1995 Legislative Session: 4th Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
WEDNESDAY, APRIL 19, 1995
Afternoon Sitting
Volume 18, Number 25
[ Page 13457 ]
The House met at 2:05 p.m.
Prayers.
Hon. M. Harcourt: It's a great pleasure for me to introduce to the House the Deputy Governor of Hebei Province, which surrounds Beijing. He is here from China with members of a very distinguished delegation that is here to carry on some of the discussions we had during the Team Canada trip to China. The Deputy Governor's name is Mr. Guo Shichang. His delegation is here with him from April 17 to April 29, seeking partners for over 120 investment projects and promoting investment opportunities. Would you all join in giving a very, very warm welcome to the Deputy Governor, Mr. Guo Shichang.
L. Reid: In the gallery today is Mr. Ken Morris, the secretary-treasurer of the Richmond School District. He and I have worked together for at least a decade, and I would like the House to please make him welcome.
G. Campbell: I'd like the House to welcome two enthusiastic young parliamentarians visiting us today in Victoria. Mark Karjalvoto is a member of the British Columbia Youth Parliament and a student at the University of Victoria, and Ryan Willoughby is joining him today. I hope that our actions today will encourage them both to seek public office and to serve in this Legislature. I hope we'll make them welcome.
D. Schreck: In the precincts today are Barbara MacLellan, chair of the North Vancouver School Board, Keith Denley, president of the North Vancouver Teachers' Association, and Mike Hocevar, president of CUPE Local 389. They are here to meet with the Minister of Education today. Will the House please join me in making them welcome.
A. Warnke: In the gallery today is a school board trustee from the Richmond School District, Ms. Chris Evans. Would everyone please make her quite welcome.
N. Lortie: I'm very pleased to have visitors from my constituency, Delta North. This entire balcony is filled with 54 grade 11 students and three adults from Seaquam Secondary in North Delta, led by their teachers, Mr. Hardy, Mr. McLeod and Mr. Schuman. Would the House please make them welcome.
D. Symons: As Richmond is inundated with portables, some members of the Richmond School Board have transported themselves to the Legislature seeking a more permanent solution to the classroom crunch. Would the members please welcome Sylvia Gwozd, who is the vice-chair of the Richmond Board of School Trustees.
D. Lovick: Mr. Speaker, on your behalf I would like to welcome a group of students from the Brethren Heritage School in Modesto, California. I would ask my colleagues in the chamber to please join me in making them welcome.
Hon. D. Marzari: Hilda Symonds has been introduced to this House on many occasions. Today I want to make special reference to the fact that she is here to witness something that she has worked very hard on over the last number of years -- that being the growth strategies act, which will be introduced today. I'd like to commend Hilda for her efforts, for her experience and for what she has brought to this bill. I'd like the House to welcome her today.
WORLD WILDLIFE FUND'S ENDANGERED SPACES PROGRESS REPORT
Hon. M. Harcourt: I rise to draw the attention of the House to an announcement that was made this morning that should be a source of pride to all British Columbians. Today the World Wildlife Fund released their 1994-95 Endangered Spaces Progress Report. This national report card grades the federal, provincial and territorial governments on the progress they've made toward protecting wilderness areas and maintaining biological diversity.
Hon. Speaker, I'm very pleased to inform you that this report awarded British Columbia an A minus rating, which was by far the highest rating of any jurisdiction in Canada. I think the next highest was Prince Edward Island, which received a B minus rating. Furthermore, we were the only jurisdiction to be upgraded from last year. All the others have received much lower marks, most ranging from C's down to an F -- nearby to British Columbia.
Hon. Speaker, I have already gone on record saying, as you are aware, that in the years to come, this period in our province's history will be looked upon as a time when British Columbia's most spectacular natural areas were set aside for permanent protection: areas such as the Tatshenshini, the Khutzeymateen, the Kitlope, and the old-growth rain forest in the upper Carmanah and Walbran valleys on Vancouver Island -- over 100 new protected areas in all since 1991.
This A minus rating is a recognition of that achievement. I can tell you that the report card was first of all run by the Minister of Education to make sure it was done in simple, cogent language, as the report cards are now done in British Columbia. It's indeed a recognition of the tremendous progress that we've made towards meeting my government's commitment to doubling the park and wilderness areas in British Columbia. It's a recognition, I believe, of everyone -- the companies, small communities, workers, environmentalists and government representatives who have invested a tremendous amount of time, energy, thought and commitment into land use planning to achieve solutions that meet both the environmental and the economic needs of British Columbia.
By working together for this land use certainty, we are creating jobs and investment in B.C. New parks and protected areas are also creating some direct economic benefits -- as a matter of fact, $9 in visitor spending for every $1 that's spent in parks, according to a Coopers and Lybrand report that was released yesterday, for a contribution to our gross domestic product that is now over $400 million per year. This shows what we can achieve when people set aside conflict, sit down, roll up their sleeves and work together. I believe that all British Columbians can be proud of the example we're setting not just for Canada but for the world. British Columbia is pioneering a new way of bringing predictability, certainty and sustainable prosperity.
[ Page 13458 ]
Interjections.
Hon. M. Harcourt: I can say that I am sorry to hear a few people in this House who once again are questioning the value of what we're undertaking here in British Columbia. Hopefully, now these people will understand, as we have always understood, that jobs and investment flow from working together on sound decision-making, which not only enhances British Columbia's reputation for environmental protection -- as you can see in the A minus mark we got this year, and we hope to be upgraded again next year with more designations and for years to come with the new park and wilderness decisions we're going to make -- but will also validate our approach to economically sound sustainable development.
[2:15]
G. Campbell: Certainly we can all take a moment to congratulate the people of British Columbia for an A minus rating. We would certainly want to pursue an A plus rating, and I think there are ways we can do that which will provide for the long-term sustainability of the province. The fact of the matter is that, unfortunately, the Premier has not listened to the voices of many communities of British Columbia who have pointed out that while there may be some tourism jobs that have been generated, there are many, many resource area jobs that have been lost.
An Hon. Member: Name one.
G. Campbell: I'm glad to name many. I can name you the mills from Creston. I can name you the hundreds of workers who have lost their jobs in Tahsis. I can name you the hundreds of workers who have lost their jobs in northern Vancouver Island.
Interjections.
The Speaker: Order, please.
G. Campbell: However, the purpose of the statement that I understood the Premier to make was that we all, indeed, do recognize the importance of our natural environment in British Columbia. I think one of the important things that the government has often forgotten is that every British Columbian is an environmentalist, every British Columbian is willing to work to protect and preserve the natural environment of their community. However, what British Columbians are concerned about is that the government has consistently turned a deaf ear to the cries of communities to be listened to when they talk about economic activities, when they talk about sustainable jobs and when they talk about long-term security for their families and for their homes.
I also think it's time for the government to listen to the voices of the communities in the Kootenays and to learn from the voices of the communities in the Cariboo, who said quite clearly to the government: "Do not impose solutions on us. We are willing to work with you. We are willing to show you how to accomplish our goals as British Columbians." Had we pursued that route, I believe we would not have just received an A minus rating this year. We would have got an A plus, because we would have protected parks and wilderness, and we also would have protected British Columbians' jobs and their communities.
J. Weisgerber: In responding to what I suspect must have been a ministerial statement -- although there was never any indication of that -- the first reaction is that the most endangered species in British Columbia today is the NDP. I suppose we might hear an announcement about a park or a protected area in a few key constituencies around the province where that endangered species might thrive and survive.
In listening to the Premier read his speech, one is tempted to pose the question: author, author? But I suppose, given the events that have occurred in British Columbia over the last few months, everyone would know the answer. Looking seriously....
Interjections.
The Speaker: Order, please.
J. Weisgerber: In order to have an author, you have to have some notification of an event occurring, and that has failed to become the practice in this House recently.
To get to the issue, it's an important achievement for British Columbia to have an A minus rating in the area of wildlife. But we must recognize that it can't only be through the creation of parks and protected-areas strategies that we protect wildlife habitat. As a society we can't continue to set aside single-land-use designations. We've got to work -- and should be working -- towards better multiple-use, multiple-user activities on Crown land. It should be with that goal in mind that we recognize that there is both the need to preserve habitat and the need to maintain an economic base. Communities in the northern part of Vancouver Island and across the interior are recognizing that the approach taken by this government, which is ever-increasing set-asides, is threatening their economy -- indeed, is causing them to become endangered species in their own communities. We have to work more effectively and more cooperatively, and use our land base to better advantage.
So I'll applaud the government for having achieved a goal, a plateau. But I don't believe that we can continue to depend on the creation of ever more parkland in order to preserve wildlife habitat. This province can't sustain an ongoing growth in park size and in protected-area size.
The Speaker: The hon. member for Okanagan West rises on what matter?
C. Serwa: On a point of order, referring to Parliamentary Practice in British Columbia, the ministerial statement of the Premier doesn't qualify under the code. There is no new or altered policy, which is a requirement; there is no matter of urgency; and the statement should be brief, factual and specific. A licence and a latitude have been given that are not warranted or authorized.
Hon. G. Clark: I have a point of order to raise. I have reviewed the Blues from yesterday, and the Opposition House Leader stated very clearly: "...it's been the New Democratic Party, and this Premier in particular, who have been smearing the province of British Columbia all over the place with their misappropriations of funds in Nanaimo." This is incorrect, slanderous and clearly unparliamentary. Yesterday, when asked to withdraw his statement, he denied making it. From
[ Page 13459 ]
reviewing the Blues, it's clear that he did, and I now ask him to withdraw it fully.
The Speaker: The matter was addressed yesterday by the Chair in that the hon. member was asked if he intentionally intended to impugn any member, or words to that effect. After being given several opportunities to withdraw the offensive remark, the hon. member chose to accept the penalty of being removed from the chamber, which is the remedy we have had in the past in matters such as this. While the Blues do confirm the fact that an offence was committed, it was addressed yesterday, and it would be inappropriate for the Chair to revisit that matter.
Hon. G. Clark: I say respectfully that the member opposite was perhaps under a misapprehension that he did not impugn the integrity of the Premier. The Blues confirmed that he did. I would say, hon. Speaker, if this is your ruling, that this side of the House would be prepared to give leave to that member to make a statement in the House to apologize to the Premier and to withdraw his remarks.
The Speaker: The hon. member for Okanagan West rises on a point of order?
C. Serwa: Yes. The point of order is that you have made a ruling in the matter and your ruling is not to be questioned in this Legislature. That's a fundamental rule.
G. Farrell-Collins: As the Speaker ruled, the case stands. I will not deny the findings of the court. I will not deny the truth, and I don't know why the Minister of Employment and Investment would ask me to do so.
Interjections.
The Speaker: Order, hon. members. Just a moment. Before....
Interjections.
The Speaker: Order, please, hon. members.
The submission by the hon. Opposition House Leader was not on the topic that we have before us. We are not here to debate the issues that have been raised from time to time respecting questions of concern. What we are talking about now is a ruling made yesterday respecting comments by the hon. Opposition House Leader in question period which he refused to withdraw. The Blues indicate that the member was indeed in violation of decorum. He chose, however, not to withdraw, and that matter was addressed by asking the member to leave the chamber for the remainder of the day. The Government House Leader's suggestion that, with leave, the member would have an opportunity to withdraw is a matter which I have to leave to the assembly itself.
Hon. G. Clark: I obviously respect your ruling, hon. Speaker. I would ask the member, then, to withdraw his remarks in the chamber today which clearly implied a confirmation of his remarks of yesterday, which he did not withdraw. So I ask him to withdraw his remarks today, and I also ask here in the House that he repeat those words outside the House, where he can be sued for slander.
Interjections.
The Speaker: Order! Order, all hon. members.
Hon. members, the matter is settled as far as the Chair is concerned, and if members wish to take any further action, this would be their prerogative.
GROWTH STRATEGIES STATUTES AMENDMENT ACT, 1995
Hon. D. Marzari presented a message from His Honour the Lieutenant-Governor: a bill intituled Growth Strategies Statutes Amendment Act, 1995.
Hon. D. Marzari: Rapid growth is the single most powerful force propelling economic and social change in our province. Communities throughout British Columbia, particularly in the fastest-growing regions, are struggling with urban sprawl, air pollution, loss of green areas and agricultural land, traffic congestion and lack of affordable housing. They're struggling because these problems transcend the local boundaries of municipalities, and British Columbia's local government planning system does not support integrated planning at the regional level.
This legislation will provide the foundation for a better, more practical relationship between the province and local governments, so that we can pool our resources and coordinate our efforts to capture the positive benefits of growth. Clean air and water, livable and safe communities, green space and parks, efficient services and jobs are the goals we are all pursuing, and this legislation will take us one giant step in that direction.
I'm very proud that this bill provides explicit recognition of the vital role that local governments play in developing long-term solutions to the growth-related challenges we all face. I'm also very proud that this bill is the product of close cooperation and consultation with local governments. It responds very closely to their needs as they have been expressed to me over the last year and a half.
Bill 11 introduced, read a first time and ordered to be placed on the orders of the day for second reading at the next sitting of the House after today.
[2:30]
WCB REGISTRATION OF BABYSITTERS
G. Campbell: On March 22 the Minister of Skills, Training and Labour rescinded his decision that the minimum wage would apply to babysitting in British Columbia. We have now been informed that the WCB has decided that single parents and families who have to hire babysitters for more than 15 hours a week are required to register with the WCB, pay assessments and have their homes open for inspection.
My question is to the Minister of Labour. Will the minister act today to rescind this ridiculous intrusion of the WCB into the lives of British Columbians?
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Hon. D. Miller: The WCB is run by a board of governors that is representative of the employers and the labour community of the province, and has two public interest governors. Those decisions are made by the board of governors; they have responsibility for their decisions. If the member has opinions with respect to decisions made by the board he should convey them to the board.
The Speaker: Supplemental, hon. member.
G. Campbell: My supplemental question is to the Premier. Unfortunately, the minister still doesn't get this. Single parents spend enough time and make enough effort to ensure that they have adequate child care for their children without having to waste their time filling out innumerable WCB forms and submitting their homes to unnecessary inspection. Once again NDP ideology has run roughshod over common sense.
Will the Premier direct his minister and the minister's deputy minister to instruct the WCB to rescind this order and to act to protect the families of British Columbia?
Hon. D. Miller: Last year the Liberal critic for WCB made a very declarative statement that there should be no political interference in the operation of the board of governors of the WCB.
Interjection.
Hon. D. Miller: I repeat: if there are members on the board who would be open to any ideas or complaints that the Leader of the Opposition has.... I would urge him to contact the representatives of the B.C. Business Council or the small business coalition who are on the board, and perhaps they will take up his concerns.
PAYMENTS BY PREMIER'S OFFICE TO U.S. POLITICAL ADVISERS
F. Gingell: Conflict-of-interest commissioner Ted Hughes believes that the Premier's office funnelled payments to the American spin doctor Karl Struble through Ron Johnson's NOW Communications to intentionally mask the true recipient of these taxpayer funds. When, Mr. Premier, did you first learn that the staff in your office, staff under your direction, were using this devious charade to deliberately deceive the citizens of British Columbia?
Hon. M. Harcourt: We have just had a very extensive and expensive review of this issue by the conflict-of-interest commissioner. He made two very important findings: firstly, I was cleared entirely of any conflict, real or perceived; secondly, he went on to say that, unlike the allegations that have come from the opposition, NOW Communications obtained any contracts that they have through merit and through existing government policy. This is according not just to what Mr. Hughes had to say but to what the existing industry had to say. Mr. Hughes made a couple of observations. He expressed some opinions that right now are part of a review by the auditor general, who is going to be dealing with just these questions.
The Speaker: Supplemental, hon. member.
F. Gingell: Agreed: no conflict -- but a deliberate intention to deceive. When will the Premier advise this House that he and his party have finally learned the simple lesson that masking payments of taxpayers' money -- or charity money, for that matter -- is wrong, whether the masking takes place in the Premier's Office or in Dave Stupich's office in Nanaimo.
Hon. M. Harcourt: I have said that I was unaware of the details of the contract until the details came out in the study that was done by Mr. Hughes, and Mr. Hughes made that very clear. The opposition may not want to take the wax out of their ears or get their sight checked. If they read Mr. Hughes, he made it very clear that I had no knowledge of these contracts or of the details of this contract. I should say to the Leader of the Opposition and his cohorts that people who live in glass houses shouldn't throw stones.
J. Weisgerber: My question is to the Premier. Mr. Hughes has implied that the Premier's advisers did not tell him the truth about the deliberate attempt by the government to mask the payments to Karl Struble. Any reasonable person would take it from Mr. Hughes's comments that the Premier's staff essentially deceived him under oath. How can the Premier have any confidence in the people in his office who were responsible for that activity?
Hon. M. Harcourt: Mr. Hughes, I repeat, said there was no conflict, real or apparent, as far as the Premier was concerned. He said that NOW Communications obtained their work through merit. He expressed some observations and an opinion about a matter that is clearly in the jurisdiction of the auditor general, who is at this time reviewing the question of these particular contracts. On the administration of the series of contracts in the relationship with Karl Struble, I have said that the issue of more transparency of who was involved in those contracts and the details of those contracts are areas I intend to take up with my deputy and with the auditor general.
LINKS BETWEEN PREMIER'S OFFICE AND U.S. POLITICAL ADVISERS
J. Weisgerber: When I specifically asked for copies of memos and correspondence between the government and Struble-Totten, I was told that none existed. Yet Karl Struble testified that he did communicate so-called "work product" that included "notes on memos" and "memos they generated off conversations," with "they" being the Premier's staff. Can the Premier tell me why I, along with Ted Hughes, was deliberately deceived by members of his staff? Will the Premier commit today to table the information that I requested and that Karl Struble has now confirmed exists?
Hon. M. Harcourt: What we should table here today is something from the leader of the Reform Party for wasting many tens of thousands of taxpayers' dollars on an unfounded, unfair and politically motivated conflict inquiry that took up a lot of taxpayers' money to come to the obvious conclusion that I said from the beginning would take place. I think that's what should be tabled in this House, instead of the opposition of smear and fear -- whichever day it is they're up making their wild statements. I think we should be dealing with the real issues that are important to ordinary British Columbians: job creation and defending medicare from the right wing in this province and this country.
G. Farrell-Collins: Given the comments from the Premier, I assume he personally will be picking up the tab from
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the city of Vancouver for their driftnet fiasco and freedom of information there, where they tell nothing -- nothing.
My question is to the Premier. On the list of persons interviewed by Ted Hughes during his investigation, there is no mention of an interview having been conducted with Johanna den Hertog from his office, in spite of the fact that Struble-Totten was used by den Hertog in her September '94 trip to Europe. Did or did not the Premier inform Mr. Hughes about the personal relationship between Johanna den Hertog and Ron Johnson and the financial relationship between Ron Johnson and Struble-Totten and the use of Struble-Totten by den Hertog in her Europe trip?
Hon. M. Harcourt: The opposition are indeed running dry; they are indeed running dry. They're quite prepared to waste this House's time and the taxpayers' money instead of dealing with the great accomplishments that have taken place in this province over the last three and a half years -- including an A minus rating from the World Wildlife Fund that we're going to improve on, including some magnificent land use changes that are bringing security and prosperity to British Columbia and creating more jobs than in any other area of Canada, and including the fight that we will carry on to preserve medicare from these people who want to cut and slash and have a two-tier health care system. Those are the issues which we should be debating in question period instead of these spurious questions.
Interjections.
The Speaker: Order, please.
Hon. member, the supplemental question.
G. Farrell-Collins: The opposition and all parties are just trying to find the truth in this matter, and day by day it becomes clear that the truth is far from forthcoming.
Interjections.
The Speaker: Order, please.
G. Farrell-Collins: During the period immediately prior to and following den Hertog's European trip, over 50 faxes and phone calls were made to Struble-Totten from den Hertog's office at 999 Canada Place. Can the Premier tell us why he did not explain to Ted Hughes the relationship between Johanna den Hertog, Ron Johnson of NOW Communications and Struble-Totten?
Hon. M. Harcourt: The commissioner is quite capable, with a very experienced counsel, of asking the questions that he believed were important to deal with the issue before us, which is whether there was a conflict or not, and whether NOW Communications received any special treatment.
To now deal with a member of my staff who was an important part of our efforts to preserve the number one industry in this province's market -- that's the forest industry, in case they've forgotten about that in all the smear and fear campaigning they're doing.... Ms. den Hertog, with her knowledge of five different languages in Europe, and her knowledge of some of the key members of the European Parliament Environment Committee, was very instrumental in helping with my very successful trip to Europe, with the forest industry, with forest workers, with aboriginal leaders, to make sure that our forest industry wasn't harmed. That's what Ms. den Hertog was doing, instead of this guttersniping that's happening from the Liberal opposition and Reform.
U.S. PRIOR KNOWLEDGE OF TATSHENSHINI DECISION
R. Neufeld: My question is to the Premier. The Premier stated that Mr. Struble had no inside knowledge of major announcements he helped communicate. Yet Mr. Struble told Ted Hughes that he did get policy briefings from the Premier's advisers, including Chris Chilton, Doug McArthur and Thomas Gunton. Karl Struble said: "If we're talking about communications, you've got to first understand the policies that you're talking about before you can communicate them." Given Mr. Struble's confirmation that he was briefed in key policy decisions before they were communicated to British Columbians, can the Premier tell us what advance knowledge, if any, Karl Struble had of the Tatshenshini decision before it was announced?
Hon. M. Harcourt: The knowledge that Mr. Struble picked up about policies, quite frankly, was seen by every British Columbian in our platform in the 1991 election. And that was that we would bring in an environment and jobs accord. That is, we would change the way we conducted forestry. That is, we would involve the people of British Columbia in protecting protected areas, in bringing about a new way of carrying out forestry, so that we could increase jobs as we have in this province -- 14,000 new jobs in forestry. The investment of forest companies in the forest industry has gone up from $1.4 billion to $1.8 billion, showing their confidence in forestry in this province. And that is the information that Mr. Struble had access to, which all of the members had access to, and which we won the last election on.
The Speaker: The bell terminates question period.
D. Mitchell: I would like to present to the House today a petition signed by 15,000 British Columbians -- I don't have them all here; they're in a couple of boxes over there in the corner. It states: "As B.C. MLAs enjoy gold-plated perks and benefits that are a gross double standard compared to what is available to the province's taxpaying citizens." Therefore, your petitioners respectfully request that the honourable House "reform the following MLA perks": the MLA pension plan, the clean-office policy, tax-free allowances and the MLA severance plan. There are 15,000 signatures that say we should do that.
[2:45]
R. Chisholm: I'd like to present a petition on the prisons in the Chilliwack valley. At this moment, 3,067 letters are being taken to the Premier's office. The people of the valley are protesting the increase of prisons in the valley, and there is a new $17 million prison planned at this moment. They have asked me to petition this House to look into this drastic situation that they are very, very appalled by.
Hon. G. Clark: I call Committee of Supply A for the purposes of discussing the estimates of the Ministry of Small
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Business, Tourism and Culture; and in the House, I call committee stage of Bill 7.
COLUMBIA BASIN TRUST ACT
The House in committee on Bill 7; D. Lovick in the chair.
On section 1.
D. Mitchell: I have a question on the procedure on this bill. Do you propose to deal with the preamble last, or do you want to deal with the preamble now?
The Chair: Normal procedure is to deal with the preamble last. Unless there are compelling arguments otherwise, we'll do that.
D. Mitchell: Fair enough, hon. Chair. We'll save the preamble till last. I do have a question on the preamble itself. Not every bill brought before this committee has a preamble, and I'd like to ask the minister for some clarification on one aspect of that.
On section 1, which deals with the interpretation and definitions in this act, I do have a couple of brief questions under "Interpretation" for the minister. First of all, the first definition offered in the interpretation section deals with "corporation." The minister has been on record as talking about the trust as a regional corporation. He's also referred to it, I believe, as a quasi-Crown corporation. He's also said this is a corporation that has unprecedented autonomy. He's made a number of rather grandiose comments about what this trust in fact is.
I would like to ask him, because the definition isn't really very explicit under this act, if he could tell us very clearly what this trust is. Is it a Crown corporation? Is it a quasi-Crown corporation? Is it a trust? Is it a utility? Can you please define it for us?
Hon. G. Clark: It is not a Crown corporation in that sense; it's not an agent of the Crown. It is a corporate entity which we have a role in and a share of, but it is not a Crown corporation.
D. Mitchell: Could the minister, then, just be a little more forthcoming about this? If the corporation is not a Crown corporation and not an agent of the Crown, but it's an entity that we as the province of British Columbia have some interest in, how would we describe it then? Are there any other models he could point to, so that we could say this trust is like something else that's clearly established already in the province? Or is it unique?
Hon. G. Clark: It is unique. There is no other precedent. It's not a Crown corporation or government corporation, because even though it has one share -- and the Minister of Finance owns the share, as you'll see later on in the bill -- it's not a voting share. That makes it quite unique and quite distinct.
We wanted to try to develop something unique with the people of the region which would give them control over this entity but which would still have the reporting requirements, legislation and transparency requirements that the government would bring to it. That's why we.... There was a lot of debate about this -- how many members of the board of directors the government of B.C. should have, and all those kinds of questions. This was arrived at in consultation with the communities of the Kootenays and the Columbia Basin.
G. Wilson: Hon. Chair, I have a question of procedure that I'd like your ruling on. Because this Columbia Basin Trust Act is so heavily implicated by the memorandum of understanding with respect to the Columbia Basin accord, which.... The minister is shrugging his shoulders. I'd say that $500 million is a fairly significant implication, along with about a 25-year commitment beyond that. I'd like some ruling as to the extent to which we can canvass that accord in relation to the sections as we go through them.
The Chair: Member, I guess that all I can do is invoke the normal rule governing committee -- namely, that debate must be strictly relevant to the section under discussion. Clearly, you make a case prima facie that there is that connection, and it would seem to me that a reasonable canvass of the issue you refer to would be appropriate -- not, however, having a debate about the advisability of that other mechanism. I hope that clarifies a little how I will be guided in this.
G. Wilson: I'm certainly not suggesting that anybody is going to try to play politics with this question, but I think it is of significant interest to people -- in the Kootenays in particular, but also to all of British Columbia -- as to how this trust, which is a new creature in this province, is going to work, given that there is already, de facto, an agreement with respect to funding and how that funding is going to be applied. I think it is a relevant matter, and I would appreciate that latitude.
The Chair: I think we'll work on the assumption that we do indeed have an understanding. If I might just add one final caution for everybody's benefit, however: we have had a second reading debate on the principle, so if we talk about the existential premise of the memorandum, we're clearly straying far afield. If, however, we're talking about its impact on this bill and particular sections, we are within order, it seems to me.
Hon. G. Clark: I was going to say that that leaves me out of the debate, but.... Sorry.
I would like to introduce my staff today: Blair Redlin, who is the assistant deputy minister for economic policy in the Ministry of Employment and Investment; and Michelle Poirier, who is the project officer in the employment strategy branch of the Ministry of Employment and Investment.
D. Mitchell: We're still on section 1, under the definitions. The minister has indicated that when it comes to the definition of the trust as a corporation, this is a unique entity; there is no model for it; it is unprecedented. The minister also said that this entity will have unprecedented autonomy in terms of its ability to deal with investments in its region.
Hon. Chair, I guess there's another question of procedure here that we could raise: the fact that this announcement was made outside this House, before the government ever brought
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the bill to the assembly. There is a question of the cart being put before the horse -- a question of presumption -- and a question, I suppose, of legislative privilege in terms of us being consulted after the fact.
Having said that, the minister has indicated that the corporation itself is going to receive a significant share of public funding. Yet the minister has said clearly that it's not a Crown corporation; it's not a quasi-Crown corporation. In fact, the government has a share in it, but it's a modest share. Can the minister tell this committee today whether or not we, as legislators who are being asked to approve this measure today, should have any concern about the unprecedented autonomy of this corporation, which is going to be funded largely by the public purse?
Hon. G. Clark: This is part of the debate we had with the region, to be candid. The region would ask -- many of the civic leaders, regional district politicians or average folk who attended literally dozens of meetings on this question -- how much autonomy there was versus how many provincial government strings attached, etc. The way we resolved it was that this corporation is created by an act of the provincial parliament. It does give unprecedented autonomy, and that's certainly what we intended; but because it's created by an act of the Legislature, the Legislature at all times has the opportunity to revisit the legislation at some future date. I think there is a balance between how much local autonomy there is and the role of the province in this question.
The role of the province, I think, is intact and significant, in that it's created by legislation; legislation can be changed by future governments. There is a third of the board of the directors, so the province is always informed of the decisions being made; there's a very close informational relationship there. The regional representation on the trust is made up of elected politicians or people appointed by elected politicians in the regions. You'll see later on in the bill that there's a certain accountability in public input requirements.
I think that that should give members some comfort that, while there is an unprecedented amount of autonomy, there is a significant investment being made in the region, and there is real local control. There are sufficient safeguards for the province as a whole -- for the public interest as a whole in the province -- to be protected by virtue of our share of the seats on the board, by virtue of the openness and accountability in the bill, by reference to the fact that the elected politicians in those regions will have some control, and by reference to the fact that, at the end of the day, the corporation is created by statute of this House and can therefore be changed by statute of this House.
D. Mitchell: I think that, given the record of this government on accountability or the lack of accountability of Crown enterprises -- whether it be Crown corporations or other agencies -- we should all be concerned as legislators. Even members of this committee who support the principle of this bill, who may have spoken to that during second reading debate and who believe that some kind of investment or endowment of a legacy fund should be made in the Columbia-Kootenay region, should be concerned when the province -- this government -- wants to create a new entity with unprecedented autonomy. It's a unique corporation or trust. I don't think the concerns about accountability have been adequately addressed. We'll have a chance to canvass them a bit more later on in the bill.
Hon. Chair, I'd like to ask the minister one other question about the interpretation section. There's something missing here: a definition of the minister. Throughout the bill, in many other clauses, the bill mentions the minister; it says that the minister may do this and the minister may do that. But under the interpretation section, under the definitions, the minister is not clearly defined. I'd like to ask if we can be told today in committee if it's implied that it's always the Minister of Employment and Investment that is being referred to, or whether or not the minister is referring to the Minister of Energy, Mines and Petroleum Resources or other ministers who may have an interest in this.
Hon. G. Clark: When the minister is not referred to specifically, it means the minister who sponsored the bill in the House. The Minister of Employment and Investment is the sponsoring minister, under whose name the bill stands. It's not necessary to refer to that title in the text of the bill. Only if there were another minister who, for some reason, had some authority being granted under the bill would you have to define it as another minister.
W. Hurd: Just a further series of questions, then, on how we're going to deal with the Columbia Basin accord, which is wrapped up with this bill. Clearly, there are a number of obligations from the parties. In fact, if we look at the Columbia Basin accord, we see reference made to a partnership and the investment of some $500 million. Can the minister clarify whether or not the existing accord has any force in law, or does that only come into effect when this bill is passed, creating this corporation? I think that's an important clarification. There must be some way in this act that we can review the expenditure of some $500 million and examine the nature of the partnership between the trust and the province. I would just ask for clarification on this point: is the Columbia Basin accord, which is an agreement between Her Majesty the Queen and the Columbia River Treaty Committee Inc., a legal document, or will it only come into force of law when this bill proceeds to royal assent?
[3:00]
Hon. G. Clark: That might well be a question of legal interpretation. For all intents and purposes -- from my perspective, speaking on behalf of the government -- it's a document that we intend to fulfil. It is binding on the part of government. We entered into it freely, and we signed the memorandum of understanding.
The memorandum of understanding does refer to a subsequent legal document to be engaged. That is my recollection, in any event. We could certainly refer to that; I'll have my staff refer to it while we're discussing it. My understanding is that it refers to a subsequent legal document. I will say that it may well be more of a political commitment at this time, at least until the bill is passed by members of the House.
Just in making a general statement, if the members opposite are opposed to investing this kind of money in this fashion, they should vote against the bill. That's the debate in the House. I welcome the members opposite to oppose the bill.
I might remind members that in the memorandum of understanding -- given the latitude the Chair has given to discuss these questions -- there is a share from the province
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and from, in this case, the regional trust. I look forward to much discussion during my estimates about the provincial contribution. That might be a more appropriate place to have a full debate and discussion. Under estimates, the province is an equal contributor, and therefore there is full accountability with respect to how that's spent.
W. Hurd: This is an exceedingly important issue. The memorandum of understanding is clearly an agreement between Her Majesty the Queen, in the right of the province of British Columbia, and the Columbia River Treaty Committee Inc. It is signed by the Premier of British Columbia and Mr. Josh Smienk, chairman, on behalf of the Columbia River Treaty Committee. Is it a legal document or is it not? Does it come into legal force as a result of us eventually approving Bill 7? I think it's a very good point, because the Columbia Basin accord contains all the information that will bind the parties over a ten-year period. There are totals of revenues mentioned that will be advanced to the treaty committee. If we are prevented from engaging in any review of the basin accord during this discussion, then we're clearly being denied an opportunity to properly scrutinize this bill.
The Chair: It sounds to me like the member's comment was suspiciously like a point of order. Let me try again to clarify, if I might.
By the rules of this chamber and by the rules governing committee, we are empowered only to deal with the specific sections of this bill. The larger questions about the advisability of the bill and other attendant documents or agreements are for a second reading debate. I think the minister tried to clarify the legal question the member posed, and on that basis I said that for clarification we'll let that proceed. To have a debate now about the accord, however, I think is entirely out of order, with all due respect. I would say to the member, however, that as the minister pointed out, the member and other members will indeed have an opportunity to canvass those sorts of questions in the minister's estimates. Having said that, I'm going to caution all of us, then, to stick to section 1.
Hon. G. Clark: I want to make just one further point on that. Members should be reminded that the trust can still proceed even if the accord didn't. So the linkage that the members want to make.... I appreciate the discussion. This bill stands separate and apart from any political decision, if you will, that the government has made to provide funds to the trust. That's a separate debate, which I know members opposite may well want to oppose. This trust creates an entity which in itself is debated here in the House, not what the government may choose to bring forward to that trust.
Having said that, I have just one further point. If they'd like, I will certainly undertake for members a formal -- I shouldn't say formal; that's too expensive -- or informal opinion, if I can gather one from my ministry, in terms of the legal question. It's irrelevant to me whether it's legal or not; there's a political commitment made with respect to the accord that we fully intend to live up to. If members opposite don't want to live up to it, then they can campaign in the next election saying they're opposed to living up to it. I welcome them to it, and I fully expect they'll do that. But for technical clarification for members -- even though it's off topic, Mr. Chair -- I'd be happy to ask staff to give me a sort of legal quickie, a verbal legal question, which I'll relay to members opposite.
W. Hurd: I would at this point settle for an assurance from the minister that the committee will have the opportunity to examine the partnership arrangement between the province and the trust during some aspect of this bill. Having received that assurance, I think we can deal with a number of other funding-related issues. I would ask direction from the Chair as to in which section of the bill it would be appropriate to canvass those particular issues. I suspect that it might be section 4, the purpose of the corporation, or the preamble. But the wording in section 4 is mysteriously like the wording of the partnership in the basin agreement. But I'd certainly happily settle for a ruling on that or some sort of....
The Chair: With agreement, we'll say section 4, in the event that we get to section 4 before we have that legal opinion. I don't know if that will be the obstacle. If that isn't the obstacle, then we'll deal with it under the preamble. But we'll assume section 4. I hope that's satisfactory.
J. Tyabji: In section 1 we see that the definition of tribal council' means -- and my pronunciation might not be great -- the Ktunaxa-Kinbasket Tribal Council. I'd like to know how the tribal council is decided. Who are the voting members who make up this tribal council? And to what extent does the province have any jurisdiction?
Hon. G. Clark: I'll try the pronunciation first; I think it's Ktunaxa-Kinbasket Tribal Council. The tribal council, unlike the other delegates on the Columbia River Treaty committee, actually.... The delegates that were at the table in negotiations with the province did not have the authority to sign any agreement until they went back to the tribal council for a full democratic vote, which they did. We did not supervise that vote. We were fully cognizant of the tribal council's jurisdiction in that regard, and we were quite prepared to accept the wisdom of the delegates to the CRTC on the basis of their processes. My understanding is that they had a vote at the tribal council, and the vote was unanimously in favour of agreeing to sign on to this historic agreement.
I might just say, if I can, that the process we went through was exhaustive, and the role of the delegates from the tribal council was really outstanding. I think there was real leadership in the community, among the Ktunaxa-Kinbasket people, and it was just a pleasure in terms of the negotiations and discussions and the process that they undertook. I was personally always a bit nervous when it went back to the people of the tribal council -- even though I was quite confident -- and it was very heartening that the vote was unanimous in favour of this agreement. I think that demonstrates yet again the tremendous support and the process we went through to arrive at this historic agreement, which culminates in the act today.
J. Tyabji: How many voting members are there in the Ktunaxa-Kinbasket Tribal Council? If the province does not supervise the vote, is that done with some federal supervision? What is the accountability process for that? Is there a provincial appeal mechanism or input for the members directly to the province?
Hon. G. Clark: No. I don't know how many members there are, and nor does it concern me. Secondly, there's no provincial and no federal monitoring role, I believe. Frankly, I find it just a hair paternalistic or offensive that you might
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suggest there should be some kind of role. My own view is that this tribal council, in a very mature way, took it back to their people for a full discussion. My understanding is that it was a full and exhaustive canvassing, discussing and debating that arrived at a consensus position, which is quite common. I wouldn't support, frankly, any intervention on the part of the province. At the end of the day, you know, these things can only be supported if there is support. Not to make a tautological observation, I think there has to be a sort of community of good will and support from the people of the tribal council, and there is that. If at some future date there isn't, then I'm sure the tribal council will have the appropriate remedies as a nation in British Columbia to handle these questions on their own. I don't anticipate any provincial interference in any process that they might set up.
J. Tyabji: I think it's interesting that the minister feels that any senior level of government monitoring an election, which is supposed to be due process, is perceived to be paternalistic. When municipal or regional district governments have their local elections, I don't know that the government's ensuring that there is due process is considered to be paternalistic. I think that's called due process. So what the minister is saying, in effect, is that he has in the definition the words "tribal council." We know that later on in the bill there's a serious impact. We know that there's a large issue in the area with the tribal council arbitrarily moving the boundaries so that suddenly they have greater jurisdiction over the future of this. We know that there's an aboriginal treaty negotiation process ongoing with the tribal council.
The minister doesn't know how many people there are, what process they followed, when it was done or even if there was due process. But he's comfortable allowing them to arbitrarily change their boundaries so that they have greater jurisdiction over a $1 billion series of hydro projects. I find that to be a very interesting approach. If this provincial government is going to ensure that the public's trust, including the aboriginal public trust, is protected, I think there is a cooperative effort that ensures due process for all members, not just the delegation that happened to come to the table.
If there is no method for the province to have any kind of dialogue with the membership of the tribal council directly, to what extent is this definition going to relate to the aboriginal treaty negotiation process, to the talks that are ongoing with the Ktunaxa-Kinbasket Tribal Council? We see that it is directly tied to both the bill and the memorandum of understanding.
Hon. G. Clark: First of all, I don't think aboriginal people would accede to the idea that there is a senior level of government, being the province or the federal government. They would argue that their level of government, which was here first, of course, has jurisdiction to discuss among themselves how they wish to participate. Secondly, let's put it in context that the tribal council here gets two out of 16 seats on the board of directors. They have no authority to act without the support of at least, I guess it is, seven other directors supporting them. So one shouldn't get too carried away about the role of the tribal council to act unilaterally in this matter. They have a role: it's an entrenched role, but it's not one that they can exercise in and of themselves. So I don't think it's all that significant that they have two members of the board of directors, that they choose them and that the province is not going to have any say in how they choose them. That would be my very strong view.
In addition to that, I don't understand the.... I know there's a question of accountability; we'll get to that later. This corporate entity and the individual components of it is where there's the question around accountability. We leave to the tribal council the accountability of the two members of the board from the tribal council; it's to the aboriginal people themselves to choose that. I have no problem with that. If the member does have a problem with that, then quite correctly she and her party should vote against this legislation.
G. Wilson: Maybe I could come at this from a slightly different angle, given that we are on definitions here. We're trying to focus down. My colleague raises an extremely valid point that the minister wittingly or unwittingly -- I'm not sure how much wit he has about him today -- somewhat avoided. We notice in the definition of region that you have defined in (a) through (e) each of the regions that is then represented in section 5(a) through (e) as having a land jurisdiction.
Essentially, you've argued in the definition that it's the Regional District of Central Kootenay, that there's the Fraser-Fort George Regional District or a very small portion.... And I'd like to talk about how you came up with that, because if you look at the map, it's interesting that you sort of crossed drainage divides and a few things, which we'll talk about in a minute. Then you talk about the Columbia-Shuswap Regional District, the Kootenay-Boundary Regional District and the East Kootenay Regional District. So it's very specific with respect to the regions in terms of the authority granted the ten regional directors who are going to be appointed under section 5 of this bill.
[3:15]
But there is no mention, in terms of the provision of region, as to what we're dealing with concerning the Ktunaxa-Kinbasket Tribal Council in respect of the territory or region over which they have some authority or jurisdiction. We know that this definition is going to be critical, because a parallel process is underway. I don't mean to get into that debate at this point, but I do mean to raise or flag it. Under the Treaty Commission process, there is a parallel process that's going to greatly impact on this definition in terms of jurisdiction and authority over this particular entity.
In fact, if the minister is correct and there is no recognition that there is some kind of law subjugated to those of the province and the federal government, and if this is a first nation that stands almost in a sovereign state, then it may render this entire bill completely redundant at the end of that process. The downstream benefits may not even go to a British Columbia entity but may in fact go to a first nations entity, which is another debate.
The question, then, directly on this specific issue on the regions is: where in this definition is the defined territory that would be the purview of the two members from the Ktunaxa-Kinbasket Tribal Council, given that every other member has their region very clearly defined?
Hon. G. Clark: The member has deduced from this bill an excellent point, in that there are members from the region who represent the region geographically, and then there are two members who do not represent a defined geographic region necessarily but rather are interest-based representation on the board. Therefore if this definition here overlaps with the traditional territories of the Ktunaxa-Kinbasket Tribal
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Council, it clearly overlaps. This is the geographic region as a whole. It refers to the legal definitions as such, because of the basin itself and the legal structures that exist -- mainly regional districts. The region agrees with this.
The tribal council is dealt with on a without-prejudice basis for representation of aboriginal people in the region in an interest-based way. I certainly have no problem with how they choose to define that. Everybody up there, if you will, in the region knows that the tribal council has an administrative structure. They are aboriginal people up there, and we felt very strongly that aboriginal people should be represented in this process.
Aboriginal people, I'm delighted to say, joined in this process, even though they are not in control of the process. They joined the process as part of it, as opposed to being separate and distinct. Every discussion with aboriginal groups -- and I would do the same thing if I were them -- is without prejudice to any negotiations in the future with respect to their legal entitlements.
If you look at the accord, Mr. Chair, I am sure it says "without prejudice to any future land claims negotiations." If it doesn't, I'd be very surprised. So we would not be very smart to try to define the region for which the tribal council is represented geographically when it's the potential subject of either litigation or future negotiations. In fact, we gave two seats out of 18 on the board -- I think I said 16 earlier -- to the tribal council on the basis that aboriginal people should be represented as a sector, if you will, as an interest-based representation as opposed to a specific geographically-based representation.
G. Wilson: I appreciate that somewhat lengthy but informative explanation. Given that they are interest-based and not geographically defined, one might argue why other tribal councils weren't included that may have overlapping claims. That would be another issue which, again, we're not going to get into in the debate here -- at this time, anyway. There may be an opportunity later with respect to other sections of the bill.
I want to focus on this question of regional allocation, because it ties directly to the region as it is defined above. It talks about moneys paid by the government to the corporation for the corporation's purposes, and that's given the regional allocation. Within this bill it's made very clear -- and that's reinforced under the accord -- that any moneys that come into this corporation do not in any way obfuscate local government from their duties and obligations to perform the normal kind of functions that they have. I would argue that the bill also says, later on, that any moneys that come into this corporation through this regional allocation do not obfuscate the provincial government's obligation and responsibilities to the larger mandate that it may have to finance.
My question is: given that there is a regional interest only with respect to the Ktunaxa-Kinbasket, and given that the downstream benefits -- according to the definitions of this bill with respect to the provisions we see in front of us, as well as the accord -- are to provide some restitution or some compensation for alienated lands or lands lost, or costs associated with the Columbia River Treaty, will this corporation be liable for the payment of any of those compensations with respect to the Ktunaxa-Kinbasket claim? Quite clearly, the moneys going into economic development issues and other sorts of issues that are going to come out of the expansion of the Brilliant and Waneta dams, as well as the Keenleyside project, are going to very definitely be subject to the successful negotiation on that other process.
So my question is: what obligation or liability is this corporation likely to find itself in with respect to taking those revenues, which could quite arguably be claimed under the Treaty Commission process, to be paid then to the Ktunaxa-Kinbasket Tribal Council...? Has that been explored or discussed? That's why I'm asking about the definition, because if it isn't defined with a specific region and if they can talk about it as an interest in the Columbia Basin, it strikes me that they've got a tremendous claim to simply take the assets of this corporation as part of their land claim.
Hon. G. Clark: The problem with this line of questioning is that they are sort of abstract questions which are based on a whole series of assumptions. It's very hard to get into: what would happen if this happened, if that happened, if this happened? This agreement is without prejudice to any aboriginal settlement. I can't comment on what the terms of any future settlement -- if there's a future settlement -- would be. Therefore this corporate entity, this Columbia Basin Trust, will be developing significant assets. And it will presumably be affected the same way anybody else is or is not affected in the region, subject to negotiations.
If I could be cavalier about the question, it seems to me that the provincial government is not likely to enter into any agreement without broad community support from aboriginal and non-aboriginal people. This entity is such a magnificent achievement for the region that I'd be very surprised if a provincial government would want to give or negotiate that away in any future discussions with the tribal council.
It's completely without prejudice. It's a separate issue, and it has nothing to do with this legislation. This is without prejudice to any future discussions.
I gave an undertaking and discussed the question with a couple of lawyers, and although I find it very hard to believe, I gather they agree. I'm sure that if we discussed it with other lawyers, we might get other interpretations, but our understanding is that the memorandum of understanding is not legally binding, although apparently one might argue the case. It's clearly a commitment on the part of the government, one which I've made repeatedly, and it's currently under public discussion and consideration in the region. Should the Columbia River Treaty Committee go forward and sign the final agreement we are negotiating now, it will be legally binding.
The last point in the trust says that the province and the trust intend to enter into a formal written agreement regarding the content of this memorandum. That's under discussion. When that is agreed to and signed, it will be legally binding. While there's always an argument when it comes to lawyers, our understanding at this point is that it is not legally binding until there's a legal document signed.
G. Wilson: I'll come back to some of those issues under more specific questioning later in the bill. I'm curious to know whether the minister would even be aware that this might be a subject of that negotiation, but I think there is a place later in the bill where we can get to that legitimately without straying too far.
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I will come then more specifically to the definition of region B. What has been done here is that a portion of the Regional District of Fraser-Fort George has been defined. I've taken the trouble of having the regional district forward me a fairly detailed map of exactly where it is, because there is some dispute as to what the Columbia Basin includes and doesn't include. I don't want to get too specific on each river, valley and mountain, although with respect to the Canoe River boundary, it is interesting to notice how it varies between taking the boundary per se and taking what is called the watershed of Baker Creek and of Canoe River.
I come to the question of watershed because this is likely to be a dispute, and I can see that this might in fact be a legal complication. My suggestion is that perhaps there's an oversight in the bill, in the sense that it would have been useful to have had a definition of the term "watershed" with respect to the Columbia Basin, so that this kind of distinction would have been made and so that geographers such as myself who look at this don't say that this definition doesn't fit what's on the map.
Hon. G. Clark: I have a noted expert, the member for Nelson-Creston, at my side. In my discussions with the region, I have to say to the member that at no time have I had members of the region either writing me, phoning me or complaining to me or members of the government caucus from the regions, saying there is a dispute as to what constitutes the Columbia Basin -- the drainage area that is the Columbia. I think there is agreement on this question. If the member knows otherwise, he could forward it to me.
I will say that section 31(2) of the bill permits changes to the definition of the region, if the region decides. But I have not heard a hue and cry around this definition. It's generally accepted in the region. I think there is broad consensus on it. In the bill here is a legal definition based on everybody's understanding, as I understand it, at least, of the Columbia Basin. I've heard no representation otherwise, except for the member now saying that there is a dispute as to the territory.
G. Wilson: I'm not trying to be obstreperous here in any way; I'm just trying to define it. The Fraser-Fort George Regional District is a huge regional district -- as this minister, I'm sure, is aware -- that extends from Williston Lake in the north, all the way down through Valemount and into the Columbia Basin. It's only the very, very small portion in the bottom that is included in this definition, yet it has two elected members who sit on this trust, and they will be beneficiaries, presumably, of any revenues that are generated from it.
So the question, then, is: if there is to be money put into employment opportunities, and if this thing works as I would like to see it work and as we would support it to work -- I'm not sure that the government has quite got there yet, but we're hoping to change their mind on a few things -- to what extent is the Fraser-Fort George Regional District the recipient of that proportional share? Or would they be through the trust? Or to what extent are they bound to only that southern region and the boundaries that are very specifically outlined in this bill?
That is a legitimate question, because I even think the minister might suggest that the boundaries actually exclude Valemount, as it's been defined here. We've done a very quick pencil drawing on a map, but according to the wording in this.... And believe me, if the minister has ever been involved in municipal boundary altercations, he'll know there is nothing that gets the sentiment of people whipped up as fast as being either in or out of something they want to be either in or out of, when it comes to drawing the line of a municipal boundary or, in this case, a regional district boundary. So I think the minister might want to comment specifically on region B.
L. Boone: As a representative for that area, I would like to advise the member that Mona Grasdal, the representative for the Fraser-Fort George Regional District, sat on the CRTC, as did Jeanette Townsend, the mayor of Valemount. These two individuals have no question as to where the division takes place and the fact that Valemount is clearly recognized as being the community that's in that treaty and that it has been affected by the Columbia River Treaty. I've never heard from the mayor of McBride, and let me tell you that the mayor of McBride is not someone who would not let me hear from him if he thought that he should be included in that area.
Mona Grasdal, the regional district representative from there, is also very clear as to where the interest is and what part of her region would be affected by the Columbia River Treaty and by this trust company.
[3:30]
There's been such a tremendous cooperative movement by all the individuals who worked with Josh Smienk on this whole area. Just in talking to what the member said in the past with regard to some of the divisions there, one of the things that I think is really important is to recognize that each and every one of these people who sat on the CRTC and were with this area see themselves as representing the whole region, and do not go into a sort of parochialism with regard to their own communities.
If you're concerned about the divisions there, I can tell you that the regional district representative is clear as to where the boundaries are and what area she represents, as is the mayor of Valemount. This process has been very inclusive of everybody there, and I would urge the member to contact these individuals if he's not satisfied.
G. Wilson: I have only one further question. We actually have been in contact with a number of people there. I'm delighted to hear that there's such huge support, because...
An Hon. Member: So will they.
G. Wilson: We might, and they probably will, also.
...we seem to be hearing from people who have concerns, so that's interesting.
But with respect to this, all I'm trying to do is get a clear definition, and I'll come back to one last question in terms of the regional allocation. It seems to me that this is a corporate allocation, which is going directly into this new entity that's coming out.
I want to hear the minister say that the regional allocation that will be made through this -- well, it isn't a Crown corporation -- new strange entity that's being developed is not going to in any way mitigate the government's obligation or responsibility for normal regional allocation that may be found under the Municipal Act or through any other division of assets of this province.
There is concern that what's happened here is that we're going to get three big dams, or an extension of two and the
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Keenleyside project, and that basically this is a recipe for the government to off-load borrowing to a new entity in the Kootenay area.
Hon. G. Clark: I can certainly make the commitment to the member. I think their MLAs, in particular, but also all the politicians in the region were acutely aware that they did not want to be party to a new corporate entity with access to significant income over time, which would simply displace the province's commitment to the region. The provincial government would no longer fund schools and roads, etc., and would simply say: "Well, you paid for it, and you've got this new entity." That's not contemplated at all. In fact, later on in the bill you'll find that we specifically made reference to the fact that this is not to supplant. In fact, if you read section 4(2), it says: "Nothing in subsection (1) relieves any level of government from any obligations it might have with respect to the region." We feel very strongly about this. This must truly be incremental for economic development purposes supported by the trust.
D. Mitchell: The interpretation section of most bills offers definitions for clarification. It's interesting that during this discussion we've become increasingly confused about a lot of the terms we're going to be using in this bill. It makes us wonder why we have a section in here dealing with the region, when the region, as the minister says, is not very specific at all, and it's kind of an abstract concept.
I don't want to pursue this too much further, but I would like to ask the minister one thing. During second reading debate on this bill, the minister will know that it was raised that the Columbia River Treaty, which this bill is pursuant to, was part of the famous two-rivers policy of the government back in the 1960s. The Columbia River Treaty would not have proceeded without the simultaneous development of the Peace River. When we define the region this trust is going to be working with.... Did the government give any consideration to extending that trust to include the Peace region as well as the Columbia-Kootenay basin?
Hon. G. Clark: I think it's fair to say, and I've said it publicly on occasion, that I'm quite sympathetic to looking at the Peace country as separate and distinct in terms of whether there isn't some way of giving people of the region some influence over decisions that affect them, particularly on economic development.
In this case, speaking personally as the minister responsible, I didn't give any consideration to Columbia River Treaty revenue going directly as part of this trust to another agency in the Peace. But as I say again publicly, I'm sympathetic to the notion of working on that question at another time. The return of the downstream benefits has given us a unique opportunity to address the concerns of the Columbia Basin. It's much harder financially -- somewhat harder, at least -- to deal with a similar kind of exercise in the Peace country, which was impacted by the hydro developments on the Peace.
C. Serwa: I guess I have concerns. I've listened to the minister speak in second reading debate with respect to the historic injustices and all of the other concerns he had in the development of this bill. When I look at the definition of "region," it's hard to relate the areas that are included with such historic injustices. For example, Rossland is included; it's perched way up high on the mountain just next to Red Mountain and Granite ski hills, yet it's included in this. When you look at the Columbia River Basin, it is a very extensive and broad area, and certainly includes the Okanagan as part of the Columbia River drainage system. It's not directly affected, but it's not any less affected or more affected than a municipality such as Rossland.
It appears to me that when this was drawn up, the utilization of the definition of "region" was for those regions represented by government MLAs, rather than the regions affected. In fact, there was no intent to correct any historic injustice, if it ever was so -- rather, to shore up the current government seats. As my hon. colleague has pointed out, there is no accommodation for similar concern in the Peace River areas.
Hon. G. Clark: At the risk of prolonging debate.... I realize that I shouldn't be sensitive to these questions, but I really do find those remarks offensive, Mr. Chair. I think this is a much longer history than who occupies the seats at this given time. When you look at the debate in the region, this definition came from the people involved in the debate. Those people involved in the CRTC were not all members of the governing party by any stretch of the imagination, nor should they have been. This was something which generally has to have support from the region and from across political boundaries. We have endeavoured to do that; I believe we've got that. I frankly reject the notion that we've undertaken this simply because we happen to have government members sitting in every seat in the Columbia Basin at this time.
Section 1 approved.
On section 2.
G. Wilson: I just have one question that the minister can clear up fairly quickly, I think. This corporation being established, called the Columbia Basin Trust, is a new entity. It's going to have 18 directors, and this spells out how they get appointed, and that's fine. It has share capital, which we see happening in the next section.
It says: "The corporation is not an agent of the government." That's an important point. It will receive virtually all of its funding from the government, and it will also receive a virtually unconditional guarantee from the government with respect to its financing, at least in terms of the dollars that are going to be put into the three dam projects. We learn that from the memorandum of understanding. So this is a corporation of elected officials who can potentially change every three years through an election, or they can potentially change at the whim of a regional district, which may appoint their representatives by whatever virtues or processes that they decide are appropriate. In a later section we see that that can be done; the government isn't going to interfere. It doesn't have to be a consistent process; regional districts can do it differently.
So we've got this corporation that is not an agent of the government, and it is going to be handling hundreds of millions of dollars for at least three large capital projects. It is going to have a board of directors that is likely to change on a fairly regular basis within a two- to three-year period. The only appointments that are likely to be consistent are the six that may be appointed by the Lieutenant-Governor-in-Council, and that assumes that there is stability within the
[ Page 13469 ]
government and the governing authority. If they are political appointments, those tend to be somewhat tenuous as elections come and new governments are formed and so on, as we have seen in this province.
I have some real concerns about the consistency and the maintenance of this corporation in terms of its administration. We're talking about billion-dollar projects, or projects of that worth, and we're talking about its directors changing on a fairly frequent basis. That's a significant concern. It is not an agent of the government, and we therefore have to ask where its financial accountability is going to be given when the government has fully underwritten its financial affairs.
Hon. G. Clark: It strikes me that either you believe in giving local control or you don't; you can't have it both ways. In this case, I say this to all members of the House: have faith in the people of the region. We are giving an unprecedented amount of autonomy -- power, if you will -- and money to a regional corporation, which has people of all stripes on its board. All are from the region. If that member is unwilling to say that we should give that kind of regional autonomy, that Big Brother in Victoria should continue to manage the affairs of the region, then that is his prerogative.
It's not our position. Our position is this: this is unique and different, and we are giving the people of the region a significant amount of say in decisions that affect their lives as well as a significant amount of income. That's at the very heart of this bill, and I have no problem defending it. I think to do otherwise is simply not to make the kinds of changes required to really deal with the question of regional control, which has for so long been demanded by members of the region.
I want to go further and say that at the end of the day, this House is accountable to the public. This corporation is controlled by a statute of the provincial House, and any future government can change it. The logic of the member's remarks is that because the members who occupy government change every four years -- well, gee, we'd better be careful what we do because democracy might suddenly intervene and change the people in positions of power. Well, frankly, that may happen here too. Democracy may intervene, and board members representing particular regional districts may be turfed out of office because they didn't like the way the trust handled a particular issue, and that's good. It's up to the people of that region to take control of that.
Just on this point, nobody in their wildest imagination should suggest that this is going to be easy. No one should be under any illusions that giving control -- a significant amount of power, if you will -- to this entity is going to solve all the problems in the region, nor is it not going to lead to intense debates between communities in that region. Everybody knows that. Everybody goes in with their eyes open. We've been up front about that. We on the government side have faith in the people of the region to work cooperatively to solve those problems, but it is not going to be without tension or debate at any given time, nor is it not going to be the subject of regional elections from time to time, probably. I say: "Good stuff, let's let the people of the region have a say in their destiny for a change."
G. Wilson: I find it absolutely amazing that this minister would stand up in defence of this section of this bill in this process and say that we should have faith in the people of the Kootenays. It was this minister who went in and signed a memorandum of understanding, committing the Kootenay region to $250 million and ongoing debt liabilities that are going to be on three hydroelectric power developments, before this corporation, which this minister says we should entrust the people of the Kootenays to determine how it's run, was even set up. I mean, they have set up exactly what this corporation is going to do before they even gave them the authority to determine if it was a good idea. Talk about hypocrisy. It's just unbelievable.
[3:45]
With respect to section 2(5), the fact that this is not an agent of the government, which is my specific point.... The reason I argue this is that we have created a corporation run by politicians. I don't think that's a good idea. I don't think corporations run by politicians is the way to go. There's an enormous difference....
Interjection.
G. Wilson: I'm getting pulled into another debate by the member for Yale-Lillooet who's suggesting that British Columbia is run by politicians, and I suggest that there's $28 billion debt to show for it.
Having said that, there's an enormous difference between having a corporation established as it's spelled out in section 2, which provides an opportunity for real investment in the region, run by an independent authority or an agency able to take representation from local governments, to hear from the public and to make sound and sensible investments.... I support that. In fact in 1987 I advocated that as the way we should go. There's a huge difference between that, which would be an agent of the government that would be....
An Hon. Member: The good old days.
G. Wilson: Those were the good old days, and this member should be happy that things changed the way they did, although he may not be in the long term.
The fact is that this entity not being an agency of the government is a problem, because it's run by politicians. The people of the Kootenays have not been widely consulted on this. We had representatives who discussed this issue at the last meeting that you had in the Kootenays, and there were all kinds of questions about how this thing was going to operate and whether or not it was a good idea for the $500 million to go into this thing. So if we're going to have a change in the way that the directors work, surely the minister would agree that it would be sensible to amend this to provide for some stability in terms of its board of directors so that a board of directors would be appointed who were not politicians, who were not elected members, but who had some expertise in the running of a corporation and in the maintenance and management of investment opportunities. We would go out and get the brightest and best minds possible to take moneys that would be coming back from the Columbia downstream benefits so that the people of the Kootenays could diversify their economy, could invest in something other than three new dams. This, to me, is a serious problem. I'd like the minister to tell us how he envisages this working if in fact it is a corporation run by politicians, which is exactly what this amounts to.
C. Evans: Leaving all the nonsense, rhetoric and other stuff aside, the member asked two real questions. One of them
[ Page 13470 ]
is how the thing is going to be accountable if it's not a function of the government. I would draw all members' attention to section 26, which we're going to get to, where they will read that everybody in British Columbia will know everything that happens with every penny because it will be reported out in this room. If it is ever not reported out in this room, the members on the other side will simply stand up and ask how come it wasn't reported out. So the accountability issue is clear; it is not a function of the government....
Interjections.
C. Evans: What's the deal? I stand up and all of a sudden....
The second real question that he asked is how come they're all politicians; or maybe he asked how come they can't all not be politicians. This was the subject of a great deal of discussion -- first in Nakusp over a three-day meeting, then in Cranbrook over a two-and-a-half-day meeting, and then in negotiations between the Columbia River Treaty Committee and the government. It's a great question. It's a really important question. The Ktunaxa-Kinbasket Tribal Council may wish to appoint people. The Regional District of Kootenay-Boundary may wish to appoint people. Then the Regional District of Central Kootenay might say: "It's important, it's a big issue here, so we want to have an election." They will be allowed to have an election.
When we -- we being the government -- met with the five regional districts and the tribal council, some people made a very articulate case that there should never be an election, because it becomes parochial. When running for office, you tend to say: "All the money should go to my town." Other people said: "If we appoint and the people don't feel there's enough accountability, ten years from now we may wish to have an election." The act was written precisely to address that so that people could choose; they could be appointed or elected. You'll note from the act that the provincial government can also make that same choice. They can appoint an elected person; they can appoint a non-elected person. It's a very good question, but you'll see that the answer is also in the bill; it's not in the rhetoric.
The Chair: I would remind members that we are on section 2, "Corporation established," and that the purpose of the corporation and the directors of the corporations are dealt with in other sections of the bill.
G. Wilson: Thank you, hon. Chair, for your direction; I won't make reference to the fact that when the member talks of section 28 he should then read section 30, which says that the Offence Act doesn't apply to this act or its regulations, which is another matter. But we'll get to that when we get there. I won't raise that at this point.
My last question, with respect to the underwriting of the loans, is to the member -- or to the minister or to whomever; I think the minister probably would want to answer this. If it is not an agent of the government, can the minister tell us under which statute it can provide the unconditional guarantee of its expenditures and accounts? How is that going to be maintained? In the memorandum of understanding, there is an unconditional guarantee of its financing. If it isn't an agent of the government, under what statute does this government have authority to do that?
Hon. G. Clark: It's a bit off-topic, but what we've agreed to, as I understand it -- and members here who might know more about it could correct me -- is really to make the three.... First of all, I don't think the member is referring to the capital allocation of $45 million and $2 a year; he's referring to the three big hydro projects, I think, which is about $1 billion over ten years, half of which would be equity and half borrowed. To make those viable, one of several things is required. The easiest way to make them viable is to agree to purchase the power at a certain price. If anybody agrees to purchase the power at a certain price over a certain period of time, those projects are financeable anywhere in the world at any time. We've agreed that Powerex and West Kootenay Power are in discussions now, because West Kootenay Power needs power, and Powerex can sell power in the United States as a result of this agreement and, of course, the opening up of the market in the U.S. At a certain price, both of those agencies are quite prepared to buy all the power generated by all the dams.
If you agree to guarantee a price for the power, the questions then become: is the thing viable, and what rate of return would you receive on your equity? So we can do several things. We can guarantee the projects themselves for the region by borrowing the money on our credit line, and by extension.... We can do that by statute. We can borrow on their behalf, using the provincial government's borrowing power. Or an agent of the government -- in this case, B.C. Hydro or Powerex -- can guarantee without any legislative approval, can buy power from this agency at a certain price. They do that every day of the week, and they're going to do that from private power producers. This will have the same standing as a private power producer in British Columbia. And they're looking for a long-term, firm price for that power to make those projects viable.
So we have two choices. The province has agreed to make these happen because we're satisfied, in terms of due diligence, that either of those options is satisfactory. The price of the power will make sense for B.C. Hydro, for Powerex or for West Kootenay Power, and therefore we've made that commitment. But no statutory requirement is required to make either a guarantee of the borrowing or a purchase price agreement for the power generator.
G. Wilson: It is interesting that these negotiations are underway. So much for local autonomy, local control and trust of the local public -- right? -- because Powerex and West Kootenay Power are involved. But that's another matter.
Interjection.
G. Wilson: Yes, it's an already-done deal which the people of the Kootenays will be pleased to learn about, I'm sure.
I want to come back to that very specific question because the minister actually didn't answer it. It's not a trick question. I'm not trying to cause a political debate to break out here on the merits of this particular.... I'm curious to know from a legal point of view. I don't know the answer to this and I'm not trying to entrap the minister, but if this is not an agent of the government, then how is the government able to provide an unconditional guarantee with respect to financial transactions that this company enters into? Under what statutory authority is the government acting? It's a very simple question.
[ Page 13471 ]
Hon. G. Clark: The Financial Administration Act.
R. Neufeld: The corporation is not an agent of the government, and I appreciate that the minister explained earlier that you want the people of the area to make the decisions. It's been explained quite well how the decisions are being made.
I want to go ahead a little bit, with the indulgence of the Chair. Section 3(2) is exactly opposite to what.... The corporation is not an agent of the government, yet subsection (2) says: "The share in the corporation must be issued to and registered in the name of the Minister of Finance and Corporate Relations and must be held by that minister on behalf of the government." The shares of the corporation are all registered on behalf of the government, so I can't quite understand how the corporation is not an agent of the government. It doesn't make sense.
Hon. G. Clark: Sorry. We did canvass this earlier, and the member wasn't here, but....
Interjection.
Hon. G. Clark: Oh, I'm sorry. I thought we did.
The share, which refers to section 3.... I hope we'll get through that quicker if I answer it now, Mr. Chair. It's true that the Minister of Finance owns the share; it's a non-voting share, and the board of directors is two-thirds from the region and one-third from the province. That makes it quite unique and distinct and not a government corporation, because the shares are not exercisable in what would be a Crown corporation sense. That's why it's a corporation with share capital. It's a non-voting share.
D. Mitchell: I would like to ask a question on this. I know we've been spending a lot of time going through this bill, and I've just been passed a note from outside this chamber, saying that the estimates of the Ministry of Small Business, Tourism and Culture that are ongoing in Committee A are in danger of being passed because some of the less competent members of this assembly are possibly going to let them pass. So I want to go over there and participate and ask a few questions. But I have one brief question on this section.
Section 2 establishes the corporation. The minister has told us very clearly it's a unique corporation. We're not really sure what to call it, but he said it's not a Crown corporation. Section 2(5) says: "The corporation is not an agent of the government." Could the minister tell us what legal requirement compelled him to insert this clause into this section? Why is it necessary for the government to state in this bill that the corporation is not an agent of the government? Is it because, even though this is going to be a publicly funded agency, the government does not want to be liable for any of its actions -- it does not want to be liable for any legal recourse or actions that are taken against this trust for any policies, actions, investments, borrowings or debts that it incurs? Maybe that would help answer this question. There has to be a specific purpose for the bill to specifically declare that the corporation is not an agent of the government.
Hon. G. Clark: This was part of the discussions with the region. This is to give it more local autonomy and to clearly define that this is not a provincial government Crown corporation. It's not an agent of the government; it is a regional trust -- a unique entity being created, with regional control and regional autonomy.
J. Tyabji: So that we don't have to make up reasons to stay on section 2 while my colleague looks at the Financial Administration Act, could we stand down section 2(5)? There was an answer from the minister specifically on the Financial Administration Act. We're doing a little research. The alternative is that I do a bit of a song and dance, and delay it.
The Chair: I appreciate the member's candour. Minister, is it agreeable that we would stand down section 2? Apparently not agreeable. Let the song begin.
J. Tyabji: I defer to the member for Okanagan West.
C. Serwa: I want to enter into debate on section 2, with the fact of the corporation established. The reason I want to talk about it -- not so much in the purposes, although I'll probably refer to it at that time -- is that there are two diverse jobs for this corporation to attend to. First are the regional concerns with growth and development and the investment of earned capital. The other aspect of this corporation appears to be the ownership of the expanded hydroelectric facilities.
[4:00]
The reason I enter this at this time is that there is only one corporation contemplated. We have B.C. Hydro, which has the expertise and staff and the ability to assume the ownership. The dividends from that operation could then go to the corporation the minister is striving to establish, which has the regional interests at heart. It seems to be far more efficient to have gone on that pattern and model, with the assurance and guarantee that the dividends would accrue to the regions, and that the corporation could do its job more ably with respect to care and consideration. But all that we appear to be doing in the establishment of this one corporation is involving redundancy and duplication, and expertise that is already available through B.C. Hydro.
I know there is some concern in the Kootenays with B.C. Hydro. That was evident when West Kootenay Power and Light was taken over by American ownership and the thought of B.C. Hydro purchasing West Kootenay Power and Light was rejected by the residents of the Kootenay area.
Hon. G. Clark: B.C. Hydro bears a legacy in that region which is not particularly popular. Whether one agrees with that or not -- or the debate, etc. -- it was the agent of the government which wrought this change on the region, which has given rise to this resentment and concern. One of the reasons for doing this is to bring some justice and remedy to that historical grievance. I agree with the member. B.C. Hydro is a logical agent, if you will, to construct, manage and assist the trust. I might advise members that Keenleyside will be contracted back to B.C. Hydro to manage, because Keenleyside has been a Hydro project, and they've done years of work. The member might know that a lot of the work was done before, and it's really shelf-ready.
Waneta and Brilliant capacity projects are expansion projects owned by a new corporation called Columbia Power,
[ Page 13472 ]
which has no real employees other than employees of my ministry. It was formed to hold those assets, because we purchased them from Cominco in return for Cominco rebuilding the smelter.
So it's envisaged at this time, at least with those projects, that Columbia Power will be the government agency that joint-ventures with the trust. Then that gives the trust the capacity to use B.C. Hydro, should they choose to do so, for Waneta and Brilliant expansions, or to go to the private sector.
There are many large corporations around the world that have expertise in this kind of area. Maybe I'm being overly sensitive, but I think the trust might want the option of going to the private sector to build those expansion projects, once they have the operational expertise of the Keenleyside project. I guess that in this chamber I'll be candid and say that I think it makes sense to contract back to B.C. Hydro to build them and to build up some expertise in managing those facilities and in working out a coordination agreement with Hydro, which would be required in any event, and probably with West Kootenay, in terms of managing these assets.
But at this point, I think the historic animosity toward B.C. Hydro is significant. I think the idea of the trust being allowed to pursue a joint venture down the road, perhaps with a different company, is one that we leave open to future discussions and negotiations. So that's the genesis of it.
My sense is that the Keenleyside project will be a bit of a test case to see if Hydro will be managing it, contracted back. They'll be running it, and they'll be working intimately with the trust and with the people of the region. After that, I suspect it will be logical for them to proceed with the other ones. But having a bit of a market test on that is not a bad idea, and I think giving the region some influence over that is a good idea. So that's how I see it unfolding.
G. Wilson: I wonder if the minister might point me to the section of the Financial Administration Act that he says permits this corporation not to act as an agent of government, which it does. It's very clear -- and the Financial Administration Act is extremely explicit -- that if the government has 50 percent or more of the shares, if it's in owned shares, this is a government corporation. If the shares are to be held 100 percent by the Minister of Finance, which it says under section 3, this is a Crown corporation. If there is a provision for underwriting the financing and for guarantees to be put in place, this is a Crown corporation, according to the Financial Administration Act as I'm reading it right now. If I'm wrong, then maybe the minister could explain where those sections are.
Hon. G. Clark: Section 14(2) says: "The Financial Administration Act applies to the corporation as if the corporation were a government corporation."
G. Wilson: If section 14(2) of this act talks about that in terms of borrowing and the borrowing powers, then I would ask the minister why and under what legal advice. Again, I would like to know why it is that 2(5) is even warranted. In terms of its borrowing, if it acts as a Crown corporation, if it is secured in terms of its financing like a Crown corporation, if the Minister of Finance holds 100 percent of its share equity as per a Crown corporation and if all the other matters of the Financial Administration Act apply like a Crown corporation, then why specifically does section 2(5) say that it is not an agent of the Crown? What is it that we're putting in there? What is the reason for that to be there?
Hon. G. Clark: Really, part of the discussions leading up to this bill was such that we wanted to give every assurance to the region that this would not be bureaucrats or politicians in Victoria telling the region what would be done. So it's to give comfort to the region that this is not a Crown corporation. It's a different entity, a unique entity, which gives regional control.
But for the purposes of making sure that these investments take place, if we choose to do so, we can exercise the powers and prerogatives of the Financial Administration Act.
G. Wilson: I don't see any consequential amendments that would alter what's in the Financial Administration Act. I haven't heard any assurances from the minister that the statement of this not being an agent of the government, given that all the other conditions that apply to this company are conditions that would apply to a Crown corporation, would even stand the legal test under the Financial Administration Act. How is it that this government can create a brand-new entity, with the provision to borrow up to $500 million to go ahead in terms of construction of this and in which the government is putting in place a full guarantee that impacts on every taxpayer in the province, and yet say that it isn't an agent of the Crown, when the Financial Administration Act is specific with respect to what the government must have in terms of the provision of those guarantees? I've not heard how this is, in fact, a legal entity. What is it? If it isn't a Crown corporation, exactly what is it? It certainly isn't a private corporation; it's a creation of government. If it isn't a Crown corporation and it isn't a private corporation and its board of directors are all politicians, it's a pretty suspicious animal to me.
I would again like to reiterate what my colleague from Okanagan East said. I think the minister should permit this section to stand down until we can get some advice on it. The minister is asking why. The reason is that, if one looks at the act that regulates the borrowing and spending powers of this new corporation.... It's the Financial Administration Act, by the minister's own admission. As I read this act.... I could well be wrong; I'm not a lawyer -- which some people say is to my credit -- but it seems to me, in reading this Financial Administration Act, that there is no provision for the guarantees that this government has given assurances of in an accord that's set up between the people of the Kootenays.
Either the government has pulled the wool over the eyes of the people of the Kootenays and they've entered into an agreement that they know full well they don't have to fulfil, or this is a lot of smoke and mirrors, and they've created a Crown corporation that's going to do a deal with B.C. Hydro and West Kootenay Power and Light to build a few more dams and pretend that the people of the Kootenays somehow had some say in it. Which is it? It's one of the two.
Hon. G. Clark: I don't understand. Normally I'm prepared to stand down for further explanation, but I think we've canvassed this. The explanation is clear. The Financial Administration Act does give the power to government to guarantee or to borrow money; that's what the whole act is about. For the purposes of this act, in section 14 it is deemed to apply to this corporation, even though it's not a Crown corporation. The member is correct: it's not a private corporation and it's
[ Page 13473 ]
not a Crown corporation; it's a unique entity which we have worked very hard with the community to develop.
We didn't want a Crown corporation of which the government of British Columbia in Victoria could dismiss the board of directors; we wanted to have an entity which had, by statute, control by the region. We also recognized, certainly with the big projects and the big undertakings we're prepared to commit to, that it required the resources of the provincial government. So we've allowed it to access those resources through the Financial Administration Act. I might remind members that the Financial Administration Act is extremely strict.
Not to belabour this section, but there's a whole section under "Financial administration" that says that the accounting system must have satisfied the Minister of Finance; that whenever required by the Minister of Employment and Investment, they must submit detailed accounts of its revenues and expenditures to the minister; and that all books and other financial records must at all times be open to the province. There's a whole openness section.
So it is a hybrid. We're not trying to hide anything here; it's completely clear. I've been very straightforward on this. The member is not familiar with the Financial Administration Act. That's nothing this committee can deal with; that's up to the member. It has all the powers of the Financial Administration Act. If it's deemed so, we can apply it to this corporate entity for the purposes of facilitating the investments the province of B.C. has committed to with the region.
J. Tyabji: I think the minister is missing the point. What's at issue is not whether or not the members are familiar with the act but which part of the Financial Administration Act would allow the act before us, specifically section 2(5), to have a clause that says that the corporation is not an agent of the government, when it's governed under the Financial Administration Act, which has some very specific provisions. My question to the minister is: did the minister or his staff have a legal opinion which said that section 2(5) was something consistent with the Financial Administration Act?
Hon. G. Clark: Legislative counsel and the Attorney General ministry draft the detailed provisions of the legislation, and it is a constant, iterative process. After discussing with them our commitments to the region and how they would be transformed into legal text, this is their best effort to do that. It's something we've shared widely with the community and elsewhere. I am advised -- and people take comfort in the fact -- that this is not a Crown corporation controlled at the end of the day by Victoria. There are sufficient safeguards so that Victoria can intervene. There is openness. We have some influence, but it is not a Crown corporation from Victoria; it's a regional corporation, and a regional trust, with control and power in the region.
[H. Giesbrecht in the chair.]
J. Tyabji: It's quite clear that Victoria is extremely involved in this, whether the minister wants to admit it or not, based on the memorandum of understanding. Having said that, why wouldn't the minister have chosen to leave out section 2(5), given that in section 5 of the bill the way that the board of directors is constituted is laid out very specifically? Wouldn't that achieve the same thing? If this continued to be an agent of government, which for all intents and purposes it is, and the section with the directors remained as it was, the minister would have the same effect. The region would still be appointing the board of directors, but we would at least have a section 2 that was consistent with the Financial Administration Act.
If the minister is wondering why we're belabouring this point, when we were talking about this specific section earlier, the minister himself admitted that there are negotiations underway with Powerex and West Kootenay Power for purchasing the power, and that there are all kinds of independent negotiations going on. I am assuming that the negotiations he was referring to are occurring through B.C. Hydro; or perhaps they're occurring through this minister, who was setting up the memorandum of understanding. I'm raising that because that was part of the minister's response to section 2(5) earlier in the debate. We're going after this to find out what the purpose of section 2(5) could possibly be, given that section 5 deals with the question of regional representation. Section 2(5) does not need to be in there. If there's some other reason for it to be there, we'd like to know, and then we can move on.
[4:15]
Hon. G. Clark: I take advice from legislative counsel on the question of what needs to be in or not in. My understanding is that this was required to be in there if we wanted to give the security of the region.... It does seem a bit.... If we wanted to make it a Crown corporation, it would be a challenge to make it a Crown corporation and then give the control entirely to the region. It's not a Crown corporation. It does give the benefits of a Crown corporation for the purposes of the Financial Administration Act -- they're not insignificant; we acknowledge that -- but that's to make these large projects proceed. I want to tell the committee that I didn't personally write these words; I didn't add this particular section in there. We have an army of very well-qualified lawyers, legal counsel, who advise us on how to effect our political commitments, and that's why this is here. Frankly, with the greatest of respect to the members opposite, I think I'll defer to the Attorney General's legislative counsel for guidance on these questions as opposed to the members of the Alliance Party.
G. Wilson: We could probably move beyond this point if the minister will give us a commitment today that he will provide -- at least for the members of the Alliance Party, if nobody else is interested -- some written legal opinion from the legislative counsel who put that in as to how this is not a Crown corporation and how it is managed under the Financial Administration Act. As I read this, section 2(5) has absolutely no weight. This is a Crown corporation. It looks like one, it acts like one, it's financed like one and its shares are held like one -- it is one. The minister might want to tell the people of the Kootenays it isn't one because he may have made a commitment to them that it won't be, but in effect it is one. That's how I read it, and if I'm wrong we'll hear that from the legal counsel. Could the minister perhaps tell us, given that this isn't an agent of the government -- and given that the taxpayers are financing it, however -- who owns any assets that are created through it?
Hon. G. Clark: The trust owns the assets.
G. Wilson: We can look at this in a bit more detail when we get down to disposing of assets and how that's going to
[ Page 13474 ]
work -- which I notice is actually not covered in the bill -- and with respect to revenues and the share of revenue and how that's broken out between the two partners. If the trust owns the asset, how is that going to be registered within the province with respect to the construction of the new projects that are going to be put in place? To what extent does the Crown have authority over those assets with respect to their disbursement?
Hon. G. Clark: We'll get to it later.
I don't know if this off the topic or not, but let's be clear. In terms of the three power assets we've been talking about, the trust will own 50 percent of those assets and the other 50 percent will be owned by the government of British Columbia. That's always been our discussion of that question. It's a billion dollars' worth of project; it will be half equity and, of that, half will be the trust and half will be from the government of B.C. The piece that is the trust's is the trust's, and income is shared on the basis of the ownership of it. So they would receive half the income as well as the province receiving half the income, whether that's B.C. Hydro or Columbia Power or the government of B.C.
We've all been upfront about this. I don't know if that's news to the members; it's not news to the people of the Kootenays. We have now held 12 open houses on all of this, and we've got reports back; we're having intensive dialogue and discussion. All of these details are matters of public domain.
C. Serwa: I'm tempted to make a quorum call, with very little of the official opposition present in this debate. But I'll let it go, even though there is not a quorum present in the House.
On this section it appears that the explanation the minister is trying to give us is one of deception, or an illusion. First of all, according to the Financial Administration Act, this has to be a Crown corporation. But in order to provide the comfort.... Not only is B.C. Hydro not necessarily in the good books of the people in the East and West Kootenays; neither are governments, traditionally. There is that feeling in the Kootenays that the Rocky Mountains...that many of them would have liked to have been part of Alberta, and most of their commerce is in effect there.
But I think that's the reason for the explanation and the reason for the statement -- and the minister can correct me if I am wrong -- where we are trying to convince the people in the East and West Kootenays that it is in fact their corporation. The reality under the Financial Administration Act is that government does not have the latitude or the licence to enable that concept to be fulfilled. The fact is that the government can pull the strings at any time. That's obvious from the minister's statements that agreements are presently being negotiated and have been concluded with respect to the export sale. I think that's the explanation.
W. Hurd: I have one question on section 2. It relates to the power and capacity of the corporation to act as a natural person. When you look at the basin agreement, some $1 billion of debt incurred, of which half will be guaranteed by the province for the trust. Can the minister clarify whether, with the passage of this act, the loan guarantee provisions that are in the agreement automatically apply to the new corporation? Will they have any ability to decide they don't want the province's loan guarantee if, for example, they don't want to incur another $500 million in debt?
That leads me to another question. Where did the $1 billion valuation come from for the three projects? If I were a member of this new board of directors and was going to incur a share of the $1 billion debt, I would certainly want to be apprised of the rationale the government had used to come up with the valuation of these assets.
Hon. G. Clark: B.C. Hydro, KPMG, RBC Dominion Securities and Richardson Greenshields were all involved in the evaluation of the assets. Just to clarify, half of it will be equity and the other half will be debt-financed.
Certainly after Keenleyside and, I think, with respect to Waneta and Brilliant, if the regional trust sells the power by virtue of a long-term energy purchase agreement or something like that, at attractive rates, they won't need the province's guarantee. They don't have to avail themselves of the province's guarantee. They could simply borrow the money on the market on the strength of that contract. The province's guarantee tends to allow you to borrow money at a lower rate, so they'll probably avail themselves of it. But I certainly don't see any problem with them doing that if they choose to.
W. Hurd: This is again getting us into issues related to the memorandum of understanding. Clearly, when we look at that memorandum, it says the province will also pay $45 million to the trust. It will be responsible for the cost of guaranteeing the trust's half of any borrowing for the power projects. Clearly, there's an implication there that as soon as this bill becomes law there will be a series of empowerments or entitlements -- if one could use that term -- by both the trust and the province.
So, under section 2, how can the corporation have the power and capacity of any natural person, when in fact there's a series of encumbrances under the downstream benefits agreement which will take place simultaneously with the passage of this bill into law? This corporation will not have the ability to change any aspect of this Columbia Basin agreement, one would have to assume. They wouldn't have the ability to decide, for example, that while.... "Maybe we want to go back to the province and renegotiate whether we want to be guaranteeing loans or whether we want the province to guarantee those loans on our behalf -- meaning that we will have to incur the cost should the market go down."
A troubling aspect to this whole debate is the fact that we have this agreement that's been signed, for which the minister has pledged to get a legal opinion on whether it has the force of contractual law, and then we have the bill we're dealing with, which purports to set up a corporation with the freedom and the latitude to do anything on behalf of the people in the Kootenays. So I guess my question still stands. Will the minister assure this committee that the people of the Kootenays who engaged in these public debates were given a thorough and honest accounting of these $1 billion in assets they were acquiring? Were they given the long-term implications of the borrowing and the debt they were incurring? This is the most troubling thing to some members of the opposition. I'm not convinced that the people of the Kootenays who endorsed this know what those assets are worth. If they do know, they certainly haven't received the appropriate level of communication.
[ Page 13475 ]
We can safely say, under section 2 of the bill, that the corporation does have the power and capacity of a natural person only as it applies to the limitations or the encumbrances of the Columbia Basin agreement. It's important to put that on the record, because we are not creating a corporation that -- in my view, anyway -- has the ability to change anything in the memorandum of understanding.
Hon. G. Clark: They can turn it down.
W. Hurd: The minister says they can turn it down. But how? They're legally encumbered to $1 billion in borrowings.
Hon. G. Clark: They don't have to.
W. Hurd: The minister says they don't have to. I'm really baffled by that comment, because I believe that as soon as this act becomes law, the memorandum of understanding -- which was signed by Mr. Smienk, on behalf of Columbia River Treaty Committee Inc., and by the Premier of British Columbia -- becomes a legally binding contract on the corporation. They would have no ability to renegotiate, should they see fit, if the value of the assets had been improperly valuated by B.C. Hydro. The minister assures us that there's $1 billion of equity there. In fact, with respect to the Waneta and Brilliant dams, there are no assets; it's just the power generation capacity that the trust is acquiring. It's an issue that I'm sure we'll get into in subsequent sections of the bill, but I am somewhat troubled that the memorandum of understanding was not clearly encapsuled within the act to give at least the people of the Kootenays the opportunity to scrutinize the costs, the benefits, the debts being incurred, the valuation of the assets and all those arrangements that....
Interjection.
W. Hurd: The member for Nelson-Creston claims that there were lots of meetings, and I was fortunate enough to attend one of them. I sat there for a whole day, hon. Chair, and I can assure you that the issue of the cost of the assets of the dams never came up. The group I was in had no idea that the province was even putting dams on the table.
With that, I would just ask for the minister's assurance that he really believes that the corporation has the power and capacity of a natural person -- or are they encumbered by the memorandum of understanding? In fact, they don't have the power and capacity of a natural person. That would normally accrue to any new corporation that comes into the Ministry of Finance and sets up articles of incorporation; then it's a blank slate.
Hon. G. Clark: First of all, the member did attend one meeting, and that was at the beginning of the most intensive series of discussions and negotiations that went on. He never attended any of those; he attended at the beginning or middle of the process and not at the discussions subsequent. Since that time, there have been 12 public meetings with literally dozens of groups and thousands of pieces of mail. There was a TV show produced by the member for Nelson-Creston and the member from Trail-Castlegar. This has been the subject of intense scrutiny and discussion. If the member is saying that he would have preferred us to pass the bill and then engage in a discussion.... We were doing things, and this is happening as a simultaneous process.
Mr. Josh Smienk has signed on behalf of the Columbia River Treaty Committee, not on behalf of the trust. He cannot bind the trust. The trust is formed. They can reject the government of British Columbia's offer; they're free to reject the deal we negotiated with the CRTC. We negotiated with the people of the Kootenays as best we could -- in an informal structure, then in a formal structure and now in a series of public meetings -- and we're doing it simultaneously with the passage of this bill, which was also negotiated and discussed with the people of the region. When the bill is passed, all of this work will then go to the trust for their ratification or rejection.
[4:30]
This is a spectacular deal for the region in terms of all of the open houses we've had. It's not without its critics, nor should it be. There has been discussion and debate. It's not perfect, but I assure the member that this trust has all of the power and capacity of a natural person of full capacity.
W. Hurd: I'll settle for one brief explanation. There is an organization in place, the Columbia River Treaty Committee Inc., that signed the original memorandum of understanding, the Columbia basin accord, with the Premier of British Columbia. I note that there were also six MLAs who signed the agreement. In what capacity they were acting is a mystery to me. There is an entity that signed an agreement with the Crown and that goes by the name of the Columbia River Treaty Committee Inc. Can the minister tell us whether that incorporated -- I assume that's what "Inc." means -- committee ceases to exist with the passage of this act? Is it a company that is registered by the registrar of companies in the province? In what capacity was it acting to bind this new trust commission to the kinds of...?
Interjection.
W. Hurd: The minister says that they're not being bound, but it appears that they are. Can he just advise us as to what capacity the Columbia River Treaty Committee Inc. was acting in? Is the agreement that they signed an agreement on behalf of a corporation with the government of British Columbia?
Hon. G. Clark: I guess the challenge is that when we're entering into a sort of grass-roots exercise to discuss how we might manage this entitlement to share in the region, there is no agency with which we can negotiate. In fact, the people of the region came forward and said: "We want to engage in this dialogue with the province. We asked for a dialogue." They formed this CRTC, and they formed it as a corporate entity. It will cease to exist at the time.... In fact, here's the memorandum: "Within 30 days of the establishment of the trust, the CRTC will transfer and invest in the trust all the shares of the CRTC." This was a transitional organization designed to move this along faster than it might have otherwise, instead of.... Why would we pass a bill before we had engaged in this kind of dialogue with the region about the nature of the bill, and the nature of the investment the province was prepared to make in the region?
It seems to me that we have been doing something which is unique. We've been working on the deal, if you will, on what we would be prepared to offer. We're working on the legislation; we're working on it in discussion. The region, to their immense credit, took the initiative from the province and formed their own negotiating committee. They pre-empted
[ Page 13476 ]
the province going out and trying to orchestrate a discussion in the region. They said: "We want a formal say." I said: "Good for them." We embraced that. The CRTC deserves, I believe, enormous credit in that regard.
Just to draw attention to the other memorandum here: "The province and the CRTC wish the trust and the province to own and operate in equal partnership certain hydroelectric projects as described below." The trust can reject the work of the CRTC. I would think that would be a dumb idea.
Interjections.
Hon. G. Clark: "Suicidal," the members opposite say. Well, maybe. It's up to them. They have the power to do it. The CRTC has done all the legwork; they've done all of the work. The people are to be commended. They've done an outstanding job, from all political parties. We've engaged in this grass-roots dialogue. It results in this magnificent piece of legislation before us today. This trust formalizes a direct role of control by the region, and the work of the CRTC goes over to the trust for ratification -- or, if they wanted to, they could reject it.
While we're discussing this, we're taking out the financial details of this proposal, which we canvassed at great lengths with the CRTC. Because they were negotiating on behalf of the region, they are the agency that set themselves up, and now we're going out to public open houses saying: "Here are the details; here is the debate." And people are debating this, as we speak. They are saying: "Is it worth a billion? Is it not worth a billion? Should we say no? -- all of this kind of stuff. We're not negotiating with thousands and thousands of people at open houses. We've said: "We have negotiated with duly elected representatives; we have negotiated with the CRTC; here's what we've arrived at. What do you think?"
I can tell you that my reports -- I haven't been to any of them personally; I don't know if the member opposite has -- are outstanding. People are saying: "It's about time we got justice in this region. This is a wonderful deal. Let's get on with it. Let's get on with creating jobs. Give us the control." That's what they're saying to us. I don't understand why members opposite are debating picayune matters like this and trying to derail this outstanding deal for the people of the Columbia Basin.
W. Hurd: We're not talking about picayune matters when the Columbia Basin agreement suggests that the province will pay to the trust $25 million per year from the downstream benefits in each of the province's ten fiscal years. The total investment of $500 million from the province and the trust is expected to amount to one-half of the total capital costs of the power projects of the province, and the trust will jointly finance the remainder.
[D. Lovick in the chair.]
The valuation of the assets becomes critical, because at $500 million of debt, the trust could potentially be bankrupt. It could have no asset value; the shares could have no asset value. All I'll do at this point is settle for an assurance from the minister that, should the trust decide that it doesn't want to engage in this kind of debt incurrence and if it decides that it doesn't want to invest in the dam, it's not legally bound by any aspect of this agreement, which is certainly an impressive document signed between Her Majesty the Queen and the right of the Province of British Columbia and the Columbia River Treaty Committee Inc. But if it has no power to bind this newly created trust, then I'm encouraged by that. I think there is some latitude available to the new board to go out and undertake those kinds of studies, to look at the long-term situation for power exports in the province, to examine exactly what these assets should be and what they might be valued at in the future, and not have to rely on B.C. Hydro, the interpretations of Powerex and some of the other agencies that obviously have had this deal cooking on the back burner for quite a few years.
As long as the minister can assure the committee that the Columbia Basin accord has no ability to bind the decisions that the new trust may make, then that's encouraging to me. It represents progress and would allow us to move on to further sections of the bill.
Hon. G. Clark: I want to make it clear that when the trust and the province enter into the formal written agreement, then there is an obligation. They have not entered into a formal written agreement because there's no trust until this bill passes. My advice on the CRTC document -- the member wasn't here when I sought it at his request -- was that it is not legally binding, but it soon will be. The MOU that we signed says: "The province and the trust intend to enter into a formal written agreement regarding the content of this memorandum." Until that agreement is signed, my advice is that there is no legal commitment to proceed with these power projects. We're engaged in this dialogue now and are including all the factual information about the evaluation of these assets, but once this trust is formed and this document is signed or not signed -- if it's not signed, that's fine, too -- B.C. Hydro will build the power projects and generate the revenue, I suppose. That's up to the people who are part of this process. Once they sign the legal document, then it is legal, and those debts, as well as those assets, are incurred by the trust.
G. Wilson: I just wanted to ask the second half of a question that I couldn't get back to you on, and it has to do with liability -- we've heard about assets.
Just before I do that, the minister gave an answer a few minutes ago about how this is not an agent of government -- I'm talking about section 2(5) -- and because this trust is not passed yet, therefore there is no legal agreement. I would agree that that's probably true. The difficulty is now that there is this document in place, this was the only substantive offer that the province made. And I see the minister smiling about this, but it's true. Basically, it was take this -- or what? What else was on the table? What else was there for them to take? What other options did they have? They really didn't have any.
So clearly what we're hearing -- and we have people at all those public meetings who report directly back to members of the Alliance -- them say is: "Listen, we'd better take this because it's the best deal we're going to get. The government's not going to offer anything else." So whether they're legally bound by it or not, the comment about being suicidal if they don't is because there's really nothing else on the table.
Coming back to section 2(5), and this is an important point: if the assets held by the trust are 50 percent -- and I'm not sure how that's legally going to be registered and maintained in the province -- who holds 50 percent of the liability
[ Page 13477 ]
then? The Crown is going to pick up 50 percent of the liability or maybe the liability share is different. There's nothing in this document that lets us know. Are the elected members or appointed members or gifted members -- or however they get to be directors on this -- personally liable for that debt? If they're not, how does this trust in this rather nebulous form deal with the liability question?
Hon. G. Clark: Fifty percent equity by the trust, 50 percent equity by the province and 100 percent of the debt guaranteed by the province.
G. Wilson: I appreciate that clarification because when I asked that earlier on, there was some doubt as to whether or not the debt was fully secured by the Crown. So, in fact, this non-Crown corporation, under the Financial Administration Act, is going to pick up 100 percent of the liabilities of a trust, which is not a private trust or a public trust, but it's some kind of agent. I guess that's something the minister is going to have to provide. I'd prefer to move on, if the minister could just clarify that he is in fact going to provide us with that written legal opinion on that section.
Hon. G. Clark: Yes, I can do that. I also want to say, just to be clear in terms of 100 percent of the debt guaranteed by the province, that that's with respect to these three power projects. I anticipate that this agency or trust, once the revenue is coming in over time, will be pursuing other agencies. It does have the power to incur debt, and that is not going to be guaranteed by the province unless the province chooses to do so at some future date.
So the memorandum of understanding is with respect to the time horizon that we're dealing with now and the memorandum of understanding, as opposed to sort of future, 20 years out, borrowings by this corporation.
G. Wilson: With respect to that additional liability, then, that's presumably held by the officers of the trust. Is that right?
Hon. G. Clark: It would be held by the trust itself, so in that respect the normal rules of corporate behaviour would apply. I suspect the member is correct.
C. Serwa: Section 2 is a very interesting section. It's obviously interesting; we've had a lot of discussion on it. My question is still on section 2. It has to do with the basis of the formation of the corporation. The minister has indicated it's a hybrid that is neither a private corporation nor a Crown corporation. I do know that the directors of public and Crown corporations act under different rules. Under the Company Act there are strict rules with respect to liability, to fiscal responsibility. It's significantly different in a Crown corporation to a private corporation. My question to the minister is: what will this hybrid work under? There doesn't seem to be any format that it can work under -- neither public nor private.
Hon. G. Clark: The Company Act doesn't apply to the Columbia Basin Trust, with the exception of three sections of the Company Act, which are referenced -- sections 32, 125 and 152 -- and that are helpful in regulating the corporation. This act itself is the regulatory body, and you'll see all of the fiduciary obligations, reporting requirements, etc., referenced. Only three sections of the Company Act are referenced, for the sake of brevity in this legislation, where it helps to clarify the regulatory structure of this company.
I would also say that we've given power to the Lieutenant-Governor to apply additional sections of the Company Act by regulation at a future date, or if there are future amendments to the Company Act we can apply them where it will assist the regulatory structure. You don't repeat the Company Act in this act, and there are enough safeguards in the act itself to canvass the kinds of questions the member is dealing with, save and except, we think, these three sections of the Company Act which help to deal with that question.
C. Serwa: Just a question on that. We've skirted around a lot of issues, but I do know that in a private corporation, for example, the directors are legally responsible, and they may be sued for environmental damage, individually or jointly, as may take place. Until this is really spelled out either one way or the other, it seems that you are exposing the appointed directors to a liability, and no one knows what it is.
Hon. G. Clark: To clarify, the one section -- section 152 of the Company Act -- that will apply is a section dealing with allowing the corporation to indemnify board members. So, in fact, the very point you're making about the Company Act and how it applies will apply to this trust.
[4:45]
Section 2 approved on division.
On section 3.
W. Hurd: I have a brief question with respect to the capital of the corporation. I wonder if the minister could advise the committee what rules would be in place should the corporation wish to issue further shares, as any private corporation would do to recapitalize the company. I note under section 5 of the bill that the province, which has a 50 percent equity in the assets, is in fact not represented to that extent on the board of directors. I wonder if the trust has the autonomy, as any other corporation would, to float a new share offering. The only example I could draw on is perhaps a situation in Alberta. Alberta Energy Co. was partially owned by the province of British Columbia, yet the corporation continued to have the rights, responsibilities and abilities that any publicly traded company would have to issue further shares. I would welcome a clarification of that under section 3 of the bill.
Hon. G. Clark: It has no power to issue shares. If the member is asking if it can issue shares or equity shares, the answer is no, it cannot. The capital of the corporation is one share with a par value of $10, and there is no provision in the act to do an equity offering or anything like that.
W. Hurd: Section 3(2) says: "The share in the corporation must be issued and registered in the name of the Minister of Finance and Corporate Relations...." I would welcome a clarification on that. Does that mean that the one share issued at a par value of $10 is actually held in escrow by the Minister of Finance? There must be some legal rationalization for this section. Clearly, the trust as a corporate entity doesn't have the ability to issue further shares.
[ Page 13478 ]
Hon. G. Clark: This is common in Crown corporations, to the extent that this part reflects that point of view. The purpose of not allowing the corporation to issue shares.... The trust couldn't privatize itself, if you will, or dilute its holdings by doing a share distribution or otherwise. This is just a proforma protection which allows us to apply the Financial Administration Act, etc. It does give some accountability to this House at any future time, if the House wanted to, in terms of that balance between regional control and provincial accountability.
Section 3 approved.
On section 4.
G. Wilson: I have put forward a proposed amendment under section 4(1). It would add a section (d) where the current section (d) exists. That would read: "...the establishment of a growth fund, and...." the current section (d) would then read as section (e). The reason I advance this is that it is fairly clear, with respect to the purpose of this corporation, that what was intended with respect to investment, spending and management of this so-called regional allocation, which we know to be the money to go into this trust corporation, and that one of the benefits that would be provided to the region is if this corporation had mandated the need to establish a growth fund.
This is at least being advanced by one of the local municipalities in the area, and I would say that it is a proposed amendment that will be advanced by the city of Trail in support of the establishment of this growth fund. It's something that has a great deal of merit. In terms of its intention and the purposes of this corporation, this trust was supposed to do more than simply construct a few dams and have the revenue from those dams come back into this trust. It was to effectively take the money that was being provided in this regional allocation, invest it in job creation projects -- to be sure -- but also to assist in the diversification of the economy that would therefore be permitted through the establishment of such a growth fund.
I think the amendment is friendly. It is supported by at least one municipality, and I believe others are coming forward. I would be happy to send that over for the minister if he'd like to take a look at it. I think it provides as a mandate the establishment of this growth fund, which effectively provides for security of the asset over the long term.
On the amendment.
Hon. G. Clark: In principle, I don't have any problem with anything the member said, or even with the words. "Growth fund" sounds kind of nice. I do have a problem in that this section was, in effect, negotiated with the CRTC and with my staff in terms of the mandate and how it would function. I'm reluctant to sort of.... Even though I appreciate the member saying it's a friendly amendment and I take it as such, I have had no representation, and neither my staff nor the member for Nelson-Creston is aware of any representation. I would say that even though.... I can't support the amendment, as friendly as it is. I like the ring to it, but I think that it's something that would come out of left field with respect to the community and the region, and we don't want to betray that negotiated process.
Notwithstanding that, I'd say further that a growth fund is not prohibited by this section. The trust could set such a fund; they could even call it that. It sounds very good to me. The whole purpose of diversification is a key element in what I'm sure the community wants and what we as a province would like, but I'm reluctant to put it in. I don't think it's required in the act to do that; in fact, I'm sure it's not required. Secondly, it wasn't part of the discussion with the region, and therefore I'm very reluctant to tamper with that. I don't want to spring it on the people of good faith in the region who we've discussed this bill with back and forth, so unfortunately I can't support the amendment.
G. Wilson: I don't think you'd be springing it on the members; I think you'd be demonstrating that this government is tuned into the members -- as the minister sees correspondence, certainly from the city of Trail. I don't think it would be springing anything on the people. It looks at the specific mandate of this proposed corporation and establishes a growth fund, which is a bit more than simply disbursing on an annual basis moneys that come in to the trust.
When one looks at section 4(1), subsections (a) through (d), it talks about the social well-being of residents of the region; that's good. Subsection (b) says: "...the preservation, protection and enhancement of the environment of the region." That's something that's acceptable. It talks about economic development of the region and other prescribed purposes, which -- the minister is correct -- could include the establishment of a fund. I don't take that away from it. However, this specifically mandates this corporation to establish that fund for the ongoing well-being of the area. I think it sends a signal to the people of the Kootenays that this is going to be more than just a dam-building project, more than simply building a few dams, and that once those dams are constructed it's going to be Columbia River 2, effectively, because we will have an ongoing fund that can then be administered and applied to assist in the diversification of the economy.
That's the key here. That's what this trust is really all about: the provision of revenue for the diversification of the economy. I think that by accepting this, the minister will demonstrate that he's with the community, not springing it on them, and that he's prepared to endorse a good idea. I can't take credit for the wording of it. As you'll see, it comes out of the good people of Trail who have been working on this. I know that the member opposite would know that. I think it's a sensible, worthwhile amendment that I hope the minister will see the wisdom of; and if in light of day in the future he sees that it isn't, he could always take it out.
Hon. G. Clark: My problem is that this is a motion that has not yet gone before Trail City Council. We have a draft of a motion from an individual in Trail. I'm not making any criticism of or taking any shots at that individual, but the individual is not on the CRTC, and he's put forward a motion that has yet to go to Trail council. I think it would be a bit presumptuous of the House and the government to support an amendment to the act like this, on the strength of someone who has yet to go before Trail council with the suggested wording. I personally don't have any problem with the wording, but I just think it betrays the kind of discussion and negotiations we have had with delegates from the region. We've had 12 open houses....
Interjection.
[ Page 13479 ]
Hon. G. Clark: We have, and no one has presented this. We just have an individual who wants to go to Trail council with this. We can't change the act because of that, as well-intentioned as it may be.
The Chair: May I suggest that we have had arguments on both sides of the amendment, and unless there are other members who choose to speak to the amendment, it would seem to me that we should dispense with this and get onto the substance.
G. Wilson: I'd be prepared to do that. I want to clarify to the minister that this isn't just an individual; this is an elected member of council. So this isn't just somebody who dreamed it up during the night. I would also say that it's important to recognize, as we move to vote on this amendment -- and I'm sure we will pass this amendment -- that if we are to take the minister's words and say that it's presumptuous to make any changes whatsoever to this bill because the people that sit on the CRTC haven't approved it, it makes this process absolutely redundant. This minister has got to realize that you don't draft legislation through some committee in the Kootenays, as well-intentioned as they may be, and you certainly don't -- or at least you shouldn't -- drive government policy by public meetings that are often stacked by partisans. You do that in the....
Interjection.
G. Wilson: I understand that the member from Cariboo rarely has meetings with his partisans. That's because there are very few partisans left up there in that part of the world.
The point is that this is the House; this is the venue where we can make these changes. This is a very sensible proposition, one that I'm sure will be well accepted by Trail council when they have an opportunity to see it, and I hope the minister will support it.
G. Farrell-Collins: I think the minister -- if I can just correct him.... I think the intent of the amendment is good. I take to heart the comments of the member for Powell River-Sunshine Coast with regard to the process of legislation. If the minister would be willing to assure us that the intent of this act.... As section 4 reads, it is fairly wide open; it's fairly broadly worded. It certainly is not an exclusive section. It provides them with all sorts of opportunities and parameters around that. If the minister could give us some assurance that there will be nothing in the act that will preclude them from doing that without having it specifically written into the act, I'd take some comfort in that.
Hon. G. Clark: I'm certainly prepared to give such an assurance.
G. Wilson: By way of one final clarification, what we are saying by voting against this amendment is that we're not prepared to put something into this act that would specifically mandate this new trust company to do that. It's not enough to say that there's nothing that prevents them from doing it; that's true. What the amendment tries to do is put something in the act that specifically mandates them to do it. Who knows whether they will or not? I think it's in the best interests of the people of the Kootenays that this growth fund be established. So by voting against the amendment, you're effectively saying that you're prepared to yield to the government's goodwill and take their word.
[5:00]
The Chair: We are on Bill 7, the Columbia Basin Trust Act. The question before you is the amendment to section 4. Do you wish me to read the amendment?
Some Hon. Members: Yes.
The Chair: The amendment is that we add a new section (d) to section 4, to read "the establishment of a growth fund, and"; and a new section (e), which is the the original section (d), "any other prescribed purposes."
Amendment negatived on the following division:
|
YEAS -- 16 | ||
|
Dalton |
Gingell |
Reid |
|
Campbell |
Farrell-Collins |
Hurd |
|
Weisgerber |
Hanson |
Wilson |
|
Tyabji |
Tanner |
Jarvis |
|
Symons |
K. Jones |
Fox |
| Neufeld | ||
|
NAYS -- 38 | ||
|
Petter |
Sihota |
Marzari |
|
Pement |
Priddy |
Edwards |
|
Cashore |
Zirnhelt |
Charbonneau |
|
O'Neill |
Garden |
Perry |
|
Hagen |
Hammell |
B. Jones |
|
Lortie |
Giesbrecht |
Miller |
|
Smallwood |
Gabelmann |
Clark |
|
MacPhail |
Ramsey |
Barlee |
|
Pullinger |
Janssen |
Evans |
|
Farnworth |
Doyle |
Lord |
|
Simpson |
Sawicki |
Jackson |
|
Copping |
Schreck |
Lali |
| Hartley | Boone | |
The Chair: I'll give members an opportunity to go to their other duties before the committee resumes.
I call the committee to order. I understand the member for Nelson-Creston is going to answer questions. I therefore recognize the member for Okanagan East.
J. Tyabji: I would like to state on the record that although I welcome the contributions from the member for Nelson-Creston, the Minister of Employment and Investment is responsible for the bill, and I would like him to answer the question.
The question that I have is on the unamended section 4(d). It says "any other prescribed purposes." The question is: prescribed by whom?
C. Evans: By the trust.
J. Tyabji: Will that render invalid the memorandum of understanding? It starts: "The province desires to develop..."
[ Page 13480 ]
and it has as its mission statement "the province prescribing the program...."
C. Evans: It's up to the trust to decide.
J. Tyabji: I am sure the Chair will recognize at this point that it is quite difficult to ask questions without the minister here.
Hon. Chair, is it the minister...?
The Chair: Maybe I could clarify.
J. Tyabji: It's okay. He's arrived. We should all applaud.
For the minister's edification, on section 4(d), it says....
Interjections.
The Chair: Order, members. We'd like to hear the question, if we could.
J. Tyabji: I'll ask the question again to the minister.
"The purpose of the corporation is to invest, spend and otherwise manage the regional allocation and the corporation's other assets, including any assets that may be transferred to it, for the ongoing economic, environmental and social benefit of the region including, without limitation, for..." -- and then in (d), "any other prescribed purposes."
The question is: prescribed by whom?
Hon. G. Clark: The legal answer is the Lieutenant-Governor-in-Council. When the legislation says "prescribed purposes," it has to be prescribed by legislation, by the Lieutenant-Governor-in-Council. The actual answer, however, is the trust, because the prescribed purposes will only be.... We will only pass regulations, or the Lieutenant-Governor-in-Council will only pass regulations, if the trust requests a purpose that is not covered by the previous ones.
J. Tyabji: I asked this earlier, and I'll ask it again. What the minister is saying is that, as with any Crown corporation, it is the Lieutenant-Governor-in-Council that will be prescribing any of the mandate of the corporation. We see, however, that there's a memorandum of understanding already signed, in which the province is providing a framework through which the trust will be operating. Since it will be the trust that in practice is setting the terms of reference, does that render invalid the memorandum of understanding set by the provincial government?
Hon. G. Clark: I ask leave to make an introduction, hon. Chair.
Leave granted.
Hon. G. Clark: I'm delighted to introduce the UVic MBA class. I believe this is who's here; yes, I have the right group. They're heading for Malaysia in the next few days to do practical work with companies there. They are accompanied by Professor Ng of UVic, who heads their delegation, along with Mr. Lotto. I say, just by the way, that I have been to Malaysia twice. The opportunities are enormous for British Columbia companies, and I'm delighted to see the UVic MBA class going to do practical work in a very rapidly growing economy. I know that MBA program, and I know the work they do there will be good for them as well as for British Columbia. I ask the House to make them welcome here today, and I wish them well in their endeavours in Malaysia.
J. Tyabji: I will repeat my question for the minister -- and thank him for such a lovely introduction and welcome to the students -- the question being that since the minister has said that although in theory the Lieutenant-Governor-in-Council will be prescribing, it will in practice be the trust. We see that there is a memorandum of understanding set up by the province, which is trying to dictate to the people of the Kootenays what will be done. Does this prescription, which in practice is from the trust, render invalid the memorandum of understanding?
[5:15]
Hon. G. Clark: Of course it does not, but let's make it clear that the memorandum of understanding is not dictated by the province. It was the result of a month of negotiations with the community, the CRTC, and the province and its agencies and representatives. It is a mutually agreed, signed and supported document by the people of the Columbia Basin, so the document stands. This in no way derogates the commitments we've made in that agreement or, hopefully, the legal document we will sign with the trust.
J. Tyabji: The province is clearly the one setting the parameters, because the bill follows the memorandum of understanding. I will ask again: if it turns out that the trust does not approve the memorandum of understanding, does that render it invalid? And why would the province presume to send out a memorandum of understanding before the trust is even struck, if it will be the trust that will be setting the terms of reference for the spending and growth in the region?
Hon. G. Clark: There was no organization with which the province could negotiate, and the region itself set up an organization because they took the province's offer to heart. They formed an association called the Columbia River Treaty Committee, and we negotiated with them. Not satisfied with that, we had a series of symposia, where hundreds of people came. There was even a member of the Liberal Party at one of the dozens of meetings, and there has been intense discussion and debate. Since then there have been 12 open houses. Since those, we've been working on this legislation with the people of the Columbia Basin. We've been working on this arrangement where we could share the benefits of the Columbia River Treaty with them, and we've been working with as many people as we can in the Columbia Basin.
So I say to the member that that is why reforming this legislation is the culmination of an intense grass-roots process, with the government working with the community. Rather than us bringing in legislation and then engaging in a dialogue with the community, we have in fact done the appropriate thing -- for one of the rare times in British Columbia history. The government of the day has delegated and worked on this legislation with representatives of the region, and this is the result, the culmination, of that process.
R. Neufeld: Hon. Chair, through you to the minister.... I can see he's starting to get a little bit excited here -- or tired. One of the two, maybe.
[ Page 13481 ]
Section 4 is pretty broad. It says: "The purpose of the corporation is to invest, spend and otherwise manage the regional allocation" -- I can understand that -- "and the corporation's other assets" -- the next part of the sentence I'd like a little explanation on -- "including any assets that may be transferred to it...." You must have had something in mind when that part of the sentence was inserted, because that could mean almost anything in the Columbia River system. Are there some parameters around what may be transferred to this trust in the future? And if so, what are they? Or is it just broad-based enough that you could transfer almost anything?
Hon. G. Clark: Primarily, they are the power assets we were talking about earlier: 50 percent of the assets of the expansion rights for the Waneta, Brilliant and Keenleyside dams. If you read it, remember that the trust doesn't exist yet.
We have a memorandum of understanding with the CRTC: "The purpose of the corporation is to invest, spend and otherwise manage the regional allocation" -- $45 million -- "and the corporation's other assets" -- meaning the three power projects -- "including any assets that may be transferred to it, for the ongoing economic...."
In addition to that, there is the fish and wildlife fund of B.C. Hydro, which we anticipate being managed by the trust. If not, it will still be Hydro's fund, managed by the trust. But there are other things in discussions and negotiations as we move along.
R. Neufeld: Could the minister just expand a little more on it? The fish and wildlife fund -- okay, I can understand that. What other things are you talking about? I understand the three dams that you are talking about, and I understand the $45 million. But I just want to know how expansive this is going to get. The interpretation is pretty broad -- and can be.
Hon. G. Clark: Remember that this is an act which we want to live for some time, so we're not contemplating transferring any more assets than we've already made public at this time -- none whatsoever. But as the corporation has its own resources and revenue coming in, it may choose or seek to negotiate with the province on further development rights or assets, and a future government may wish to do that. This allows that opportunity at a future date, but we have made no commitment other than the memorandum of understanding with the CRTC. We don't intend to make any further commitment, other than continuing to hold dialogues with the region.
R. Neufeld: If you could assure me that there would be no assets from B.C. Hydro transferred to the trust.... Is that what you are saying -- none whatsoever that are in place now?
Hon. G. Clark: Other than Keenleyside, or 50 percent of the Keenleyside equity, at this time there's nothing contemplated.
W. Hurd: Just one brief question with respect to the purpose of the corporation. Again, it's a clash between the Columbia Basin agreement and this particular act. The Columbia Basin agreement indicates that the trust will be given a broad mandate but will not be expected to fund projects normally performed by any level of government. I know this issue was briefly canvassed in the definitions section, but I just wonder if, when we are debating the purposes of the corporation, the minister can advise us whether the trust would be precluded from participating with any level of government in a joint venture. Or would they be able to cooperate in building a road, for example, where that might be necessary to access resources or recreational assets? I'd welcome a clarification on that, since we do have this dichotomy between the basin agreement and the purposes of the corporation under section 4 of the act.
Hon. G. Clark: It has not at all precluded the kinds of arrangements the member is talking about. In fact, I think it's quite likely. I think the people of the region, quite correctly, would be vigilant in ensuring that if they're going to provide incremental resources that are now at their disposal, matched with the province, they're not supplanting -- or the province is not off-loading onto the region -- commitments they should otherwise make and are making in other regions of the province. Certainly I would anticipate that there would be an opportunity for partnership between the trust and agencies of the province, including Crown corporations or the province of B.C. directly.
D. Mitchell: While we're on this section, "Purpose of the corporation," the minister has clearly said that there's a memorandum of understanding contemplated but not yet signed. There's a trust the government wishes to create, but it's not yet formed. So this process is a little bit confusing. We don't know which comes first. The memorandum of understanding is not yet completed, the minister has said.
Under section 4 we're talking about the purpose of the corporation. Although the government is hoping that this trust, once it is formed -- this corporation, once it is created -- will make specific investments in upgrading the existing hydroelectric facilities in the Columbia-Kootenay region, there's no guarantee, I take it, under this act. There's no specific mention under Bill 7 that those specific investments will be made. I just wonder if the minister could clarify that. There's no guarantee under this bill that those specific investments that the government hopes and contemplates and wishes that the trust will make -- and which may or may not be a good idea -- will be made. Is that correct?
Hon. G. Clark: In this bill that's correct.
W. Hurd: Just one other point of clarification. It relates to section 4(2), where it says: "Nothing in subsection (1) relieves any level of government from any obligations it might have with respect to the region." I understand the minister's previous explanation that this was an assurance to the people of the Kootenays that their trust wouldn't be undertaking commitments that the government would then be welshing out of; they wouldn't be duplicating the role of any other ministry.
I just wonder if the minister could indicate whether there's any chance that this section might unduly limit the trust's ability, as I mentioned earlier, to sit down with local governments and regional districts and negotiate some sort of cost-sharing arrangement. Would that not bind the hands of the directors in their ability to negotiate those kinds of arrangements with local governments, regional districts or any other entities they may choose to do business with?
While I'm on my feet, I will again go back to the basin agreement, which indicates that the trust will have the power
[ Page 13482 ]
to invest, buy and sell land and assets, and purchase the shares of private corporations. Again, there's no mention in section 4 that the trust would have the ability to go out and play the stock market. I wonder if the minister could just clarify those two terms: whether section 4(2) would limit the ability of the trust to undertake joint ventures with governments, and whether the trust can play the market, so to speak, and invest in the shares of publicly traded corporations.
Hon. G. Clark: With respect to the first question, this doesn't unduly limit it at all. The trust can enter agreements with any level of government or any agency of government or any Crown corporation or otherwise to pursue a joint venture. The trust is to promote the economic development of the region.
Can the trust buy, if you will, or joint-venture with a private company in the region? The answer is yes, if the trust chooses to do so. Does that mean that it can make an equity investment in a regional corporation? The answer is yes.
I'm not sure about the stock market question. I guess by inference that it could make an investment in the stock market. Let me give you an example. This is up to the trust, but there are a lot of cogeneration opportunities with sawmills or forest companies, for example. The trust could joint-venture, could provide some equity capital, with one of the forest companies in the region to expedite some cogeneration opportunities. I think that would be a real.... When you look at economic opportunities in the region, that's one that really jumps out.
If, for a variety of reasons, they're maybe not quite economic or they're right on the margin, the trust could potentially expedite a fair number of these projects in that region by making an equity investment and perhaps taking a slightly lower rate of return. That would likely require some equity participation with a private company. If I were on the trust -- which I'm not -- that would be an area where I would see real potential for significant economic development and long-run opportunities in the forest industry in that region. So in my mind, that is contemplated and allowed and encouraged, if you will, by this section, and that does require them sometimes to make equity participation.
G. Wilson: Actually, that speaks directly to my question with respect to this notion of assets under section 4(1), where it talks about assets that may be transferred to it. It says that these assets may be transferred to it for the "ongoing economic, environmental or social benefit...." In light of his comments just now about the notion of the broader economy on the basis of forestry activity and so on, I wonder if the minister might give us an example of what kind of asset may be transferred to it with respect to ongoing environmental enhancement or what kind of asset is contemplated with respect to the ongoing social well-being of residents. Are we talking about Crown lands here? Are we talking about the possibility of involvement in a CORE-like process, where parks and recreation facilities may be part of it? Are we talking with respect to social well-being, about things like community schools? Are we talking hospitals here? Is this going to be that broad a function?
Hon. G. Clark: What's contemplated is what's been signed by the CRTC and the government of B.C. in the memorandum of understanding. What could be transferred in the future, especially if it was purchased by the CRTC or by the Columbia Basin Trust? I would think boat-launch ramps operated by B.C. Hydro. You know, B.C. Hydro has a variety of recreational amenities, which are attacked from time to time for not being expansive enough. For purposes of economic development in the region, they may wish to support the expansion of recreational opportunities, and that may require them either purchasing those assets from B.C. Hydro.... That would certainly be allowed. I just say again that there's no contemplation of any assets being transferred other than those on which we've now reached an agreement. We now have to convince the people of the region and the trust that this is a fair agreement, and I don't think we have any problem with that. But there's nothing further than that being contemplated at this time.
G. Wilson: Coming back to these assets, we've established that this isn't an agent of government and therefore it isn't able to sort of punch the government credit card -- I think really that's what it's basically talking about. If these assets are transferred -- we can use B.C. Hydro properties, the capital investments they have -- is this trust then going to be exempted from any taxation by local government authorities? Or are they going to have to pay tax to local authorities?
Hon. G. Clark: A good question. They're going to pay municipal tax.
[5:30]
G. Wilson: I have one other question with it. It's good news that they will pay municipal tax -- for which I'm sure they're going to be coming to the provincial government to find their proportional share, to be able to pay. At least the region will finally benefit from some taxation coming through B.C. Hydro, where they don't at the moment.
"Nothing in subsection (1)...." This is a really important statement, because there is some fear that this may be a vehicle for the government to off-load. The people of the Kootenays would like to hear the minister say unequivocally that section 4(2) does not provide an opportunity either for local government to find themselves in a position of duplication, which they may find a financial disadvantage, or for the provincial government to say: "Look, through regional allocation into this trust account, you've had the benefit of being able to provide amenities in local parks, for example, or local highway development or various other social amenities. You go and get that out of your trust, because you've got lots of money, which would otherwise be part of the financial obligation of government." We need to hear that, because my guess is that at some point in the future, when there may be many other people sitting in this assembly, that piece of Hansard is going to be read out over and over again.
Hon. G. Clark: Yes, I say unequivocally for the record that subsection (2) is put into this legislation specifically to prohibit governments of all levels from off-loading onto what should well be a very successful trust, with significant income for generations to come. We put this in to give to the region real comfort in legislation. It does not relieve the obligations on the part of the province or any other level of government to continue to make investments in that region or to treat that region as they would any other region in British Columbia.
I think the fear that the member has represented is in the community. I agree with that fear. Having sat here, I under-
[ Page 13483 ]
stand the pressure on provinces and other levels of government to try to do just that. I make an unequivocal commitment that it is not the intention of this administration. We try to protect against that in legislation specifically, so that future administrations would not attempt to use this legislation to off-load to the trust expenses which would otherwise be made by the provincial government.
J. Tyabji: Following up on that last question with respect to levels of government and their obligations concerning the region, what would the recourse be for a community if it turned out that a local level of government were not living up to some of its obligations because of amenities being provided by the trust? Conversely, what would the community's recourse be if the province withheld some of the funding that the community would normally be entitled to because of the amenities of the trust, especially with reference to section 30 of this bill?
Hon. G. Clark: With respect to municipal government in the region, this will be part of the ongoing debate in the region. I think it's a fair comment that there are no criminal or punitive sanctions on a level of government that attempts to off-load onto the trust. All I can do is put in legislation protection and make political commitments. We can't bind future legislatures. At the end of the day, the court of public opinion in the region and elsewhere will have to be part of that discussion.
I said to the region and at the end of the day that a lot of the provincial protection in this legislation -- and strings, if you will -- were required because people in the rest of the province also have to support this redress and justice: jobs for the region. At the end of the day, this chamber represents all parts of British Columbia. It has to reflect the will of the chamber for us to be successful. We can't bind future generations or future parliaments. We do the best we can to lay out what we believe, but it always has to command the support of the region. If at any time it doesn't, then I suspect we'll be back in this House debating a bill that looks different than this.
J. Tyabji: Given that the minister admits that notwithstanding that there is a line in here that says that we should not be relieving any level of government of the obligations they might have, there really isn't any protection. Given that there is nothing other than perhaps political will or the goodwill of the regions, what are the implications of section 30? The only reason I ask -- I know we're going to get to section 30 -- is specifically with respect to section 4(1)(b). Section 30 says, "Section 5 of the Offence Act does not apply...," -- section 5 being the section of the Offence Act which says that if you do not abide by an enactment of an act, you commit an offence. Seeing that this bill actually goes out of its way to remove that protection, how do we have any confidence that a private citizen could take issue with a level of government that is not living up to its obligations and is downloading or off-loading, or however you want to put it, onto the trust, if they do not even have recourse through the Offence Act?
Hon. G. Clark: My position would be that nothing in the Columbia Basin Trust Act -- no breach of that act -- warrants a jail term, which is really what the Offence Act deals with. There is other recourse and sufficient protection in the act, in my view, to deal with it. I wouldn't say this is meaningless. This is law. This is legislation we're dealing with, and this will have legal enforcement where it says: "Nothing in subsection (1) relieves any level of government from any obligations it might have with respect to the region." So it has legal implications, and it should have.
All I'm saying is that at the end of the day, this parliament can change any legislation, and there's no ultimate guarantee of future governments not wishing to try to off-load onto this trust, other than the court of public opinion and the democracy we live in. So this is significant, it is in law, and we'll get to the Offence Act when we get to section 30.
R. Neufeld: The purposes are laid out in subsections (1)(a), (b), (c) and (d), being the social well-being of the residents of the region, the preservation, protection and enhancement of the environment of the region, the economic development of the region, and any other prescribed purposes."
Subsection (2) goes on to state: "Nothing in subsection (1) relieves any level of government from any obligations it might have with respect to the region." I understand what the minister is getting at with subsection (2), and I appreciate it. I think I would have those same fears if we were ever lucky enough to have something like this set up in the northeast.
Interjection.
R. Neufeld: Yes, I sure will.
It's nice to see that the minister confirmed what someone else had asked earlier, when he was so incensed that someone would suggest you were looking after an NDP constituency. And now you're saying that we should vote NDP to get the same type of corporations. It's amazing!
To get back to the question, is the province's responsibility not already the social well-being of the residents of the region? Is the province's responsibility not already the preservation, protection and enhancement of the environment of the region? Is the province's responsibility not the economic development of the region and any other prescribed purposes? One seems very opposite to the other, and what I see....
I envision that if this was to take place in the north.... Noting around the province the amount of money that's being spent on highways, ferries, infrastructure, trains and you name it -- planes, everything -- down on the lower mainland compared to what's being spent in the north on highways, I would think to myself that if we were lucky enough to have something like this, if a corporation in the north were to say: "Look, we've been trying to get government's attention for a long time to finish the Beatton hill, let's say, or the crossing, or to pave it" -- which you're going to do in the next two years..... Would saying that maybe we could add some infrastructure here preclude this trust from being able to do that? It's already a responsibility of the government. Subsection (2) is really a contradictory statement altogether.
Hon. G. Clark: First of all, subsections (1)(a), (1)(b), (1)(c) and (1)(d) have to be read in the context of the overall section, which says: "The purpose of the corporation is to invest, spend and otherwise manage the regional allocation..." for the purposes of subsections (1)(a), (1)(b), (1)(c) and (1)(d). The member is quite correct; it doesn't detract from the province's requirement to look after the social well-being of the residents of the region as it does anywhere else in the province, but
[ Page 13484 ]
within the context of investing those assets, it requires them to be invested with those purposes in mind.
Second, with respect to subsection (2) and relieving any level of government, what we're trying to get at here is not that the government doesn't have an obligation to promote economic development or the social well-being of the people in the Kootenays even though there's a trust here, but to simply stop the government from off-loading it by saying: "We're not going to build any schools in the Kootenays; let them do it with their trust money. We're not going to build any roads there; we're going to cut back on our road construction because they've got assets there." The attempt here is to give a clear signal and, in fact, a legal obligation on the part of governments. It doesn't relieve them from their historic obligations in that region.
I appreciate that members are saying there's a bit of a line there. Maybe there is, but we're trying to show that this trust genuinely is incremental money spent in those areas, and it's not for the province to have a corresponding subtraction in what would be their normal commitment to the region.
W. Hurd: I have one further question with respect to how the trust is going to be capitalized. I don't see any other section of the bill where I might be able to canvass it, so I just want to get it on the record for purposes of clarification.
It's my understanding that the trust is going to receive a lump sum payment of some $45 million in the first fiscal year, to be followed by $2 million thereafter for purposes of administration. The province will pay the trust a further $25 million a year, which is being redirected into the dam reconstruction project and will have a ten-year window of construction and activity.
I just wonder if the minister could tell us when the revenue stream will start from those projects for the corporation, given the fact that under "Purpose of the corporation," section 4, it's critical to know when the revenue might start for the trust. The lump sum payment of $45 million may seem like a large amount of money, but it can go very quickly. The $2 million a year is strictly for administration costs and some small amount of activity that they might be able to generate with the remainder. Clearly the trust has all its eggs in the basket of these dams in terms of its revenue stream. I just wonder if the minister could tell us when there's going to be a significant return on those assets for the people of the Kootenays to be able to undertake the kinds of investments that are envisaged in section 4.
Hon. G. Clark: The member is correct in how he characterizes it, with one exception: the $2 million a year is for 16 years or something. It's not an unlimited $2 million a year for administration; there's a sunset on it precisely to carry the administration prior to revenue being generated by the power projects. We'll just check for you, but my recollection is that the first income from the first project is about seven years out. The first call would be on debt repayment when it starts generating revenue, and the income generated on the equity portion starts at the same time. It would be six or seven years, depending on the completion of the project and the sales of the power. It will start receiving revenue in six or seven years.
Dominion Securities and Richardson Greenshields have mostly done the analysis of the cash flow and how it will work -- managing three projects consecutively with the income coming in -- and that's why we gave that $2 million-a-year cushion, if you will. It will carry the administration costs until the power projects start generating significant revenue to carry themselves.
[5:45]
W. Hurd: Under normal circumstances a corporation would have the ability, during the course of a fiscal year, to realize some benefit from the $25 million it was receiving. It would theoretically be able to collect interest on it and reinvest it in short-term money instruments. Can the Premier...?
An Hon. Member: Premier?
W. Hurd: He may as well be.
Can the minister tell us exactly whether or not the trust will be able to realize any benefit on the $25 million that's being invested? Will it be able to realize any incremental revenue, or is the money just being routed through the books of the corporation for purposes of bookkeeping? Will they have actual physical control of the $25 million a year that they're receiving? Because if they don't, then really all they're getting for their activity is one lump sum payment of $45 million, $2 million for administration and no revenue stream for at least seven years. I'd welcome a clarification on that point.
Hon. G. Clark: Yes, the member is correct, although the detailed legal agreement that we're working on obviously links the payment from the province to the development of the power projects, so they can't divert attention.
But just as an interesting.... I probably shouldn't open this up at this late date, but the Columbia River Treaty Committee would also like to buy, for example, the Brilliant Dam -- the asset itself. It's worth about $100 million. B.C. Cominco is thinking about possibly selling the actual asset. So they've said: "Gee, you know, we might be able to carry that asset. With the $25 million a year, we might be able to do all three power projects and buy it." It's because of exactly the reason you're mentioning: there's room in there, depending on the time of the project. What it does is move up the borrowing requirements a little faster so the curve, if you will -- the timing of the payments -- changes if they decide to try and make a major purchase like that. They haven't decided, and it's not necessarily for sale, etc., but those are the kinds of discussions we've had. That's because the $25 million a year goes to them, and the timing of the spending of that $25 million in equity is contingent upon a whole series of construction contracts and weather conditions, etc., and the interest carried on and the money they invest and all that stuff.
Sorry to give you a long and probably distracting answer, but the fact is that they are going to receive the $25 million a year. It is going to be linked to the power projects, but they will have it to invest. There'll be some interest income from time to time. There'll be more borrowing or less borrowing required, depending on the equity flow. But the province needed some security, some understanding that the $25 million a year happened every year, so we could budget for it. Rather than just give them the $250 million right up front, which they might like, or put it back-end-loaded, which the Ministry of Finance might like, we agreed to give them
[ Page 13485 ]
$25 million a year, which clearly allows them to do those three projects. But it affects how much they have to borrow at any given time, because the equity portion is sort of over ten years. Do you follow that?
W. Hurd: If we could just crystallize the issue, then, for purposes of discussion, for the fiscal year-end from, say, January 1 to January 1, my first question would be: would the money be received in the first quarter of the fiscal year? Would it be received on a monthly basis? Would it be received in one lump sum at the end of the year and then simply turned over? Would the corporation have the ability to decide that it didn't want to turn the $25 million over to the province to be reinvested in the power projects if it saw another business opportunity? Or is the $25 million that it receives dedicated revenue from the province to be automatically reinvested within the fiscal year received? Or could it be money the corporation could borrow? Or would it have to be merely a paper transfer, subject to whatever interest they might be able to earn in short term money markets or whatever else? That's just the point I'm trying to clarify.
Hon. G. Clark: On the legal document, we'll finalize the details of when the transfer will take place. Make no mistake; they are linked to the three power projects. That's the offer we've made; that's what we've been negotiating; that's the agreement with the CRTC. So it's not money they can divert to other uses; it's money that is dedicated to the power projects.
W. Hurd: Just one other question, and this speaks to the fact that we're dealing with what amounts to a seven-year window here before the trust will earn any appreciable revenue from the dam projects. Can the minister just assure the committee that the seven-year projections, which I'm sure have been done by Powerex and B.C. Hydro, have been shared with the people of the region? Is he confident that he can look into the crystal ball seven years down the road and assure the committee of the viability of these projects? These would be questions that if I was on the trust I certainly would want to have answered, and perhaps they have been answered in the course of meetings throughout the region. Since we are dealing with such a long period of time, seven years, I wonder if the minister could just amplify that.
Hon. G. Clark: I want to assure the committee -- believe me -- that that's precisely the bulk of the questions asked by the CRTC. They want to ensure that these are viable propositions. As I said earlier, aside from B.C. Hydro, which I agree people are dubious about, we engaged Peat Marwick, RBC Dominion Securities Inc. and Richardson Greenshields. They extensively discussed the financials of these power projects with the CRTC before they would agree to sign on to this agreement. Subsequently, there was extensive discussion in the open houses about the economics of these projects. The key question -- the key variable or key risk, if you will -- is the rate of return on that equity portion.
What we have given as comfort to the CRTC and the people of the region is that the rate of return will not be minus, but we can't give comfort on the.... You know, it depends on the market price for power at the time at which it's sold. We can give every comfort that it won't be zero, because if the rate of return on their equity goes to zero, then the price of the power is sort of under three cents for all three projects, virtually.
There's no scenario under any forecast, in any private sector or otherwise, that can foresee those kinds of inexpensive power projects out over the next ten years. All the forecasts are significantly higher than that, in fact. If we use the average price that B.C. Hydro uses for future projections of power, then the rate of return is somewhere between 8 percent and 10 percent on the equity portion of those three projects. I believe that's the number, in any event. But again, those are subject to price risks. When you look at all the financials, the key for the region is what price West Kootenay Power in particular, which really needs power, is prepared to pay. It's certainly a premium above a zero rate of return, so there's ample opportunity. You're absolutely correct. This is a subject of intense discussion. We've had numerous experts look at this question. We've shared all that information with the CRTC, and we're sharing it now with members of the region. I agree with the member that it is a critical question, but I can assure the member these three projects are very much economically viable.
W. Hurd: I have just one further question, then. Can the minister tell us whether B.C. Hydro, which has obviously looked at these three dam projects before, has ever undertaken an assessment of them on the basis of a transfer of fair market value? I suspect that what we're dealing with here is an advantage in capitalization, an advantage in equity. In corporate terms, a return on equity is critically important. If you can acquire an asset at less than fair market value, you can accept a lower rate of return.
I guess the concern that has been expressed to members of the opposition, and I assume that Hydro has looked at the water flows and power generation capacity of the three projects, is whether they assessed them based on the transfer of those assets at what would amount to fair-market value. It's the impression of the opposition that the economics of the project change dramatically when you look at the asset value in real market terms. Cominco certainly would have proceeded with the Waneta and Brilliant dams long before now, had not the economics been marginal at best. I guess that's a legitimate question in terms of Hydro's involvement in this project. Have they looked at those assets in terms of fair market value, not the depreciated asset which is being contemplated here with the infusion of money from the trust? That is a question that I know was asked at the meeting I attended and I'm certain will continue to be asked.
Hon. G. Clark: It's a very legitimate line of questioning, but I want to assure the member that we are transferring these assets at fair market value. But the key question, the key difference, and what gives an advantage to this trust, is that the trust is prepared to make a lower rate of return on their equity than a private capitalist might. That is correct; it gives an unfair advantage. We are giving an equity investment of literally $500 million. If this were a private company making that equity investment, they would want a very high rate of return for a huge amount of equity they're putting up.
We're suggesting that to make these projects economic under any circumstance, there is some risk of the rate of return of the equity going down, in some cases, potentially below borrowing costs, which no private company would do, and that is what.... The member has made -- or I am making it to clarify -- the essential point that what makes these projects inherently economically viable is the large equity investment. Make no mistake about it; private independent power pro-
[ Page 13486 ]
ducers will have some concern about that, because they won't have the advantage or they won't want to take the risk of their equity. They would rather invest it in China or in the TSE or whatever -- invest it in the stock market and make more money. That is what gives these projects an economic advantage. It makes them economically viable; it makes them guaranteed of success. It's why these projects will proceed and are viable -- because of the large equity injection and the willingness of the region and the province to make sure their rate of return is such that it can't go to zero. But it could go below what the private sector would demand for similar risk. That is the key difference.
It's not the transfer.... The member is asking what gives it an unfair advantage. Is it giving these assets valued at nothing...? We're not doing any of that. The only advantage they have is in that large equity investment. A private company that wants to invest in IPPs with private capital and is prepared to make the same kind of risk.... They could make many other projects very economically attractive if they were prepared to do that, because there's also a big upside. If the price of power goes up, as many analysts are predicting, these will make very high rates of return.
Most people around the world with opportunities to invest would not choose to make the upside here when the downside is that they will also make a lower rate of return. Because this region is looking at investing huge amounts of money in the region for economic development and social development purposes, there are a limited number of areas where they can make that kind of money. This investment allows a series of things to take place. But that is the key element, which is why the opposition should take comfort in that there is no risk to the region. These are economically viable projects, and they are 100 percent debt-financed. They are right on the margin, very close to being viable. I would say that Brilliant and Waneta are viable anyway, and the other two are close. Everybody knows that Keenleyside is right on B.C. Hydro's list in any event, so it's right on the margin.
Once you put an equity investment in and you are prepared to go down to an 8 percent rate of return, you guarantee that these are all extremely viable projects. They're probably going to make a decent rate of return in any event, but there's some risk it will be down around 8 or 9 percent.
W. Hurd: I'll just settle for the assurance that B.C. Hydro, and indirectly the people of the province who own the corporation, are not going to end up subsidizing the power produced by those three projects. I assume that if the seven-year investment has been carefully reviewed by Hydro, not only will benefits accrue to the trust but there will also be a benefit for the province and for B.C. Hydro. If what we're dealing with here is Hydro purchasing power at 7 cents or 6 cents a kilowatt-hour and having to resell it at a loss, that would be of interest to the people of the province as well. That would be my final question on the matter.
Hon. G. Clark: Absolutely not. I am trying to make it as clear as I can. The price of the power will be the market price. B.C. Hydro, or whoever buys the power, will get it at market price. The area where there's competition is in the return of equity. That's what moves up and down with the price. B.C. Hydro is made whole and the consumers in Vancouver are made whole; the risk is on the equity side.
There's a projection of price that everybody accepts called the CONES rate. If future price projections of B.C. Hydro are accurate, the rate of return on equity is 10.4 percent. The expected rate of return for the equity portion on Keenleyside is 10.4 percent. But there's a risk on the price side, where it could go lower or higher. It's the rate of return that fluctuates, not the price of the power. The price of the power is market price.
I wonder if, with indulgence, we could pass this section with one more question.
D. Mitchell: Maybe it's a good idea to pass this section, because otherwise we'll come back and spend another day on it.
Maybe the minister can answer a point of clarification quickly. He indicated, in response to a question from the member for Powell River-Sunshine Coast earlier, that the trust as a corporation would pay municipal taxes. Can the minister confirm that the trust will be paying its full share of municipal taxes, not a grant in lieu of taxes?
[6:00]
Hon. G. Clark: Yes.
D. Mitchell: I have just one further question, then. Will the trust pay all of its fair share of provincial taxes? The corporate capital tax? Will it be exempt from any provincial taxation?
Hon. G. Clark: It's exempt from provincial taxes.
D. Mitchell: It gets curiouser and curiouser as to what kind of a corporation we're actually establishing here. We're going to have a few more questions on this, past adjournment.
Hon. G. Clark: On this section?
D. Mitchell: On the purpose of the corporation itself. So I wonder if we could adjourn, because the minister has just added another new element into this interesting, strange, new breed of corporation that we're creating. I have a few more questions about that, unfortunately. I don't know if we want to extend the debate.
Hon. G. Clark: Just to be clear, it's exempt from income tax and corporate capital tax. It will pay property transfer tax and social services tax as well as all municipal taxes.
Interjection.
Hon. G. Clark: I'm sorry, but we've done.... I was unaware that members opposite weren't aware of these facts, because we've been discussing these openly and publicly everywhere. There's nothing in the bill....
Interjection.
Hon. G. Clark: If there's nothing in the bill, then I suspect the members shouldn't be discussing it here. But if anybody had attended any of the briefings or any of the questions, these questions have all been a matter of public debate. We're not hiding anything here.
An Hon. Member: Then why do you use that exemption?
[ Page 13487 ]
Hon. G. Clark: The exemptions are because we discussed this with the members of the community. We decided that as a corporation with a social purpose and a social objective, not a private corporation, it would be exempt from provincial income tax or corporate capital tax. But because it would be engaging in the marketplace to buy goods and services, it would pay the sales tax -- in purchases for the dams, for example. And it would pay the property transfer tax in any engagement in that marketplace.
But on the income tax and the corporate capital tax side, which is completely in the domain of the province of B.C., because these are achieving goals which the province set, we agreed to exempt them from those levels of taxation. I'm surprised that members opposite would ask us to make them pay those kinds of provincial taxes.
It is a special arrangement for the people of the Kootenays. We've not hidden that fact. I'm nervous about the apprehension I see on the other side. We're not trying to hide anything. This is a special relationship; it is part of the negotiations. And it won't pay income tax or corporate tax.
D. Mitchell: The minister says that this is a special corporation for the benefit of the residents of the Columbia-Kootenay region, when, in fact, he spent the afternoon in this House describing the son of B.C. Hydro -- a dummy corporation to front for B.C. Hydro that's really going to be a quasi-utility generating hydroelectricity. Yet this corporation is going to be exempt from paying the taxation that B.C. Hydro, a Crown corporation in this province, is obliged to pay under the laws of the province.
He says that this dummy corporation -- this trust -- has some high principles that we are going to debate further, especially when we get to the preamble to the bill. When we deal with that last, we'll deal with the high, noble purposes of this corporation -- this unique, unprecedented corporation that the minister has been trying to describe and trying to explain to us in this committee today.
He hasn't explained why we're setting up a quasi-utility that's exempt from paying taxation and that's going to have advantages over any other corporation in the public or private sector. I don't know, hon. Chair. The minister's explanation has been really unsatisfactory this afternoon.
The Chair: Members, I am cast in an awkward role because we're clearly over our normal time. We are also having a second reading debate at the moment, and one can point the finger in either direction and say it's somebody else's fault that we're having a debate that should have occurred earlier, but the fact is that that debate is out of order.
And on section 4.... Again, I am a creature of the House.
R. Neufeld: I guess I want to expand on the corporate capital tax, because if it's well known to you -- and I guess it would be -- it wasn't to me. You talked about this corporation being able to invest with other independent power producers to supply capital. Would that then make them exempt from the corporate capital tax?
As the member for West Vancouver-Garibaldi said, B.C. Hydro has to pay the corporate capital tax. We're creating something that can already be done through B.C. Hydro for the Kootenays, and it's starting to make one wonder just what they are exempt from and what they are not exempt from, and what they are going to do and what they are not going to do. Just to give us some time to think about section 4, I would make a motion that we adjourn the debate until the next sitting of the House.
The Chair: The appropriate motion, member, is that the committee rise, report progress and ask leave to sit again.
R. Neufeld: Okay.
The Chair: Well put.
Motion approved.
The House resumed; the Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 6:07 p.m.
The House in Committee of Supply A; M. Farnworth in the chair.
The committee met at 2:51 p.m.
ESTIMATES: MINISTRY OF SMALL BUSINESS, TOURISM AND CULTURE
(continued)
On vote 51: minister's office, $356,000.
F. Gingell: I would now like to focus on the Small Business portion of the minister's responsibilities. Perhaps it would be worthwhile to start off.... I don't know whether the minister did this yesterday, as I was busy dealing with the Columbia Basin Trust initiative and couldn't be here. I wonder if the minister would perhaps repeat, if he has already said it, a precis of what he sees the role and purpose of the minister's office in the area of small business.
Hon. B. Barlee: Precis -- that gives me significant latitude. The hon. member has given me, perhaps, more than that....
Interjection.
Hon. B. Barlee: You want a very small.... Basically the third hat -- or the first hat in the ministry, of course -- is Small
[ Page 13488 ]
Business. I think we would both acknowledge this: small business is the key to the economic performance of the province. There are probably at least 320,000 small business people in the province, if we include at-home businesses. They create about 89.4 percent of the jobs in the province. It's a little less than the lower mainland -- 88 percent in the lower mainland and 90 percent in the rest of the province. When I examine the strategy in small business, I think that the strategy is basically sound.
We got a report from Statistics Canada several day ago which indicated that for the third year in a row we lead the country in retail sales, which I think is a significant indicator of the health of small business in British Columbia. The second province in that respect is Ontario, also an NDP province, and the third one is Saskatchewan, the other NDP province. Unfortunately, the Liberal provinces have not done too well, mostly in the minus quantity. I think that our small business record -- if we flesh out a reasonable strategy and keep that disposable income flowing in the province of British Columbia -- will continue to be the best in the country. Our economic performance, when you factor in medicare, is superior to any in Canada, and any one of the states of the United States, followed by Utah, Nevada and Oregon, in that order. So we adopt some long-term strategies and some short-term strategies, like every government in every jurisdiction in North America.
We have a problem with certain sectors. Our most vulnerable sector is between 18 years and 29 years of age. Last month, for instance, we created 29,000 full-time jobs. That's almost a thousand per day. Those are not our figures; that's a federal government figure. That's really quite effective.
We have a population equal to 13 percent of the population of Canada. We've created 25 percent of the new jobs. Not that our record is perfect in this area; it is not. But it is certainly far superior to that of any other province.
F. Gingell: I was a little surprised by the wide range of the minister's response. He picked on two of the NDP provinces that have the highest budgetary deficits and are creating debt at a faster rate than any other province in the country. I guess if you spend more than you take in, that will have some spinoff in jobs. I appreciate, as I'm sure he does, that the Liberal provinces of Newfoundland, Nova Scotia and New Brunswick in the Maritimes have had a difficult time. I'm surprised you would think that that is because of the government, rather than the conditions that have been prevalent in the Maritimes for many years.
Anyway, you spoke about the problem of young people between the ages of 19 and 29 getting work. Could you tell me what programs you have put into place to help counter that?
Hon. B. Barlee: We have a number of programs. We put in about $1.5 million into a summer employment program.
C. Tanner: It's in Tourism.
Hon. B. Barlee: This is Tourism; it's also Small Business, of course. It impacts significantly on small business. This program has been, I think, eminently successful. We have launched a number of other programs which I mentioned yesterday in my introductory speech. We had, I believe, 700 entrepreneurs coming to seven different programs -- young entrepreneurs, by the way -- to give them an idea of how to proceeed with business and what pitfalls to avoid. We had about 100 per meeting. Our regional economic development officers, all 24 of them, have launched a series of meetings around the province -- in the interior, on Vancouver Island and, to a lesser extent, in Vancouver. We have actually received, I think, superb attendance at those; it rather surprised us. So we have probably six or seven major programs that hit upon a sector that I consider rather vulnerable -- that's women between the ages of 18 and 29 -- and most of these programs do address that. About 83 percent of the individuals in the program that comes under my Tourism branch are women between those ages. We find that about 70 percent of them do get a permanent full-time job, and we track that fairly closely.
We track all of our programs. They vary in effect. Most of them are quite successful. Most of them are pilot projects. I believe in a pilot project. I think if you launch a pilot project and then monitor it extremely closely, and it is effective, then you can elaborate on it in other parts of the province.
F. Gingell: Before you create a program.... I mean the program is only, of course, created with intended results. Do you determine the measurements that will be made at the end of the program, the benchmarks that will be measured for the purpose of determining whether or not the money has been well spent and the program is successful?
Hon. B. Barlee: Yes, we do, and I think that's part of the responsibility of the ministry. What we do is we have various follow-ups. Usually we follow-up in a six-month area to see if those people are still employed, if they have entered the workplace and have been successful. In most instances, if we are not happy with the results, we don't follow-up with that program. Sometimes it is an experimental program, to see if something works better than a previous program. Generally speaking, the programs have been successful. I think that's acknowledged by the creation of jobs in British Columbia. The problem, of course, is that British Columbia this year, for instance, will probably pick up another 100,000 people, including businesses coming from Alberta and Washington State, by the way. We're tracking that now. So we have an influx of 100,000 people; it requires constant job creation and constant monitoring of the programs we do establish.
F. Gingell: Recognizing that there are lies, damned lies and statistics, and recognizing the weakness of much of the information that comes out of Statistics Canada -- even though I accept that Statistics Canada is held up in the world as an example of perhaps even the best statistical information produced by any government agency, I think that says more about the other countries than about Statistics Canada....
Recognizing the critical importance of these measurement processes to ensure you measure the community before the program is started and after the program is completed to see what change has taken place -- there has been a certain amount of discussion in the government circles about outcome measurement -- I was looking for an indication from you as to whether your ministry has taken this to its bosom, as it were, and is really into the business of outcome measurement and reporting.
Hon. B. Barlee: The ministry has a program evaluation unit. We have several employees who evaluate the programs
[ Page 13489 ]
that we commence. Usually, our long-term programs have been evaluated. They are also re-evaluated, which is not a month-by-month thing but a year-by-year thing. We also evaluate it with Treasury Board staff, which I think is very important, to get a third party validator on it. When I look at the results, given the economic climate of North America as a whole, I'm quite pleased. I think we have been successful. There are areas, as I mentioned before, of weakness and certainly we are working on those.
[3:00]
When we do launch a new program, we try to target those areas such as Aboriginal women, and women between the ages of 18 and 29, and other areas where we think that our job creation program is weak. We launch the pilot projects in those areas, and then evaluate them very closely, and have another party evaluate them as well.
F. Gingell: Recognizing that we all believe in government accountability, and no accountability really takes place until the citizens of the province have this information in their hands, I'd be happy to help in that information dispersal. I wonder whether we could get a copy of some samples of program evaluation.
Hon. B. Barlee: I'd certainly be glad to oblige the member with copies of some of those programs and the evaluations that we have done on them.
F. Gingell: I have in my hands a cabinet submission dated January 22 from your ministry to cabinet. One of these documents that got sent to us in a brown paper envelope; I know your deputy minister doesn't believe that ever happens. It is an interesting one because it deals with a series of proposed programs to assist small business. It wouldn't surprise me if this was sent by yourself or by some member of your office.
There were four programs listed particularly: the implementation of a provincewide new entrepreneur assistance program; the implementation of a small business loan guarantee program, outside of the greater Vancouver and Capital Regional Districts; the implementation of a provincewide on-line business information access program; and the enhancement of the delivery of small business training. Could you tell the committee if any of these projects were approved.
Hon. B. Barlee: No, none of those we followed through were approved.
F. Gingell: The amount of money involved in setting up these programs, other than the issue of exposure under loan guarantees, was relatively small. You have in your budget a total amount of $22 million for administration and support services; you have $33.7 million for community and regional development. I'm surprised that you couldn't find the funds for any of these. Of course, in the end, the most important job of government is to make spending choices, and I would have thought that these choices would have taken preference over some current programs.
Hon. B. Barlee: When I compare it with some of the programs we have launched, they weren't as high a priority. For instance, we cooperate with federal government and the Canada-British Columbia Business Service Centre in Vancouver. That service centre fields about 200,000 calls per year. The cost is split fifty-fifty between both governments. It has worked extremely well. It's a pilot project across Canada, and both the federal government and my ministry are very pleased with the results.
We've also done a number of other things. We fund up to 86 chamber of commerce information centres, called "BICs," which are, perhaps, our contacts in a lot of small towns. We have a businesswomen's advocate as well, which I think is probably a higher priority. We sponsor 21 Women in Business workshops all across the province. About 1,500 women came out to those pilot projects. We've got a number of other things. We have 79 home-based business workshops serving approximately 1,800 people.
We look at these programs very, very closely to see where they have been effective, and I must say that my REDOs -- that's my regional economic development officers -- are rather stretched. There are only 24 in the entire province, so we have to be careful not to overload them. We also use the government agent offices, which are very valuable to the Ministry of Small Business, Tourism and Culture, because they act, again, as a contact in places like Oliver, Vanderhoof, and all of the small towns through the interior and upper Vancouver Island.
We come up with a number of ideas. Not all of those are accepted by Treasury Board, nor do we push all of them. We may bring some prospective programs to Treasury Board, and they may be turned down. That's fine; that's part of the process, because it's a difficult time. We have to be careful of the moneys we expend, and I am responsible for that, essentially, as minister. Otherwise, I would be raked rather heavily over the coals if we wasted money. I don't think there's much evidence of wasted money in the ministry.
C. Tanner: The minister could be accused of waffling in his answer to my friend's questions. Since we've been sitting here, you haven't spoken of any specific program in Small Business -- not in Tourism, in Small Business -- which assists any segment of the population. You've talked about having meetings. You've identified two or three groups that need your help, but you haven't told me one specific job that your ministry has done for anybody in small business. Could you tell me two or three?
Hon. B. Barlee: Yes, I would be delighted to. I will quite gladly tell you two or three. For instance, the Working Opportunity Fund, which has raised $75 million in British Columbia since 1992....
F. Gingell: Every time the subject of WOF comes up, you say: "It's got nothing to do with us, it's got nothing to do with us."
The Chair: Order, order. Through the Chair, please.
Hon. B. Barlee: It still comes under the aegis of this ministry. They have invested in a number of areas all across the province, as has the employee share ownership program. It has registered 35 companies and 9,500 employess. Back to the Working Opportunity Fund, they have invested $400,000 in Canadian Oil Filter Recovery Corp.....
F. Gingell: We've been briefed by WOF; we know all about it.
[ Page 13490 ]
Hon. B. Barlee: Oh, have you? So you really don't want....
F. Gingell: We're asking about what your ministry is doing, what you've done.
Interjections.
The Chair: Order, please. The Chair would like to remind the assembled members that there's no television in the House, that Hansard has a little more difficulty picking up comments, and that as much as the Chair enjoys the repartee, if we could direct our comments through the Chair, please, it would make Hansard's life a little easier.
Hon. B. Barlee: The employee share ownership program, ESOP, helps bridge what we consider an equity capital gap between the companies who really haven't got enough money to carry on what I consider, in some cases, is a successful business, or to plan for the future. So this really taps their most important source, and that taps the employees of the company itself. It's a tax incentive program, as we all know. It levers private sector investment activity. For example, $2 million of tax incentives result in about $10 million of new private sector equity investment. As I said before, there are 9,500 employees who've invested in this initiative, and 35 companies. They've raised not quite $10 million in new equity. It has benefited those businesses right across the board. It first took place in the United States many years ago, actually, and it was tracked very, very closely and found to succeed beyond their wildest expectations. So we monitored it very closely and picked it up, and it has succeeded indeed.
C. Tanner: We are not, at this moment, talking about the Working Opportunity Fund. We are not talking about the employee share ownership. We are asking you, Mr. Minister, what your ministry did in Small Business to make any jobs. You haven't given us any answers yet. The Working Opportunity Fund, in which you've raised $72 million and only spent a piddling $9 million, is not much better than what you did last year when you had $45 million and you were down to $4.5 million. You're not doing any better. We're not talking about that.
[3:15]
Tell us specifically, other than have some meetings, what did you accomplish to create jobs in that department -- not the Working Opportunity Fund, not the employee share ownership, but in your department, Mr. Minister. I don't think you did any. Prove to me that you did.
Hon. B. Barlee: For instance, we have -- and I mentioned this in my preamble yesterday -- the fourth-largest film company organization in North America.
C. Tanner: Tourism.
Hon. B. Barlee: No, this is essentially Small Business. It comes under the aegis of the ministry. We brought in $283 million in 1993-94. It was $402 million in 1994-95. We assume that it will be higher than that this year, so I hope we break the half-billion-dollar mark. And we accomplish that by seeing some of the players.... We have an advantage, as we all know: the Canadian dollar is cheaper, and we're in the same time zone as Los Angeles. We have, however, significant opposition -- certainly from Ontario, which has the third-largest in North America, New York City and, of course, Los Angeles. So we compete with a number of other jurisdictions all across North America. Some of them are not well known, but some of them are extremely tough competitors.
I'll give you an example. North Carolina happens to be a very tough competitor, as is Oregon. What we do as a ministry is track what they're doing in those jurisdictions, and then we go down.... I usually make a trip to Los Angeles once every 15 months to see the major players. So we see some of the major players and some of the minor players in Los Angeles. They like British Columbia for a number of reasons. It's safer, the dollar is cheaper, it's in the same time zone and we have a vast variety of destinations.
This is one of the ways we would approach an area that has created about 7,200 jobs. It has grown significantly in the last three years. If we extend the zones, I anticipate that we will probably have 10,000 to 11,000 jobs within two years. So there is steady growth there, certainly growth in the economy. When you look at $283 million versus $402 million in one year, that's significant growth. We anticipate that will continue to grow.
C. Tanner: The minister's predecessor was starry-eyed and gaga about the film industry, too. She used to slip down to Hollywood a couple of times a year and had a great old time. And you go down every 18 months, as you said.
I'm not talking about the film industry. I'm talking about what the Small Business segment of your department has done to create any jobs. You still haven't named one, Mr. Minister. Tell me one.
Hon. B. Barlee: What we have done is put in an infrastructure that does serve the small business community extremely well. I'll tell you why it serves them well. I'll go back again. At the present time, according to Stats Canada, we have a 12.5 percent increase in retail sales. Our bankruptcy rate is down again this year, despite creating 21,000 new businesses last year -- these were incorporated businesses, by the way. So we use our network of REDOs, which are regional economic development officers. We have 24 around the province.
In conjunction with the 60 government agents, we launched -- I'll give you an example -- 79 home-based business workshops last year to let the beginning entrepreneur recognize what is required in the area of small business. A lot of them don't; a lot of them come in green. The bankruptcy rate is still high. We both know that. We've both been in small business.
We had 65 workshops in business training for entrepreneurs, as well. We had another 21 initiatives for women in business workshops. We had half a dozen, as I mentioned, young entrepreneur workshops, which were attended by 700 people. We had five Small Business Development for Aboriginal Women conferences. The unemployment rate in that area is extremely high, around 70 to 90 percent, and we felt we had an obligation to those particular sectors.
So it is a combination of ways to address what I think is probably the best place in North America to do business. I checked this with some of the broadcasters last night and their
[ Page 13491 ]
profits are out of sight -- almost embarrassing. So, we've done due diligence in most of these areas, working with the various branches of my ministry.
F. Gingell: This helps us. I am getting old and forgetful. There were 79.... The first items that you mentioned, what were they called?
Hon. B. Barlee: Seventy-nine home-based business workshops?
F. Gingell: Yes. How many people attended those?
Hon. B. Barlee: I mentioned before that 1,820 individuals attended those. The B.C. Creative Arts Shows....
F. Gingell: No, let's just deal with that first.
Hon. B. Barlee: Okay -- 1,820.
F. Gingell: Before you put the program on, what benchmark did you set for how many home-based businesses would be created from these workshops?
Hon. B. Barlee: If my memory serves me correctly -- and I haven't got this figure in front of me -- I believe there were 21,000 incorporated businesses last year and another 20,000 home-based businesses as well. Out of the individuals who came there, some of them were early retired, some had been laid off, some were looking for other options. Obviously, of those 20-odd people per workshop, we had a number of individuals who were looking for options they didn't have prior to that time.
F. Gingell: I take it from the way your answer comes that when this program was being designed you did not say to yourself, "Our goal is to create one home-based business for every three people who attend" -- or every two people who attend, or every ten people who attend.
Before you spend government money, I'm sure you know what you intend to accomplish, other than serving coffee and doughnuts, and putting on an interesting evening program or morning program. You're looking for measurable results. The road I'm trying to follow is: what were your targets? What were the benchmarks that you thought would be acceptable? What did you accomplish and how did you measure that? Or did any of these things happen?
Hon. B. Barlee: We will get the details of those programs and give you all the precise information. I don't have them at my fingertips.
F. Gingell: I take it that there is a process by which each program has its outcome targets or goals specified before the program is put into action and that there is a process by which, at the end of the program, or after some reasonable time -- the world doesn't suddenly change; it requires a catalytic process to take place, if one can use that term for people -- something happens. What I'm looking for.... I'm not absolutely certain whether this process is in place or whether this will encourage you to put it into place.
Hon. B. Barlee: First of all, I think the proof is in the pudding. There are major things we watch very closely. As far as the home-based business program is concerned, we are in the middle of a survey right now. That will probably be done relatively soon, I assume.
Part of my responsibility is to watch the indicators very closely, and the indicators are bankruptcies. Bankruptcies, traditionally, in the small business community are very high sometimes. The most volatile of that, of course, is the restaurant industry. There's no doubt about that. But we also track other things. We track retail sales, which I've mentioned a number of times. And we track the number of new businesses that have incorporated. Certainly, it's the highest in the country, as far as our population is concerned. We have, I believe, including home-based businesses as well as incorporated businesses that fall under the aegis of this ministry, over 300,000 in the province of British Columbia.
We haven't got detailed accounts of all 300,000, but we do keep track and monitor exactly how that business is doing. What we try to do, of course, is use disposable income. How do we get that disposable income? Through the other two parts of the ministry. That's why it's a very logical ministry. If you use the multiplier factor, tourism adds another $1 billion a year into the British Columbia economy, every year. That's not the $6.3 billion. The $472 million last year, if you use a 2.5 multiplier, would yield about $1.1 billion circulating in British Columbia that didn't circulate the year before. I think that's very important. I think it's a buffer.
F. Gingell: Without dealing with the issue, are you saying that there was an additional $1 billion added to our GDP from tourism in British Columbia in the past year -- i.e., 33 1/3 percent, roughly, a fraction under that, maybe about 31 percent of all GDP growth, came from tourism?
Hon. B. Barlee: I'm talking about revenue growth over the year before.
F. Gingell: That is GDP.
Hon. B. Barlee: Yes, but I'm also talking about revenue growth. The GDP in tourism is based at about $6.3 billion. The year before it was $5.8 billion. The year before that it was $5.5 billion. The year before that it was $5.25 billion. What I do when I take that $472 million increase last year.... We didn't quite make the half-billion-dollar mark. We didn't do too badly, by the way. For every $1 we were given, we made $94, which is a pretty good record. That $472 million.... Just use a multiplier of 2.5 -- $472 million times 2.5 equals $1.3 billion.
F. Gingell: I appreciate, Mr. Chairman, that looking at statistics, like total retail sales, total number of bankruptcies -- which way the graph is going -- total number of new incorporations, the total number of business licences issued, may give you some sense of comfort about the total community -- the whole business. The object of the programs that your ministry delivers and spends taxpayers' funds on is to accomplish specific goals. My question was dealing with the issue of assurance that you're trying to measure the results of programs, and you keep coming back to measuring the global picture. That's not the issue; the issue is how wisely you are spending money. The only way that you will discover that is to determine benchmarks or other criteria for each program and measure the results after the program is completed or on
[ Page 13492 ]
a periodic basis. I don't hear that happening, although I'm pleased that you're going to do a study of the home-based business exercise.
So, do I take it that in the study of the results of the home-based workshops, you have the means of getting to every single person -- all 1,820 individuals -- who took that program and finding out what kinds of results have come from that?
[3:30]
Hon. B. Barlee: We also have a responsibility to the taxpaying public that we can measure. We do have a measurement unit, as I mentioned about 15 minutes ago, that does measure our major programs. We probably do not measure every one of those 1,820 people, but we do recognize that it is important that we launch programs that hit our weak areas. For instance, I mentioned our program with the various chambers around the province and the BICs that employ 400 people. Seventy percent are employed after six months. That's a very, very high success rate in today's economic climate.
We do that with tracking all the way across the board. We monitor generally and watch the basic trends. We also examine other jurisdictions, such as the state of Oregon, which in many respects is probably the best-run state, in my consideration, in the United States. There's not much doubt about that at all. We keep track of our major competitors and find where we think there is a niche in the market. We follow that up as well. So, the home-based business is just one example of what the ministry does, and it's not the only example, of course.
F. Gingell: At this time last year when we were having this interesting discussion, we were talking about a pamphlet that was described as a commitment to small business. One of the matters that we discussed was the issue of financing for small business. Of course, that was the major subject of your proposal to cabinet in January that got turned down.
You said at the time that you were talking to corporate lenders. You talked about the meetings with the five big banks and the credit unions to try and make them more amenable to lending to small business. Can you bring the committee up to date on how that's been happening?
Hon. B. Barlee: I did indeed discuss that with some members of the corporate banking community and found that they have loosened up the purse strings slightly -- not as much as I would like for small business. They point back to 1990-91, when there was devastation in the small business community not only in British Columbia but right across the country. Their losses were significant, forgetting, of course, Canary Wharf and Cadillac Fairview and all the big corporate players they extended untold credit to.
Generally speaking, the credit unions have been rather more lenient than they were last year, and certainly some of the major banks -- perhaps the Royal Bank is the best -- have been relatively good, but not to my satisfaction. I think that small business.... I have a lot of sympathy for small business. They do not get a buyout, they do not have a pension plan, they usually have to access their own capital and the chances of going bankrupt are still significantly high.
F. Gingell: When the previous administration put pressure on the credit unions in the 1980s to be more amenable to making business loans -- rather than sticking to their knitting, which is merely personal loans, consumer loans and mortgages -- the credit unions got into a great deal of trouble.
Hon. B. Barlee: Some of them did.
F. Gingell: Yes. Well, the credit unions as a group did, because they all had to come to the party through B.C. Central. How have you managed to reconcile that with what you seem to be doing at the moment, which is encouraging credit unions to get into an area that they're not as skilled and as expert in as other areas they do so well?
Hon. B. Barlee: The credit unions have access to information, the same information that we have. They recognize that when your retail sales are up over 10 percent, it usually means a healthy economy. That is sometimes short-lived; they're aware of that as well. The credit unions, of course, would rather make safe loans. I think they have a social responsibility as well. We have discussed that with them on a number of different occasions. They are certainly more lenient than they were, as are the banks.
The unfortunate part of the banking community as a whole is that they will lend you money when you don't need it, and sometimes you have difficulty when you do need it. That has ever been the case in the small business community. It's an ongoing battle to remind the major banks that they do have a responsibility, especially when this part of the economic community creates about 90 percent of the jobs. They have been extremely successful. It's a slow progress with the banks, but there is some progress.
C. Tanner: Mr. Chairman, I don't think the minister answered the previous questions about benchmarks and what accomplishments they had from his program with the 1,800 people who were in home-based businesses.
Let's try another area. You also claimed that you were doing some work with aboriginal women, trying to get them into the workforce and putting them into business for themselves. I've forgotten the number; I think you said 800. Whatever the number you said you had, could you tell us...? It's exactly the same series of questions that we asked you about the other program you had.
Did you have any benchmarks that you were working to? Did you have any results? Did you do any testing? What specific results can you point out to us as examples of the success of that program?
Hon. B. Barlee: The various conferences for aboriginal women were launched on October 14, 1994. Sixty-three women came out in Williams Lake -- these are aboriginal women, of course; most of them would be status -- on November 9 and 10. There were over 200 participants in Terrace on February 16 and 17, which was quite remarkable. There were 47 participants in Cranbrook on February 18 and 19, and 160 participants in Duncan on March 4 and 5. In Merritt there were 180 participants on March 31 and April 1, so that's just a few days ago.
We did make attempts to register all late registrants. As of April 1995, 650 aboriginal women will have participated in the conferences in all five regions. These regions, as the member well knows, are regions where there is a significant status
[ Page 13493 ]
Indian population -- with the exception of the Kootenays. Those would come from the Tobacco Plains region; there's not as many individuals there. The program will cost, over 1994 and 1995, $528,000. The Ministry of Small Business, Tourism and Culture contributes $160,700. B.C. 21 contributes $363,900.
F. Gingell: Through which ministry?
Hon. B. Barlee: B.C. 21 is in Glen Clark's ministry, Employment and Investment.
The Ministry of Women's Equality contributes $3,500, and the Ministry of Skills, Training and Labour contributes $25,000. So those are the four participants in it.
We saw those programs started in November of last year. We should have tracking of those probably by late spring of this year.
C. Tanner: Six hundred and fifty people participated in five conferences. You are spending $528,000 from four ministries. Question one: who's in charge? There's got to be somebody in charge. Two: who's setting the criteria? Three: how do you test whether you're having any results? And four: what results can you tell us of now?
Hon. B. Barlee: It comes under the aegis of this ministry, there's no doubt about that at all. That's about $800-odd per person, which seems like a lot. I don't think it is. The unemployment rate in those aboriginal communities is dramatically high. It is staggering, and they are, I think, at risk. I don't apologize for that; I only wish the program could be expanded. We will do that if we see that we are successful. We don't expect to be successful in every one of those instances. If 650 women participate, I would be surprised if we had a very high success rate.
For each one of those individuals who is probably on social assistance -- and most of them are, in those areas -- I think it is money well expended. I think they want to get into the workplace, and I think women are generally at a disadvantage. I have cautioned my own daughters to make sure they have a career. I don't think that happens enough in the aboriginal community, and I think it's basically a sound program. I don't think the results will be spectacular in the first year. We will monitor those results very, very closely to see where we have been successful and where we have not been successful.
C. Tanner: You've had five conferences, and you've had 650 women attend. You must surely have said -- of the 650 or whatever number attend -- that you want 10 percent, 1 percent, 50 percent or some percentage to see as a result and that you're going to track it. That's the number one question. Have you done that?
Number two, are the results you're obtaining putting people into work or are they putting them into self-employment? Are they creating jobs or are they new jobs? Or are the jobs just training them to get to work, in which case they shouldn't be in your ministry? If it's creating businesses, it's your job. If it's training people to get to work, it's somebody else's; it's not your ministry.
Number three, are you going to assess in the future the success you've had in this program?
Number four, I suggest you're going about it in entirely the wrong way. I'll give you a suggestion on how you can improve it.
What you should be doing, in my view -- and because it's so often said of the opposition all that we do is criticize, let me give you an instance where you can do better -- is going out and finding people in business and asking them: "Would you take on a trainee," or "If we can help you financially, would you take a person into your business -- one of these aboriginal women -- and show her how you do it, so she can learn?"
Anybody who's out of work, and I agree with you it's 80 percent unemployed in all 198 of the bands around this province, would grasp at any straw that came past. If they're going to go to a meeting and get a bun and a coffee and listen to somebody say how you can get back into business, they'd go. I don't think the figures mean anything unless you're quantifying the results; I don't think you've quantified the results, from what I've heard you say.
Hon. B. Barlee: First of all, I don't agree with that. I don't think they'll go in the middle of February in the northern part of British Columbia. We're both aware of the north and how difficult it can be to travel, let alone get out in some instances. These are people usually from far-flung reserves, as well. It's quite a problem for them in many instances to get into a place like Burns Lake or Terrace or wherever it is.
Certainly it is a small business development or entrepreneurship program. That's basically what it is. We do monitor the success rate. This program started in November, and it's new for us; I'll give you a little more information. About 650 women participated in an intensive training and mentoring workshop -- you mentioned mentors -- to develop their own business plans. We think mentoring is important. We use local business people who have been successful in the small business community; usually they are retired. Frankly, I think that is the responsibility of government; I think it's an important responsibility. The member admitted, of course, that the unemployment rate is at least 80 percent. In some reserves, it's higher than that; it's virtually 100 percent. I think it is my responsibility as a minister to see that this forgotten segment of the population is at least given a chance. This does give them a chance. We will look at this program. We will monitor it. We will take a look and see how successful it is and where the successes are.
[3:45]
It's not easy to embark on a small business career; we both know that. It's especially difficult with women in the aboriginal community, who, generally speaking -- with some exceptions -- do not have the education that women in other parts of society have. They are looking for options; I think this is a reasonable option. It isn't necessarily a safe option, but it is an option.
C. Tanner: The minister keeps telling me about the 650 women. He keeps telling me about the five meetings. He keeps telling me they come from all over the province to these meetings. Fine, I don't argue with any of that. But tell me just one concrete result you've obtained from having these meetings and talking to these people.
Hon. B. Barlee: In Prince George, for instance, with aboriginals, we launched a micro-lending circle -- four to six individuals would be in on that micro-lending circle and they
[ Page 13494 ]
will receive up to $1,000 each. If one of those individuals does not pay that back, the others are responsible. The success rate is evidently reasonable. It is a new program for us.
Most of these programs are new programs. They haven't been tried in other areas. Some other jurisdictions, both Saskatchewan and Manitoba, if I remember correctly, have launched programs of similar vein, and their success rate varies as well. I reiterate the point that it is extremely important that we get these people into the mainstream, and a lot of the women are not in the mainstream. When you look at the aboriginal bands -- the Cheslatta, for instance -- many of them have simply been forgotten. I think we have a responsibility. The member wants concrete examples of individuals....
C. Tanner: I want just one.
Hon. B. Barlee: I was not there. My REDOs take advantage of that, and my regional economic development officers are working in those various communities right now.
C. Tanner: But you must have some target.
Hon. B. Barlee: Sure we have a target.
F. Gingell: I'll put that question on the record. You must have had some targets? Could you tell me what the specific targets were?
Hon. B. Barlee: Well, our targets, always being optimistic, are 100 percent. But our success rate, of course, would not be 100 percent. It would be somewhat below that, varying with the community, the area and the opportunities in those various areas. So that's why we go out hitting what I consider the most vulnerable sector of society, and I make no apologies for it.
As I say, this program started five months ago -- that's 150 days. We will be doing the follow-up on it to see where we are successful. I do not anticipate, however, a remarkable success rate. But if we get some successes, I think it will not only pay society, it will also help those women who are successful in this area. So, again, I have no apologies for this program. It's a pilot project and I like it.
F. Gingell: We are not saying that you shouldn't do it. I would like to suggest to you that the pre-employment programs that are in many communities -- and in my own community of Delta -- is perhaps a more appropriate way to start off, because people who have not been in the workforce at all or who have not been in the workforce for many years need a whole bunch of training and help and assistance and patting to help them get over the initial problems.
This whole line of questioning is to ask if you had set any benchmarks or criteria before the program started that you believed you would accomplish with this program. I take it from all the discussion that we've had that the answer is no. You are hoping for some. You are going to try and do some measurement, but you didn't say before you started: "We are going to spend $582,000, and we hope to get 10 percent of the people who attend this program into the workforce within three months." I haven't heard you say that. I have heard you say that you are going to measure it. I have heard you say that the statistics are terrible, that the unemployment rates are high and that you hope they will come down -- we all do, of course.
But we have got to focus on spending taxpayers' money on results, and programs like this must have goals that will help in the design of the programs. When you start to think about what you are trying to accomplish, it will help you to design the programs better. I am not going to ask another question. I'm just going to leave it at that, because I've come to the conclusion that you didn't have any goals before you started, except to get a whole bunch of people in a room.
So, moving on, in last year's debate we also discussed a White Paper that you had put out dealing with the review of the cumulative impact of fees, licences and taxes, which, you will remember, was an issue of some magnitude at that time. And when we were discussing this last year, you had not got to the point where the White Paper discussion was finished; it was all in process. I expect, Mr. Minister, that you, in your role as minister, will receive correspondence and phone calls from small business people complaining about government and what they're doing to small business. You will also get that in your constituency office in your role as MLA. I was wondering if the Minister would tell the committee the major subject of small business ire at government that he gets correspondence about both as minister and as MLA, and if there's any difference between those two roles.
Hon. B. Barlee: I think one of the major areas outside of access to funding is certainly the fees and licences that sometimes plague the small business community. And with that in mind, and being chair of FLAC -- the Fee and Licence Advisory Committee -- I am particularly sensitive to that area. So I asked my ministry, as well as other parts of government, to undertake a survey. And that small business survey, by the way, was answered by over 1,000 businesses across the province, which is a pretty good return. That's not bad. It gives us a good cross-section of what they really want.
C. Tanner: One in eight.
Hon. B. Barlee: Yes, that's reasonable, because ordinarily, if I remember correctly, it's about 3 percent to 4 percent. We were up significantly, to around 12 percent. We compared the fees and licences from 1989 to 1993, and we found that they really had very little impact upon the business community. Now there were exceptions to that rule. The only major exception was the outfitter area, where the fees and licences jumped from 3.4 percent of their total income to 5.8 percent of their total income. The others were just fractional: retail and wholesale, 0.5 percent; service-based, 0.2 percent. It virtually did not change in any of those categories at all. All participants, 0.9 percent to 0.9 percent -- so they were taking in more money, partly because business was better. As I say, the one exception was the outfitter area, where it was 5.8 percent and started out at 3.4 percent; so in those five years, it increased 2.4 percent.
F. Gingell: Mr. Minister, is there any particular subject that has come up in this past year, in communications to you as minister or MLA, that's of particular concern to small business -- other than this?
Hon. B. Barlee: I just got a letter from an old friend of mine -- who is not a New Democrat, not a social democrat at all. There is an area that is problematic.
[ Page 13495 ]
Interjection.
Hon. B. Barlee: It was problematic. We know the family. We go back about 75 years. He was very concerned about the fishing resorts and so on, so I asked the Assessment Authority to prepare a full report on why the fees and licences in that area had gone up. They came back with a full report after about six weeks, and it was, indeed, a full report. Their defence was pretty good -- in fact, their defence was very good. They said that because of the value of the camps, which have sold at dramatically higher prices than the original owners anticipated, and the value of lakeshore lots, which have gone up in some instances in the Cariboo from about $30,000 to $120,000 in the last two or three years, the assessment of those camps and those lakeshore lots did go up. I then pursued the question and said: "Well, some of these camps only operate five months of the year because they're high-altitude camps. They then came back, and so did some of the camp operators, saying: "Well, we're operating now more than five months of the year." So some of these fishing camps are operating as snowmobile camps as well in the height of the winter.
I thought the work done by the Assessment Authority was pretty good. I think there were still a couple of holes there, but nothing dramatic.
T. Perry: I thank the opposition members for their courtesy. After such a gruelling grilling -- or grilling gruelling -- that the minister has experienced this afternoon, I wanted to give him a small break just before I finish my shift. I've heard a lot of good things about this minister in my riding of Vancouver-Little Mountain, in the small business and tourism community in Vancouver and even up province....
C. Tanner: You've been talking to your doctor friends.
T. Perry: No, doctor friends don't have a lot of good things to say about anybody these days. They're always griping and grumbling, but they're good souls.
I was thinking more of the Tourism Vancouver people and the president of COTA, the Council of Tourism Associations, who say this is the best Minister of Tourism that B.C. has ever had. I thought it ought to be put on the record that he's doing a very good job. Somebody needs to say that.
I have only one question for him, though. He's been under severe and intense pressure from me for months over access for B.C. tourism to the Internet. I wonder if he could tell us whether any progress has been made in the last 48 hours, since I last talked to him about this. When are we going to see a competition for tourism advertising? I should say that I gather advertising is verboten on the Internet. When will we see tourism information about British Columbia on the Internet?
Hon. B. Barlee: First of all, we launched a pilot project last year on the Commonwealth Games on the Internet, and it was very successful. We're getting into the twenty-first century. We have two individuals in the ministry working on the Internet. It can be time-consuming, as we both know, and it can be relatively expensive. We know it's the window into the twenty-first century. We know that our competitors are also jumping on board. We've examined some of the operations by our immediate competitors on the west coast, and also our competitors across the country -- New Brunswick is an example. I think that these two individuals....
Interjection.
Hon. B. Barlee: Warren McCall is one of them. That was the individual I was trying to remember. He is working virtually full-time on the Internet. We think that it will certainly help us to make information accessible to virtually everyone.
[4:00]
[F. Garden in the chair.]
T. Perry: Just one other compliment for the minister. I know that he is groaning with compliments already, but it won't break his back to hear one more. The cultural communities in Vancouver are thrilled that he's managed to pull a $4 million increase for cultural funding out of a hat, which is something rare in the country these days. B.C. still doesn't rate very well compared with other provinces, as the minister knows, but he's been the first minister in a long time to turn that record around. I want, through the Chair and the minister, to compliment his staff in the community grants office. They've done some very good work in my riding over the last year.
Interjections.
T. Perry: I hear the Liberal opposition -- or Libcred opposition -- members groaning. I know that their leader doesn't support cultural funding, and he's on record as being opposed to infrastructure funding for the cultural industries. It's in stark contrast with the federal minister responsible in B.C., David Anderson, who pointed out at the salvation of the Stanley Theatre last December that the cultural industries are major employers in Vancouver, Victoria and other parts of the province.
I didn't want to be political, Mr. Chair; I just want to compliment the minister's staff. The community grants people are always very efficient, polite, fair-minded and non-partisan. As as far as I'm concerned as an individual MLA, they're the model of what one would look for in a civil servant.
C. Tanner: The member who just spoke should have been here yesterday, when the minister got more than an adequate number of compliments. Having read the Blues, I realize I got carried away in saying good things about him.
An Hon. Member: The truth will out.
C. Tanner: It's not that the truth will out. The truth will out today, because he has talked about two programs today: the home-based business procedures and the aboriginal women. To my mind, he has been a total failure in both of those. Last time, you couldn't tell us one concrete result you had obtained from any of those things. You can tell us what you've done -- you've had the meetings -- but you can't tell us one concrete result.
Last year, the minister said he did his survey, and that 8,000 forms were sent out and 1,000 came back. I accused him
[ Page 13496 ]
then of looking for work, and he hasn't given us any results from that time. My fellow member asked him whether there were genuine complaints in the 1,000 that came back again, but in actual fact, my accusation still stands. You were just looking for justification, Mr. Minister, for what your department does. This part of your ministry is a typical example of good intentions paving the road to hell. You've accomplished nothing in the two programs you told us about.
To add insult to injury, you've done no better in the Working Opportunity Fund. You have $72 million stashed away in there, paying nice interest, and you've used only $9 million. Tell us what you've accomplished there. Last year, I think you had about $40 or $50 million, and I think you had spent $4.5 million. This time, you've got $72 million, because it's going up and making a nice attractive return with special dividends to the people who invest, and yet you've spent only $9 million. If you have an opportunity to do something useful with this part of your ministry, for goodness' sakes, do something, and tell us what you've done with the Working Opportunity Fund.
Hon. B. Barlee: We don't invest money carelessly. We invest money very, very carefully, and the record across the country indicates that. All I have to do is compare the three NDP provinces, which lead the country, and the four worst, which are the four Liberal provinces. The proof really is in the pudding, and I'll read them again.
We've led the country for three years in a row: 3.8 percent increase in 1992, 7.5 percent increase in 1993, 9.9 percent in 1994 and 12.5 percent in 1995. That's retail sales, a very important indicator. I look at 0.2 percent in 1994 in New Brunswick, which has dramatically fallen to minus 2.6 percent. In P.E.I., which is another Liberal province, 2.9 percent last year has dramatically declined to minus 2.6. That is not a very good record. I'll make sure it does get out, though, by the way.
As far as job creation is concerned, there were 29,000 jobs last month. For every working day, that's over 1,000 jobs a day, and the majority of those jobs are full-time.
C. Tanner: Tell me about the Working Opportunity Fund.
Hon. B. Barlee: I'm quite glad to go over the Working Opportunity Fund again. Here's our investment: $10 million in the Working Opportunity Fund, in nine or ten different companies, I believe. There are ten different companies: Canadian Oil Filter, $400,000; ProCarry Systems, $275,000; Stone Electronics, $880,000 -- by the way, we expect that there will be an attrition rate, some faders, in this area, but so far that has not occurred; Photon Systems, $550,000; Con-Fax Publishing, which impressed both of us, $497,000; $1 million for AutoMed Corp.; $1.6 million for Great Canadian Rail tour; $1.1 million for Tapp Technologies; $1.245 million for Chancery Software; $2 million for Dees Communications; and Xillix Technologies Corp. of Richmond, a recent one, $709,000.
The Chair: The Chair recognizes the member for -- somewhere. The member for Delta South.
F. Gingell: The member from Mars.
C. Tanner: Oh, no, Fred.
F. Gingell: We have recently been briefed by the Working Opportunity Fund. They tell us that they run it. You tell us that you run it.
Hon. B. Barlee: I watch it, to make sure there are no mistakes.
F. Gingell: Let's get back to some other issues after the compliments that came spewing forth from the member for Vancouver-Little Mountain.
You spoke about a report being done by the B.C. Assessment Authority, I believe, that dealt with the issue of assessed values and taxes on tourist facilities. Could we have a copy of the report, Mr. Minister?
Hon. B. Barlee: Sure.
F. Gingell: Thank you.
Secondly, there seems to be some confusion here, because you were talking about the value of these places for resale. I guess you've been listening to Deputy Attorney General Maureen Maloney, who believes in a capital tax. If you believe that because lakefront properties sell at higher prices, you will get your taxes when they sell, both through the property transfer tax and through the province's share of income taxes, which will come through the capital gains that will have been realized.... There is no relationship whatsoever, Mr. Minister, between the value of a lakeshore lot or acreage and the ability of a fishing camp or a hunting lodge to earn money to pay these annual assessments. You must not mix up the relationship between an unrealized capital gain -- I know you're a businessman and you understand what it is of which we speak -- and the ability to pay greater property taxes out of income. There's simply no relationship. It concerns me that that seems to be happening.
I must admit that I don't have any of these types of businesses within my constituency, but I did have some communications from some fishing lodges up in the northern central part of the province. I'd be most interested in the minister's response to my concerns.
Hon. B. Barlee: That's a fair question. We will, by the way, send you a copy. I'd be quite delighted to do so.
As far as the community grants are concerned, that's open as well. I had one of the members of the Reform Party ask for a copy the other day. He said I got $19,000 too much in my riding over three years. I looked it up, and I had it all down there. Of course, we have each party down there. I found out that he was correct, so I will be taking a $19,000 cut.
C. Tanner: In pay?
Hon. B. Barlee: No, not in pay. I also did the due diligence on their receipts from community grants, and they were up significantly higher than mine, on average, by far. I was very pleased to report that. I also found out that only two members in the entire House have not received community grants, and these are both New Democratic Party....
Interjection.
Hon. B. Barlee: No, you have received a grant, thank you -- at least one, and perhaps two. So there are only two members, and both are NDP members.
F. Gingell: Shame. I didn't ask any questions about community grants.
[ Page 13497 ]
Hon. B. Barlee: If the grant is good, we look at it very, very closely, and regardless of whose riding it is, it does come out.
As far as the Assessment Authority is concerned, the average rental rate in the private community for leasing a fishing camp would be 7 percent to 10 percent of the market value per annum. That's the average; that's the Assessment Authority's analysis of the situation. The government charges 3.5 percent of market value. They say that it must be based on a common assessment standard -- that is, esentially, market value. So this is what they did.
The Tourism Accommodation Act provides for up to $150,000 -- 50 percent relief -- to a lot of these camps. So somebody has come under that aegis and under that particular act.
I also prevailed upon the Assessment Authority to not have a jump in values or in assessments. They agreed that in any assessments they would notify the owner and increase those gradually over a three-year period. I think we've done due diligence in most of those areas. There are still a couple of owners who are not happy. We are in consultation with the major players in the industry, by the way.
F. Gingell: We are now dealing, I take it, with two costs that the operator pays if they're leasing Crown land: the amount of the lease rental and the property taxes they pay to the local government or to the provincial government in unorganized areas.
The point I'm trying to make is that your ministry, as the Ministry of Small Business and Tourism, must recognize that their ability to pay these increased amounts has nothing to do with the capital value of their lease. It has to do with the amount of income they can earn, the amount they can charge, the number of customers they can get and how the fish are biting. I know you will recognize that, and I just want the assurance that some work is being done to get a feel for their ability to pay these increased charges before the charges go through.
Hon. B. Barlee: I disagree entirely. You cannot base your assessment on the ability to pay, because most businesses.... Some businesses have an ability to pay; they're in a very good location. It's like charging rent equally across the province. You don't do that. In some high-volume areas, you charge significantly more rent. In a place like Pouce Coupe, I don't think your rent would be too high. I'm not singling out Pouce Coupe, but they have to go by a standard. The standard is based on the common assessment, and the assessment is the basis that virtually every jurisdiction in Canada works on.
F. Gingell: I would like to suggest to you that the value of the lease or of the business is related to the amount of money that you can make from it. It has nothing to do with any other issue. If you want to take that out of commercial use and put it into private use, you can then turn around and auction off the leases, you know. There are many different ways of doing it.
But if you're the Minister of Small Business and are interested in protecting small business, you recognize, first of all, that businesses are worth a multiple of their earning capacity and that multiple will change depending on the buyer's feeling about prospects. Yes, I'm sure you can say that this piece of lakefront property could be worth more by getting rid of the cabins, not allowing the tourists to come in and leasing it to a private individual to build their own private family holiday camp, and that may well be the case.
[4:15]
It's actually fascinating how we've got onto this subject. I started this discussion looking for you to admit -- because I'm sure your experience has been the same -- that one of the major problems you must have heard about in this past year is the Workers' Compensation Board's inclusion of small businesses within their assessment authority. I hear the minister saying that he hasn't had any complaints whatsoever about that issue.
Hon. B. Barlee: If the member is referring to WCB, of course there are always complaints about WCB. WCB is kind of a set-aside; in other words, there is equal representation from both sides in WCB. I don't say it works well. I'm not saying that, but that was the last question the member asked me. So if the member would clarify that, I would be delighted to answer him.
F. Gingell: I'm not talking about the operations of WCB. What I am talking about is the fact that the Workers' Compensation Board, through a change in policy, has included in its net -- and has made to register and is now assessing -- a whole series of small businesses which previously were not required to be registered with the Workers' Compensation Board.
I have had more complaints in my office about that single matter from small businesses than any other subject -- three or four a week. Over a period of time that is a substantial number of small businesses which are complaining to me that they have suddenly received communication from WCB. There's confusion about whether they're a subcontractor and should be insured under the payroll of the person they are working for.
I even had an accountant the other day, a lady who works from her home with four or five clients -- I don't think any more than that, but I think she does a fairly comprehensive bookkeeping accounting job for them -- who has been told that if she works more than 15 hours in a week for one client, she has to be registered, for Workers' Compensation Board purposes, as an employee of that client and that that client will be assessed WCB on the fees that are paid to her for the work that she does.
Of course, the truth of the matter is that in maybe the third week of the month she may well work two and a half days or even three days, getting in 15 to 20 hours, but that's the only week of the month that she's there. She has an arrangement to come in on Monday, Tuesday and Wednesday of the third week and do the sales tax return, make sure the employee tax deductions have been sent in, write out the cheques for accounts payable and stick them in the drawer so they get mailed out as there's money in the bank.
This is ridiculous, but this is the way small business is being treated. I had another call from a cement place that primarily works for one business, and there were similar problems there. I'm surprised that as the Minister of Small Business you haven't been getting these complaints expressed to you. Workers' Compensation Board, in my belief, is trying to look after their unfunded liability by including in their assessment letter a whole group of new businesses. That is
[ Page 13498 ]
complicating small business people's lives -- making them file and prepare more returns and adding costs to them that they can't pass on to their customers.
As you are their champion, Mr. Minister -- the person concerned with their welfare -- I would be most interested in hearing what you're planning on doing about this issue. So there.
Hon. B. Barlee: The Workers' Compensation Board consists of a board of governors and there's equal representation from the labour side and there's equal representation from the business side. They make those appointments; I do not make those appointments. It's a type of Crown, as the member well knows. If the member has a great deal of difficulty, he may reply in kind by writing a letter to the board of governors and expressing his dissatisfaction. And I assume he has done this.
F. Gingell: As a matter of fact, I haven't, and that's a good thought. I shall do that, and I'll tell them that I was recommended by the Minister of Small Business.
The shock to me is that I'm an opposition member, and you know how much influence opposition members have. You are the Minister of Small Business. You are the minister who's supposed to look after their interests. I know that the Workers' Compensation Board is set up in the fashion that it is. The labour side is represented only by organized labour, even though they don't form more than 50 percent of the workers that are assessed. I would have thought that the minister would think it appropriate, as the guardian angel of small business, to at least write them a letter and say: "Recognize what you're doing to small business in British Columbia."
I am derelict, clearly, for not writing a letter. I'd like to suggest that the minister is doubly derelict for not writing a letter also. I will take the minister's advice, and I will write to them. I expect the minister to take my advice and write to them also. Will you do that, Mr. Minister?
Hon. B. Barlee: If I did that, I think the opposition would attack me as interfering in the workings of the board, which is represented both by business and by labour. There's a difference between representation and interference. I would certainly not, on the letterhead of my ministry, attempt to influence -- and I think that's what the member is suggesting -- the decisions of the board of governors of the Workers' Compensation Board. I don't think that comes directly under my aegis, nor would I expect it would. I do, however, discuss it with various other ministers and various other ministries. But I do not directly interfere with the workings of the WCB.
C. Tanner: I wonder if I may just go back to the fishing lodges. My fellow member was trying to make the point -- and I think he made it quite clearly, but I'm not sure the minister got it -- that there's a case of double jeopardy here. The assessments across the province are going up. The assessments are particularly going up on waterfront and lakefront property. These businesses -- and that's what they are -- are paying higher taxes. Nobody likes paying higher taxes, but the fact of the matter is that they're paying higher taxes.
Hon. B. Barlee: I love it.
C. Tanner: And so you should be. When you've been handed it on a platter -- like you have, Mr. Minister -- you should pay higher taxes.
But the fact of the matter is that these businesses are paying higher taxes. That's acceptable. Although they may not like it, that's acceptable to them, I suppose. But the fact of the matter is that the fees they pay for being in business are predicated on the assessment, too. Consequently, they're going up, and that's the problem. They're complaining that they're paying the higher taxes -- like everybody else in the province, based on an assessment -- but they ask if they should be paying higher fees based on that assessment. I don't think the minister adequately answered that question.
Hon. B. Barlee: First of all, I understand about lakeshore. My taxes went up 102 percent in one year, and I cannot appeal because I'm a minister of the Crown. So I do not appeal. A hundred and two percent in one year was a little more than I anticipated. When I mentioned it to an assessor -- I wasn't appealing -- I said: "Well, why have they gone up dramatically?" He said: "In the state of Washington" -- and I accept his explanation on this -- "they take all of your asset values." He said: "What do you think your house is worth?" I said: "X number of hundred thousand." "Well," he said, "what are you charged in taxes?"
C. Tanner: Hundreds, you say? Hundreds? Hundreds?
Hon. B. Barlee: Hundreds of thousands, okay.
Anyway, I found that, indeed, I could have been charged another $1,400 a year, because they weren't charging me 1 percent of the value of that lakeshore place. So, essentially, it was a fairly good deal.
I think that they have to work from a benchmark. I don't care if it's Bethune Lake or one of those other resorts up there. I went back, and they must have had 30 or 40 pages of going over....They went over each one of those resorts individually. I'll make that available to both of you. I have no problem with that at all. They said they had to work from a benchmark, and I think, frankly, it's correct. Some of those lots...we'll say Hatheume Lake. I think the owner took over that operation about 35 or 40 years ago. When he took over that operation, business was not spectacular, I must admit, but in the last three or four years, business has increased dramatically in those areas. The Assessment Authority has to take into consideration what those lots and those resorts are selling for. In many instances, the resorts were assessed at X dollars and sold for many times that amount, so the Assessment Authority has to fall back on a benchmark. I don't think that's illogical. I know what you're stating: that it must be based upon ability to pay, general revenue and so on. I'm quite aware of that. They don't use this benchmark: frankly, I don't think they should.
I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 4:27 p.m.
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