1994 Legislative Session: 3rd Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
THURSDAY, JULY 7, 1994
Morning Sitting
Volume 17, Number 11
[ Page 12883 ]
The House met at 10:02 a.m.
Prayers.
Hon. G. Clark: I call committee on Bill 34.
FOREST AMENDMENT ACT, 1994
The House in committee on Bill 34; D. Lovick in the chair.
On section 1.
W. Hurd: Section 1 is an amendment to the Forest Act that basically repeals a definition of "control of a corporation" and allows, I assume, a different definition under division 1, part 4, of the act to stand. Could the minister offer the committee a rationale for the change and advise the committee why the definition of "control of a corporation" under a separate section of the Forest Act is advisable and, obviously, the preferred definition compared to what currently exists in the Forest Act under section 1(1)?
Hon. A. Petter: I think a detailed discussion of this, if the member wishes it, is probably better achieved when we reach the amendments to section 50 of the Forest Act, which follow through on this change. But in general terms, what's being accomplished through this bill is the closing of a potential loophole in existing legislation to the 5 percent takeback requirement at a time when control of a corporation changes; and as a result of that change in control, there is to be a 5 percent takeback of the volume within the licence held by that corporation. We're trying to ensure that companies cannot, through creative share arrangements or otherwise, circumvent that requirement. This is a small step in doing that; the larger step comes later in the bill.
W. Hurd: I certainly welcome the opportunity to talk about that provision. I think the 5 percent reduction, which then goes into the small business program, is an important consideration. However, I just wonder -- back to my original question -- why the repeal in its entirety is necessary. I still haven't determined....
The implication of the repeal is that there are two different definitions of control of a corporation. The rationale offered in the explanatory notes is that division 1 of part 4 of the act shall basically stand in its solitude as a definition for control of a corporation. I guess my question relates to a clarification of why, apparently, two different definitions existed in the Forest Act, and whether we're dealing here with a clarification that involves repealing one definition and allowing the other to stand.
Hon. A. Petter: The answer is that two definitions did not exist. There was one definition in section 1(1), but it related to this issue in particular. For the sake of clarity in making the change, not only did we change the wording of the definition, but we moved it into the section of the Forest Act to which it applied, so that those looking to that section could have the definition as part of that provision rather than having to refer back to the definition provision. So it's really replacing one definition with another and, in the process, relocating that definition into the appropriate section to which it applies.
Section 1 approved.
On section 2.
W. Hurd: Again I refer both to the section and to the explanatory notes. The purpose of this section is obviously to adjust the time periods for the chief forester's obligation to determine an annual allowable cut as a result of, one would assume, a reduction in the area-based tenure. I assume this implies that by definition there could be further reductions in the area-based tenure, and therefore there's a requirement for the chief forester to have shortened time frames for intervention with respect to AAC reductions. I wonder if the minister could offer the committee a general rationale for the need to amend this section, which basically provides more opportunity for the chief forester to amend the annual allowable harvest on a tree farm licence or some other form of area-based tenure.
Hon. A. Petter: My understanding is that the section really doesn't change the opportunity; it ensures that the government, in particular the chief forester, has the capacity to review AAC determinations at least every five years with respect to TFLs. That, of course, is consistent with the timber supply review. This is just to ensure that that ability of the chief forester is maintained.
W. Hurd: But this section deals with a change in the act. The explanatory notes indicate that section 7 of the Forest Act is amended to "adjust the time periods." I was asking a question of clarification. The minister is advising us that under the current provisions in section 7, there is not enough of an opportunity for the chief forester to review the annual allowable harvest levels on a tree farm licence. It's my understanding that before the tree farm licence rolled over for a further five-year term, a set of development and working plans had to be filed with the Ministry of Forests. On the basis of those working and development plans, an AAC level was set at five-year intervals. The implication of this amendment appears to be that that was not the case; we're now requiring an AAC determination to be made every five years. Could the minister advise the committee whether the existing section 7 of the Forest Act did not require the same kinds of review of AAC every five years, and what exactly is being changed under section 2 of this bill?
Hon. A. Petter: To put it at its simplest, this section is designed to make sure nothing does change as a result of subsequent sections that we're about to get to. Because subsequent sections alter, in some respects, the way in which AAC is reviewed as a result of information, etc., this section is designed to ensure that the status quo is maintained in the face of those subsequent changes. That means that the chief forester will have the opportunity to review the cut determination every five years, as he does now. The concern was that if this section was not put in, subsequent sections might be construed as displacing what currently can take place.
Section 2 approved.
On section 3.
[ Page 12884 ]
W. Hurd: Section 3 gets us to the area of what I would consider to be fundamental concern and disagreement. In this section we are dealing with a series of penalties and powers by the Crown to require the holder of a tree farm licence to submit additional information that the ministry may require. It provides for the possibility of a 25 percent takeaway of annual allowable harvest as a penalty for failure to provide that information. As we have gone through the considerable number of forestry bills in this session of the Legislative Assembly, the one thing that continuously shines through is the heavy hand of the Crown in dealing with these kinds of licences and tenure agreements in British Columbia.
[10:15]
As I have indicated before in this assembly, a tree farm licence offers an opportunity for the Crown to invite a higher level of forest stewardship than would otherwise be the case. As I have pointed out in the past, many tree farm licence holders in the province undertake a higher level of planning function as a matter of sound business practice. Under this section of the act they will now be required by law to share that additional information with the Crown, under the threat of heavy administrative penalties. My concern with this section is that there is a disincentive for tree farm licence holders to compile that information, because the Crown may at a future point demand that those plans be made available. I would much prefer more of a carrot-and-stick approach, with some incentives being offered for tree farm licence holders to undertake willingly the studies and plans that may be above and beyond the requirements of the licence.
I wonder if the minister can tell us, from a general philosophical standpoint, why this section appears to place large additional burdens on tree farm licence holders and calls for measures I consider draconian. A 25 percent reduction in the annual allowable harvest in a TFL for failing to provide information that the Crown might request does not strike me as being a provision that would inspire cooperation, confidence and a sound relationship between the Crown and the licence holder. I wonder if the minister can offer us some sort of rationale for what appears to be the very heavy hand of the Crown with respect to TFL-holders in the province.
Hon. A. Petter: I fear the member has it just a bit wrong, and I think some of the critics of this section haven't fully understood what it's intended to do. These amendments were requested by the chief forester so he can do his job of ensuring he has the information necessary to set sustainable rates of cut on tree farm licences. Past governments regrettably did not have in place the necessary instruments to ensure that tree farm licence holders were held accountable, to ensure that there were sustainable rates of cut.
The member will be aware that there has been litigation recently in which the question arose as to whether the chief forester had adequate information to make accurate determinations. As a result of that litigation, the chief forester is understandably concerned that he has the necessary instruments to gain the information for making determinations that will survive judicial scrutiny. What this provision does is give the chief forester the tools he needs to have information that is in the public interest, to ensure that sustainable rates of harvest are established for tree farm licences.
It has a preventive aspect to it as well -- not a punitive aspect, I would argue, but a preventive aspect. If the information is not provided to the chief forester, there is then a temporary reduction in harvest levels. It is not lost forever but is temporary and recoupable. If the chief forester does not have information, and to ensure that harvest rates do not continue beyond what is sustainable, there is a presumption in favour of a reduction, in the order of 25 percent. Once the information is provided, that 25 percent is recouped retroactively. There is no permanent loss in the level of cut. It is simply there as a preventive measure to ensure that tree farm licence holders who do not provide adequate information to the chief forester are not placed in a position where they may be continuing to cut or cutting at rates beyond what is sustainable.
I think this is a very responsible provision, one that places an incentive on tree farm licence holders to maintain an adequate information base for the chief forester, and to supply that base so that the public can be assured that the rates of cut are sustainable. Where the information is not provided, there is a preventive provision that allows for the reduction in that rate of 25 percent. Cut control does not mean there will be an actual rate reduction of 25 percent in a cut. Once the information is provided in a satisfactory form, that 25 percent reduction is restored and recouped retroactively. The only event in which it wouldn't be restored is if the information were not ultimately provided.
I think this is a very responsible provision, one that has not been fully understood, unfortunately, by some of those who have criticized it. It clearly tries to give to the chief forester the kind of authority that I would hope all members of this House want the chief forester to have to perform his roles responsibly.
W. Hurd: It's the first time I have ever heard a potential 25 percent harvest reduction referred to as an incentive. I am reminded by my colleague for Delta South that the prospect of being hanged in the morning tends to focus one's mind on the task at hand.
I think this is an issue that really has to be pursued with some vigour at this point. A tree farm licence is an agreement between the Crown and the licence holder. One would assume that built into those licensing provisions is a requirement by the licensee to furnish information that allows the chief forester to set an accurate level of harvest for that licence. If the minister is saying that the licence agreement is really not sufficient for the chief forester to make that determination, then, clearly, the problem exists with the licence agreement.
This provision, I guess, means that the tree farm licence holder undertakes measures of their own volition. In other words, they may commit the entire inventory in the TFL to a computerized program -- something I know occurs on some TFLs in the province -- and they may go beyond the level of the licence. I know that in the case of TFL 35 there is an agreement between the Crown and the licence holder for an enhanced level of stewardship and increased annual allowable harvest based on measures that the licensee is paying for in their entirety. They are paying for everything. The Crown isn't investing a dime in that particular enhanced forestry regime.
I wonder what the future is for those kinds of agreements when the ministry can simply come along and suggest to the licence holder: "Look, we're going to ask for plans beyond what is called for in the licence. We're going to ask for the additional information that you have paid for, because it may or may not assist the chief forester in making a determination." I can't, for the life of me,
[ Page 12885 ]
determine how that would be in the best interests of fostering a relationship between TFL-holders and the Crown. As I've said in this assembly many times before, TFLs represent an opportunity for both parties to invest more money in the forest land base without necessarily accessing Forest Renewal B.C. funds, which could go to other purposes. I believe that this section takes us in the opposite direction. It's a heavy-handed approach that says: "We are going to move in at any point, at any time, and ask for any study that you have done, whether it be a wildlife management study, a visual scape study or a special sensitive-area study that you may have been required to do or might have done of your own volition. We are going to ask you to provide that study, and if you fail to do so, we may temporarily order a 25 percent reduction in the AAC. If you provide us with that information, you won't get hit with a 25 percent reduction." The minister calls that an incentive, but I fail to see how it could possibly be.
Therefore at this time the opposition would move a couple of amendments to section 3. I'm just going to sort them out here; the amendments from the minister arrived about the same time as mine did. Let the record show that the minister is offering the opposition the chance to move his amendments, but we politely decline the opportunity.
[SECTION 3,
7.1(2) The chief forester may require the holder of a tree farm licence, at the holder's expense, to
(a) prepare and supply any plans, studies or analyses required limited to questions of timber growth and yield, environmental protection, and other objective timber and environmental considerations; and
(b) obtain and supply any information limited to questions of timber growth and yield, environmental protection, and other objective timber and environmental considerations,
that the chief forester considers adequate to assist in the determination of allowable annual cut for the tree farm licence area.
I would move that amendment and await a ruling on its admissibility.
The Chair: Perhaps the minister would like to respond while we take a look at this.
On the amendment.
Hon. A. Petter: Before responding to the amendment, let me respond to a few of the comments made by the member.
First of all, the requirements to provide information were moved into legislation two sessions ago; I'm not sure where the member was. That was done when amendments were made to the Forest Act regarding the provision of information by tree farm licence holders. It had to do with the need to ensure that there was an adequate supply of information for the chief forester to assure the public that sustainable rates of harvest occurred. So that change, the move from licensed documents into legislation, took place two years ago.
I think it's also a desirable change, and one I'm glad to see we're continuing with here, because it creates a level playing field. One of the problems of putting this kind of provision in licence agreements is that you do not provide an assurance to the public that the same level of information is being required of all licence holders, and you do not place all licence holders under the same obligation, at least not necessarily at the same time, because licences come up for renewal at different times. So I think that's a highly desirable change, and one that is worthy of support.
The information required here, as indicated in proposed section 7.1(1), is information "that the chief forester considers adequate to assist in the determination of an annual allowable cut...." I am shocked that the member would want to tie the chief forester's hands, because at other times the member has spoken of his independence and of the need to have a chief forester who presides over the forests to ensure they are adequately managed. Now the member is proposing that the chief forester's hands be tied as to the kind of information he might deem necessary to determine an annual allowable cut. I think that's highly undesirable.
The member talks about further information on enhanced yields or whatever. It strikes me that licence holders would want to provide that information to the chief forester. He may not require it, but I would suspect there is a strong incentive, due to this legislation and the chief forester's authority, for licence holders to provide that information, because that information will encourage the chief forester to maintain a higher rate of cut than would otherwise be the case.
For all those reasons, I think the amendment is inappropriate. It seeks to hamstring the chief forester in doing the job that this independent official needs to do to ensure that all the forests of the province -- even those in tree farm licences -- are adequately managed and maintained on the basis of sustainable rates of harvest.
W. Hurd: I would like to return to a comment the minister made earlier in the debate which I think is germane to both the section and the amendment. He talked about the appeal on Vancouver Island with respect to MacMillan Bloedel's tree farm licence 44; I believe that was the licence involved. In any case, it was an appeal that was found in favour of the company. The inference from the minister in this debate was that the chief forester was not in possession of information that he should have had in order to make a determination. In fact, the company had information that enabled it to win the appeal. Can the minister tell us whether the information possessed by the company was information that was beyond the licence requirements of TFL 44? Was it information the company had gone out at its own time and expense and filed? Or was it information that was required to be filed under the licence agreement, under the Forest Act? That's an important issue. If the minister is bringing in this section to address a deficiency with respect to the licence, that makes little or no sense. He is saying that the appeal was lost because the Crown didn't have the ability to require information that the company had compiled of its own volition. I wonder if the minister could clarify that point, because I would be more satisfied with his explanation if he could assure me that the reason the appeal was lost by the Crown was that the company had been withholding information that it more appropriately should have provided to the Crown. That's an important distinction.
[10:30]
Hon. A. Petter: As is so often the case, this member is behind the times; I am happy to say only two years behind the times, rather than two decades behind the times, which is his normal mind-set. Two years ago changes were made to bring AAC calculations and the information necessary for those calculations into legislation. The sad reality is that previous governments did not, either in
[ Page 12886 ]
legislation or through licence documents, have adequate provision to ensure that information was provided to the chief forester, and through the chief forester to the public, to ensure sustainable rates of harvest with respect to tree farm licences. Tree farm licence holders weren't even required to maintain information in a common information base so it could be compared with other information. Two years ago this government moved to make necessary changes to legislation. There has been litigation, as well, some of which was based on circumstances prior to that legislation taking effect. Subsequently, there has been a court decision that helped to further clarify the situation. Following that court decision and further policy considerations, the chief forester indicated his desire to have clarity and some additional powers to ensure that the information is made available.
I would have thought that this member would want to recognize, first of all, that two years ago this issue was moved into legislation as a matter of public policy and accept the fact that this is desirable, rather than refight an issue that was debated in this Legislature two years ago. Secondly, I'd have thought he would want to support the chief forester having the powers necessary to ensure that there are sustainable rights of harvest. We as British Columbians all have that interest of ensuring sustainable rights of harvest. For this member to complain that the chief forester's ability to gain information goes beyond what previous licence agreements may have provided is frankly to continue the same old mind-set that tree farm licence holders should be allowed their own rules. That changed two years ago, and now that change is being further built upon with these amendments to ensure that the chief forester has the ability, by legislation, to set sustainable rights of harvest for tree farm licence holders.
The Chair: Excuse me, member. Just before we pursue this, I want to suggest what I have suggested to the committee on other occasions when we were dealing with fairly complex and lengthy pieces of legislation. Amendments that are in order, of course, are perfectly legitimate and ought to be debated. It seems to me, however, that once we have had a position taken by the presenter and the response in some detail from the minister -- perhaps even two responses from the proposer and from the minister -- that should be sufficient. I don't think much interest is served by protracted debate on amendments. I'm certainly not going to suggest that as some kind of unilateral or arbitrary ruling, but I would suggest that it might be a good rule by which we could conduct our deliberations.
W. Hurd: Thank you, hon. Chair. I certainly have no trouble calling the vote on the amendment. The questions that we've been addressing during this portion of the debate could just as easily be addressed under the section as a whole. I would welcome the guidance of the Chair and call the vote on this very responsible and reasoned amendment.
Amendment negatived on division.
W. Hurd: Returning to the discussion with respect to the case involving TFL 44, I think this is clearly the purpose of the amendment. I wonder if the minister could just clarify one thing for me. Can he advise me whether the appeal in that case was subject to the new rules, which were passed in this Legislative Assembly two years ago, or to the old rules? I think that's an important distinction, and it would assist the opposition in clarifying the need for this particular section.
Hon. A. Petter: The case was governed by the rules that existed prior to the last amendments two years ago. But the decision came after those amendments had been made, and it assisted in the formulation of these further amendments.
W. Hurd: I guess what the minister is saying, then, is that under the previous legislation there was no requirement for the licensee to furnish anything other than what was required in the licence agreement and that the information spelled out in the licence agreement may not have been sufficient to allow the chief forester to make an AAC determination. It occurs to me that one of the biggest challenges in setting the AAC determination has not been with information that may or may not have been presented by the licensee as much as it has been with land withdrawals by the Crown, which have resulted in the chief forester being forced to consider a smaller area-based tenure and being forced to make these kinds of determinations.
In the event of an area-based withdrawal from a TFL, would the chief forester be able, under this section, to require all information, which, in that case, the tree farm licence holder may be concerned about providing if it was not provided for under the licence agreement? We're dealing with two different issues here: the chief forester's ability to set an annual allowable cut determination for a TFL every five years and the impacts of land withdrawals. As the minister well knows, one of the ongoing policy directions in the province is an AAC reduction, based on a reduced amount of land available for forest harvesting. In the event that there's a determination made that an area of a TFL is sensitive or needs to be set aside for some special provision, would that automatically trigger the chief forester to require additional information -- on the spot, I suppose -- to set a new AAC determination for TFLs in the province?
Hon. A. Petter: The regime is one in which the tree farm licence holder is subject to an AAC determination every five years. The chief forester requires adequate information. Prior to two years ago, there was no legislative requirement for the provision of such information. Two years ago a requirement was put in place and is now being strengthened. The effect of this amendment is not only to strengthen the requirement for the provision of information but also to give breathing space, in the event the information is not provided, by having this 25 percent precautionary provision.
As part of the chief forester's review of information, he would no doubt review information relevant to the state of growing sites, sensitive areas and all other land conditions that exist within the tree farm licence. This section says that the chief forester can obtain that information, where he considers it adequate, to assist in the determination of an annual allowable cut.
W. Hurd: I think the point is an important one. Maybe I didn't do a decent enough job of explaining it; I accept that possibility this late in the session. Clearly, if there is a land withdrawal from a TFL, that would trigger the need to reduce the annual allowable harvest. You can't grow the same number of trees on a reduced area of land. My
[ Page 12887 ]
question is pretty basic. If the Crown decides to reduce the area base of a TFL, for whatever reason, obviously the same level of harvest cannot be sustained. I wonder if that would then trigger the requirement of the chief forester to basically say to the licensee: "Look, you have a smaller area base to deal with. We want you to go out and do studies and plans, based on the reduced area, that would assist the Crown in reducing your annual allowable harvest, because you will no longer have the same area base to work with."
That's the potential, as I see it, under this section. The minister is shaking his head, but clearly we're going through a process now which involves an AAC reduction in every one of the 38 timber supply areas in this province -- for tree farm licences, timber licences, small business licences and every other type of licence -- based on the reduced area that's available for harvesting. So clearly we could see a scenario under section 3 where the Crown may decide to create a park or study area, to reduce the land base in the TFL and then to order the licensee to do all the work in providing the information in order for the chief forester to step in and make an AAC reduction. Worse than that, if the licensee doesn't provide the information, there's a provision in this section to whack 25 percent off the AAC, as a sort of cushion. That's what I see as.... And the minister is offering this as an incentive. I wonder if the minister could clarify those concerns.
The Chair: It seems to me that the debate is beginning to take on a cyclical character. I'm picking up phrases that we've heard in the last 40-odd minutes, and I would caution all members about that.
Hon. A. Petter: I can't clarify concerns that need better to be dispelled. I can dispel those concerns by saying that the issue of withdrawals is dealt with under section 53 of the Forest Act. Where a withdrawal takes place, the chief forester simply reduces the AAC in accordance with the AAC that would have been attributed to the area being withdrawn. But that has no relevance to what we're discussing here. We're discussing the provision of information with respect to land that is, and remains, within a tree farm licence. I can assure the member that the withdrawal issue is dealt with completely separately. It does not trigger any additional requirements here, and it is not germane to this discussion.
W. Hurd: Rather than belabour the point at this juncture, I think that another reasoned amendment needs to be introduced, which would, I think, clarify the concern for all concerned. I would now move the following amendment:
[SECTION 3
7.1(3) If the chief forester determines that the holder of a tree farm licence has deliberately and wilfully failed to comply with subsection (2), the allowable annual cut for the tree farm licence in effect at the time of the determination is reduced by an amount not to exceed 25 percent, subject to the nature and severity of the offence, effective January 1 of the year following the year in which the determination is made.]
The purpose of the amendment is, I think, a reasonable one. It's to clarify that the chief forester can reduce the harvest where it's clearly evident that the tree farm licence holder has been either negligent or wilful in withholding information from the Crown, and clearly that is the intent of this section. I think this is a reasoned amendment that assists TFL-holders in knowing that the 25 percent reduction, which is a draconian penalty, will be triggered when they wilfully disobey a requirement to furnish information to the Crown.
Hon. A. Petter: Ironically, in claiming his concern that this might be a penal provision, the member has now succeeded through his amendment to turn this into a penal provision when it isn't intended to be one. He's trying to turn this provision into one that would exact a penalty from tree farm licence holders for wilfully failing to provide information. That's not what's intended. What's intended is that where the information is not there and we, through the chief forester, cannot be assured of what a sustainable rate of cut is, we have a precautionary provision that ensures a reduction in the AAC in order to guard against the possibility that such a reduction might be necessary. We won't know, because the information is not there. So it is a precautionary provision that gives some breathing room and comfort to the public, through the chief forester, that the room is there, should the information disclose that a reduction is necessary. It is not a penal provision, although it would become so, were this House to succumb to the amendment proposed by the opposition.
Amendment negatived on division.
Section 3 approved on division.
Sections 4 to 8 inclusive approved.
On section 9.
W. Hurd: This gets us back to a discussion we had under section 1, and I guess it offers more opportunity to canvass that particular issue. I wonder if the minister could tell us again the rationale for the amendment in control over a corporation. I think he mentioned before that there was a potential loophole where a tree farm licence was sold and transferred to another corporate entity. There was a loophole that potentially allowed the 5 percent takeaway not to apply. I wonder if the minister could just clarify that for the committee.
[10:45]
Hon. A. Petter: Without getting into the intricacies of corporate law, which are well beyond my ken or understanding, the concern here is that the way the section is worded now enabled high-priced and creative corporate lawyers to devise what has been referred to as a golden share. That is, they could devise a very artificial form of share structure for the corporation that would appear to maintain a sufficient degree of control to satisfy the existing standard, but it would effectively transfer ownership of the corporation and thereby undermine the purpose of the existing provisions. As the member has indicated, these provisions require a 5 percent takeback when the change in the control of corporation takes place. In order to put those lawyers out of future work and to take care of the creativity that they have engaged in to date, this amendment is offered so that that kind of creative avoidance of the provision could not be effected by the creation of a golden share. There is also the inclusion here of a subjective test to discourage such creativity in the future by high-priced corporate counsel, and to make it clear that this government is determined to stand behind what we regard as good public policy -- albeit enacted by previous governments -- and that is the
[ Page 12888 ]
requirement that there be a 5 percent takeback upon the transfer of a licence from one holder to another.
Interjections.
W. Hurd: I must admit that any reference to the previous administration with some measure of support is a shock to me as well.
I want to just clarify again the intent of this section, which refers to the election of directors of the corporation, voting rights and the election of 50 percent or more of the effective directors. Is the minister suggesting that under the existing act the control of the corporation where less than 50 percent changes hands was a way that was being utilized to avoid the 5 percent provisions? I sense that the minister is saying that what we're dealing with here is a share transaction process that was being used to transfer the TFL, but ostensively not to meet the share control provisions. Are we dealing with the shareholding of the corporate entity here? Perhaps he can explain whether the shareholding has any impact, because when a tree farm licence is transferred it's done as part of a purchase of the outstanding shares of the corporate entity. Is that the means by which an avoidance or an end run was being done on the Forest Act in relation to corporate control and licence transfers?
Hon. A. Petter: It is hard to explain. What happened was that there was the creation of a different kind of share. That share had certain limited rights and was retained by those who sold the corporation. So there was an appearance on the surface that by attending to the shares, control had not in fact transferred. But if you looked at the actual rights attached to those shares, there in fact had been a transfer of control, because the rights were not the same for all shares. Essentially they created a share structure that seemed to retain control in the same company, but in fact, by any reasonable test, it transferred effective control to others.
It was the creation of that golden share that technically accorded with the act but was clearly in violation of the spirit of the act, because it allowed effective control to be transferred while the appearance of control in the same hands was maintained. What this provision tries to do is get around that. It wasn't a situation in which they transferred less than effective control by any reasonable measure; they did. But they did it in a way that involved some very creative shares that did not have the same rights as other shares and lent the appearance that they hadn't transferred control, when in fact they had.
W. Hurd: I have no desire to revisit the whole issue of share capital of corporations, and I'll accept the explanation that there's a special kind of share created. I'm not sure exactly what those special shares would be; I'm aware of only two or three kinds.
In any case, I wonder if I could ask a question about subsection (d), which is the definition of five-year annual allowable cut. I wonder if this particular change in the Forest Act in any way affects the five-year cut control on a TFL, where some flexibility is built in on an annual basis. This may be dealt with in a future section; in fact, I think it is, but I'll just clarify that with the minister. As the minister knows, in a five-year cut plan for a TFL there's a variance of a certain percentage above the AAC for that year, which may range from 5 percent to 10 percent below the cut control provisions for a five-year period. I wonder if the minister could clarify whether subsection (d) in any way affects that type of administrative recognition that there is some flexibility built into the harvest levels in a five-year cut control plan on a TFL.
Hon. A. Petter: This does not affect cut control. It's a housekeeping change recommended by legal counsel to essentially ensure that current administrative practices are continued, and it does that by clarifying that a tree farm licence holder is subject to cut control restrictions on only the allowable annual cut that is available to the holder. It doesn't affect the fluctuations in cut control that the member referred to.
Section 9 approved.
On section 10.
W. Hurd: I'll settle for a brief explanation with respect to section 10, which is an amendment to the Forest Act, as they all are. However, a need to provide for this change has been identified, and I wonder if the minister could offer a brief explanation. Again, looking at the explanatory notes where reference is made to a 5 percent reduction, does this section refer generally to licence transfers, or is it more detailed than that?
Hon. A. Petter: The one substantive change I would draw to the member's attention is that, as a result of these amendments, transfers to affiliates would now require the minister's consent but would not be subject to the 5 percent reduction. There has been a concern in the industry that affiliated companies, when they transfer, should be not be subject to that 5 percent. I don't think that was the intention, and this clarifies that it was not. It ensures that, for good public policy, the minister's consent is obviously required to ensure that the affiliated company is able to manage the licence in an adequate way and so on.
These changes largely clarify existing provisions, but there are also some changes, and I draw to the member's attention that one major substantive change. They also provide for 5 percent allowable annual cut reductions, and the imposition of conditions and requirements, where a person transfers an agreement without the minister's prior consent, and the minister chooses not to cancel the agreement. The minister can currently only cancel the licence when this occurs, and if the minister chooses not to cancel the agreement, the 5 percent takeback cannot be applied. We have a rather anomalous situation right now in circumstances where a person does not obtain the minister's consent, and this corrects the situation.
W. Hurd: A corporation can set up a subsidiary rather than an affiliate company. Would the same rules apply where the company may choose, for whatever reason, to create a new corporate entity for purposes of managing timber lands? Would this inhibit in any way a corporation that did have a licence for harvesting on public land from creating affiliate companies to hold licences? Would they always have to get the consent of the minister to do that? I guess that if the answer to that question is yes, then the minister has identified some rationale or justification for this. He has indicated he would be seeking proof that the new corporate entity could manage the resource in an effective manner. I wonder if he could clarify what kind of things he might be requiring in the event that a new
[ Page 12889 ]
subsidiary is set up, for example, or the licence is transferred to an affiliate.
Hon. A. Petter: The rule with respect to subsidiaries is essentially the same. If there is an ownership relationship of 50 percent or more, then there is no 5 percent takeback, but as a result of this section, there is a requirement for ministerial consent. Which criteria? Solvency would obviously be a good threshold one, but beyond that, we would need some assurance that the directors of the corporation and the corporation itself have the capability to manage the licence in an effective manner, and that the requirements of the licence are carried out in accordance with good public policy.
W. Hurd: I have one additional point of clarification under section 10. With reference to 50.2(10), I want to ask one question with respect to the compensation payable. Can the minister tell us whether it is a current provision of the act that, where there is a loss of some kind sustained by virtue of a provision, no compensation is payable? We have raised this issue with respect to other bills, concerning the prevention of any sort of court challenge of a particular section of an act. When we deal with no compensation, does that also bind the courts in some way in dealing with an application that might come forward?
Hon. A. Petter: Giving credit where credit is due is going to become my hallmark of the morning. This was a provision brought in by the previous government, and it provided for no compensation in the event of a transfer and a 5 percent takeback. It was good public policy then, and it remains good public policy today. There is no change.
[11:00]
Sections 10 and 11 approved.
On section 12.
W. Hurd: I want to seek a brief clarification on the need to amend the Forest Act to distinguish between TFLs and other replaceable tenures. Could the minister offer an explanation of that? The question I raised in a previous section about the five-year cut controls would now be in order with respect to section 12, which mentions percentages of 90 percent and 110 percent. Does that tighten the five-year cut control provisions for a TFL?
These are two questions. I'd settle for an answer for the first and further clarification on the second.
Hon. A. Petter: No, the numbers haven't changed. On the advice of legal counsel, this section simply tries to clarify what is current practice, which is that a tree farm licence holder is subject to cut control rules only on the annual allowable cut available to the holder, as opposed to the total annual allowable cut of the tree farm licence area. That is because in some tree farm licence areas, due to takebacks and other provisions, there may be small business programs operating, etc. It is clear that the tree farm licence holder's cut control should be relative to the holder's share of that total, not to the entire tree farm licence area.
W. Hurd: And could the minister explain the rationale for the need to distinguish between TFLs and other replaceable tenures with respect to existing section 55 of the Forest Act?
Hon. A. Petter: The point of distinction that is being made here relates to the fact that tree farm licences as area-based tenures have an area. Within that area, the tree farm licence holder may have an AAC, and there may be other AACs. That is not the case with other forest licences, where the AAC is determined by the licence itself. In the case of a tree farm licence, you have an area within that area. There may be others who have rights, and the tree farm licence holder will have rights. That is why tree farm licence agreements are different, and that is why this section distinguishes their treatment from that of other forest licences.
W. Hurd: I have a brief question with respect to the last subsection in 12. There is a repeal of section 55(3) of the Forest Act and a different designation for TFLs and forest licences that have relatively small annual allowable harvests of 50,000 cubic metres. I wonder if the minister could identify the need for different rules pertaining to TFLs of 50,000 cubic metres of timber. I wasn't aware there were too many TFLs that have those kinds of harvest levels. I wonder if the minister could clarify the intent of section 12(b).
Hon. A. Petter: I'm informed that this is an existing provision that allows for different treatment in the case of very small tree farm licences. It's been repealed and replaced simply to bring its form into conformity with the other provisions of this section and to break out the tree farm licence holders from the forest licence holders. It's not a new provision.
W. Hurd: Has it no application for woodlot licences?
Hon. A. Petter: No.
Sections 12 to 16 inclusive approved.
On section 17.
W. Hurd: With respect to section 17, I'm particularly interested in section 55.5(1)(b). This obviously deals with special instances within the TFL boundaries and refers to private land, which I assume is in a managed forest unit. In a previous section the minister referred to different rates of AAC within a TFL. I wonder if the minister could clarify the intent of subsection (b), which spells out "different types of timber or terrain or from different parts of Crown land or private land within the tree farm licence area" and obviously carries with it the implication of a penalty if the licence holder fails to harvest from the private land, I would assume. I wonder if the minister could clarify the rationale and intent of this amendment.
Hon. A. Petter: I'm informed there is no substantive change in this section from previous sections. It has been redrafted to take account of some of the other changes and for the sake of clarity, on the advice of ministry legal counsel.
W. Hurd: If there's no substantive change, I guess my next question relates to section 55.5(1.1). There's an indication that "Crown timber within the tree farm licence area may be disposed of under this Act to persons other
[ Page 12890 ]
than the holder of the tree farm licence...." This seems to fly in the face of the requirements we've been dealing with that call for AAC reductions in the event of a licence transfer. Obviously we're not dealing with a licence transfer here, but the ability of the TFL holder to sell timber to anyone. I'm not clear there was ever any restrictions on who the licence holder could sell the timber to, so I would welcome a clarification.
Hon. A. Petter: It's largely clarifying. Again, under existing provisions, I'm informed, as the member would be aware, that if a portion of the cut is within a tree farm licence that is of a particular timber type, on particular terrain or whatever, and the tree farm licence holder is not in a position to take advantage of that, then the cut of the tree farm licence holder may be reduced correspondingly by the chief forester.
This provision makes clear that following such a reduction, if others have the capacity to harvest that timber, a corresponding award of that volume can be made to them. For example, if some portion of the AAC is a particular type of timber that the tree farm licence holder is unwilling or unable to harvest, but others are willing to harvest, the chief forester would not only be able to reduce the harvest attributable to the holder, but would then award a corresponding volume to someone who could take advantage of that particular form of timber.
W. Hurd: I think this is an important point, because it raises one of the significant challenges in developing a hardwood forest industry in British Columbia, where clearly the harvesting of some non-conifer species by a tree farm licence holder is not economic because it causes the AAC to be affected for non-hardwood species. I know there are examples in alder manufacturing, for example, where there would be additional opportunities for alder harvest if the harvest did not affect the ability of the licensee to harvest the more valuable conifer species. This may not be the appropriate venue, but I wonder if the ministry has given any thought to treating the hardwood species on a tree farm licence differently from the ongoing level of harvest. Clearly, as things stand now, it is not justifiable for a TFL-holder to harvest alder because, of course, it reduces the amount of harvest for fir, spruce and the more valuable species that go into commodity products. I wonder if the minister could comment on that.
Hon. A. Petter: In general, I think the chief forester has looked at the whole question of partition cuts. In the case of aspen, a partition cut was created in the Fort Nelson area, so I know the chief forester has an interest in maximizing the value of the forest. I don't want to prejudge what he might do in the case of tree farm licences, but I suppose it's conceivable that the chief forester could, in a sense, identify a component of a cut in a tree farm licence area on a sort of partition basis for hardwoods and invite the tree farm licence holder to harvest. In the event that the tree farm licence holder was unwilling or unable to harvest, he would then provide access to that component of the cut for someone else to do so.
I don't want to prejudge the chief forester's decisions, but I would say that the chief forester has clearly indicated an understanding and sensitivity to trying to afford opportunities for better utilization of the full range of species. We've seen it in the Fort Nelson case; we've seen it recently in some opportunities for alder offered through forest licences on the coast. I suppose it's not an illogical or inconceivable step for the chief forester to decide to move in the same direction with respect to tree farm licences. I note that some tree farm licence holders on the Island who have private land do have some expertise in harvesting alder, and they're looking at cottonwood and other species.
W. Hurd: I think the minister will be aware that this is a significant problem on some of the better-growing forest sites on Vancouver Island, where alder is rapidly maturing and now needs to be cleared to make way for a new crop of conifers. The big barrier continues to be that when the licensee decides to harvest that alder, it's designated as part of the annual allowable harvest. So even if the licensee were to log the alder or hardwood at a loss, it would still come off the five-year cut plan, or the five-year cut control. I think that's a barrier, and it really speaks to the need for a different policy from the ministry with respect to hardwoods in the province. I would only offer that as an appropriate entry in Hansard with respect to this particular issue. Clearly, when the harvesting of hardwoods is lumped in with the more valuable conifer species, that is a barrier to developing that industry in the province.
[11:15]
Sections 17 to 19 inclusive approved.
On section 20.
W. Hurd: This gets us into a mention of the woodlot licence, and I guess this is the first time this appears in the context of this bill. I wonder if the minister could offer a brief explanation of how this amendment affects woodlot owners, who are now lumped in with major licensees for purposes of the amendment to section 129.7 of the Forest Act.
Hon. A. Petter: I'm not sure what section the member's on, but I don't think it's section 20.
The Chair: The member has leapt ahead to section 21, I believe. If I'm correct, can I suggest that we ask for the vote on section 20?
Section 20 approved.
On section 21.
Hon. A. Petter: I have to confess that I was sufficiently perplexed when trying to find the reference the member was making to woodlot licences that I did not hear the substance of his question. I'd ask him to repeat it.
W. Hurd: I was just asking for clarification under section 21(a) of the new 129.7(5), because for purposes of this section, woodlot licences are now lumped in with major licensees. I believe this is the first time woodlot licences have appeared in this set of amendments to the Forest Act. So I wonder if the minister could just briefly explain whether any additional requirement is being placed on woodlot licence holders as a result of this change to the Forest Act.
Hon. A. Petter: There's no effect on woodlot licence holders as the result of this change. I'm informed that
[ Page 12891 ]
they're already lumped in -- to use that expression -- and this section will not change their status in any way.
W. Hurd: In the event that the woodlot owner harvests timber but, in the determination of the regional manager, has not established a free-growing crop on the harvest land, then there can be a reduction in the annual allowable harvest of the woodlot licence. Is that what's being called for here?
Hon. A. Petter: Yes, as is the case now under the existing provision.
Sections 21 and 22 approved.
On section 23.
Hon. A. Petter: I have some amendments to section 23 that are in the possession of the Clerk. I guess I could use some advice from you, hon. Chair, as to whether you would like me to move them individually or collectively.
The Chair: Thank you, minister. Give me a moment, if you will, and I'll take a look at exactly how they connect to the section.
Given the length of the section, I would suggest that perhaps we deal with them individually.
Hon. A. Petter: In that event, I would move the amendment to section 23 that's in the possession of the Clerk. It makes reference to proposed section 154.2(4).
[SECTION 23, in the proposed section 154.2 (4) by deleting "the content requirements of the regulations" wherever it appears and substituting "the Act and the content requirements of the regulations".]
On the amendment.
W. Hurd: Could the minister give us a rationale for the amendment under section 23?
Hon. A. Petter: I'm given to understand that the act currently requires that they meet the content requirements of the regulations, but there are some content requirements in the act as well. It would be anomalous in the extreme if the content of the regulations had to be adhered to but not the content of the act. This just clarifies that that is not what's intended.
Amendment approved.
Hon. A. Petter: Perhaps we could get through the amendments and then come back to any additional points, if that's acceptable.
W. Hurd: I would first like a point of clarification. The opposition would have no trouble with the amendments being moved in totality and dealt with. I just have a few brief questions with respect to the section generally, which could be addressed when the amendments are passed.
The Chair: In that case, then, could I suggest, minister, that we move the three remaining amendments together?
Hon. A. Petter: Yes. I would then move the three remaining amendments to section 23 that are in the possession of the Clerk. Just for clarity's sake, I will mention that those amendments affect proposed sections 155(2), 155.1(1) and 155.2.
[SECTION 23, in the proposed section 155 (2) by deleting "subsection (1)" and substituting "subsection (1) (a)."]
[SECTION 23, in the proposed section 155.1 (2) by deleting paragraph (c) and substituting the following:
(c) serving a written notice of appeal on the minister
(i) in the case of a determination, order or decision that has been reviewed, not later than 21 days after the date the written decision is served on the person under section 154.2 (3), and
(ii) in the case of a determination, order or decision that has not been reviewed, not later than 21 days after the date the determination, order or decision is served on the person under the provisions referred to in section 155 (1) (b) and (c), and]
[SECTION 23, in the proposed section 155.2 by deleting subsection (4) and substituting the following:
(4) Despite subsection (3), if the appeal board determines that the written notice of appeal does not comply with the Act and the content requirements of the regulations, the appeal board does not have to hold a hearing within the 45 day period referred to in that subsection but does have to hold a hearing within 45 days after a written notice of appeal that does comply with the Act and the content requirements of the regulations is served.]
Amendments approved.
On section 23 as amended.
W. Hurd: I had just flagged section 154(3), which says that in a review conducted by the chief forester or the regional manager, they may then "delegate the power to decide the review to an official in the Ministry of Forests." It occurs to me that this may be a somewhat significant change with respect to appeals by the chief forester. I wonder if the minister could advise the committee whether that is a new provision, and if it is, why there would be a justification for the chief forester to appoint, in essence, an official in the Ministry of Forests when clearly the licensee's appeal may be based on a decision by the ministry in some respect. I wonder if we could clarify the intent of section 23, subsection 154(3) -- I love the way these bills are drafted.
Hon. A. Petter: Yes, it is a new provision that allows for delegation on appeals by the chief forester or the regional manager. The reason is to assist in spreading the workload on appeals but also to ensure that those who have the greatest expertise can be involved in the appeals. For example, with an appeal on stumpage, the director of valuation might be delegated by the chief forester as an appropriate official who has particular expertise in the area. It enables the chief forester and regional managers to delegate. That's administratively less burdensome, but potentially also will result in a more effective appeal process.
W. Hurd: Can the minister tell us, then, whether this has any implications for appeals with respect to the Forest Practices Code? Clearly the Ministry of Forests soon will have -- when we clear third reading on that bill -- quite wide discretion to have the bible of the code in one hand and a stop-work order in the other. It occurs that the appeals to the chief forester, which can now be undertaken for a variety of measures.... It would be somewhat discomforting if the chief forester in fact is able to designate responsibility for the appeal -- I assume that's what this section means -- to Forest Service
[ Page 12892 ]
personnel. Clearly the intent of section (3) appears to be that the power -- and I use that term because it appears in the section -- to decide the review would reside back in the Ministry of Forests. Is that the intent of the section?
Hon. A. Petter: Given the member's reference to the bible, we've travelled now from the golden share to the golden rule.
Let me assure the member that this does not apply to the Forest Practices Code and that the chief forester is a member of the Ministry of Forests. This will assist the chief forester in performing his functions. The appeals will be heard by those who have qualifications to hear those appeals, as a matter of ministry policy -- and the good judgment of the chief forester and regional managers as well, I'm sure. It does not impact upon the Forest Practices Code in its biblical or other qualities.
The Chair: Can I suggest before we go too far with these metaphors that we observe the golden mean?
W. Hurd: I realize it may have been an error on my part to attach any religious significance to the Forest Practices Code, even though it has been pursued with religious fervour by the minister involved.
This is obviously a very large section, which relates to appeals and covers section 154 almost to the end of the act. I wonder if the minister -- since this is such a major revision -- could highlight some of the changes that are contemplated here and the rationale. Clearly, one of the important considerations in the entire Forest Act is the appeal process, which really protects both the licensees and the ministry from making serious errors in judgment that may prejudice or otherwise cause a loss to the parties involved. With respect to this rather large section of the bill, could the minister offer some sort of comprehensive analysis?
Hon. A. Petter: I'd be happy to do so, and to be fully comprehensive I'll make sure that I go through the notes I have in front of me.
What the provisions do -- and this embraces both section 22 and section 23 -- is replace the chief forester and regional manager appeal hearings with a single administrative review. A person not satisfied with the review can appeal to an ad hoc independent appeal board, but it streamlines the appeal process in that way. It provides that the review be conducted by the regional manager or forest officer for district manager decisions, and by the chief forester for regional manager decisions. The regional manager and the chief forester will be able to delegate the review to another ministry official, which is the aspect we just discussed.
They also enable the persons conducting the review to extend the time period for filing a notice of review. The Minister of Forests currently has this power and will retain it for filing notices of appeals for the ad hoc appeal board. They remove the ability of a person seeking a review to require a hearing. If the person conducting the review decides not to hold an oral hearing, he or she can decide the matter, based on the notice of review or the notice in any other communication with other ministry officials and the person seeking the review, as the reviewer considers necessary. They provide that a person cannot appeal a decision without first having it reviewed. They enable the Ministry of Forests to specify in regulation the content of review and appeal notices and the procedures to be followed by a person conducting a review and by an ad hoc appeal board conducting an appeal. They provide more flexibility in existing time periods for filing a notice of review and appeal, for holding an appeal hearing and for providing a written decision for the review or appeal. They explicitly recognize that the power of decision of the reviewer and the ad hoc appeal board includes the ability to refer a decision back, with or without directions, to the person who made the original decision or the person who varied it upon review. And they provide the appeal board with the power of subpoena. In summary, those are the major provisions contained within the section.
W. Hurd: That's a somewhat legalistic summary of the section, and I appreciate that. I was also looking for some sort of rationale for the need to bring what appears to be substantial changes to the appeal process. Is it designed to make the process more open, to provide more opportunity for licensees? Given the intent of the bill, I suspect it might not be that, but I can always hope. Obviously this is a major revision of the appeal process, and I wonder if the minister could describe why it might be necessary under this section of the act.
[11:30]
Hon. A. Petter: I would be happy to. The overall intent is to try to streamline the appeal process in a number of ways, first, by eliminating one level of review that currently exists and enabling licence holders to get on to an independent appeal in a more timely way. That will also place less unnecessary burdens on ministry staff. It also allows the appeal and review processes to be shared more equitably throughout the ministry by those who have expertise through the power of delegation we have referred to. It also provides for recognition of more reasonable time periods, where necessary, for those who would pursue review or appeal. It's an attempt not to reinvent the appeal process, but to make it more effective for both the ministry and licence holders by streamlining it and by addressing some issues concerning time and resources.
W. Hurd: At the end of the day, I suppose, the ultimate check and balance on legislative power is access to the courts. That leads me to a question with respect to section 23, subsections 155.4(1) and (2), which on the surface appear to restrict the ways in which the Supreme Court may adjudicate an appeal in the event the courts are petitioned by either the appellant or the minister. There is a section here that suggests that the only avenues for appeal are on questions of law or jurisdiction. Could the minister clarify whether that represents a substantive change, and whether the courts are being limited in some way with respect to the grounds for a court challenge to an adjudication under the appeal process in this bill?
Hon. A. Petter: This is a status quo provision; there is no change. It provides for a broader form of review by the Supreme Court. If the provision did not exist, the judicial review would be limited to jurisdictional issues. This provides for a broader review, based on law as well as jurisdiction.
Section 23 as amended approved.
Section 24 approved.
[ Page 12893 ]
On section 25.
W. Hurd: Section 25 is a significant section of this particular bill because it confers additional powers to the chief forester with respect to annual allowable harvest designations. My interpretation of section 25 is that when the Crown decides to designate an area of Crown land for a park or some other purpose, the chief forester now has the power to require one licensee to take a bigger proportion of the AAC reduction to accommodate that other designated use. Under the existing section of the Forest Act, there was a requirement by the chief forester that there be an equal AAC reduction for the licensees in the affected region. My interpretation of this amendment is that the chief forester will now have the ability to order a disproportionate AAC reduction for licensees that may be affected. Could the minister advise the committee whether that is in fact the effect of this particular section of the bill?
Hon. A. Petter: The only change represented by this amendment is that it ensures consistency between the provisions that now exist with respect to temporary AAC reductions under part 15 of the Forest Act and permanent AAC reductions under section 54. The amendments to section 54 to allow exemptions to small licence holders -- defined as those who have licences for less than 10,000 cubic metres per annum -- were passed in 1993 and brought into force last month. The rationale for the 1993 amendment was that these small licence holders feel disproportionately large impacts from such AAC reductions, and that same recognition is reflected here.
W. Hurd: I realize that there is recognition in the event of a park designation or some other reduction in the area base for forest harvesting, and it's understandable that a proportionate takeaway wouldn't be allocated to small licence holders who might have the potential to lose every stick of timber they have. But I believe that the effect of this section is to allow the chief forester to decide that where two forest licensees may be side by side with equivalent volumes, the chief forester may now decide that one licence holder is going to take a bigger hit, in other words, than the other. I believe this section allows the chief forester to be more selective in the way he decides which licensee is going to be required to give up more annual allowable harvest to accommodate that other use, such as a park, protected area or any other designation the Crown may make. I am seeking assurances from the minister that that is not the case under section 25.
Hon. A. Petter: Save for the recognition on temporary AAC reductions for those who hold licences of less than 10,000 cubic metres -- small licence holders -- there is no change from the existing regime under the Forest Act.
W. Hurd: I would like one last brief clarification. Where the government did decide to designate a new park, for example, and there was a need to reduce the annual allowable harvest because part of the park was bordering on maybe one or two TFLs, under this act the chief forester would not have the ability to decide that 10 percent of the reduction would apply to one licensee and 50 percent to another. I know there has been concern expressed with respect to this particular section that that's exactly what it allows the chief forester to do. There can be a disproportionate AAC reduction now, whereas before he was required to reduce the AAC on an equitable and a fair level. I think it is important to clarify that, because if that is indeed the case, then a significant additional power has been conferred on the chief forester. Therefore it does represent a significant amendment to the Forest Act.
Hon. A. Petter: First of all, this deals with temporary alterations; the permanent ones are dealt with elsewhere. Second, the power of the chief forester refers to the setting of an AAC within the timber supply area. The actual allocation of that among licence holders is done by the minister. This is the case in the current act, I am given to understand. I have the current act here in front of me, and you will see that the minister may, by written order, do so proportionately under subsection (2.1)(a) or (2.1)(b), which allows for a different discretionary approach. None of that is altered in any way from the current Forest Act.
W. Hurd: I guess sections 25 and 26 are actually related. I had some further issues to canvass on this, but I'll deal with them under section 26.
Section 25 approved.
On section 26.
W. Hurd: Section 26, of course, refers to the Range Act and division (1), part 14 of the Forest Act. I wonder if the minister could advise us what impact the changes contemplated under section 26 will have on the holders of range tenure in the province. One of the things I've certainly tried to emphasize during the course of debate on a number of forestry bills is the fact that range licence holders really occupy a different category of business and social activity than do holders of forest licences for the purposes of harvesting and manufacturing. I wonder if the minister could clarify the changes under the Range Act that have occurred with respect to this section.
Hon. A. Petter: This section is entirely consequential upon the changes in the appeal mechanism under the Forest Act. The Forest Act appeal mechanism governs appeals with respect to rangeland. Given that that mechanism has now been streamlined and altered in accordance with earlier sections that we have debated and discussed, this section simply ensures that those alterations are carried over and reflected in appeals under the Range Act. That's the only change here. It's consequential to the earlier provisions.
Section 26 approved.
On section 27.
W. Hurd: I wonder if the minister could just advise us on the purpose for the change under subsection (1), particularly with respect to the management plans that specify an annual allowable cut. Clearly there's a role for the chief forester in making that determination, but this section seems to imply that some TFLs in the province have a provision that requires them to provide a management plan specifying AAC levels, and other TFLs may not. I just wonder if the minister could clarify this section and the rationale for this amendment to the Forest Act.
[ Page 12894 ]
Hon. A. Petter: This builds on the changes that were made two years ago. AAC is no longer dealt with as a matter of the management plan; it's dealt with through legislation. Indeed, it makes sense for the chief forester to make his determination on AACs upon reviewing the management plan. It makes good sense, and it removes some bureaucratic requirements from tree farm licence holders to remove and exempt the tree farm licence documents so they no longer require the annual allowable cut to be specified as part of the management plan.
W. Hurd: Would this section have any effect on a tree farm licence holder who may wish to present the ministry with an enhanced intensive forest management regime, which the licensee would then argue could justify a higher allowable harvest -- and considerable expense, I guess? An analysis would be done to identify the higher harvest levels from that incremental investment. Would that not potentially be an additional burden on the chief forester, who might be required to assess the enhanced silviculture regime and come to his own determination on cut levels without the benefit of having information from the licence holder?
Hon. A. Petter: No, it wouldn't do that at all. Despite the member's best efforts earlier in the debate to keep that kind of information from the chief forester, thankfully the chief forester, due to the government majority prevailing, will have access to that kind of information. I'm being a little supercilious. Of course, tree farm licence holders would want that information made available. This change in no way affects that information being provided to the chief forester so that he can take account of the kinds of intensive forestry initiatives that some companies are contemplating and that we certainly hope many more will be undertaking through the forest renewal plan and through their own initiative.
[11:45]
W. Hurd: I have to confess that my curiosity has been piqued by that answer. Throughout the course of this debate, we've been requiring additional information from licensees, with the possibility of major administrative penalties in the event that they don't comply. Lo and behold, when we get to the last section of the bill, the minister offers the magnanimous observation that licensees may no longer have to specify an annual allowable harvest in their plans. I find that curious. I can only assume that, as he's indicated, most licensees will want to cover their backsides by providing that information anyway, even though it's no longer a requirement under this transitional section, section 27. I don't quite understand why the ministry would not deem it desirable for the licensee to do as much work as possible on establishing a sustainable annual allowable harvest level as a matter of sound corporate or land management policy. I would certainly welcome a more timely, more rational and, frankly, more believable rationale for reducing this requirement on the licensee.
Hon. A. Petter: Certainly the ministry expects and welcomes information from licensees concerning the establishment of an annual allowable cut, and that information will be forthcoming from licensees in one form or another. All that this clarifies is that the actual AAC determination is a function of legislation now, and has been for the last two years; it's not a function of a management plan. Therefore to specify the management plan is, frankly, at odds with what is now the situation. It is specified through legislation by the chief forester, not in the management plan. The management plan will become one of the documents the chief forester will want to look to along with additional information that licensees will want to provide in formulating an appropriate annual allowable cut.
W. Hurd: I return to the intent of this particular bill, which is to require by statute the provision of more information from the licensee. The chief forester may be facing a huge additional administrative burden if he does not potentially have access to the annual allowable harvest that the licensee believes is sustainable, given the area, the soil conditions, the species mix and the range of issues that go into growth and yield on the TFL. What the minister is now saying is that the chief forester will be required to receive all this data but may not receive the best assessment of the licensee as to a long-term annual allowable harvest. I find that somewhat curious, given the fact that the intent of the legislation is to require that information to be forwarded in a timely manner.
So what I see in this section is the possibility that the licensee would furnish all this additional information to the Forests ministry, but not the information about an annual allowable harvest. Is that what could happen? The minister is shaking his head and assuring me that that's not the case. But earlier in the debate he suggested that they were doing the licensee a tremendous favour by reducing the burden of planning and by streamlining the process. Perhaps the minister could clarify that.
Hon. A. Petter: I wasn't suggesting that it was a tremendous burden. Of course licensees will do their timber supply reviews, and they will provide those reviews to the chief forester to determine an appropriate and sustainable level of cut. They will propose what they think is an appropriate and sustainable level of cut. The chief forester will look to that and to the management plan. Licensees will have adequate opportunity and, indeed, the obligation to provide that information.
It's just that the system has changed from what existed more than two years ago. The management plan is no longer a document that sets out the AAC. That is done under legislation; therefore it is redundant and perhaps confusing to require licensees to specify it within the management plan. The process doesn't work that way anymore, but licensees have ample opportunity, through their timber supply reviews and the recommendations they make based on those for the AAC, to provide the full scope of information to the chief forester, which the member has referred to.
Sections 27 and 28 approved.
Title approved.
Hon. A. Petter: I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; D. Lovick in the chair.
Bill 34, Forest Amendment Act, 1994, reported complete with amendments.
[ Page 12895 ]
Deputy Speaker: When shall the bill be considered as reported?
Hon. A. Petter: With leave of the House now, hon. Speaker.
Leave granted.
Bill 34, Forest Amendment Act, 1994, read a third time and passed on division.
Hon. A. Petter: I call committee on Bill 56.
FOREST LAND RESERVE ACT
The House in committee on Bill 56; J. Pullinger in the chair.
On section 1.
W. Hurd: I have a couple of brief questions on the interpretation section of the act that I feel need clarification. I wonder if the minister could explain, first, the reference to the Agricultural Land Commission Act in the interpretation section. My other question is on the definition of "managed forest land" under the Assessment Act. I assume that's in reference to a rate class under the Assessment Act. This definition will certainly be important when we talk about the tax clawback provisions later in the bill. Under the definitions section, I wonder if the minister could offer us an explanation for the interpretation of "agricultural reserve land" as it applies to this bill, and also the term "managed forest land" under the Assessment Act.
Hon. A. Petter: I take it the member is interested in why these definitions are here and what their import is. The "agricultural reserve land" definition is here because, as we will discover, land covered by the Agricultural Land Commission Act as agricultural land is excluded from being in the forest land reserve, so that there is not an overlap of the two.
The "managed forest land" definition refers to that category of land defined in section 29 of the Assessment Act. As I explained in second reading debate, that is land that the individual landowners requested be categorized as managed forest land in exchange for certain tax concessions that they received. So there is a category of unmanaged forest land for which certain tax rates are charged. Owners of unmanaged forest land can obtain additional tax relief by making a commitment to the management of those unmanaged lands. If they make that commitment, they then receive additional tax relief and are included in the category of managed forest land. This becomes significant, because the category of managed forest land provides the base for the private land component of the forest land reserve that is created through this legislation.
W. Hurd: The minister's explanation seems to imply an investment in that managed forest land by the owner, and he is obviously referring to the fact that it receives a lower rate of assessment under the Assessment Act. Is that lower assessment -- and again, we are dealing with the rationale for these interpretations -- based on the recognition of the investment in forest management that the owner has made on the forest land base? Or, in the minister's opinion, is it based on the social values associated with green space or with...? There is obviously a recognition here that the rate of property tax paid on private forest land should be lower, for a whole range of societal values. Is the recognition of the lower assessment based on the long-term investment that the owner has made on the land and the fact that they are making a commitment to a resource with a life cycle of 80 years?
This is an important point in the debate, because the whole thrust of the bill is the suggestion by the government that the lower tax rate on private managed forest land confers a benefit on the owner. I wonder if that benefit is conferred based on the recognition that the owner is making a long-term investment from which immediate recapture is not possible.
Hon. A. Petter: Just to be meticulously correct, the rate of assessment on managed forest land is the same rate of assessment as on unmanaged forest land. It is the rate of tax that is exactly one-half of that on unmanaged forest land. In exchange for obtaining that lower rate of tax, the owners make a commitment to reforest that land and manage it for long-term forestry. So there is an exchange of benefit. But there is a problem with the existing system that can result in an unintended benefit, which is one of the things this reserve will help to remedy. Having received that tax benefit for a period of time, but for less than the long period that reforestation would imply -- the cycles of 80 years that the member has talked about -- the owner can currently remove that land and turn it into some other use, without having fully lived up to the commitment that was implied.
[12:00]
Through the forest land reserve legislation, that will only be possible if the owner can first demonstrate that the land is suitable for other uses in accordance with the criteria established. Then some of the benefit that was conferred in exchange for that long-term commitment to reforestation is to be returned, because the long-term commitment has not been realized in the way that was contemplated.
W. Hurd: There is an important point of philosophical difference here. This is a blanket definition of private land, specifically on Vancouver Island. As the minister well knows, when it comes to forest management plans, different levels of investment are possible on the land base. Some private land holders may have invested considerable sums of money in their managed forest land, which considerably enhances the long-term growth and yields of that particular land. It may be an investment that is ready to harvest on a second-growth basis, for example, forgone a considerable benefit on that land over a period of 80 years. Let's say for the sake of argument that the private managed land contains a stand of 80-year-old trees. Over the previous 50 or 60 years, the private land holder has invested in intensive forest management practices like thinning and fertilization at considerable expense. Then the timber is harvested and processed, which creates jobs and economic opportunity for British Columbians. There's no recognition in the minister's definition that that particular type of private land should occupy a different designation. It is lumped in with other landholdings that may have 15-year-old stands of timber that will be bulldozed over and rezoned.
I think the level of investment that has been made and the relative rate of growth of the timber resource should surely have some import with respect to this legislation,
[ Page 12896 ]
but clearly it doesn't. That's why I asked the question with respect to the interpretation of the definition of managed forest land in the Assessment Act. Clearly it represents a significant problem. If a private land holder has invested money over an 80-year period, they may have invested far more money than the tax benefit would have conferred, particularly given the fact that the assessment and property tax process in this province is relatively short in duration.
I just ask the minister that basic question. In this definition of managed forest land under the Assessment Act -- and the minister has indicated that that assessment has conferred a considerable public benefit on the landholder -- is there any recognition of the uneven stands and uneven investment in the forest lands of Vancouver Island, and that it's very difficult to establish a level benefit for the purposes of this definition?
Hon. A. Petter: I would argue that as things stand now, no, there isn't. But thanks to this legislation and the Forest Practices Code, in fact, that kind of recognition will effectively be given. I would offer two reasons to the member.
The first is that land within this category will be subject to the Forest Practices Code, and those who have managed it in the way the member has indicated will have no difficulty under the Forest Practices Code. It's those who have not managed it to that level who will be subjected to the Forest Practices Code requirements in a more rigorous way, and that will serve to level the playing field in a way that I think corresponds with the member's concern.
Second, there's a serious problem for those who hold this category of land under the current regime. If the ownership of the company changes, the land comes out of the managed category and into the unmanaged category. So far so good. Then the owner has to reapply to have it go back into the managed category. Still right? And if the Assessment Authority determines that that land has some higher and better use, that reincorporation and the tax benefit are not allowed, because the Assessment Authority makes an independent determination that there's a higher and better use for some other purpose. That benefit is therefore denied to that company. Still correct? Under this legislation, that will not be the case. Once land is in the reserve, the forest company and subsequent companies will have the assurance that the land included in the reserve will continue to enjoy the tax benefits that are currently afforded and will not live under that measure of insecurity.
I get 100 percent from my staff on this. So the member's concerns are in fact well-reflected in two aspects of the regime, which I'm hoping we can get on and debate.
C. Serwa: This is rather an interesting discussion at the moment, and I want to expand on it because it is really critical to this particular issue. The Minister of Forests stands up and indicates that somehow the B.C. Assessment Authority is now going to be able to classify and tax property not on its land use but on its land zoning. This is a total, absolute, complete departure from what the B.C. Assessment Authority presently does. A case in point is an example....
Interjection.
C. Serwa: Yes. The minister.... Just to clarify it -- there are looks of puzzlement on the government side of the House -- the minister is saying that land managed for forest production will enjoy a different rate than land that is not managed for forest production. Under the B.C. Assessment Authority, land is taxed on the basis of its use. For example, if you have a residential home on property that is zoned commercial, you do not pay commercial taxes; you pay taxes on the basis of that land use, not on the zoning. I hear the minister talking loud and long about the fact that taxes will now be assessed on zoning and not on use. This is a complete and absolute departure from everything that transpires here in British Columbia. If a land base is used for the production of forests, whether it's managed or not managed, the end result of that product is absolutely identical under the government's classification.
The taxation picture has to be treated equitably. You cannot have some artificial situation where, because of the government's will, zoning impacts taxation. That is a significant concern. It's an absolutely uncalled for departure, and it's probably not authorized by law in British Columbia. Perhaps the minister can clarify that.
Hon. A. Petter: There's no departure here whatsoever. The market value that's determined is the market value of the land as zoned. Agricultural land that's zoned for agricultural use, even if it's next to a city, is assessed at market value based on its agricultural use, because that's the zoning. Zoning the land to forest land reserve will determine that its assessed value will be based on its forest value. That's quite consistent with the way the assessment system works, and it is to the benefit of those companies that wish to hold the land and utilize it for timber production.
If I take the member's point, what he would much prefer is that the Assessment Authority create disincentives for the continued use of that land for forestry through exorbitant assessments, thereby depriving the citizens of British Columbia -- Vancouver Island in particular -- of the forest land base that they depend upon for their jobs and security. I'm very pleased that it's this view that's prevailing and not the member's.
C. Serwa: It's always distressing when a minister of the Crown stands up and is absolutely ignorant of what transpires in the province; that's the regrettable portion of it. Taxation is not dependent on zoning, and it never has been; it is dependent on utilization. The minister should use the noon recess to get up to speed on that situation. Agricultural land is taxed at different rates, depending on the type of agricultural productivity. There is no tax on agricultural land that is stable and so many dollars per hectare, nor should there be. We have agricultural land used for Crown grazing land. Obviously it cannot support the burden of taxation that you would see in the central Okanagan for tree fruit production or vineyards or other high-density agricultural operations. There's a substantial variation in the taxation levels even on agricultural land.
The reality is that regardless of the land zoning.... For example, there's a substantial amount of land being farmed in urban areas that is not classified as agricultural land. The land is farmed, and it is taxed on the basis of its use, not its zoning. I cannot say that loudly enough or often enough or strongly enough. A phone call to the B.C. Assessment Authority will enlighten the minister and his staff in the buildings at the moment. What the minister is
[ Page 12897 ]
talking about is completely wrong, wrong, wrong. It is not possible to differentiate between a managed forest and a non-managed forest on the basis of productivity; they're producing the same thing, and they will be taxed on that basis. I would suggest that the taxation levels will vary dramatically with forests capable of very rapid growth. Obviously, in coastal or more favourable growing areas with a shorter rotation period, they will be taxed at a substantially different rate than managed lands in the interior, perhaps, where the rotation period is one and a half times to double that on the coast. The minister is very wrong in this situation.
I suggest that we rise, report progress and ask leave to sit again. In that interval the minister can get his facts straight on this issue.
Motion negatived.
Hon. A. Petter: I really don't want to prolong this debate. The fact is, whether you a want to call it zoning or use, that this land will be for forestry, just like agricultural land reserve land is used for agriculture.
The Assessment Authority -- as it does with agricultural land contiguous to an urban area but zoned as ALR, assessing that land in terms of its highest and best agricultural use -- will assess this land in terms of its highest and best forestry use, save for those components within the reserve utilized for other purposes within the reserve -- as is the case with agricultural land, I understand. There's no departure here. The same principle that applies there applies here. The member may choose to argue the niceties of zoning and use if he likes. But I suggest to him that what's happening here is that the assessment is being based upon the highest and best use of this land, as forest land, by virtue of it being in a reserve.
W. Hurd: The minister is ascribing wonderful interpretative benefits to the B.C. Assessment Authority. On Vancouver Island there can be a difference in soil and rainfall conditions from one hillside to the next. This particular assessment makes no differentiation between a tree six inches high and one that may be ready to harvest.
[12:15]
The minister has suggested that this zone is conferring a benefit on the private land holder because he has benefited from a lower rate of taxation. The fact is that if the timber on the site is of higher value, under this zone there is no ability of the Assessment Authority to recognize that fact. For purposes of this particular interpretative section with respect to part 1 of the bill -- managed forest land under section 29 of the Assessment Act -- there's absolutely no ability to recognize that the value of the land is different.
I mean, it is different. I've travelled extensively on Vancouver Island. Because of the age of the stands, the relative value of the trees up at Elk River near Campbell River, for example, is much different than it would be on a site recently harvested near Youbou. Land that has been harvested and is out of productive capacity for another 80 or 90 years clearly is not as valuable for assessment purposes as land ready to harvest. The minister has suggested that those landholders who have 80-year-old trees should occupy the same rate class, have the same effects of this act, as owners of private land who have seedlings six inches high. It's absolutely ridiculous.
This touches on the rationale for the bill. The minister is suggesting that those individuals who have invested substantial sums of money on the land and may be ready to harvest it have received a massive benefit from the Crown. Therefore they would have to pay that back in some way, should they choose or apply to have the land effectively rezoned. I think the point has been well taken that a one-size-fits-all solution for Vancouver Island just isn't going to work. It confers a disproportionate penalty or loss across the board for private land holders on Vancouver Island.
Hon. A. Petter: The member is wrong for a whole bunch of reasons, but I think I will just refer to two and suggest we take this up again when we get to section 45 of the bill, which deals with valuation.
First of all, it's not the timber that's being assessed, it's the land. The timber only becomes assessed at the time that it's cut. It's the land value that is being assessed.
Second, when we get to section 45, section 29(5) -- and this is completely in keeping with the current assessment provisions, which are not changing -- it reads: "The actual value of forest land is the total of (a) the value that the land has for the purpose of growing and harvesting trees, but without taking into account the existence on the land of any trees, and (b) a value for cut timber determined in accordance with subsection (8)." That's the provision I just referred to. It does not include timber.
Third, section 45, section 29(6), says: "The value of the land referred to in subsection (5) (a) must be determined on the basis of its topography, accessibility, soil quality, parcel size and location." So there is plenty of variability within the category of forest land to determine land that has a higher or lesser value based upon topography, accessibility, soil quality, parcel size and location. The concern the member expressed is just not based on fact. But I suggest we not take it up in the definitions section, which is pretty far removed from the issue, but when we get to section 45.
W. Hurd: In the minister's lengthy explanation, there was not one mention of the relative rate of growth of the standing timber, of the age of the timber.
Interjection.
W. Hurd: The minister suggests that it's not taken into account. Absolutely it isn't by the Assessment Authority. As I pointed out earlier....
Hon. A. Petter: It's not taxed.
W. Hurd: The minister says it's not taxed, but it strikes me that this is like.... If we applied this to the stumpage system in the province, we would have a one-step stumpage system for every stick of standing timber in the province. If we applied the same rationale to taxation -- and I imagine there are a lot of people in the province who wish sometimes we did -- you would have the same rate of.... The ministry makes an attempt to value the resource when it assesses stumpage.
Interjection.
W. Hurd: Anyway, I realize that we're dangerously close to belabouring the point, and I welcome that explanation under the definitions section.
I just had one additional question, and that's with respect to "first nation," which is referred to in the
[ Page 12898 ]
definitions section. Is that the standard provision that the act does not prejudice in any way the rights and values of first nations with respect to treaty settlements? There is potential here, I think, for land placed in a reserve to be locked into that designation and devalued for purposes of treaty settlements or first nations rights. I wonder if that's what's referred to here with respect to putting "first nation" into the definitions section of the bill.
Hon. A. Petter: The definition of first nation is there because it deals with provisions of the bill that contemplate consultation with local governments and/or first nations.
R. Neufeld: I want to deal a little more with managed forest lands and the folios that are going to be affected. Would the minister rather that I deal with them later under section 45 or 49, or should we deal with them now?
Hon. A. Petter: I think it would make more sense to deal with them later on when we're actually looking at the provisions that deal with that land base and what's going to happen with it, rather than in some abstract sense. If the member doesn't object, I suggest we wait until we get to the substantive sections.
H. De Jong: It appears throughout this bill that the minister wants to compare this reserve to the agricultural land reserve, and that is wrong; it's quite different. I would have preferred to have had some discussion on the management of this land before we finalize section 1 in terms of all the definitions, because I think it would have probably helped us to better understand the intent of this bill. It's unclear to me what the minister has been saying -- in terms of taxation and assessment, for instance.
The way I look at this bill is to compare it to the Agricultural Land Commission Act in terms of taxation and assessment. If a farmer farms the agricultural land reserve and he makes X number of dollars, then he will get farm classification, which is considerably lower than those who don't. The ones who cannot meet that magical figure of $2,500 of income from their property are taxed as residential -- which is also wrong, because the land is still within the agricultural land reserve.
The minister talks about the highest and best use. If a private owner has a few hundred acres of forestry land and he wants to get the highest and best use out of that land, he also has to adhere to the management and the allowable cut of the Minister of Forests under the overall plan. So in fact, by having those controls on the use of that land, while this tree farmer may want to get the highest and best use out of that land, he may not be able to do so because of regulations in this act and in other acts that have already been passed. While the farmer may want to get the highest and best use out of it, he probably would be assessed at a higher value because of the well-run tree farm, but he would be limited in what he can take off -- defeating, really, the highest and best use of that farmer's land.
Perhaps the minister could clarify how he sees that that particular area would work.
The Chair: Before I recognize the minister, I just want to acknowledge that I have allowed the debate on section 1 to go beyond what we usually do at committee stage, and I want to remind the members that section 1 is the definitions section. I ask you to restrict your remarks to what's actually in section 1.
Hon. A. Petter: I don't want to back into a debate on principle, but as we get further into the bill, perhaps it will become clearer.
The way the legislation works is that within the forest land reserve, the private land that will be included is the land that has been managed forest land. That means that the owner has undertaken an obligation to the Assessment Authority to reforest that land and file a management plan for doing so. If the owner doesn't live up to that obligation, then the land reverts back to an unmanaged category. That will continue to be the case, so there remains an incentive within the system for the owner to continue to manage the land in order to receive the 50 percent tax-rate reduction under the assessment provisions for managed forest land. If the owner fails to do so, then it remains in the reserve, but as unmanaged forest land, and doesn't enjoy the same tax benefit.
So I don't think it is as different as the member suggests. What is different, and I acknowledge this -- and it doesn't have as much to do with this act as with the Forest Practices Code -- is the extension of the Forest Practices Code and the obligations that will flow from it following a period of consultation with respect to private managed forest land. The member may want to go back and consult the legislation that was passed under the previous government, because the previous government passed legislation enabling government to impose management requirements on private managed forest land as well. That debate, I would suggest, is one that we should have had, if we were to have it -- and we did, to some extent -- under the Forest Practices Code and not under this legislation.
R. Chisholm: I have just one question on this section, and that is on the definition of first nation. It states here that it means "an aboriginal governing body, however organized." I'd like to hear the minister define what is meant by "however organized." Exactly what framework will that come in?
Hon. A. Petter: I guess the most obvious example would be a band. Under the federal Indian Act, bands are differently organized. Some bands choose to organize themselves in accordance with more traditional organizational systems; others invoke some of the Indian Act provisions. This terminology or wording has been used in other legislation. It's a way of simply recognizing that aboriginal groups organize themselves differently -- some more in conformity with traditional practices and some more within the superstructure of rules under the Indian Act. Some organize themselves at a local level and some at a regional level.
Where there's a requirement for consultation contemplated, as it is here, it is important to recognize that different groups are differently organized, so that one recognizes that different kinds of groups need to be consulted.
W. Hurd: I thought I had finished with this section, but there is another small point that relates to "recapture charge," which is another definition. I welcome the opportunity to debate this a little further in sections 21 and 24 of the bill. I notice there's a reference to an interest calculation. Clearly, with respect to assessing land values,
[ Page 12899 ]
that application of interest is a considerable change in definition. I wonder if the minister could provide the committee with a brief explanation of whether this is a totally new provision, where the Crown is not only clawing back taxes for six years but is now going to make an interest determination on the amount that the Crown has allegedly forgone. I realize we'll be getting into it later on, but it's a significant definition, and I would welcome the minister's reaction to that.
[12:30]
Hon. A. Petter: This is a very conventional provision, I am told, that exists in all sorts of legislation and that says either you pay your recapture charge in a timely way or you pay interest. There's nothing really that extraordinary about it.
W. Hurd: So it refers to the fact that once the applicant has successfully removed land from the reserve and has been given a bill, there's interest owing on it for the period that's outstanding.
Hon. A. Petter: Following the period that is allowed for payment, if payment hasn't been made within that time, then interest starts to flow.
Section 1 approved.
Hon. G. Clark: I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
The Speaker: When shall the committee sit again?
Hon. G. Clark: Later today, hon. Speaker.
Just before we adjourn, I call third reading of Bill 53.
PENSION STATUTES AMENDMENT ACT, 1994
Bill 53 read a third time and passed on division.
Hon G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 12:34 p.m.
[ Return to: Legislative Assembly Home Page ]