigger loads. Instead, today we announced something which I think is far more visionary, especially when it links up to the Island Highway. We have the Duke Point truck terminal, which is a much trimmed-down version of what could be there. We take Departure Bay, and it becomes a fast-ferry terminal, which is very modest indeed. It doesn't require the big holding capacity of terminals like Tsawwassen and Swartz Bay. We get tremendously increased service, and we get more volume through a smaller area.
So we've got high-speed, aluminum car-carrying ferries -- three of them, built in British Columbia -- going to the Horseshoe Bay-Nanaimo run to service that route. We're moving all the trucks off that route out of Departure Bay. The member from West Vancouver should be pleased with this. I haven't had a chance to talk to the mayor there, but I will be doing that. It's very exciting for the people at Departure Bay to be moving all of the trucks out of Departure Bay, save and except those going to Bowen Island and the Sunshine Coast. There will have to be some costs at Departure Bay to deal with significant growth in the....
Some Hon. Members: Horseshoe Bay.
Hon. G. Clark: What did I say?
An Hon. Member: You said Departure.
Hon. G. Clark: Oh, sorry, Horseshoe Bay.
There will have to be some investment in Horseshoe Bay because of the tremendous growth in the Sunshine Coast. That is going to put pressure on Departure Bay, but eliminating the trucks...
An Hon. Member: Horseshoe.
Hon. G. Clark: Sorry, Horseshoe Bay.
...from Horseshoe Bay will be a dramatic improvement and will eliminate much of that route 30 traffic. Also, the fast car ferries don't require the same holding capacities, so that makes Departure Bay work better.
Interjection.
Hon. G. Clark: Horseshoe Bay and Departure Bay work better, in this case.
We are also reviewing a reservation system that we might couple with the fast ferries, which will do even more to alleviate congestion at both of those ports.
Today we announced the construction of a new Queen of Prince Rupert, which will reduce the travel time from the Charlottes to Prince Rupert from six and a half to four hours. That's a conventional steel vessel. There will be significant cost savings through staff cost savings -- no overnight accommodation will be required on board -- and fuel savings, because it's a new ship with new technology. Also, because of the configuration of the new ferry, the ability to carry dangerous cargo will, we think, save money.
Further, we announced a new Queen of Sidney to go from Powell River to Comox. That ship is now one of the oldest in the fleet. It's about 34 years old, as I recall. Clearly a new vessel was needed. The member for Powell River-Sunshine Coast might be interested in this, but probably not particularly pleased. We actively explored two smaller ships, with one at both ends, and different ways of trying to accommodate some of the legitimate needs of the people of Powell River. We weren't able to do that. We are going to have a significantly faster and more modern vessel, which will save a lot of money for the Ferry Corporation and allow for a new service from Powell River to Comox.
[ Page 12495 ]
So we have two conventional ships, three high-speed aluminum ships, a new terminal at Duke Point, new facilities at Bella Bella, Departure Bay and Horseshoe Bay, and still some refit required at Swartz Bay and Tsawwassen. In addition to that, we have a ten-year plan. The bulk of what I've just mentioned is over the next three to four years, and after that we'll be one-ship-a-year for the remaining six.
We have a vision of the corporation which marries new technology and technology transfer to our yards in British Columbia. It gets us on the cutting edge of technology with the ability to market that technology by building ships for export around the world, not just for the Ferry corporation. We have conventional replacements that are long overdue, given what I said in terms of the capital bulge coming through the system. We have a new terminal on the Island, which takes most of the growth on the Island, which is extraordinary. When you link up Duke Point with the new $1.2 billion Island Highway, you're really getting an integrated transportation system which has a dramatic impact, will really change the shape and face of Vancouver Island, and has dramatically positive benefits for the economy.
The ferry plan is one in a series that this ministry is working on under the B.C. 21 initiative. Over the next year there should be a Transportation Financing Authority ten-year plan on where we see the vision there going. We have a ten-year plan worked on by the Transit Corporation. Of course, we've announced commuter rail under the B.C. 21 initiative. There are some other initiatives working with local communities going on with respect to transit to maintain our quality of life, again long overdue when you're looking ahead at the rapidly growing areas of the lower mainland. We have a BCBC plan -- many of you know about the Victoria accord and others -- and are looking at rationalizing that. As well, at B.C. Hydro we have very exciting opportunities that we're exploring and will talk about later.
In the ministry itself, we're working on partnerships with the private sector on a number of interesting initiatives, some of which unfortunately I can't really mention today. We have a whole section working on partnerships with the private sector to promote economic development. Funding in the science and technology sector has been increased some 10 percent in the last budget. Again, there are some very useful partnerships that we are trying to build. The days are gone of just giving government money to any community -- whether for science, technology or otherwise. Partnering with the private sector, with other agencies or with the federal government gives us tremendous spinoffs and benefits with science and technology.
Working in this new Ministry of Employment and Investment in all those areas -- and I haven't mentioned the investment promotion side or the trade side -- really brings together in the ministry a very exciting tool for government to lay the foundation for private sector growth. Almost everything that I have mentioned today has been on the infrastructure side. Regardless of one's politics or ideology, if you want to maintain your quality of life and promote economic development, you need efficient transportation networks, and you need government to make the kind of infrastructure investment that really lays the foundation for private sector growth and for maintaining our quality of life.
In the next year you will see transit; ferries; road, building and hydro construction; as well as private sector partnerships in science and technology, and in investment opportunities. I think that is very exciting. No other government in Canada is proceeding in this manner. We are rapidly growing. At last count, we created 268 full-time jobs a day, every day, 365 days of the year last year: 102,000 net new jobs were created in British Columbia. Nowhere in North America is job creation and economic growth taking place like it is in British Columbia. If we want to build on that, we need to make the investments today to lay the foundation for growth in the future -- and that is what B.C.21 is all about. That's what these initiatives are all about, and I am very pleased that the Premier chose to put them together in this fashion, because it is critical to effecting the pace and pattern of development and the quality of life and economy of British Columbia.
That's my opening statement, hon. members. I hope we can proceed with a bit more discussion on the Ferry Corporation, and then we can move to the others.
I was surprised to learn when I walked in the door there was a large number of people in my office from all these different agencies. With the House's indulgence, I would appreciate it if we could go through them in some kind of order, because obviously they have other things to do than sit in my office. We will try to finish ferries and then move to transit. I apologize if any members miss any of that, because I don't think it will be easy to revisit it, given that I will send staff home after we are completed.
D. Symons: I appreciate the opening remarks, for the second time, from the minister. I guess it's the minister with his finger in everything, because he named the great number of activities he has. I suppose my one criticism -- and I have made it before -- is that I feel somehow that the minister should have the Ministry of Highways under there too, so that we have all the transportation things in one ministry. Or maybe he should cut off some of those things like ferries and transit and put them in Highways, where I think they really belong. We do indeed call it the Ministry of Transportation and Highways, but there seems to be very little transportation left there. I appreciated those comments nevertheless.
I am also pleased that you gave us sort of an overview; I think that is great. I was not able to be at your announcement earlier today regarding the ferries. You may remember during the last election campaign that our party spoke in favour of faster and smaller ferries and more frequent service for them. The superferry was a fait accompli of the previous administration. You inherited that, and I see you are moving in that other direction more rapidly now. I suppose I can compliment you on taking that step.
I was also a little bit surprised at your very last statements where you were talking about the private sector. It seems when we deal with contracts for the Island Highway and so forth, the private sector has to be only one portion -- the private sector that is unionized. I had hoped that would not be the case in many of the other government initiatives. As for developing this new ferry technology, let's open it up to all of the private sector that would like to get involved. That is my response to your opening statements.
To get back to the ferries, where we left off, last year we were given a figure of a large increase in the operating grant that was given to B.C. Ferries. I believe somewhere around $15.8 million was the increase in the operating grant last year. That was primarily blamed on the start-up for the S-class ferries and also for the implementation of the safety recommendations that came out of the Nemetz report and other reports regarding accidents that had taken place. This year there didn't seem to be very much of a drop. It didn't drop back to former levels; it dropped back by about $5 million, not the $15 million that it had increased. I'm wondering if the minister might tell me why there is a need
[ Page 12496 ]
to sustain that high operating grant. Can you give us some flavour as to why that's still there?
Hon. G. Clark: I apologize to members; I'm not quite following the member's comments. The operating grant, the subsidy, from the government of British Columbia has gone down every year since we've taken office, including this year. That operating subsidy has gone down to $31.4 million, so we've had a continual reduction in the three budgets for which we've been there. There is a federal subsidy, which doesn't flow directly to Ferries; it goes into general revenue. As a result of Northland Navigation, I believe, when the previous Liberal government shut down the ferry service to the north, they transferred a $17 million subsidy to B.C. Ferries to proceed with that. I might say that I suspect that's vulnerable. It shouldn't be, but it might be vulnerable, given some of the comments made recently by the Minister of Transport. Of course, the ferries on the east coast are massively subsidized by the federal government. This subsidy to British Columbia is for dealing with the northern routes. Some variance takes place on the federal subsidy. I don't know if that's what the member is talking about.
D. Symons: I'm sorry, I don't have my estimates for ferries here; I have the transit ones. I have a news report from last year, and the minister responsible for ferries at that time was quoted as saying: "The operating grant required for the government was $41.3 million, compared to $28.1 million last year." Then he went on to explain that it was because of those two particular issues that I mentioned. That was the $15.8 million increase I mentioned. We're down somewhat from the $41.3 million, but we're certainly not down to the $28.1 million we had in the '93 fiscal year. That was the comment there.
[2:45]
While you're responding to that, I might just ask the next question, to move it along a little faster. We've had a recent fare increase. Obviously we have larger operating grants. How much is that fare increase going to generate?
Hon. G. Clark: A 1 percent tariff increase is $2.5 million. I guess members can figure that out in terms of any future.... Then, of course, traffic growth is similar: a 1 percent increase in traffic growth generates about $15 million in revenue to the corporation, without any rate increases. So that gives you a sense of the magnitude of the issues. We've had 4 percent annual traffic growth for the last five years. These are phenomenal numbers, which have increased revenue significantly. That's part of the reason why we've been able to reduce the subsidy while not raising fares dramatically, although there has been some change in our differential fares.
With respect to the member's earlier question, I'm still not quite sure exactly what he's talking about. Let me just say that there is some increased staffing as a result of the Nemetz inquiry, and that's not a one-shot thing. There was, if you will, some one-shot capital investment, but there have been some increased staffing costs associated with that, and they're a permanent lift, if you will, in costs.
There has been an increase in staffing on the superferry. But as I say, when you add the two superferries together, which take the capacity of three other ships, you've still got a net savings in some of the costs. The big problem with the superferry is simply the winter season, and we have peak-capacity problems, which members are aware of. In defence of the superferries, though, I do want to say -- because there was an implied criticism of what we are doing -- that the superferries have worked very well; they're very successful. The previous government commissioned the first one; this government, and myself as minister, commissioned the second one. They are very popular and extremely successful. If people can't get on a superferry, they prefer to line up and wait an hour or two for the next superferry run. So it builds the business, if you will. It is very popular and performs the service very well.
I will say also that we have not revisited that old decision. I know members would agree that those decisions were made.... The superferry was a decision made on the one route, which locks you in in some ways, though it's very popular and working well. But the advantage of the new plan, our further vision, is some redeployment in terms of the disaggregated load, if you will, the segmentation of the market.
The superferries are still working very well, and they fit nicely with what we've done on the high-speed side. As we move to high-speed ferries on the Horseshoe Bay-Departure Bay route, some of the C-class vessels that are on there now could move to route 30, which will be from Tsawwassen to Duke Point. Or we could refit them to not carry trucks at all, because the C-class are phenomenal car-carrying ferries; that's what they were originally built for. You could take out the truck level. Then you would have a very efficient, successful car-only ferry. That is a perfect future supplement for the superferries, which are superb truck-hauling ferries because they are so big.
You can see that with what we're doing, you have real cost savings, potential for redeployment of the fleet -- including now supplementing the superferries, which take everything, particularly big trucks -- and the opportunity to move some C-class vessels down there later on to take the growth in car traffic. That's a long further explanation.
One last point is to give a sense of the revenue increases for government: parking and catering, a 10 percent increase, at $2 million; traffic growth, 2.5 percent projected for 1994-95, at $5 million; and the fare increase, depending on route, about 6 percent on average, $13 million. That's the total revenue increase.
Again in anticipation of some questions on the capital plan, we've instructed the corporation that the $800 million over ten years that we announced today, some of which I mentioned, has to be self-financing, at no cost to the taxpayers, so there won't be an increase required in the subsidy. If we get the 4 percent traffic growth we've had for the last few years, and we couple that with inflation increases, it will more than pay for the capital costs of the program. Obviously there is some risk in terms of traffic. Also, we believe that we can potentially do some premium pricing for reservations, and that we've only begun to scratch the surface of other revenue sources. This government introduced cappuccino machines. We joke about it sometimes, but it brings very significant revenue to the corporation.
Interjection.
Hon. G. Clark: Some members aren't wise to the cappuccino market, but I will say that there are other business opportunities which we're rapidly exploring. There could be business opportunities at the terminal sites. On board the vessel there could be other opportunities, from selling space or yoghurt to other kinds of things.
An Hon. Member: Casinos.
[ Page 12497 ]
Hon. G. Clark: Not casinos. I say that's been completely ruled out. We've said to the corporation that they have to get more revenue from non-tax sources, and they've done a good job of that. There's a lot more potential there without impacting on service or price to the passenger.
With the traffic volume we've got, we're in very good shape in the Ferry Corporation. Hopefully, we can reduce and eliminate the subsidy -- although I say for members that we probably would not want to eliminate the subsidy beyond the federal subsidy which we are receiving, because that could potentially put at risk the federal subsidy, unless we were to negotiate with them some way of doing that. There's a lot of cross-subsidy inside the system right now, and you would want to maintain the discrete subsidy for northern routes that the federal government provides, at least at this time, unless we were to negotiate something otherwise.
F. Gingell: I hate to go back to this question of subsidies, but I thank you for the briefing note you sent me and for the financial statements for the year ended March 31, 1994 -- which you were to table today, according to your earlier statement, but have failed to.
I just can't follow the numbers through; I've tried every which way. Could you please tell this committee, Mr. Minister, how the amount that is included in this year's estimates is determined? Every year, the amount that is given as subsidy is the amount in the estimates. I understand how you treat that within the financial statements -- though I don't agree with it -- but I don't understand how you arrive at the original amount of the subsidy, the amount that's approved by Treasury Board and included in our estimates.
Hon. G. Clark: It predates our term of office, but let me give you my understanding of it. The Ferry Corporation has very little subsidy, and this capital bulge I talked about.... Even though there wasn't a sophisticated vision of the B.C. Ferry Corporation, everybody knew that we had serious problems. Any British Columbian knows you don't need any rational understanding to know that if you have to wait five hours for a ferry at Departure Bay, we've got a problem. So the government decided to pursue these two superferries -- initially it was one superferry.
The previous government decided to give an annual capital grant to the corporation to cover the capital costs, so there was an original link to the capital side and a link to the operating subsidy, which was a result of minor routes -- the northern route, etc. When we took office we had this $50 million, I think it was at the time. We applied.... This member could criticize us, I suppose. You may recall that in previous years I as Minister of Finance gave ministries targets that we asked them to achieve. Those targets generally start at minus 15 percent. So we tell every ministry in government and every Crown corporation that's subsidized that they must come in with a budget that's 15 percent lower than last year, and then we work up from there. Some of them are successful in saying that that would cause horrendous damage. The Minister of Health could come in and say that that target would be catastrophic for this reason or that reason. So we would then work our way through it. The B.C. Ferry Corporation came in having achieved the target of a 15 percent reduction, and Treasury Board accepted that when I was Minister of Finance. They've accepted it in the subsequent two years. So the corporation is challenged to reduce the subsidy by the target set by Treasury Board, and then the minister responsible for ferries will go in and explain the consequences of the cuts to the subsidy and seek ways to minimize it or to find other sources of revenue.
It's an ongoing tension that exists, and I think it's a very healthy one. The cut by Treasury Board can be larger, but generally speaking, they've been taking some variant on their original target based on proposals put forward by the corporation to deal with it. I think there used to be a bigger link between the operations. We've been determined to try to ratchet down the subsidy, and we've been doing that very successfully, I think.
F. Gingell: Yes, it's exactly 15 percent less than it was last year, so this hasn't been done in any logical way. In fact, I wish we had been told that earlier.
Included in your budget and in the vote is an amount under asset acquisitions, which I believe is the lease payments on the Quinsam and.... There were two vessels; I think it's the Quinsam and one other. The original agreement was from many years ago, and I believe that arrangement finishes in this current year. Can the minister please tell us if there's an option to purchase these vessels for a nominal sum at the expiry of the lease, on what date that happens and whether or not the B.C. Ferry Corporation, to whom that right has been transferred, intends to exercise that option?
Hon. G. Clark: The member's almost correct. There are the three C-class vessels, which I talked about a minute ago, built essentially for car ferry traffic -- the Queen of Cowichan, the Queen of Alberni and the Queen of Coquitlam, which now run on the Horseshoe Bay-Departure Bay route. They all expire this year. The number the member pointed out as the lease payment is correct. That lease expires between now and November. The cost of repatriating those ships -- buying them back -- is $8.3 million. That will be done, and it will be a prior-year adjustment -- I'm advised, anyway, -- amortized over the course of the project and debt-serviced.
F. Gingell: I imagine that you would just capitalize the $8.3 million option price and add it to the cost of the vessels.
Mr. Minister, you have included in your estimates a full year's lease payment on these three vessels, and it expires in November. So you have overbudgeted $2 million or $3 million. Would you please advise the committee if that is correct?
Hon. G. Clark: I wish it were, but there's a lease payment and then a buy-out. Essentially, we have to pay twice this year, if you will -- at least that's my advice. There's no padding there; we have to pay it out.
The corporation has no plans for further sale-leasebacks. It's largely used as a tax advantage for corporations to write down. There's some attraction, I guess, because they don't pay federal taxes. But all those loopholes have been closed. We do get approached from time to time with creative ways of exploiting the same kind of loophole -- largely in the United States -- but to date we have no plans to do any future....
F. Gingell: My reading of the financial statements -- and I can't put my finger on it immediately -- is that the right to pick up the option to purchase has been transferred from the provincial government to the B.C. Ferry Corporation, and the provincial government is responsible only for the lease payment. If the lease payments expire in November, surely you have overbudgeted the amount that's required for this by $2 million.
[3:00]
[ Page 12498 ]
Hon. G. Clark: I'm advised that there is a small discrepancy between the actual payments required and the estimates; it looks like about a 25 percent reduction. So the member is correct. I'm advised that there was a debate at the time the estimates were printed about whether it would be prior-year adjustment or we'd have to expense it, so they just left the number in. It's pretty modest in my view, and I'm sure the member would appreciate that it's a conservative number. That's good news; it's not the other way. There may be $1 million in there that's not required for the actual pay-out, but there's a final lease payment as well as a pay-out required this year before November.
F. Gingell: Mr. Minister, I would really like to encourage you to make history and amend your budget to reduce that amount to the amount that is actually going to be paid.
While you're thinking about that, I'd like to ask another question. The draft financial statement for the year ended March 31, 1994, says: "The corporation may request the province, at its expense, to exercise the option to purchase these ships." I take "at its expense" to mean the B.C. Ferry Corporation would pay, but maybe it refers to the province. I wonder if you could advise the committee if it is the province or the corporation that will pay the $8.3 million when you exercise the option.
Hon. G. Clark: It's actually the government's request, and it's the government's obligation to pay out. So in a sense it's one hand or the other. But it's the government that's obligated to buy back the leases at the prices we talked about. I guess they will use prior surpluses to pay out the leases and make a prior-year adjustment to that effect. As always with Treasury Board, they are pretty diligent about ensuring that this is a businesslike transaction. They may require the corporation to deal with this in some manner or form; that's up to Treasury Board. But the obligation is the province's. I should tell you we have advised the province, if you will, or the treasury to proceed with the pay-out, and that's obviously in discussions with my staff and treasury.
I should advise you that Peter Mills is here, who is the treasurer of B.C. Ferry Corporation, and Admiral Martin, who is the CEO of the corporation. Peter was a Treasury Board analyst -- good training for this -- and was stolen by the Ferry Corporation about a year ago, so he understands fully the detailed relationship between Treasury Board and the corporation.
F. Gingell: It would seem, then, that in the end you've either overbudgeted by $2 million, or underbudgeted by about $6 million if the option gets exercised, because you would have to put that through in a vote, I think.
Hon. G. Clark: As I said earlier, my understanding is that there is about a million dollars of overestimation, if you will. We don't know whether there are enough surpluses in prior years to pay the lease payment down, so there's a little room there for treasury and the corporation. These are estimates. At the end of the year, if we don't need the money, then it will show up next year. It doesn't make sense to eliminate any room there, because we're not sure how the lease pay-out will work.
F. Gingell: We're moving on. During the first part of estimates debate on this subject, you talked about the major strategic planning exercise that Mr. Sommers of Deloitte was helping you with. That's not going to be completed till the end of July. Surely the issues you've dealt with this morning -- the announcement of a major shift -- would be part of that strategic plan yet to be finalized, yet to go to and be approved by Treasury Board and yet to be made a public document, as you have agreed. So why has the announcement been made now on something that clearly hasn't gone through the complete planning process? We all know what goes wrong when you're in the middle of a strategic planning process, and you suddenly go rushing off and do something before the whole thing has been fitted into the master plan.
Hon. G. Clark: I'll accept some of the criticism, except that there are two initiatives going on simultaneously. One is the capital planning exercise, and one is the strategic planning exercise. As we talked about last time, there are some significant differences. In a strategic plan you'll be looking at labour relations, managerial structure, promotion, training, decentralization versus centralization and a whole range of issues. On the capital planning side.... In an ideal world you might stop everything, spend a year doing a plan and then implement it. But in a business environment, with five-hour lineups at peak periods in the summer in Nanaimo and with critical capital pressure building in the corporation, we did simultaneous tracks on both planning exercises. Believe me, they're intimately linked.
The member is correct. But as he noted, obviously the strategic planning process has been taking into consideration the capital planning process in their discussions. While the strategic plan is not yet finalized, these are dynamic or living documents that are iterative, if you will. They work together. We've been spending two years on both these exercises -- a little more on the capital planning side. They both fit together, and the strategic plan now obviously takes into consideration the capital decisions the government has now made.
Maybe if you had the luxury of sort of just stopping everything -- you do your strategic plan, and then it would....
Interjection.
Hon. G. Clark: We've been doing.... Well, we're only a month away from finalizing it, but that's not to say that there hasn't been some.... It's the same people who were working together on the same products at the same time. It's simply a matter of getting on with some of the critical capital announcements while we are completing the strategic plan.
F. Gingell: At the present time, in your financial statements you are depreciating the ships over 40 years. In the discussions you have had about the ones that are wearing out and are in desperate need of being replaced -- they are about 30 years old.... You almost make them sound like artifacts to be taken out and sunk for fish to live in and divers to swim around. Is the corporation giving any thought to changing your depreciation rates?
Hon. G. Clark: As a matter of fact, we had a serious discussion on this, and it was carefully looked at by our auditors. They have determined that they still prefer the 40-year depreciation. The reason is that there are refit opportunities for these. The Queen of Prince Rupert, which I talked about earlier, is almost 30 years old. We could have done about a $17-20 million refit and it would have probably given us another ten to 15 years. The problem is that these older vessels, while they're completely seaworthy and they work very well, have costs associated with them that the
[ Page 12499 ]
modern ones don't, particularly fuel costs and efficiency costs with respect to engines, electrical systems and the like.
So these vessels will still last for 40 years, but it makes sense to vary that over the course of your capital planning exercise. If they are all 40 years old at the same time, then you have to start earlier with some of them. Anyway, the auditors determined that a 40-year life cycle is not inappropriate. There is some revenue in selling some of the older vessels, which was not budgeted. The Queen of Prince Rupert is likely one that we may sell. Unfortunately, because of the age and the cost of refit, they don't command significant amounts of money. I don't know what the number will be -- probably $1 million or $2 million for the Queen of Prince Rupert, if it's finally put out to pasture, if you will.
F. Gingell: The two new superferries cost a total of $295 million. Could you tell us whether the Spirit of British Columbia and the Spirit of Vancouver Island cost the same amount? Or was the first more expensive than the second, or the second more expensive than the first?
Hon. G. Clark: One was $135 million, and one was $131 million. So there were some cost savings, but not as much as I had hoped -- although over the period of construction there were some inflation and cost pressures, wage costs, etc. So there were some efficiency gains.
F. Gingell: Where did the other $30 million go? The financial statements indicate $295 million. "Construction of the Spirit of British Columbia was completed in April and its sister ship, the Spirit of Vancouver Island, completed in March '94. Assets placed into service -- $295 million."
Hon. G. Clark: I'm pretty sure I can get it for you. My staff think it may be training and start-up costs, although it sounds like capital assets. My instincts tell me it may be the capitalized interest costs during the period of construction, which may have added to the final price tag. But the actual contract price was $135 million. We'll get that information for you.
F. Gingell: Can the minister please advise the committee what the original budget was? Did they come in on budget?
Hon. G. Clark: I wasn't involved with the original. The second one, which I was involved with, came in on budget. It was about $135 million, I think. I believe the initial quote was $130 million for each ship, so they were pretty close to coming in on budget.
F. Gingell: With these two vessels, a great deal of money was spent to put into the engine room what can only be described as the very latest high-tech controls. But the fact of the matter is that on an hour-and-a-half run, the staffing required in the engine room is exactly the same as it would be if there wasn't any high-tech equipment there. In fact, I understand that you've had to increase the amount of staffing in the engine room, not just for Coast Guard safety purposes but because of the workload in the engine room on the new vessels. Can the minister explain why we went to the expense of this very expensive high-tech control equipment when there wasn't going to be any saving?
Hon. G. Clark: The vessel is dramatically larger than anything we had. The sophistication of the equipment on it and the Coast Guard requirements around a vessel of that size are significant. If the member is saying that there's an excessive amount of new technology in the engine room to service it, I would frankly have to reject that. I probably have no more expertise than the member in this area, and I know that in this industry there are a variety of critics in the field. I see the author of the superferries here, so maybe I'll have some further discussion with him.
My understanding is that the staffing requirements are decisions which are largely driven by the Coast Guard. We have had some concern about the workload. It is so large and carries so many people in the summer that it's a tough shift to work compared to other vessels. As a corporation, we obviously can't make any real apologies for that; it is good news in terms of efficiency and cost. But it is a bigger ship to manage, and the engine room is correspondingly bigger. It requires more staff and more sophisticated technology, but all of our evidence suggests that this is working extremely well. If the member has any evidence that there's anything contrary, then we'd be happy to do otherwise.
[3:15]
Just to give you some sense of the magnitude, this ship does have good air conditioning. Did we have to put air conditioning in this ship? Maybe not. Obviously we're trying to market this as more than just a utilitarian service, but something which people can be proud of and tourism.... I can tell you that the evidence that that has been successful is very significant. Similarly, if the member has been on the tour of the superferry, he'll see there is a very heavy, large garbage compactor on the ship. We didn't have to do that either. But for the efficient handling of the garbage generated by this large vessel, the engineers and marine architects involved deemed it advisable to pursue this. It's working extremely well. All of it adds to the weight of the ship.
This is a very large vessel with a lot of state-of-the-art equipment and technology. A lot of decisions were made by a user group set up by the engineers and architects, which other engineers, architects or users can clearly second-guess. Some of that has been going on, but my view of the evidence is that this is popular and successful. The two vessels are an expensive proposition. If we did not have them today, I wouldn't want to be the minister dealing with what is already happening. We've gone to the summer schedule; it's June, and those two superferries are at full capacity already because of this phenomenal growth -- and that's before the Commonwealth Games or anything. There's 40 percent more capacity and a corresponding increase in the crew to deal with that, as mandated by the Coast Guard.
I don't know if the member wants to get into.... If he has any evidence, maybe we could hear it. But for any detailed critique of the engine room, I will be happy to provide briefings and discuss it with him. I do have staff here, but all my evidence is that things are working very well.
F. Gingell: In this one instance, I think that my sources are just as good as yours. I believe that you spent a lot of money on making that engine room extremely high-tech when, because of the length of the run and the staffing required to run a vessel of that size, you had no savings in engine room staffing whatsoever. Some of those additional capital costs that were incurred were perhaps not needed. But the money is spent now and there's nothing you can do about it.
But it does indicate a change in B.C. Ferries' position, where they have moved from trying to build what were considered to be plain-Jane vessels. It is a relatively short run, and I don't think people go to Vancouver Island because they want to go on the vessel. I agree that they may decide to go on vessel A rather than vessel B, but the purpose of getting on the vessel is to get to the Island, not to have a boat
[ Page 12500 ]
trip. If you have indications that people are cruising in large numbers, just going back and forth, I would be most pleased to hear about that. Is it now the policy of the B.C. Ferry Corporation that the plain-Jane days are gone and that you are going to build vessels that, in the era of less-than-two-hour ferry rides, are the cream of the crop in the world?
Hon. G. Clark: First of all, let me clarify some errors the member made. This is classified by the Coast Guard not as a small-boat run, but as open water. As a result of the open-water journey, it has the highest Coast Guard standards in Canada. In the Ferry Corporation, we have the highest life-saving and Coast Guard standards anywhere in Canada. That is partly as a result of the Coast Guard and partly as a result of policy by B.C. Ferries. In the engine room the member referred to, there is one more staff person than on the other ships. It carries 40 percent more passengers; there is one more person working in the engine room.
Interjection.
Hon. G. Clark: No, these are much bigger and more sophisticated engines than we have had before. The member could say that the design of the new technology would allow us to run it with less people, and therefore there are some savings there. But because of the Coast Guard, the training and other considerations, we have chosen not to do that. I don't think it's fair to say that this is an enormous burden on the corporation because we have this state-of-the-art vessel.
On the last point, which is whether the days of plain-Jane are over, I'll say two things. First of all, this is not a cruise ship; it's still a B.C. Ferry Corporation vessel. The cost of refitting the interior to a higher quality than has been seen on, say, the Washington State ferries, is very marginal. The costs involved in the ship construction are not in nicer carpeting and nicer finish. It is my contention -- and I guess the previous government agreed with me -- that because it is run by the government it does not mean that it has to be grey, have no carpets and have surly staff walking around wearing grey suits. We want to be cost-effective. We don't want it to be fancy, but we do think that it is a showboat -- no pun intended -- for British Columbia.
In the summer months, 70 percent of the travellers are tourists to British Columbia. It sure doesn't make sense to me to have a vessel which is dowdy and run-down. With all due respect to Washington State Ferries -- they do a good job, and I don't want to criticize them for doing it -- the two superferries and the cosmetic refit that's gone on have had enormous implications for the tourism market. Far from making it fancy, what we need -- and what I've asked the corporation to do, and I'll ask it publicly again -- is to do more with what's on board now.
For example, I'll say this publicly: there is no Victoria Line display on B.C. Ferries. We should be saying that we have a vessel that can take you down to Seattle -- given that 70 percent of the passengers are tourists. We should be marketing private hotels and charging them to market on our ferries. We're doing some of that. We have a magazine now -- many of you may have seen it -- which doesn't cost us anything. It's fully paid for by subscribers. In fact, we're trying to make some money off the magazine, which is for tourists. In other words, let's make better use of these existing ships to promote British Columbia in the tourist marketplace.
It's not a question of being fancy or being a cruise ship or anything else. Clearly, we don't want to do that. If there are too many frills, then I'm prepared to listen to that, and the new vessels won't have too many frills. We do want them to look nice, and we don't think it costs any more to do that. We do want them to serve quality food, and we have been working on that. We do want to open up the marketplace of British Columbia and to talk about what it's like in the Peace River on the B.C. Ferries. These are visitors to British Columbia, and we should talk not just about the Island, but also about the Sunshine Coast and the interior of British Columbia. This is a spectacular province. We think we can do a good marketing job, and I know my colleague the Minister of Small Business and Tourism is keen to promote that.
It's a showcase for British Columbia, and I make no apologies for the superferry. It's very popular. Believe me, the costs are very modest in terms of making it look nicer. Most of the costs were in the construction, which would have occurred in any event.
F. Gingell: The item in the income statement that talks about salaries, wages and benefits doesn't distinguish between what we'd call administration salaries or overhead salaries or management salaries and operating costs. The general administrative expenses do not include administrative salaries. Could you please advise the committee what the administrative salaries were for 1992-93 and 1993-94 and what is budgeted for 1994-95?
Hon. G. Clark: The administrative salaries are roughly 5 percent of the overall cost. In fact, as part of the strategic planning review, we had a review of the structure of the administration. Most of our preliminary evidence is that they don't think we have enough administration for the size of the corporation. Obviously, we've rejected that advice. It's very lean in terms of administrative costs -- about 5 percent of the total payroll. In most corporations it's probably more like 9 percent, although it varies. I don't have the actual numbers here, but as a percentage of payroll it's pretty modest.
I've just had the staff research the earlier question, and uncharacteristically I was correct. It's the capitalized interest on the cost of construction.
F. Gingell: While we're on the subject of interest, I see that included in your long-term debt are some short-term loans to be refinanced at maturity. It looked as though none matured last year. I wonder when they do mature and who the money has been borrowed from.
Hon. G. Clark: We have a fiscal agency agreement with Treasury, and Treasury does all of this. We take their advice. All the borrowing for the Ferry Corporation on the advice of Treasury has been short-term borrowing in the last year to take advantage of lower interest rates. The yield curve, as you probably know, is fairly steep, so the long-term rates do not decline the way short-term rates did. As a result of the debt portfolio they are trying to manage, Treasury's advice was to pursue short-term strategy for the past year. In a sense, it's an agency agreement, and that means that Treasury discusses the borrowing profile with the agency. Believe me, Treasury manages that asset on behalf of the province as a whole, as it should.
F. Gingell: Have any of these short-term loans been replaced with long-term financing since April 1, 1994?
Hon. G. Clark: The answer is no.
[ Page 12501 ]
F. Gingell: One last matter. Under the description of the obligations of the corporation under capital leases, specifically the Queen of the North and the Quinsam, the note in the financial statements refers to total future minimum lease payments, so one presumes that there is some future maximum lease payments. Could the minister please advise why the word "minimum" is in there?
Hon. G. Clark: I will advise you that it's conservative accounting language. I'm advised by staff that there is no maximum, but that is the language of the accountants.
F. Gingell: One last, last question. This year you changed the accounting treatment of the accumulated capital grant of $125 million and deducted it from the value of various assets. I've tried to work out exactly where it got deducted, but I wasn't able to work it out completely. There are two things. Doesn't the minister think that the most important thing for the financial statements to do is to clearly show what the costs of operating this organization are? Included in those costs must be the amortization of the real cost of the vessels, the ships, that the Ferry Corporation has and operates. You will be reducing its costs in the future if you treat that $125 million capital grant as a reduction of the cost of the vessels, thereby reducing the amortization, the cost or the depreciation. Wouldn't it be better to show those grants as contributed capital? That's what they are; they are contributions made by the shareholders to the corporation, and they're really capital. I truly believe we will have more accurate financial reporting in the future if they're treated in that fashion.
He's all ready with the answer; I can tell.
Hon. G. Clark: I would just advise you that then we would have to pay corporate capital tax.
No, I think the member has made an interesting point, and I will take it under advisement. You heard me describe the evolution of the subsidy from the provincial government. It may be more appropriate to look at it as a capital contribution, but I say that advisedly. People on the north coast, for example, and even people on Vancouver Island will argue -- and they have argued with me vociferously -- that this should be a subsidized service, because this is the highway to their islands; it's an extension of the highway system. It was much to my surprise, actually, when we reduced the subsidy, that not everybody on the Island thought that was a good idea. They said: "You're not giving us our due, because you're building highways elsewhere in the province, and this should be an extension of the highway."
[3:30]
Similarly, the government's contribution -- particularly the federal government's contribution, which goes to the provincial treasury as opposed to directly to the corporation -- is not a capital subsidy; it is, in fact, an identified operating subsidy for the very high cost of operating ferry services to remote regions of the province. Similarly, there is some subsidy on the other side of the system, which the province may well choose to....
I take the member's point that disaggregating so everybody can see where the subsidy is, who gets it and how much is capital and all that is important, and we've been trying to do that. If the member is saying that the financial statements or the balance sheets don't show that, then I certainly will take a look at them, because I haven't recently.
As you may know -- and this has caused a lot of consternation, which I again make no apology for; I don't see the member for Saanich North and the Islands -- we are now printing on the tickets how much subsidy each run is enjoying. Of course, people on the Gulf Islands are completing rejecting.... They don't believe that there is a subsidy. They think we are importing overhead costs from the B.C. Ferry Corporation or bureaucrats' costs or something into it. I think it's been a very useful debate; not everybody agrees with me, because it's a bit tense. But we have to expose it, if you will -- not necessarily to eliminate it -- so that everybody can see that this run to this island is subsidized by the people of British Columbia. Then we can have a debate about whether that makes sense or not. I am prepared in this House to defend a significant subsidy to the Queen Charlottes. It's not an economic proposition. There are literally thousands of people on low income living on the Queen Charlottes, and they deserve attention by the government of British Columbia. I am prepared to defend that. We might debate the magnitude of the subsidy, but I am prepared to defend that. It's harder to defend some of the Gulf Islands, but people are living and going to school there. It's an essential service, and one could make a defence for that.
I will just say that we have engaged in that dialogue now. We have printed on the tickets, we have questionnaires, and we have people working on it and talking about it. It's not all pleasant talk, because it highlights the issue, and a lot of people don't want to do that. I think the member agrees with me that generating and showing this, and having public debate is what public policy is all about. We shouldn't be hiding a subsidy in the books anywhere. We should be upfront about it, and then debate it.
I have one last point. I am just corrected: the federal money we receive is not a subsidy, and that's important. It's a contract we have with the federal government to provide services. Obviously they are expensive services and therefore it's not covered by the revenue received. But it's a distinction which is worth making, in the sense that with the closure of the federal Northland Navigation, they then contracted to the Ferry Corporation to provide those services, which we do. It's a fairly significant amount of revenue for a very significant service which wouldn't otherwise be provided; or if it was provided, it would be prohibitive.
F. Gingell: I would endorse your remarks. The subsidy has to be recognized. I am not trying to suggest that it should be cut down, but the Skidegate to Prince Rupert run is costing the taxpayers of British Columbia $9 million a year. This past year we got it down to $8.5 million. Only 52,000 passengers travelled on that route. You only recovered 30 percent or 40 percent of the cost in the fares. But that's what British Columbia is all about; I agree with you.
D. Mitchell: I would like to go back to the minister's opening statement about the high-speed catamaran announcement. I am quite excited by the announcement, and I would like to believe I can support this announcement. It's a bold vision. The minister's description of that in the House in his opening statements to this review of B.C. Ferries is the closest thing that I have heard to a vision for B.C. Ferries in terms of where it's going over the next multi-year period. Normally, the accountability for Crown corporations in this estimates review doesn't go beyond a fiscal year or the year ahead, so I appreciate the minister's comments. He has painted a picture. It's a very bold picture. We don't know if we can afford it. It sounds like a very expensive proposition and, of course, most of the money is going to have to be borrowed. So there has to be some concern about that.
[ Page 12502 ]
I would like to ask some questions about the high-speed catamarans, in particular from the perspective of the Horseshoe Bay terminal in my constituency and what impact it's going to have there. The minister has made some comments about that. I have a couple of questions for clarification, and I hope the minister won't mind if I put these questions together for the sake of efficiency. There have been conflicting reports about what each of these high-speed catamarans is going to cost. Some have said $70 million; some have said $80 million. I wonder if the minister can clarify that. He has also indicated that these high-speed catamarans are ultimately going to provide the service from Horseshoe Bay to Vancouver Island. Over what period of time will they be phased in? When will we see only high-speed catamarans operating from Horseshoe Bay to the new Nanaimo terminal?
Hon. G. Clark: First of all, with respect to borrowed money, obviously we're very concerned about that. But let me make a couple of points that I think are significant. This corporation -- my numbers might be a little out -- carried 21 million passengers a year. It's the largest ferry corporation in the world, and it's growing at 4 percent a year, or about a million passengers a year. As a result of that passenger growth and traffic and the services on board the vessels, it generates about $240 million a year in passenger revenue. That's not tax-supported debt. There is a small subsidy relative to that revenue. Obviously the taxpayer provides a capital contribution and the government of B.C. is guaranteeing the debt. But this is not debt associated with welfare, education or health care spending; this is debt associated with a commercial corporation, if you will, with physical assets which have a value and a life. I think it's important to make that distinction. It's an investment in physical assets which will last for 40 years, and which in an expanding market.... At the moment, this is a corporation without competition in the same industry, with secure terminals, with a 4 percent passenger growth forecast and with the strongest economy in North America. In other words, it's a very impressive business proposition. We have the lowest ferry fares in the world right now. I guess that is part of the reason why we've been able to do as well as we have.
So yes, there's a concern about borrowing, but if we were to do nothing.... We have some very big cost pressures down the road which will have big impacts. We've also directed the corporation to sell financing; given the characteristics we've just mentioned, we don't think that's impossible.
First of all, the budget. We are budgeting $70 million for each 240-car catamaran. It's not a fixed budget, in the sense that we obviously have to go through the RFP and bidding processes, and then we'll have a sense of what the actual costs will be. But that's what the estimates are. We think that's a conservative number; it may be between $60 million and $80 million. Again, a superferry is $135 million, so that will give you a sense of the numbers.
Finally, I have a couple of points.... I'll just give you a sense of the timing. I wish I could be more precise, but I can't. We think it takes about 14 to 16 months to actually build the first one; we may cut it down to 12 months after we've built the first one. That's how long the construction process is. Prior to that we have to choose a technology, which we have not done yet. We'll be engaging Sandwell Engineering and some others to review the existing technology and allow people to bid on it. Then we have to work with local naval architects and others, because, even if we choose an Australian or a European technology, we want the work to be done here. By the way, some of the superferry work was done in a joint venture with overseas designers. There would have to be some work done on that. Then we have to design it, draft it and then put out the tender documents. I would say it will be two years before we actually launch a high-speed ferry in British Columbia. Actually, it's a bit too far away for this election, so it will be a second-term announcement.
Regarding the Duke Point terminal, there will be no ferries at the moment.... Well, that's not true. There are no plans at the moment for a terminal for.... I have to be a bit careful. There's a possibility that we could go from Horseshoe Bay to Duke Point, but the high-speed ferries are not going to; they're going to go from Horseshoe Bay to Departure Bay. We will most likely eliminate truck traffic at Horseshoe Bay, except for Bowen Island-Sunshine Coast truck traffic.
After that first catamaran, the next two would probably be at six-month intervals. At one point we may have both running. Then when we get the three high-speed ones, we'll be moving the C-class out of Horseshoe Bay. It will be a high-speed terminal to the Island. It will still have a terminal to Bowen Island and a terminal to the Sunshine Coast.
Just to flesh it out a little more, the member well knows that right now the lineups are just ridiculous. Getting rid of the trucks and moving to high-speed ferries should literally eliminate the lineups. But the growth on the Sunshine Coast and Bowen Island is so significant that we have abandoned plans for.... If the member recalls, B.C. Ferries was planning an elaborate parkade superstructure -- not illegitimately, because this was a new technology and a new vision -- which would dwarf Horseshoe Bay. That's gone; it's no longer required. But there is going to have to be some structure for parking that is more efficient and probably bigger than what's there now, even with this dramatic reduction in traffic, just because of the Sunshine Coast and Bowen Island growth.
I have one last point, just to elaborate on it a bit more. We need to disaggregate the high-speed traffic from the Sunshine Coast traffic. As you know, it's a fairly small area, relatively speaking. This is a big improvement, but there's still going to have to be some investment. If we're going to have a reservation system on a high-speed ferry to Departure Bay, then we'll need a separate area for people who have reserved to go on the high-speed ferry and a separate holding area for people going to the Sunshine Coast.
It's a dramatic improvement, and I say that without hesitation. But there will be some investment in the Horseshoe Bay terminal. If the member has any interest in this as an MLA, we'll be engaging with the people of Horseshoe Bay and with the municipality about how they want to work on that. We know there have been some strained relations because of some of the things we've done. We hope we can work with them, because we do believe that this is a significant improvement.
[3:45]
I'm sorry, I was wrong about the total revenue to the corporation. It is $298 million a year, excluding the money from the provincial government. It's $298 million, including parking, catering and passenger payment. So the corporation receives about $300 million in non-taxed revenue. Again, if you're borrowing money for a new ship, obviously the people or agencies you're borrowing from will look at the fact that this is not a tax-supported issue; this is essentially a commercial Crown. They will look at the corporation's ability to pay back. As you can see, that ability is obviously very substantial.
[ Page 12503 ]
D. Mitchell: The minister is obviously responsible for a large corporation; it's a big company. There's a bit of irony in the fact that a socialist is in charge of an enterprise that's engaged in monopoly capitalism, as the minister has indicated, and he spoke strongly about that. I think it's a successful company. It's a company that also needs to be somewhat more accountable to the communities in which it operates. The minister and I have exchanged views on that in the past.
[D. Lovick in the chair.]
I have a couple of specific comments about Horseshoe Bay in particular, about the changes that are going to take place there and some of the safety concerns that have been expressed. The minister indicated that he expects traffic congestion at that terminal will decrease when we bring on the fast ferries, the catamarans. Taking the truck and commercial traffic off the Vancouver Island run from Horseshoe Bay should certainly be a benefit, and that should be very useful for the community. Just in the last 24 hours, many people in Horseshoe Bay have expressed a concern to me that these fast ferries might become so popular, they might increase automobile traffic, and we might end up having more total volume over the course of time. We don't know. I don't know if the corporation has done any projections on that. We don't know if there's going to be a net decline in the volume of traffic from this terminal, although we agree with taking off the commercial and truck traffic to Vancouver Island. I applaud that.
I have one question that I'd like to ask about the fast ferries. The minister has indicated that these are going to be new vessels. There isn't a model for them anywhere else in the world. We're not really basing these catamarans on any other vessels in the world; they're going to be the first ferries of this kind. Do we have any real appreciation of the true operating costs for these catamarans? Do we know if there's any risk associated with the B.C. Ferry Corporation investing significant amounts of money in vessels that are basically untried and unproven? Is there a risk for the province that this may not work out as we hope? What is the risk assessment on the project?
Hon. G. Clark: The ones that are operating now commercially are about 74 metres, and the ones we're looking at are about 96 metres. But essentially the technology is exactly the same; it's not a quantum leap, even though it is a stretch. Technologically, we had Sandwell Engineering do all of that work, to give us some comfort in that regard. Secondly, Stena Line is building ones that are 130 metres. That is a quantum leap, and they're going to be taking semi-trailer trucks and everything. That's massive, the size of a football field, and it's almost exactly that rectangular shape. They claim it will fly at 50 knots. That is due to be commissioned in January, although there's a certain amount of secrecy around it. It will take 1,500 passengers and 300-plus cars -- about the size of the superferry, really.
Hon. B. Barlee: Where would they run it?
Hon. G. Clark: They are looking at running it on the Irish Sea. Anyway, that's new technology.
In other words, this is new technology, but it will be similar to.... It's not untried technology; it's technology that's working. We're not pushing the bounds of existing technology. But we want to make sure that Finnyard.... It's being built by Finnyard. They obviously want to compete for this, and they are building one now that's much bigger. So we don't want to go into this saying that we're picking this particular technology. We'll have a fairly short process to do that, with independent consultants and engineers.
Is there a risk? The answer is yes. I don't believe there's a risk that this won't be technically successful. These are working everywhere in the world; these will work, in other words. I don't believe there's a risk in building them in British Columbia -- at least, not much of a risk. We have the quality workforce and talent to do the job.
It is a different service, however, from the existing service. On the Irish Sea, for example, Stena runs an existing conventional ferry and a high-speed ferry on the exact same route. The high-speed ferry competes with air traffic, and they claim.... The same company put them on in competition with each other, and they just grew the market dramatically. They're doing well, and now they're looking at putting this huge one on there in addition to the conventional ferry.
So we don't believe there's a great deal of risk. When I say there is some, that's because you're moving into something which is only four years old and it's a different service. I want to give you some comfort. We've done an enormous amount of work on this: we've done wave simulations here; we've had experts in; we've had consulting engineers look at it. We would not be moving into this if we thought there was much risk associated with it. But it is a new venture which requires a different kind of training, different staffing and a different model of service than we've had.
I've had the privilege of riding in a couple of these. It's more like riding on an airplane than a big boat -- or ship. I apologize, Admiral. The experience is a bit more like being in a train than being in a great big ship. It's a different service, and in Europe they've been used as a higher-end service, at premium pricing and in competition with airlines. We think that's not required here, but we will be looking at that.
The member indicated concern that this will grow the business to the detriment of the people at Horseshoe Bay. I think we can give some comfort on that. First of all, let me say this: running smaller, more frequent ferries means that instead of having a huge parking lot, like Tsawwassen, with 1,000 cars parked in it, waiting for a superferry to suck 500 vehicles into the ship -- I'm exaggerating a bit.... That is a superb service that works very well, and I have no criticism of it whatsoever. What we'll be doing at Horseshoe Bay is carrying a smaller number of cars -- say, 240 cars -- with faster service. You don't need the huge parking lot because you're going to be cleaning them out, if you will, in shorter intervals. In Europe, the fast-ferry terminals are very modest, indeed. They are not at all like our big terminals, because they're moving very fast with smaller volumes. Second, if we combine that with a reservation system, we should have the capacity to eliminate any kind of concern the people of Horseshoe Bay have. Smaller, faster ferries mean quicker turnaround and quicker cleaning out of people. If we do a reservation system, then I think we can give them some comfort that it won't be a problem. I'm biased, but I think there's a real possibility this will be very successful and will attract more people. With the combination of more service on route 30 -- which will now be Duke Point-Tsawwassen -- and some premium pricing, over time we'll be in a position to mitigate any impact from Horseshoe Bay, if we have to.
D. Mitchell: I have just a couple of further questions on this. I appreciate the minister's answers, and I really want to believe with him that this is going to have a positive impact on Horseshoe Bay. The minister will recall that in 1992 and 1993 the experiment with all-night ferry sailings at
[ Page 12504 ]
Horseshoe Bay caused a very negative community reaction. The community is delighted that they were cancelled -- that those all-night sailings were not continued with as an experiment. As a result of that, a certain amount of ill will remains in the community.
The minister will also remember that at that time a commitment was made that any further changes that would affect the Horseshoe Bay terminal would be preceded by consultation with the community. To my knowledge, no consultation has occurred yet, although there was a general awareness that the government and the Crown corporation were going to be looking at different options. The announcement made today was really the first opportunity for people to understand what the Crown corporation had in mind.
I'd like to ask the minister whether any public opinion research was conducted prior to this announcement. I know that the B.C. Ferry Corporation does a lot of public opinion research on a whole range of issues, because I've seen much of it. Were any kind of public opinion studies done to see whether these high-speed catamarans would be acceptable, broadly speaking, in British Columbia, and whether there would be any specific reaction in specific communities where B.C. Ferries operates, such as Horseshoe Bay?
Hon. G. Clark: I'm just checking. No, we did no public opinion research on the high-speed car-carrying ferries. But I'm advised that we did do some opinion research on passenger-only ferries in 1992, two years ago. Is the member aware of that?
Interjection.
Hon. G. Clark: Oh, sorry. There are no others that I know of.
On the consultation question, I'm trying to be sensitive to that. But obviously we had a whole series of things to go through to get this vision accepted, if you will. It had to be accepted by Treasury Board and cabinet. The corporation had to work on it -- and were working hard on it. Now that we've announced it, we will be engaged in detailed consultation. It seems to me it would have been difficult to say: "We're thinking about these high-speed things. Gee, let's talk about them." It seems to me you have to do your diligence, your homework, your engineering, your wave simulation -- all of that -- to get to a stage where we make some announcement.
But we do intend to have.... I guess in this case I had a bias in my very strong belief that this is a dramatic improvement in Horseshoe Bay. I wasn't as concerned that there would be an adverse reaction, because I really do think it's very positive. Now, though, we want to move forward, because I think we do want to have some detailed discussion with the community and the city council around the questions I've discussed. We've got a bit of time on some of them -- not on the fast ferry, but on the capital improvements required for Sunshine Coast, etc. -- to consult with them and with users of the vessel on the configuration at Horseshoe Bay. And we'll do that.
D. Mitchell: I suppose it's unfortunate that the consultation occurs after the fact in many cases. We're at the point now where the government and the Crown corporation have an opportunity, before changes are made to the terminal operation at Horseshoe Bay, to engage in some very useful and necessary dialogue with the community itself.
The reason I say that and am concerned about that is that there already have been media reports that an engineering firm apparently has been engaged and has delivered preliminary plans to modify the facility at Horseshoe Bay. Well, if that's already happened and the announcement is only 24 hours old, I think the minister can appreciate the kinds of concerns in the community that the plans are already delivered and that there hasn't been consultation yet. The minister may be interested to know that my constituency office in West Vancouver has already been flooded with calls in the last 24 hours from people who are very concerned about whether or not there is going to be any impact and what that impact might be.
I've just been passed a note saying that the most recent call to my constituency office came from a fisherman who operates out of Horseshoe Bay. He is concerned about the public safety issue of the hundreds of small boat operators who use the Horseshoe Bay area for their activities, their livelihood and their recreation, and those who come in the summer to rent boats from the area. They don't have radios, and they don't have any real knowledge of large-boat operation. The minister has indicated that some wave simulations have been done. There is some real concern about the wave action that's going to be caused by these high-speed ferries. I think the community needs some reassurance from the minister that not only are these issues going to be addressed, but there's going to be consultation beforehand.
I also want to ask the minister about the modifications to the Horseshoe Bay terminal itself, because it's a very difficult site. It's right in the middle of a solid granite mountain. Horseshoe Bay is not designed to be an ideal ferry terminal. If we're going to be spending.... I don't know what it is. I've heard some reports that up to $30 million is going to be spent on modifying Horseshoe Bay. Is it being modified for the long term? Is the government really saying that this is going to be the location for a ferry terminal well into the next century and that we're not going to look at alternative sites? If that's the case, there has to be some planning to deal with parking. Horseshoe Bay as a community doesn't want to become a parking lot, and I think the minister appreciates that.
Hon. G. Clark: First of all, just to make it clear, the Ferry Corporation met with the Horseshoe Bay Business Association as recently as last week to talk about some of these questions, and we believe we're developing a better relationship.
The member referred to engineering reports. I think that was a conjecture piece. Was that by Jamie Lamb or Rosetta Cannata?
Interjection.
Hon. G. Clark: If it's in the paper it must be true, the member for Powell River-Sunshine Coast says. Well, of all people to say that.... I don't know.
[4:00]
I want to give you some comfort in that we have not commissioned engineering studies on Horseshoe Bay; but we did commission Sandwell Engineering on the feasibility of high-speed, car-carrying catamarans and the question around Horseshoe Bay. So there was some very preliminary work done by the engineering consultants about what configuration might work. For example, here are some of the questions we asked: can a catamaran come into an existing terminal? The problem with an existing dock is that steel boats have a point to them and catamarans are square. So it
[ Page 12505 ]
can come into the dock, but it's too far away from the ramp. I'm giving the scientific engineering terminology here. Can you refit the existing one to take one of these vessels? What are the options? Obviously work had to be done to see whether that is possible and what other things are possible. That's maybe what was referred to. It's not a full-blown engineering study, etc. It's about whether it's feasible. Does it make sense? What does it look like in a preliminary way?
We will be engaging with the community and with consultants on the very detailed engineering work required. We have not done that. This is a preliminary review. There are some seismic problems in the existing facility and all of that. We have had ongoing discussion.... I'm just reading this. It says "marine-side berth, not terminal configuration...." That's what the engineering company was looking at -- whether we could put a side berth in. So that's what has been done. We will be engaging in consultation and discussions with engineering about the detailed configuration. Other work has been done on the seismic upgrade questions, and all of that has been ongoing.
I just want to give you some comfort that we haven't gone ahead and planned this entire thing, and now we're going to consult. We've obviously had to do a lot of work to see whether it was feasible, technical and possible -- how we would do this and what it would look like in a very rough way. Now we move forward with intensive consultations and detailed planning and engineering around a variety of questions, not the least of which is the fast ferries, but also the questions relating to Horseshoe Bay. We think we're developing a better relationship there; we hope we are. Now we want to engage in a process that I think they will be happy with.
D. Mitchell: I have a couple of brief final questions on the Horseshoe Bay upgrade. Could the minister tell us how much is going to be expended on that and what the capital plans are for the upgrade and modifications to the Horseshoe Bay terminal? I think the minister made the commitment that there will be consultation with the community on any changes.
The major concern in the community -- and the minister may appreciate this -- is parking. Horseshoe Bay doesn't want to become a parking lot. It's a very delightful, small community that wants to work in conjunction with B.C. Ferries as much as possible. There needs to be some real bridge-building, if I can use that term, in the relationship between the corporation and the community. The parking problem really needs to be addressed, because it's not in control now. If the upgrade would address the parking problems or we could get a commitment that it would, I think that would meet some of the concerns of the community.
Hon. G. Clark: Yes, I would certainly be happy to give a commitment on behalf of the corporation for the consultation. I agree with you that parking is a concern, although the business concerns are a little different than the residents' concerns in some respects. Obviously, if you are a business operator, you want some traffic through there.
On the cost, it's a fairly big upgrade -- about $30 million in the Horseshoe Bay terminal to do the new ramps or what is required for the fast ferries, the seismic upgrade and the changes required to disaggregate the traffic for Sunshine Coast, Bowen Island and the new service to Departure Bay.
D. Mitchell: The minister referred earlier, when I asked the question about public opinion research, to the fact that there had been some studies on fast ferries connecting the Sunshine Coast and Bowen Island to the mainland. I'm aware of that, and I noted with interest that the Howe Sound fast-ferry study was conducted by Canadian Facts. The Ferry Corporation spent $12,000 or so on the study. It was a pretty positive study. I had a chance to look at it, because I accessed it through freedom of information.
Has the Crown corporation or the minister's office done any follow-up on that study? Is passenger-only fast-ferry service linking the Sunshine Coast and Bowen Island with the mainland at Horseshoe Bay still being planned? Is that being given serious consideration? Does that fit into the vision the minister outlined in his opening statements this afternoon?
Hon. G. Clark: No. Actually, I have seen the summary of the results, so I haven't seen as much detail as the member has. There was a lot of public concern and consultation around the issue. We did the opinion research. It was kind of put to bed for awhile. The corporation has just advised me that they have dusted off the opinion survey, and they are going to take a look at some of these questions related to the new service to see if there is any relevance. I would be surprised if there isn't some further opinion research as we get closer to how to market this -- if there will be a premium charged, reservations and those kinds of questions.
My understanding is that there has been none. I don't believe the corporation has done any. The Crown corporations secretariat hasn't done any, nor has my ministry. I don't know if there are any floating around out there. I'm just a little hesitant, because I'd forgotten about the 1992 study. My advice is that there isn't any. I'm sure the member can access any through freedom of information.
I will say this, though, now that you've mentioned it: I think it obviously will be prudent, and that's what the corporation is saying. They are going to revisit the findings in the '92 study, and take to the board, over the next couple of years while these are under construction, how they look at what people want in the way of amenities and so on. It will probably require some kind of opinion research.
R. Neufeld: I have just a few brief questions to the minister. I want to touch lightly on the Port Hardy-Prince Rupert ferry. Could the minister tell me what the operating loss is on that route? And what is the makeup of the traffic that ferry carries from Port Hardy to Prince Rupert?
Hon. G. Clark: The operating loss on the Port Hardy-Prince Rupert run is $3.5 million. That's a little less -- a few thousand dollars -- than it was in 1993.
The traffic breakdown is crudely this way: in the summer you can't get on it. It's absolutely jammed -- full of RVs and tourists, among other things. In the winter it's fairly slow. There's lots of capacity, and it carries freight, essential services, like people coming down for doctor's appointments, and what might be called recreational travel by British Columbians -- recreational in the sense of coming down for Christmas holidays, meeting family, etc. So there's quite a distinct breakdown between the types of traffic in the summer months and the winter months. It's a classic problem we have at the Ferry Corporation.
We probably could -- one might argue "should" -- significantly increase the prices in the summer months, because there's clearly a demand. You can't make a reservation; it's jammed to full capacity. One obvious thing, if you were in the private sector, would be to increase the prices dramatically. The problem with that is that it really is
[ Page 12506 ]
an essential service for people on the coast in Bella Coola, Bella Bella and Prince Rupert, for example. So you not only increase the price for tourists who may be able to afford it -- and it's a beautiful, almost cruise ship experience -- but you increase it for local residents as well. We've been reluctant to do that. The price is actually very high, relative to other ferry standards, although it's not high for the trip you get. So we've been very reluctant to deal with the problem in that way. In the winter months, there may not be very many tourists. Even though it's heavily subsidized, the actual cost of taking your car on for a working person is very expensive, even for an essential service.
So that's the breakdown and the challenge we face. How do we maximize our revenue in the peak periods in the summer, because it's a discretionary item for tourists? It's not to gouge tourists -- far from it. It's simply to charge what the market would indicate and at the same time not penalize working people or citizens of British Columbia trying to get an essential services. That's a challenge we've been trying to deal with in a variety of ways.
Could I add a little bit on the new Queen of Prince Rupert? In the summer months the Queen of Prince Rupert goes between Prince Rupert and the Queen Charlottes. It takes about six hours and sometimes longer, depending on the weather -- in fact, often longer, depending on the weather. We believe the new ship will cut that down to about four hours, although, again, the weather can be very wild there, even in the summer. So that's the summer months. The Queen of the North does the northern route and will still be in operation. It's a beautiful ship. It will still run that service in the summer from Port Hardy to Prince Rupert. There's no change there, only we'll have a new vessel going across. In the winter months, when the Queen of the North comes out for annual refit or review, the Queen of Prince Rupert does the full leg -- the triangle from the Charlottes to Rupert, down and then back again -- once a week. The new vessel will do that, and instead of 18 hours, it will go to 12 hours in the new service to the north. Really, it's simply because it's a brand-new ship designed for the route with new technology and new service. That's just to flesh that out. The Queen of the North will still do peak-period service. The new Queen of Prince Rupert will be the kind of workhorse that the current one is -- and it works very well; it's just an older vessel.
R. Neufeld: I appreciate what you're saying and the dilemma you face with trying to get the right ships on that route. I would agree that the tourists should probably pay a little bit more, instead of being subsidized by the province. I don't have any problem with subsidizing ferries, but I do come from a part of the province where there is, to be perfectly blunt, quite a neglect in maintaining and upgrading...
Interjection.
R. Neufeld: ...our highway system. It's not just in my constituency. The member for Cariboo North sits there and chirps at me, but I'm sure I can drive to his constituency and find a lot of people who have a problem with the highways there. In fact, I'm sure the Minister of Mines has some areas in the Kootenays that are not very good and, in fact, are in terrible shape.
Interjection.
R. Neufeld: Yes, probably can't drive.
What I'm saying is there has to be a little more fairness. When we're talking about $800 million into a ferry system that just experienced about $300 million in capital expenditure and growth, we're talking about an awful lot of money in a short period of time. I do think that the transportation needs in some other areas of the province are being neglected. What I'm really trying to say is that I don't have any problem with a good ferry system being subsidized, because it has to be; it's a continuation of the road. But on the Prince Rupert-Port Hardy run, when the minister talks about people coming down for essential services only in the winter....
Interjection.
R. Neufeld: That's what I understood. Regardless, even coming from Prince Rupert, a community that's about three times the size of Port Hardy, unless they're driving in from Port Hardy all the way down to the other end of the Island, you're talking about an almost 30-hour trip. If Prince Rupert weren't serviced by a highway already, then I could understand the subsidization, but we have a community that is serviced by a major highway, Highway 16, and we're still subsidizing a ferry to run into there. The ferry from Prince Rupert to the Queen Charlotte Islands is a different story, and I can appreciate and accept that.
To go on a little further, as I understand it, the Ferry Corporation is legally authorized to borrow up to $700 million. At the present time, I think the debt is about $471 million. How are you going to add another $800 million in total? Is it the government's intention to borrow that money through the Transportation Financing Authority? Just how are you going to borrow that money when there is a $700 million limit?
Hon. G. Clark: First of all, let me.... I have to be careful when I answer this. I agree with some of the member's remarks to this extent: we have made some significant investments in much needed infrastructure. The Island Highway is one; we believe this is another. We have announced commuter rail, which we believe is another important investment. There is the Seattle-Victoria ferry. Those are useful and important investments that help to generate jobs. I agree with the member that we have to look at other regions of the province for infrastructure investments, and not just the ones I've mentioned -- which are big ones.
Let me just say this, however. In our capital planning exercises -- which we will get to later with the B.C. 21 initiative -- we did a per capita breakdown of capital expenditures by government. By far the biggest area of government investment in infrastructure in British Columbia on a per capita basis is Prince George. In fact, it is dramatically higher than anywhere else. We're not making any apologies for that. It includes the University of Northern British Columbia, the road to UNBC, the courthouse in Prince George, the Justice Institute facility, schools that are going up and some other things.
I just want the member to know that the government is very conscious of making sure there's some regional equity. We're dealing with ferries. It's obviously a coastal issue, and we're managing an exciting new initiative. But if that's the sole extent of our transportation division, that's not good enough. I agree with the member that it isn't. We're working very diligently on a whole series of initiatives, infrastructure investments in all other areas. Obviously we're dealing with ferries right now, so it doesn't affect.... I do agree with the
[ Page 12507 ]
member, though, that we need to look at it. That's why, of course, the Beatton River crossing.... New roadwork in your area is critically important. Notwithstanding the Reform Party members' representations, the government is proceeding to make that investment in that member's constituency. It's not a partisan issue; it's an important part of government investment.
With respect to the debt of B.C. Ferries, right now it's $380 million; by the end of the year it will be $470 million. Obviously we're concerned about this. I did answer this, but I will just briefly answer it again. This corporation generates almost $300 million in annual non-tax revenue. This is a user-pay situation. We generate revenue from the gift shops and the bookstores and everything else. On top of that $300 million, it does receive about $30 million from the government of British Columbia. That's the pure subsidy for the variety of things we talked about. Half of that subsidy is federal; half of it's provincial, if you will.
[4:15]
When we go to the capital markets to borrow for the $800 million over ten years -- first of all, it's over ten years -- some of the $470 million will be paid off, but not very much of it. We will be borrowing on the markets and saying that we would like some money on a commercial basis to invest in assets which generate a lot of revenue. So this is not like borrowing money to pay the deficit or for welfare, education, health care or all the important things that government does. Essentially, a commercial Crown corporation is borrowing money to buy physical assets that have a value, that can be sold and that generate income.
My last point on this -- and I have to be tighter than this, or we won't finish for a week or two -- is with respect to the subsidies to the Queen of the North. In the summer months the Queen of the North makes money for British Columbia. In addition to providing an essential service, it makes money -- and it doesn't just make money for the people of Port Hardy or for the government; it makes money for all British Columbians, regardless of where they live, because it is generating enormous tourist dollars in British Columbia. I want to make the point that one should not think that this is just for these communities. These are important infrastructure investments for the people of British Columbia, regardless of where they live.
R. Neufeld: I have one final question -- or observation, I guess. The minister can talk all he wants about the revenue that the Ferry Corporation generates, but the debt is guaranteed by the people of British Columbia. It is debt; it is a liability. We have to pay it back; there's no doubt about it. That's working from all kinds of models where we're going to have continual increased traffic, low interest rates and all those things. That's just great. When we talk about asset-based debt, it's pretty tough to sell a school. The Premier did talk about it the other day, and I didn't have a chance to remind him. I can appreciate that's it's a little easier to sell a ferry, but it's pretty tough to a sell a school or hospital to anyone. In fact, your government did that in Cassiar, and you found out just how much money you got back out of an investment of about $4.5 million. The debt load is a concern to people in British Columbia, especially at a time when you're talking about spending $800 million on a ferry system. You're cutting out hospital beds and you're not building schools.
Interjection.
R. Neufeld: That's a fact. The members say: "Oh, come on." You're not. You're cutting out hospital beds and cutting down schools and all those types of things, and we're spending $800 million on a ferry system.
Hon. G. Clark: I won't rise to the bait on that question, but I will say that the TFA option is an option for government as well. No decision has been made on that, but because the Transportation Financing Authority is doing the integrated planning, it was intimately involved in the ferry capital plan and worked very closely with the Ferry Corporation. As I say, you can see that there are some really neat tie-ins with the Island Highway. It's possible for the Transportation Financing Authority to finance the acquisition of new ferries, but you would be required to put a surcharge on the ticket. That's because of the act, really; the TFA must be self-financing. I have to say that a 50-cent Transportation Financing Authority charge for new capital acquisitions is an option for government either way. What we're really saying is that it will be user-pay.
D. Symons: I won't comment on your comment about a 50-cent surcharge on the ticket to pay back the Transportation Financing Authority. I think that would barely touch the interest, let alone pay off the principal of the loan in that case.
Going back to the fast ferries for a moment, you mentioned operating out of Horseshoe Bay. I would be somewhat concerned. I believe there are some problems right now with scheduling the route times when the Langdale ferry, the Bowen Island ferry and the ferry from Nanaimo are all coming in there. You're suggesting that possibly we'll run two sets of Nanaimo ferries -- a fast ferry for cars and people, and maybe another one for trucks and commercial vehicles. I'm just wondering how these fast ferries in particular would operate on a faster schedule. You would have that vessel coming in more often than it does with the current two-hour crossing. You're going to have some problems in that terminal, I would think.
On top of that, I noticed that back in September there was a news release in which the government announced that a Horseshoe Bay upgrading was underway. You were doing some upgrading of the pedestrian facilities at the terminal. Will that upgrading be wasted, in a sense, if you have to redesign the whole area there? You have spent very close to a million dollars on some recent upgrading, and I wonder if you might answer some questions on that upgrading.
Hon. G. Clark: With respect to the last question, the million dollars was not at all wasted. It was on pedestrian safety questions, and that will obviously be valuable. Second, we have done all the modelling to make sure we can do this efficiently, and we can. Part of the investment in the terminal is to make sure that it is efficient, because it is a complex terminal to operate. So we don't think there will be a problem.
Somebody asked a question earlier -- and I think it's legitimate.... One of the reasons it's not 45 minutes to cross, even though theoretically it could be, is that the Horseshoe Bay harbour quite correctly has about a five-mile-an-hour limit, so this vessel will chug at five miles an hour out of the harbour. There are a lot of fishing boats and recreational boats. It's not until it gets into the open water that it will go to speed. So that delays the advantages to some extent at both ends; but you would have to do that anywhere, generally speaking. And the wake won't be any problem.
D. Symons: I realize that, and probably once you get past Passage Island in Howe Sound you will have to reduce
[ Page 12508 ]
speed, which means you will get off that planing hull, I would suspect. It will be the same thing at Entrance Island at the Nanaimo end; there will probably be areas where you won't want to be going flat out.
There is another problem. I assume these will be aluminum hulls, and aluminum is more prone to fatigue than steel or iron, so the time the ship will last could be somewhat less. Also, aluminum is much more susceptible to electrolysis. I am wondering if these factors have been taken into account. Let's say the length of service of these ships will probably be considerably less than the length of service of the current ferries. While you're at it, to save time in jumping up and down, I believe the fuel consumption of the high-speed ferries goes up considerably as your speed goes up. I am wondering if you could give us some idea of whether these boats are going to be ecologically sound, because they are going to drink a lot more fuel.
Hon. G. Clark: It's not absolutely certain yet, but we're working on it. Preliminary estimates are that fuel costs shouldn't be any higher on a per-passenger basis. They do consume more fuel when they are operating, but the trip is shorter and they are carrying more people, relatively speaking. So there may be some there. The staffing has not been.... We have to deal with the Coast Guard on that. In Europe, the fast ferries have a lot less staff on board than the steel boats.
As the retired admiral advises me, the superstructure of the navy vessels is aluminum, even though the hull is steel. It's aluminum welded to steel, and they haven't got a problem. The life expectancy of these is shorter than the life expectancy of a steel boat, but they are still relatively new, so no one is quite certain. It may be 25 or 30 years instead of 40 years. Finally, there is no corrosion problem or otherwise. Because these have only been in operation for several years, this is a debatable question. The answer you always get -- and I think it's a legitimate one -- is that this is exactly the same kind of technology that aircraft are made of. You can't get much more stress and fatigue than in airplane parts, and this technology is borrowed from the airline industry. At least, that's my understanding, so there is a high degree of comfort. In talking to our engineers and the people operating them, and with all the work we have done over the last couple of years, we are comfortable that while they may not be quite as long-lasting as a steel boat, the fatigue question has been adequately addressed. One only has to look at the airline industry to see the success they have had with aluminum.
D. Symons: Because of other questions asked, my order of things has changed considerably. While we are on the upgrading that was done at Horseshoe Bay on the passenger facilities, was it done on time, and was it on budget? You might recognize those terms; I have heard them from the minister quite often. Was the lowest tender accepted, and was it union-built?
Hon. G. Clark: It was on time and on budget; it came out in the Nemetz inquiry, and it's not wasted. Whether it was union or not I have no idea, because I don't ask. So I don't know. It would be open tender, lowest bid. That's the policy of the corporation.
D. Symons: The next one is the chair's quote from a while ago, but I think I'll skip that. Basically, it had to do with the continual increase in fares and the fact that the ferries are an extension of the highway.
B.C. Ferries basically sold, or in some way transferred, the Queen of Burnaby to Victoria Line. Was that a sale? What amount of money did B.C. Ferries receive? Or was this a freebie to Victoria Line?
Hon. G. Clark: Yes, there was a sale by B.C. Ferries to Victoria Line. I think it was $3.5 million. That money came from a grant from the B.C. 21 special account. We wanted to make sure that the Ferry Corporation was made entirely whole on that exercise, and in fact they have been.
D. Symons: Just a few more questions on this particular set. Last year the member for Delta South asked:
"Can you please tell us what projects the Crown corporations secretariat did for you last year?"
The response was:
"One of the larger projects that is underway at the present time has to do with creating a mathematical model to allow optimization of the system in capacity, in scheduling and in fuel consumption. The model, then, has the ability to drop or reshape routes."
Are you now using some of the information gathered from that model? Are there plans to adjust any route pricing or to reduce service to any particular routes as an outcome of the model that you supposedly got from the Crown corporations secretariat?
Hon. G. Clark: Yes. It's what we call the Mercer model -- Mercer was the consultant engaged -- and it's still in operation. We use it as one of our tools for designing, and for dealing with a variety of questions at the corporation.
K. Jones: Speak up. We've got noise back here.
Hon. G. Clark: Sorry -- it must be that Pink Floyd concert you went to, Ken.
It's route modelling, and there is a financial component to that as well. If the member is asking whether there were recommendations dealing with rates.... The recommendations by the Crown corporations secretariat were adopted long ago -- not completely. There was a recommendation to move to differentiated pricing. The route modelling is used as one of the diagnostic techniques to help the corporation test concepts, and it's still being used today. Obviously, it was used when we designed the capital plan and looked at some of these questions.
[4:30]
D. Symons: The present collective agreement contains what was described by the then CEO, who's sitting in the House today, as innovative language on "technological change, contracting out and pay equity." I was interested in those terms that the CEO was quoted on in the paper on April 21, 1993. I'm just wondering if you might explain what the innovative language was on technological change -- and what that involved in the collective agreement -- contracting out and the pay equity program.
Hon. G. Clark: Tech-change language in collective agreements has been around for a long time. I'd be happy to provide the member with the appropriate language in this agreement, but I don't have it here with me. We have a very good relationship with the union, notwithstanding that we had some dispute about a settlement last time. I went to look at the fast ferries in Europe with Admiral Martin; Len Roueche, a planner; and the chair of the board, Maureen Headley. As well, we took with us two members of the union -- paid for by the corporation -- Lee Cochrane and George
[ Page 12509 ]
Wrean, the vice-president of the union. Again, in moving into new technology, we wanted to involve the employees in a discussion. So we have a very good relationship with them. I can provide for the member the innovative language on technological change, but I don't have it here.
G. Wilson: First of all, I look back to the estimates of June 10, 1992, when we had a very similar exchange. At that point I was suggesting that the B.C. Ferry Corporation needs more mid-sized vessels sailing more frequently. It's interesting that in 1994 that's been announced.
The difficulty that the public is going to have with the cost of this new announcement, notwithstanding the long-term financing implications, is due to the B.C. Ferry Corporation seeming once again to have concentrated its energies and efforts on what I would call the primary routes: either the route from Horseshoe Bay to the new ferry terminal, with truck traffic coming out of Tsawwassen to the Island; or the lower Island run, in terms of the provision of greater service, which is where we see the two superferries now.
I'd like to read to the minister the following piece of information put together by a gentleman by the name of John Sperring, who's involved with Travel Sunshine Coast and whose livelihood is dependent on seeing adequate transportation networks. He points out that the population of Bowen Island is 2,078, and the population of the Sunshine Coast is roughly 34,000. He points out that there are 16 sailings a day to Bowen Island and only eight to the Sunshine Coast. He points out that the total car-carrying capacity to Bowen Island is 1,360, and only 2,800 to the Sunshine Coast, which is about 100 percent more. He points out also -- and I think this is important for the minister to recognize -- that the operational cost recovery on the Bowen Island route is 47 percent, and on the route from Horseshoe Bay to Langdale it's 102 percent. He points out that the first sailing a day is at 5:45 a.m. for Bowen Island and at 6:20 a.m. with respect to the Sunshine Coast, and that they have a later last sailing.
I put all of this to the minister by way of asking him to please explain the following. One of the fastest-growing areas in British Columbia right now is serviced only by ferry service from Horseshoe Bay; there is no road connection. It is a through service to Powell River, where you have a second ferry. Why can't we get the B.C. Ferry Corporation to recognize the urgent need for provision of greater service there? Can the minister tell us why that's so and whether the Ferry Corporation is doing something immediately about this? We're not interested in something that's going to come on two, three, five or ten years down the road; we need this service now. The statistics -- and I'd be happy to pass this over for the minister's perusal if he'd like it -- are quite clear. For the size and rate of growth of that population, it is underserviced by ferries, which are its only natural link to the highway system. If the minister might explain why there isn't more concentration on that run, we'd be anxious to hear his comment.
Hon. G. Clark: First of all, I want to make clear that in the capital plan we announced -- the $800 million that was bandied about.... I've talked a lot about the three years that we've got for the fast ferries, etc., but I should say that in the last seven years of the ten-year plan, there's $40 million a year for new vessels. So it's not all concentrated there; there will be new capacity added in a variety of areas. We'll be working on those incremental capacities over the next couple of years.
Second, the simple answer for the Sunshine Coast is that we do have the Queen of Cowichan on there now, which is a C-class vessel. According to our information, it runs at 60 percent capacity, so there is excess capacity on that route. My understanding is that it's not really a capacity problem but that people on the Sunshine Coast would prefer longer days and more service. The current Sunshine Coast run breaks even. It makes a tiny bit of money on the operating side; it does not cover the capital costs of the ship. I'm delighted that it covers operating costs. It's not a sinkhole like some of the other routes. But it is not exactly a moneymaker for the corporation; it doesn't cover its capital costs yet. I simply say that putting more service on those routes would cost significantly more money. I'm very sympathetic to trying to look at extending the days and the like, but it seems to me that we have excess capacity there now.
The second new conventional vessel we announced today is for Powell River-Comox. That will be a significant improvement in times and quality for the Powell River region the member represents, so we haven't ignored the Sunshine Coast in our thinking on this question. We have to do some improvement at Horseshoe Bay to accommodate the growth.
Even though this is a vision and a sense of direction for the corporation, as I say, we do have seven years, with $40 million a year budgeted.... We'll be looking at creative ways of doing that. There is capacity-growth potential on the Sunshine Coast, and we have to engage in a dialogue about that. We talked earlier about concerns about high-speed passenger service to the Sunshine Coast. The economics of that may not be that bad. It's a question of whether people think that's an improvement or not. If we're looking at incremental growth, before we put on more vessels when they're running at 60 percent capacity, then it may be in those niche areas where you could provide more service if you wanted to move it faster. We are interested, and we have had lots of discussion with people on the Sunshine Coast. I know Admiral Martin was there, and he enjoyed the visit to the Sunshine Coast. I know that people would like improved service, and we're trying to do that within our financial ability to do so.
G. Wilson: Admiral Martin was indeed there. I was at the same meeting, and I think that the community made it really clear with respect to what was needed. The public is simply not going to accept this notion that somehow it's running at 60 percent capacity. As I understand it, there are two problems in the way that we're looking at the service.
The minister might think that the issue of peak loading can be dismissed with respect to opportunities that people have to come onto the Sunshine Coast, enjoy the tourism opportunities and go back to the city or wherever it is they're going. That creates peak loading on Thursday, Friday and often Sunday, especially on long weekends. That's a really critical time. But I can tell the minister, as somebody who has been a regular commuter off the Sunshine Coast since 1976, that when I first bought a residence and lived on the Sunshine Coast, we had double the capacity that we have right now in terms of numbers of sailings. We had two vessels, not one. We have, in fact, gone downhill.
Could the minister specifically address the questions that I raised with respect to Bowen Island? How is it that you've got a population of 34,000; you're serviced by eight sailings a day, as opposed to 16 to Bowen Island; you have an operational cost recovery of 47 percent to Bowen Island and 102 percent on the Sunshine Coast -- and the fare is not even equitable with respect to the tariff charged for distance on the
[ Page 12510 ]
Sunshine Coast? Clearly this run has been ignored. When you're counting people coming from Horseshoe Bay or people leaving from one end, and you don't look at the totality of the service provided -- taking into account that you have a major traffic problem there in peak periods and a problem with people having to sit for six hours on occasion and even having to stay overnight.... Those services have to be addressed, because it is the natural extension of the highways. I can tell you that the people on the Sunshine Coast are not going to take kindly to hearing about $800 million worth of new ferry service when they can't even have the bottleneck already there addressed. Could the minister tell us what he has in mind?
Hon. G. Clark: We do have to put it in context. The overloads, which means you're at peak capacity, you can't take any more.... There are two overloads a week on the Sunshine Coast. On the Tsawwassen run, every single sailing is at overload right now.
If you are the government of British Columbia and you are looking at where the problems and pressures are in the system, if you are overloading one sailing every single day and that route makes money, and on another you are running at 60 percent capacity and have two overloads a week -- which I grant you is not desirable -- with scarce resources, you have to decide how you are going to apply them. It's running at 60 percent capacity. The residents of the Sunshine Coast have some concern. The member communicated it to me, and I am sympathetic to it, but we have to do what we can within our available budget. We are already being criticized for $800 million dealing with the absolutely critical areas, which by any objective criteria are more significant problems than those of the Sunshine Coast. I don't at all diminish the problems of the Sunshine Coast that the member alludes to, but we have to do this within scarce resources and within our ability to do so.
At the moment, $280 million of that $800 million is unallocated. It is for vessel construction from years four to ten, and we are now reviewing vessel construction. Over the next couple of years we will be reviewing which vessels are required to deal with the next level of problems in the system. I would submit -- and the member may not agree -- that the Sunshine Coast is deserving of improved service, new ship construction or new investment to deal with the growth there, at the next stage after the next three years of construction.
G. Wilson: The minister and the members of the B.C. Ferry Corporation will know that they will continue to hear from me on a regular basis until such time as we get that service looked at. In the overall planning strategy, is any thought being given to priority loading or some kind of residential loading to allow residents who commute on a regular basis, or people who are travelling on business or for commerce, to have an opportunity to get back in peak summer periods when overloads are a lot more frequent than just two days a week?
Hon. G. Clark: The short answer is yes. In terms of assured loading or preferential treatment, the real problem has been Horseshoe Bay. With $30 million budgeted for the upgrade at Horseshoe Bay, we will definitely look at ways in which we can provide priority lanes and access for the Sunshine Coast. That's been the bottleneck in the system. This is further evidence that the Sunshine Coast isn't left out of this vision, because the investment in Horseshoe Bay will be of significant benefit to the people of the Sunshine Coast.
G. Wilson: I offer my services, for what they are worth, to work with the corporation in putting that together, because that would certainly be a major asset.
I would ask what dollars are committed with respect to the terminal completion on the Langdale side of the Sunshine Coast. We are at the end of June -- almost July -- and we have yet to hear what Highways plans to do in terms of the actual dollar commitment on the Gibsons bypass, which is something we might want to talk about in more detail when we get to B.C.21 funding.
Hon. G. Clark: My understanding is that the highway to the terminal, the expansion of the parking facility, the paving of the facility and new toll booths, etc., are to be completed throughout the fall. I don't have a number in terms of the budget, although there is a reasonably significant budget for improvements to Langdale. I am advised it is about $1 million to $1.5 million.
[4:45]
G. Wilson: That's good news, because that sounds as if there is going to be at least some allocation of money for the completion of the Gibsons bypass, and we look forward to hearing that. As I say, we can talk about that more when we get to B.C. 21.
I wonder if we could just move to midway in my riding, since the riding goes almost to Bella Coola. With respect to this new service, is there an intention to do terminal upgrading in Powell River? Will this new vessel fulfil the promise of this minister's government and dock in Powell River, as was promised to the people?
Hon. G. Clark: There is no new terminal construction contemplated for Powell River, although there are continual upgrades. I answered the question by saying that it would not be docking in Powell River. We seriously investigated the two-ship option, which we talked about -- two smaller ships, with one at both ends -- and it just didn't make any economic sense. So the vessel will stay in Comox, but it will be a new vessel. We'll save significant amounts of money, and it will be a lot faster. There is improved service to Powell River in travel time and a new ship, but unfortunately we won't be able to dock it in Powell River.
G. Wilson: I guess we'll leave the absolute battle on what was promised to whom, and when, for another forum and another time, rather than do it here. Clearly, the two-vessel option never was on. In the heat of an election campaign that red herring was thrown out by one group that was quite successful in that election and formed the government.
Since that is not on, and because the terminal that now exists is in serious need of some repair, can the minister tell us what the B.C. Ferry Corporation is doing with respect to integrating their plan with the overall waterfront development plan of Powell River? That is a key component of the overall economic development project that this ministry is presumably going to be involved with. Are there any plans at all in place? If there aren't, I guess that's one more thing I'll be on the doorstep of this minister about again.
Hon. G. Clark: My advice is that the corporation believes the current terminal is in fine shape; it's not in disrepair. Obviously, it needs ongoing upgrading.
We continue to talk to Powell River about their waterfront development, but it is very costly to move the terminal to the proposed development site. While we're not categorically ruling it out, obviously from a financial point of view we have to look at it very carefully. If the advice of the
[ Page 12511 ]
corporation is that the current terminal is adequate and not in disrepair, then we would be hard-pressed to justify the significant expense to move it. The corporation continues to talk to the Powell River people about the waterfront redevelopment. I've talked from time to time with the mayor, and I know you have raised it. It's a big issue there, and we'd like to be helpful, but obviously we have to look at what is best for the taxpayers as well.
G. Wilson: I'll just remind the minister that he has a standing invitation from the chamber of commerce to accompany Admiral Martin -- or whoever is at the helm of B.C. Ferries, if that should change in the next number of months -- to come up to discuss this much more thoroughly in the hospitality of the good people of Powell River.
I have a few other questions with respect to ferries. One relates directly to the Gulf Islands questions. In looking at the documentation that we receive from B.C. Ferries on the cost breakdowns and the analysis of various routes, it shows that the Texada Island route -- which is a rather unique ferry run, because of the heavy amount of industrial usage on it -- is obviously not considered to be a moneymaker. It costs some substantial dollars, but then it's also critical to the industrial component of the island. I notice that the Gulf Islands seem to be under review right now with respect to the amount of service that is being provided there. Can the minister tell us whether or not the corporation has any intention of reducing services either on the Texada run or on the Gulf Islands run? Are those runs actually under active review now with respect to diminishment of services in any way?
Hon. G. Clark: We're always examining our service, and are under active review with respect to the subsidies -- it's over $4 million for Texada Island. We have no plans at this time to reduce service.
The Chair: The member for Surrey-White Rock.
K. Jones: Surrey-Cloverdale.
The Chair: It was a late, late night last night.
K. Jones: I don't know why you should have so much problem. I was there at 2:15 also.
Interjections.
K. Jones: Where were you, hon. minister? You were sleeping, I guess, were you?
Hon. minister, I understand that you've made some announcements with regard to the services to Bella Bella; you've announced that there's a new docking facility at Bella Bella. Could you explain to us what provisions are being made in the way of servicing for both Bella Bella and Ocean Falls?
Hon. G. Clark: Actually, one of the nicest announcements I've had the privilege of making since I've been elected was up in Bella Bella recently with the Minister of Skills, Training and Labour and B.C. Ferries staff. We announced the construction of a roll-on, roll-off -- a ro-ro -- dock in Bella Bella. That's about a $3 million investment in that community. It will take about 12 months or so to build. We have an agreement with the aboriginal people there to have one person there to maintain and staff it.
There's no increase in the frequency of service, but the ferry -- rather than pulling up to the side of the dock and having people pack their kayaks, etc. out through the cafeteria -- will now be able to let them drive off like at any other ferry terminal. There aren't very many roads in Bella Bella at the moment, but there are tremendous economic, tourism, access and ecotourist opportunities in the region. There are about 2,000 people living in Bella Bella -- mostly aboriginal people. It was a great privilege to be able to make that kind of investment through the B.C. 21 initiative, which we think will really open up that community and area for job creation. That's a significant advance there.
In addition to that, the Minister of Skills, Training and Labour again has been very persuasive in trying to get some service back into Ocean Falls -- very infrequent service. The corporation has done a good job, I think, within limits. It comes in about every six months, a couple of times a year. But maybe after a few more times we can go over and get some kind of schedule. There are very few people in Ocean Falls, and obviously we can't make a regular stop there. Just to have the ferry come in a couple of times a year really has been warmly received. Obviously there's not much anticipation of more service than that. But they have well-developed facilities there; there are possible tourism opportunities. Those two communities have seen some improvement, and we look forward to more.
K. Jones: Just prior to Christmas and on New Year's Eve I had the pleasure of being on board the Queen of the North as it went in and served the 125 people of Ocean Falls. At that time they were promised that they could hope other ferry services would be coming. Could you give us an indication of just how regularly and when they could expect to have a consistently visiting ferry in their port?
Hon. G. Clark: We have no schedule at this time. It's a bit of an experiment; it doesn't make much economic sense for the corporation. But as a result of pressure from the MLA, the Minister of Skills, Training and Labour, and the corporation's desire to service those remote communities, I think, it did come into Ocean Falls. We want to try to do it maybe every six months, maybe three times a year on special occasions -- Christmas maybe -- where people can come down or go up, and to consult with the community on some timing. We simply can't do a regularly scheduled weekly service into Ocean Falls, and probably not even monthly. But with consultation with them we can give them lots of notice, and we can talk about some kind of very infrequent but regular service. That's what we're working on.
K. Jones: I understand that you could substantially reduce the length of sailing between the north and Port Hardy if you were to go into the port of Kitimat. It would also reduce a lot of road travel to the interior of the northwest. What plans have been made to look at that to provide a better type of service to the northwest?
Hon. G. Clark: First of all, I don't believe that's correct with respect to saving sailing time. More importantly, Prince Rupert is a strategic area, because it links up with the Alaska State ferries and the Queen Charlottes. That schedule of having one ship in the winter months go from Port Hardy to Prince Rupert to the Charlottes is important, and going into Kitimat really impacts dramatically on that service. So Prince Rupert is not there just for historical reasons; there are some sound economic reasons for Prince Rupert being the port.
[ Page 12512 ]
K. Jones: Has the minister seriously looked at the possibility, particularly in the non-tourist winter season, of tying the run into Kitimat and then going to the Charlottes, rather than going to Prince Rupert, so you have a shortened run by not having to go so far?
With regard to the Charlottes, the minister was speaking about the triangle run. Would he also indicate whether the return trip from the Charlottes was going to go directly to Port Hardy by the outside route -- namely, through Hecate Strait?
Hon. G. Clark: The ship will go through the Inside Passage, not the outside route.
K. Jones: Could the minister answer the other parts of the question? He was busy talking to the member for Skeena.
Hon. G. Clark: I'm sorry, the answer is no. We can't stop at Kitimat on the way down from Prince Rupert, because you have to go up the Douglas Channel, and it's quite a long way inland. For all kinds of reasons, it just doesn't appear to be feasible to make that journey down from Rupert, back up, and then back down again. It would just add significantly to the time. Again, you can drive from Prince Rupert to Kitimat fairly quickly. There have been some improvements in the highways since we've taken office. I just don't think it's in the cards.
I was just talking to the MLA from there, who has raised these question with me privately and on many occasions. I've met with him, and we've looked at it. We're not above trying to look and see if we can accommodate that, particularly when the MLA is so aggressive on the subject, but it just isn't in the cards in terms of the costs to the corporation.
K. Jones: It's unfortunate that the minister wasn't paying attention. The question was not related to going to Prince Rupert whatsoever. We're talking about the winter season, when there is no requirement to link up with the Alaska cruise ships or the Alaska marine highway, because there isn't any traffic there to speak of. As you say, they have an excellent highway between Prince Rupert and Terrace. Since you have a much larger population being serviced through the Kitimat, Terrace, Smithers and Hazelton areas, going up the Stewart-Cassiar highway as well as being able to feed to the west to Prince Rupert, it would be more appropriate to go into the port of Kitimat, which is a much shorter route, and then make your run across to the Charlottes without having to go so far. It's actually reducing the length of your route. It would appear to be very much more efficient.
[5:00]
Hon. G. Clark: It doesn't make any sense to spend tens of millions of dollars on the Kitimat port to do what the member is suggesting and cut out Prince Rupert. It's not shorter from Kitimat to the Charlottes; it's shorter from Prince Rupert to the Charlottes. We have to make five trips a week into the Charlottes, and the economics just dictate that for a whole variety of reasons, Rupert makes more sense. Again, I've talked to people in Kitimat, and I know their desire to enhance the port facilities there. I'm very sympathetic to that, but obviously there's a reason why it goes into Prince Rupert, and it's a significant cost advantage.
K. Jones: I appreciate that that's a dispatch of the decision to do anything with regard to the Kitimat port. The member from that riding will probably have to be satisfied with that. He seems to think that's a good idea, anyway.
Could the minister tell us, with regard to the high-speed ferries to the mid-Island...? He may have mentioned it earlier, but I was unable to hear that portion of it. I heard most of it, but I don't recall hearing why the mainland terminus wasn't at Tsawwassen or some other location -- Tsawwassen possibly being the easiest place to have it -- rather than the Horseshoe Bay area.
Hon. G. Clark: It's more logical on route 2. Tsawwassen has a huge terminal and has the superferries. There are a whole bunch of reasons, but there is another very good reason: the wind conditions at Tsawwassen terminal are problematic for aluminum vessels because of the wave action and wind problems. Even if we didn't have the wind problems, we have a system in Tsawwassen-Swartz Bay with the superferries that works very well and carries a lot of people. Where we have a problem is in the mid-Island. Going high-speed from Tsawwassen to Nanaimo was considered, but it was decided that this makes much more economic sense.
K. Jones: Having used that route many times, I find that the Mid-Island Express is very convenient for the majority of people who live in the lower mainland. They don't have to go through the heavy traffic area of Vancouver and the whole length of the North Shore to get to a ferry terminal. From the standpoint of service to the community, something in the Fraser River delta is far more feasible and a much shorter route. I understand that there have been studies of a terminal at Iona Island or somewhere at the mouth of the Fraser as an alternative to Tsawwassen.
Hon. G. Clark: I won't give a long answer, but route 2 carries more than route 30; in other words, Horseshoe Bay to Departure Bay carries more than the Mid-Island. The Mid-Island Express will continue, so members can still take it; anybody can still take it. In fact, we expect it will grow significantly over time.
Finally and most importantly, all the truck traffic between Duke Point and Tsawwassen is moving there. We're not going to take truck traffic on the high-speed ferries. This whole configuration of moving trucks out of Departure Bay and Horseshoe Bay, and all the ramifications we've been discussing at some length this afternoon, would not be possible if fast ferries were out of Tsawwassen.
K. Jones: Could the minister tell us if there will be any major changes in the senior management of the Ferry Corporation in the near future?
Hon. G. Clark: No, no major changes.
K. Jones: Is the rumour not true that the current CEO is going to retire shortly?
The Chair: I'm going to allow the minister to answer that question, but I have to advise the member that when we get into the realm of rumour, we're really going beyond the pale in terms of the estimates debate. I'd also remind him that pursuant to standing orders, the conduct of high officials is not an appropriate part of estimates debate.
Hon. G. Clark: I was going to say that I never comment on rumours.
The Chair: The member continues -- with something equally exquisite.
[ Page 12513 ]
K. Jones: If he doesn't comment on rumours, could the minister comment on whether any investigations or reports are being done on the Ferry Corporation at the present time?
Hon. G. Clark: I'm not sure what the member means. We're doing a strategic plan which involves management and employees, and we're three-quarters of the way through it. I've just been advised -- I'd forgotten -- that the auditor general is looking at doing a value-for-money audit on the Ferry Corporation. We don't have any problem with that. I don't believe he's begun, but he's had some discussions with us about it.
K. Jones: Could the minister tell us the scope of the auditor general's investigation into the operations?
Hon. G. Clark: First, it's not an investigation; it's part of his value-for-money auditing. He's looking at doing one of the Crown corporations, and he has talked to us about doing the Ferry Corporation. As I understand it, he hasn't started. You'd do better to ask the auditor general about this, not the Ferry Corporation.
K. Jones: Is it possible that the auditor general would be looking at one specific area of the operations -- namely, the superferry construction and operations costs?
Interjection.
G. Farrell-Collins: Perhaps we can move off of the larger Crown ferry corporation and onto the smaller one for a few minutes.
Interjection.
G. Farrell-Collins: Yes, Victoria Line. I don't know if the minister has to make some changes.
Hon. G. Clark: Are we finished with ferries?
An Hon. Member: No.
G. Farrell-Collins: Oh, I'm sorry. I didn't realize the member had some more questions on that. I'd be glad to let him continue, and we can come back a little later.
D. Symons: I'm going to move for a moment into the realm of accidents, because I was concerned -- and I'm sure the corporation was too -- when I read in the paper a year ago in September when there was an accident where the ramp raised and bumped a car. I believe it was at the Tsawwassen terminal. It certainly scared the driver considerably. It seemed to me that a year after the Nemetz report, and considering the fact that we had a death at Nanaimo, this thing just should not have happened. From what I gather, apparently the ramp was raised prematurely and it lifted the car a little bit, and the driver gunned it and carried on to the ferry.
We've read this report, and there were a great many recommendations. We were told that those recommendations were all implemented. If that was the case and there was the interlock, the lights going and all the other things indicating that now everybody was clear and the ramp could be raised, it just should not have happened. That concerns me. What went wrong?
Hon. G. Clark: We certainly agree that it shouldn't have happened. But these are human operators and captains, and accidents happen. We do the best we can. In this case it was a minor accident, but it shouldn't have happened. The individual was disciplined, and we're continuing to work on it. It clearly should not have happened, but remember that there are 3,000 employees in this corporation. It carries 21 million passengers a year; it's the largest ferry system in the world. It has a very good safety record. Obviously we have some problems that we've been working on, but we cannot control every.... People make mistakes, and that's why we have to try find fail-safe solutions. We're not completely there yet.
D. Symons: As I read the Nemetz report, I saw items in there that I think would indicate double-checking and all the rest, so if indeed you say somebody made a mistake, I guess that leads up to a question I asked during the estimates last year. Two employees were dismissed and six others were demoted as a result of the ferry accident at Nanaimo. Grievances were filed, and then I asked what the outcome of all this was -- and if any other disciplinary actions were taken, what the outcome of those were. I believe the minister answered something to the effect that they were in arbitration procedures and he didn't think it convenient to respond at that time. Could the minister tell me what the outcome was? Is nobody to blame when these accidents occur?
Hon. G. Clark: With the greatest respect, I'm really reluctant to get into the outcome of arbitration and personnel matters on the floor of the House. There were arbitrations and personnel questions, and the matters are resolved. I don't want to get into some details around the outcomes of the process that took place.
The Chair: I hope we will be guided by that enunciation of due process by the minister. I think we all ought to be guided by that and would caution the member accordingly.
D. Symons: I was going to ask if there were any demotions, but I gather that would be outside the realm of what he cares to answer. Then I would just ask if we can move further up the ladder and off the deck. Certainly something has happened in the organization, the supervision and so forth. It seems to me that it's not only those on the deck who should be disciplined. There should be some disciplinary action because obviously somewhere along the line procedures were not followed and these procedures were not enforced by the officers or people in charge. How high up does the investigation go when you look into these incidents?
Hon. G. Clark: Look, this is two years old. We reviewed the responsibilities from the president right on down. Any disciplinary action -- and I made this point a year or two years ago -- that did take place was not confined to bargaining unit people. We took it very seriously, and we've made some changes to correspond with the results of the Nemetz inquiry, including at the senior management level.
Members may remember that Admiral Martin, who's now the acting CEO of the corporation, was hired specifically do deal with safety questions. He's done an outstanding job. There is now a unit within the corporation dedicated to the safety ethic of the corporation, and we're still working very hard on that.
[ Page 12514 ]
D. Symons: Part of my concern is coming from the fact that I wonder whether another accident is waiting in the wings. I read the internal investigation results from the accident between the Queen of Capilano and the pleasure craft Wanderer in Snug Cove. The news release said: "The report determined that the relief master had made an error in judgment in his manoeuvring of the vessel in the close quarters of Snug Cove." I can go along that accidents do occur, particularly when we have tides, winds and other things affecting it. The panel also found that the mate and three deckhands acted quickly and efficiently in preventing further damage to the Wanderer. I would add at this point that I should certainly hope so; that's what we would expect from the crew members. "The fact that the Queen of Capilano had been successfully operating in and out of Snug Cove dock for a year with any number of masters was noted in the investigation."
Again, there almost seems to be an implication built in there. As you said a moment ago, we've carried lots of passengers and so forth with a good safety record, but the fact that they've gone in and out for a year doesn't excuse the fact that something happened at that time, I would think. There almost seems to be written into here an excuse for the accident rather than getting down to the fact that we've had one, let's deal with it, and let's see that it doesn't happen again. There seems to be built into it that we're really good fellows and we haven't had one yet this year. That was my concern. There may be an attitude here which must be addressed; we have to take these things seriously. I'm sure the Ferry Corporation does, but the way that report came out caused me some concern.
Hon. G. Clark: That is a two-year-old incident, and there was a human error again. All the rules and regulations you can devise won't completely insulate you from human error. I want to reiterate that Admiral Martin's standards unit within the Ferry Corporation was set up after that accident. We've taken to heart the concerns raised by that accident, the accident in Nanaimo and the Nemetz inquiry, and established a division within the Ferry Corporation which is designed to deal precisely with these questions. These are the estimates for next year's spending, and we're talking about stuff that happened two years ago which was canvassed at length in the House at that time.
[5:15]
D. Symons: I believe that accident was just last summer, if I remember correctly. I will just check the news release here. It was May 18, 1993, so it wasn't two years ago.
I am wondering if we can move on. The hon. member for Surrey-Cloverdale asked a question regarding Bella Bella. I would like to move up the coast a bit and take a look at some of the situations on the mid-coast. I believe you are now constructing a ferry terminal at Bella Bella. I gather from some people that ship up that way that there seems to be some problem with the placement of the dock being built there. The implication is that it is being built at the wrong spot. It should be closer to the side of the harbour so that it would be easier for ships to off-load from either the front or back end. I am wondering if you did seek the information of the people that ply those waters and get their input.
Hon. G. Clark: That's a bizarre question. If the member wants the minister to tell the masters and the consulting engineers where to put the ferry terminal, I simply won't do that. I was just up there, and this has the entire support of the people of Bella Bella. The entire community was.... As I said, it was one of the most wonderful experiences I have had since becoming a minister. No one there complained to me about where the dock was. The consulting engineers and the masters have decided where the best place is. The community supports it, and I don't know who the member is referring to who has a problem with it. But there won't be any changes, and I won't instruct them to make any changes.
The Chair: The member for Saanich North and the Islands on a point of order.
C. Tanner: It isn't really a point of order, and I never thought I would have to ask Mr. Chairman to ask that member to speak up. I never thought I'd have to ask him to project, but if he would, please.
The Chair: I think that's probably an aesthetic point of order.
D. Symons: Actually, I was given that information by a mariner. So it came from there, not from a resident of Bella Bella. I am sure they are very happy to have the terminal, so they are certainly not going to complain about it. I will just leave that open -- that it was suggested that it was maybe not in the best location.
Has the corporation considered extending a car-type service from Bella Bella or somewhere up there over to Bella Coola? It would be really nice if we had roll-on, roll-off for vehicles at Bella Bella, and then got those vehicles over to Bella Coola. It would connect very nicely into Highway 20 and make a beautiful circle route for people who may not want to go up to the Prince Rupert area.
Hon. G. Clark: We are looking at these questions. We developed a mid-Island strategy, and Bella Bella now becomes the hub, if you will -- a kind of hub-and-spoke of opportunities -- and we would like to see the private sector.... We think there are opportunities for the private sector to be the spoke, if you will, with B.C. Ferries being the hub, at Bella Bella with the new roll-on, roll-off facility. There are contracted services now up the mid-coast, and we are looking at renewing those questions. We think there are better opportunities for the private sector in all of these areas. With the roll-on, roll-off facility, it really does open up some opportunities: tourism, fishing and others.
B.C. Ferry staff had public consultations: 85 people showed up at the Bella Coola area, and they said that ferry service was a lower priority. Obviously they like ferry service, but we put it at Bella Bella because there are more people there. We think there are some wonderful opportunities, though, for private sector people adjacent to that.
D. Symons: We are on the private sector, then. There is some concern for some companies that do operate, and I believe some of them get some subsidy from B.C. Ferries to operate a freighter service between mid-Island points there. They are somewhat concerned that B.C. Ferries might be moving in on that area and creating, in a sense, some unfair competition for them. Right now quite a few communities on the coast do not have much in the way of passenger ferry service. Is B.C. Ferries thinking of moving into the realm of meeting this need with a multipurpose vessel that could carry dangerous cargo as well as passengers and freight?
Hon. G. Clark: I am aware of the issue the member is talking about. It's a bit complicated. Coast Ferries had a long-term contract. The previous government awarded the
[ Page 12515 ]
contract to somebody else, and there were some problems with that. Coast Ferries got a piece of the contract back. The owner of Coast Ferries was at the announcement in Bella Bella, and I had a chance to talk to him. We're working closely with the private sector. I know there are some concerns, but we're very confident that we can improve service with respect to the private sector.
We had a mid-Island strategy, and we had a mid-coast strategy, and we involved stakeholders. All of the private sector freight service-providers were involved in the stakeholder consultations. In fact, the last one was in Port Hardy two weeks ago. I met with Bill New, the owner of Coast Ferries in Bella Coola, who was at the opening and was very complimentary. We are in negotiations with them now, and I'm quite confident that we can come to a satisfactory resolution.
D. Symons: I will take heart from the minister's answer that indeed the private sector should still be alive and well in that portion of the mid-Island. I hope that message will go back to those people and allay some of their fears.
The corporation prepared a briefing paper last October proposing scaled-down service between Port Hardy, Prince Rupert and the Queen Charlotte Islands. Is that briefing paper available? I gather you have come to a decision not to scale it down.
Hon. G. Clark: We did a detailed study to see if it was at all possible to do that route all year with one ferry. We submitted that for consultation with truckers, and it was just not feasible at all. The member is correct; we are not pursuing that. This is a regular occurrence in the Ferry Corporation. Different route options are looked at to see if we can save money. We do public consultations, and then we make a decision.
D. Symons: Earlier you mentioned federal money coming in to -- you didn't use the word "subsidize"; I forget the term you used there -- help contracting-out. I wonder if you might give me a figure for the federal money that comes in to help maintain the service to the coastal communities.
Hon. G. Clark: It is now $18 million; it was $20 million.
D. Symons: I'm taking that to be downloading from the federal government onto the provincial scene, then.
How many private firms are contracted by the B.C. Ferry Corporation for providing coastal services? While we're at it, what is the total of the subsidies paid to those companies? If you can tell me, what is the subsidy to each of them, if it's not a very large group of people involved?
Hon. G. Clark: There are nine routes, but I understand that there are probably only five contractors. Some contractors do more than one route.
D. Symons: Does any of the federal subsidy money go to B.C. Ferries as a subsidy, or does B.C. Ferries simply pass it out to these other privatized firms for doing the northern routes?
Hon. G. Clark: Contract money goes directly to the government of British Columbia. There's a subsidy that's determined by Treasury Board, and the corporation acts as any private company would when dealing with contractors.
D. Symons: I gather it goes into one pot. Some of it could end up operating the Queen Charlottes route and all the rest, in a sense, because it's just all drawn out as the Ferry Corporation has expenses.
Does B.C. Ferries plan on instituting passenger...? Sorry, I asked that earlier. I'm out of order here. Hey, this is going fast.
Interjection.
D. Symons: Well, your answers are very full.
Is there a move to stop dangerous cargo sailings on the southern routes and leave such cargoes to the private sector? I read something a while ago in the paper about possibly cutting out the sailings to the Gulf Islands for dangerous cargoes.
Hon. G. Clark: The answer is no.
D. Symons: For the Queen of the North, some of the crews have their airfare, hotel and meal expenses covered by B.C. Ferries when there's a shift change. They go up there for their two-week stint and then come down. Others that are on that same shift change don't have that covered. It seems that there's a fare expense to them. Indeed, they can be doing the same bartending job, or be an oiler on the boats. One has basically about a $500 to $700 expense that the other one has picked up by B.C. Ferries. It seems inequitable. I would think a government that's for fair wages, job equity and so forth would be paying the same to both.
Hon. G. Clark: No, it's quite the opposite. About 20 people are left who were grandparented nine years ago. They have this rich provision, if you will. The union agreed in earlier negotiations to grandfather those people. Their numbers are shrinking over time. Anyone new hired by the corporation knows exactly what the rules are and what the wage rate is. Hopefully, we will have eliminated that entirely within the next few years.
C. Tanner: The minister made reference...or at least our member asked a question with regard to the southern Gulf Islands and dangerous cargoes. The minister's answer was quite brief, but I think it should be on the record that I was involved with some negotiations with the ferry terminals on Galiano, Pender and Saltspring. The House should know that the Ferry Corporation, with a great deal of negotiation and a lot of work, were most cooperative; we resolved a problem on the delivery of fuel between those three islands. I, for one, very much appreciate how much you helped them.
Hon. G. Clark: We very much appreciate that from the member. I will just say on the record, as well, that there are lots of difficult issues on the Gulf Islands and lots of concern about ferry traffic. It is a very heavily subsidized route. We are engaging in a dialogue with them, and I want to invite the member to work with us on that. The corporation is really learning a lot in working with the communities, and we're optimistic we can deal with the service questions and the subsidy question in a cooperative way over time.
D. Symons: Going to Gabriola Island for a moment, there is some concern from people about what's going to happen to the Gabriola service if the dock is moved to Duke Point. Will the dock for the Gabriola ferry also move to Duke Point? If that's the case, then, is there going to be some provision for foot passengers? A good number of Gabriola passengers
[ Page 12516 ]
were deposited right in downtown Nanaimo before, and there would have to be a bus service or some way of parking at Duke Point to accommodate them. Has that all been taken into consideration?
Hon. G. Clark: We're very conscious of this issue, and we have no plans to change the current route right now. Obviously, on all these routes, we're consulting with people and discussing them with them. We will be discussing it with the people of Gabriola over the next few years, but at this time we have no plans to change the current structure.
[5:30]
D. Symons: Just one thought here. In a sense, the government is trying to discourage people from using their automobiles, and I think that's an admirable thing to do, because we are very dependent upon them. But when people take their bicycles on the ferries to the Gulf Islands, or wherever, they have to pay extra for the bicycle. On the few occasions that I've biked over there, you parked your bike at the side, and it didn't take up the space for a car. In the sense of encouraging people to get out of their cars and get some healthy exercise by biking, I'm wondering whether you might decide to do away with the extra $3.25 fee for the bike, which is on top of the fee for the rider.
Hon. G. Clark: With the greatest of respect, it's $1.25 for a bicycle, which does take up space on the deck. Often -- not always -- it does take up car space, and there's a cost associated with that. We've talked a lot about the subsidy, and there are a lot of concerns about borrowing requirements. I'm happy to review it, because I agree that we would like to try to promote it. In all respects, generally speaking, we try to have the fee based on the occupancy of whatever you're transporting.
D. Symons: Just a few more questions. The people in Delta have been somewhat concerned about access to the ferry terminal there and about the amount of traffic that is going through there. I believe that the council recently passed a motion suggesting that there be a levy put on the ferry fares to pay for upgrading the road or for putting in another road leading up to the ferry terminal. Has that come before the minister? Have you actually taken that into consideration, and has there been any resolution regarding that concern?
Hon. G. Clark: I'm sorry, I haven't actually seen that proposal yet; I read about it in the paper. I have a call in to the mayor of Delta about the announcement today. Unfortunately, I'm in here doing my estimates. I know about their concerns. In my view, there are two good road proposals to address the concerns of the people of Delta. One is obvious: the Ladner bypass; and the other is the south perimeter road. Both are under active consideration by the government, and in fact we can obviously approve both proposals in principle. They really are important projects to the completion of efficient travel around the terminals. So the government is aware of that, and I'll be talking to the mayor of Delta about concerns in that regard.
D. Symons: We talked earlier about the problem of parking, particularly in relationship to Horseshoe Bay. There's not much parking there. There's a lot of parking, but not enough, at the Tsawwassen terminal, and we have the same problem at Swartz Bay in Victoria. It seems to me that if we can put in parking and charge an appropriate amount to cover the expense of putting it in, and maybe the cost of security, we would be getting people out of their cars and onto the ferry. If we reconfgure this, we can put more people than vehicles on the ferries. I'm wondering if we can't increase the parking at those terminals in order to accommodate the people who would like to take a bus or something at this end across to the other side rather than taking their car on the ferry.
Hon. G. Clark: That's a fair comment by the member in terms of trying to provide incentives and parking facilities. We have an innovative agreement with the aboriginal people in the Tsawwassen area; we have that big parking facility that they charge for. I'm advised that they make big money. It's a good commercial proposition for them, it's good for B.C. Ferries and it does what the member suggests -- it's an economic use. There are other options we could explore.
D. Symons: It is built into the Island Highway agreement that the contractors pay into something called a union development fund. Is there such a thing going in on a per-hour basis through the employees working for B.C. Ferries?
Hon. G. Clark: Not yet.
D. Symons: Oh, now you've let the cat out of the bag, hon. minister.
What prompted the question is that I gather that although B.C. Ferries is supposed have an apprenticeship program, particularly for shore workers, they only have three apprentices currently. It would seem that you've been saying how marvellous this arrangement is to the roadbuilders, that they should be training people, and that it's a good program to get them prepared for the working field, etc. Our own Crown corporations aren't doing what you're suggesting that the private sector and other people should do. I wonder if the minister might comment on that.
Hon. G. Clark: I think the member is correct that there are three apprentices at the Deas dock facility. That's three more than existed in the entire B.C. Hydro corporation just prior to the last election. But I agree that we need to do more. In fact, we're in discussions as we speak on that very topic, because I'm not satisfied. We need to do more than we've been doing.
D. Symons: In the last short while, I guess since your government has taken office, has there been any sort of independent audit of the management of B.C. Ferries? "Quality management," I believe, is a term that's now used -- something like a value-for-money sort of thing. Has B.C. Ferries gone into that and taken a look at the bureaucracy of the management level of B.C. Ferries?
Hon. G. Clark: That's a good question, maybe one I should have my staff deal with. As I understand it, we are looking at quality management and certification under the ship management code, which is a form of quality management. So that's well in hand, and we expect that over the next six months to a year we'll move towards it.
D. Symons: I'm encouraged by the answer. Thank you.
G. Farrell-Collins: There have been some concerns -- obviously the minister knows about them -- over the hiring process that took place at Victoria Line. I understand that letters were sent to a number of the former employees of
[ Page 12517 ]
Stena and B.C. Steamships, advising them that the interviewing process would begin on April 11. Everyone would assume that the only people who were on board as staff in that period of time or prior to that -- given the guarantees that were given by the minister and the Premier -- would have been some senior management people and perhaps a few clerical people to serve them. It was found that on April 8, three days prior to the date the interviews began, a certification application was put in by the Teamsters union. I'm just wondering who the Teamsters were certifying if nobody had even been interviewed for the staffing jobs until April 11.
Hon. G. Clark: Sorry, I'm not familiar with the details, honestly, on the dates the member mentioned. I just want to clarify something for the record. When we announced this, some employees from Stena asked if they would be given an opportunity to work on the new vessel. I gave them a commitment that all former Stena employees would be given an interview and an opportunity to compete for the jobs. I did not say they would all be hired.
This is a different service -- one ship instead of two. It has only 70 staff instead of the 200 or 300 that existed in the major operation. The former service was overnight in Seattle, which involved significant expenses, and one of the reasons that they had problems was people sleeping on board. This is a very different and much leaner service. So we said we would give interviews to the individuals, recognizing that they had certain qualifications which we may not be able to get elsewhere.
We had 1,200 applications before we did any advertising, I believe -- obviously people interested in the service. We hired the catering supervisor. We hired some outstanding -- and I'm not just saying this as the minister responsible -- and talented people, some of whom had worked for Stena and some of whom were in other tourism- or service-sector jobs and who were in a managerial capacity prior to hiring. We didn't do the interviews for the catering manager or for the passenger services director. We had pulled some people together first, and we had some maintenance work to clean up the terminal before we even began. A dozen people were hired before we began the interview process, and then we began the interviews, fully recognizing and trying to give preferential treatment to those former Stena employees. I'm pleased to say that something like 28 out of 70-odd employees are former Stena employees. I realize that not everybody was satisfied with that, but we did have hundreds and hundreds of applications.
The Teamsters' application was certainly a surprise to everybody, including me. They had, I guess, signed up the initial hirers and made application. Obviously there are lots of challenges to that from other unions, and we've taken a neutral position on these questions. The Canada Labour Code questions and the B.C. Labour Code questions are quite different in this regard. It's very hard, it seems to me, to sign up a few people and claim to represent everybody, but those are matters for legal debate. That's the sequence of events as I know it. In any of these situations, some people who weren't hired feel they should have been, and that's very unfortunate.
G. Farrell-Collins: I do know that a number of people who applied for positions early in the process -- I think as early as November, or certainly before February -- found, on or shortly after April 8, that the positions they had applied for were already filled and were subject to the certification application of April 8 before those people were even interviewed. The interviews started on April 11, and those people were not interviewed until days and weeks afterwards.
They had been given a guarantee by the Premier and by the minister -- in writing, I might add; I have the letters here -- that they would be given consideration. I understand that there's a difference of opinion as to what level of consideration they would be given. One letter that came from the Premier's office -- if I can just quote from it -- stated: "I am assured and confident that the employees of B.C. Steamships and B.C. Stena will receive first consideration in the hiring process." Obviously some people thought that if there was a job there that they had been doing before, or a job similar to it, it would be their job. I guess there was a misunderstanding and that what the minister was trying to communicate was that they'll have first dibs on an interview; they'll at least get an interview and be plugged into the process. Quite clearly -- or I guess, not quite clearly -- that wasn't what the Premier was saying. It was a little bit different, perhaps not quite as clear, but I can see where that may have been the intent and people reading it from different sides would see different things.
[5:45]
There is no doubt whatsoever that there was a commitment made by both the Premier and the minister that those people would be entitled to first consideration, at least in the interview process. They would at least have an interview before those positions were filled and would be considered for those jobs. Quite clearly, that didn't happen. These people, despite having their resumes in months in advance, found out that the jobs they had applied for were already filled, even before they had the interview process. Can the minister explain how that happened and why those people were dealt with in that manner?
Hon. G. Clark: Every single former Stena employee who applied for a job got an interview. That can't be said for the thousands of other people who applied for the jobs. Every single one got an interview. The argument that half a dozen jobs were filled before all the interviews took place may have some validity. But the point is that we didn't guarantee them. Half of those people who were hired were literally painting the terminal, sweeping and cleaning. They then rolled into jobs in the corporation at that labouring level of occupation.
All the jobs weren't filled. Maybe half a dozen or so were filled prior to the interview process, but we never said those individuals from Stena would get those particular jobs. We said we would interview everybody and we would try to see how many we could accommodate. We accommodated fully a third of the workforce from the Stena employees, even though Stena hasn't operated for three years. I think we did pretty well. There may have been a half-dozen jobs filled by people because we were obviously in an incredible rush to get this up and running for the season and were moving as quickly as we could.
I will tell you something, hon. Chair, and I am delighted to say this in the House. I have never -- and this is not a criticism of any of my staff -- been in a situation where I've gone down to a new Crown corporation started by the government and the captain, the chief executive officer, vice-president and the personnel manager were in their overalls painting and scrubbing the floors and bathrooms in that terminal to get this open on time. My deputy minister and other staff were down there doing manual labour. That may be contrary to some of the union issues as well.
Interjection.
[ Page 12518 ]
Hon. G. Clark: That was probably why there was a certification application.
There were literally five full-time staff and eight or nine people hired off the street to get the thing up and running. Then they went through an orderly process of interviewing as many people as they could. I think they've done a magnificent job. The fact that there are some labour applications has nothing to do with us, and we try to handle it as objectively and as neutrally as we can.
G. Farrell-Collins: A description of everybody in coveralls -- from the chief executive officer down -- moving furniture and scrubbing floors reminds me of the first few days in my campaign office during the last election.
The minister says he did his best. That's subject to interpretation, I guess, and will be seen from different angles -- depending on which side of it you end up on.
There were some long-time valued employees who had been at Stena for years and who had been doing just those types of jobs. They would have been involved in the maintenance of the dock area, the maintenance engineering and that type of thing for a long time. They had a variety of skills and would have been very qualified, and they weren't even asked. They weren't even phoned to say: "Hey, we've got to fast-track this thing and we've got to get somebody in here to do these things." If I was the CEO, I would have gone through those resumes and found somebody who had been there before. Obviously they know where everything is. They have been there for 15 or 20 years or whatever it is. They know where the electrical hookups are; they know the wiring system; they probably know all the ins and outs of the heating system. You name it; they probably know it. They know the idiosyncrasies of that place.
I find it very strange that an assurance would have been given around November, when the announcement was made, and that these people wouldn't find out until April that other people had already been hired and were doing the jobs that they thought they would be very qualified to do because they had been doing them for 15 years. The minister has to understand that that doesn't look very fair. It looks suspicious, especially when this fast certification application takes place that he says he's surprised about. When you see something like that happen so quickly, one has to ask about the motivation for that taking place. Why were these people not at least brought in and interviewed, or at least given a phone call saying: "We're trying to get this thing up quickly. Can you come in with all your experience and all your skills and get this thing started quickly?" That's what I would have done if I was in that position.
So that leaves a couple of questions, particularly when you look at the media coverage that took place over that period of time. There was an article in the Vancouver Sun by Justine Hunter on February 8, 1994, under the headline: "'More Flexible' Labour Agreement Key To New Victoria-Seattle Ferry Run." In that article, the unions that represented Stena and the B.C. Steamships agree that they're obviously going to have to come to some agreement, that they're going to have to do something. You've got all the jobs, and they want them. They're going to have to come to some more flexible arrangement. So it sounds like they were willing to discuss that flexibility, but there were a number of unions involved there.
If you look through another clipping.... The minister talks about neutrality. I have a clipping from Wednesday, April 27, the Victoria Regional News, in which Shawn Thomas, executive director of communications for the Ministry of Employment and Investment, says that in the end he expects one union will represent everyone. Well, how the heck does he know? Where does that come from? Is it a guess? There's still a certification application before the Labour Board that's not even ten days old, and the minister's director of communications is telling the media that in the end there's really only going to be one union. All these other unions haven't even had a chance to start their membership drives. Indeed, they've only been in the interviewing process for about a week and a half. So how is it that the minister's director of communications can make a statement like that, given all the things that had gone on with those workers and executives and business agents of those other trade unions? Does the minister feel, with the scenario that's taking place there and the timing of that, that those unions and employees were dealt with fairly, specifically the ones whose jobs were already filled before they had a chance to even be interviewed for them?
Hon. G. Clark: As far as I know, there has been no determination by the Labour Relations Board as to which union will represent the employees. I guess my executive director of communications was probably referring to a commonly held management view, which I share, that it would be preferable to have one union. That may be an inadvertent expression of bias about something before the board. That may be not be proper, but clearly it would be desirable.
My only problem with this line of questioning, hon. Chair, is that the Liberals oppose this service. We wouldn't even have the Victoria Line if it were up to the Liberals or the Reform Party. They're coming up here and saying: "Oh, it's terrible that these employees are treated so poorly." They wouldn't even have jobs if it were up to the Liberal Party. They were opposed to this Crown corporation; they opposed this service. These 70 people wouldn't even be working today. To get up and complain about labour relations or the half-dozen people who weren't hired is a bit shallow coming from the Liberal Party, which has taken a consistent position of opposition to B.C. 21, the funding for this initiative. They have said that it should be up to the private sector.
I think that any worker -- if they purport to represent any of the people who wanted to work there, or if they're concerned about them -- should think about the source, because those individuals clearly not only don't care about whether they're.... Maybe they care about workers, but they wouldn't even be working, which I think is more important to those individuals than any of the concerns mentioned.
We have a good operation there. Some different unions are applying for certification. That'll be held in due course. We're trying to take a neutral position on it. I can tell you -- and I'm not saying this to try to influence debate -- that we need a flexible labour relations agreement, because this service will not be subsidized by the taxpayers of British Columbia. We've agreed to subsidize it for a few years. If it's not working, it will be closed. We're at least trying to make this work; we're trying to ensure that it's not subsidized. We're trying to operate this as best we can. That's better than the opposition parties, which are opposed to this entirely. But having tried it, we need to make sure it's not a drain on the taxpayers, because the taxpayers won't tolerate it.
With that, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
[ Page 12519 ]
Committee of Supply B, having report progress, was granted leave to sit again.
Hon. G. Clark: I move that House at its rising stand recessed until 6:35 p.m.
Motion approved.
The House recessed at 5:55 p.m.
The House resumed at 6:40 p.m.
Hon. J. MacPhail: I call Committee of Supply.
The House in Committee of Supply B; D. Lovick in the chair.
ESTIMATES: OFFICE OF THE PREMIER AND CABINET OFFICE
(continued)
On vote 8: British Columbia Trade Development Corporation, $17,940,000.
G. Campbell: I'd like to start out by commenting on the fact that I wasn't here for the opening of the Premier's estimates or of the B.C. Trade Development Corporation debates.
I would also like to say on behalf of my wife Nancy and myself that we are almost up to 24 years. I'd like to wish the Premier a belated happy anniversary. I'm glad he took a little time off last weekend to celebrate it with his family. The Premier has been married for 23 years, and I know he has spent 22 of those years in public life. I think he was correct the other day to recognize not just his wife but his family generally for the support they have given him. I want to congratulate him on that.
Before I get started, if it's all right with you, hon. Chair, I'd like to make some general comments in response to the Premier's general comments. I have some specific questions to ask, and I'm sure other members will have some questions as well. I will be glad to let them come in, and I'll come back a little later.
Let me start with some comments. As I read the Premier's comments, I felt that there is a larger issue at stake here than some of the issues that were referred to in his speech. I think there has been a general breakdown in the public trust about what's taking place in the province of British Columbia. We seem to be moving further and further away from the day-to-day lives of average British Columbians. I think it is important for us to try to re-establish that connection.
When the Premier sought office as Leader of the Opposition, one of the points he made in Kelowna was that people had confidence in his party and in him at the time, and that they were not going to say one thing before the election and do something significantly different afterwards. In fact, I think there is ample evidence that the election platform that was laid out by this government has not been followed to the letter. Even the first promise this government made -- that there would be no special deals for friends and insiders -- has been breached so many times that the public generally has trouble believing anything that anyone in the government says. It's important to note that when we go through the Premier's comments, and he put them into sections, because it's fundamental that we understand what the public and individual citizens are saying about our performance when we are in government.
For example, recently the B.C. Chamber of Commerce came out with a report called "Moving Forward." It's important that the leader of a government read the comments that were made. The highest area of concern for the 70,000 members of this organization, which was put in this particular report, was that existing levels of taxation are negatively affecting B.C.'s global competitiveness. That certainly has a direct relation to our ability to become active in the trade area, which should be one of our fundamental strengths as a jurisdiction. They asked: "Is sound leadership, directed to the interest of all British Columbians, being provided by the leaders of the provincial government?" Eighty-nine percent of the people did not agree that it was. They were also asked: "Is the provincial government creating a positive environment to allow our business community to actually grow and to prosper?" Eighty-four percent said that, no, the provincial government is not doing that.
We all know -- and the Premier has gone to great pains to point this out -- that our forest industry is our number one industry. It is a very important industry to all of us in British Columbia. Yet what we have is recommendations from independent investment bodies like RBC Dominion against investing in the B.C. forest industry. What they recommend is the following: "We suggest that portfolio holdings should shift to emphasize companies operating in jurisdictions where reasonable profits are not considered excessive."
One problem is the message that has been sent out by this government, if you look at what the Premier's comments were the other night. To date, the government has not understood that they are not connecting with the very investors and enterprising activities they say they are trying to establish. A comment from a former president of the B.C. Chamber of Commerce was that "there is, without any doubt, growing dissatisfaction, anger and even despair within the business and broader community with the growing litany of ill-advised and anti-business measures or policies of the Harcourt government." I'm simply pointing this out because I believe that all of us in public life are endeavouring to reinforce, re-establish and build up trust between our governing institutions and the public they serve. It's not good enough to simply ignore the comments of British Columbians.
[6:45]
I was in Kelowna a couple of weekends ago, talking to a young Kelowna family. He is a truck driver who works two shifts a day: one for a company and one for himself with his own truck. His wife works in a restaurant. They have three kids. I said: "How are things going?" They said: "Well, we're just not getting ahead. If one of us loses one of our jobs, that's going to put our entire family in some sort of economic jeopardy." They are not feeling the sense of comfort and confidence that was reflected in the Premier's comments of last Monday.
As we look at the macro picture and play games with statistics, it seems to me that one of the things we have to recognize is the impact of our policies on individual British Columbia families. We have watched as the tax load on individual families has increased substantially. We have watched as they feel threatened and jeopardized about their economic future and therefore their social future. Frankly, we've watched as the trust between the public and our governing institutions has continued to erode. It seems to me that the response is to recognize and accept when things aren't working and to try to find some new solutions.
There is no question, for example.... I understand that the CORE table in the Kootenays, like the previous two
[ Page 12520 ]
CORE tables, has basically closed down without coming to a resolution. What that means is that the resolution will have to be imposed from outside again. I have talked to communities on Vancouver Island, in the Cariboo and in the Kootenays, and all of them are concerned about this process that has been established, which they really feel leaves them out. We have to understand that changing the name from special interest groups to stakeholders does not include the public in developing policies which have a direct impact on their community, their livelihood and their future.
As we go through the estimates tonight, it will be important for all of us to remember that the link between what we say and what we do is essential if we are indeed going to re-establish the trust between the citizens of British Columbia and their government. This government promised open tendering; instead, they have closed the tendering process. They have restricted the tendering process so that only particular kinds of British Columbians need apply. We have heard that from this government's Minister of Employment and Investment. We have watched as labour laws have been brought in which business tells us week in and week out are jeopardizing their efforts to establish the kind of viable enterprise that's going to be essential in communities throughout this province. So as we go through this, we should be looking not just for leadership that talks but for leadership that listens and, more importantly, learns from the people of British Columbia as we endeavour to serve them in a whole range of activities.
To start my questions tonight, I'd like to begin with an issue that has taken up some time at the Legislature, but which still leaves the public with a great deal of concern and a lot of unanswered questions. I would like to see if the Premier can respond to some of these issues in a way that will allow the public to re-establish their sense of trust in the processes we have in British Columbia.
Mr. Chris Chilton of the Premier's office sent out a letter to all of the newspapers in British Columbia saying that they had in fact misled the public when they suggested that a letter from the former secretary of the Motor Carrier Commission referred to Rita Johnston. Barry Bergh, the former secretary of the Motor Carrier Commission, subsequently pointed out that he was referring to Premier Harcourt, not to former Premier Johnston. Can the Premier tell us whether or not it is his intention to correct the error that Mr. Chilton put out to the public?
Hon. M. Harcourt: I answered that question in question period, so I'm surprised that you have not had it dealt with. I said that the previous Premier had been involved with taxi company proponents who were interested in increasing the number of taxi licences during the fall of 1991 -- prior to our government being elected. I made it very clear.... As the chair of the Motor Carrier Commission said, not only would it be improper, but he wouldn't expect that the Premier's office would be involved in influencing a decision of the Motor Carrier Commission. I said that I agreed with that statement, and that that had not occurred.
G. Campbell: I am not questioning whether the Premier was involved. I am asking the Premier a question. The fact is that a member of the Premier's staff put out to the public that the Premier being referred to in the letter to Mr. Gill, which said to Mr. Gill that it was not appropriate -- and that is correct, it is not appropriate.... But the Premier was Premier Harcourt, not former Premier Rita Johnston. Since we have used public dollars to create that misinformation, we should use public dollars to correct that misinformation which has gone around to community newspapers across the province. So I am asking the Premier if he would be willing to direct Mr. Chilton to correct that misinformation which was put out. Mr. Gill was referring to Premier Harcourt, not to Premier Johnston -- that is what the secretary of the Motor Carrier Commission said. Would the Premier undertake to have Mr. Chilton correct that misinformation that was put out to the public?
Hon. M. Harcourt: This is ridiculous. First of all, you are asking me to comment on what somebody said to somebody else. I am saying very clearly that whatever somebody else's opinion is, they hold that. I and my staff are saying clearly that my office has not contacted the Motor Carrier Commission -- nor would it be proper to do so -- about a matter that is before it as a quasi-judicial body, and that stands.
G. Campbell: The letter that came from the Premier's chief of staff says to the people of British Columbia: "Unfortunately, the coverage overlooked the fact that the Premier in question was Rita Johnston, not Mike Harcourt." It has been clarified quite clearly by Mr. Barry Bergh, the former secretary, that Mr. Gill was referring to Premier Harcourt....
The Chair: Member, I'm sorry, but I must interrupt you. I was hoping that I could get the signal to you that we are not allowed to use proper names in the chamber.
G. Campbell: I hope no offence was taken.
The current Premier was the Premier referred to. I am simply asking if the current Premier will direct his current chief of staff to correct the misinformation. I don't believe that that is untoward, and I would hope that the Premier would do that. I will repeat it: will the current Premier ask the current chief of staff to the Premier to correct the misinformation which was put out to the public?
Hon. M. Harcourt: I don't ask the Leader of the Opposition to correct whatever his staff does, and I don't expect him to do the same. This line of questioning is ridiculous.
G. Campbell: It's difficult, because the current Premier has made a point of telling everyone that he is the person who is running the province, and it now sounds like his staff has decided how they are going to run British Columbia.
Let me move to another area. The current Premier has said that the cabinet would have nothing to do with these appeals. Yet his minister, who was sitting on the appeal with regard to Kimber Cabs, said quite explicitly -- and I quote from the transcript:
"My decision on this appeal will be a recommendation to cabinet. It will be to confirm the decision of the commission, reverse the decision of the commission, or alter or vary it in some way. Once I have reached my decision, I will send it to cabinet for consideration. It does not become effective until and unless it is confirmed by cabinet. The whole process normally takes about four weeks."
Can the Premier explain why his minister didn't understand the process he described to us in the House?
Hon. M. Harcourt: I don't mind answering these questions, but I've already answered them. I answered this question in the Legislature quite a few days ago. I'll repeat what I said at that time. I'm prepared to send copies of Hansard to the Leader of the Opposition if his staff hasn't
[ Page 12521 ]
made him aware of my answer at that time. My answer was that our government has removed the right of appeal to cabinet from a large number of quasi-judicial bodies, and one of the few remaining bodies is the Motor Carrier Commission. The reason we did not proclaim some legislation that was passed last spring is that the new Minister of Transportation, whom I appointed in September, looked at the legislation and thought that an appeal back to the same body that made the decision was not an appropriate way to proceed, and she wanted to have a fresh look, as ministers sometimes do, at that legislation.
During that process, there were still a number of appeals from the Motor Carrier Commission that would proceed to cabinet. As a result of that, at the end of October, an appeal body, consisting of three ministers, was set up to hear appeals on decisions of the Motor Carrier Commission. One of them could hear those appeals. One of the ministers who heard appeals was the Minister of Energy, Mines and Petroleum Resources, and she heard this particular appeal by Kimber Cabs on the Motor Carrier Commission's decision.
I have explained in this House that this is strictly a technical reference to cabinet and that decisions of the minister are final. They're not reviewable by cabinet, they are not alterable and they cannot be infringed on in any way. It is simply the technical processing of an order-in-council before cabinet, without comment and without any review in any way whatsoever. That is what happened with this licence appeal, particularly buttressed by a clear and unequivocal legal opinion that said that cabinet had no authority or ability to do anything but technically process a decision of the minister and sign the order-in-council.
G. Campbell: Perhaps the Premier could explain to us why he and cabinet felt it was necessary to ask for a legal opinion following 134 appeals. Why did this particular decision prompt a legal opinion being sought by the Premier?
Hon. M. Harcourt: I didn't seek a legal opinion at all. My deputy minister did, and he did it out of an abundance of prudence to clarify what the role of cabinet was in these matters. He did that without asking me for permission, within his capacity as my deputy minister. When he decided that this was a matter that should be reviewed, he exercised that judgment call. It was reviewed, and a decision came back that these references to cabinet...a decision of a minister acting as a single-person court of appeal on decisions by the Motor Carrier Commission was not reviewable by cabinet. It was a decision made by my deputy out of an abundance of prudence, as the secretary to cabinet.
G. Campbell: If I can be clear about this, then: the minister did not understand the process that the minister was involved in as part of an appeal process. It carried on for 134 different appeals, and then the deputy to the Premier decided that they'd better find out what the process actually was before a decision was made. Is that the process that the Premier went through in his office?
Hon. M. Harcourt: I have three comments. First of all, the minister understood clearly what her role was. She may not have expressed it as articulately as the Leader of the Opposition would have liked, but she was very clearly of the opinion that these matters be referred to cabinet only for the technical processing of the order-in-council.
[7:00]
The secretary to cabinet, my deputy minister, has always been of the opinion that that is the reality. To have an independent third party confirm that judgment was a matter of caution. In an abundance of caution, he sought an outside legal opinion that confirmed his judgment in this matter.
The Chair: Before I recognize the member for Vancouver-Quilchena, let me just offer a caution to members. These matters indeed have been canvassed at some length in other venues. More important, however, are the rules governing estimates debate. I just caution members to please look at MacMinn's Parliamentary Practice. The standing order isn't so pertinent or crucial to understanding, but rather the commentary made by MacMinn on page 107.
Second, I ask members of the committee to please take a look at the estimates book under vote 7 on page 44 and discover precisely what we're supposed to be debating under these estimates. Certainly I have no wish to impede the normal flow of debate, but we must be bound by the rules of the House. I just offer that caution to all members of committee.
G. Campbell: Thank you, hon. Chair. I will attempt to stay within the rules of the House, but my understanding is that this is an opportunity to deal with some of the government's policies. Therefore I think the leader of the government, the Premier, who is responsible for these policies, is the best individual to answer the questions.
[J. Pullinger in the chair.]
Perhaps I could ask the Premier this question: can the Premier tell us the cost of the legal opinion which was received from his office with regard to the Kimber Cabs issue?
Hon. M. Harcourt: I don't carry that information around in my head. I will get the Leader of the Opposition that information.
G. Campbell: As the Premier is getting that information, could he also let us know whether additional costs, beyond the legal costs, were incurred as a result of this process in providing policy advice to the cabinet and the minister about how to run this appeals process?
Hon. M. Harcourt: There were no other costs, but I will get you the cost of the legal bill submitted by the independent legal counsel that was sought.
G. Campbell: Can the Premier explain to us once again why the Attorney General was not included in looking at the way the appeal process should work, so that prior to it being established it would be clear both in the mind of the minister or ministers sitting in appeal and of the cabinet itself?
Hon. M. Harcourt: The reason is very simple: the minister responsible was not the Attorney General. The minister responsible for the Motor Carrier Commission was the Minister of Transportation and Highways.
G. Campbell: Finally, with regard to this issue, it seems to me that it is important to look at what the public believes took place here. It would be important for the public to hear from the Premier why the legislation was not proclaimed prior to the Kimber Cabs appeal being made. Accidentally, or coincidentally, it just happened to be brought forward to the
[ Page 12522 ]
House within a week of the Kimber Cabs appeal being allowed by the minister, which has brought so much question into the public's mind with regard to how you can trust these processes that have been established.
Hon. M. Harcourt: It wasn't proclaimed for the reason I just explained at the opening of these questions -- and again quite a few days ago. The reason is that the new Minister of Transportation and Highways, whom I appointed in mid-September, wanted to review the legislation, because she thought there was a better appeal process that could be looked at by the Legislature. That's why the matter was still before cabinet instead of having another body outside cabinet to review decisions by the Motor Carrier Commission.
G. Campbell: If I may, I'll move to another small item which was discussed by the Premier at the beginning of his comments on Monday. The Premier explained that he has seen a 2 percent budget increase, but in looking at the budget book, we notice that the Premier's office has increased from $1.803 million to $1.907 million. That comes out as a 5.76 percent increase, which is two times the rate of inflation. Can the Premier explain the discrepancy with regard to that?
Hon. M. Harcourt: As I explained when we dealt with this matter on Monday, the increase is 2 percent over the restated 1993-94 budget. The increase this year over last year is $83,000. That comes from the reclassification of a position, from speech-writer to director of communications, in the Premier's office -- a much more significant role with a higher order of skills required, which is a $42,000 item. Secondly, there was an increase of about $34,000 for the normal increments that occur for staff, plus one of the deputy ministers in my office received a car and a car allowance, which amounted to $6,960. That amounts to $83,000, which is a 2 percent increase.
G. Campbell: Restated, that obviously makes a difference, and I appreciate the answer.
I'd like to move now to the issue of the Vancouver Island land use decision, which has taken up so much of the Premier's time. I know this was canvassed at some length on Monday, and I don't wish to revisit all of the issues. But I would like to ask the Premier some questions surrounding his office's involvement in the process. To begin with, could the Premier tell the committee what the total costs of Mr. McArthur's recent trips around Vancouver Island were, which have been described to me as arm-twisting missions around the communities of Vancouver Island?
Hon. M. Harcourt: I don't know who described them as arm-twisting, because the involvement of my deputy.... He has great experience in land use and natural resource economics and was a deputy minister and a cabinet minister in a variety of portfolios and situations. He is a highly respected public leader in this country who gained the confidence of the forest industry when I established the forest sector review committee in April, 1993. As a result of a year of very intense and creative discussions, we were able to launch the forest renewal plan; we were able to make significant progress on a number of other initiatives, such as the Forest Practices Code.
Mr. McArthur gained the confidence of people who had very different agendas around our number one industry -- forestry. So that is an unusual description of his role, because people like Peter Bentley, Jake Kerr, David McInnes from the industry, people from the Truck Loggers' Association -- Ralph Torney, Graham Lea -- aboriginal leaders, people like Gerry Stoney of the IWA and Brian Payne of the pulp workers and many others have personally expressed their confidence and respect in Doug McArthur. That is one of the reasons that I asked him to go out and talk with a number of leaders around Vancouver Island. I said we would listen to the concerns of the people on Vancouver Island around the report that came in from CORE commissioner Stephen Owen. So I asked Mr. McArthur to go out and do just that, because he had the confidence of people involved in the industry.
As for the exact costs of his recent visits over the last month around Vancouver Island, again, I'll get that information for the Leader of the Opposition.
G. Campbell: I'd appreciate receiving the costs, and perhaps while the Premier is getting those costs, he can confirm how much money was spent on helicoptering Mr. McArthur around Vancouver Island.
In terms of the arm-twisting, I am aware of the individuals the Premier has cited. I can also tell you that I have heard from people up and down the Island about the meetings that were taking place. Committee members pointed out that Mr. McArthur was very explicit in that there were no choices left: this was what the government was going to do, and they should stand up and say they agree. There was no question left in their minds that there were going to be consequences if they didn't stand up and say they agreed. That's where the description of arm-twisting comes from. I'm sorry the Premier hasn't heard it, but if he had gone to Port McNeill last night with his ears open, he would have at least heard some people who were concerned about that.
Considering how little was actually changed from the CORE report as a result of the Vancouver Island decisions, and considering the disparity in lost jobs that we've heard from the Premier -- from 50 to 900, and I understand the Premier was discussing the Share community's thoughts that it was going to be 3,500 jobs -- can the Premier inform this committee today of the economic studies and analyses that were done? Would the Premier commit to giving the committee the full analysis? It's been asked for before but to date has not been forthcoming from the government?
Hon. M. Harcourt: I didn't hear once last night, and I listened very carefully, the word "arm-twisting" used. If you know of anybody who felt that occurred, I'd like to know who they are. I'd like to talk to them, because that certainly wasn't what I asked Mr. McArthur to do, and it certainly isn't the way that he has behaved as my deputy. So I would be very curious about who felt offended by my deputy. I certainly haven't had that expressed to me, and I never once heard that last night, and I listened very, very carefully.
On the issue of providing the background information on the 5,000 jobs that are going to be created on Vancouver Island over the next while -- on top of the 20,000 to 25,000 jobs that are being created through the economy on Vancouver Island, one of the fastest-growing economic areas in North America -- I can certainly get for the member the economic analysis that was utilized to come up with those figures. Some of that I said would be announced in the very near future. I announced some of that today, with an $840 million ten-year plan to improve the highway and ferry service in British Columbia. If the Leader of the Opposition would like to have access to the economic analysis that was done to show that there would be job gains, not job losses,
[ Page 12523 ]
with the economic activity taking place on Vancouver Island, I'd be more than pleased to provide him with that information.
G. Campbell: Perhaps the Premier could share with the committee the names of the consultants or the staff people who put together the economic analysis which led to his job projections.
Hon. M. Harcourt: There's a range of officials who've been involved across government in preparing this information, whether it be in Employment and Investment, the Forests ministry or my staff in the Premier's office. I can certainly let the Leader of the Opposition know who the team was that prepared this information.
G. Campbell: I'm amazed that we don't actually know today who put these numbers together and how they were put together.
[7:15]
The problem is that we have had these numbers floating around, and we forget that those numbers are actually connected to people's lives. I'm sure the Premier heard last night in Port McNeill that many people are very concerned. They have watched as the government has brought forward study after study that frankly don't hold water. The Island Highway study that was brought forward doesn't meet any kind of independent objective needs of anyone in terms of establishing public policy. We know that it's going to cost substantially more money. We know that it's not going to provide the kind of service that people in British Columbia want.
People in this community, the Cariboo and the Kootenays are concerned that the government is acting out an ideological agenda that is designed strictly for their political purposes and their political ends. It's not surprising to understand that, in view of the information that's been brought forward in the media. It is essential that the Premier give us this evening not some broad numbers but specifics about how they came to the conclusion.
This is the Premier's policy. He's the man who stood up and said: "This is my policy; I have decided. I am bringing stability to forests." I can tell you that on Vancouver Island, where we have watched the annual allowable cut be reduced, there is still substantial uncertainty across the Island with regard to the sustainable economy of their communities and sustainable work. It is essential that we learn tonight in committee, from the man who decided what this policy was going to be, the specifics of the economic analysis which leads to the sloughing off of this decision's human impacts. So I would again ask the Premier to be specific about how he has created stability in the economy and in families' lives, when we know that there are still timber supply reviews going on, there is still a protected areas strategy and there are still forest practices codes.
The people across this Island and across this province want to have answers; they don't want political bromides. They want specific answers that are based on professional analysis. Would the Premier please explain to the committee tonight where he came up with his numbers, how they were derived and what assumptions were used to derive them, so that we will be able to look at whether or not the promise is going to come close to meeting the potential of Vancouver Island?
Hon. M. Harcourt: A lot of these questions were dealt with over and over again in the estimates of the Minister of Forests. I know that the Leader of the Opposition would like to have this analysis, and I made it clear to him that I'm prepared to pass it on to him and let him read that information.
I said very clearly that we know how many jobs could potentially be affected by the protected areas boundaries and the impact they may have on cutting rights. After reviewing that empirical information, we came to the conclusion that 50 jobs could potentially be affected on Vancouver Island by the change in boundaries to establish the 23 protected areas. We also have launched.... And we know the number of jobs that will be created: as a matter of fact, 70 on Vancouver Island, according to an announcement that I made last Thursday. Under the forest renewal plan, $52 million will be invested across this province, creating 2,500 jobs for the rest of this year in watershed restoration, road reclamation and intensive silviculture. Of that $52 million, $10 million will be invested on Vancouver Island, which will create 500 jobs.
We know how many jobs because we know the effect the lines on the map have on cutting rights. The potential number of jobs that could be lost is up to 50 this year, and the number of jobs that will be created on Vancouver Island.... These are good jobs. People will be working with the skills they have as fallers, as equipment operators and with other skills they have built up in building roads and reclaiming those roads, building bridges across salmon-spawning streams and logging around those streams -- repairing some the problems that have been created.
So that's very real, empirical evidence, and I would be more than pleased to pass that on to the Leader of the Opposition. Secondly, I'd be prepared to pass on to him our figures, which show that 800 to 900 jobs are going to be impacted over the next five years as a result of these decisions on Vancouver Island, from that same empirical evidence dealing with the potential job loss in 1994 that I just talked about. We believe that 1,000 good, family-supporting jobs will be created through the forest renewal plan, which will more than replace those 800 to 900 jobs that will potentially be lost through the protected areas strategy.
So if there is no net job loss, there is no multiplier effect that needs to be applied. I'm sure that with the background the Leader of the Opposition has -- an MBA from Simon Fraser -- he would know that you don't apply multipliers when there's no net job loss. So that figure of 3,500 jobs that could be lost on Vancouver Island doesn't exist; it's fictitious.
With regard to the other jobs that I have talked about on Vancouver Island, they are happening. Finally, after the people of Vancouver Island have been asking for it for 30 years, the Vancouver Island Highway is being built -- on time, on budget, with no strikes and no lockouts. This government is committed to completing that highway, which should have been built a long time ago. Many, many lives have been lost because that unsafe highway has existed for far too long. Today I announced $840 million over the next ten years for new ferries -- both conventional steel-hulled ferries and aluminum ferries -- new docking facilities and other improvements to the ferry system that will create jobs in the lower mainland and on Vancouver Island.
Yesterday I assured residents and workers in Port Alice that they would have continued fibre supply, which allows Western Forest Products to be able to go ahead with a $60 million construction project to bring their AOX pollution standards down to 1, and that will provide 200 construction jobs. I can go on with a whole series of other very real -- not imaginary -- projects that will be going ahead in the public and private sector and that will create over 4,000 new jobs on top of the 1,000 new jobs under the forest renewal plan.
[ Page 12524 ]
What I have heard all over Vancouver Island -- and I've been to nine different centres -- is an acceptance of the fact that a decision has been made on Vancouver Island. It will bring stability and predictability, in my opinion, or I wouldn't bring it in. The people on Vancouver Island are tired of fighting with each other. They're tired of the conflict, and they are prepared to work to bring that about.
I also heard a healthy skepticism. A number of people on northern Vancouver Island were part of the South Moresby and Lyall Island decision, and they were promised a worker adjustment program. Well, the only adjustment they got was a pink slip. I made a commitment that no worker on Vancouver Island who wanted to work in the forests would be treated that way, and they won't be. There will be work for forest workers who want to continue to work on Vancouver Island.
G. Campbell: The problem with the answer the Premier gives is that the people on Vancouver Island don't believe him. I can understand why they don't believe him, because it's the same Premier who, prior to being elected, said there were going to be no new taxes. Then he brought in $2.8 billion of additional taxes, which hammered the average working family on Vancouver Island, just as with the rest of the province.
What I hear from the Premier tonight is a list or a cataloguing of hoped-for projects, etc. I've been in Campbell River, in Port Hardy, in Port McNeill, in Port Alice and in Gold River, and people in those communities are concerned. They have been misled before by this government, and they are concerned that they are being misled again. When we hear this sort of general bafflegab answer from the Premier, with his little lines written out, I'm not surprised that families on Vancouver Island are saying: "Just a minute, how are you going to take care of us?"
In terms of the economic analysis that we're going to get sometime -- and I hope the families on Vancouver Island will get it sometime -- can the Premier tell us if that analysis took into consideration not just jobs in the forest, but also the indirect jobs that would be lost as a result of the changes the Premier has imposed on the communities of Vancouver Island?
Hon. M. Harcourt: I just answered that question. That is not a list of imaginary projects; these are very real projects. I'm astounded that on the first opportunity the Leader of the Opposition has to ask questions on my estimates, he wastes it on trivia that I've already answered in question period. I expect far better from the Leader of the Opposition than to rehash questions that I have already answered fully and clearly. And to say that real projects that are going to go ahead are imaginary.... I hope I'm just imagining these questions that are being asked of me.
G. Campbell: Hon. Chair, I can tell you that the Premier is not imagining the questions. He may be imagining the fact that we got any answers to these questions before. He wasn't in the House when we asked the questions, and the answers weren't forthcoming then, nor are they forthcoming tonight.
Perhaps we could try a couple of other issues to see if the Premier has answers to them. The question I have for the Premier regards the 23 parks that have been announced by the government. Can the Premier tell us what compensation is anticipated to be paid as a result of the establishment of these 23 parks on Vancouver Island?
Hon. M. Harcourt: The question of compensation is part of the negotiations that will now take place as these new parks are being established. Those negotiations are a matter for the future.
G. Campbell: If I can be clear with the Premier, then, these decisions were made without knowing what the costs of the decisions were going to be.
Hon. M. Harcourt: No. It is very clear what the costs of the decisions are going to be. The negotiations that are going to take place should take place in the best interests of the people of British Columbia, and the negotiations should be kept whole.
G. Campbell: Can the Premier tell us what the global cost is estimated to be? I am sure individual negotiations will take place. In establishing what the cost of this decision would be, can the Premier tell us what the global cost of the compensation would be for the establishment of 23 parks of questionable boundary across Vancouver Island?
Hon. M. Harcourt: The Leader of the Opposition's friends in the Vancouver Club and the forest industry can ask those questions directly. They don't need their person in the Legislature to ask those questions. I am quite prepared to sit down and negotiate those kinds of things with the members of the Vancouver Club, whom the Leader of the Opposition is representing.
F. Gingell: Do you find something objectionable to being a member of the Vancouver Club?
The Chair: I will ask the member to take his seat, please.
F. Gingell: I have been a member of that club for 30 years.
The Chair: Order, hon. member. Take your seat, please.
G. Farrell-Collins: On a point of order. I have to draw the Chair's attention to the fact that the Premier has obviously offended not only hundreds of British Columbians, but obviously the member for Delta South. Perhaps the Premier could retract those statements before the member for Delta South asks him to.
The Chair: This is a dispute, hon. member; it is not a point of order.
G. Campbell: Hundreds of thousands of dollars have been spent on an announcement by the government. We are trying to establish if the government has any idea whatsoever of the cost of the decision, not just the cost in terms of jobs -- for which we get a listing of government-paid jobs -- but a question of whether we know the full cost for the implementation of the decision. Would the Premier please tell the people of British Columbia -- who belong to every club in British Columbia or who are involved in the forest industry in British Columbia -- what the cost of this decision will be to them as taxpayers.
That is the question, hon. Chair. What is the cost to the taxpayers of British Columbia for the establishment of these 23 parks on Vancouver Island? We know the Premier is a little fuzzy on the job losses. We are only dealing with families here, so he doesn't know about that. We would like to know the explicit amount budgeted for the Premier to negotiate the establishment of 23 parks.
[ Page 12525 ]
Hon. M. Harcourt: Now that the member for Delta South has taken his seat -- instead of being in the peanut gallery in the back and out of order -- I am quite prepared to say that now that the Vancouver Club has finally changed its policy to allow women to be full members, it is a more acceptable place. I am sure that the hon. member has been voting for years to say that women should finally be members of the Vancouver Club.
[7:30]
I am quite prepared to say that the costs of the way we have conducted ourselves in the forest and natural resource areas of this province have been incalculable. From the roadblocks and the valley-by-valley battles that have taken place to the lost investment that has gone on in this province by not deciding what should be in parks and wilderness.... Our party got a mandatee when we ran in the last election that said that approximately 12 percent of British Columbia's unique and representative ecosystems would be put into parks and wilderness areas and that that would be done openly. That process is taking place through the protected areas strategy. We said that the forest lands would be protected. We have protected the forest lands of Vancouver Island with the forest reserve and have said that 81 percent of Vancouver Island is protected from people who want to encroach on those lands either for urban strip development or for more parks.
Our government has also committed to settling with the aboriginal people and finally putting behind us the litigation, uncertainty and conflict that has resulted from not addressing aboriginal issues. Price Waterhouse said, in a study they did a couple of years ago, that that uncertainty had chased away over $1 billion in investment in this province because people wouldn't invest in uncertainty. The land use process that we are carrying out in this province, the protected areas strategy, settlements with the aboriginal people, the Forest Practices Code and the forest renewal plan are all leading to providing the certainty and predictability that the people of British Columbia want. It's going to save an immense amount in human costs -- the squandering of economic opportunities and the waste that many aboriginal people have faced by not having opportunities for themselves and their children. British Columbians have seen some of the finest and unique park and wilderness areas anywhere in the world disappear.
I'd like to know whether the Leader of the Opposition calculates more than what's on a balance sheet. Does he also calculate the human costs? Does he calculate the value of having the most unique and representative ecosystems in this province preserved for future generations and for people from around the world to enjoy? Those are the values that my government represents, and it is bringing about a scale and scope of change through CORE and through these other initiatives that is unparalleled in the world. I'm proud of those initiatives.
We have a clear idea of the issues we're going to face now that these designations have taken place, and we have a clear idea of how we can negotiate with the holders of rights to those properties. I'm sure the member would find it quite imprudent for me to release the details of those negotiating strategies and negotiations before they take place. That would prejudice the public interest and the position of the people of British Columbia.
G. Campbell: The Premier has told us that this is going to establish certainty and predictability. Yet he's uncertain: he cannot predict the job losses that we're going to see and that families are going to see in British Columbia. He's uncertain: he cannot predict for this committee what the costs and compensation for the parks will be. He's uncertain about what the boundaries of those particular parks will be. The Premier says to us that he has established certainty. I began my remarks tonight referring to an independent analyst who pointed out quite clearly that the uncertainty that has been established by his government is what is driving away investment in our primary industry, the forest industry. The Premier should be straightforward with people. There is no certainty with regard to this issue. For example, can the Premier tell us with certainty how many indirect jobs are going to be lost on Vancouver Island as a result of job losses in the forest industry?
Hon. M. Harcourt: With certainty, I can say none.
G. Campbell: That's exactly the kind of glib response that the people of Vancouver Island will not accept. I will guarantee you that they won't accept it. As I walked among the people and families of Vancouver Island on March 21, it was clear that they weren't willing to accept that kind of answer. We know that there is a timber supply review going on, and we know we're going to have a reduction in the annual allowable cut. Can the Premier tell us with certainty how much the annual allowable cut is going to be reduced as a result of the implementation of the Forest Practices Code?
Hon. M. Harcourt: These matters were canvassed very thoroughly during the Minister of Forests' estimates. Again, I don't know what's happening with the Liberal caucus research staff, but this has been gone through exhaustively. Other members of the Legislature are nodding their heads. They are not just members of the government; they are members who sat through those estimates and heard the answers. But I will find those answers for the Leader of the Opposition.
I also heard him say that we can't define the parks. Well, I very clearly defined the parks in the Vancouver Island land use plan, which I announced last Wednesday. I said there were 23 parks, 18 of which have the boundaries determined, and five of which -- four on the north end of Vancouver Island -- will have significant reductions to those boundaries. I met with people on the northern end of Vancouver Island, and they made it very clear that they didn't think it made a lot of sense to have aboriginal reserves, housing subdivisions outside Port McNeill and second-growth timber and forests included in those boundaries. I happen to agree with them, so we're changing those boundaries. Those boundaries will shrink.
It's very clear from the boundaries that are there and from the work we have done on the cutting rights that may be impacted that up to 50 jobs could be affected. Because of the relationship that my deputy and our government has with companies, workers and communities, we believe that we'll be able to make sure that any of those workers who are affected will be able to continue to work in the forests. I have established a forest jobs commissioner, Don Cochrane, who has worked on Vancouver Island in this area for many years. We're on the ground now, working with the companies and those workers to make sure that the forest workers who may be impacted, along with their families and their communities, will have alternate work -- good family-supporting work -- on Vancouver Island as a result of the Vancouver Island land use plan.
G. Campbell: The Premier raises the Vancouver Island land use plan. He stands up and says: "People should simply believe my press releases, because I've always been so
[ Page 12526 ]
believable." But we know that the fact of the matter is that even when you deal with the so-called 81 percent, there are significant reductions. The Premier knows that non-forested land is equal to 7 percent; he knows there are inoperable forest lands equal to 12 percent; he knows that there are set-aside lands equal to 22 percent. That reduces his 81 percent to 40 percent, so why does the Premier try to put over on the people of Vancouver Island that somehow he has their interests at heart? He's not even giving them the straight facts; they're lies -- damned lies and statistics. He has certainly managed to massage the statistics so that his public-relations machine can put it out to the people of Vancouver Island, but they are not being fooled.
The Premier claims that these answers were given in estimates; they were not. This announcement was not made until after estimates was complete. The uncertainty that this government has created goes far beyond the public-relations tools that he's tried to put together to assuage the concerns of the people of Vancouver Island. Maybe the Premier can explain why he tries to fool the people of Vancouver Island with this 81 percent as opposed to the 40 percent that is really available for forest activity on Vancouver Island.
Hon. M. Harcourt: I think it's sad that the Leader of the Opposition is trying to fan the conflicts of the past and is behaving like a dinosaur of the past. It's unfortunate that he's not looking ahead to the present. People on Vancouver Island are tired of the battles of the past. They want to work together to work out these solutions.
I said that 81 percent of Vancouver Island is in a forest reserve. That forest reserve includes a variety of different types of ecosystems: lush forests to mountain tops to marshes. What I did say is that that 81 percent, which has a variety of uses -- forestry, mining, tourism activities, other economic activities and values -- is zoned like the agricultural land reserve. You cannot continue to encroach on that land for the strip development that's happening on the east side of Vancouver Island, for urban use or for settlement. You cannot continue to eat into that forest reserve for uses other than what is permitted in that forest reserve. I hope that the Leader of the Opposition agrees that we should preserve that forest base. I hope that he supports that forest reserve legislation, and that he won't misuse those figures for any other purpose. That 81 percent is in a forest reserve -- people cannot remove land from it for parks or urban settlement without going to the people in those communities through the local and municipal governments to change that use. So I would hope that the Leader of the Opposition would support this historic and very important forest reserve legislation and concept.
G. Campbell: I am aware of the agricultural land reserve and the proposed forest land reserve that the government has put forward.
The fact of the matter is that we are dealing with families in British Columbia here. The Premier talks about dinosaurs. He has probably already seen The Flintstones this summer, but I can tell you that there's only one dinosaur here, and it's the process that's being used. When the government decides that they're going to send out their henchmen to tell -- not ask -- people what's going to happen; that they're going to ignore the communities of Vancouver Island in trying to structure a response that protects the 12 percent, which we have all endorsed; and that imposing threats is the way to deal with this, it's not the way of today. It's not going to be the way of tomorrow; in fact, it's going to generate a lot of lost jobs and concern in communities across this island.
If the Premier were to do anything more than talk at people, if he were to listen to them and learn what they had to say, he would in fact admit that. He would find a way to give the communities the decisions they need to make so they can sustain their work and provide for a sustainable improvement to the environment. That is clearly available.
I don't believe we're going to get any more out of the Premier with regard to this. He's obviously in PR mode, and I will resign myself to that fact and allow someone else to deal with this issue.
G. Janssen: I rise to take part in the debate on the Premier's estimates. I recognize that the Leader of the Opposition is like many members in his party. They are not from resource-based communities; they are urbanites who are used to dealing in land use in the terms of development of housing, expansion of urban societies and taking away forestry lands from productive use so that they and their developer friends can enrich themselves even more fully than they have in the past.
Eighty-one percent has been set aside on Vancouver Island, and recognizing that they don't spend much time in those resource-based communities -- particularly because I've never seen them in Alberni..... All of the land in that 81 percent is harvestable; however, the ability to harvest is dependent upon price and, of course, availability. It has now been made available, and much of it has been replanted and is simply waiting for that new growth.
[7:45]
The forest renewal plan has already created new mills. Franklin Forest Products was created less than a month ago in Alberni. That's 36 new jobs. I recognize that they're union jobs, and perhaps the opposition has some problems with that term and with the good wages that are paid through those jobs. The Toquaht band has instigated a new mill, creating 50 new jobs within the last month. Rebco Forest Products started within the last eight months. That's 30 new jobs. I know those aren't great numbers when you talk about urban development and the great opportunities available in Vancouver and the lower mainland.
The cost of parks has been brought up in this debate, but what is the cost of not creating those parks? We have of course read in the press and understood that we have lost many contracts in Europe and other parts of the world because of the harvest....
G. Wilson: On a point of order, as informative as this commentary is from the member for Alberni, I think the Premier's estimates are here for the opposition -- and for members on the back bench, if they wish -- to be able to ask questions of the Premier. What we're entering into resembles second reading debate on some mythical bill. We haven't even got to the B.C. Trade issues yet. I'm told the Premier wishes to have this wrapped up by 8:30. Other members are waiting to get in with legitimate questions, so we'd like to get down to that.
The Chair: Hon. member, every member in this Legislature has the right to enter into the debate, so I'll ask the member to proceed.
G. Janssen: I thank the member for Powell River-Sunshine Coast for his comments. As I was leading up to the contracts being cancelled by foreign corporations, I was getting into the Premier's area of trade. The Premier went to Europe to secure some of those contracts that we are losing, to assure Europeans that we are in fact changing our forestry practices and to dispel some of the misinformation being
[ Page 12527 ]
spread by such organizations as Greenpeace. Could the Premier perhaps inform the House of the message he took to Europe, whether that trip was in fact justified and whether those contracts are going to be assured? Will we continue to harvest on a sustainable level in communities such as Alberni?
Interjections.
The Chair: Order, please. Hon. Premier.
Hon. M. Harcourt: I just want to say that the hon. member for Alberni read that question I wrote out for him very well.
Interjections.
Hon. M. Harcourt: Yes, and the answer is very clear. It's the one I have given all over Vancouver Island, including communities in your riding. The answer is very simple: change has to take place in the way we've conducted our forest industry in this province. That change has to take place if future generations are going to have jobs in our number one industry. Change has to take place if our customers, opinion leaders and political leaders in Europe, the United States and elsewhere are going to continue to have confidence in British Columbia's forest products. That is absolutely essential.
One of the reasons we don't have boycotts from the European Parliament, Washington, D.C., and Sacramento is because the leaders in those centres have heard what I've had to say about the range -- the magnificent scope and scale -- of change happening in British Columbia's forest practices and land use decisions. They have heard that change is happening in British Columbia. That is why parliamentarians, congressional leaders and members of the European Community, the United States and across Canada have come to British Columbia and seen the forest practices -- good, bad and ugly. They have seen that the large clearcuts on Hesquiaht Peninsula and Mount Paxton -- four thousand hectares -- are things of the past. They've seen the new Forest Practices Code. They have seen the changes that are happening.
I have spoken to the customers of our forest companies and forest workers -- yes, the families that the Leader of the Opposition talks about -- to make sure that they can continue to work in Port Alberni, Youbou and Port Alice, because they can withstand with comfort the pressure that's been applied by some of the more extreme environmental groups in this province and other parts of the world. They know they can withstand those pressures because of the changes taking place; they take comfort in that. They therefore continue to buy British Columbia's forest products.
That's the cost if we don't bring about these changes, if we try and defend the status quo. That cost is huge. That's why I'm not going to vary from the changes my government is committed to bringing about in our forests.
H. De Jong: Just to safeguard the Premier, so he doesn't accuse any other clubs, I would just like to inform him that I belong to the Kiwanis Club, as well as to the Rotary Club.
Having said that, I have great difficulty understanding how this commissioner is going to make the allocations each year from this forestry reserve as to what can be cut, how much can be cut and where it can be cut. I understand there's quite a bit of privately owned land within that reserve. There is land under forest tenure and there is Crown land that is simply allowed to be logged at some time. There are basically two kinds of land: public land and private land.
The Premier likes to equate this with the agricultural land reserve. With the agricultural land reserve, people in the reserve have to produce a certain amount of goods each year so that they reach the level of agricultural taxation. This is quite the opposite: they are perhaps going to be limited in terms of what they would like to cut. And on land that is privately owned, the person who owns the land obviously wants to get the greatest return out of that land. It is the same as agricultural land. But the government is going to come along and tell these forest landholders: "You can only cut so much." They're paying the taxes on that land, just like any other private landowner.
I would like the Premier to explain how he's going to deal, in a fair and equitable way, with those who have private lands.
Hon. M. Harcourt: The jobs commissioner is not going to be making those decisions. The jobs commissioner's sole role is to identify those workers -- 50 or so, we guesstimate, and I think quite accurately, for this year, and 800 to 900 over five years -- who may lose their jobs because of the decisions around parks and park boundaries and the impact they may have on cutting rights this year, next year and the year after that. His job is to work with the companies, unions, contractors and employees to see if they can work in the 500 jobs that are being created this year under the forest renewal plan in watershed restoration, logging road reclamation and silviculture. That is the role of the jobs commissioner.
On the question of the application of the forest reserve to private lands, yes, it applies to lands that are not in the agricultural land reserve: 3 percent in settlement areas and the 13 percent that will be in the protected areas status. So it applies to public and private lands, including Crown lands in that 81 percent that's in the forest reserve.
The Forest Practices Code applies to all Crown lands and to private lands involving either TSLs or woodlots. The Minister of Forests is looking at the application of the Forest Practices Code to other forms of private land. He will be coming to some conclusion after consulting with the people who are going to be potentially affected in the near future.
H. De Jong: I have difficulty understanding how anyone, whether it be a commission, a commissioner or the Minister of Forests, can make decisions on the basis that the Premier has explained. Having said that, I have another issue I would like to ask a few questions about.
The Premier probably remembers that about ten years ago he and I were on the Federation of Canadian Municipalities infrastructure committee. At that time we were desperately trying to get the federal government to see the infrastructure program initiated so that it could be improved and enhanced, some of the old systems could be renewed, and so on. We did a long-term study on that, and we finally came up with two aspects of infrastructure improvement that would lead to job creation.
I was rather pleased this winter when the federal government came up with the infrastructure program as outlined by the Prime Minister at the time. I felt that we had finally got something that we had worked on from the municipal level up -- a good response to the initiative that we wanted to start ten years ago.
If I recall correctly, the Premier was very enthusiastic about this plan, and very supportive. The Premier came back and said: "I am supporting this program very strongly. We will make every effort to make the finances available so that
[ Page 12528 ]
the province of British Columbia can get maximum benefit from that program." Have I heard the Premier correctly that he feels exactly that way about the program? The Prime Minister said the intent of the program was to have new jobs for projects that would not otherwise be funded by provincial or joint programs with the municipalities. Am I correct in understanding that?
Hon. M. Harcourt: The answer to that question is yes. I want to say that the hon. member for Matsqui, who was the mayor of Matsqui at the time, was on the committee that I was involved with....
An Hon. Member: The member for Abbotsford, the former mayor of Matsqui.
Hon. M. Harcourt: Right. George Ferguson is the mayor of Abbotsford; let's not forget him.
He was a member of the Federation of Canadian Municipalities committee that pioneered this very important one-third, one-third and one-third cost-sharing among the federal, provincial and municipal governments to upgrade municipal infrastructure, which had fallen into a state of substantial disrepair back in the mid-eighties. It's gone even further into disrepair since then.
[8:00]
The answer to the member is yes, new funds were invested above and beyond the conditional and unconditional grants to the municipalities in the amount of $225 million over the next two years as part of a $675 million investment in basically upgrading our water through sewage treatment and water purification in British Columbia. It is extra funding that will be invested over the next couple of years on a fair basis around the province. I hope the federal government will see that this has been such a success that we'll be able to carry on with a number of other projects that still need to be done over the next few years after that.
H. De Jong: Having heard the Premier make those statements, I am somewhat disillusioned by what is actually happening in British Columbia. When I read through the program that was made available in early March as to how people could apply for it, where to apply -- and noting again that the Premier was in very strong support of new projects, new jobs, new money.... This is not happening, and I believe that everyone on this side of the House -- the loyal opposition, Reform Party and independent members who sit here -- is involved and supportive of these good job creation programs because they mean real jobs and real improvement to the economy of British Columbia.
Unfortunately, many municipalities applied according to the booklet that's in front of me here. Applications for water and sewer were sent to municipal finance services. They were advised to do that by this booklet. Other applications, though, should be submitted to the Canada-B.C. infrastructure program. Many municipalities sent their applications into Municipal Affairs, because they've sent those applications for those particular programs to the Ministry of Municipal Affairs for years. Last year there was a program; there were hundreds of millions of dollars available to municipalities. It has been going on perhaps for ten to 12 years. Now all of a sudden, after these municipalities had sent these applications to the exact addresses mentioned in the booklet, they have been informed that all of these applications should have gone to the Canada-B.C. infrastructure program, not to the program stated in the booklet.
I interpret that a fund that has been made available by the federal government for new projects, new jobs and new infrastructure is now being channelled through the normal program of the Ministry of Municipal Affairs, which does not mean that it is new money on the part of the province, which the Premier said they would provide. I believe that this comes very close to defrauding the federal government of a well-intended program -- and we talk about working together as federal and provincial governments to make it better for all of Canada. As I said, I believe this is deceiving the federal government of a well-intended plan -- a plan that could put more people to work in British Columbia if in fact it had been followed to the letter.
Hon. M. Harcourt: I'm puzzled by the member for Matsqui....
Interjection.
Hon. M. Harcourt: Abbotsford. Sorry -- I'm thinking of the other member. I should know which seat I'm talking about.
[D. Lovick in the chair.]
The hon. member should be aware that the federal government is totally aware of the projects and has signed a protocol with the province on how the project moneys will be disbursed. As a matter of fact, we have kept whole the concept that municipal infrastructure money be invested in basic municipal infrastructure and not be off into miscellaneous projects at the whim of individual MPs or MLAs -- that they truly be part of the municipal infrastructure program. We have probably the purest municipal infrastructure program in the country: 85 percent going into purifying our water; $210 million going into the Annacis Island treatment plant to clean up one of the worst environmental polluters on the greatest salmon river in the world, the Fraser River. Because our government made sure that 85 percent was going to go into basic municipal infrastructure projects like Annacis and a series of other water purification and sewage treatment plants around the province, and that it would be fairly distributed on a regionally equitable basis, the federal government signed on to that agreement. Second, it is on a committee that vets and approves all of these projects. Saying that this is perilously close to defrauding the federal government is patently untrue.
I am sure it was because the member may not have been aware of the amount of involvement the federal government has in signing the protocol and approving these projects that he made that statement, because we have the purest municipal infrastructure program of any province in the country. It is new money: $675 million will be invested into new projects, creating more than 8,000 jobs in British Columbia above and beyond the conditional and unconditional grants that go to municipalities.
H. De Jong: I am not going to belabour this very long. It seems to me that what is happening here happened some 20 years ago in a municipality in the lower mainland when the late Prime Minister Diefenbaker had a similar winter works program for municipalities. One municipality laid off all its outside staff and then rehired them again under that particular program. I believe I see a similar scenario working here. There is no more money. No additional money has been placed in Ministry of Municipal Affairs joint programs than there was the previous year. It is simply replacing programs that were already done by the provincial government under
[ Page 12529 ]
joint sharing with municipalities. From the figures I know, I do not believe that this is fair game on the part of the province with the federal government.
G. Campbell: The opposition has heard that Ms. Johanna den Hertog will be moving over to carry out a special campaign on behalf of the Vancouver Island land use plan. Can the Premier confirm that for us?
Hon. M. Harcourt: Johanna den Hertog is being seconded from her position in B.C. Trade into the intergovernmental relations office of the Premier's office, to work on providing the international community with the good news about the changes that are happening in British Columbia in our forest practices, the Vancouver Island land use plan, the activities of CORE, the settlements for the aboriginal people, and making sure that the international media, international political leaders and some of our key customers are fully informed of the positive changes that are happening in British Columbia. I believe it is absolutely essential for the international community to be informed of these changes when they take place in the number one industry in our province, and Ms. den Hertog has been seconded to carry out that task.
G. Campbell: Can the Premier tell us Ms. den Hertog's credentials? We know that her credentials for the B.C. Trade Development Corporation were only that she was a member of the New Democratic Party. Could the Premier explain what Ms. den Hertog's background in forestry is and why the Premier believes that her public relations activities will have the kind of impact...? They certainly won't have the kind of impact that his Minister of Environment had when he said to people around the world that our forest practices in British Columbia were shoddy and hopeless. Is she going to spend her time trying to compensate and make up for the problems that are created by the government's cabinet ministers, or does she actually know something about forestry that will allow her to communicate those concerns in Europe?
Hon. M. Harcourt: Ms. den Hertog has been very active over the last two years hosting the president and a number of members of the European Parliament who are on its environment committee, as well as representatives of the Canadian Parliament and world parliamentarians. Leading journalists from Europe, the United States and other countries have full briefings when they come to British Columbia. They can go on site to see some of the forestry practices of the past, present and future. She has been invaluable in making sure that the people who come to this province get the full picture of what's happening in the forests in British Columbia.
Secondly, when I went to Europe, Ms. den Hertog was present and was very helpful in meeting with parliamentarians and business leaders in Germany and Brussels. I can say that it was very helpful that she speaks German, Dutch, French and Spanish and has a number of contacts in Europe. Also, I'm sure the hon. member is aware that Ms. den Hertog has extensive communication skills as a senior staff member of the Telecommunications Workers' Union from 1979 to 1992. She was the director of legislation and research at the B.C. Federation of Labour from 1977 to 1979. She was the ombudsperson for the Vancouver Status of Women Council from 1975 to 1976. She was the co-founder of Vancouver Rape Relief and was there from 1973 to 1975. And she has been a member of a number of international organizations. She brings great skill and talent to making sure that our number one industry, the forest industry, receives a fair hearing in the important forums of the world.
I think it's absolutely essential that we as partners in British Columbia do everything possible to make sure that our forest industry remains healthy and viable, and that we have somebody with the skills and experience and linguistic talents to help us in that task.
G. Campbell: I wasn't suggesting that Ms. den Hertog is not a fine individual, but the question was with regard to her ability to deal with forest issues in British Columbia. The Premier's answer, as I understand it, is that she's part of the communications arm of the government. Can the Premier explain to the committee how Ms. den Hertog will be paid? Out of what budget will she be paid?
[8:15]
Hon. M. Harcourt: She's carrying out essentially the same activities that she was carrying out on my behalf in the Premier's office and with B.C. Trade. She has been seconded to the intergovernmental relations office to head up this initiative and make sure that our forest industry stays viable internationally.
G. Campbell: In turn, if I can just deal with communications here with the Premier.... We have watched as the communications budget -- the public relations budget -- has increased by some 47 percent since the Premier took office. Can the Premier explain why the salaries and benefits that have been passed out by the government have also gone up by over 100 percent in the same period of time? Will Ms. den Hertog be paid out of this vote or out of the Trade Development Corporation's vote? How will she be paid? Where will those dollars come from? Are they part of that massive communications budget increase that we've seen under this government?
Interjections.
The Chair: Order, members of the committee. I know we all enjoy these deliberations, but I must say that the only way we can function is if we can hear the questions and answers.
Hon. M. Harcourt: She has been seconded from the office of the Premier, the minister responsible for B.C. Trade, to work in intergovernmental relations on what I'm sure the Leader of the Opposition will agree is a very important task: to preserve the markets for our B.C. forest products and to make sure that the international community hears the truth. Who would the Leader of the Opposition rather have talking about B.C. forests? Does he want Greenpeace Germany or the Western Canada Wilderness Committee talking about B.C.'s forests? I'd much rather have somebody of the quality of Johanna den Hertog, who has been carrying out this role over the last two years, making sure that our forest industry stays as B.C.'s number one industry.
G. Campbell: I appreciate the Premier asking me who I'd have. I'd have a professional rather than an NDP hack carrying this out, because it's an important issue.
When we move to the B.C. Trade Development Corporation, I certainly share the purported commitment of the government to trade. However, I understand -- and I hope the government does -- the impact of their policies on trade across the province. To use the comments of Mr. Yamagishi of the Kamei Sushi restaurants: "The current Premier is killing B.C. businesses with his tax dollars. Since
[ Page 12530 ]
his last trip to Japan in 1991, there has been no benefit to Japanese trading companies." There's no question that we have benefited from world lumber prices going up. We have watched the Canadian dollar devalue anywhere between 40 and 50 percent against the Japanese yen.
Also, I would be interested in the Premier's comments about a company that has moved to British Columbia, which says quite specifically that high taxes are forcing this company and others to think twice about investing in our province. I know from my own visits to Asia-Pacific that the Trade Development Corporation understood and was told of the problems there were being creating by the British Columbia tax regime. I'd like to quote from this particular gentlemen, Michael Ho: "B.C. government officials sing the praises of the investment climate here, but they don't tell you about taxes. They would tell you all the good things. Nobody told us; we didn't realize there was a such a tax as the corporate capital tax."
I know the Premier has visited there on a number of occasions and has been told how destructive the corporate capital tax is. Indeed, it is so destructive that it has probably offset the investment that we could have encouraged with the Trade Development Corporation. Could the Premier tell us when the Trade Development Corporation intends to fully lay out the tax regime in British Columbia? After the Premier has done that, when will he remove the corporate capital tax so we can encourage investment and job creation in the province of British Columbia through the private sector as opposed to the public sector?
Hon. M. Harcourt: As I said in my opening remarks, the facts don't match the rhetoric of the Leader of the Opposition. Exports are up dramatically, particularly exports of value-added forest products. Knowledge-based industries in particular are up dramatically. So the Leader of the Opposition can say whatever he wants and make up whatever he wants.
If the Leader of the Opposition would like some further evidence of that, an employment and investment update of June 1994 says that on an industry basis, initial capital investment intentions in 1994 in B.C. are substantially higher than the 1993 preliminary actual capital expenditures in the following: fishing and trapping, plus 14. 6 percent; logging and forestry, plus 18.4 percent; mining, 18.5 percent; manufacturing, plus 20.1 percent; and retail trade, plus 35.6 percent.
Bankruptcies are down 24 percent. The corporate capital tax is there to deal with the deficit. It is deficit-driven, and as the deficit comes down the corporate capital tax is being eliminated for 5,000 businesses. It does not apply to businesses in their first three years. It is a tax that exists in seven other provinces, plus a flat tax in the other provinces.
Studies have been done that show that our manufacturing industries are very competitive with our competitors in Washington, Oregon, California and Alberta, and we're doing just fine. I don't know who you were talking to from Japan, but I can tell you who I've been talking to: I've been talking to the head of Mitsui Homes, in Langley, with whom I opened up a value-added forestry plan a couple of months ago. They know the value of establishing in British Columbia, and they are establishing a value-added plant here.
I can show you other value-added plants and high-tech joint ventures -- in Korea, Sansei and MPR; people throughout Asia who realize that the number one economy in North America is right here in British Columbia. Over 100,000 jobs have been created over the last few years right here in British Columbia; 60 percent of the new jobs in Canada in the last month were created here in British Columbia.
The only problem we have is the gloom-and-doomers in the opposition here and their pals -- a few of them -- in business who want to do nothing but run down the positive accomplishments of British Columbians. The biggest impediment to investment that we have is hearing the Jimmy Chickens of the opposition talking about how terrible it is in British Columbia. That's the biggest problem we've got.
The rest of us are optimistic and are investing and living in the best place in North America to live, and it's only those that are -- I don't know if it's constitutional -- pessimists.... I don't know if they're constitutionally incapable of seeing anything good. But the fact is that the people of the world are speaking with their feet, and they're flocking to British Columbia -- 100,000 people a year. Does that sound like people that don't want to invest or don't want to live here? I mean, get with it.
I've listened for almost two hours to nothing but puerile pap and rhetoric from the Leader of the Opposition. I expected something better. He's had months to prepare for this evening, and I've had regurgitation of question period and recycling.... The only recycling that he seems to believe in is of estimates in forestry and other areas, and passing around precisely cut-out and subjective comments from a few people at where he goes to eat sushi now and again in Vancouver.
You should get outside Vancouver and see the optimism that's out there throughout this great province of ours. You should see how upbeat people are about the number one economy in North America, instead of running around trying to discourage people from investing in or coming to British Columbia.
Interjections.
The Chair: I would just advise members that the night is young, and I would suggest that our enthusiasm for the debate might be tempered somewhat, given that we have to husband our resources.
I'm going to accept a couple more questions from Quilchena, and then I'm going to go to Powell River-Sunshine Coast.
G. Campbell: You know, it's always interesting to hear the Premier when he gets caught out in some of his propaganda. This is not the opposition talking; this is 70,000 businesses across the province talking. This is hundreds and hundreds of families across British Columbia, who have said quite clearly to this government that they are tired of the rhetoric and they are tired of increasing taxes. They all understand what the public relations machine will put out, and they all understand the Premier will stand and tell them what's supposedly taking place.
The fact of the matter is that the leadership in this province has eroded the opportunities that British Columbians feel. Furthermore, the Premier himself went to meetings that were reported back to me where the international investment community -- which he takes great pleasure visiting and having bites to eat with around the Pacific -- has told him clearly, just as British Columbia business has told him clearly, that the corporate capital tax has killed jobs in this province.
There is no question, and I would like the Premier to hear this, that we have the best economy in Canada. But I have news for you. In the international economy and in
[ Page 12531 ]
international competition we are not in competition with Prince Edward Island. I take no pleasure out of the fact that we are the best in Canada. Canada's got enough trouble as it is.
In British Columbia, with our tax regime, we have watched as entire industries have left. The mining industry has basically left British Columbia, and the Premier should know that. The forest industry is investing outside and not in British Columbia. The corporate capital tax is driving jobs away. Even his officials in the Trade Development Corporation will tell him that. The chairman of the Trade Development Corporation shared that with me previously. So I am not quite sure why the Premier insists on saying that the corporate capital tax is helpful. It is not. It is driving jobs away and driving revenue out of the province. If he is not hearing that message, the problem is probably that the B.C. Trade Development Corporation has become known as the B.C. NDP's senate. It is where we place anybody that we can who needs a job.
I'd like to ask the Premier to refresh our memories with regard to the situation with Mr. Eliesen. I'm sure he's prepared for this. He told us in the House that British Columbians would pay nothing for Mr. Eliesen; there would be no compensation for Mr. Eliesen's contract. We have discovered that the British Columbia taxpayer is indeed on the hook for Mr. Eliesen's contract. It's time the Premier told the committee exactly how the taxpayers are jeopardized and what the agreement is with Mr. Eliesen, who has been fired from B.C. Hydro and is now working for some sort of consortium.
Hon. M. Harcourt: First of all, as I said earlier, British Columbia is competitive with our major competitors for manufacturing. We have on average the second-lowest taxes in Canada, and we are the best place in which to live and invest. We have the highest bond rating of any province and the highest credit rating of any province. The Leader of the Opposition asks where we get this information from -- how can we possibly believe this information?
Interjection.
Hon. M. Harcourt: That's right, and the quiet, genteel member for Surrey-Cloverdale says we manufacture it. Well, I can tell the hon. member that we find it in Statistics Canada -- the facts that I have just quoted to you. And if the official opposition is now attacking the integrity of Statistics Canada, how low can they sink? I'm sure we're going to find out just how subterranean the opposition can get. They're mining an empty shaft.
I answered the question about Mr. Eliesen on Monday. I said that Mr. Eliesen's services were sought out by two major energy companies in the world. One is ABB, a very significant company in Europe, which, along with Westcoast Energy, wanted to enter into a joint venture with B.C. Trade on energy projects in Asia. I said on Monday, while the Leader of the Opposition was preparing for his speech to his fundraiser, that there's over a trillion dollars of infrastructure investments in Asia. Just in case the hon. member for Surrey-White Rock wants to know whether I manufactured that or not, I didn't; it came out of the Asian Development Bank. One of the major areas that the countries of Asia want to develop is energy. You have one of the major consulting companies in energy in the world, ABB; and on top of that you have Westcoast Energy, which is the major natural gas company in Canada.
Mr. Eliesen has over 20 years of international experience in negotiating energy deals. He is highly respected in that community, and he was sought out by the other members of the consortium to come to this company and be the chair of this new joint venture. His salary and bonuses will be paid by the joint venture, and the B.C. Trade Development Corporation will be reimbursed for all of those costs. The office and administrative support for the new company will be provided by Westcoast Energy, and the Pacific Rim offices and facilities of ABB, which has 800 employees in China alone, will be utilized. I said that the benefits, including the pension, will be continued as per the B.C. Hydro contract.
But again, we have these pessimists in the opposition. We believe that with $1 trillion of infrastructure projects and expenditures in Asia, this joint venture is going to make money. There is not going to be any expenditure.... It is going to make money for the people of British Columbia, for ABB and for Westcoast Energy. These companies are not used to losing money. They are not in this venture to lose money; they are in this venture to make money -- and so are we.
[8:30]
We are here to make sure that the consulting engineers and fine talent we have in energy projects here in British Columbia are utilized to help the developing countries in Asia to modernize their economies. Mr. Eliesen is going to play an important role as part of this consortium.
G. Campbell: The Premier said: "We have some difficulties in areas like executive bonuses -- and they were in place during the previous administration." The problem is that the agreement with Mr. Eliesen was signed by this administration, and now, in spite of the fact that he supposedly was recruited by these outside agencies, the British Columbia taxpayer is still on the hook for his pension. The point that I would ask the Premier to respond to is: if we are going to continue on with these kinds of bonus provisions for Mr. Eliesen -- which are $30,000 bonus provisions, we understand -- can the Premier tell us what performance is going to be required for Mr. Eliesen to secure his bonus in his new position?
Hon. M. Harcourt: The pensions are going to be continued as per the B.C. Hydro contract, but the salary and bonuses through this private company are those that the public sector doesn't usually pay. Private sector decisions are going to be governing how this joint venture performs.
Quite frankly, when you look at what Mr. Eliesen was making -- around $195,000, plus the pension that deputy ministers and others receive -- his salary was one-fifth of what a comparable CEO at a major private sector energy company here in British Columbia is making. His pension didn't even come close to matching the $400,000 per year that that senior official of a British Columbia private sector energy company makes. A chief executive of the third-largest utility in this province, which has $3 billion a year in sales, is going to come with skills and experience -- and with compensation and bonuses comparable to that.
The fact is that Mr. Eliesen was sought out by members of the consortium to be chair of this joint venture, which I'm very excited about and which I believe the people of British Columbia are going to prosper from. It's going to be of great benefit in helping countries like Vietnam, China, Malaysia, Thailand, Indonesia and India get the modern infrastructure that those countries want and will seek out. I believe that, with the big skills that British Columbians and Canadians have in energy, this joint venture is more than going to pay
[ Page 12532 ]
for itself. It is going to be of tremendous benefit to British Columbians.
G. Campbell: I apologize for carrying on with this, but the fact of the matter is that if the private sector came to seek out Mr. Eliesen, the government would not be having the taxpayer support and subsidize his contract.
Mr. Eliesen is lots of things, I'm sure, and he has had many years of experience in the government sector. We have all watched as Ontario Hydro reeled from his management. Even the NDP government in Ontario realizes what a bad job he did there, and they're going through huge restructuring as a result of his activities.
I would still like the Premier to just answer the question that I asked. Mr. Eliesen has a bonus provision in his contract. What performance is the partnership -- which the public of British Columbia is a member of -- requiring of Mr. Eliesen to receive his bonus?
Hon. M. Harcourt: Mr. Eliesen has worked for a number of governments, some NDP, some not. As a matter of fact, he was hired by a Liberal government in Ontario as a deputy minister of energy. The problems at Ontario Hydro started well before the present New Democrat government came in. As a matter of fact, the sloppy, terrible mismanagement by the Liberals and Conservatives -- who created the Darlington white elephant and the overestimates of what was needed in Ontario -- went on into the seventies and eighties. The mess is now being cleaned up by a New Democrat government that had the moxie to bring in Maurice Strong, who is one of the senior business leaders in the world, in order to bring about changes that should have taken place many years ago at Ontario Hydro.
This is a private sector venture in which B.C. Trade is a minority partner. The salary and bonuses are being paid by this joint venture, and I have outlined to you the relationship of the various partners to this joint venture. There will be a senior person from Westcoast Energy, who, by the way, is the head of the B.C. Business Council. He is a man of astute judgment and a very well-respected B.C., Canadian and international business leader. He chose to undertake this joint venture. Mr. Stephan Schmidheiny, the leading businessman in Switzerland and the largest shareholder in ABB, chose to undertake this venture.
Pensions and pension arrangements for staff who are being seconded from 20 or 25 years of involvement in the industry are being carried by the parent organizations. The salaries and the bonuses are being picked up by the joint venture.
Interjection.
Hon. M. Harcourt: Because the people are not going to come into this venture from ABB or Westcoast Energy and give up their rights to pensions that they have built for 25 years and spent a whole lifetime contributing to. They don't expect their senior people to do that, nor do we.
G. Farrell-Collins: What does he have to do to get the bonus?
Hon. M. Harcourt: I think that question should quite properly be addressed to the major partners in this undertaking. And I think that instead of being the pessimist that you are about these magnificent opportunities for British Columbia to participate with two of the leading energy companies in the world -- Westcoast and ABB -- and combining the talents of all three, in a trillion-dollar market in Asia, you should be proud of the fact that we have been sought out to be part of this partnership to enter into these projects in Asia, rather than being so negative and so down on the opportunities that British Columbians have.
G. Campbell: It isn't about being positive or negative; I'm simply asking for a piece of information. The taxpayers of British Columbia are a major partner in this endeavour. It's a simple question. I don't need a five-minute answer or a five-minute speech again. What I need to know is: what performance criteria is Mr. Eliesen required to meet in order to get his bonus?
L. Reid: Oh, there's the answer.
G. Campbell: Oh, you've got the answer, good.
Maybe we'll get the answer now, hon. Premier. If you could just give us the answer to that, I'll be satisfied. What are the performance criteria?
Hon. M. Harcourt: The performance criterion will be determined by the board of directors and by the compensation committee of the board of directors of the new private sector joint venture. It will be based on performance, as I hope it is in most private sector ventures -- and in the public sector. It will be based on whether or not the results that we anticipate -- about which we are optimistic -- happen. If they don't, there's no bonus; if they do, then there's a bonus for performance.
G. Wilson: With regard to the Premier's capacity in intergovernmental affairs, we note that very shortly the government is about to enter into an historic round of negotiations with respect to the treaty process and the Treaty Commission process. Can the Premier tell us what legal advice has been provided by the office of the Attorney General with respect to the question of land title? I have put this question to the Minister of Aboriginal Affairs, the Minister of Forests and the Minister of Lands in previous estimates debates, and they seemed unable or unwilling to answer it. It's a most important question, because it is going to determine the position that this government will take on behalf of all British Columbians with respect to treaty negotiations.
Hon. M. Harcourt: The Attorney General has expressed the government's opinion on the Delgamuukw case and on amendments to the pleadings on the Delgamuukw decision. The position that our government has taken is that aboriginal rights exist, that they haven't been extinguished and that we want to negotiate a description of those rights through modern treaties, rather than through litigating or confronting each other. Aboriginal rights are defined as not applying to titled private property. They cannot apply to private property as it is identified under our land registry system, the Torrens system. And we are talking about Crown lands.
On the description of aboriginal rights, we have disagreed with those who say that aboriginal rights and title are property rights. Our position from the beginning has been.... When I was Leader of the Opposition, I said that we recognized that aboriginal rights exist, that they haven't been extinguished, and that we wanted to negotiate without any preconditions, through a treaty process. Those rights were defined back in the 1830s by a Chief Justice in the United States and carried forward into decisions in Canada: the
[ Page 12533 ]
Calder decision, the Sparrow decision and decisions of our Supreme Court and the Court of Appeal -- Delgamuukw. Many decisions of the Supreme Court of Canada have stated that aboriginal rights are not property rights; they involve the use and occupation of a territory for the sustenance of the community.
[8:45]
The concept of property rights is more akin to the European definition, or as we brought forward, the Canadian definition of property rights is from our British background. That is not the concept that aboriginal people talk about. They have a different concept of what ownership means: the use and occupation of certain territories that aboriginal people have lived in for 5,000 or 10,000 years -- to fish, to hunt, to build their housing, to carry out traditional activities of sustenance. That is the position of our government as to how we will conduct the negotiations through the treaty process. We genuinely believe that we will be able to reach a fair and just settlement that will benefit aboriginal and non-aboriginal people.
G. Wilson: I appreciate the answer from the Premier. In the Delgamuukw case, then, it's quite specific on the question of title. I don't take issue with the government's position with respect to rights. I think that's been subsequently reviewed, and there is other jurisprudence that would give support to what the Premier has said.
On the specific question of title, then, can the Premier tell us that this province is not putting title to land on the table for negotiations between governments?
Hon. M. Harcourt: If you're talking about the private title that people hold in fee simple, which is registered in the land registry systems, the modified Torrens system we have here in British Columbia, I have said over and over again that private property is not on the table. The aboriginal leaders have said the same thing. It doesn't apply to private land; it doesn't apply to anything other than the common lands held by either the federal or provincial Crown.
G. Wilson: I have just a couple more questions on this. In terms of the fee simple process, I recognize that private property rights don't apply, because they have never traditionally applied. We know that the collective interests and rights of aboriginal first nations have been negotiated as such, and even treaties that exist today represent those kinds of collective interests.
The question, however, is that in meeting with the commissioner and looking at the treaty negotiation process.... One of the issues this government is going to have to negotiate with respect to first nations is the introduction of a system of self-governance that might require this government to yield on the question of jurisdiction over land to which title will apply. If that won't be required, perhaps the Premier can tell us what the alternative is.
That title -- however it's worded, however it's provided authority within the statutes of this province and of the federal government -- obviously requires concurrent agreement with the federal government. We are hearing from the federal Minister of Indian and Northern Affairs that title is an issue that can be looked at. If one looks at the recent negotiations in the Northwest Territories, one can argue that that precedent is setting us up in British Columbia for such a negotiation.
If the Premier can tell us, then, whether or not title in any form is on the table, we will know this government's position with respect to the process by which it will be negotiating on behalf of all British Columbians in the upcoming rounds.
Hon. M. Harcourt: I hope the member is clear that we're not talking about private land; that is not on the table. The concept of title or ownership that has been described in our courts is the one I outlined earlier. The aboriginal concept of title -- of rights to hunt, to fish, to sustain one's family and people -- is the description that I have put before this Legislature. It is very clearly not the argument of private property rights that some legal representatives for the aboriginal people have put forward.
As to how those rights are going to be exercised and how self-government will be carried out, it basically means dismantling Indian Affairs and letting the aboriginal people run their own affairs, as they've done for hundreds and hundreds, if not thousands, of years. Aboriginal people have been governing themselves for centuries. This is not new. It's just in the last 120 years that they have been thrown artificially and against their will onto reserves which were created under the Indian Act, and forcibly governed under the Indian Act.
What we are talking about is dismantling the Indian Act and bureaucrats in Ottawa who are running the affairs of aboriginal people around this province. That form of government will be within Canadian sovereignty, within our federal system. It will not create any new rights to land. How that government will take form within the Canadian federation, respecting federal and provincial jurisdictions, and how those rights will be exercised will be negotiated through the treaty process.
The keepers of that process are the B.C. Treaty Commission. The interests of third parties -- in other words, the people who are most directly affected who utilize the Crown lands of this province for the harvesting of forests or for mining activities or ranching, and who utilize the fisheries -- are represented by the province and the federal government at the treaty table in government-to-government negotiations with aboriginal people. They are going to be participating in those negotiations through the province's representation of those users of those natural resources.
So I hope that answers your question about title. I hope you're clear on title, clear that negotiations do not apply to private land, and clear that these are all going to be defined in treaties which are going to have to be to the benefit not just of the aboriginal people who are negotiating on their own behalf, but of the people of British Columbia.
G. Wilson: I heard clearly and listened carefully to what the Premier said. The issue, however -- if we go back to the Delgamuukw case or look at other case law on this question -- is that with respect to the rights of an aboriginal person to the resource, that does not in any way obfuscate the role of the provincial government with respect to maintenance of jurisdiction over and title to the land. The problem is that in the agreements that are coming forward now for negotiation, on the table is the question of jurisdiction and title of land. What we need to know from the government is whether or not that's even a negotiable item.
Hon. M. Harcourt: I'm trying to answer the question. It's a difficult question that the member is asking. I'll try to answer it this way: any lands that are made available to aboriginal people through the treaty negotiation process will have to be negotiated to the satisfaction of the people of British Columbia, represented by the Province of British Columbia. This may be an extension of existing communities
[ Page 12534 ]
because they're short of land to grow. As we've heard from the Burns Lake band, the Musqueam band and others, they need more land for their community to be able to be a healthy community. It may be a form of comanagement of certain areas of resources.
All of that has to be negotiated through the treaty process, and it will be done within the framework of the sovereignty of Canada and the jurisdictions that are defined in our constitution -- provincial and federal jurisdictions. The treaty negotiations will deal with land, with funds, with taking over services -- possibly adoption services, child welfare services, health services and possibly education -- but the aboriginal people will receive resources to carry those out. We have negotiated a cost-sharing agreement with the federal government whereby for basically every dollar of land or of funding that the provincial government puts in, $3 will be contributed by the federal taxpayer. And land that's of value either for resources or because it's urban land of some value will be evaluated -- the provincial dollar -- on the basis of its market value, and we will be compensated on that basis.
So it's not a complex area, but it requires some explanation as to how we will now roll out these treaty negotiations. The province will be very diligent in protecting the interests of those British Columbians who are most effected -- those who live close to these settlement areas or who are presently carrying on economic and other activities in these areas.
G. Wilson: I don't want to go back to what was thoroughly canvassed in the Aboriginal Affairs estimates, but I take it from the Premier that the question of title may be on the table, and that his comments do not exclude that from being so. That's news for us tonight. As part of their agreements, all three governments that are party to these negotiations must have a process of ratification for the parties that they purport to represent. As the Premier is the principal minister responsible in the three-party negotiations, could he tell us what process of ratification the people of British Columbia will have with respect to negotiations that are signed off?
Hon. M. Harcourt: The tradition has been that the Legislature and the Parliament of Canada are the legal bodies to ratify these agreements. As I have said, during the treaty process there will be very active involvement of what we call third parties, whether it be sectoral third parties, as in forestry, mining and fishing, or regional third parties -- those more directly effected by a particular set of treaty negotiations. Through a memorandum of understanding that we have signed with them, the municipalities will be represented at the table. Their concerns will be voiced about jurisdictions, taxation, and a whole series of issues they have brought to our attention. I have been very conscious of the fears and concerns that a lot of British Columbians have about how this will impact on the non-aboriginal people. We could all serve this province well by addressing those fears and concerns honestly. Most of them are only that. The concerns about losing land, not being able to harvest or not being compensated can be answered.
In this historic moment -- as we enter into six or eight sets of intense negotiations with the aboriginal people this fall, supervised by the Treaty Commission process that we agreed to in this Legislature -- we all have a duty not to fan the flames of ignorance or misunderstanding that would create unnecessary conflict. We all have a duty to hear the fears that people in British Columbia have about the uncertainties of the treaty process and explain it to them. I hope that the information the Minister of Aboriginal Affairs provided recently in the Legislature helps. If any member needs more explicit information about how the treaty process is going to take place to finally bring an end to 123 years of injustice -- an era that I think British Columbians will want to put behind us, by settling just treaties with the aboriginal people -- or if you have any questions about the treaty process, I would be prepared to try and answer them. You can then pass that on to people in your riding where there may be a treaty process underway, in order to deal with their fears and concerns.
These are valuable and important questions that the member is asking -- ones that I welcome. If you have some specific concerns beyond this debate, either myself, my deputy Doug McArthur -- who was the deputy for Aboriginal Affairs and the chief negotiator in the Yukon for the settlements there -- my ministry or any of my officials would be more than prepared to give you a briefing on this whole question.
V. Anderson: The Premier and I go back some 25 years, working with people in the inner city of Vancouver, which the Premier, I know, remembers quite well. They were learning days for all of us, and in that era many community projects were developed that were of benefit to the community. Out of that grew some expectations of the Premier and his party. Those expectations, which were heightened over the years, were heightened when the Premier was running to form the government of British Columbia. There was an expectation by many people, some 20 to 25 percent of our population who live below the poverty line, that the situation would be improved with this government, and that was the promise they made. As the Premier indicated earlier when he talked about his forest mandate, it was a mandate that he promised to fulfil. Unfortunately, the situation for the people who are forced to live below the poverty line is worse off than it was in 1972, in 1981 and in 1991. The situation has continued to become much more tragic for 20 to 25 percent of our population, in actual purchasing power and ability to turn their lives around.
[9:00]
Although we have heard all kinds of promises and we have heard that no jobs in the forest sector will be lost -- whether that's true or not is another thing -- the reality is that the situation of people who live below the poverty line has continued to become drastically worse under this government, despite the Premier's promises. I'd like the Premier to respond to that major concern about the promises of his government, which have not in any way, shape or form been fulfilled.
The Chair: I thank the member for Vancouver-Langara for his question. I was listening with passionate attention, and I have real difficulty in understanding how that question related to the Premier's estimates. However, given that the member has had an opportunity to articulate that question at some length, I'm going to give the Premier an opportunity to respond, if he wishes.
I want to caution members of the committee, however, that we cannot use the Premier's estimates as an opportunity to canvass every operation of government. That is simply not workable or allowed, frankly, under the rules of the House.
Hon. M. Harcourt: I appreciate the question from the member for Vancouver-Langara, who I regard as an old friend and colleague who was involved in the board of
[ Page 12535 ]
directors of the Inner-City Service Project. I remember it as a great institution in the city, one that represented the poor and allowed me to start the storefront lawyer program that became the Community Law Office, the Legal Aid Society of British Columbia and the law students' legal advice clinic. I was involved in a number of other actions that spawned DERA, the crisis centre, Cool Aid and a number of other very important agencies in British Columbia, based on a sense of justice, dealing with issues of poverty.
I am sure the member was able to canvass a lot of these issues during the estimates of the Minister of Social Services and was able to ask the Minister of Skills, Training and Labour about how a quarter of a million British Columbians over the next two years are going to be receiving opportunities for skills and training, and for child care, to improve their lives. I'm sure he will have an opportunity to ask questions of the Minister of Employment and Investment about why people are moving here from Alberta and other provinces, where benefits are being slashed, opportunities are being cut and there is no employment. A hundred thousand people are moving here every year because we have the number one economy in Canada, and we haven't based our politics and political popularity on attacking the poor and the vulnerable. That is always a temptation for some people, and we refuse to do that.
I can say, hon. member, that yes, I hoped we would have been able to do more about poverty. I'm sure everybody in this room would have liked to have done more about those genuinely in need and poorer from circumstances where there but for the grace of God go I or thee. I would have liked to have been able to have increased the GAIN rates for single parents, for people with disabilities and for people unable to work.
But I think the member is aware that we had to deal with and bring down an accelerating deficit. Cuts under the Canada Assistance Plan were $600 million this year. We had to deal with these terrible demands of an accelerating deficit. We had to bring that under control, and we have. We also had to deal with the federal government dumping the federal deficit onto our taxpayers, which cost our taxpayers another $600 million in welfare costs this year alone. Even given those difficult circumstances, we have improved the GAIN rates, particularly for families.
We have kept our housing programs going when the federal government has totally abdicated its role in housing. You heard from the Minister of Housing and Consumer Services that we're going to be accelerating affordable housing for low-income people -- within the resources of the people of British Columbia -- using a lot of imaginative new approaches as well as the traditional housing programs.
As I said, we have a quarter of a million young British Columbians who don't have the skills for the modern economy, the required skills well beyond high school graduation -- single parents who find they have two or three young children at home and don't have the skills, child care or opportunities to get into the workforce, and unemployed workers whose skills are obsolete or who need to upgrade their skills. Through the Ministry of Skills and Training and the Ministry of Social Services alone, we will be providing opportunities through the Skills Now program and other programs for a quarter of a million British Columbians to be able to get the skills they need to have good-paying jobs to support themselves and their families.
For people on welfare who are able to get the training, child care and counselling they require and get out in the workforce, we've made a very conscious decision to extend medical and dental benefits -- for the children of those single parents in particular -- for a year after those single parents leave welfare and go out into the workforce. So there's a bridging there, which was one of the problems and disincentives for people to get off welfare. We have increased child care spaces by 12,000, targeted at just the people who the hon. member for Vancouver-Langara has talked about.
So I think we have tried to improve things for those who have been on social assistance, GAIN or other publicly supported programs. And I think we have had some success -- not as much as the member or I or our government would have liked to have seen. For the working poor, we have taken specific steps to raise the minimum wage a dollar. We have eliminated the Medical Services premium for half a million low-income British Columbians so they can have access -- unlike the working poor in the United States, a third of whose citizens have incomplete or no access to health care. We've said we're eliminating the Medical Services premiums for the poorest in British Columbia, either those on social assistance or the working poor.
I've just given some instances of areas where our government, which is committed to the abolition of poverty and to creating opportunities for British Columbians, has done things within the financial constraints we have faced to deal with the very genuine poverty that unfortunately does exist in this province.
V. Anderson: I'm interested that we can discuss almost everything in the minister's estimates, but when we begin to discuss the situation involving 25 percent of the population, that's not in the minister's estimates.
In response to the Premier, priorities are shown by how one operates, and the Premier has shown that those who live on low incomes, who do not have enough food to eat, who cannot find adequate housing, who cannot get the kind of home care they need to continue their regular lives, whose children's education.... Some 100,000 children live in poverty in this province, and the Premier stood up in the estimates last Monday and again today and said that this is a wonderful place for these people. The Premier ignored 500,000 people in this province -- 20 percent of our population -- in the statements he made again and again in the House this week. If he had stood up and acknowledged those people....
The Premier talked about the money he has spent on hundreds of projects, and then he says he has a priority for low-income people, who are suffering the most. The reality is that the way the money is being spent in this province does not make those people a priority in any way, shape or form. The Premier's response tonight has not been adequate....
The Chair: Member, you are now on record many times over in addressing your particular concerns. I must remind you, however, that you are quite out of order in continuing to raise these issues when we have dealt with them in at least three different sets of ministerial estimates. I must caution you that I cannot entertain this discussion, because it does not refer to the Premier's estimates vote. I'm sorry, member. I'm not trying to restrict your right to participate in debate, but there are rules by which we must govern ourselves. I would ask the member to either contain his remarks to these estimates or yield to somebody else.
V. Anderson: I will respect your wisdom, hon. Chair, and the wisdom of this government in recognizing that the Premier has no responsibility in his estimates for people on low incomes. If that's the Chair's ruling, I will respect that ruling that the Premier has no responsibility in his estimates
[ Page 12536 ]
or in his work in this province for those who live in poverty. If that's your ruling, I will respect it.
The Chair: Thank you, member. Please take your seat.
Mr. Premier.
Hon. M. Harcourt: I don't think that's the ruling. As a matter of fact, I know it's not the opinion of our government. Our government, as I've said, would have liked to have done more, but....
The Chair: Excuse me. All members, please take your seats. By a very clear and literal translation of every comment the Chair might make regarding the rules, one can draw particular conclusions. In the Chair's considered opinion, the conclusions are simply wrong. However, I would not recommend for a moment that we get into a procedural debate on points of order and what members meant or didn't mean. We're trying to allow considerable latitude here for all members to have the opportunity to voice their concerns. We have done that.
The rules of the House are very clear, however, that what is subject to debate are the matters that come under the minister's estimates. If you look closely at the particular vote we are discussing, you will discover what we are looking at: the operations of the Premier's office and of the Trade Development Corporation. That is all. All of the other areas of government are spoken for or are addressed directly under particular ministry estimates. Those are the rules of the game. They are not a judgment or personal preference on the part of the Chair; they are the rules by which this House governs itself.
I would suggest, members, that we restrict ourselves entirely to what we are allowed by the rules to discuss. Otherwise, quite frankly, we can have a debate on everything that we choose any time we choose.
Having said that, I will now recognize the member for Fort Langley-Aldergrove on a point of order.
G. Farrell-Collins: Thank you, hon. Chair. I just saw the debate going in a direction contrary to the ruling of the Chair, which was that we would not be discussing social assistance issues. He disallowed the member's questions, and I didn't feel it was appropriate for the Premier to be answering questions that the opposition is not allowed to ask.
The Chair: Thank you, member. I appreciate your comment.
D. Mitchell: I have a couple of brief questions for the Premier that follow up on some issues we canvassed during the review of the Premier's estimates earlier this week. There have been some new developments since then. The Premier will recall that I asked him whether or not the government has prepared any kind of plan B -- and I use the term "plan B," which the Premier is familiar with -- with respect to the upcoming election in Quebec later this year and problems in the Canadian Confederation, and whether or not British Columbia is developing or planning on a contingency basis should we have a crisis in Confederation and British Columbia has to re-evaluate its relationship with the rest of the country.
[9:15]
The Premier didn't like the question. He didn't want to contemplate such a situation, and he didn't want to prepare for it. He didn't think it was possible; he didn't think it was constructive to even think about this issue. I'd like to ask the Premier whether or not he has reconsidered that in light of what has happened since we raised that on Monday of this week, because the Minister of Finance returned from a trip from Europe and reported that wherever she went in Europe, she got the same question when she met with private and institutional investors. They wanted to know about Quebec and Canada, and they were uncertain. There were fears. Headlines in the newspapers since the Minister of Finance's return have been saying that officials are finding that Canadian bonds are a tough sell in Europe, and that investors are very nervous.
In light of the fact that the Minister of Finance has come back with this intelligence and information for the Premier, I'm wondering if he's willing to reconsider the advisability of considering a plan B for British Columbia in the event that the unthinkable should happen and Quebec elects a separatist government later this year. That might lead to a referendum, and we can't prejudge the results of that referendum. Canadian bonds are now a tough sell, and I wonder if the Premier might agree that one of the reasons for that is that we don't have a plan B?
Hon. M. Harcourt: No, I think the opposite. I think the problem is that people fan those concerns and fears. They speculate on these things, which then feeds back into the financial centres of the world. I've said very clearly that I don't believe that separation is going to take place. I disagreed with the separatist leader and the opinion he expressed when he was on a book tour here in British Columbia. He was invited to speak to a Canadian Bar Association meeting of some sort. I disagreed with the opinion that separation is going to happen. I think the polls and the vast majority of the people in Quebec are saying the same thing. They disagree with him too. Whatever the outcome of the election in Quebec -- which I'm not going to prejudge; I'm going to let the people of Quebec make that decision.... I say to the separatist leaders, Lucien Bouchard and Jacques Parizeau, that if they think in their minds -- not in reality, but in their minds -- that separation is going to be logical and easy, forget it. British Columbians want to keep this country together, and they are passionately committed to doing so.
On top of that, I said that our plan B is to change this country to make sure that British Columbia receives a fair deal once and for all. We have seen $11 billion in shipbuilding funds going from Ottawa -- a good chunk of it from British Columbia, as one of the provinces that pays into equalization -- into eastern Canada over the last ten years, and zero into British Columbia. That unfair misuse of federal funds has got to stop. I've said that we have to renegotiate the fiscal arrangements, and the Minister of Finance has made that very clear this week. I've said that we have to streamline government. We have to get rid of the waste and duplication of about 13 to 15 federal and provincial bureaucracies. That's part of plan B.
So no, I haven't entered into the speculation, as some people have -- writing books and that -- about separation, because I don't believe it's going to happen. I believe that a lot of the speculation about that and the unchallenged comments by separatist leaders like Lucien Bouchard fan the flames and concerns that people outside of Canada have about the unity of the finest country in the world, as the United Nations recently found -- that's Canada.
[ Page 12537 ]
D. Mitchell: I have only one further question for the Premier. The Premier says that we don't need a contingency plan; we don't have one. Time will tell whether or not there is wisdom in that position. Time will tell whether or not that is a prudent position for the Premier of British Columbia to be taking.
Financial markets are already telling us that there is a need for a plan B. We have seen the Canadian dollar discounted heavily in international trading, and we've seen as a result that the Bank of Canada has had to prop up the Canadian dollar by increasing interest rates. Right now in the province of British Columbia, interest rates are a full two percentage points higher than the Minister of Finance predicted in her budget that was tabled earlier in this session. When the Minister of Finance tabled her budget earlier this session, she was predicting interest rates at a relatively low level. Already we are seeing interest rates two full percentage points higher. The day after the budget was tabled, I asked the Minister of Finance whether or not, in a period of rising inflation and rising interest rates, those projections were comfortable -- whether she was secure with them. She said yes at the time. Now, two full percentage points higher has a tremendous impact on the British Columbia government's budget of $20 billion.
Apparently, the payments on our debt have increased by up to $40 million; there's a $40 million debt repayment increase over the budget projections that the minister brought in. In Ottawa, this has caused a serious enough crisis that the federal Minister of Finance, Paul Martin, is having to consider bringing in a new budget. We don't know that the situation is that serious for the province of British Columbia, but I would ask the Premier about the confidence that we can have in his Minister of Finance, given the projections that she made in her budget, which are totally out of whack now. The increase in interest rates is going to cost the province of British Columbia up to $40 million more in debt-servicing charges. We don't know if interest rates are going to stop where they are today. They may increase more yet -- we have no idea.
A finance official was quoted in the press this week as saying that he didn't think that anyone could predict that rates would be this high. What does the Premier say about the confidence we can have in his Minister of Finance, who can't forecast interest rates, who has brought in a budget that needs to be rethought, and when $40 million of debt-servicing charges have to be paid that we weren't anticipating at the time the Minister of Finance brought in the budget? Can the Premier address that single issue?
Hon. M. Harcourt: I think the member for West Vancouver-Garibaldi is making clearer for me the difference between plan B and a self-fulfilling prophecy. I've said that plan B is to change Canada so that it works more for British Columbia and for Quebec. We have similar interests in wanting to see less decision-making in Ottawa and more in British Columbia or Quebec -- for different reasons, but a similar intent. We are allies, naturally, in seeing that happen instead of seeing all of the decisions being made in Ottawa. That change in Canadian Confederation has to take place and can take place. We can make these accommodations through administrative and other arrangements. That plan B is the one that I have been representing for the two and a half years or more that I have been the Premier. I continue to push that position.
The self-fulfilling prophecy is to continue to speculate about separation, to continue to send that nervous tremor out into the rest of the world, instead of talking about our confidence in this country, which over 120-odd years has gone through many crises, world wars and depressions -- some very difficult times in the past, and we will go through them again in the future.
Interjection.
Hon. M. Harcourt: As the hon. member was saying, we've gone through and even survived a Bill Vander Zalm Social Credit government. That's the strength of the people we have in this province and this country.
What we should be doing as Canadians is not fanning those fears and concerns; we should be confident in the finest country in the world. Through plan B, we should seek the changes that we want to see in Canada, here in British Columbia and in Quebec: a more decentralized, streamed-down Canadian federation that is getting rid of waste and duplication. We should concentrate on the real issues like jobs, training people for those jobs, renewing our forests, getting to our fiscal game plan, getting rid of our deficit and getting our debt management plan in order at the national level. Instead of dumping on the provinces, take care of your own operations, streamline them and get rid of waste. That will raise the confidence of people in the international financial community, which will lower interest rates, which will lead to a more prosperous and united Canada. That's plan B, instead of the self-fulfilling prophecy that the member has alluded to, which he doesn't want to see and I don't want to see.
A. Warnke: This is one of the disadvantages of being scooped, or of coming in second. What I wanted to pursue with the Premier is actually plan A. Exactly what is the Premier embarking on in terms of a strategy of enhancement for national unity to bring the country together in the face of all of this? I don't want to promote redundancy, but I am interested in the Premier's view of executive federalism and his contributions to and strategy for the enhancement of national unity.
While I'm at it, to expedite things a bit, I have a second question. Last year I pursued with the Premier his role in supporting and advocating an international park in the northwest corner of this province. He embraced that enthusiastically. There is the prospect of a park being constructed that would comprise an extensive area in the southern part of this province and the northern part of Washington State. Could the Premier answer a second question on the establishment of an international park? What sort of action or strategy has the Premier taken with Washington State and Washington, D.C., to establish an international park? Is it on or off?
Hon. M. Harcourt: We have a protected areas strategy, and a number of areas are being looked at. If you're talking about the Cascades park proposal on both sides of the border, yes, that is one of the areas that is being looked at.
The member is probably aware that there are already significant parks on both sides of the border in that particular area. The real issue is whether it meets the criteria we've established: is it going to contribute to us preserving unique and representative ecosystems? This province, with over 600 different ecosystems, is one of the most biologically diverse areas of Canada. So we are in the process of identifying those park and wilderness areas that fulfil that criteria.
[ Page 12538 ]
We're doing a significant amount of that work through the CORE process. We're also doing it through the protected areas strategy that covers the rest of the province, before other CORE processes get underway, or through the regional natural resource planning approach that has been taken quite quietly and successfully in a number of other areas of the province.
No, a decision has not been made. Yes, it is an area that we are looking at as part of a provincewide protected areas strategy.
G. Campbell: This is my last group of questions to the Premier, and I'll be relatively brief.
Tonight I started by pointing out that one of the concerns I had was that there was a larger issue out among the public than a lot of the details that we get into, and that is the whole issue of trust. There's no single area where this government has done more to let down the people of British Columbia than the area of making special deals with friends and insiders. My question is, I assume, to the Deputy Premier -- the current Deputy Premier.
An Hon. Member: Deputy minister.
G. Campbell: Deputy minister -- or it may be the Deputy Premier.
We know that the government has signed a number of contracts which extend beyond the mandate of the government. Mr. Eliesen's is one in particular that has been in the news, but others as well have been signed by the government which last beyond the term of its mandate. Could I please have an answer to how many contracts have been signed by this government with friends of the New Democratic Party which extend beyond the mandate of this government?
The Chair: Suspense having built and the audience being suitably primed, I call upon the Premier.
[9:30]
Hon. M. Harcourt: You know, with some of the fearful comments that came from the member for West Vancouver-Garibaldi, I had to go and check with my broker just now to make sure that my stocks were doing okay, and they are.
Interjections.
Hon. M. Harcourt: Of course, they're all outside of British Columbia, so that I cannot get into a conflict.
As I understand the question, it was how many long-term contracts exist in the Premier's office that extend beyond the term of this government. There are no long-term contracts that extend beyond the term of this government; as a matter of fact, there are no long-term contracts in the Premier's office.
There are only two short-term contracts that have been entered into. One was with a previous member of my staff in the cabinet secretariat, Jennifer Charlesworth, who left for a very important reason -- to have a baby. She worked from November 26, 1993, to March 31, 1994, on a $10,464 contract to analyze and recommend strategies to enhance and streamline the functioning of the cabinet office. She had great experience in government operations and was very helpful in that capacity. The second short-term contract -- from August 15 to September 25, 1993, for $7,951 -- was with Marnie Mitchell, who helped develop an action plan in regard to the Korbin commission's recommendations on the public sector and coordinated the implementation of that plan, which of course led to the establishment of the Public Sector Employers' Council and other initiatives this government has taken. Those are the only two contracts that exist. There are no long-term contracts.
G. Campbell: I'd like to be clear on what the question is. I'm not sure that was the answer. There are a number of Crown corporations in government. This Premier is the head of the government. There are a number of departments in government. The question is: have any contracts been signed with anyone that extend beyond the mandate of the government? I understand Mr. Eliesen's contract extends beyond the mandate of the government. I think there are maybe a couple of others, but I'd like the Premier to let us know how many extend beyond the mandate of this government.
Hon. M. Harcourt: Hon. Chair, I'm not aware of any. The deputies are compensated as all deputies are, so I'm not aware of any. I will certainly check into that, and if there is anybody, I will let the Leader of the Opposition know about it.
G. Campbell: I'm going to close by saying that this has been an interesting experience for me. I know I have not got the answers that I was looking for, and I don't believe the people of British Columbia have got the answers that they were looking for. But I don't believe there's much point in carrying on beyond this.
I believe families in the province are feeling frightened today. They are frightened by the uncertainty being created by this government. Business has been frightened away by the tax regime of this government. In the long term, I believe that if the government doesn't move away from government by public relations, we are going to jeopardize the quality of life that we have come to expect and deserve in British Columbia.
With those comments, I'll thank you for your indulgence, hon. Chair.
Vote 8 approved on the following division:
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YEAS -- 31 |
||
|
Pement |
Priddy |
Edwards |
|
Cashore |
Zirnhelt |
O'Neill |
|
Garden |
Hagen |
Hammell |
|
B. Jones |
Giesbrecht |
Miller |
|
Smallwood |
Harcourt |
Gabelmann |
|
Clark |
MacPhail |
Ramsey |
|
Barlee |
Blencoe |
Pullinger |
|
Janssen |
Evans |
Randall |
|
Doyle |
Streifel |
Jackson |
|
Kasper |
Krog |
Lali |
| Hartley | ||
|
NAYS -- 12 |
||
|
Wilson |
Hanson |
Farrell-Collins |
|
Campbell |
Reid |
Chisholm |
|
Jarvis |
Anderson |
Warnke |
|
K. Jones |
Symons |
H. De Jong |
Vote 7: office of the Premier and cabinet office, $4,310,000 -- approved on the following division:
[ Page 12539 ]
|
YEAS -- 31 |
||
|
Pement |
Priddy |
Edwards |
|
Cashore |
Zirnhelt |
O'Neill |
|
Garden |
Hagen |
Hammell |
|
B. Jones |
Giesbrecht |
Miller |
|
Smallwood |
Harcourt |
Gabelmann |
|
Clark |
MacPhail |
Ramsey |
|
Barlee |
Blencoe |
Pullinger |
|
Janssen |
Evans |
Randall |
|
Doyle |
Streifel |
Jackson |
|
Kasper |
Krog |
Lali |
| Hartley | ||
|
NAYS -- 12 |
||
|
Chisholm |
Reid |
Campbell |
|
Farrell-Collins |
Hanson |
Wilson |
|
H. De Jong |
Symons |
K. Jones |
|
Warnke |
Anderson |
Jarvis |
Hon. A. Edwards: On a point of order, I didn't see the member for North Vancouver-Seymour voting.
[9:45]
The Chair: The table did, hon. minister, and we have therefore recorded his name accordingly.
Interjections.
The Chair: The table has eyes on both sides.
I now recognize the Government House Leader.
Hon. G. Clark: Thank you, hon. Chair. I call vote 23.
ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT
(continued)
On vote 23: minister's office, $362,400 (continued).
G. Farrell-Collins: When we adjourned this vote at about 5:55 p.m., the minister had just finished misstating the position of the opposition, so I'll clarify it for him. When the minister announced his last.... I guess it's not the last, but at that point in time is was the newest in a long string of new Crown corporations -- new jewels in his crown or little polishes on his throne. The opposition stated that we were glad to see a service established once again between Vancouver Island -- Victoria in particular -- and Seattle. We thought it would be good for the tourists, but we wanted to see the business plan and just how much it was going to cost us, given that the two companies that operated it previously had substantial losses in very short periods of time and it seemed to be getting worse. But we were willing to see what the minister had to say and give the project a chance to prove itself.
The jury's still out. It started operating. The minister has offered a $2 million subsidy over a number of years. After the end of that, which I imagine will coincide with the next election or so, the government will decide whether or not they're going to continue the project and continue to subsidize it. Perhaps the wonderful chance may exist that it will actually be turning a profit.
Interjections.
G. Farrell-Collins: I'll wait for the Minister of Labour to finish his....
The Chair: Could we have some order, please, members?
G. Farrell-Collins: Thank you, hon. Chair.
We will wait and see what happens with the corporation. I know the minister has staked a fair bit of the profitability of this line on the flexibility of a collective agreement that he'll be able to get. I thought there would have been a number of collective agreements, because I thought it would have been up to the new employees of that company to decide which trade union they wanted to be a part of. I thought we would hire all the employees first and then give them a chance to certify and either become part of a trade union or not. Most likely they'd go back to the trade unions they had before, because they're more comfortable with them, but that's up to them.
Unfortunately, it appears that the director of communications for the Minister of Employment and Investment has stated that, to the best of his knowledge, he anticipates there being only one union. I assume it's the Teamsters. We'll have to wait and see what the Canadian Labour Congress has to say about that.
At the time, I was asking the minister not whether this project should have gone ahead -- he seemed to be confused on that -- but rather about the way the commitment he and indeed the Premier gave to those workers was carried out. It appears that a number of very qualified people -- according to the letter and correspondence from the Premier, in which he states they were very qualified -- were not even allowed the courtesy of an interview, completely contrary to what the minister and the Premier's guarantee was to those employees. The jobs they had been doing, I believe in some cases for up to 20 years -- if not the same jobs, then very similar jobs -- were filled before the interview process even took place. Indeed, there was then a certification application for those employees before they even had a chance to be interviewed, which is completely at odds with what the minister promised those people. I think it's suspect.
I'm concerned that the minister -- and perhaps the gentleman heading up this new Victoria Line, his director of personnel -- was so concerned about getting a sympathetic or flexible collective agreement that there may have been some negotiations that took place -- there may have been some determination. I'd like to ask the minister if Mr. Chris Jones met with the heads, business agents, executives or any representatives of the Teamsters union or any of the other unions in the time leading up to the certification application on April 8.
Hon. G. Clark: First of all, I'd like to introduce the staff here tonight. Broc Robertson is a policy adviser at the Crown corporations secretariat, Richard Bridge is corporate secretary to Victoria Line and also with the Crown corporations secretariat, and, of course, Admiral Frank Rhodes is deputy minister to the Ministry of Employment and Investment.
I simply want to say this. The member is alleging something which would be unfair labour practices. We wouldn't engage in unfair labour practices, so it's simply not correct. Having said that, contacts were made by seven or eight unions that came in before any hiring to discuss what the corporation was looking at. I think in that respect everybody was talked to -- not by me, but by my staff -- including the former unions involved with Stena corporation. So it was a completely open door.
[ Page 12540 ]
It still is an open door. There's no fix or anything in. I've given strict instructions to keep hands off, not to interfere with labour relations and to allow the members to choose whomever they want.
G. Farrell-Collins: Question No. 1: why were those longtime employees of the corporation not given the courtesy of at least an interview before those positions were filled?
Question No. 2: is it the belief of the minister that his Crown corporation should be negotiating and meeting with the unions before there are any members of the union -- before the members who are going to be hired have even chosen which union they want to be represented by? Isn't it the position of this government, as it relates to labour relations and collective bargaining, that those employees themselves choose whom they wish to be represented by and not the government, or employer in this case?
Hon. G. Clark: With respect to the first question, to the best of my knowledge -- sincerely -- every former Stena employee who asked for or applied for a job received an interview. I'm not aware of anybody who did not receive an interview.
G. Farrell-Collins: Before or after the position was filled?
[A. Hagen in the chair.]
Hon. G. Clark: Well, six or seven people may have been hired, but I don't think the order is particularly relevant. They were all given an interview for jobs, and there are different kinds of jobs in the corporation.
With respect to the last point, we did not seek out any meetings with any trade unions, nor would we. Several trade unions came by or asked for meetings, and that's quite appropriate. No negotiations, collective bargaining, hiring or discussions around that took place. Several unions simply came by and asked for a meeting to discuss when the company would be doing the hiring and those kinds of practices -- what the labour relations situation would be. I never met with anybody personally, but my understanding is that the management of the corporation -- and I'm not sure who -- met with several different unions, including the unions representing Stena Line, simply to discuss the new service, which is different from the other one, and what the process would be. That's quite appropriate. No action was taken as a result of that.
G. Farrell-Collins: I do think it's inappropriate for those positions to be filled without giving those people the benefit of an interview beforehand. Those people were given a personal commitment by the Premier and the minister that they would have an interview before those positions were filled. I think it was unfair. If the minister looks into it, he will find that those individuals put in resumes right at the beginning. They had personal commitments directly, not by correspondence, but one on one -- and, I should say, with correspondence -- with the Premier and the minister that before those jobs were filled, they would be entitled to an interview for the jobs that they held for years and years. That isn't what happened. I think it's an injustice, and I think the minister should look into it.
Maybe it was done without his knowledge. If that's the case, I would suggest to the minister that he review those cases and see if some accommodation can be made, some advantage in the hiring process or some positions given to those people -- or reconsideration in the future for other positions in the corporation, should they come up. If that personal commitment -- the word of the minister and of the Premier -- was given to those gentlemen and it was broken, then I think it's inappropriate. I think the minister would agree that that's inappropriate.
All I would ask of the minister is that he undertake to look into that and find out from the head of personnel at the Victoria Line, Mr. Chris Jones, what actually took place in that case -- why those people weren't granted interviews before those positions were filled. They would have been at the top of my list for interviews, if I were the personnel director, given their experience and their knowledge of the facilities on the dock. The few people who worked there for many years know the site and the facility, and I would question the management's decision to not look to those people first -- at least for an interview. Especially if, as the minister said, they were trying to fast-track and get the thing going, I would have thought he would draw on the most experienced people first. So all I ask from the minister is a commitment to look into it, contact those people, talk to Chris Jones, who is head of personnel, find out what really took place there and see if an injustice was perpetrated. If there was, try to make some amends to deal with it; and if there wasn't, then come back and let me or others know exactly what took place at that time.
Hon. G. Clark: Well, the member has made his point, but frankly, I disagree with him. We did not give a commitment that Stena employees would be given specific jobs or even be interviewed for specific jobs. We said we would interview all Stena employees who applied, and the proof is that a full third of the people working there now are former Stena employees. The fact that half a dozen people were hired early on to do labouring jobs does not preclude former Stena employees in any capacity from receiving a job in another capacity. They had an opportunity to compete for those jobs, and some of them were unsuccessful.
G. Farrell-Collins: I don't want to belabour this, but quite frankly, I'm a little disappointed with the response. The jobs these people were eminently qualified for, which they had done for years, were filled before they were even allowed to be interviewed. Now they're applying for jobs that they are not qualified for. They're applying for jobs as stewards or caterers or for some other positions on the ship or within the corporation, because the jobs they're qualified for, which they thought they were applying for, were filled before they were given the chance to even have an interview.
[10:00]
The minister may not want to give me that assurance directly, but whether he wants to do it publicly or however he wants to do it, I would ask the minister -- he doesn't have to respond -- to look into this situation and find out what really took place there. I think it's an unfortunate situation. I think people were not treated properly, and I know the minister wouldn't normally treat people that way. I think something may have happened in the system. Somebody may have got bumped or had a resume shuffled out of the way. I don't know what happened. But whatever it was, I think the minister should spend some time, pick up the phone, go directly to the chief of personnel, ask him some questions and find out what really happened there. He should undertake for himself and for his own conscience to see that those people were dealt with fairly. I hope he does that. I hope that he undertakes to do that as a minister and as a person who's given his word. I won't even ask for a response, unless the minister wants to give one.
[ Page 12541 ]
Hon. G. Clark: I'm satisfied that everything was done above-board in this regard and that all commitments were kept. But I will have my deputy, who's also the president of Victoria Line, review the situation.
G. Farrell-Collins: I'll take that as being probably as good as it's going to get. I hope that will be looked into carefully, some questions will be asked and some people will be contacted, because I think it's only fair.
I do want to ask another series of questions regarding the Victoria Line. There's a contract that we've discussed a couple of times in question period, and we've never seemed to click on the answer. We seem to be talking at cross-purposes. Now that we have more time, I want to go through it in a little more detail, ask the minister some direct questions and, hopefully, get more detailed answers.
As the minister knows, a tender was put out on some work -- the fendering of the dock site, or the bumpers, if you want to call them that, for the Queen of Burnaby, a different ship from what would normally be used there. The tender was put out, and the people came in with their estimates. The minister has stated that they were all significantly higher than what was anticipated, and the corporation decided to do it in-house. In doing so, it subsequently saved $300,000 on a project that was.... The low bid was $431,984 for the work. The corporation, by doing it in-house, saved some $300,000.
An Hon. Member: $200,000.
G. Farrell-Collins: Well, $300,000 is what was stated during question period, in Hansard. If it's $200,000, we can make that correction, but there were substantial savings.
The minister stated, upon questioning, that that contract was given to the second-lowest bidder, Harbour Pile Driving, a union company. It got the job after the cancellation to do it in-house, and some subcontract was sent out by that company.
My assistant has talked to all of the people who put in bids, I believe, except one -- no, I believe she's talked to all of them now. West Shore Constructors, the one that had the lowest bid, was not even contacted to find out if they wanted to resubmit or if they wanted to be involved in the subcontract. Pacific Pile Driving, the third-lowest bidder, was not contacted. JJM Construction, who also were not contacted, said that they made numerous attempts to contact Victoria Line, but their calls were never returned. Fraser River Pile and Dredge were contacted quite informally four weeks after the project was cancelled on February 28. They did a redesign, and then found out that Harbour Pile Driving was doing the work. Surespan Construction was not contacted at all about the resubmission. They called Victoria Line numerous times, but their calls were never returned. Out of seven on the list, Delta Catalytic was not contacted, either.
So I have to ask: why is it that at least the lowest bidder wasn't even contacted? Why is it that these other people weren't contacted in a realistic time frame so they could submit bids for that subcontract? Why is it, that of the seven companies that submitted on that tender, only one was contacted to do the subcontract after the project was cancelled and the tender withdrawn? And why is it that calls made by those other companies were not returned?
Hon. G. Clark: First of all, the member is correct that the low bid was about $431,000 -- significantly above what was estimated. So what the corporation did was a direct build. At the end of the day, they needed to subcontract out a contract worth about $130,000. That's why we say the taxpayers saved $300,000. It's not completely accurate, in the sense that the in-house people who did the work were on payroll. Therefore it has not saved quite as much as that. Nevertheless, it's absolutely astonishing savings as a result of a redesigned tendering system and managing the contract in-house. The fact is that a relatively small contract, relative to the original price, of $130,000.... The time pressure to get this project up and running simply meant that, as I understand it, the low bid was contacted first; they couldn't get through so they went to the next-lowest bid, and they took the job as a direct-build, redesigned program of $130,000.
I don't know what the member is trying to allege. Half of the companies the member just referred to were union companies. It wasn't a union-non-union thing. If they're all complaining because they weren't successful at getting this relatively small subcontract, then they may all be complaining, but there's not a union-non-union question here. It's a question of the corporation acting in a manner to save the taxpayers several hundred thousand dollars by doing it in-house and subbing out a smaller amount of work. I'm very pleased with the corporation. Frankly, I don't know what the member's point is.
G. Farrell-Collins: My point is that it's poor business practice.
Interjection.
G. Farrell-Collins: Well, the minister doesn't know how much money he saved. He doesn't know how good a deal he got on the subcontract, because he didn't put it out to tender. He granted it. He just gave it out. That's why we tender, so that we know we're getting a good price. The minister may have saved money by doing it in-house. We don't know that, because we don't know how much time the staff on the payroll devoted to that project. It may well be that the redesign of the project was a smart idea that saved money and made it more efficient, and that's great. Maybe by doing it in-house the corporation saved some money, but we don't know. We certainly don't know that for the $130,000 contract that was sent out.
The minister says that the low bid was contacted.
Interjection.
G. Farrell-Collins: I'm sorry, an attempt was made to contact.
I wonder to what extent that attempt was made, because I have a letter from that bidder who says:
"We answer the phones daily 8:00 a.m. to 5:00 p.m. and have an answering machine and fax line for off hours. In fact, it appears to us that Victoria Line made every attempt to avoid both the original low bidder and the local Victoria open shop contractor by not returning our many phone calls or granting a meeting when we showed up at their offices."
These people were beating a path to the corporation's door to bid on a contract. It's not like they were sitting there with their feet up on their desks and their phone off the hook watching the baseball game. These are people who wanted the work and wanted the job. They didn't wait for you to contact them; they contacted you. They went out of their way to contact you. They left messages with the corporation. They actually showed up, knocked on the door and asked for a meeting. Why is it that they were not given the opportunity to bid on that subcontract? They were ready to do it. They
[ Page 12542 ]
weren't just ready; they were excited and anxious to do it. Why wouldn't they be given the opportunity to bid on that subcontract?
Hon. G. Clark: First of all, when the decision was made -- and it was very difficult for the corporation -- not to proceed with the original design, because of the excessive bids, they then dramatically eliminated their time frame to take action. They did their own redesign and build project. The member should know that if they put the smaller subcontract to tender, it would take time for everybody to bid. Given the significant cost savings achieved by this method, it was decided to move quickly to a direct subcontract basis. I'm sure if the individual company that the member is referring to had received that contract, then all the other bidders would be writing to the opposition saying it should have been them. I don't blame anyone for that. But the reality is that when you're saving this kind of money through innovation at a Crown corporation, they should be commended and not criticized because they didn't go through a tendering process on the subcontract, which would have taken a month to complete and would have meant that we couldn't have opened the Victoria Line on time.
G. Farrell-Collins: That's interesting, because I have some comments from the Fraser River pile driving firm that I said was contacted. They were contacted almost six weeks after the project was cancelled and almost four weeks after they had seen that some work had in fact been started on the project.
So I just wonder what effort was made. Would it consist of just picking up the phone and trying them? I mean, there had to be some negotiating, a contract or something done. It wasn't just like saying: "Hey, come on tomorrow. Bring your tools, and we'll get started." It sounds a little sloppy to me, like poor practice. I don't know if the minister operates that way all the time, but this doesn't sound like the type of effort that we would expect from a senior minister of a government and one of his several Crown corporations. It's not the type of seeking of good value for the taxpayers that we would expect.
The minister stated that the redesign of the project and doing it in-house saved a significant amount of money. Can the minister tell us what the in-house costs were for that project? How much was spent and allocated to that tendering contract?
Hon. G. Clark: I don't have the information with me, but I'll be happy to get it for you.
G. Farrell-Collins: Just to make it clear, I'd like to know the number of hours and the in-house cost of doing that project. It would also be nice to have a one-page summary of how the project differed from the original project, without getting too technical -- just a description of what changes were made in the project that allowed the redesign to save so much money. I'd be very interested to know that.
I hope that, after two and a half years in government, in the attempt to bring a project on-line very quickly the government in the future would do a little more preplanning and maybe back up their planning process a couple of months so we're not into this rush situation. It's great to see that people are excited about the project, and the CEO and others are down there in overalls moving things around. It's a good sign. It shows that people are excited about the project and are anxious to get it going. But for good government and good management, I think we have to be careful that we try not to rush into these things, because when you start to rush into these things and fast-track them is when you start to get into trouble.
The minister himself has stood up in this House hundreds of times, if not a thousand, and chided the former government for the cost overruns on the Island Highway, which was a fast-tracked project. I wasn't in this House at that time, but I imagine during those estimates there were similar sorts of explanations about fast-tracking and, "We've got to get this thing done," certainly on a much grander scale but certainly along the same process and pattern. With the way this government is sprouting out new Crown corporations every couple of months, I hope we won't see that type of thing happen on an ongoing basis with the other Crown corporations -- just a word of caution.
Hon. G. Clark: I accept a word of caution, but I make no apologies for saving the taxpayers' money. Frankly, I commend any corporation that can operate this way to save this kind of money; I do not criticize whatsoever. We may just differ on that. I prefer to save the taxpayers' money on the bottom line rather than follow a convoluted process that the member may be referring to, if that's what his preference is. If that's the only area we disagree....
Would it be nice to have more time? Yes. Obviously, in this case we would have preferred more time. Perhaps we could have gone through a different process. But a lot of work went into this, and it saved money. It's up and running, and it's working well.
G. Farrell-Collins: I look forward to receiving the information from the minister so we can see how much was really saved, because the minister said $300,000 one day, $200,000 another day, and today we don't know. So let's wait and see how much was saved, before we start throwing numbers around. Once we see the numbers and the redesign we'll know exactly how much was saved. I'll reserve my pats on the back of the minister until I see those numbers.
D. Symons: In listening to this line of questioning here, I have some questions. The answer sort of bothered me, the first part being when the minister said: "Well, it came in over budget." It would indicate to me, then, that somehow the people who scoped out this program to begin with were way off base, because if all your estimates came in.... Somehow you blew it. Let's put it that way.
The second thing is that I don't think the minister seems to account here for the fact that when a company puts in a bid, they have gone to a great deal of expense. They don't just sit down for a minute, write down a few lines, mail it in and that's all there is to it. They have to cost out the whole program and do an awful lot of work in order to put in a bid. Basically, you're saying that it doesn't matter if someone puts one in, because you're not going to choose them anyway; you rescoped the program. If this had been the only time that this government had done that sort of thing, we might overlook your excuse that you had to get it going quickly and so forth. I know of two projects with B.C. Ferries where this was done. One was at the terminal building on this side of the water, and the other was at Tsawwassen on one of the docks. It was exactly the same procedure. It came over what they had set as their ceiling for it, and it was rescoped and then simply given out to somebody; it was not retendered.
[10:15]
That is not the way to go about handing out contracts in this province. We must go through the bidding process,
[ Page 12543 ]
because although you told the member here that we came in under the bid and saved so much money, you have no idea whatsoever how much was saved unless you end up giving these companies a chance to bid on the rescoped project. You say you downsized it; you changed the project. You had a bid, and that money you say you're saving was based on the original bid, which was a different project entirely. If you change the project, it changes the whole situation. You did not give the other companies a chance to rebid. You have no idea how much you saved. Those are false figures.
Interjection.
G. Farrell-Collins: We'll be going for some time tonight, so it's wishful thinking. I doubt that we'll be done quite this quickly.
The next issue that we'd like to move into and spend a little time on is B.C. Transit. I know the member for Richmond Centre has some questions with regard to that. If he is ready, once the minister gets his staff in we can perhaps start on that in the next 30 seconds or so.
The Chair: Would the member for Richmond Centre like to proceed? I think the minister has indicated that he's prepared to go ahead with the questioning.
D. Symons: My first question will deal with the total estimated contributions from government to B.C. Transit for 1994-95, which I notice is up about 6 percent. We find that the capital contribution is actually up 12 percent, whereas the operating part of the total government contribution is down slightly. It seems to me that it should be the other way around. Indeed, B.C. Transit is adding more capacity because of the increase in population. This should increase the operating contribution, or it might mean that the fare increases that you've been putting in recently mean that the government's putting a smaller percentage into the operating budget than they have in the past. Has the amount that the government is contributing toward the operating expenses of B.C. Transit decreased over the last few years?
Hon. G. Clark: First, I would say that fares are not the domain of the provincial government. The member knows that fares are set by the Vancouver Regional Transit Commission. Second, the reason for the capital cost increase is the debt servicing associated with the Surrey extension of SkyTrain.
D. Symons: You might say that the fares aren't the government's responsibility, but the government controls, in a way, the amount collected through the transit tax in the city on the hydro rates and on the fuel rates. They control how much money is donated or given as a grant to B.C. Transit, and the only other way they can make up the difference is through the farebox. So, because the government controls the other two aspects of what goes into operating a transit system, it has a great deal of influence as to how the transit system can make up that difference, and primarily it's through the farebox. I would reject the concept that the government doesn't really set the fares. You set the parameters under which they can set the fares.
Hon. G. Clark: For the record, I take some exception to that. For two and a half years I have been asking for a fare-free zone in downtown Vancouver, like Portland, Seattle, Calgary and most cities in North America. Your leader, the former mayor of Vancouver, led the attack on the transit commission against that. I have been arguing aggressively to try to get some creative options on fares. Time and again, I've been reminded that it's a lot better now that the Leader of the Opposition is not on the transit commission, and I say that without any partisan attack. It's a lot better now, but we have still been unsuccessful in convincing them to proceed with the kind of innovation that exists in most other jurisdictions. So I reject this notion.
Obviously, there is some relationship between the subsidy -- which at over $200 million is the largest in North America from a provincial government -- and the capital contribution and the impact on fares, but there are several options for the transit commission, including a property tax, a gas tax and a parking tax. All of those options are with the transit commission and the local mayors. They rejected them all and jacked up fares. That was not the provincial government's decision. If it were up to this provincial government and this minister, we would have fare-free zones in downtown Vancouver to dramatically improve transit, but we've been unable to convince them to do that. So I want to go on record as saying that the fares are not the domain of the provincial government. Although we have some influence, clearly we have not been successful in convincing them to use other sources of funding to try to promote transit use like every other jurisdiction.
D. Symons: Since the minister admits that he would like to see a fare-free zone within the downtown core, as in Seattle -- I've ridden the Seattle system and can share your interest in that, and maybe agree with it -- would he suggest how the Vancouver transit authority should pay for this free zone, let alone make up the difference between what the government supplies them in grants and...? You mentioned three; just pick your favourite.
Hon. G. Clark: There are a variety of options on this that I have proposed to the transit commission, from as cheap as $800,000 to $2.5 million per year, or in that ballpark. I suggested a tax on parking, and that's very progressive. I've been suggesting that for two years. We even changed the law to allow it. They not only rejected it, but when we put a sales tax on parking and offered to give it to them, the transit commission, led by your leader, opposed even taking the money. We ended up having to give it to them in the form of an increased provincial contribution, because they refused to accept responsibility for dealing with this question. That would be an obvious area. A very small commercial property surtax on parking, particularly in the downtown core, would cover at least a modest fare-free zone downtown.
There are all kinds of other creative ways of doing it. Unfortunately, all your leader wants is more money from the taxpayers of Prince George and elsewhere. All they demanded was more money from the provincial government. They refused to accept any responsibility for it. We have given them more money -- a significant amount more. But we can't simply bail out the transit commission from their legal responsibility by giving them $2 million from the provincial taxpayers of Prince George -- where, by the way, they pay on their property tax -- and everywhere else.
I will just catch myself here, because I don't want to attack the transit commission, even though I guess I have a bit. We've been working well with them. We're working hard on these questions, but when it comes to creative options around that, I haven't been very successful. We've been trying to develop a better relationship and to work with them on that. We've been somewhat productive. I only rose
[ Page 12544 ]
to the bait, I guess, when the member suggested that the province is the one jacking up fares. It's simply not correct.
D. Symons: I know the member hasn't been a member of a civic government, and he has certainly not been on the transit commission, but I think he would realize that the transit commission works much like a municipal government where each member votes. It's not like the party system we have here where everybody stands up for or against something. It doesn't matter who the chair of the transit commission is. They cannot control how the others vote. To sort of point to one man and say that that person was the chair of it.... Indeed, the leader of your party and the Premier of this province was on that transit commission once, and the change wasn't that much when he became Premier. So I don't think that pointing to a member on this side of the House somehow absolves you.
As a matter of fact, if you look at it now, I believe the chair of the transit commission is one of yours again, and I don't think they've been any more receptive to your plan. The current chair is one of yours, and he has been no more receptive to that parking fee plan than the previous chair. So to blame the leader of our party for somehow rejecting your parking fee is a red herring that you're throwing out. Now we can move on from that to some other issues.
In 1993, B.C. Transit submitted a report to the Vancouver Regional Transit Commission which showed that B.C. Transit service in greater Vancouver cost $83.12 per hour to provide, while in Victoria it cost $68.58 per hour. The same report showed that the service in Whistler, Abbotsford, Matsqui and Mission cost in the range of $55 to $60 per hour to provide, operated by the private sector. My question, then, is: couldn't more service be provided for this budget that we have if the minister used the obvious advantage of allowing the private sector to be operating the transit system?
Hon. G. Clark: I don't know. If the member is suggesting we privatize B.C. Transit.... I guess we could do that, though it seems to me to be a significant challenge. If we maintained the subsidy level, that would be one thing.
My view is that there is certainly room for the private sector in transit initiatives, and we have been pretty open about that. All of our contractors are private companies, they run quite well, and it's competitively bid. Secondly, we have a taxi system, which is a private form of transportation. And there may well be opportunities for the private sector to participate in transit.
But I think we've got to look towards efficiency gains in the main system that we have right now -- the very heavily subsidized main system. There certainly are all of the labour relations questions and the cost pressure questions associated with privatizing the transit system, from my point of view. I never reject any of these things out of hand without doing a review of it; but this one, I guess, I will reject out of hand in terms of the implications for planning and for rational transit operations, at least in a general sense.
So at the margins, in small communities, they're all privately contracted. They do a reasonably good job of it. I'm not sure if they're any more efficient than the transit system itself. We had an international consultant review our transit system because of concerns the government had about efficiency. He said that B.C. Transit was about the middle of the pack for efficiency in North America. Since that time we've followed up on many of his suggestions, changed some of the management structures and other things, and we think we're now improving it quite significantly. More work can always be done.
D. Symons: I note that B.C. Transit has some experiments, if we could call it that, or experience with privatizing, because I believe your handyDART system is a privatized system, and the cost of operating that on a per-hour basis is considerably better than operating the bus system. Indeed, in Los Angeles they managed to privatize some of the routes that had poor ridership and were losing money for the system. I believe some of those routes turned around and became fairly profit-making, and the city was rather envious of what the private sector was able to do with routes that they weren't able to operate very well under their public system. So I'm throwing that out as a suggestion. As the costs of transit continue to skyrocket and we have to move fares up every year, there may be another way of dealing with the problem through the private sector.
[10:30]
In dealing with employee productivity, we found that the plan for Vancouver for, I believe, '93-94 showed that employee productivity had declined by 5.3 percent between that year and the '88-89 year. So basically, over those five years there was a 5.3 percent reduction in productivity, with 1,469 hours of service being provided per driver in the 1989-90 year compared to 1,359 in the '92-93 year. More recent reports show that this trend is continuing. Is the minister satisfied that his own Crown corporation is up to 10 percent less productive than other transit systems? I believe Toronto is one that we can compare ourselves to, and we do not compare well.
Hon. G. Clark: It's important to compare apples to apples. There is a dramatic expansion in transit service out into suburban areas, which have a low ridership -- at least, in initial periods -- so that artificially depresses productivity for some time. In the last couple of years there has been some expansion, but we are projecting a 1 percent increase in productivity next year.
I would be interested in asking the hon. member whether he is actually suggesting we try to privatize the routes within the system on a full cost recovery basis, as he suggested about Los Angeles.
D. Symons: Rather than answer the question directly, I will do as the minister often does, and answer obliquely. I would suggest that we should be looking at what the private sector is doing in these areas, and see if they are doing something that we can incorporate to make our transit system better. If that means privatizing, then so be it. If it means we can operate it within the current system, I would be quite pleased to see it continue that way. If the private sector is able to turn a money-losing operation into something that is either breaking even or making money, with all respect to our ridership, I think we should be investigating that.
What I was referring to wasn't so much that we have routes that might have low ridership; but apparently part of our productivity is the fact that our drivers are spending less time driving, so that they are.... A confidential report that was put out for B.C. Transit in December 1992 by a Toronto consultant indicated that, in general, B.C. Transit drivers spend less time driving than their counterparts in other Canadian cities. The report goes on to estimate that this is four to six minutes per hour of non-driving time, which is more than other cities, and that accounts for the 10 percent figure I gave you earlier. That's the figure I was referring to when I spoke about productivity. There is more downtime, therefore we need more drivers because there is more time that they are not actually on the road.
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Hon. G. Clark: We commissioned the study; we have commissioned many studies at B.C. Transit to try to review these questions. We don't agree with all of it, but I will simply point out that we are projecting a 1 percent increase in productivity this year. That deals with some of the member's concerns. As I said earlier, this corporation has gone through a series of reviews because of concern to try to minimize the load on provincial taxpayers.
I have one last point on the question of private operators. Right now, nothing is preventing a private operator from running a bus service from one community to the next. There is a private bus right now between Mission and downtown Vancouver, which we will seriously jeopardize with the advent of commuter rail. It's a $7 ride. So there are private operators that do business. We don't allow them to do business on our routes because there is a significant subsidy to those routes by the taxpayers of the region, with transit tax, etc., and there is therefore a subsidized fare. I am not sure where the member is coming from in terms of trying to have some of those routes privately operated.
D. Symons: I noted the statement that you don't allow private operators to operate on your routes. But it doesn't work the other way around, unfortunately for the private operators. Since B.C. Transit is a subsidized transit system and the private operator is not, when B.C. Transit moves into their area, it's hardly fair competition. They automatically have to drop out due to the fact it's costing.... In those areas they are getting about a 50 percent subsidy that the private operator does not enjoy, so it could hardly be referred to as fair competition.
D. Jarvis: I want to perhaps get a question out of the deputy. Has the minister gone?
An Hon. Member: He's outside.
The Chair: Please continue, hon. member.
D. Jarvis: I wonder if it is worthwhile asking a question at this point in time, when the minister is not in the room and the deputy.... I want to ask the minister a question with regard to transportation and the Lions Gate Bridge. Is he thinking of privatizing the construction of the new First Narrows crossing, whatever it may be?
An Hon. Member: We're doing Transit.
The Chair: Hon. member, I think that we have attempted to organize the minister's estimates. There are staff members here with the minister to support questions on B.C. Transit, so perhaps we'll continue with that.
S. Hammell: I would just like to make a few comments on the minister's estimates. Surrey-Whalley and Surrey-Green Timbers were lucky enough to be the recipients of the three new SkyTrain stations that have opened in the last year in Surrey. The SkyTrain originally stopped at Scott Road and came up the King George Highway, stopping at three stations: Gateway, which is the first station; the Surrey Central station; and the King George station. When this government came into power, they reassessed whether we should continue to have SkyTrain stations coming up the hill. After looking at it very carefully, they proceeded with the project. Fortunately for Surrey, the three stations will be the centrepiece of the new city centre.
The government has made a considerable commitment to Surrey itself with the SkyTrain stations. They have invested over $120 million in the SkyTrain stations themselves, along with some contribution through private enterprise....
K. Jones: Is this a ministerial statement? Is this a statement on behalf of the minister?
The Chair: Hon. member, the member for Surrey-Green Timbers has the floor, and she is discussing the member's estimates, so would you please....
K. Jones: She doesn't appear to be asking a question.
The Chair: The member has the floor, hon. member.
S. Hammell: Transit has also ordered a number of new cars so that the system can be operated from the Waterfront station right through to the King George station. Those new trains should be in place some time this fall. It is worthwhile mentioning the whole SkyTrain system, because you can get from the Waterfront station to the King George station in approximately 35 minutes without taking your car and without polluting the environment. It's a service that I use frequently. I wonder if the minister has any comments on this wonderful system that he has supported.
Hon. G. Clark: I'm delighted by the comments from the member for Surrey-Green Timbers. The introduction of the SkyTrain system and of the three stations in Surrey helped to really make that regional town centre. I know that I, on behalf of the government, was very pleased to be there with the member, who is a very effective voice for Surrey in the chambers. Contrary to what the member opposite said, I think it's a very useful comment.
K. Jones: I think that obviously should have been paid for by the transit authority. It certainly doesn't belong in this process. It was nothing but paid pap of the transit authority. It certainly isn't a representative statement by any representative of anything to do with this thing.
The Chair: Order, hon. member. I'd like to comment that in the estimates of any minister there's wide-ranging opportunity for comment and question from all members of the House, and that is what we have been engaging in.
I would also note to the member for Surrey-Cloverdale that the language he just used is unparliamentary, and I would ask him to withdraw.
Interjection.
The Chair: Hon. member, when the Chair indicates to a member that language in their comments is unparliamentary, it's customary for a member to withdraw those comments. I would ask you to do that now.
K. Jones: Hon. Chair, I have not made any unparliamentary statement.
The Chair: Hon. member, I would ask you to reconsider your comment and to observe the traditions of the House. You have used language which the Chair has asked you to withdraw in the tradition of the House, and in respect to the members here, I'm sure you would like to follow those traditions so we can proceed with the debate. I would ask you to cooperate with us in doing so now.
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K. Jones: Unfortunately, because of the noise here, I was unable to hear what you said.
The Chair: Then, hon. member, let me say very briefly that the traditions of the House are that if the Chair indicates there is unparliamentary language outside the traditions of the House, it's customary for the member to respect the request of the Chair and to withdraw those comments. I would ask you to do that so we can proceed with the debate and your participation in that debate.
K. Jones: If I've said anything unparliamentary, hon. chair, I withdraw it.
The Chair: Thank you, hon. member. The debate continues.
K. Jones: Following up on this proposal of private sector transit, I'd like to ask the minister if he would stand in the way of a private sector operation operating east of White Rock and north through to Cloverdale, in an area where transit has already cancelled the two-times-a-day transit service that used to supply the very minimum of transit service to about 7,000 people who live east of White Rock and south of Cloverdale.
Hon. G. Clark: Once again, I'm puzzled by this line of questioning, because the transit commission establishes routes and closes routes. Your leader was on the transit commission for years, and he was one of the hawks that suggested closing these high-cost routes. It's up to the transit commission to determine routes -- not the government of British Columbia, myself or B.C. Transit. So if the member is concerned about route closures in his constituency -- and I share many of those concerns, hon. member -- then he should talk to his leader and to other members of the transit commission who had a say in those decisions.
Interjection.
Hon. G. Clark: Well, he has influence over members of the transit commission, and he was there when most of these route closures took place. So it's up to the member opposite to raise those concerns, and not in the House. It's not an administrative function of B.C. Transit or this minister.
K. Jones: I categorically reject the minister's statement that this is a responsibility of our leader. Firstly, our leader is not involved with transit in the province of British Columbia at this time, and on top of that, the person who did the advocacy for that was your party representative, Mayor Bose, the NDP mayor of Surrey. It was Mayor Bose that advocated the cancellation of this transit route, not our leader. So get your facts straight, hon. minister. Now the chair is another NDP hack and supporter, who is well known and represents Richmond council. The real fact is that there are some possibilities that there is an interest in providing a transit service in that area. But the question we asked of you, hon. minister, was: would you stand in the way of a privately operated transit service in that area? That is your jurisdiction.
[10:45]
Hon. G. Clark: I'm not sure I have any jurisdiction over a private sector operator. We would have to look at the details of the proposal. I don't have anything in principle against it. If they want to use our bus stops and there are those kinds of questions, then I may have a problem. But if it's purely a private sector service like the one from Mission to downtown Vancouver, I'd be delighted. Be my guest -- great.
K. Jones: In the area that I'm describing in southeast Surrey, both east of White Rock and south of Cloverdale, there isn't one single transit stop provided by B.C. Transit, so there's no problem of any conflict, hon. minister. You haven't got anything in there; you don't have any service and haven't had any. You didn't even have any service stops when there was one bus twice a day; there was no way for people to even know that Ttransit was operating in the area. It's no wonder it didn't have high ridership.
Could the minister also tell us what the gate leakage is on the buses of B.C. Transit?
Hon. G. Clark: On the private sector question, I don't know what I or B.C. Transit could do to stop a private sector operator. So I don't know what the purpose of the last ten minutes were.
Interjection.
Hon. G. Clark: Go ahead. Be my guest.
SkyTrain fare evasion estimates are about 3.5 percent; on SeaBus, it's about 2.7 to 3 percent; on the Vancouver bus system, it's about 1.5 to 3 percent; on the Victoria transit system, it's 0.8 to 1.5 percent. Those are our estimates of fare evasion.
K. Jones: Could the minister tell us what the fare leakage is on SkyTrain? I didn't hear what the minister said.
Hon. G. Clark: I said it's about 3.5 percent or a little higher, depending on the various studies which we're still looking at. But estimates from SkyTrain indicate it's about 3.5 percent.
K. Jones: Could the minister tell us how he's measuring that leakage on SkyTrain?
Hon. G. Clark: Yes. As the member knows, we've done several studies in this area, but the best estimate to date is done by SkyTrain attendants. They check several hundred thousand individuals for proof of payment. Talking to SkyTrain attendants directly, their estimate is about 3 percent fare evasion. We've done several other studies which indicate it might be higher than that. This has been a subject of much debate in this House. The members know my views on it. We're very concerned about it, and we're reviewing various action plans to deal with it. But again, our best estimate is a little higher than that, about 3.5 percent fare evasion.
K. Jones: Hon. minister, isn't it a fact that you have information in your office that fare evasion on transit is really closer to 60 percent or 70 percent, not 3 percent?
Hon. G. Clark: No.
G. Wilson: I only have a few questions with respect to Transit. One thing that's interesting and that we have to try to remember when following this estimates debate is that on the one hand we have to make a decision....
Frankly, I'm surprised to hear what appears to be a fairly significant change in policy with respect to the Liberal opposition, which is now advocating the privatization of the
[ Page 12547 ]
transit system. I think it's important for us to recognize that transit is a service that is often used by the people who can least afford to travel between where they live and where they work. These are often people in the lower income brackets of the population. As government is attempting to provide services, one has to recognize that a certain level of subsidy should be built into that service in order to provide some level of equity among the people living in a community. Privatization may not necessarily be in order, although some services may certainly be singled out.
My question is of greater concern to rural communities, and interior communities in particular, where we are now moving to a very competitive bidding system. Transit may be administered by the municipality or regional district; in some instances it's administered by various other organizations within those communities. Transit builds a social dependency, and when that social dependency is there, it is important for everybody to recognize that it has to be provided on an ongoing basis and in an affordable and accessible way. It is not always the case -- and I hope the minister will comment on this -- that the lowest cost is the best service. There will come a time, and I think this time may be upon us, when we have to make some policy decisions that recognize that a certain level of subsidy to transit is a desirable expenditure of taxpayers' money in order to make a more equitable system of transportation in those communities.
I am aware of at least two communities in the interior, Kelowna and Kamloops, where there has been a great deal of concern about very large companies coming in and undercutting contracts already in existence that have provided excellent service to the community for long periods -- there has been more than just a transit relationship built up. Once those contracts are undercut, these large companies can effectively come in and provide a less than sufficient service. It may be cheaper, but it will provide less service to the public. I'd like the minister to comment on that.
I know those two areas have gone under review. I've been actively involved in trying to see those reviews done, as has my colleague for Okanagan East, but we'd like to hear the minister's position with respect to looking after those kinds of service contracts.
Hon. G. Clark: Yes, I completely agree with the member; I think he knows that.
We extended the contracts in those two communities by one year. Given the concern people in those communities had, we did a review and had people talking to several council members at least, if not the council. How we might deal with this situation is under active review now. We're very close to having a way to deal with this -- I was just checking to see if I could make any announcements -- but we're not quite there yet. We're asking for a bit more technical work. I think Setty Pendakur is involved in the review, but his report is not quite complete. I've been briefed on it, and it looks like we'll be able to do something satisfactory. We've got this one-year extension, which I think is worthwhile.
Hopefully, we can establish some bidding process that takes long-term service and the people who work in those communities into account. The fact is that there are longtime employees of the bus company. Maybe it's not like other areas. Often the bus driver is a very important part of the fabric in some of those communities.
Anyway, I simply say that I agree with the member's comments, and I think we'll be able to fix that in the next few months.
G. Wilson: My last comment on this, and it's an important one to make, is that one of the thorny issues in that whole process has been successor rights and how those successor rights are going to be built into contracts under an open-bid process that may change. It's important to go on the record to say that if we're to build some kind of long-term service record of people who've committed to this kind of a social service in communities in the province, successor rights is an important issue in employment. No matter what happens with respect to that open bid, we have to recognize that relationships are built up between those involved in transit and those dependent upon it. To have those rights alienated, as I understand they will be in this process, may be a disservice to people who have put long hours into this public service sector transit. As a result, once again it might give advantage to large companies that are able to come in with what on the surface appears to be a low bid, because they're not prepared to pick up or pay for the same level of service in terms of successor rights. If the minister could comment on that.... I realize it is a sensitive issue right now. I appreciate the fact that I have had ongoing briefings from a number of people who have been involved in the process. But it's important to go on the record to say it's not always the bottom line of the ledger that's important. Sometimes in fact it may cost a little more, but for that additional money you get a far better and more humanitarian service employing people who've had a long history of employment in the community. Sometimes it's better to look at the larger picture in terms of that social service than simply to look at the bottom line of the ledger.
Hon. G. Clark: In principle, of course, I completely agree with the member. There are some technical and legal considerations, which are part of the review.
The member again proves that he really is a liberal. He's taking a very progressive position on this issue, one that I support. It's unfortunate that he doesn't do that on all the issues that come before us. He's taking a very enlightened view on this one, which I share.
D. Symons: With the other people intervening, I sort of lost my train from where I was asking before.
An Hon. Member: You've lost your bus.
D. Symons: I missed the bus there, yes. So if I could just go back to where I was on my question before, I was dealing with employee productivity.
I'll just move on to the other fact. We found a recent B.C. Transit report -- I think it was for the third quarter of fiscal '93-94, up to December '93 -- that showed the ridership in Vancouver was 3.7 percent below its 1992 levels. Considering that the region grew in population about 2.5 percent over that time, that means we've had, in proportion to the population, a proportionate drop in ridership of approximately 6.2 percent.
I'm concerned that if this is the case, we seem to be dropping ridership. Something is going wrong with B.C. Transit. The excuse or reason given by B.C. Transit is the fare increases. As much as I'd like to stick up for that sort of excuse, I don't think that's turning people off. Rather, I think the service is the main reason people are not riding the buses and still sticking with their cars. So I'm wondering what the
[ Page 12548 ]
minister is doing, through his ability to deal with the transit situation in the province, to see how we can turn these figures around and have ridership increase on our buses rather than decrease.
Hon. G. Clark: First of all, we're projecting some increase next year in ridership. The reasons last year really are a combination. First is the fare increase -- simple supply and demand economics. Second, there wasn't as much increase in service, which we've had in previous years. Third, there's been the economy. Although we're doing very well in British Columbia, in the lower mainland last year there actually wasn't the same level of growth as in the rest of the province. So a variety of factors led to a modest decline in ridership. I share the member's concern about that.
We're projecting some fairly significant increase this year, partly with the extension of SkyTrain to Surrey. Also, we're going to take on a number of initiatives which we hope will continue to attract increased ridership.
D. Symons: Going back to the question I asked earlier about regional control of transit, when the current Premier was mayor of Vancouver he spoke of turning over transit responsibility to the GVRD. Now that he's in a position to, he hasn't carried through with that recommendation. Does the minister support the present Premier's position when he was mayor, and why has the Premier not acted on this after almost three and a half years in office?
Hon. G. Clark: Clearly, along with the Premier and members of the government, I agree in principle with more regional control of the transit system, if not complete regional control, but with control comes responsibility. Most of this massive annual subsidy of over $200 million, taken from all around the province, goes into Vancouver. Most of it goes to SkyTrain, which was not a decision by local people, and it was one that, at the time, I was involved in opposing. Nevertheless, my position has been and still is that a regional transit authority is an appropriate mechanism -- at least for managing the bus company side, if not the big capital expenditures. But the people who are delegated that authority have to take responsibility for incremental or future funding. We have simply been unable to convince the local people of that. At the moment, they simply won't accept any increased share of responsibility. That's one point.
Then there are a number of technical questions around that. I can tell the member that we're actively exploring many of them. I would like to see more local control, and the Premier has actually given some instructions to that effect. We have a system now in which one Crown corporation has Victoria, Vancouver and the small communities in it. So we have some disentangling to do on the Crown's side.
Also, I'm not sure what the appropriate regional authority would be. Personally.... Perhaps I'd better not say this. Well, I'm not convinced that the GVRD is necessarily the body that should be the transit authority. Maybe an elected transit commission, or maybe.... There are a variety of models. Now that we're moving commuter rail out to Mission, and they're not in the GVRD....
[11:00]
I've said consistently, along with the Premier, that in principle we would like to see regional transit control. We hope to take some steps that will lead in that direction, but there are lots of issues on the table. It's very complex. It's not that we haven't seen cooperation from the transit commission, but.... And I don't really blame them. They've been vigilant in protecting the tax base of their municipalities, and they've been reluctant to take on a very expensive obligation, which the province of British Columbia currently provides. So there's that tension. But we're still in favour of regional control and we're still looking for options and solutions.
D. Symons: It's interesting to find how many concerns I share with the minister. We often seem to see eye to eye on some of these things -- for example, about whether the GVRD is the appropriate authority because it's not directly elected. It is indeed true that the members of it are elected in their municipalities for another purpose. I think the Vancouver Regional Transit Commission is the same sort of system. They're not directly responsible to the people, because they're indirectly elected into those positions. So I share your concerns, and feel that we should move that into a sort of municipal control. I'd like to come back to that topic a little later on.
I would like to move for a moment to another aspect of transit, and that's the use of minibuses. In many of the outlying communities, where there's not a large ridership in the off hours, minibuses could serve a good purpose. They would be more manoeuvrable than the bigger buses around some of the narrower streets in some subdivisions. I realize that the main expense in operating a bus is the driver behind the wheel. Nevertheless, I think there is a place for minibuses in the communities and that should be explored more so than it has been.
Hon. G. Clark: Using minibuses more creatively and exploring opportunities for them is something that is under active consideration. We may have had this discussion, but when they designed New Westminster Quay.... It can't accommodate a full-size bus. We have a service running there now. We think there are other opportunities with respect to minibuses, and we are actively exploring those. We are now very close to a decision to purchase some more minibuses, and that process is under discussion right now.
D. Symons: We've had at least a two-week interlude between when we initially started asking questions on your ministry and today. I made up some questions about the new catamarans, but you answered them in an announcement earlier in the day and with hints about them in the press in the days before. It seems that I'm a bit on the edge regarding the minibuses, so I will be waiting with bated breath to hear what you're going to say about minibuses.
On hiring practices, since the NDP took office there has been a great turnover in the management staff of B.C. Transit -- and I guess that's an understatement. A large number of new management staff have been hired, and some have come in and gone out through revolving doors. In many cases, these staff members were hired without competition, and they have had limited or non-existent experience in the industry. Ironically, prior to the new and improved B.C. Transit by the NDP, ridership was growing; now it's falling. We have a problem here. I wonder if you've made some wise decisions.
You might want to take these questions on notice, but we will see if you have the answers. How many upper management staff have been hired by B.C. Transit since you've taken office? How many of them have been the result of an internal or external competition, where they competed for a jobs rather than being appointed? How many of these people had a track record in the transit industry before they were appointed to the particular position? And how has the NDP management team managed to produce a drop in ridership, and what's the minister going to do about it?
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Hon. G. Clark: First of all, there is no relationship between the drop in ridership and any senior management changes. I would simply have to reject that. Secondly, maybe over time there will be, but we're not talking about the short-term drop in the last year or two.
Let me just take this opportunity -- I apologize to members -- to introduce Rick Krowchuk, the vice-president and chief financial officer of B.C. Transit, and Blair Trousdell, the present acting chief executive officer of B.C. Transit.
Actually, I will take the questions on notice and get back to you. I guess it's not appropriate now. I don't know the number, but it's not very high. Contrary to how it might seem, there hasn't been a huge turnover. Almost all of them, if not all, have been competitions for appointment. But I shouldn't say that without getting.... We will review that, and I will send you the information.
D. Symons: I guess the fairly highly visible change at the top may have prompted that question. You've introduced the new Transit manager, who is in an interim position. Will the current holder of that position be competing in a competition for the full-time job when it becomes a regular one, or is this interim appointment just holding that place? Will he not be there in the future? I'm just curious why it's interim and why it hasn't gone to the person who's going to be the.... We need some stability at the helm of B.C. Transit, which we have not had for a few years.
Hon. G. Clark: I certainly hope that he will apply for the job. I say with the greatest respect that if Mr. Trousdell had been appointed directly, without a public competition for the job, this member would be up attacking the fact that there hadn't been a public competition. Mr. Trousdell is "acting" for a variety of reasons, one of which is the fact that it's important that we try to have public competitions for these jobs. I certainly hope that Mr. Trousdell will apply for the full-time position.
The Chair: The member continues.
D. Symons: Maybe he continues. He's fast-tracking some of these, I suppose.
I wonder if I can move on to some other questions relating to your new Surrey service centre. I'm wondering why such a large facility is now being built for buses, when the recently opened extension of SkyTrain is likely to reduce the number of buses in that region. Indeed, we find that commuter rail also might have some effect on the number of buses in that region and in the valley. You seem to be opening a rather large facility in Surrey.
Hon. G. Clark: I will remind members that Surrey is the fastest-growing community in Canada, if not North America. Beyond that, when I made the B.C. 21 announcement -- one of the first -- with my colleagues from Surrey fairly recently, the people who worked there were pretty excited. You should see the old trailers and dilapidated quarters they had. They had been promised new facilities by B.C. Transit for some ten or 15 years. As a result of the B.C. 21 initiative, we and the board of directors of B.C. Transit made a commitment to provide this fast-growing region with a quality service area.
As to the size, I'll confess on the floor here that I didn't determine the size of the maintenance or service shop out there, and I defer to the member if he has any expertise in this area. This was done by professionals at B.C. Transit. Again, intuitively I think he'd agree that this is a very fast-growing community, and we wanted to make sure we had a quality facility to do the maintenance that's required on an expanding bus fleet. Notwithstanding SkyTrain, there will be an expanded bus fleet in Surrey, including out in Langley, over the next decade.
D. Symons: Continuing on that centre, when the contract was first let, I believe it was for two buildings: a service centre and a maintenance building. Then I think it was rescoped into a single building, and I'm not sure if it's now a single building or back to two buildings. There seemed to be a complete change there. There were plans in the initial planning of it, when the building had actually begun, to put in a fuelling station for buses using natural gas. That natural gas station was taken out of the plans, and then it was rescoped again and brought back in. I think the gas fuelling station is there today, so I'd like to ask what's happening here. It seems to keep changing from the time the initial drawings were made of that building. The plans have been changed many times during actual construction, and it's been rather interesting for the contractor, not knowing one day to the next exactly what he's building.
I wonder if I might ask what amenities this service and maintenance centre would have for the staff. By that I don't mean washrooms and cafeterias, but more in the form of recreational facilities that might be included in these buildings. Is there anything of that sort there?
Hon. G. Clark: I'd be delighted to give the member a private briefing on the details of this contract. I simply don't know what the washroom facilities are like in one facility in Surrey. Maybe my Surrey colleagues can give us some advice on this. I can't on the floor of the House give the kind of detail the member has requested, but I'd be delighted to find it for him.
Incidentally, just for the member's information, it's an open-shop contractor who has been awarded this contract, and I say that simply to confirm yet again that there's no bias in the awarding of the contract. If the member is alluding to problems, I'm not aware of them. It's two buildings. There's obviously a design process going on, working with the construction company. I say this in all sincerity: if the member wants to know precisely, to the blueprints, what's in that building, I would be delighted to have staff go through it with him; I simply don't know. My briefing notes say, for the record, that the contract includes underground services, paving, site lighting, landscaping and other work. The facility is an operations building, a maintenance building and upgraded site facilities, including a new bus wash and accommodation for 190 standard buses and 50 articulated buses. The scheduled completion is the fall of 1994. That is the extent of my notes on this, and I can give him as much information as he would like on it.
D. Symons: I will take the minister up on that. I must commend the staff the minister has with him. When I ask a question I know what I am going to ask but the people on the opposite side don't, and I am always amazed that you are very quickly able to supply the minister with the answer, or the minister knows the answer.
An Hon. Member: Or he fakes it.
D. Symons: Or he fakes it, or whatever. But he does a good job in answering questions, so I appreciate you gentlemen being part of that process. It was not so much what the plans are today, but why there seem to have been
[ Page 12550 ]
changes on two or three occasions with the buildings and the supplying of a natural gas station there.
B.C. Transit recently hard-wired -- and I don't know exactly the term for it -- Airport Square for electronic mail. I believe the system they are putting in is called CC:Mail. It seems to me that from the time that wiring went in you will be in the building less than six months before you are in your new quarters in Surrey. It seems to be a great waste of money to put in an internal electronic mail system, when you are going to be abandoning it very shortly.
Hon. G. Clark: I am advised that the setup cost of the electronic mail system was about $10,000, and the wiring is fully transferrable to the new facility in Surrey.
[11:15]
D. Symons: I would love to hire the people you had doing the electronic work for you. I don't think I would get them that cheaply.
Interjection.
D. Symons: I didn't think it would go that far.
During Mr. Dixon's short stay as CEO, he instituted a thing called a performance improvement program. He apparently believed that the bureaucracy could be reduced and that management should be flattened. Would the minister commit to completion of that project? I gather it has been somewhat in limbo since his departure.
Hon. G. Clark: Yes, it is currently underway, and it is being brought to completion.
D. Symons: Would it be possible for this member to get a copy of that when it's completed and you have had time to examine it?
Hon. G. Clark: Yes, certainly.
D. Symons: In another area of concern, we were dealing with regional control. One way in which the minister could assist in that regional control is that.... Three communities have asked to do an independent study so that they are not simply using the studies B.C. Transit has done on transit routes within their systems. I believe that Burnaby, Surrey and Richmond have all made those requests -- I know that my community of Richmond has made that request and has been turned down. Burnaby estimated the cost to be about $25,000 for the independent study, and they were turned down because B.C. Transit said they couldn't afford it. Yet when B.C. Transit opened the SkyTrain station in Whalley they managed to find $106,000 to put on a show for opening day. It would seem to me it would have been a more appropriate use of that $106,000 to allow these three communities to have an independent study and either prove what B.C. Transit is doing is right or find a better way of servicing the nearly 400,000 people in those three communities.
Hon. G. Clark: Not to repeat myself, I have given those communities every opportunity to participate in the transit system. But they have to pay for it. I simply cannot say here in the House that the taxpayers in Nanaimo, Prince George, Fort St. John or Port Alberni should give $25,000 to do an independent study for Burnaby. I just can't do that. If Burnaby wants to do a study of transit, they can hire somebody and we'll work with them. To ask Transit or the taxpayers of British Columbia to pay for a study in Burnaby is simply not acceptable. We have our own five-year service review underway in which we are involving the communities. Richmond has done some independent work on transit, and I commend them for it. That's fine; they are paying for it. But they can't just ask B.C. Transit to fund any study that they decide is desirable. If they want to take responsibility for the system and pay for it from their tax base, I'm delighted, and they're welcome to it.
D. Symons: I'm sure that the minister, having been Finance minister at one time, would be delighted to see them take over responsibility and the full cost, because the government is now contributing something. But when we consider transit as such, it is a service to the community; and just as the government puts down roads and so forth, a subsidy to transit is not inadvisable. In fact, I think it's desirable that we offer that subsidy in order to get people out of their cars. If we don't have them on transit, we're going to have them on the road. One way or the other, the taxpayer is paying for it. In a sense, I would rather see improved transit as the carrot, I suppose, rather than using the stick to force them into transit, with roads so clogged that nothing moves. I've seen too much.... When the latest GRVD study came out, it seemed to have an awful lot of stick in it and not as much carrot. Let's get the carrot there before we start beating people with the stick to remove them from their car.
That leads to my next question, which deals with a government news release dated June 8, 1994, talking about transit strategy being a key component of planning for the First Narrows crossing. This minister said somewhere along the line: "The structural alternatives being considered for the First Narrows crossing must be complemented by a public transit strategy." Indeed, I think we've had that public transit strategy. For the first few years when I was critic, I asked questions about transit and highways, and the answer I always got was: "Well, that's under the 2021 study. When that comes out, we'll have a plan for the whole region." But it seems that's already come out, and this statement was made after that. I just comment that I think that study has been done, and now we should be getting on with it, rather than saying we've got to study things still. The studies have been done; it's time we moved on to doing some of the projects. I don't know whether that will elicit a response or not.
I'll move on to the next question, dealing with the Broadway task force, which looked at transit service along Broadway. They came up with three or four recommendations, and I'll fast-track those as well: the idea of using a limited-stop express bus; a city express that would have more stops within the city than the limited-stop one; and the concept of also introducing superbuses along that route. You mentioned, I think, that the Surrey one will handle a fair number of articulated buses. So I appreciate that you are looking into larger buses. But with express buses also, we would have a system that would appeal to people and encourage them out of their cars -- another one of these carrots I'm referring to, rather than sticks. I wonder if you might care to respond on that Broadway task force.
Hon. G. Clark: Broadway is one of the very few routes that make money in this transit system, and I've always argued that adding buses might be cost-efficient, unlike with most of the subsidized system. Unfortunately, again -- and I don't want to harp on this.... Libby Davies and Murray Dykeman, the mayor of North Vancouver, were the two members of the task force. Mr. Dykeman is on the transit commission; Libby Davies now is on the board of directors. I
[ Page 12551 ]
think they've come up with some excellent suggestions, and I'm fully supportive of them. They've gone to the transit commission for review, and it's now under consideration by the transit commission. I hope the transit commission will accept many of the recommendations, within its ability to do so, because we really need to improve service on Broadway. In fact, it may make money for the corporation, and I think there are some really excellent suggestions there.
D. Symons: One of the difficulties with that particular route is that it isn't just a case of being able to put more buses on, because they run at about three-minute intervals already. If you put more buses on, they're going to bunch up. So what you need is bigger capacity and a way of moving them along faster. The problem, of course, with putting in express and HOV lanes is that all the businesses along there are rather reticent -- as they were out in Marpole and are on East Hastings -- to give up the parking in front of them, because they're going to lose. So I recognize the problem there. But certainly it would be a solution to a real problem if we could have an express system with larger-capacity buses operating along there.
Another concern that comes up related to this is the fact that there are times within the B.C. Transit system, apparently, because of the unavailability of equipment -- when there are enough buses down in the shop -- that you have cancellations of certain buses. They choose routes where you simply won't have every third bus appearing, because they're short of equipment or sometimes short of staff. At other times they have too many people in on overtime. All of this creates real problems and inequities in the service that is given and in costs to the system. I'm wondering what you're doing to address those problems of shortages of equipment and the fact that quite often, because of this, it involves overtime of drivers, which jacks up the cost of operating the system.
Hon. G. Clark: My advice is that it is improving from where it was four or five years ago, but there are still some problems. Actually, it's quite interesting to go through some of the maintenance facilities. There is really high-quality craftsmanship and workmanship in some of the facilities -- the Burnaby facility, for example.
I know members don't know this, but they've stopped making some of the parts for the buses, or they're very expensive, and for some of the guideways and for some of the small pieces.... I don't know what the actual technical term is for where it hooks onto the trolley line. So they actually fabricate them there, and they take a lot of pride in that. They do interesting work.
They're doing lots of innovation to try to maintain the fleet and minimize downtime. There have been some really significant improvements, but more work needs to be done in some areas.
D. Symons: B.C. Transit has a few buses that are leases, though the majority of them are owned by B.C. Transit. I'm wondering if there's a trend one way or the other. Are you going out of leased buses and into total ownership? You appeared to give answers earlier on B.C. Ferries that indeed the few ferries that were leased were being bought back. What's the case with B.C. Transit and also SkyTrain, while we're at it? You have more SkyTrain cars that are leased proportionately than buses.
Hon. G. Clark: We had this discussion on ferries. There were some tax advantages for capital leases prior to 1988, I think, and they were exploited, if you will, by the previous government in the ferry system and, to some extent, on some of the buses. I think they looked at SkyTrain as well.
In any event, that loophole was extinguished in 1988. There were simply no tax advantages, so we haven't been pursuing the lease option. That's not to say that we wouldn't pursue a lease option in some cases; in fact, we would explore leasing, as you probably know, or capital leases for the commuter rail cars. We actually are exploring that, but the trend, if anything, is toward ownership and not leasing.
D. Symons: There was a labour dispute on April 22 this year, when the office workers were disputing overtime pay. It closed the system down, because basically they put up a picket line around the yards, and the bus drivers refused to park. They parked out on the street, and so forth, and it caused considerable trouble. I'm wondering first if that dispute has now been settled. I haven't heard anything of it. You got an injunction to get the buses into the yards again and out of the street. What steps have been taken by either B.C. Transit or government to ensure that transit users aren't held hostage or inconvenienced by wildcat strikes -- which I believe that one was?
Hon. G. Clark: The situation has been resolved.
D. Symons: Is B.C. Transit taking any steps so that wildcat strikes won't inconvenience the public?
Hon. G. Clark: Absolutely. I could make a major speech on this, but I'll refrain tonight. We have engaged in something called relationship by objective -- RBO -- under Brian Foley's direction. It was a two-day workshop, with real significant progress on the labour relations front of B.C. Transit. We have a way to go on both sides, but I'm very optimistic.
Blair Trousdell brings some expertise on the labour relations side as well, which already is paying dividends. I think the best way to deal with labour disruptions is to have a mature, respectful relationship between the parties. I think we're making progress. We clearly have a way to go, but I'm very optimistic.
D. Symons: I spoke a few minutes ago about HOV lanes or bus lanes. Can you give me an idea on bus priority on roadways? How is the Barnet-Hastings connector coming? Bus lanes were going in there. It was slowed down somewhat with the advent of this particular government, and I believe they've committed to completing that project. Is it completed? I believe it was going to be four-laned, as well as having an HOV lane, but two car lanes have been cut out. Can you give me an idea about that project? When is it likely to come on stream?
Hon. G. Clark: It would be easier to answer when we get to the TFA section. I reject the notion that it was slowed down. Some unrealistic promises were made and time frames given by the previous administration which simply weren't possible. We proceeded apace with the development of the HOV lanes, and anybody that drives it can see that. Even with the downsizing of the capital budget and highways, a lot of work is being done along those routes. So we're still proceeding and spending significant millions of dollars on that.
[11:30]
I'm not sure of the time frame; I think it's a little way away. Tenders for the last phase were for '97, I think, and that's the Port Moody end. They'll go out then, and we'll
[ Page 12552 ]
finish it in '98 or something like that. But we're proceeding apace, and HOV lanes are there. We've done the work with commuter rail, so we're confident that there isn't the cross-debate -- there isn't the sort of leakage. We can accommodate both; it makes sense for transit purposes. So we're proceeding forthwith.
D. Symons: I won't get into the relative merits of whether that should have gone ahead prior to starting the commuter rail, but there indeed seems to be some difference there.
I hope the minister is within hearing distance. Maybe someone else can pass the message along that I'm asking about the test that B.C. Transit did in 1992, I believe, using methanol in the buses. I'm wondering how that particular methanol experiment turned out, whether you're now planning on methanol buses, whether it was a failure or whatever. It gives a cleaner burn, but does it work as far as an alternative fuel goes?
The Chair: I will recognize the member for Alberni while we wait for the minister's return.
G. Janssen: I have listened with great interest to the debate on transit in Vancouver. I'm sure that the member for Langley will agree with me that many of us in the rural communities who pay for our own transit services, rather than getting them out of the public purse through a subsidy that is provided by all British Columbia taxpayers, are getting a little sick and tired of the whining and complaining of those members from the lower mainland who continually demand more and more subsidy so they can ride SkyTrain and other fancy modes of transportation that are unavailable to those of us who represent rural areas.
I would ask the minister to comment on the level of subsidy and what is being done to ratchet down those dollars, so that more of the subsidy provided to the fat cats of the lower mainland, who seem to have no end of demands on the public purse.... Could those dollars be reallocated to rural communities, where they are needed, I would suggest, at least at a comparable level to that of the lower mainland? We see announcement after announcement on commuter rail; millions and millions of dollars simply go to ensuring that those people can live in the suburbs and still access their highly paid, and sometimes overpaid, jobs in the downtown area.
I believe there was some suggestion by the minister some time ago to impose a parking tax to encourage people to leave their vehicles at home and make better use of the transit services that are being provided, either through bus or SkyTrain. I wonder if the minister has some idea of why the city of Vancouver rejected that excellent proposal and demanded even more subsidies.
Also, something that's dear to my heart, as members of the assembly are aware, is the high-occupancy-vehicle lanes or bus lanes. The motorcycle community has asked that motorcycles be allowed to use those lanes to alleviate some of the congestion and to speed up the ability of people to use motorcycles and get to work quicker.
Interjection.
G. Janssen: I know the minister is interested in this. I've invited him many times to come to my home with his children so I can teach them how to ride a motorcycle -- something he hasn't learned how to do yet. I'll leave that with the minister.
G. Farrell-Collins: I just have to rise in my place and respond to that scintillating question from the member for Alberni -- a series of questions actually, good filler. Perhaps in the future, when the minister has to vacate the premises briefly, we could just take a break for a minute.
First, I want to defend those fat cats of the lower mainland. I would suggest that that member turn around and talk to the two members from Surrey who represent those fat cats and to the three members in his caucus from Coquitlam who represent those fat cats from the lower mainland, who have been whining, as he said, for transit. They have received a multi-multimillion dollar rail link, which many people say is going to be quite inefficient. To quote the minister himself: "My God, we're shovelling money off a truck here." So if he has concerns about the fat cats of the lower mainland, I suggest he take that up with some members of his caucus first.
Second, I find it interesting to hear the members of the more rural communities. I feel that where I am is sort of in the middle, between a rural community and an urban community. I find it interesting to hear members in this House get up and lambaste people from the lower mainland because they don't know anything about the rural areas. Yet these same members seem to know so much about the urban areas. They know all the problems and the things that are wrong with the urban areas. I find it interesting, but I don't think the way to get good policy is to stand up and go after the urban people versus the rural people. I think you have to try to spread things around in order to make it productive for everybody. I just hate to see us calling the people of the lower mainland fat cats. I think this member should bring his motorcycle to the lower mainland, involve himself in a commute back and forth, and see if he thinks things are okay and peachy in the lower mainland.
The Chair: Well, I'm sure the cause of grappling with and furthering the minister's estimates has been advanced considerably by the last two speeches, and I thank the members for them.
D. Symons: I was just going to repeat the question I asked when the minister was inadvertently called away, and that was regarding the use of methanol-fuelled buses. Indeed, there was a test carried out by B.C. Transit with methanol in 1992. I'm just wondering what the results of that test were.
Hon. G. Clark: I may be wrong, but I'm not aware of a methanol experiment at B.C. Transit in 1992. There have been some CNG and dual-fuel experiments, and there's the Ballard bus, which is hydrogen, but I am not aware of methanol. I'll undertake to see if my memory is mistaken and get back to the member.
D. Symons: I'll just help the minister a little on that. It's in a publication called Transit Exchange put out by B.C. Transit. It's their newsletter; it's in the April 1992 edition on page 7. That will give a reference point, and the minister can find that.
Also, I'm just wondering....
Hon. G. Clark: First of all, are you in favour of it or against it?
D. Symons: Methanol? I want to know how it worked before I give that answer. If you tell me what the results of it were.... If it burned out the motors more quickly so we have higher maintenance costs, I'm against it. If it worked well
[ Page 12553 ]
because it's cleaner-burning fuel, I'm all for it. I'd be delighted to tell the minister where I stand on it when I know the results of that test. That was why I asked the question.
Tied in with that sort of thing -- because it is a cleaner-burning fuel -- I note that B.C. Transit doesn't go through the AirCare stations. What sort of AirCare testing takes place at the maintenance centres for the buses? Do they reach the same standards as expected from the public and for cars? Are they tested to those standards? What is done for the bus fleet as far as AirCaring goes?
Hon. G. Clark: B.C. Transit is exempt from the AirCare testing program.
G. Farrell-Collins: I stepped out for a few minutes earlier too, and I don't know if this issue was canvassed. But before the member moves on to the new rail links to the northeast sector and touches on SkyTrain briefly, I do want to ask the minister some questions about the changes that have taken place at the senior management level of B.C. Transit and about where we're at now.
It's been a fairly disruptive phase over the last couple of years at Transit, with a fairly large turnover in senior management fairly quickly after the last election. It seems to be a continuously unsettled scenario there. We've gone through a couple CEOs, and I know we have someone else in there now who seems to have the confidence of the minister and others. I'm just wondering where we're headed. Are things going to settle down, or are we...? What's the plan to try and stabilize the upper levels and echelons of B.C. Transit and to try and deal with some of the labour relations problems that have been there? I guess you can say B.C. Transit -- to a certain extent, as far as labour relations go anyway -- has been the Post Office of British Columbia. There need to be some changes, as the minister said, on both sides. I'm just wondering where we're headed in that direction. What are some of the corrections we're taking to stabilize senior management, to try and fix up some of that labour relations environment there and to make the corporation more productive?
Hon. G. Clark: I don't normally do this to my critic across the way, but I really did canvass this question in some detail and gave some undertakings to the member. I just don't want to go into it in great detail.
On the labour relations question, I believe we really have made some significant progress in the last few months with what was called relationship by objective, our RBO program, which was organized and coordinated by Brian Foley from the Labour Relations Board, who came in and spent two days. They're really starting to make some significant progress there. I just say that for the member. But if he could review the Blues, I've tried to be fairly full in my answers on the change at Transit.
D. Symons: There was some comment made earlier about commuter rail, just in passing. I believe the minister mentioned that he was for SkyTrain at the time it was put in. I have a concern that when Skytrain was put in, or before the previous government lost the election, there was an agreement to pick up the expense of the rather huge debt load, because of the cost of that technology they put in SkyTrain. This particular government, when they took over, basically did not follow through with that obligation of approximately $30 million to help pay off the debt charges on the outstanding principal of the loan.
If we could move into commuter rail now, I have some concerns. I'm not too sure that the figures the minister is giving on ridership and the cost per rider in commuter rail are what they're actually going to be. I have some nagging doubts that maybe the government has been over optimistic on how profitable or how close to making ends meet that particular route is going to be. Can the minister take some responsibility for the figures they've given for B.C. Transit, so if we find that indeed you were over optimistic and it doesn't live up to your expectations -- as happened to Vancouver when SkyTrain was built -- you're not going to dump that train onto the people in the lower mainland and the Vancouver taxpayer? You were on the side arguing about SkyTrain. You seem to be doing to B.C. Transit, the Vancouver transit authority, precisely what happened to them when SkyTrain was built: putting in a technology, telling them how wonderful it's going to be and then stepping away from the expense of it after it's put in place.
Hon. G. Clark: No, I don't accept that at all. We are in discussions now with the transit commission and with the city of Mission, largely, about the funding question. But I had a dinner meeting with the transit commission prior to the announcement, and we had a full briefing and a good and frank discussion. I am cognizant of the experience of SkyTrain, and it simply won't happen. I've given an undertaking to the transit commission that it won't. When we made the initial announcement, we said that the province -- B.C. Transit -- would pick up 100 percent of the capital costs, so right away there was no capital cost implication for the transit commission.
[11:45]
We're in discussion now with the operating side. I don't want to discuss our negotiations now, but I've given an undertaking to the transit commission that we understand their concerns and that we're working on it. We still have some discussions left with Mission with respect to the contribution we would like to see to commuter rail. So I give the assurance to the member that this is not at all like the SkyTrain situation. We're going to be working with the transit commission, and we have already made significant progress in that regard.
D. Symons: The question I asked was expressed by a number of the mayors in the region. I'm hearing you saying that there's going to be a floor that the government will support. Basically, it's a government deal; this is not a B.C. Transit deal -- in that sense. The government set up this program and is going ahead with it regardless, almost -- in a sense. I gather that you're saying that there is a floor, and that you're not going to say where it is right now. Will you be providing some cushion in the event that it doesn't live up to your expectations?
Hon. G. Clark: I don't want to give a definitive answer, because we're in discussions right now, but I am sympathetic to the notion that if ridership exceeds expectations, then.... If those mayors or municipalities would like a floor if the ridership is less than expected, then we're willing to consider that -- provided that if they exceed expectations, revenue will accrue to the provincial government or B.C. Transit in that respect. So we're having those discussions now about how to deal with the question of ridership. As I say, in our view these are not optimistic ridership numbers.
G. Campbell: The transit commission has been urging successive provincial governments for probably ten years now to stop unilateral actions. I recognize that the minister
[ Page 12554 ]
met with the commission, and I recognize that the chairperson of the commission has a particular interest in commuter rail. However, the transit commission has requested a protocol where unilateral decisions should be fully funded by the partner that is making those unilateral decisions. Is the minister considering fully funding the unilateral decision that's been made by the government with regard to commuter rail?
Hon. G. Clark: As the member knows, we took what I think is a historic decision to fully fund the capital costs upfront, and we are discussing the operating side with them. As your colleague from Richmond mentioned, there is a concern among some municipalities that there may be a risk associated with the ridership projections, and all I can say at this time is that I'm sensitive to that. But I happen to think that there may be a risk if they are too conservative. So we are discussing these questions with them. As the member knows -- better than I do, in terms of the details of some of these issues -- we think there are some revenue opportunities around selling coffee and other things on this service. It's a premium service, and we think there are opportunities for premium pricing. So all of that gets into the mix, and we're in discussions now with them.
Obviously, there are concerns about ridership and being insulated from that risk, and I am sympathetic to that. But in general, unless the members have any other information that I don't know about, I think my discussions with the commission are better than they've been in the two and a half years I've been responsible. We're working hard to avoid the mistakes of the SkyTrain system and to develop a protocol to make this successful, and I really am confident that we can do that. If it involves the government taking more of the risk associated with that, then I'm prepared to consider it -- again, provided that maybe there will be some rewards if the ridership is higher than expected.
D. Symons: I'll just go on with the commuter rail issue. I gather that it is coming out in the press now that the figures you were using are unrealistic. I am wondering how out-of-house these were done, and how much you have gone with figures that were gathered by people who were always in favour of the project; therefore the questions you are asking and the answers you are getting might have been skewed. If you ask somebody in the northeast sector if they would like better transportation into the downtown area of Vancouver, they will say yes. If you ask them if they would ride a commuter rail if it were there and if that is the way they would go each morning, that might not be the case. They will say yes because they think somebody else will ride it and free the roads up for them to drive in quicker, wherever they are headed. Depending upon how you phrase the question, you can get the answer you want. We seem to be having a great deal of discussion now, and it's in the press a great deal, as to how viable this operation is going to be.
There is a fair amount of money going into it; not nearly as much as building each kilometre of SkyTrain, but it's money that could have gone into completing the Barnet Highway the way it was initially designed -- four lanes of traffic as well as bus lanes -- and that's not happening. This seems to be precluding any upgrading of these other systems, and may be precluding the eventual arrival of some light rapid transit out to that particular sector. Now they have the commuter rail, and even if it's not working too well you have committed yourselves to it. You are going to arrange the bus routes out there to service this particular facility, as a lot of the bus lines in Vancouver service SkyTrain. You will have a vested interest in making it work -- or doing what you can to make it work -- and not look at other options.
Hon. G. Clark: I reject that line of reasoning. Let me give you some background on ridership numbers. We use exactly the same model as the GVRD for projections, and any simulation or mathematical model to make these projections has a number of assumptions in it. We changed three out of probably 100 assumptions from the Transport 2021 model to arrive at our forecasts. We used exactly the same models as everybody else. We concluded that park-and-ride stations will attract more commuter rail users than the model projected. We also projected an increase in ridership as a result of bus feeder routes into commuter rail. We only adjusted two or three assumptions from the Transport 2021 and the GVRD-generated model, and I think they are very reasonable ones. Any model with a variety of assumptions in it has problems, and the three assumptions we adjusted are very defensible in terms of what they do. By virtue of routing buses to the commuter rail stations, B.C. Transit will increase ridership, and that was not taken into consideration in the GVRD model.
There is absolutely no advantage to the government to have numbers which don't reflect reality. We want to make this successful, but we want to ensure that the ridership numbers are conservative, if anything. We also want them to be realistic, so that we can have a realistic assessment.
D. Symons: I was concerned, because the GVRD study.... When I was asking questions in the previous two years, the Minister of Transportation would always say they were waiting for the study to come out. The study didn't seem to indicate that commuter rail was very high on their list of priorities, as far as the various methods of solving that particular sector of the lower mainland was concerned. It seems that the one they didn't rate very high is the one that this government has taken.
What other studies...? I know one study that I was given when we were at the October federal pre-election rally.... You called a press conference out in Port Coquitlam announcing that you were discussing with Canadian Pacific Rail and the federal government the possibility of setting up a commuter rail, and how you could get them all on side. At that time you put out this study that seemed to indicate that this was a great thing. How many other studies has B.C. Transit or the B.C. government done on commuter rail? Have all those studies been made public now that the decision has been made to go ahead with it? It would seem that this was a good transit option, but what proportion indicated some concerns about it as a transit option? Surely you did more than one study. How many, did they all indicate that you should go ahead with it, and will you make them all public?
Hon. G. Clark: I'm sure they're all public as a result of freedom of information. There was a study done in 1975. I think that was the first one. There was a study done in 1981; there was a study in 1988. Those latter two were virtually updates of the 1975 one.
An Hon. Member: Was it '74 or '75?
Hon. G. Clark: I'm not sure -- 1974 or 1975.
An Hon. Member: It was 1985.
Hon. G. Clark: In 1985? There have been a lot of studies.
[ Page 12555 ]
When we took office, we engaged Brian Sullivan to do a review of the northeast sector. We had a citizens' advisory committee do a review. They recommended, based on these earlier studies, that we look at commuter rail again. Brian Sullivan, who is an expert in this field, was retained, along with a gentleman named Karl Englund, who is one of the foremost experts in commuter rail out of New Hampshire. They did a major study, and then the Crown corporations secretariat did some further review of that.
The ridership estimates from the New Hampshire experts and from Brian Sullivan are significantly higher than the ones we published and were relying upon. We were concerned about them being overly optimistic. We ran the models with.... Of course, they still believe that they weren't optimistic, but using an abundance of caution, we wanted to do a further review on it. Along with the Crown corporations secretariat, we then worked over the numbers again. We used the GVRD model. We made some very modest adjustments on two or three of the assumptions and came up with a much more conservative number. If you want to do a sensitivity analysis, we're about in the lower half of the range, depending on the assumptions you use, with the GVRD model being the lowest and the Sullivan report being the highest. All of that is public information.
Ridership is the risk associated with any of these services. I can't resist saying this: B.C. Transit was 100 percent wrong on their ridership projections for SkyTrain -- we're at double the ridership they projected -- and they were roughly 100 percent wrong on the ridership projected for SeaBus. New services in this region have historically been well received. We're not relying on Transit being wrong on that, but I think the record of Transit has been fairly conservative. We had a private consultant do a review, and it was more optimistic. We then used the GVRD model and came down to something that we think is very conservative. That's why I feel a fair degree of comfort on ridership levels. There is a risk associated with it; I don't diminish that at all. It's a brand-new service that has never been introduced into this market before.
D. Symons: I believe the projected ridership that you're using is somewhere in the neighbourhood of 6,000 passengers each rush hour. I note that B.C. Transit supposedly carries about 178 people across the Pitt River Bridge each rush hour and a little more than 1,000 people from Port Moody into Burnaby on the Barnet Highway, which is basically the route that commuter rail will take. I haven't seen these ridership studies, and I'm sure you must have done ridership studies. I basically ask if you would release those studies on ridership so we can see what they are, because the actual number that B.C. Transit is carrying now.... Going by the SkyTrain experience, it seems that the ridership you get is not people leaving their cars but people who rode the buses before and now ride on new technology. You're going to have those bus riders there, and that's nowhere near the 5,800 figure you're using. I'm just wondering if you can release those ridership figures; I would love to see them.
Just carrying on with that, I'll leave that with you, and maybe you can answer a few together. How much of the commuter rail cost is going to upgrade the CPR tracks? Once the upgrading is done, will CPR own all of those improvements?
Hon. G. Clark: First, the member has made a point which I think is a legitimate point of debate on commuter rail. One of the problems -- at least intuitively -- I have with the ridership numbers and why they're so conservative is because all the models show that what the member suggests is correct. In other words, people go out of buses onto commuter rail, and that's the only sure ridership. In the Coquitlam area we have the lowest percentage of people taking the bus in the lower mainland. If you go to the Coquitlam area, they'll say the reason is that they have poor-quality service. I think there's some truth to that, although we can't bank on it.
So when we do the ridership numbers and say that the only people we can guarantee are people moving out of buses onto commuter rail, then the numbers are very low. However, when we're dramatically improving service, as commuter rail would, then we anticipate that the ridership number will grow, and that's the area of debate. Will people move out of their cars and into commuter rail? The evidence in North America is that there is some movement because of the different kind of service, but that's a bone of contention or part of the debate.
The railway infrastructure costs were estimated at about $64 million, and those are CP Rail infrastructure improvements, which we will be leasing from them or working with them on. We have been working hard to ensure that there's no off-loading or hidden subsidy to CPR and that these improvements are absolutely necessary for commuter rail. One of the reasons we had Karl Englund from New Hampshire was to make sure that we weren't getting sucked in by CPR to do some upgrading for them. We're still negotiating with them -- all the time, actually -- on what's absolutely required to make the system work. But our budgeted number is $64 million.
D. Symons: I have just a few other questions dealing with commuter rail. The projected cost of this -- and it's a rather flexible cost you seem to have put out, within a time frame -- is around $100 million. But I don't believe that includes the rolling stock. I gather that you're leasing the rolling stock, and I'm not sure whether the leasing of this rolling stock has gone out to tender. I wonder if you can tell me if this has gone out to tender around North America or whether it has been a closed agreement with Bombardier, which I believe is supplying them. I wonder if you might be able to go into that and explain how much the leases are going to cost. Indeed, when we give a price for this, the rolling stock is part of that price, and I think you've been underestimating or underreporting what the cost of our commuter rail is going to be if you're not including the rolling stock as part of that cost.
[12:00]
Hon. G. Clark: Well, I've been very upfront about it. I don't believe I've been understating it. The member is correct: there's $102 million or $103 million in infrastructure improvements, and then there's rolling stock. We have several options. We plan to be doing a lease on the rolling stock, so we aren't absorbing the extra capital cost, but we do have several options.
We did an invitation to quote on commuter railcars. We received three submissions: Morrison Knudsen, which I just visited last Thursday in upstate New York, in a town called Hornell; Bombardier; and a two-year lease on old Go Transit cars. We received two international unsolicited inquiries -- one from Talbot of Germany, which eventually declined to submit a quote, and the other from Waggonbau of Germany. Waggonbau's proposal was actually quite interesting. It's a former East German company that is the largest producer of commuter rail cars in the former East bloc countries. We have some concerns about the technical ability to meet North
[ Page 12556 ]
American standards, and that one is a bit of a long shot. The bid looks fairly attractive, although I'm not sure that it's in the running.
So we may have new railcars constructed. That may be an option, but it'll be on a lease basis so that we're not incurring the capital cost; we'll be incurring the lease payments over time. That's quite normal in the railway business. I hope I've been very upfront about that in all the announcements and public discussions. I think the numbers are upfront, and we haven't been hiding anything in that respect.
D. Symons: From what you were just saying, these are expressions of interest -- I'll call them that -- that you have from these various companies. At this stage you're not asking for formal bids. Or were these formal bids that you were referring to? If they were, could you give us a rough framework, like you did for SkyTrain, of what these leases might cost per year for the number of railcars that will be needed? Were these formal bids, or an expression of interest at this stage of the game?
Hon. G. Clark: I've just been advised to be careful, because we are negotiating right now with some options around that. The range would be between $4.5 million and $7 million a year in costs for the lease payments.
D. Symons: And the other part? I didn't quite hear the answer to whether these were just expressions of interest.
Interjection.
D. Symons: These are now formal bids coming in. Okay, thank you very much.
Unless other members have some questions on commuter rail, I think that's all I have.... No? I've asked about the SkyTrain station. It may take me a moment to sort my papers out, so I hope someone else will have a SkyTrain question.
K. Jones: Could the minister tell us what plans Transit has for extending SkyTrain in through Surrey?
Hon. G. Clark: No further extension is planned at this time.
K. Jones: Does Transit have a five-year capital plan?
Hon. G. Clark: We are in the final details of a ten-year capital plan about the future vision and direction of transit, similar to the B.C. Ferries announcement this morning.
[L. Krog in the chair.]
K. Jones: When will that plan be public?
Hon. G. Clark: In the fall.
K. Jones: Does that mean we will have a long-range plan for transit extensions throughout the province?
Hon. G. Clark: If you agree with me that ten years is long-range, then yes.
K. Jones: It's good to see that we're going to start doing some long-range planning in British Columbia. It's long overdue. It certainly wasn't done under past governments, and so far under this government it hasn't been done. It's nice to hear that it is now being done.
Could the minister tell us what bus service or alternatives to bus service are being planned in the Fraser Valley area, particularly in the Surrey-White Rock and North Delta areas?
Hon. G. Clark: On the bus service side, we've had this discussion. Improved service in any of those communities is really up to the commission. It's not a government decision. We have some influence, but really little influence on the expansion of bus service routes. That's up to the commission.
K. Jones: Does the minister mean that he will be implementing the minibuses that have been talked about in the Surrey area or on the development routes, so we can start getting transit into the brand-new subdivisions, particularly buses that don't have the long turning radiuses that the regular buses require?
Hon. G. Clark: It's up to the commission.
K. Jones: Is the minister saying that the ten-year plan he's talking about is all up to the GVRD transit commission on the lower mainland?
Hon. G. Clark: No, it's a ten-year capital plan. We may have a provision in the capital plan for more buses, but it's up to the commission as to where they go and what routes they're on.
K. Jones: Just to clarify that, Transit will then provide whatever is requested by the commission. Is that correct?
Hon. G. Clark: Absolutely -- within the budget provided.
K. Jones: Therefore the transit commission will create the budget, the budget will then go to the transit authority and the transit authority will then take it to the minister, who will then take it to Treasury Board. Is that the program for financially organizing this? Or is there some variance to that?
Hon. G. Clark: When I said within budget, the province sets the budget, but the commission has it's own sources of revenue. If they have a surplus in their budget, they can spend it, or they can submit to the province that we should match it. That's how the process works. As a result of some of the changes we made to increase funding sources for them, the transit commission does have a small surplus. They've now agreed to spend that, and I support that.
Within our capital financing ability as a province -- and I know the members opposite talk a lot about that, and they are concerned about debt -- we will be providing funding, a capital envelope, for a variety of initiatives, including more buses, other kinds of buses or small buses. It will be a limited budget; it won't be unlimited. Where they go will be determined by the commission. The commission may come and request more buses, to which I would respond that the province can't afford it, for financial reasons. Or I would suggest that they raise their own sources of revenue to provide more buses. They can do either.
D. Symons: I rise with a bit of fear that I might incite the wrath of the member for Alberni. Nevertheless, I think I will ask the question. The B.C. 21 study came in with a rather peculiar recommendation, I suppose, or result, when it
[ Page 12557 ]
discussed the relative merits of rapid transit going out to Richmond -- which happens to be my domicile -- or out to the northeast sector. Basically, what they said was that Richmond deserves it because they have the population base there now to support transit, but the northeast sector, because of its potential growth, should get it if they only build one; but if they build two, they should build both, and Richmond really deserves it. If you want to get the best bang for your dollar, the result of that study seemed to say that it should go out to Richmond. Also, since you now seem to be supplying commuter rail to service the northeast sector, I would assume that because of the GVRD study and the fact that you're doing something in the northeast sector, in all fairness you're going to commit to supplying a rapid transit link to Richmond shortly. Could I have some comment from the minister on that?
Hon. G. Clark: I have to reject your premise. First of all, commuter rail is not a substitute for rapid transit. It's not rapid transit; it's older dedicated rail lines. It's an important addition to transit in those communities, but it's not a substitute for LRT, and it will not slow down the planning for LRT or ALRT to the northeast sector.
Secondly, the member is correct in his analysis that the northeast sector has a higher potential for density, but right now there is a higher population in Richmond. Both of these routes are under active consideration. We're very sympathetic to both of them, and as part of our ten-year capital planning exercise, we're reviewing that. The costs are very high for both those routes, so we have to be very careful with our limited resources. We don't have any bias on it. I also want to say that commuter rail did not bias us, either, in terms of discounting any potential rapid transit to the northeast sector.
G. Farrell-Collins: I know the minister has to change his staff. We've finished with Transit and will move on to B.C. Hydro.
The member for Surrey-White Rock has a line of questioning he wishes to pursue with the minister on B.C. Hydro with regard to Kemano, I believe. If the minister wants to just take a minute to get his staff in, we can then launch ourselves into that area.
W. Hurd: With respect to the Kemano completion hearings, I wonder if the minister can advise the committee exactly what role his ministry will play in terms of receiving that information, and what he might direct Hydro to do in response to the findings of that commission? The fact is that it does pertain to the B.C. Utilities Commission, which is a separate and independent body but which, nevertheless, has been receiving information from B.C. Hydro with respect to some of the business aspects of its relationship with Alcan. Could the minister advise us what role he expects his ministry to be playing with respect to the ultimate report that is delivered from the B.C. Utilities Commission to the government?
[12:15]
Hon. G. Clark: At the moment, I cannot conceive of a specific role the Ministry of Employment and Investment would play in the receipt of that, other than that we are responsible for promoting investment in the province -- if there's any relationship there. But I honestly don't think there's a role for the ministry. There is a role for B.C. Hydro in all of these discussions, but not for the ministry.
W. Hurd: My questions obviously do relate to what role Hydro might play. Obviously, Hydro is what we're discussing; it is under the purview of the ministry. I am interested in the business relationships between Alcan and B.C. Hydro, particularly with respect to the Kemano agreement. Can the minister advise the committee whether, to his knowledge...? Can he describe for the committee the nature of the discussions that have gone on between Alcan and B.C. Hydro in the last year or so, even continuing through the hearing process with the B.C. Utilities Commission? Can he advise the committee whether the power purchase arrangement with Alcan has been modified in any way in the past few years? Are there any changes to the agreement? Perhaps I could just start with that sort of general question.
Hon. G. Clark: First let me introduce to the House John Sheehan, on my left, who's the present chief executive officer of B.C. Hydro, and to his left is Thom Thompson, vice-president of B.C. Hydro and responsible for aboriginal affairs as well as corporate affairs of the corporation.
The answer to the member's question is no, there's been no change to any contractual relationship between B.C. Hydro and Alcan over the period the member was asking about or, really, since the signing of the agreement.
W. Hurd: The minister and his Hydro officials, I'm sure, will be aware that there has been a line of questioning at the B.C. Utilities Commission hearings with respect to the business arrangements between Alcan and B.C. Hydro on this particular long-range power project. Indeed, in the long-term energy plan of B.C. Hydro there is an assumption in the tables presented that Alcan will deliver energy and capacity according to provisions of a long-term purchase agreement with B.C. Hydro through coordination with the Kemano completion project. So clearly there's an assumption built into the long-range energy plan of B.C. Hydro that some 500 to 600 megawatts of energy, I believe, will be available on a long-term basis.
Could the minister advise us whether Alcan would have been forced to work with B.C. Hydro in achieving a fast-track capital cost write-off for the Kemano completion project? The minister may or may not be aware that that was one line of questioning pursued at the B.C. Utilities Commission hearings: that Alcan may have been able to achieve a three-year write-off of the entire Kemano completion project, and that B.C. Hydro may have played some role in assisting that.
Hon. G. Clark: First of all, there's a commercial deal between B.C. Hydro and Alcan; and how the contract is structured, I have no doubt, is to try to advantage the parties in their business arrangements. I don't know for a fact, but it certainly wouldn't surprise me if Alcan structured the agreement in such a way that they could take advantage of accelerated depreciation or other opportunities. Would B.C. Hydro be assisting the company? I wouldn't put it that way. I would say it was a normal commercial relationship between two parties.
Just to back up a minute, the member is correct that Alcan is legally required to provide to B.C. Hydro a significant amount of power. It's in our long-range energy plan; in fact, it's in our short-term energy plan. They are obligated by contractual arrangement to provide that power whether or not Kemano completion proceeds. Some people feel this power agreement is attractive to Hydro; for others, there's some debate about that, given the current energy prices.
[ Page 12558 ]
Nevertheless, that's part of our planning. Obviously it would be very irresponsible of B.C. Hydro or the government to not hold Alcan responsible for providing a significant amount of power to B.C. Hydro at this time in any of these discussions. It is completely in our energy plans that we will receive a certain amount of power as a result of the agreement reached in 1987, I believe, by B.C. Hydro and Alcan.
W. Hurd: It was last year in the assembly that the Premier rose to make a ministerial statement with respect to negotiations between Alcan and the government. According to Hansard, at that time the Premier indicated:
"B.C. Hydro may enter into discussions with Alcan in order to arrive at a fair price for converting its current short-term contracts for surplus Kemano 1 power into a long-term contract. Such arrangements have the potential to mutually benefit Alcan and British Columbians."
It appears that that conversion, according to testimony at the B.C. Utilities Commission, has enabled the company to achieve a fast-track write-off that wouldn't have been otherwise achieved. I guess the question remains, and it certainly has been raised at the B.C. Utilities Commission hearings, that if the company was able to achieve a three-year write-off on a potentially $1.2 billion project, as opposed to the normal write-off of 12 to 15 years, why wouldn't B.C. Hydro -- since the government obviously would have to acquiesce in the arrangement of a fast-track write-off -- have achieved some benefit for the people of British Columbia?
Hon. G. Clark: I'm not sure where the line of questioning is going. B.C. Hydro acts in a commercial capacity, and where it's in their interest to make any arrangements with Alcan, they do so. My staff here -- and we have some significant expertise in the chamber tonight -- say that short-term contracts have nothing to do with the fast-track depreciation that Alcan may be attempting to achieve, nor does the government of B.C. have anything to do with it. It's a federal matter, not a provincial matter, about whether they are qualified in the way they've structured their agreement.
Again, B.C. Hydro in its commercial capacity may have agreed to some contractual arrangement which allows Alcan to pursue that tax advantage. That's normal business practice with any two commercial corporations -- one of which is a Crown in this case. I certainly haven't intervened politically in that regard, nor has the government. At this point there is no write-off associated, as we understand it, with Kemano completion. Any arrangements at the moment are to do with Kemano 1, the original deal.
W. Hurd: As I'm sure the minister knows, the provisions for capital cost write-offs are different for independent power plants than they would be for a plant that is using the energy for industrial purposes. So clearly what appears to have happened in this case is that Hydro has purchased the existing power plant from Kemano 1, in exchange for some sort of arrangement which allows the power from Kemano 2 to be used for industrial purposes. There appears to be, with the understanding of Hydro, a business arrangement that has enabled the company to achieve a fast-track write-off of three years for the entire project. In light of that information, which I'm sure the minister is aware was pursued at the B.C. Utilities Commission hearings, it appears that B.C. Hydro has been in a position to convey a significant benefit to the company. My question really relates to whether or not Hydro, in agreeing to that arrangement, was able to extract any benefit for the people of the province of British Columbia.
Hon. G. Clark: First of all, I just want to be clear. Any of these arrangements are as a result of the 1987 agreement, which long predates anything I have to do with the current practices of B.C. Hydro. If there is an arrangement that allows them to fast-track, it's as a result of the original agreement in 1987. There may well be, and that would be a commercial transaction between the parties. That's the first point. Sorry, it was the 1989 agreement, I've just been reminded.
Secondly, was there any advantage to the government of B.C. or B.C. Hydro to structure it in this way? To follow the line of the logic of the member, I guess the answer is yes. The power at the time was at a very attractive price. In fact, when I was in opposition, looking at the question, my criticism of the arrangement was that there was no commitment to provide any further value-added by Alcan, given the deal. But what made it hard to criticize in opposition, as I recall, was that the price that B.C. Hydro was receiving for the power was significantly lower than alternative sources of power at the time. The market is changing and continues to change very rapidly, but at the time of the announcement of this agreement there was a very attractive price for power. So in that commercial arrangement, B.C. Hydro achieved an attractive price for power. There are all kinds of elements of a very complex agreement worked out in commercial terms between the parties, which advantage one party or the other. But in a nutshell, the advantage to Hydro or the government of B.C. -- Hydro being an agent -- was in what appeared at the time to be inexpensive power.
W. Hurd: During the time in question, documents presented to the B.C. Utilities Commission clearly indicate that the government -- at least, B.C. Hydro -- was making purchases of interruptible power on a short-term basis from Alcan. It's my understanding that some agreement has been struck to convert some of those interruptible purchases to a long-term commitment. The minister indicated that in fact the agreement has remained level and has been unchanged during the Utilities Commission hearings. But he must be aware that submissions to the hearings carry a contrary point of view with respect to relations between the company and Alcan. My concern is that the decision the B.C. Utilities Commission comes to with respect to water flows in the Nechako will clearly have a direct effect on how much power B.C. Hydro is ultimately able to purchase. I ask the minister, in light of Hydro's policies on social commitments and responsibilities, whether continuing to deal with the company and converting interruptible power rates to long-term contracts is in the best interests of B.C. Hydro at this time -- given the fact that for environmental purposes, the B.C. Utilities Commission may order a dramatic reduction in water flows in the Nechako or may suggest to cabinet that the project be scrapped altogether. I wonder if the minister is comfortable with the role that B.C. Hydro has played with respect to the B.C. Utilities Commission hearings and dealings with the company on behalf of the people of British Columbia.
Hon. G. Clark: I want to separate the two issues here. First, there's the agreement reached with B.C. Hydro under the previous administration. That is unchanged. It's in part a subject of the Utilities Commission review; at least, it's being viewed in that context. I'm satisfied that B.C. Hydro has
[ Page 12559 ]
cooperated fully with the independent review. That has been unchanged, and that's the point I made earlier.
Having separated that, in recent months Alcan has had surplus power as a result, I assume, of the decline in the aluminum market. They have made short-term power arrangements or sales to B.C. Hydro in a commercial way. If the member is suggesting that B.C. Hydro should not purchase short-term surplus power over the next little while because of concerns about Kemano completion, then I would say that I don't agree. I don't agree with it for two reasons. One is that, as a utility, B.C. Hydro is obligated by law to take the cheapest source of power. To do otherwise would be very costly to British Columbians and ratepayers, and we'd be subject to legal action and all kinds of things. I'm sure of that. The only way around that would be for cabinet to direct the Utilities Commission to exempt B.C. Hydro from purchasing the cheapest source of power.
[12:30]
It's very problematic to get into discriminating against any company in British Columbia, given the significant requirements that B.C. Hydro and the people of B.C. have for power. This is short-term surplus power as a result of a decline in the commodity market associated with aluminum. That's the first point. If you're asking my opinion of the original deal, then maybe that's a discussion for another day. From B.C. Hydro's corporate perspective, they negotiated a deal in 1987 -- the agreement was in 1989 -- which was a relatively inexpensive source of a fairly large amount of power. I appreciate that how Alcan is generating that power is subject to further debate. We have done nothing to enhance or detract from that original agreement as far as I know, but there have been some short-term power arrangements as a result of surplus power from Kemano 1. I see no reason at this time to direct B.C. Hydro not to pursue those arrangements.
W. Hurd: At a B.C. Utilities Commission hearing, it was pointed out that even over the course of commission hearings, B.C. Hydro has been purchasing electricity from Alcan and has been making money by doing it. I'm advised that the company purchased 156 megawatts, a firm quantity of electricity described in two separate agreements. One is apparently four to five years old, and the other is about one to two years old, which obviously means that B.C. Hydro entered into that agreement while the current government was in office. I also have letters that the previous minister responsible for B.C. Hydro wrote to the B.C. Utilities Commission on behalf of Alcan and B.C. Hydro with respect to this particular arrangement. I guess the point I'm trying to make to the minister is that....
Hon. G. Clark: Are you saying we shouldn't do that? Do you understand the significance of what you're saying?
W. Hurd: I am attempting to point out to the minister that by agreeing to change the terms of reference or the agreement for the purchase of power from Kemano 1 and permitting the company to use the potential power from Kemano 2 for its industrial purposes, B.C. Hydro has made it possible for the company to apply to Revenue Canada for a tax ruling which will result in hundreds of millions of dollars of savings to the company. Clearly, that's what will occur. The information was certainly presented at the B.C. Utilities Commission hearings. No one desires to see the company discriminated against, but if B.C. Hydro is the linchpin in helping a company achieve a tax write-off which could earn it hundreds of millions of dollars, surely this minister, of all people -- or this government -- would want to get a piece of that for the people of British Columbia.
Hon. G. Clark: Alcan may want to do whatever they do for tax purposes, but I want it to be clear that the short-term purchases of power that the member alluded to very recently have been going on between Alcan and B.C. Hydro for many years. This is surplus power from their existing Kemano project. B.C. Hydro buys surplus power, and it goes up and down depending on the market and the aluminum industry. That continues to happen. It's good business practice for B.C. Hydro, and the cost of not doing it would be significantly higher for the B.C. ratepayers. That's the first point. Second, there is another agreement with Kemano 2 for B.C. Hydro to buy long-term firm power, which is very attractive to B.C. Hydro -- or appeared to be very attractive at the time -- should the Kemano completion project proceed. They are not related. If Alcan has chosen to structure it in such a way that they're trying to sell more surplus Kemano 1 power to B.C. Hydro so they can use Kemano 2 power for themselves for tax purposes, that's Alcan's doing. I'm not privy to any discussion around helping them to structure the deal for tax advantages.
[D. Lovick in the chair.]
All I can say is that we have taken the position that they have legal obligations to B.C. Hydro, and we're not relinquishing those legal obligations with respect to the original agreement for long-term firm power. We will purchase short-term power in blocks from Alcan in the way we have for many years -- if it's cost-effective to do so. To do otherwise would be very irresponsible to the people of British Columbia. We're not discriminating against Alcan, nor are we complicit with them or involved with them in any dealings other than commercial dealings, which has been the case for some time.
The other point I want to make is that the long-term contract commitments that they have made -- the firm power we were talking about earlier; I made this distinction -- which we have a legal right to, are not contingent upon the completion of the Kemano completion project. So this notion that some of it's going from one plant and some of it's going from the other plant may be in Alcan's mind, and they may structure it for tax purposes, but from B.C. Hydro's perspective, the long-term firm power -- which they're committed to provide to B.C. Hydro, at what were then attractive terms -- is independent of whether or not Kemano completion takes place. It's an important legal right that B.C. Hydro has. They are required to start providing us with a significant block of long-term firm power in 1995. How they structure it between Kemano completion and Kemano 1 is what they do for tax purposes. From B.C. Hydro's perspective, we have nothing to do with Kemano completion -- or otherwise. We have long-term firm power, and short-term contracts which we buy from time to time when it's advantageous to both parties.
W. Hurd: That answer from the minister raises more questions. Clearly, Hydro has to agree to move the power in its transmission lines in order for that business arrangement to take place. If the minister is suggesting to the committee that Hydro is not a player in helping the company achieve that tax ruling, he is clearly incorrect. Hydro has to move the power in its transmission lines, and by virtue of its regulatory authority, the B.C. Utilities Commission would have to approve such a transfer of power. It is my
[ Page 12560 ]
understanding that B.C. Hydro has been very supportive of that business arrangement. So the picture the minister is creating of a Crown corporation that has no role to play in assisting the company in achieving that tax write-off just doesn't fit with the facts.
It raises other questions with respect to the B.C. Utilities Commission hearings. One of the issues that I raised in this House was a reluctance by B.C. Hydro to provide information when it was requested to do so by the B.C. Utilities Commission people holding the hearings into the Kemano completion project. One of the pieces of information they initially declined to provide was a summary of the business relationships between Alcan and B.C. Hydro. I find it troubling that a Crown corporation is so actively involved with a company that is participating in a B.C. Utilities Commission process looking into whether the project should even proceed or not. I think the Crown corporation is attempting, for whatever reasons, to divorce its business relationship with Alcan from the issue being presented at the hearing -- namely, will the project even be permitted to go head if the environmental impact is deemed to be not in the best public interest.
I again point out to the minister that it's my view that Hydro assisted the company in achieving that fast-track write-off. It's a business arrangement that would not be available to any other independent power producer in the province. No other IPA in British Columbia could work with the Crown corporation to achieve that kind of business relationship. It is disappointing to hear the minister say that even though Hydro is an active participant in its business relationship with Alcan -- and in my view, did play a role in helping them achieve the write-off, which could amount to savings of quite a few hundred million dollars -- he has not in fact sought to secure any benefit for the people of British Columbia.
Hon. G. Clark: A correction, for the record: any private power producer that offers Hydro the kinds of arrangements that Alcan has is welcome to do so. The fact is that if Alcan has surplus power as a result of a declining aluminum market, then they can price it in such a way that it's incredibly attractive to B.C. Hydro, because it is surplus to their needs. If any private power producer has power at the price Alcan is offering, B.C. Hydro is obligated to purchase it if they need it. They are obligated to do so by the Utilities Commission -- as they should be. So there's no special arrangement there, and I can't say that strongly enough.
W. Hurd: In further pursuing the business relationship between Alcan and B.C. Hydro, can the minister advise us, to his knowledge, what arrangement Hydro has made with respect to the water rights on the Kemano completion project? The price of the water through the diversion tunnel, I understand, is tied to the international price of aluminum. Can the minister advise us what the company, to his knowledge, might be paying for the water that they are seeking to divert in the Nechako River?
Hon. G. Clark: I'm not sure what the question is. In terms of water rental, when they use power for their own use they pay a very small water rental fee, a fraction of what it is. When it goes to B.C. Hydro, B.C. Hydro pays the full water rental that they pay -- which is very substantial, around six mills. That's the reality.
While we're talking about this, I would really be interested in what the Liberal Party's position is on the Kemano completion project. We've been trying for some time to get an answer about whether they're in favour of Kemano completion or not. I guess this line of questioning indicates that they are opposed to it. That's interesting knowledge, because I've heard them argue both sides of this question, as they do with most questions. Of course, this is not uncommon for the Liberal Party. I would really be interested in what the member's view is -- whether he's taking a position now which could cost the taxpayers millions and millions of dollars and would have no impact on Kemano completion in any event. It's a puzzling question.
W. Hurd: I've been asking a number of questions and getting even more puzzling answers with respect to the business relationship between Alcan and B.C. Hydro, which is a considerable relationship. That's been demonstrated at the B.C. Utilities Commission hearings. I don't have too many other additional points to raise with respect to this agreement.
I just want to point out to the minister that information has been requested from B.C. Hydro by the B.C. Utilities Commission, and there was an initial refusal to release information. I know there was a period of time when B.C. Hydro was not anxious to release information about its contractual arrangements with Alcan.
[12:45]
Just going back to last year, I wonder if the minister can advise the committee exactly what the Premier was alluding to when he talked about reopening discussions with Alcan in connection to power purchases. The Premier made a ministerial statement in July 1993 which indicated that he wasn't comfortable with the negotiations between the company and the province. We heard the minister tell the committee today that the agreements remain level. I just wonder -- since he's advised the committee that in fact the agreements have been the same forever under his government -- what exactly, in his view, the Premier was alluding to when he stood up in the House and made a ministerial statement that, at the time, was quite uncomplimentary to the company.
Hon. G. Clark: You'll have to ask the Premier. I'm not going to get into debate about what the Premier said with respect to Alcan a year ago. We're here discussing B.C. Hydro's role in this, and I've been very clear in terms of its business relationship.
D. Mitchell: I too have a couple of brief questions for the minister on a power-related issue that not only involves B.C. Hydro but in fact explains the rationale for the existence and creation of B.C. Hydro: the Columbia River Treaty. I know I've chatted privately with the minister about this. The thing that interests me is that while this is an important story and issue affecting the province, it has not received much attention.
I'm not really sure -- at this time of the night, in this committee -- that this is the proper venue to be discussing this. I apologize to the officials who have to be here at this time of night. It's probably not the best format for meaningful discussion. But the minister is certainly willing to answer questions, and I appreciate that.
Just in the last few days, I noticed tiny articles in the back pages of some of our newspapers talking about one of the most important issues affecting our province over the next few decades: a draft deal has been reached on the Columbia River Treaty. This is for the second half of the big Columbia River Treaty -- the second 30-year period of this major treaty -- that not only launched the B.C. Hydro and Power Authority but also is going to affect our province's power
[ Page 12561 ]
requirements over the next number of years. The treaty has not been ratified yet; the terms of the treaty haven't been finalized yet. But apparently we have a draft treaty now in place. Is it possible for the minister to discuss the terms of that draft treaty and just give us a quick update on the status of it? When will we see the final terms of the treaty?
Hon. G. Clark: First of all, I have to say that B.C. Hydro is not a party to the negotiations. It is between the province of B.C. and our American counterparts. The negotiations are being handled by two ministers, myself and the Minister of Energy, and there is a staff committee handling negotiations, which is Marvin Shaffer, who works for my ministry, and Brenda Eaton, the Deputy Minister of Energy. I think it's fair to say that Marvin Shaffer has been the lead spokesperson on the negotiations.
The member is correct in saying that there is a large technical team required for such very important negotiations, the bulk of which comes from B.C. Hydro. So B.C. Hydro is actively involved in a major way in these negotiations. But there is an important distinction in terms of the entitlement. So it's obviously not a treaty that we're negotiating. It's the return of power or the entitlement and whether and in what form we may resell it that the negotiations are about.
It's fair to say that we have the draft of a proposed sale agreement, and so it's premature to make any sort of announcements at this time. We have been negotiating intensely for over a year. I really can't comment while negotiations are underway, except to say we are clearly getting closer to some arrangement with respect to the treaty entitlements.
D. Mitchell: I appreciate the distinction the minister has made about the negotiating team. I hope he doesn't mind pursuing this a little bit further in the review of B.C. Hydro during his estimates; it will save time later on when we get to the Crown corporations secretariat.
The minister appears to be briefed on this. I'd like to ask him if he can inform the committee as to what instructions were given to the negotiating team, which the minister has indicated is made up of Dr. Marvin Shaffer and Brenda Eaton. What instructions were the negotiating team given? Is it possible for the minister to inform us of that?
Hon. G. Clark: The instructions were to get the maximum benefits for British Columbia.
The Chair: I'm sure we're all reeling from surprise at that answer, but the member for West Vancouver-Garibaldi continues.
D. Mitchell: I know the minister must be well briefed on this. We're talking about the second period of the Columbia River Treaty, a 30-year period where we have the right to take back the tremendous downstream benefits of this treaty that were negotiated back in 1964. They were extremely controversial in our province a generation or so ago, but now we're starting to realize the tremendous potential benefits of the second half of this treaty. In the second 30-year period we can either take back the power that we presold for the first 30-year period, or we can sell that power again to the Bonneville power commission and other authorities in the States that might be interested in purchasing it.
The minister says that we want to get the best deal possible for British Columbia. I have a few questions about that. Are we interested in getting the downstream benefits returned to British Columbia in power or in cash? In the minister's opinion which would be preferable? I'll leave it at that because I don't want to get too complex. What is the best deal for British Columbia according to this administration?
Hon. G. Clark: Just to keep it clear, we get the power; the member knows that. That's what the entitlement is. We get the power back at Oliver. The question is whether we can or should negotiate something different than getting all the power back at Oliver. It costs $150 million for Bonneville to build a transmission line to Oliver. The greatest need for power that we have is in Vancouver and on the Island. So that's where you start saying: "Maybe the power should be returned to Blaine, rather than to Oliver. That saves you $150 million, Bonneville, so give it to us, or give us $149 million, and you're still better off." I'm making up these numbers, but they're in the right order of magnitude. Obviously there's lot of room for discussion in that regard.
We receive the power back at Oliver. That can be triggered at any time, including today. That would commence immediately. There are some construction costs and some environmental impact studies, etc., needed for massive transmission lines up to Oliver, and there are some on our side in terms of transmission lines through the Okanagan Valley. In any event, the return of that power to British Columbia is of use to British Columbians, because it means that we will not require the added expense of building new facilities or independent power projects or anything.
The other option is to have the right to resell the power back to the United States in a more flexible arrangement, rather than another long-term sale, as was done by W.A.C. Bennett. We have been discussing those very options and what's in their interest and what's in our interest with the Bonneville power authority. I already mentioned to you that it may be in our interest not to take the power back at Oliver but to take it back at Blaine, but that's very much in the interests of Bonneville power authority because of the significant savings that accrue to them by returning it to Blaine. There's obviously room for discussion there.
I can't really say any more than that, except to say we've been grappling with these issues. It's a very complex commercial arrangement that we have been attempting to review. The bottom line for British Columbia is a very rational review and a net present value analysis of the various options.
I'll say this: one of the obstacles to trade that we face is our inability to access the American market with our power. Bonneville has constricted access, so one of the things we are interested in as a government is whether or not these negotiations would give us more flexible arrangements to pursue power sales in parts of the United States that have heretofore been blocked by Bonneville.
If you want to get some negotiating mandate instructions, it's obviously to maximize revenue or the cash or power equivalent to British Columbia; it's to see whether there are opportunities for more flexible arrangements than in the past for access to the American market; it's to see whether or not there are alternative places to receive the power which would be financially beneficial to British Columbia. There are some other technical questions around capacity versus energy. There may be some opportunities for sales of capacity, which are advantageous to us, as opposed to energy. Anyway, I won't get into a long discussion, but I think that gives you -- I know the member is familiar with this subject -- a bit more of a handle as to where we're going on some of the discussions.
[ Page 12562 ]
D. Mitchell: Hon. Chair, I appreciate the minister being as forthcoming as he is on this, and I know he is sensitive about going any further. I'd like to just ask him a couple of other brief questions on this.
I know that when the treaty was first signed three decades ago, it was criticized by some as a massive sell-off of our birthright as Canadians. That's not a view that I've ever subscribed to, but it's interesting that now that we're contemplating the second half of the treaty, we're looking at some potentially tremendous benefits to British Columbia. Could the minister tell us what the value of the benefits for the second half of the Columbia River Treaty will be to British Columbia? What would be the dollar value, the net present value, of the treaty? Does the minister have an estimate of that?
Hon. G. Clark: I want to be careful on the net present value side, because that's part of negotiations. Let me put it the other way. Over the life of the agreement -- there's another 20-year life span when the entitlement returns to British Columbia.... It's worth about $6 billion over the next 30 years. How that flows and, if we were to resell, how we might resell it, shape it and sell capacity now -- all of that -- impacts on the net present value, because you're really dealing with a discounted cash flow now. So the actual cash dollar return in 1994 dollars is about $6 billion.
It is a very massive and significant asset that the people of British Columbia have as a result of that legacy, and it's one which I think is very exciting, given all the things that are going for British Columbia -- the lowest debt per capita, the highest job creation in the country and all of those factors in this magnificent economy. To have this asset there is of enormous advantage to British Columbia. Particularly important to the future of the province is how we handle those discussions, and that's why we're taking such time and care in handling them.
D. Mitchell: I'm pleased to hear the minister speak about the Columbia River Treaty in terms of its positive value to British Columbia. The minister is a representative of a party that was once among the staunchest critics of the Columbia River Treaty itself. So it's enjoyable for me to hear this minister get up and speak the praises of this treaty. I think that's a tribute to the Premier of the province who actually guided the negotiation of the treaty in 1964 -- the former and late Premier W.A.C. Bennett. He was criticized tremendously at the time, both inside and outside the province, for negotiating this treaty. Now it's interesting to hear a member of the NDP, a minister today in 1994, singing its praises.
The minister is talking about the second half of a treaty worth in the range of $6 billion to British Columbia. Clearly, this is one of the most significant streams of revenue that the province will see from any single project in the next generation. So this is a very significant deal.
[1:00]
Can the minister make a commitment this evening in the committee that the benefits to British Columbia from the second half of the Columbia River Treaty -- the estimated $6 billion that he referred to -- will indeed be enjoyed and will come back to all British Columbians, that these moneys will not fund any pet project of any current or future government but will be enjoyed by all British Columbians? The reason I ask this is that this was a specific promise made by Premier Bennett, who negotiated that treaty back in 1964. He argued very strongly and very publicly in this Legislature that the benefits of the Columbia River Treaty, particularly in the second half of the treaty, should be enjoyed by all British Columbians. So can the minister tell us how that $6 billion will come back to the province, and can he tell us whether or not that promise or commitment by W.A.C. Bennett will come true?
Hon. G. Clark: First of all, let me say that very few people believed at the time that there would be any benefit to the second half of the treaty. The real reason there is a significant benefit in the second half of the treaty today is the failed policies south of us with respect to WPPSS and the failed nuclear projects. In other words, what was perceived at the time to be dramatic exponential growth in power in the Pacific Northwest and in the United States would have made the downstream benefits really worth very little. But because of a whole variety of factors, they're actually worth quite a bit now. So I think that's the record. I'm not trying to diminish the record of W.A.C. Bennett, but as was often the case with W.A.C. Bennett, there were enormous fortuitous events that took place which have proven to look pretty good in the light of day today.
I'm not prepared to make a commitment today about the allocation of benefits, because that's a matter of future policy. It's a bit hypothetical. Obviously, I could stand and give you a speech that it will benefit all British Columbians, but I'm not sure that's enough to satisfy the member's concerns. I'm not as learned on W.A.C. Bennett's speeches as the member is, but we have made some commitments -- which may be different than what W.A.C. Bennett made. In particular, we have made a commitment to the Kootenays. The Kootenays bore the brunt of the damage as a result of the developments in the Columbia basin. There were commitments made by W.A.C. Bennett and others at the time that reparations would be made to the Kootenays. Whole towns were moved in the name of progress. Of course, none of that could happen today, in my view, and I think there are some positives and negatives to that fact. We made a commitment that a share of the downstream benefits -- a share not defined yet -- would flow back specifically into the Kootenays to deal with the historic commitment that we believe was made.
Beyond that, I can't say any more tonight about what that share to the Kootenays would be or what form it would be in, nor can I say anything about the remainder -- the larger part -- which would be to the benefit of the people of British Columbia. Obviously that's a matter of great interest to the people of B.C., to members of the House and to government. It's a subject which I'm sure we will be debating a great deal -- at least, I hope we will be debating it as a matter of public discourse in British Columbia -- in the next couple of years.
D. Mitchell: I look forward to the debate that the minister just referred to. I hope it's going to be a healthy and constructive debate. I certainly have no problem with the idea that the Kootenays, the region most affected by the flooding of the reservoirs behind the dams that were built pursuant to the Columbia River Treaty.... I have no problem with the principle that the people and the region should benefit. Hopefully, that would be in the context of all British Columbians benefiting from this tremendous stream of revenue of up to $6 billion that the minister referred to. That's a tremendous amount of money -- enough to fund the whole Ministry of Health in the province of British Columbia for a year.
Interjection.
D. Mitchell: Nevertheless, $6 billion is a huge stream of revenue.
[ Page 12563 ]
The minister will be familiar with the fact that a former leader of the Social Credit Party, Grace McCarthy, introduced a private member's bill in the House at one point, proposing that the benefits from the second half of the Columbia River Treaty be poured into scholarships for young people in British Columbia who wish to pursue post-secondary education. I think that's the kind of commitment that British Columbians might be looking for to have a tangible benefit associated with the second half of this treaty.
I'd just like to ask one final question on the Columbia River Treaty. He indicated that a draft sales agreement is now in place.
Interjection.
D. Mitchell: The minister says it's a draft of a proposal. Can he tell us when that would likely be ratified? When are we likely to see the negotiating team come back home with a signed sales agreement for the second half of the Columbia River Treaty?
Hon. G. Clark: I wish I could answer that question, but I can't. I'm not trying to be dodgy, but these are negotiations. I can tell you that I thought we were very close to an agreement about four or five months ago. Then it got further apart, and then it got closer. Every time there's a meeting, I'm optimistic that something productive will be coming out of that meeting. Often there is, and sometimes there is not.
I really don't know. I would hope that by some time in 1995 we will have an historic agreement that we can then take forward for public debate and discussion. That's about the best I can do in terms of a time frame. Remember that at any time, if negotiations aren't successful, we can trigger what's in the Columbia River Treaty, which requires them to start the very elaborate process of building the transmission line. That is a real pressure on Bonneville to reach an agreement. Obviously it's worth a certain amount to them, which I'm sure they've quantified, and that's part of what we're negotiating. It may be that we won't reach an agreement. It may be that we will simply have to trigger that or make them return the power to Blaine, and there would be some modest partial agreement. Those are all still up in the air. I'm optimistic that we will have a significant agreement some time in 1995, and I'm advised that the American side may have a long ratification process as well, as a result of some regulatory and other hurdles.
First, we have to have an agreement that the government of British Columbia has accepted. We're not there yet. Again, by 1995 -- hopefully early in '95, but maybe late in '95 -- we'll have some kind of agreement that we can take to cabinet. Obviously, then we can discuss with the people of B.C. and the House the allocation of that benefit, the nature of the deal and all those other factors. That's probably the best I can do in terms of time frame.
D. Mitchell: I just have one final question for the minister on this, especially in terms of the timing issue that he has referred to. My confusion is from the media reports that came out last week from Castlegar. I thought it was interesting that the media reports were issued late last week from Castlegar. I think it's somehow appropriate that they did, but maybe that's one of the reasons the mainstream media in the major urban centres didn't pick this up.
The media reports last week -- I just refer the minister to this; he may have been out of town -- said that the agreement in principle will go to government for ratification next month. Perhaps the media reports were wrong. But when the minister indicates 1995, I would like to ask him one final question about the process here. Once the negotiating team has an agreement, presumably it comes back to B.C. for government ratification. Is that simply cabinet approval? Can the minister describe what the process for ratification will be on our side of the border and whether any public consultation is contemplated as part of that ratification process? Does the minister think public consultation might be advisable before we formally approve the second half of the 60-year Columbia River Treaty?
Hon. G. Clark: I'm not absolutely certain. As I said earlier, the Minister of Energy and I have been delegated the responsibility for this. I haven't discussed with her what options we might approve. She may have staff working on this question, so I don't want to prejudge it. My understanding is that technically the ratification would be by cabinet, or government. It's simply a government-to-government arrangement. We are negotiating on behalf of the people of British Columbia, and we can approve it. But the significance of the document leads me to say that while we may ratify the agreement, there has to be a significant amount of public discussion on the document itself, the nature of the deal and the allocation of the benefits. There are myriad questions around that.
So I can't give you a definitive answer. I can give you a technical answer, which is that I believe it's simply for cabinet approval. My deputy has assured me that he won't be deputy very much longer if he's incorrect, so I can say that with some justification. In any event, my understanding is that cabinet approval is all that is required technically, but obviously the significance of this means that there should be some consultation.
The Chair: The member for Surrey-Cloverdale.
An Hon. Member: Oh no.
K. Jones: Oh, you've got a problem? Has somebody been sitting here all night?
The Chair: Member, please proceed.
K. Jones: Anybody who wants to leave can leave.
I'd like to ask the minister responsible for B.C. Hydro a question about the employment area. I'd like to ask the minister to give us some indication of the hiring and employment policies and practices regarding disabled persons.
Hon. G. Clark: We have an employment equity program at B.C. Hydro, which I believe is an excellent model. It means that there are opportunities for disabled people at Hydro beyond those which exist, frankly, in any other Crown or public agency. I think they are doing an excellent job in a general sense. I don't know whether the member wants any more information than that.
[J. Pullinger in the chair.]
K. Jones: Could the minister tell us what provisions are made for persons with disabilities?
Hon. G. Clark: The provisions for hiring disabled people are encompassed within the employment equity program. It's very advanced at B.C. Hydro. All managers have been put through a program discussing the values of having a
[ Page 12564 ]
diversified workforce, including disabled people. There are no quotas at B.C. Hydro, but there is an attempt to reach out and have the workforce more representative of the public. Again, as I say, I think they're doing an excellent job.
I'd be happy to provide the member with a detailed briefing on the subject of employment equity or the hiring of disabled people. Gail Sexsmith is responsible, as I understand it. I say that, because I heard her on the Rafe Mair program a while ago on this very subject. What I caught of Rafe Mair's interview with Gail Sexsmith was an outstanding discussion about B.C. Hydro. She's very knowledgeable. As I say, B.C. Hydro has made great progress.
I might also say in response to B.C. Hydro -- having talked to them about it -- that I was at a meeting very recently on the economic development of aboriginal people. One of the individuals there, who had some familiarity with other Crown corporations, made the point in that public meeting about how impressed he was with B.C. Hydro's specific policies on aboriginal issues generally, which is the responsibility of Thom Thompson here, and employment equity in particular. He said to me that if this could be a model for all government corporations first of all, and then private corporations, how much better off we'd be in British Columbia. So it's getting wide reviews among knowledgable people. I was just delighted with that comment.
[1:15]
Again, I could arrange a full and extensive briefing for the member for Surrey-Cloverdale on this subject, because, as I say, we have much more knowledgable people than myself on all issues relating to employment equity and the employment of disabled people.
K. Jones: I won't take you up on the offer of a full briefing on it. I'd like to know whether you could look at the existing practices. Could the minister tell us whether there are management guidelines for dealing with persons with disabilities?
Hon. G. Clark: The only guideline, if you will, is that every manager has to go through one full day of training on the employment equity question, and a component of that deals with disabled people and disabled access to the workplace.
K. Jones: Would the minister consider it to be harassment if information is passed on to other supervisors that a person has a certain difficulty but that difficulty isn't elaborated on?
Hon. G. Clark: Maybe the member could give me a bit more information. He appears to be alluding to a specific case. I'm not trying to draw him out, if that's not his intention. In terms of training for people under the managerial level, I don't believe there is any specific training with respect to people with disabilities the way there is at the managerial level.
K. Jones: With regard to managers, would it be considered harassment of a person if someone identified that the person had some difficulty, rather than treating them on an equal basis within the workforce, such as the supervisor passing on some information to future supervisors that would imply that there might be some difficulty with that person?
Hon. G. Clark: No, it is not de facto harassment. It depends on how the information was used and whether it impacts on employment. B.C. Hydro has a very advanced personal and sexual harassment process which they go through, so any individual has ready access to such procedures.
K. Jones: If that person has ready access to those procedures and was to take those procedures, would that cause difficulty with their employment?
Hon. G. Clark: Absolutely not.
K. Jones: Would the minister look into a case if there was difficulty with the employment of a person who is being harassed or being treated differently because they happen to have a disability?
Hon. G. Clark: Absolutely. If the member has the case that he wants my personal attention to, I would be happy to do so.
K. Jones: I will make arrangements to make you fully aware of the details of this case and see whether you can address it. It's a serious case, in my mind, and it does not indicate that there is a suitable equity program within Hydro, if what I have in front of me is their practice.
G. Farrell-Collins: I just have one or two quick questions on Hydro, and then we can move on to the B.C. Buildings Corporation, although I'll formally protest the late hour....
Interjection.
G. Farrell-Collins: Was that a yawn or a sigh? What was that?
Anyway, I appreciate the interim head of B.C. Hydro being here this evening, and I know there is obviously going to be a permanent person appointed somewhere down the line. I don't know if he'll be the lucky or unlucky candidate -- I don't know how you view that. I would like to know from the minister if we're going through the full national or international search this time. Or are we going to fall back on old habits and see who we can find? Are we going to do the full, fair process or are we going to fall back on the old system?
Hon. G. Clark: There will be a process for appointment of the CEO. I'm in consultation with the board around that process. I've really delegated that to the board of directors to review. In these Crown corporation appointments, generally the work is done by the board of directors, and obviously the government, including myself and the deputy minister to the Premier, has to be satisfied with that appointment. Generally speaking, we haven't been second-guessing the board.
Mr. Sheehan has had 17 years at B.C. Hydro at a senior level. I will just say for the record -- I haven't talked to him yet -- that I'm hopeful that Mr. Sheehan will apply for the permanent position. But as you pointed out, maybe inadvertently, there has been no deal made to appoint Mr. Sheehan or anybody else to the job permanently. The board will be doing a review of possible replacements in consultation with myself as the minister responsible and the deputy minister to the Premier. To date, the board may have made a decision on this, but I don't know what the time frame for that is. Right now things are going very well at B.C. Hydro, and I don't see any particular rush to proceed. We want to do a full review.
[ Page 12565 ]
G. Farrell-Collins: I'll be more specific. Are we going to have a full search? I know there is not an unlimited number of people who are qualified to do this job; it's fairly specialized and requires a great deal of special skill. But I think it's certainly worthwhile looking at and going through some sort of an open process and trying to draw in as many good-quality candidates as possible. I'm just wondering to what extent that's being done. Or is this going to be an appointment?
I know that with some Crown corporations the ministry, the minister or the Premier can be fairly adamant: you know, here is the person and that's who it's going to be, period. That happens sometimes. In other cases the board is given a great deal of leeway to go through a more comprehensive search. I'm wondering what the agenda is for B.C. Hydro.
Hon. G. Clark: In this case the board has been given a great deal of leeway, and that's why I'm subject to the recommendations of the board in terms of how extensive the search is. We've been through this now a few times, and sometimes the extensiveness of the search does not necessarily improve the quality, and it certainly dramatically increases the number of applicants and the cost of the search. So I'm not sure how extensive the search will be.
I'll make a commitment that there will be a competition for this position. There will be a search, and there will be a lot of leeway by the board directors on that. But I'm waiting for recommendations from the board as to timing and as to how extensive that search is.
I just want to say, and I mean this very sincerely, that B.C. Hydro is the best-run utility in Canada, by all objective standards -- including the head of Quebec Hydro, who just recently said that B.C. is the standard. So it is an interesting question, about recruiting someone who runs another utility in Canada to move to B.C. Hydro, with respect to the fact that B.C. Hydro is already the standard leader in almost every category.
So that means in some ways that the search might be a little different than what might otherwise be the case. But again, I'm not trying to fudge it. There will be open competition. No decisions have been made. There won't be anybody foisted onto the board of directors. I've given them that commitment, and I don't mind saying that publicly. The board has a lot of leeway to make recommendations on a process for that review, and there will be a process.
G. Farrell-Collins: I'm not terribly concerned that we avoid hiring somebody from within the corporation or within this province. I'm certainly not saying that at all. But what I am saying is that unless you ask, unless you look, you don't know what's out there. And I know the member who is sitting in the chair today experienced that very same process in another hiring process, a search, that we went through as a committee. I think it's important to look, it's important to ask, and it's important to go beyond a very narrow list. I would hope that that would take place without wasting money.
When you have a corporation the size of B.C. Hydro, and it being the large economic driver that it is in this province, and the potential for.... When you have an operation that big, if you go in the wrong direction it can hurt. All you have to do is look across the country to Ontario Hydro or a couple of others to find that you can get yourself into trouble pretty quickly with some bad strategic planning.
I just hope that we find somebody who is good, and I'm not saying that person has to come from outside the province or even from outside the corporation; I just want to make sure that we're looking and that it's going to be an open search.
Hon. G. Clark: I agree with the member's comments, and I will say that the community, broadly defined, knows there's a vacancy for a permanent CEO position at B.C. Hydro. I can tell you that there is lots of interest to go to this very large utility. So we are getting, de facto, lots of interest in the question.
G. Farrell-Collins: I believe we'll now be moving on to B.C. Buildings Corporation. It will take a minute to move some staff around, and then we can start again.
K. Jones: Starting into the B.C. Buildings Corporation assessments at 1:30 a.m., I have to protest this late hour. It's certainly not conducive to doing a good job here. It's certainly not conducive to getting good answers. I apologize to staff on behalf of the minister for having brought you out at this hour. But it's strictly in the hands of the minister; it's not our desire to be here.
With that preface, I'd like to ask the minister if there have been any corporate structural changes in BCBC in the last year.
Hon. G. Clark: I want to introduce my staff: Brian Kennedy, chief financial officer for B.C. Buildings Corporation; and Dennis Truss, the chief executive officer of B.C. Buildings Corporation.
The answer to the member's question is that there have been none.
K. Jones: Minister, could you give us a detailing of all major projects that have been built, or are proposed to be built, in the past year?
Hon. G. Clark: I'd be happy to send detailed information to the member.
K. Jones: Could the minister give us today details of the projects over $100,000 in value that are proposed or under construction at the present time by B.C. Buildings Corporation?
Hon. G. Clark: No, I can't. I'll be delighted to send the member the information he's requested.
K. Jones: Could the minister tell us what new properties have been leased or are under rental in the past year?
Hon. G. Clark: No, but I'd be happy to send that information to the member.
K. Jones: Could the minister tell us what B.C. Buildings Corporation is doing in the energy and environmental field?
[1:30]
Hon. G. Clark: B.C. Buildings Corporation won an international award on environmental and energy questions and a Power Smart award, which I handed out at the last Power Smart award ceremony. Also, on the environmental question, BCBC is a real leader in working on environmental issues within the corporation. There have been $70 million in energy savings so far by B.C. Buildings Corporations. It's just doing an outstanding job in those two areas.
K. Jones: Could the minister tell us when this occurred? Is this just in the past year...
[ Page 12566 ]
Interjection.
K. Jones: The awards, the big savings.
...or has it been over the last three years -- or before that?
Hon. G. Clark: The Jack Davis Building, actually, won a Power Smart award for energy savings, and that was just in the last six months, I believe.
K. Jones: If I recall, it was mentioned in last year's estimates, hon. minister, that they received an award. Or maybe it was a later bulletin that B.C. Buildings issued. It must be at least six months ago.
Could the minister tell us where and over what period these savings have occurred?
Hon. G. Clark: Again, this is a detailed question that is more appropriately answered by staff pulling all of the information together. We don't have it with us. The energy work was started by the corporation in 1978. The savings have been accumulated in increments over that period of time. I'll be delighted to send as much information as we have on it to the member.
K. Jones: I thought estimates was a process in which the minister is supposed to have knowledge of what's going on. He has his staff here to give that knowledge.
It seems that the peripheral people don't have any interest in being here. They just seem to be interested in heckling, instead of allowing the proper process to go ahead. I would like to have a bit of decorum in the process. I'd certainly appreciate your support in doing that, hon. Chair.
The Chair: Carry on, member.
K. Jones: Could the minister please tell us what B.C. Buildings is doing in energy management initiatives?
Hon. G. Clark: It is mostly looking at energy-efficient design, computer simulations and computer-aided design with respect to energy efficiency. This is a growing industry, actually. BCBC is really taking a leadership position in public construction, and is a model for many private sector builders in B.C.
K. Jones: Could the minister tell us who is the head of this particular department or branch?
Hon. G. Clark: The head of our energy department is Jack Meredith.
K. Jones: Could the minister tell us how long this person has been in that office?
Hon. G. Clark: Since the late seventies, I believe.
K. Jones: Could the minister tell us if this person is doing any business outside the operations of the B.C. Buildings Corporation?
Hon. G. Clark: Apparently he has had a few small consulting contracts -- I'm not sure, but it's a free country, so he may be doing other work.
K. Jones: Does the B.C. Buildings Corporation have a conflict-of-interest policy?
Hon. G. Clark: Yes.
K. Jones: Could the minister detail how that conflict-of-interest policy is enacted in a situation where an employee is doing similar work that B.C. Buildings would be doing?
Hon. G. Clark: My understanding is that any contract work he did was of a limited amount, with the full awareness of the vice-president he reported to, and there was absolutely no conflict involved.
K. Jones: Is it possible that the person may have been tendering on the same contracts that B.C. Buildings was tendering on?
Hon. G. Clark: No.
K. Jones: Perhaps the minister would like to look into that issue further. Information that has come to my attention would indicate otherwise.
The Chair: Shall vote 23 pass?
K. Jones: Could the minister please give us an outline of the Victoria accord with regard to the role that BCBC is playing in that?
Hon. G. Clark: BCBC is the lead agency in the Victoria accord. The main purpose of the accord is to deal with government accommodation in this region, and the corporation has been intimately involved in that process from the beginning.
K. Jones: Could the minister tell us what the ministry's role in the accord is?
Hon. G. Clark: Well, Gwyn Symmons was hired by my ministry through the Crown corporations secretariat, and he's the key staff person. The minister that has been handling this and doing an outstanding job for the government is the Minister of Government Services, responsible for the Commonwealth Games. I'm the minister responsible -- I'm not trying to shirk my responsibilities -- in all respects with BCBC and with Gwyn Symmons. There is an elaborate consultation process. That's where the work is being done and worked through, and the Minister of Government Services has been the lead minister with respect to that process, notwithstanding the responsibilities I have for BCBC.
After 14 or 20 hours of discussion with the Minister of Government Services, I'm absolutely confident that you've canvassed this issue with that minister. You got much more detailed answers with respect to the Victoria accord from that minister than you will succeed in getting from myself -- not because I'm not prepared to answer, but because that minister is more knowledgable on the details of the subject than I am.
K. Jones: Could the minister tell us, when he has the primary role of administering the Victoria accord under his responsibility, why another minister is somehow acting as a spokesperson for it -- or some other role? It seems to be a rather nebulous directive as far as the operations of the Victoria accord are concerned. There seems to be an uncertainty about who's in charge over there. Could the
[ Page 12567 ]
minister tell us who is in charge with regard to the Victoria accord?
Hon. G. Clark: I'm the minister responsible for the Victoria accord.
K. Jones: Given the Korbin commission recommendations that there should be some modification to staffing of the precinct and the government operations, could the minister tell us why the accord is being built on the basis of expansion of the required employee loading in this area?
Hon. G. Clark: The Victoria accord primarily deals with replacing dilapidated and outdated existing facilities; it's not based on expansion. It also deals with the mix of leased and owned properties. Currently we've been leasing in a very tight market, and the corporation has done some work with respect to the balance between owned and leased. Those are all in the figures, but it's not based on any dramatic expansion of employees in the Victoria region.
K. Jones: It would appear that if the size of government is going to be rationalized, and if the minister is going to try to find ways to afford a reduction in the provincial debt, there will have to be some serious downsizing of the government and of the number of employees that work in government. Would that not be taken into consideration in the planning of a major expenditure such as this?
Hon. G. Clark: This is a strategic plan. It will be built over a long period of time, not next year or the year after. On top of that, this is an investment in assets. These are office buildings with intrinsic value: land value and capital appreciation value. So it's not something that need be of concern. If there's a downsizing of government now or in the future -- which could be as a result of a whole variety of things, technology and otherwise -- (a) these buildings that would be constructed won't have to be constructed, because they will be built over a long period of time; or (b) we'll have the opportunity to sell them or lease them out to somebody else. So this is a strategic planning exercise which tries to take into account all of those eventualities.
K. Jones: Could the minister tell us why it is necessary for the government to be involved in building office space, when it's something that private industry is very, very happy to do, particularly at the high prices the government is prepared to pay in comparison to private industry?
Hon. G. Clark: Well, the member may have made his own point. First of all, the corporation does an excellent job in driving the price so that we don't pay more than the private sector. But in a tight market, the prices are bid up, and that's part of the problem the Victoria accord attempts to address: to provide a better balance between owned and leased, and to have a bit more owned buildings to help bring the price to government down.
[1:45]
The Victoria accord, depending on the final outcome of the negotiations and discussions and process, will save the taxpayers of British Columbia millions of dollars. That's the hope. The purpose of the accord is to bring some strategic focus and planning to the exercise and to save taxpayers money, and all indications are that it will do so.
K. Jones: If, as the minister says, B.C. Buildings is paying competitive rates and all that, can he tell us why private business is prepared to kick out its current tenants in order to get government tenants in buildings leased with the B.C. Buildings Corporation?
The Chair: Shall vote 23 pass?
K. Jones: I'll ask the question again. Maybe the minister didn't hear me. Why are private owners of property that B.C. Buildings shows an interest in through its advertisements prepared to kick out tenants to take on leases provided by B.C. Buildings for particular ministries? It's evident that there is more money in what B.C. Buildings is prepared to pay on the lease than other tenants are prepared to pay.
Hon. G. Clark: I totally reject the member's premise.
K. Jones: I will give the case of the facility located on the Fraser Highway in Fleetwood in my riding. It was obtained for the purposes of Social Services. It had regular tenants in the building up until the time that B.C. Buildings put out a bid proposal. Immediately following that, the tenants were informed that they were to vacate, and B.C. Buildings was able to negotiate an agreement for the lease of that property. That action would appear to indicate that there was a considerably better deal offered by B.C. Buildings in order to get them to move so quickly to make that lease agreement possible.
The Chair: Member for Surrey-Cloverdale.
K. Jones: Hon. Chair, I thought we were waiting for the minister to make his reply.
Hon. G. Clark: I will have my staff investigate the situation the member has referred to.
K. Jones: Could the minister tell us why so many pieces of property were put out for advertisement over this past year to find office space? It seems as if there is a huge expansion of government on the basis of the number of B.C. Buildings proposals for lease.
Hon. G. Clark: BCBC stays competitive by constantly tendering arrangements to ensure we get the best price.
K. Jones: Could the minister explain that last statement? How is he proposing that that's going to get better tendering when they have existing leases and they are putting out for more new leases?
Hon. G. Clark: That premise is incorrect. I am saying that leases expire or are about to expire, and BCBC goes to tender to seek what opportunities there are for other arrangements or for renewal of the existing arrangements, which keeps pressure on the rates to keep them low.
K. Jones: Could the minister tell us what provisions are being made with regard to improving the maintenance of buildings that are under the responsibility of B.C. Buildings Corporation?
Hon. G. Clark: I reject the member's premise that there is anything wrong with the maintenance.
K. Jones: I'm as surprised as the Chair appears to be at that response. Perhaps the minister could look more seriously into what is being to done to improve that. Are we
[ Page 12568 ]
satisfied with the status quo of this operation? Is that the way it goes?
The Chair: Shall vote 23 pass?
The member for Surrey-Cloverdale continues.
K. Jones: With regard to the Victoria accord, could the minister tell us what the status is of the trolley proposal?
Hon. G. Clark: It's under consideration.
K. Jones: With regard to the Victoria accord, what's the status of office building, apartment and townhouse interface in the James Bay district?
Hon. R. Blencoe: It passed council unanimously this year.
Hon. G. Clark: It passed council unanimously, I'm advised.
K. Jones: I'm aware that it has passed council, but there still appears to be a concern about the James Bay neighbourhood in the James Bay neighbourhood. What work is the ministry doing to alleviate the problem that's being expressed by the people in the neighbourhood?
Interjection.
K. Jones: We're obviously getting to the silly hour; it sounds like the responses from the other side are becoming sillier every minute.
D. Lovick: Like begets like.
K. Jones: Coming from the area of the Nanaimo Commonwealth bingo, I would expect that type of response.
Could the minister tell us when the Robson Square renovation project will be finished?
Hon. G. Clark: It was completed last year. [Laughter.]
K. Jones: If the minister was.... Perhaps the people who were laughing might want to inform themselves on some of the facts. They wouldn't be quite so flippant about it. The facts are that parts of that facility are sitting unfinished. The minister's flippant answer shows very definitely that he doesn't know what's going on in his ministry.
The Chair: Shall vote 23 pass?
The member for Surrey-Cloverdale continues.
K. Jones: Could the minister tell us how much vacant square footage is in the Robson Square facility at the present time?
Hon. G. Clark: We don't have that information with us, but I will get it for the member.
K. Jones: Could the minister tell us the status of the Jericho lands?
Hon. G. Clark: The School for the Deaf has moved, and the Justice Institute will be moving next year. We will then start opening some discussion with the Musqueam around planning.
K. Jones: Are the buildings going to be retained on that site?
Hon. G. Clark: That's subject to discussions.
K. Jones: Are those discussions with only the Musqueam? Or are they going to be tendered out to anyone?
Hon. G. Clark: Well, there is a land claim, so we'll be discussing with the Musqueam first before we decide whether to go into a formal planning process with the city and the community.
K. Jones: Could the minister tell us the status of the various buildings on the Riverview Hospital site?
Hon. G. Clark: There are a lot of buildings on the site. There's been a lot of downsizing, so some of the buildings are empty. There are currently 800 patients, I believe, at the Riverview site. As the member probably knows, we're going through a process of deinstitutionalization, which will take several years yet.
K. Jones: Could the minister tell us whether there are plans to completely deinstitutionalize the Riverview site?
Hon. G. Clark: That's a question for the Minister of Health, not for me.
K. Jones: Since you are responsible for the maintenance and usage of the buildings on that site, you must know what is planned for those buildings. How many buildings are going to continue in operation this coming year?
Hon. G. Clark: It's subject to the programmatic requirements of the Ministry of Health, and we're a service agency for the ministry. In the next year, I think most of the buildings will be used in some manner or form, or parts of them will.
K. Jones: Are there plans in the present or the following budget year to rebuild the forensic facility at Colony Farm?
Hon. G. Clark: We're still in the planning process with Coquitlam around an institution there.
[2:00]
K. Jones: What it holding up the planning process with regard to the forensic facility at Colony Farm?
Hon. G. Clark: It's a debate between the city and the B.C. Buildings Corporation.
K. Jones: About what subject is it?
Hon. G. Clark: It's about the agricultural land reserve, the interface and some land rezoning that we require.
K. Jones: Could the minister tell us why there would be a problem with the land reserve, when the site already exists as a forensic facility?
Hon. G. Clark: Rather than get into this kind of detail in the estimates, which is clearly not appropriate, I'd be happy to give the member a full briefing on Colony Farm and the forensic institute.
[ Page 12569 ]
K. Jones: Thank you, hon. minister. That will conclude the B.C. Buildings Corporation estimates.
Vote 23 approved.
Hon. G. Clark: I move the committee rise, report resolution and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply B, having reported resolution, was granted leave to sit again.
Hon. G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 2:03 a.m.
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