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)
THURSDAY, APRIL 20, 1995
Morning Sitting
Volume 19, Number 1
[ Page 13499 ]
The House met at 10:04 a.m.
Prayers.
D. Lovick: Mr. Speaker, on your behalf I want to make an introduction this morning. Mr. Clyde Griffith is joining us in the gallery today, a long-time friend of the Speaker. Mr. Griffith will be noticeable by the rosy glow that emanates from him. The reason for that rosy glow is that Mr. Griffith is retiring from service in the recreation branch of the Ministry of Housing, Recreation and Consumer Services as of March 31, 1995, where he has laboured diligently since 1973. I would simply ask all members to please join me in welcoming the Speaker's good friend, this dedicated public servant from recreation, Mr. Clyde Griffith.
D. Mitchell: Hon. Speaker, I'd like to present a petition this morning. This is a petition organized by the Squamish Youth Advisory Committee and signed by 475 residents of the Squamish area. It states:
"As the lack of a well-developed transit system in Squamish has adversely impacted on our quality of life; therefore your petitioners respectfully request that the honourable House address this matter by providing improved transit services in the district of Squamish."
This comes particularly from the young people in the district of Squamish.
Hon. G. Clark: I call Committee of Supply A for the purpose of debating the estimates of the Ministry of Small Business, Tourism and Culture; and in the House, I call committee on Bill 7.
COLUMBIA BASIN TRUST ACT
(continued)
The House in committee on Bill 7; D. Lovick in the chair.
On section 4 (continued).
Hon. G. Clark: I want, first of all, to clarify some remarks I made yesterday and apologize to the House for inadvertently misleading members of the opposition. Take note, members; this is a rare occasion for me, I think.
The debate on section 4 got kind of sidetracked onto the question of whether the corporation would be taxable or not, which isn't, strictly speaking -- and this is not a criticism -- part of this section. But in my haste, because I thought we were concluding that section, I read the notes prepared with respect to the tax question. What the notes say are re a legal interpretation. This corporation that we're setting up would not have to pay capital tax or income tax, but would have to pay social services tax and property transfer tax, etc. Because of the nature of those acts, those transactions are automatically covered, whether you're a Crown corporation, a private corporation or anything thereof, whereas the capital tax is quite specific, and so is the Income Tax Act. In the absence of the government doing anything else, they would be exempt from that tax. So I'm here to say that we will, either by regulation or by miscellaneous amendment, be requiring the Columbia Basin Trust to pay the corporate capital tax. It will not pay, or we intend it not to pay, provincial or federal income tax.
So that is the taxable nature of the corporation. It would be exactly the same as B.C. Hydro. It will have an advantage over an IPP in some respects in terms of corporate income tax, but it will be treated the same way as the other major utilities. Even that advantage is negated somewhat by some federal tax changes that applied as a result of W.A.C. Bennett's nationalization of B.C. Electric. Yesterday I said, strictly speaking, that they wouldn't be eligible, and legally they wouldn't be; but on the policy question, the policy decision is that they will be covered. People should expect that. It's important, of course, that initially it has $10 of paid-up capital, so initially there's no impact on it. As it moves into a joint venture arrangement with Columbia Power, etc., then there will be capital tax applied to it.
I wanted to clear that up for the record. I apologize to the House again. My answer was correct, strictly speaking; but this is a legal interpretation from legal counsel, and I wanted to advise the House that they will be paying corporate capital tax.
The Chair: I am tempted to ask, rhetorically, "Shall the section pass," but I won't.
The member for West Vancouver-Garibaldi.
D. Mitchell: It shall pass in time, hon. Chair.
The Chair: This too shall pass.
D. Mitchell: Yes, this section too shall pass.
I thank the minister for the clarification this morning. We were trying to conclude debate on this section of the bill before adjournment last night, and trying to contemplate what was going on here was getting quite confusing.
Maybe the minister could also tell us why Bill 7 doesn't specifically address taxability. We've now determined that this trust will pay property taxes -- not a grant in lieu of taxes but full property taxes. That's what I understood the minister to say last night. He has also now indicated that it will pay corporate capital tax, like every other corporation and Crown corporation in the province, but it will be specifically exempted from paying provincial and federal income tax. That seems to be what he's saying. Even though it doesn't relate specifically to section 4, because the minister has taken us into this debate, and because we've talked about the possibility that the trust can acquire assets, including property, I think it's important to have it really clear in our minds before we move on from this section as to what the taxable status of this corporation is. Why is it not addressed anywhere else in this bill?
Hon. G. Clark: First of all, in a sense it is addressed. In fact, it's the other way around from what the member says. In the absence of anything in the bill, certain things legally apply. Our legal interpretation is that in the absence of anything....
[ Page 13500 ]
Because of the nature of it being not an agent of the Crown but having the features of an agent of the Crown, our legal interpretation is that all taxes apply with the exception of income tax and capital tax. In many respects these are policy decisions that flow from it, so you have to actually add them back in if you want them to pay other taxes. Our advice -- and there's some debate about this in terms of whether it's by regulation or whether this is a necessary amendment.... This bill doesn't deal with the question, because it doesn't have to deal with the question. You don't add everything in every time. If the government formed a new Crown corporation, it wouldn't mention any of the taxable questions in it, but it would still pay social services tax and property transfer tax. In the absence of policy direction -- in the alternative -- it would not pay income tax or corporate capital tax.
What happens is that the bill is silent on these questions, and then there are policy decisions made as to the taxable status. A policy decision has been made by both the CRTC and the government of B.C. to pay municipal taxes. A policy decision has been made to pay corporate capital tax; that may require a one-line miscellaneous amendment, or it may be done by regulation. There is still a bit of debate among the lawyers on that question.
D. Mitchell: I have one other question on section 4, the purposes of the corporation, and that's what we're dealing with here. We had quite a debate in second reading, and we've had some good discussion in committee stage as well. My sense is that the committee may want to move on to other sections of the bill and to deal with this bill, but while we're on the purposes of the corporation section, could the minister inform the committee whether or not the government gave any consideration to establishing a trust that would simply be an endowment which might take some portion of the downstream benefits from the Columbia River Treaty that could then be used for the Columbia-Kootenay region in a symbolic way? Investments could be made locally by a committee such as the Columbia River Treaty Committee that has been established. Why is it that the purposes of this corporation are being established in this manner, where, in effect, as a result of the answers that the minister gave to questions yesterday in committee, we're really establishing a utility of a kind, almost a mini-B.C. Hydro, that is going to have some very specific purposes pursuant to this act and to this section, where hydroelectric generation at the existing dams in the region is really going to be the primary purpose of this corporation?
Can the minister tell us whether or not any consideration was given to a simpler model where a simple endowment would have been established to provide some benefits from the downstream benefits of the Columbia River Treaty to the people of the Kootenays? Why are we looking at this elaborate model, where we're establishing a quasi-utility that's like Son of B.C. Hydro? Why are we really doing this?
[10:15]
Hon. G. Clark: First of all, with respect to the notion of an endowment fund of some sort, the answer is yes. It was given very serious consideration. In fact, early on in this government's mandate we were looking at all these options, discussing them with members of the Legislative Assembly and people from the region and looking at a variety of them. There is, in fact, some appeal to Grace McCarthy's proposal of an earlier date about how to handle all the downstream benefits in terms of a legacy for British Columbia. In some respects the debate on how we deal with it is still ongoing.
What happened in the Kootenays is that the issues that increasingly came back were water management and power production, and how they can help trade off these issues, plus lake levels and historic grievances. In discussions with the people of the Kootenays, this model is what we arrived at. I can give the member some assurance from the government's point of view that we had a whole range of options, including the question of some sort of endowment fund.
It's fair to say that the concern the people of the Kootenays had about an endowment fund was cash. I agree with them in this regard, for what it's worth. We could just give cash, and we might be more popular in some respects, but what people said is that they didn't want to be paid off for their injustices. They didn't want just a fund. They wanted to have access to the table and input into power generation. They liked the notion of taking what the member for Nelson-Creston calls a drone dam -- the Keenleyside, which is a dam that has no generation on it but is there for American purposes -- and generating power from it for ourselves. That's how the genesis of this came about, but we certainly considered other options.
W. Hurd: Dealing with section 4, the purpose of the corporation, will probably entail the heart of debate about the bill. The rest, with respect to directors and appointment of directors, is of a housekeeping nature. The opportunity to examine this bill in detail comes with section 4.
I want to ask the minister about a potential investment by the trust in West Kootenay Power and Light. If the corporation were to choose to make an investment in that private utility, either in whole or in part, given the fact that the B.C. Utilities Commission uses West Kootenay Power and Light as a benchmark for establishing rates for B.C. Hydro, would the trust be subject to full corporate capital tax and income tax on that investment? In the meeting I attended in Cranbrook, there was certainly some interest on the part of participants in a potential investment in that private utility. I wonder if the minister could just clarify a situation. If the trust were to make an investment in an independent power producer -- whether it be West Kootenay Power or any other -- would that investment, by the regulatory nature of the B.C. Utilities Commission, be subject to the same rules and regulations that any utility would face in the province of British Columbia?
Hon. G. Clark: The answer is yes. I'll leave it at that.
W. Hurd: Then with respect to the analysis done on the three dams, the minister made reference yesterday to a series of analyses that were done by B.C. Hydro. I think Powerex and Peat Marwick Thorne were mentioned, and I also understand that Dominion Securities was asked to review the economics of the project. I just wonder if the minister can tell us whether the dredging requirements for the Keenleyside Dam were factored into the economic analysis in those analyses of the project. The fact is that the water flows over that dam are quite shallow. As a result there is going to be a dramatic requirement for dredging some distance back from the dams in order to increase the water flow through the turbines. I just wonder whether the minister can recall in those analyses whether the costs of dredging were carefully examined with respect to the overall economics of the project.
[ Page 13501 ]
Hon. G. Clark: My recollection is that yes, they were. Keenleyside has been pretty well exhaustively analyzed by B.C. Hydro, and then of course we had third-party intervention to assure everybody the numbers were correct. I will say that Waneta and Brilliant are less detailed in terms of the analysis, although they're not as large and are probably simpler projects in some respects. So at the end of the day these are big projects that are going to continue to require more and more refinement, and the scope and cost of them will vary. But we're very confident in the Keenleyside capital costs, and a lot of work has been done -- more work, I think, than on any other project, probably more work than was done prior to other projects in British Columbia. So my recollection is that the technical engineering questions around dredging were included in the analysis.
W. Hurd: Can the minister tell us whether those analyses were done internally by B.C. Hydro, or were they in fact part of the review by Dominion Securities and/or Peat Marwick Thorne? There is some concern from the region with respect to the whole sedimentation issue around the Keenleyside Dam. There is some concern that there might be damage to downstream fisheries habitat by virtue of the amount of soil that will have to be dredged.
I think these are important questions under section 4. I can see the Chairman of the committee giving me the look that this might not be relevant to the debate under section 4. But again, I would advise the minister that once we deal with these questions under section 4, which is the only section where we can appropriately ask them, the rest invites a rather speedy resolution. These are questions that are coming from the people of the Kootenays with respect to the analysis that was done, and I think they're important questions to get on the record of this committee.
Hon. G. Clark: Most of the technical work was done by a firm.... I can get the name for the members. I apologize. It's an engineering firm in Vancouver which has done most of the technical work on this project. As I recall, they've been retained again by B.C. Hydro to continue doing the technical work. B.C. Hydro is an expert in building these kinds of projects. They have an outstanding track record, and we have some excellent international engineering firms doing work.
If the question is whether there is a risk that the capital costs would be higher and therefore impact on financial viability, I'd say the answer is there isn't. There's always a risk that the capital costs will be somewhat higher as you get into a construction project of this magnitude. But we think the sensitivity of the financial analysis to those capital costs is very low, in the sense that there are large contingencies built in and that B.C. Hydro has a long track record of doing it. It could be slightly higher with that impact on the finances somewhat, but this is a long project over a long period of time and we've done a sensitivity analysis. I don't know if the member has any of this material, but I'll be happy to provide it for him. As I said, it's from Peat Marwick, Dominion Securities and Richardson Greenshields, particularly the latter two companies, which will show the sensitivity of the rates of return to various scenarios, including power price, but also capital costs.
W. Hurd: Just a couple of final questions, and one relates to the cost of power generation, which is really the standard that B.C. Hydro uses to measure the success or the viability of power projects. As the minister will know, there has been some debate about the costs of power generation, particularly from the Keenleyside Dam. Can the minister share with the committee, to the best of his knowledge, what the costs of power generation will be? How many cents per kilowatt-hour are we looking at with respect to Keenleyside? The figures have ranged anywhere from 8 cents a kilowatt-hour all the way down to 3.5 cents, and I think that's a critical issue that we'd like to see the minister be able to advise the committee on.
Hon. G. Clark: B.C. Hydro uses a fairly sophisticated analysis called CONES. I can't remember what that acronym stands for, but it's the price of power delivered, I think, to Vancouver. It's an estimate of what the market price will be over time. That's how they compare what percentage of the CONES rate is the power. As we do the analysis now for IPP bids, we look at the price. The estimated price of power in the future is roughly 3-1/4 cents, I think; maybe it's 3.8 cents, or 3.6 cents, I think it is, that they're looking....
Interjection.
Hon. G. Clark: It's 3.6 cents; the Energy minister corrects me. I think it's 3.6 cents. This will generate a 10.4 percent rate of return at Keenleyside at 3.6 cents. So the price at Keenleyside will be 3.6 cents a kilowatt-hour, at a 10.4 percent rate of return on equity. Rather than.... The member wants me to say this is the price. The price here will be the market price. The difference will be the rate of return on equity. That's why we can.... We know this power will sell, because we can always sell at a price. If the price is 85 percent of CONES -- in other words, if the market price is less than Hydro's predicting, and there's some argument that that might be the case because of new technologies, IPPs and the price of gas -- then the rate of return on equity goes down to 9 percent. But it brings down, of course, the price of the power from Keenleyside to 85 percent of the CONES rate. If the price is 64 percent of Hydro's estimated CONES rate delivered to Vancouver, then the rate of return goes down to 7 percent. If it's 30 percent of CONES -- in other words, if the price of power just crashes -- then the rate of return on equity is 4 percent.
That just gives you a sense of it; the price of power is critical. Let me put it another way. Maybe this is what the member would like me to say: if this were a private company that was investing this kind of equity and they were demanding a 15 percent rate of return, which would arguably be reasonable because if you can make 10 percent at the bank and you take some risk, etc., then the price of power goes up to 4.5 cents or something like that -- I'm just making that up, but it's in that ballpark -- that would make it not economical. That's the key that makes this economical: the equity component which we're contributing and the trust is contributing. The risk is on the rate of return, but it will always have a market price for the power.
W. Hurd: I have one final question. It relates to some of the environmental issues that I've alluded to before. Can the minister assure the committee that all three projects would be subject to the Environmental Assessment Act and a full major project review before any work is done? I would assume that it would include public hearings in the region with respect to any environmental concerns.
[ Page 13502 ]
Hon. G. Clark: I'll assure the members of the committee that the same regulatory regime that we're currently in will be applied to all these projects. It has to go through the same process that any private company would.
CONES stands for "cost of new energy sources." I should have known that; I knew that at one time. That's how you compare it to the next-best price.
Section 4 approved.
On section 5.
W. Hurd: I have a brief question on section 5. I wonder if the minister could offer a rationalization for the appointments by the Lieutenant-Governor-in-Council. The province clearly has a 50 percent equity partnership, and in a normal arrangement that would entitle the province to half the directors. Clearly, the government has decided that there should be more directors-at-large than the provincial representation. I'd be interested in the minister's, or the provincial government's, explanation for that seeming anomaly in the makeup of the board of directors.
[10:30]
Hon. G. Clark: Actually, just to clarify -- I know it gets a bit confusing -- the province owns 100 percent of the shares in the trust. We've had this discussion. But they're non-voting shares, so while we own it, we don't have any control over it. We've said that we want the control to rest with the region, but we've also said that while we want regional control, because there's a significant backsaw from the province and because there's investment, we also want to make sure there are appropriate accountability mechanisms, openness, debate, an so on -- which you will see in later debates.
We decided that one-third of the board of directors should come from the Lieutenant-Governor-in-Council to make sure the province's interests are protected. I can tell the member that there was a lot of debate in the region. They said they didn't think there should be any provincial representation there. I was making the argument -- and I continue to make it, and I think it was ultimately agreed to by the region -- that this had to have the scrutiny of the broader British Columbia government. It couldn't entirely delegate this kind of body without some scrutiny. So we compromised on one-third, which allows us to have a window on the corporation but does not allow us to control it.
W. Hurd: With respect to the regional district representation, the minister will be aware that in some regional districts there is some tension between the representatives of electoral areas and those who represent the major centres of population. I would ask the minister whether he or the government is anticipating any difficulty on the part of the region in naming their directors to ensure that there is equal representation between the electoral areas in the regional district and the major centres of population; or how that would be addressed by the trust.
Hon. G. Clark: We don't anticipate any problems.
W. Hurd: That invites a comment, because having had the good fortune to attend the meeting with a group of electoral area representatives in addition to some councillors from Cranbrook, Trail and some of the population centres, I can anticipate there might be a few difficulties along the way. But I'm sure that the representatives of the region will be happy to review Hansard and note that the minister believes there will be absolutely no problems in resolving the issues of electoral areas in the regional districts.
I want to ask again: in the event that there is some difficulty within the region as to how the directors might be appointed, would it be possible for the region to hold some sort of at-large election for the members of the trust? In the event that there might be some disagreement within a regional district, how might that be dealt with in an equitable, fair and democratic manner?
Hon. A. Edwards: I take this opportunity to respond, because I was at a number of the meetings which dealt with this very issue. There is no question that when you come down to trying to decide who is going to represent you on a board of a trust that's as important as this one, there will be some competition to get that seat on the board. There are choices for the regional districts, and they are allowed to name their representative in a number of ways, so that they have that choice and it's not dictated by the provincial government.
I expect that any discussions about who should be a representative on this board will be dealt with quite fairly by the regional districts. So far, if you look at who represented the regional districts on the Columbia River Treaty Committee, you will find that they were nearly all -- usually -- electoral area representatives. I think you will also find that unless something goes totally off balance, the regional districts will be quite able to take care of being sure that they represent the interests of the area within their own organization.
W. Hurd: I have one other general question about the directors. It might be possible for us to proceed through to section 13, where I have a question under the formation of advisory committees. I want to seek assurances from the minister that the sections that deal with directors have been the subject of full consultation with the trust and with the people of the region, and that they are happy with the issues related to the powers of a director, replacement, quorum, etc. On first reading, these seem to be routine matters of business for the trust. But I wonder if the minister could perhaps elaborate for the committee how some of these rules with respect to the directors, meetings, quorum, remuneration, etc., etc., were dealt with, and whether this input came from the trust and the meetings. Or are they just standard terms that the province would put in place for the creation of any corporate entity?
Hon. G. Clark: It's fair to say that these have been the subject of exhaustive discussions with staff. The Columbia River Treaty Committee even retained a lawyer, Don Lidstone, who has done a very good job on their behalf, in part because he has a lot of experience with the Municipal Act in representing municipal governments. These rules were the subject of a lot of discussion and debate, and certainly with concurrence by the members of the CRTC. I think the member is correct. These are pretty straightforward business rules with respect to how the board of directors would operate.
Hon. A. Edwards: I want to add, because I think there is a further dimension, that at the symposium in Cranbrook in
[ Page 13503 ]
November of last year, this was the subject of long and colourful debate. It was a matter that, I believe, was dealt with by everyone at the symposium, and there were 200 or 300 people at that symposium. They all talked about it, and it was a matter of interest to them. Beyond that, it has been discussed at the open houses that have taken place and that have been conducted by the government and the CRTC from community to community. So anyone who has any interest in it has had the opportunity to discuss it. They have had their input. And what was chosen by the group was a response to what the discussions brought forward.
W. Hurd: Then, with respect to the participation of the tribal council on the board of directors, I note that the tribal council makes direct representation to the minister as, I guess, a quasi-government on equal footing with the various regional districts. I note, in looking at sections 7 and 8, that the tribal council and the regional district have a requirement to appoint directors within 60 days after receiving notice. I guess it invites a question as to whether, in the mind of the government and in the intent of the bill under the terms of the directorships, the tribal council occupies an equal footing with the regional governments in terms of their participation in the Columbia Basin Trust.
Hon. G. Clark: For the purposes of this act, absolutely.
C. Serwa: With respect to the allocation of the directors, I wonder if the minister could advise me of the population of the tribal council and the population of the regional districts. Being a believer in democracy and one who really believes that representation should have some reference to population, perhaps the minister could inform me of the due deliberation that, for example, gave the tribal council equal footing with all of the other regional districts on a population basis. It seems to me that there is an imbalance there.
C. Evans: It's an interesting question. The member wants to know if the population of the tribal council equals the regional districts. Well, none of the regional districts has equal population. The principle among all five levels of government is that it doesn't matter. If the Regional District of East Kootenay has 10,000 people and West Kootenay has 20,000 people, they get two members. So the principle that you're bringing forward, that the native people and the non-native people should have equal population and equal representation, is not recognized by the non-Indian governments that are signatory to the agreement.
C. Serwa: Just for the record, then, it simply means that we've thrown the concept of democracy out for the purposes of the assessment of directors.
Sections 5 to 12 inclusive approved.
On section 13.
W. Hurd: With respect to the advisory committees, this is an interesting section. Again, when I reference the Columbia Basin agreement and compare it with section 13 of the bill, there seems to be some ambiguity that invites clarification about the role of the advisory committees, which, according to the Columbia Basin agreement, exist to consider and advise upon the affairs of the trust.
I just wonder if the minister could elaborate on how he envisages these advisory committees working. It seems to me that they could have an important role to play in directing the investments, providing input into the investments that the trust may make on behalf of the people of the Kootenays. Who knows? In due course they may have occasion to question some of the involvement the trust may have with the provincial government, of all things. That possibility exists. I wonder if the minister could advise the committee of exactly what role the advisory committees might play as this trust starts up and evolves over the next number of years.
Hon. G. Clark: As I said earlier, the composition of the board of directors was the subject of literally exhaustive debate. Part of that debate revolved around what I might call democratic theory, in the sense that there were people who argued that there should be a seat on the board for environmentalists. This was a matter of some debate and some support. There were people saying: "Wait a minute. There are other kinds of interest -- interest-based representation." One could argue that we have already agreed to two seats for the tribal council on the basis of sectoral interest as opposed to geographical region, because there are overlapping.... I think this debate was really healthy and good, with lots of interest and discussion.
What we decided to do, as you can see from this bill, is deal with the levels of government, including the tribal council, in the board of directors. But we will require the board to establish at least one advisory committee, consisting of not less than seven individuals, to review other interests which might come to bear. I think there's a strong and healthy environmental component in the Kootenays, and I think there's a strong notion from the people of the region that that interest should have a formal role to play in discussions around the table.
That's just one example. It's up to the trust, but I'd be surprised if there isn't, for example, an advisory committee on environment appointed. My colleagues here might know more about this. I think that's a good case in point, to advise the trust on some of the possible investments they're looking at, etc. That's not really a compromise; it's sort of what we worked through in terms of setting up a board of directors with a certain structure and then requiring an advisory committee to look at various kinds of interests or activities that are not as geographical or as governmental in nature as the directors might be.
W. Hurd: As the minister knows, if we look at the trust and the likely way that it will evolve, there will be a lump sum, upfront payment of $45 million available immediately. Thereafter, the grant will be basically administration costs. Clearly the trust will have to make some major decisions over the short term with respect to investing the $45 million.
Perhaps the question about where the trust may be in its deliberations and where the decision-making process is would be more appropriately put to the Minister of Energy or the member for Nelson-Creston. Or is the anticipation here that the $45 million would sit for awhile before any decisions are made? Where are we in that process?
[10:45]
Hon. A. Edwards: Certainly we don't want to foreclose any options for the Columbia Basin Trust when they are
[ Page 13504 ]
appointed. That board is going to make the decisions. However, it has been very clearly pointed out, not only by the current chair of the CRTC but.... It has been an agreement that, because it's expected that there will immediately or as soon as possible be some work on the ground in the two regional districts.... In fact, the $45 million is likely to be more directed to other regional districts and other parts of the region, rather than those where the possible generators will be installed. That is very clearly understood by the public. It has been said clearly, and it's going to be directed that way. I expect that anybody who is named to the board would reflect the views of the regional district and government, which have participated so far in continuing to support that direction.
Hon. G. Clark: Just to elaborate further, in section 15 there's a fairly detailed reference to a short-term business plan and a long-term plan. There are some strings -- not strings -- attached. They are to prepare a short-term business plan within their first year and then a long-term basin management plan within two years. I think that gives you a sense of the timing. They may stretch that a bit, but I think over the next year there are some requirements for a public meeting and a short-term business plan, and that's when the debate on how to allocate some of that money or funding will be the most intense.
W. Hurd: With respect to section 13 -- and it really could apply to any section of the bill -- there's a tremendous amount of detail in the basin agreement and little information in the actual bill we're dealing with. When I look at the definition of the trust under the Columbia Basin agreement, there seems to be a lot more accountability provisions built in in terms of the requirements to hold meetings, the audited financial statements and the role of the advisory committees. Perhaps I could ask, then, under section 13, whether the advisory committee will be able to look at other aspects of the trust or make recommendations on other aspects of the trust besides the business plan. Would they be able to, as a potential grass-roots organization, express concern about administration costs of the trust, for example, or about the numbers of people who may be hired, the staffing levels? Where are the provisions in this act with respect to how the trust might be accountable to the people of the Kootenays, with respect to not only investment decisions but plans that they may develop, the costs of administration, staff, etc.?
Hon. G. Clark: First of all, remember there's an annual public meeting, which I suspect will be very intensely debated elsewhere in the act. So there's an annual public meeting required. Secondly, the member's correct: these advisory committees, I suspect, will from time to time be very critical of activities of the trust -- and that's good. They'll be able to debate and have a lot of input into it. They will be able to look at social factors, cultural questions, etc. So the advisory committees provide a bit of a check and balance, and the annual public meetings require a balance. Obviously, the reports have to be filed with the Minister of Finance -- I think it's the comptroller general; later on in the bill we'll see. The Minister of Employment and Investment can ask for any documentation at any time. Because we have one-third of the board of directors, this House can question aspects of the trust's activities. I think, in fairness, a fair-minded person would see that there are a lot of public disclosure and accountability mechanisms.
Of course, finally, these are levels of government. They are elected regional districts. At the end of the day these people have to be elected. The people who are elected in the regions at the regional district level will be appointing the members to the board. I think, again, that's another check and balance on the corporation.
W. Hurd: Just one final question, then. It may not be germane to section 13, but I can ask it anyway. Again, it gets back to this dichotomy we have between the basin agreement and the actual bill. A reference is made in the Columbia Basin agreement to decisions made by the comptroller of water rights that may affect the region, and it says that the province will include in the bill that the comptroller of water rights will consider the trust 20-year plan when making decisions.
Interjection.
W. Hurd: Section 32? I stand corrected, hon. Chair. We'll deal with it in section 32.
Section 13 approved.
On section 14.
W. Hurd: There are a few brief questions with respect to section 14(1):
"Subject to the approval of the Lieutenant Governor in Council and the Minister of Finance and Corporate Relations, the corporation, for the purpose of carrying out any power, right, function or duty conferred or imposed on it under this or any other Act, may borrow money from the government and may issue securities in the form and on terms and conditions determined by the Minister of Finance and Corporate Relations at or before the time the securities are issued."
Could the minister clarify for the committee what type of securities the trust may be issuing? Would those be debt instruments like debentures or bonds? That seems to fly in the face of our earlier discussion with respect to share offerings. I assume it would not include a share offering, because the province holds the shares, but it could include other debt instruments. What type of accountability would be built into that, other than just the normal acts that would apply to any institution or corporation carrying on business in the province?
Hon. G. Clark: This is another one of those checks on the corporation. They have to get the approval of the provincial government to borrow money. What happens is this. Right now, let's take it that if we were borrowing money in the name of B.C. Hydro, it's all one credit rating -- the highest in the country, of course, and the lowest interest costs in the country -- but people who are lending us money like to lend it to B.C. Hydro, because it's one of the strongest utilities in North America. So while it's under the credit.... B.C. Hydro has issued some of the debt bond instruments that we use to raise capital, and they have underlying them the B.C. Hydro bona fides. If we are borrowing money for the purposes of a B.C. Hydro project, it's very attractive.
Similarly, it's possible for the Minister of Finance, in the course of pursuing a borrowing on behalf of this corporation, to issue in the capital markets some of the various debt instruments I mentioned -- the bonds, debentures, etc. -- which would have attached to them this corporate entity and this
[ Page 13505 ]
business enterprise that was taking place. So you would go to the marketplace to borrow money, not for general purposes for the government of B.C., but to proceed with the development of these power projects, for example. They may have to have some paper attached to them to make them more attractive to investors or to signal to investors the purpose for which we are borrowing money.
This is kind of a boilerplate clause, as I recall. The Minister of Finance does all borrowing, and you'll see the borrowing powers. This really limits the corporation to requiring the approval of the Minister of Finance. The Minister of Finance uses all the debt instruments available, and this allows her, in this case, to use those debt instruments on behalf of this corporation if she and the Lieutenant-Governor-in-Council or cabinet decide this is appropriate.
W. Hurd: On this side of the House, we always worry about the difference between a boilerplate and a boiler room.
Some additional questions have to be asked with respect to section 14. The trust will be incurring a debt of some $500 million to meet its participation costs in the three dams. Is the minister saying that the province could then go out and issue debt instruments on behalf of the trust portions of the borrowing in the form either of bonds or debentures? What form of approval would be required from the trust? Would they have to approve the establishment or the floating of those debt instruments as a means of meeting their debt obligations? How much input would they have into the types of debentures or bonds that the government may decide to offer in the investment markets?
Hon. G. Clark: They would obviously have to request it, and that's part of these legal negotiations we're undertaking right now. Remember that the trust debt component will be $250 million. The joint venture will be $500 million, of which half will be the province's. Second, because the province is guaranteeing the debt on these projects, it's up to the Minister of Finance to determine the appropriate instruments to use to finance that. The treasury branch of the Ministry of Finance does it, not the trust in that case, because the borrowings for the purposes of these particular projects will all be the subject of the arrangement and negotiations we're undertaking right now. If, on the other hand, there is future borrowing, the trust would have to ask the Ministry of Finance, and the ministry and the minister would have to decide whether or not that is an appropriate use of the province's credit rating and whether or not we wish to undertake it -- or, in fact, whether or not the trust wants to use its own credit rating at some point to develop projects.
W. Hurd: As a point of clarification, under section 10, the Columbia Basin agreement, the total investment of $500 million from the province and the trust is expected to amount to one-half of the total capital cost of the power projects, and the province and the trust will jointly finance the remainder. We're looking at a $1 billion investment, and the trust will be responsible for $500 million of that.
Hon. G. Clark: Of which half will be equity and half will be borrowed.
W. Hurd: Half equity and half borrowed; I've got it. Thank you for that clarification.
I wonder if the minister could advise us whether Dominion Securities, when they reviewed the project, made recommendations with respect to financing the project. Was that part of their mandate? Did they make any recommendations about what types of debt instruments should be or could be used to finance the trust portion of this financial obligation?
Hon. G. Clark: Yes, they have done significant work, and there's more work to be done, because there are many varied and wonderful alternatives that investment bankers come up with to finance and develop these kinds of projects. I think Dominion Securities can speak for themselves, but in my conversations with them, they're very excited by this proposal, because these are three very valuable assets. They've done the analysis that shows that, and I think it's fair to say that they think this is easily financed. People will jump at lending this kind of money to finance these ventures.
As a result of it being so attractive in terms of financing, there are a variety of options to go about doing that. There is still some more work to be done, but right now it looks like a joint venture company owned half by the province and half by the trust. That would be the vehicle for building the three power projects, and with the permission of the Minister of Finance, they would go to the marketplace to borrow on behalf of the joint venture trust -- guaranteed by the province of B.C.
W. Hurd: Just so I have this straight, the corporation that we're creating is going to spin off a new corporation to incur the debt to build the dams.
Hon. G. Clark: Right.
W. Hurd: That invites a whole series of questions about how that new corporation might be capitalized and how the directors might be.... I mean, obviously that's in the recommendation stage at this point, and I would settle for the assurance of the minister that before such an action were undertaken and a new corporation formed, all this relevant information would be shared with the people of the region as to whether they wanted the trust to actually be involved in a new corporation. Can the minister tell us whether Dominion Securities is looking at any options for financing other than the spinoff of a new corporation by the trust and the province? Is that the favourite method of financing the projects?
I guess my concern would be that all this information is shared equitably and fairly with the people of the region rather than in some boiler room of the Ministry of Finance, B.C. Hydro, Powerex or anything else. I'd certainly welcome that commitment from the minister in committee debate today.
Hon. G. Clark: Yes, I absolutely give that assurance. All of the work by Dominion Securities is being shared in great detail with the CRTC. When you get into the technical questions, it obviously becomes more difficult in terms of the broader public. Most people are interested in what the trust is going to do and how it's set up rather than getting into the minutiae of the organizational structure proposed by Dominion Securities. Believe me, the people empowered to make these decisions are engaged at a very detailed level in terms of the possible organizational structures. It's fair to say that Dominion Securities has a proposed organizational structure which is under discussion right now.
[11:00]
[ Page 13506 ]
W. Hurd: I hope we're not getting ahead of ourselves, but I had one more question about the potential for the creation of a new company, which really would be totally devoted to the energy field because it would exist solely to capitalize the three dam projects in the Kootenays. Would it be subject to the same rules as the trust with respect to taxation? Certainly that would invite an expression of concern from the opposition in that we might, in fact, be creating a brand-new power company with a whole different competitive advantage over IPPs, West Kootenay Power and Light....
C. Evans: What a shame.
W. Hurd: The member for Nelson-Creston says: "What a shame." But I think the people who have submitted 48 proposals to B.C. Hydro to build independent power plants would be quite rightly concerned if another entrant in the field, even a hydroelectric entrant in the field, were to enjoy what amounts to an unfair competitive advantage. I think that's a legitimate question and one that we may not be able to explore in debate on this bill, but something that I think should be flagged for future discussion by the opposition and the government.
C. Serwa: Just a quick question with respect to security for the government underwriting the loan or acting as the final security. What security do you have with the corporation? I see nothing in here that indicates that you have taken any form of security.
Hon. G. Clark: It wouldn't be in the bill, but there will be a legal arrangement, which we are discussing right now, which would give comfort to the province and to the Minister of Finance that there is security. We're not simply just going to give them the money. It has to be linked to the dam projects, to long-term contracts, export agreements or energy purchase agreements, etc. So I can give the member comfort that there certainly will be legal securities required by the government before we proceed with the project.
C. Serwa: I'm certainly comforted by that because it's obviously very, very important to the province and to the provincial taxpayer. Perhaps the minister could give me an indication of what he anticipates as a reasonable type of security for a government-guaranteed loan in this particular instance. Remember, this is a hybrid type of company, neither public nor private, and it's a very interesting concept. But what type of security does the minister propose?
Hon. G. Clark: First of all, we have the ownership of half the assets -- or we will have through this venture. So we already have the ownership of 50 percent. I think it's fair to say that we will require the normal due diligence to ensure the viability of these projects before we proceed, and we will require the same kind of security that would be required by anybody lending the money.
I have to say to members of the committee, just so we're clear, Dominion Securities believes that you don't need a government guarantee to pursue these projects. Given the 50 percent equity.... The remaining 50 percent debt instruments, which were borrowed to develop these projects, were so attractive that they probably don't need any government guarantee. The disadvantage of that for the entity -- and for the province in a sense -- is that they might have to pay slightly higher interest rates on the borrowing if there's no government guarantee. But even given that, the investment bankers say they're not sure that they will have to, because it's so attractive.
Remember, I'm not being a Pollyanna about this. Because the equity portion is so large and the risk on return of equity is significant, the debt portion -- only half of it is being debt-financed, unlike most power projects which are 100 percent debt-financed.... The 50 percent debt-financing part is a slam dunk. It's very, very attractive to pension funds or to other people who want to make those kinds of investments. So let's not get as concerned as I hear a little bit of, in terms of the financing of this. The investment bankers want a chance at least to prove to us that they can be competitive with the province's borrowing rate without any provincial guarantee on that portion. I think the trust and the province would prefer not to have a provincial guarantee if it can go. But we've said we're prepared to provide one, because there's no risk to us and because the borrowing cost could be lower, which helps to increase the rate of return on equity for both the region and ourselves.
The Chair: To extend the metaphor, we will ask the member for Okanagan West to carry on with his full-court press.
C. Serwa: Thank you very much. We're into a new game.
When I listened to the remarks of the minister indicating the confidence because of the equity position and the minimal amount of borrowed capital, it was very interesting to hear that there was really no need. Yet the legislation specifically indicates that the government will guarantee. So you can't have it both ways. If we listen to Dominion Securities and to the minister, the government really has no reason to stand in this legislation as guaranteeing the borrowed capital. That leaves some considerable question in my mind, because it is less than an arm's-length transaction at the moment. If I heard the minister correctly, it's not needed; yet here we have it in the legislation. So it's not quite as ironclad as it appears.
Hon. G. Clark: It's not in the legislation. There's nothing in the legislation about a guarantee; we have the option in the legislation of providing a guarantee. There is an agreement -- a memorandum of understanding signed by the Premier and members of the region -- which said we will provide one. That's to give comfort to the region, because they're very nervous about the province's role in this. There is some appropriate concern, etc., and we want to give them the comfort that we have in this project. So we're prepared to provide that guarantee in this case. But this bill does not guarantee all borrowings. It gives the Minister of Finance the power to say no. As well, it gives us the option of providing a guarantee if we want to provide comfort.
W. Hurd: This may be the most appropriate section to ask the minister about clause 18 of the partnership arrangement in the Columbia Basin Trust Act, where it indicates that the province will guarantee the trust a floor price for the sale of electricity from the power projects, which will provide a positive return. Going back to the point made by the member
[ Page 13507 ]
for Okanagan West, if the trust were to take the $25 million a year and borrow its commitment to the dam project, the minister is saying that that would change the economics of the project because it would then be totally debt-financed. These are downstream benefits that are coming back to the region in the form of cash. It's very difficult to suggest that just because they are going into a dam project, that represents equity. It does represent equity, I suppose, for purposes of the dams, but I wonder.... If I were in the region, I would be much more comfortable if I knew in my heart that I had the option of taking my $25 million out, doing what any business would do and borrowing my commitment to the dam project, and had the assurance that at the end of the day, as a debt-financed project, it was equally viable.
In our discussion today I don't sense that the minister has provided us that assurance. It then becomes critical for us to examine clause 18, which guarantees a floor price. I wonder if the minister would use this opportunity, on behalf of the people of the Kootenays, to amplify what type of guarantee we're dealing with here. Given the energy fluctuations, are we guaranteeing a kilowatt rate per hour from the power? Are we saying to the trust: regardless of where electrical energy may go, we are going to pay you the equivalent of 3, 4 or 5 cents? Is that the kind of guarantee we're dealing with here?
Hon. G. Clark: Not quite. We are going to guarantee a floor price. All we have to do to make this project viable, to fulfil point 18 -- this floor price -- is guarantee a positive rate of return, which is above zero on the equity portion, so they don't lose any equity in the project. To get that price of 17.7 percent of CONES -- the cost of new energy -- is something like 1 cent a kilowatt-hour. Anybody in the world, including West Kootenay Power, will buy every watt of this project at 1 cent a kilowatt-hour; of course you would.
Is there a risk that the price will drop below that in the world marketplace and that you'll be paying too much for that energy? I suppose, but the risk is pretty low. All we've said to the region is that we're going to guarantee a floor price that guarantees you a positive rate of return, above zero, so your equity portion is protected forever. That price is very, very low, and that's why we can guarantee that floor price.
Therefore what we're asking the people of the region and the province to do is.... We're investing 50 percent of the equity at no risk. The equity is at no risk. All of the risk is on the upside. You're going to make a rate of return. The question is how high a rate of return you're going to make, and that depends on the market price.
W. Hurd: The minister made reference to a return on equity of 10.4 percent. Is that the guarantee we're getting here?
Interjection.
W. Hurd: Well, somebody has to be taking the risk here. Clearly, if the trust is being guaranteed that its equity of $250 million will never be worth less than $250 million, and that there's a guaranteed rate of return -- and the minister has acknowledged that the entire project, if it were debt-financed, may not be viable -- somebody has to be taking the risk here. It's theoretically possible for the projects to be entirely debt-financed, in which case they might not make any money at all.
I hear the minister saying that the risk is being incurred entirely by the province of British Columbia and that the trust is being guaranteed a return on investment of 10.4 percent regardless of whether the project is up, down or even. I think it's important to read into the record that this places the province and the people of the province at what I would say has to be some risk. Clearly, if one of the partners in a transaction is guaranteed a return on investment regardless of the economics of the project, then somebody must be taking a risk.
I think it's important to discuss that issue of floor price and to get onto the record exactly what the minister means. I assume that we're dealing with a 10.4 percent return.
He's saying no. Perhaps we can clarify that question immediately, hon. Chair.
The Chair: I'm going to give the minister an opportunity to clarify, and then I'm going to give notice to the committee that we're really stretching the parameters, I think, at this point.
Hon. G. Clark: I think I've been clear. I'll try one more time. I think the member for Okanagan West understands what I'm saying. We've guaranteed a floor price -- let me read it -- "which will provide a positive return on investment," not a negative return. So the member is correct. The province is guaranteeing to the trust that it will not lose its equity -- not that it will make 10.4 percent, but that it will make more than zero.
The reason we can guarantee that.... Is there a risk to the province? The answer is yes, but it is so infinitesimally small as to be laughable, because if we guarantee a zero rate of return, the price of power that the project can generate to guarantee that is less than 1 cent a kilowatt-hour for those three projects. Unless you think there is a risk that the price will drop below 1 cent, then there is no risk.
That's why, frankly, the province isn't going to have to guarantee a floor price at the end of the day. West Kootenay would love to sign a contract; they'll sign a 20-year contract for all the power at that floor price. The trust is not going to do that, I suspect, because West Kootenay will say: "We'll guarantee a floor price, but we want a ceiling."
So that's where the debate is. The real question for the trust and for the government is: do we enter into a 20-year contract at something like 3 cents -- very cheap power -- and make an 8 percent rate of return? Or do we enter into shorter-term contracts, knowing full well that if we get up to or higher than the CONES price five and ten years out, they'll make significantly more money, but there's a risk that the price will drop? Those discussions are going to take place.
We are guaranteeing a positive rate of return and that they can't lose their equity, and that is as close to fail-safe as I have ever seen because of what it does to the economics of the project. We're not guaranteeing 10.4 percent, but the experts we've engaged say that it is likely, using the projected cost of new energy sources -- which does change -- to generate a 10.4 percent rate of return. That is the experts' most likely rate of return. We're saying that they'll likely make 10.4, but we're going to guarantee they won't lose anything. There's no way they can lose their equity. And if the price of energy goes up beyond what people expect now, they'll make significantly more than a 10.4 percent rate of return.
[11:15]
[ Page 13508 ]
C. Serwa: I'm going to ask for your tolerance, hon. Chair, because I have just a few questions after listening to the minister. They are significant.
First of all, I'm mindful of what happened in Newfoundland and Labrador with a long-term agreement between Quebec and Newfoundland. Certainly Newfoundland is not very happy with that situation, and Quebec has really done well by it. Probably a shorter-term contract.... I'm quite confident that the molecules in my beaker of water are not all going to accelerate in this fashion and drain it, and I'm just as confident that the price of energy is not going to come down. That's the important fact.
But one thing that I wanted to ask the minister about.... It's nice that the Minister of Energy, Mines and Petroleum Resources is here. It's my understanding that the cost of a new hydrogeneration project would amount to something like 4-1/4 cents per kilowatt-hour, and with this expansion generation project, the minister is talking about a cost of 1 cent per kilowatt-hour. Am I wrong in my figures, and is the 1 cent appropriate at the cost of that expansion-generated power?
Hon. A. Edwards: I certainly can't confirm that you're correct in what you say. What I can tell you is that if you are talking about building dams, you're talking about one thing. If you're talking about adding generators to existing dams, you're talking about something that's quite different. I'm not sure where you are between those.
C. Serwa: I just wanted some confirmation with respect to the source of the 1 cent, and also in relationship to the cost of a new project, which would include the building of dams, not simply the installation of generating facilities. Although, frankly, the capital cost of the installation of the additional generating facilities is very significant as well.
Hon. G. Clark: I'll just try to clarify that 1 cent again.
The only way you get down to 1 cent is if you get a zero rate of return on your equity and 50 percent equity on the project. That's how you get down to 1 cent.
What are the ballpark numbers? Just so we're clear, we've got lots of proposals from IPP. Some of them are hydro, most of them are thermal and gas, and the price of generation is coming down. It's probably going to be 3-1/4 cents, more like the price of power out there. If we fully debt-finance the Keenleyside Dam, it would be more like 3.8 or 3.9 cents, right on the margin.
Interjection.
Hon. G. Clark: Okay, members might want to say it's 4 or 4-1/4 cents. Actually, Waneta and Brilliant are cheaper than Keenleyside, potentially. But with the debt-financing piece and with lowering the rate of return on the equity portion, the price comes down dramatically. It'll come down to the market price.
W. Hurd: I'll just settle for one assurance, then, and we can move on from this section. Will the minister assure the committee that should the trust decide that it wants to convert its equity to debt on the project -- in other words, it wants to take the money out of the project and reinvest it for a higher rate of return -- would it have the ability under this act we are signing today, or are going to approve at some point, to do that? Would they have the ability to make that kind of business decision -- to turn the project from their equity into a debt-financed project? Because the minister has clearly acknowledged that if it was a debt-financed project, it would change the economics of it considerably. That's an assurance that we'd welcome and that I think would allow us to move on from this section.
Hon. G. Clark: It's not in this section anyway, but the answer really is no. We're working on a legal agreement, which is to invest this money in these power projects. They don't have the option of taking it out and investing it in the New York Stock Exchange or anywhere else. What we've offered to the region, what we've negotiated with the region, is a linked investment strategy which we think gives them significant upside potential, meets their goals and meets the goals of the province as well.
Section 14 approved.
On section 15.
W. Hurd: Just a brief question, since we have canvassed this issue at some length with the Minister of Energy. The management plans being presented.... I wonder if the minister could again tell us exactly where they are in terms of investments by the trust. Would we be looking at potential investments within the current fiscal year? Or is that too short a window for the $45 million that's being presented as a lump sum payment in, I believe, the '95-96 fiscal year?
Hon. G. Clark: I think the question is: is any of the $45 million being allocated or going to be invested? How far along are they? The answer is no, not a penny has been allocated. There are lots of ideas -- the Kootenay regional advisory group -- and in the open houses lots of people are saying: "Let's take some of that money and build this boat ramp," etc. There are lots of ideas, but no decisions have been made. No business plan has been drafted. That will be done by the trust in a process over the next year. But we haven't directed them; we haven't suggested anything to them. There are just hundreds of suggestions at the moment.
W. Hurd: So this is a cash payment from the province. It's not the opportunity to take power back under the Columbia River Treaty agreement or anything else. This is strictly a conversion of that benefit to cash, which will be dispensed to the region. It will be a payment of actual dollars.
Hon. G. Clark: Yes, that's correct.
Section 15 approved.
On section 16.
C. Serwa: This is really very interesting. I think this is the first time I have ever seen a government bill presented with a part dedicated to conflict of interest. Perhaps the minister could explain the rationale for this. It's very comprehensive and extensive, but -- again, in my memory -- it's the first bill I've seen that contains this.
Hon. G. Clark: First, I might say that the lawyer for the CRTC -- whom I don't know well, but is an expert, I think, in
[ Page 13509 ]
the municipal conflict-of-interest act -- had some say in it. The CRTC agreed with the province that we needed strong conflict-of-interest language here, considering the broad mandate of the corporation and the possibility of individuals on the board being elected.
This section is modelled after the provisions in the School Act regarding the conduct of trustees, as opposed to the more limited restrictions in the Company Act. These are actually broader conflict-of-interest provisions, more akin to the School Act or municipal law than to the Company Act, because, again, of the public nature of it and the fact that there are municipal people, politicians likely, sitting on the board.
Sections 16 to 22 inclusive approved.
On section 23.
W. Hurd: Just a brief clarification under section 23, which refers to a resident of the region within six weeks becoming aware of a director contravening section 19. I wonder if the minister could clarify whether the rights of suit or the rights of the individual with respect to taking any aspect of the trust to court are fully protected. Clearly there's a reason why this particular section has been limited only to the actions of a director. It seems a rather curious clause that would empower a resident of the region to take court action, when one would normally assume that that would be available to any citizen of the province anyway. I wonder if the minister could just clarify the reasons, the rationale, behind section 23.
Hon. G. Clark: I think you have to read it in the context of this part of the bill, which deals with conflict of interest. The corporation, I believe, has the powers of an actual person and can be sued in the normal course of events. This deals with how you enforce the conflict rules with respect to directors. This simply allows any individual in the region who thinks that a director has contravened the rules to go to court, and the normal rules of court apply.
Sections 23 to 25 inclusive approved.
On section 26.
W. Hurd: Section 26(4) was the subject of considerable debate within the Kootenays as well. I wonder if the minister could advise the committee as to whether there has been any significant change with respect to the reporting of the trust vis-a-vis the reporting that would be required by any other registered company in the province. Clearly this is a creature that is unlike any other that we've set up in the Legislative Assembly, and I think it would invite more public scrutiny and more attention to financial reporting than might be the case with a corporation and a group of shareholders. I wonder if the minister could tell us whether this is a boilerplate clause we're dealing with here or a clause that has been specifically drafted with the trust's activities in mind.
Hon. G. Clark: This has specifically been drafted, and it is more onerous than a private company, obviously, or in some cases even than a Crown, because it requires an accounting system satisfactory to the Minister of Finance. It must, whenever required by the Minister of Employment and Investment, submit detailed accounts of its revenues and expenditures; all books, records, documents and other financial records must be open at all times to inspection by the Minister of Employment and Investment or a person designated; and the Minister of Finance may direct the comptroller general to examine and report to Treasury Board on any or all financial accounting operations. So it is more onerous than any private company. We can send in the comptroller general, if you will, to report back to Treasury Board the activities of the trust.
Again, this is part of that debate between regional control versus the role of the province, and the trust has agreed to this.
W. Hurd: I'm looking for some semblance of reporting to the B.C. Legislature. In what form would the activities of the trust, given its provincial investment, come before this House? Would it be in the form of an annual report? Would it be in the form of...?
Hon. G. Clark: Section 28.
W. Hurd: Section 28. Fair enough.
With respect to the people in the region, would the minister anticipate there being public meetings that might be held rather than just a normal shareholders' meeting? When the corporation has made a series of investment decisions -- and this might be something over which the provincial government has no control -- I would anticipate that there would be a heightened interest in the region in all aspects of the activities of the trust. I wonder whether there would be an expectation by the government in connection with reporting under section 26 that the trust would be much more involved in community relations and in holding more meetings in various cities of this rather large region. It would appear that there is a need for that, given the number of communities and regional districts involved. I wonder if he would advise the committee on whether he envisages that type of activity taking place on behalf of the trust.
Hon. G. Clark: Yes. Knowing the Kootenays as I do, I'm sure there will be lots of public dialogue in the region. I just refer the member, with the greatest respect, to sections that have already been passed. They are required every year to hold a public meeting, a regional symposium, on corporate and treaty issues; they are required to have a full public debate. Obviously, tabling the annual report in the House is required. In addition to that, the directors themselves are all appointed by regional districts and are therefore elected, so there is a natural accountability section there.
D. Mitchell: A brief question to the minister. The minister mentions that under section 28, the annual report is going to be tabled in the House. We have annual reports tabled in the Legislature of Crown corporations, and of various agencies, commissions and public bodies. We don't have a lot of scrutiny of them; we don't have a lot of opportunity to debate them or discuss them. Was any consideration given to the notion that this trust might actually report to a committee of the Legislature, where members of the House could actually talk to directors of the trust about the activities of the trust for the year under review or for the year completed in the most recent annual report? Would that have any merit?
[11:30]
Hon. G. Clark: It definitely has some merit. I think it has more merit for provincial Crown corporations than it does for
[ Page 13510 ]
this, in the sense, again, that we try to give the regions as much autonomy and control as we can while having the checks and balances back here. I think that in negotiations with the region, they wouldn't be.... I shouldn't read too much into this, but I suspect they wouldn't be as supportive of coming down to Victoria to appear before a bunch of Victoria politicians, when we're trying to give them more autonomy in the region. I suppose we could have done that, but again, I think it would be more appropriate to start with our own Crown corporations than with this regional entity.
D. Mitchell: I think that's an excellent suggestion from the Minister of Employment and Investment. I'll take the Hansard from today's debate, I'll keep it here at my desk and I'll read it back to him many times when we talk about the lack of accountability of Crown corporations, because today he seems to believe that the idea that Crown corporations should actually report to committees of the House has merit -- a novel idea. It certainly has more merit than with the trust, maybe enough to actually implement a reform. We'll move on at this point.
Section 26 approved.
On section 27.
W. Hurd: I have a question with respect to how the audit would be conducted. Could the minister tell us how he envisages the direct debt and investment in the dams being dealt with for purposes of the audit? He indicated earlier that there might be a possibility of a further corporation being created to basically take on the debt instruments.
Would the audit conducted for the trust include the debt and equity in the dam projects in their totality? Would that be separated from the audit, where we would only be looking at the money that it receives in cash and then disbursements for such things as administration of investments in the region? I think that's an important issue that speaks to the need to properly valuate the dam assets in terms of their net worth and the overall investment of the province. I would seek assurance from the minister that the audit would in fact include, in their totality, the debts, the investments and the equity in the three dams in the Kootenays.
Hon. G. Clark: I think it's a fair question. The answer is yes; all of that would be covered by a comprehensive audit.
Sections 27 to 30 inclusive approved.
On section 31.
D. Mitchell: I have a brief question for the minister. Section 31 deals with the power to make regulations. We don't seem to have in Bill 7 a specific section dealing with "coming into force." I wonder if the minister can tell us why the bill doesn't have a coming-into-force clause, which most bills that come before this House have. When does the bill come into force?
Hon. G. Clark: The Regulations Act determines how it comes into force, and it's at midnight on the night of royal assent unless otherwise stated in the bill.
D. Mitchell: Just to clarify this -- because I think we need to know when this bill will come into force, earlier in the discussion in committee the minister referred to the memorandum of understanding that's going to be signed in the Columbia-Kootenay region with the trust, and to that MOU as not yet being completed. Will that not have some impact as to when this bill will come into force?
Hon. G. Clark: No, except that we have to have the trust before we can sign the agreement, so it comes into force immediately. And the trust, as I said before, can reject an agreement. We don't anticipate that; we hope that's not the case. We've been working so closely together on this stuff that I don't anticipate it, but it's possible. The trust will be formed -- separate and distinct. This bill does not approve the memorandum of understanding, although I appreciate.... We've had a lot of discussion with that. I am not opposed to that; I think it's legitimate. But this bill stands on its own, without any MOU.
D. Mitchell: On section 31, then -- the power to make regulations -- I know we can't ask for a commitment as to what the regulations made pursuant to this act will say, but does the minister contemplate that those regulations will address the specific matter of the memorandum of understanding that has to be signed, and that they will address issues of when the trust will actually move into operation as a legal entity?
Hon. G. Clark: No. I think it's fair to say absolutely not. This trust act will pass and it will be formed as a legal entity, and the MOU should have no impact on that -- nor can it; nor will it. I don't believe at this time that the regulations will have anything to do with the implementation of that memorandum of understanding.
C. Serwa: In subsection 31(2), I find it very interesting that there is an accommodation to alter "the area included within the definition of the regions." Perhaps after all of the extensive consultation that I've heard about from the NDP members from those areas -- and they have indicated an extensive amount with respect to the presently described boundaries.... Here we have something that is specifically going to allow the altering of the region. After all of this consultation, why is that particular part of the clause in?
Hon. G. Clark: You note that "region" is a legal entity defined in the normal legal fashion: lengthy. I think there was some discussion about just wanting to ensure that the legal description absolutely conforms with the basin. The trust wanted the option to extend or to alter the technical boundaries slightly, and we just accommodated them by allowing the Lieutenant-Governor-in-Council to make those changes, subject to the trust's interventions.
Section 31 approved.
On section 32.
W. Hurd: Perhaps I can revisit the question I asked earlier in the debate with respect to the role of the comptroller of water rights in accessing the Columbia Basin plan that may be presented. Since the comptroller of water rights also has jurisdictional responsibility over water utilities, I wonder if the minister can tell us exactly what is intended with respect to what the water utilities comptroller may be required to do under this section of the act.
[ Page 13511 ]
Hon. G. Clark: The impact of this was a source of lots and lots of discussion in the region. This compels the comptroller of water rights to take into consideration the Columbia Basin long-term management plan, but it doesn't compel the comptroller to implement the recommendations coming out of that. So it gives the region and the trust influence over the comptroller general's rights with respect to water, but it doesn't legally fetter those rights in any way. So it's a process step to ensure that the views are taken into account. But at the end of the day, the comptroller of water rights still retains all the legal power and authority that he did prior to the passage of this act.
W. Hurd: Thank you for that clarification. Would the matter of water levels in the reservoirs be what is envisaged here? Before they were lowered or raised, would there be a requirement for some form of consultative process or some form of sign-off by the people in the region, or are we dealing with a broader mandate here than just the levels of the reservoir? Would it be all water management issues, streams, flows and a whole range of issues?
Hon. G. Clark: It's both. It's the broader question of water management of the basin, but it is also, in terms of reservoir levels, that the people of the region want a place to go to make their voices heard. I would suggest that it means that the comptroller must consider the opinions of the region before allowing certain actions to take place. It means that there has to be some justification, if you will, for alterations to water flows, etc., to the region. They can't fetter the rights of the comptroller general; the comptroller general has to take into account their views when making a decision. That puts a higher onus on the comptroller of water rights to ensure that everything that is being done has a full and thorough justification for it.
W. Hurd: This relates to the fact that the comptroller of water rights will hold hearings occasionally on matters of rate application increases, for example, on the part of water utilities. Would there be any anticipation here of the expansion of the public hearing process with respect to this particular agreement, or are we just dealing with a requirement that the comptroller of water utilities has this responsibility to assimilate the views of the region and somehow incorporate them into any action that is taken? That seems to be fairly nebulous. Would there be an expectation that the comptroller may have a public hearing in the region, which would be required in the event that we were dealing with a water utility rate increase?
Hon. G. Clark: No, there's no requirement for the comptroller of water rights to hold any further public hearings, etc. In fact, we anticipate that the trust will hold public hearings on these questions and then have some input. My understanding is that the CRTC, whom we have been discussing this with, is satisfied with this section. It does give significantly more input than in the past, but it doesn't give control of water levels to the regional trust, because there are some bigger public interest questions at play.
C. Serwa: I have a couple of questions on this particular section. First of all, I fail to understand how the trust or the comptroller of water rights can have the type of control that the minister has been talking about when the Columbia River is an international waterway. The agreement is between Canada and the United States, and the needs and requirements of balancing the flows are dependent on that particular agreement. Are we creating an illusion that somehow the people affected in that portion of the Columbia River Basin will now have some sort of greater control over reservoirs and subjugate the international agreement?
Hon. G. Clark: No, the comptroller retains all his or her rights under the Water Act. The member is correct. There's very limited scope on Columbia River Treaty dams and the flows that come out of them, although there is some scope. We should know that there is some room there, but at the end of the day, they are restricted by international agreements, and that's a major restriction on the ability to influence them.
C. Serwa: Thank you for clarifying it. That removes that shadow of doubt, because it seems to me it was really important to recognize that.
While we're talking about the comptroller of water rights.... Although they generate minimal power, they have minimal generating capacity, and that's West Kootenay. They nevertheless do pay water taxes for the generation of power, as Cominco and B.C. Hydro do. I'm not certain about Kemano. Will this trust be paying similar rates to the other corporations that are generating power utilizing water energy?
Hon. G. Clark: No. It will pay the same as any utility, such as B.C. Hydro, etc., for water rental fees. It's the same rate.
C. Serwa: Thank you very much. For my clarification, would it be based on the generation per kilowatt-hour? Is that the formula? There would have to be some differential, because the utilization of the dams will be for Cominco's generation purposes as well as for the trust generation purposes.
Hon. G. Clark: The member may know that we amended the water rental act last session to allow for own-use-of-power to have a lower rate, so the member is correct. Power generated for Cominco will have a differential, a lower rate for water rental. This expansion of extra power generated, and the water used to generate that extra power, will pay the higher rate, the B.C. Hydro regular water rental rate.
[11:45]
Section 32 approved.
On the preamble.
D. Mitchell: Not every government bill that comes before this assembly has a preamble. We have to ask why the bill has a preamble, and I suppose that's the first question. Why the bill has this particular preamble is the other question.
A preamble is typically a statement of principle or a statement of vision for the bill, and it should hopefully add some value to the piece of legislation. What we have with this preamble is a couple of general statements about what the government wishes for the region to be affected by the trust. Hopefully, the government would wish those things for all regions of the province. We certainly hope that the government would desire that all regions have some impact on their lives so that they could determine their future, and that the government would hope that we could create a prosperous
[ Page 13512 ]
economy with a healthy, renewed natural environment for all regions of British Columbia. So I'm not sure why it's necessary to put these words in.
The part of the preamble that causes me the most concern is the political nature of it. We would hope that a preamble to a piece of legislation would at least be factual. Why would it be necessary to put a partisan statement into a preamble? The first section says: "WHEREAS the desires of the people of the Columbia Basin were not adequately considered in the original negotiations of the Columbia River Treaty...." I have to ask: according to whom? Why is the government inserting a partisan political statement into the preamble of a piece of legislation they seek to make the law of the province of British Columbia? They're making a political statement.
The New Democratic Party opposed the Columbia River Treaty when it was passed 30 years ago. They contended at the time that there was not proper consultation. The government of that day thought there was thorough consultation, according to the standards of that time. Maybe by the standards of the 1990s, where we're much more open and government is more accountable, more consultation is desirable and demanded; in fact, I think it's demanded by people today. In the context of the mid-1960s, an international treaty was agreed to and ratified. There was input and consultation not only from Members of the Legislative Assembly but from communities involved.
The government wants to exaggerate the negative effects of this treaty in order to justify what they're creating -- this kind of Frankenstein's monster of a Crown corporation utility they are creating. Instead of investing money back into the region through a simple endowment or other vehicles that are available, they're creating something the minister has described here that, quite frankly, scares me. They are doing it by inserting a preamble that's making a bald political statement into a piece of legislation, and I wonder why. I wonder if the minister would give some consideration to deleting this preamble entirely. I think it's completely unnecessary, and it's an insult to this bill.
Hon. G. Clark: It's nice to see the keeper of the W.A.C. Bennett flame, the man who.... I know he's an authority on W.A.C. Bennett. I'm a mere reader of history, and I like to look at some of the wonderful things that W.A.C. Bennett has done for British Columbia. It's nice to see someone in this House defending W.A.C. Bennett, because that once-powerful.... That legacy of W.A.C. Bennett has been frittered away by some recent administrations, and it's nice to see someone stand up and defend W.A.C. Bennett, because there is lots to defend. But in this case, I think it's indefensible.
The member is correct. There is a statement here that sets out the spirit of this bill. Judges must view the details of the bill through the screen of the preamble, to say: "Now, what was the government trying to accomplish?" We very clearly want to say in this preamble that the people of the Columbia Basin were not adequately considered in the original negotiations, that they were left out.
An Hon. Member: Says who?
Hon. G. Clark: Says who? Say the people of the Kootenays. That's what people said to us; the whole genesis of this bill is to say we want long overdue justice for the people of the Columbia Basin -- because justice was denied them in the 1960s.
The member opposite may disagree with that, and I am glad he does, because it shows the difference between members on that side of the House and members on this side of the House -- with the exception of that side of the House over there. We want this bill to recognize that historic injustice, and notwithstanding all of the detail in the bill, we wanted to put in this historic bill a preamble which said very clearly that we believe justice was not done in the Kootenays and that we are seeking now to remedy that historic injustice as best we can.
So it is clear. Though it is unusual to have preambles in bills these days, we wanted to spell out very clearly in the preamble the entire intent and purpose and spirit of this bill, which is to redress a wrong. In part, it is to redress a wrong that took place in the 1960s. I know that not all members agree with that, and those members should oppose this legislation. We believe we are reflecting the will of the people of the Columbia Basin, which for too long has been forgotten by governments in Victoria.
The Chair: I have the Minister of Energy, Mines and Petroleum Resources, and then I'll take Okanagan West.
Hon. A. Edwards: I have to respond as well to a suggestion.... Any kind of suggestion that this preamble is partisan is so much a cloud floating over somebody's head that it is beyond belief. The people who have worked for this bill, the people who have worked for this Columbia Basin Trust and for this accord, come from all political parties, even some that barely exist anymore. And I might mention, that might be Social Credit. If you knew the area and if you came into the area and tested the number of people who are actually outspoken, they're named Liberals, and some of the people even belong to the new political Reform Party of the province. Some of them are federal Reformers, and most certainly the New Democrats support this. To suggest that this is partisan is to suggest something that is simply a figment of your imagination, and probably the imagination that comes out of the past with your appreciation and admiration for W.A.C. Bennett. This is a place where you should take a little care with your admiration for Mr. Bennett, because the deal did not do what it could have.
What happened was that people protested at the time the deal happened. Since that time, book by book, expose by expose, it has become more and more clear that this particular deal did not return to the Kootenays anything like the benefit that came to the rest of the province. The Kootenays were hard done by; the Kootenays were unfairly and inadequately recompensed for this deal, and that has become more and more clear. Anybody who wants to think of what would happen if Okanagan Lake went up and down the way some of the lakes go over 100 feet -- I'll use metric, more than 35 metres -- up and down in a single day, would think that might be a negative aspect of what happened. Anybody who looks at the dislocation of wildlife that has happened because of these dams, at what happened to the fishery and to the agricultural land but, most of all, at what happened to the people knows that this was a historic wrong, and I would urge you, sir, to look at it in this era.
The Chair: How very nice to see that this bill indeed has a political content. I recognize the member for Okanagan West.
[ Page 13513 ]
C. Serwa: Certainly I want to speak to that preamble as well. What I've heard, with the enormous amount of protest, is a sense of guilt from the Minister of Energy, Mines and Petroleum Resources, who knows full well that her constituency was not affected. It's on the Kootenay, but fortunately she's one of the government members who is controlled.... And the Columbia starts at Columbia Lake well north of Cranbrook. So she was not affected, but she was a beneficiary. The area that I'm concerned about is that she protests this altogether too much.
The fact is that this simple clause here debases the whole bill. That's what it does particularly. If there's a guilt complex over there, it's well deserved. What we're seeing, primarily because of this preamble, is a hypocritical, socialist, pre-election, pork-barrel boondoggle. That's what it is, and that's all it is.
Interjections.
C. Serwa: That's right. Remember each and every word. You talk about historical injustices, yet each one of us here and most definitely all of the people in the East and West Kootenays are the beneficiaries -- as are all British Columbians. Here we have the ability to be hypocritical and say: "It was all bad, but here are all the dividends. The dividends are good but the cause was all bad, and we didn't benefit."
The principle that was established and that we had long debate on is a bad principle, because we find out that school taxes in West Vancouver, for example, are compensating interior areas, perhaps in the Kootenays. Who has ownership? The principle of this bill is purely, simply partisan political. The whole thing is to get six members elected in the area; there's nothing else.
You talk about a historical injustice, and the white knight in shining armour -- albeit a little bit rusty.... Take a look at the agricultural land freeze that your government brought in. It expropriated without compensation the....
Interjections.
C. Serwa: No, I'm talking about historical injustices. There's a little bit of latitude here. You stole property development rights from people, rights they traditionally had under British common law, yet you compensate no one. You compensate no one in the Peace River area because there are no government MLAs in that particular area. The whole basis, the whole foundation, is partisan political for your own political fortunes. I hope the people of the Kootenays do well by this bill, but the inspiration is purely partisan political. This preamble debases the bill and confirms that.
The Chair: I have three people standing. It seems to me that at this point we're in for some good old-fashioned debate as opposed to substance. Given that it is the preamble to the bill, and given that there is obviously something there to provoke, I think I'm going to recognize the minister responsible for the bill, who is probably going to suggest adjournment of the debate at this point.
Hon. G. Clark: I rise, report remarkable progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 11:59 a.m.
The House in Committee of Supply A; L. Krog in the chair.
The committee met at 10:11 a.m.
ESTIMATES: MINISTRY OF SMALL BUSINESS, TOURISM AND CULTURE
(continued)
On vote 51: minister's office, $356,000 (continued).
F. Gingell: I think there's only one archaeological question. I know that the head of your department is here. Perhaps, rather than him sitting here fascinated day after day, listening to all this other stuff, we can get it out of the way and free him to more important things.
I'd like to bring up the issue on Tsawwassen Beach, the property of Mr. Ken McNames. I believe you have a briefing document and that you're well aware of the situation. Perhaps I can turn the ball over to you.
Hon. B. Barlee: We have information on this, which I think will answer some of the questions. First of all, the property on Tsawwassen Beach is under some diligence, shall we say. The province has processed this matter -- slowly, by the way -- and we don't think the archaeological assessment costs should be shouldered entirely by the developer....
F. Gingell: It's the property owner.
Hon. B. Barlee: Or the property owner, yes. I think the property owner is Mr. McNames. Is that right?
F. Gingell: Yes.
Hon. B. Barlee: So as part of our developer-pay philosophy, cost is sometimes shared or borne by the province, and it varies. We have a number of areas around the province where we have assumed some of the financial burden. Requests for the province to pay are reviewed, by the way, on a case-to-case basis. We have not been asked directly to pay in this case.
The police were involved, because construction was occurring at an archaeological site, and charges against Mr.
[ Page 13514 ]
McNames, the property owner, were being considered. An attempt was made to reach the property owner. The only contact the municipality of Delta could give us was an Ontario address, which makes it rather difficult. We did send registered letters to that address.
The problem of the Crown telling the developer that a Heritage Conservation Act permit is required .... But issuance is delayed because of Indian bands being given a month to provide comments or concerns. They are given that 30 days. This is a legal requirement as a result of the recent Craig Bay decision. The Craig Bay decision is a more important archaeological site. There may be as many as 300 burials there. The Nanoose band is heavily involved, as is Intrawest, which is the developer. It's not unusual, but there aren't many cases around the province -- about three or four at the present time.
F. Gingell: The circumstance in this case is that Mr. McNames inherited this property from his parents, who had owned the property for 30 years. It was the family home. I understand that the site has been excavated numerous times before.
Hon. B. Barlee: Excavated or searched? Surface only?
[10:15]
F. Gingell: No, excavated. There had not been a process of looking for things. The Tsawwassen Indian band, in fact, allowed it to proceed very quickly. The circumstances were such that on or about January 27 of this year, when Mr. McNames was down there having the excavation done, a police car arrived with a police dog in the back, which is a very frightening experience for an older law-abiding citizen and a fine welcome to British Columbia, and he was ordered to cease and desist work. He'd been previously told by the municipality that an archaeological search or dig was not required, that it was a voluntary matter. Being the kind of person that he is, he decided that he didn't want to do anything that would seem to be damaging, so he arranged with some archaeological people to do this dig. It turned out that this was a group of students from Simon Fraser University who didn't meet the particular standards. But seeing that he was under the clear impression that it was a voluntary exercise anyway, surely that wasn't relevant.
The amount of money that has been spent on getting this issue dealt with is $2,836.24, if someone wants to write that down. Because you said that there hasn't been a request for reimbursement made formally on behalf of Mr. McNames, I'm making it. I think it' really important for the ministry to review all the actions that took place in this issue, to think about what it is trying to accomplish and to work out the best way to accomplish those ends. This was bureaucracy gone wild -- it really was. What we are trying to do is work together, in a spirit of cooperation and understanding, to ensure that important archeological sites are not lost. If a written policy has been developed, might the minister confirm its existence and make it available to this committee?
Hon. B. Barlee: Looking over the background material, first of all, there were things done that we would.... I don't think he will get any reimbursement at all, quite frankly. I will give you the background of it.
In October 1994 the archeological branch received a letter from the corporation of Delta proposing construction of a single-family dwelling at that site. Future development would conflict with an archeological site -- there's a midden there -- and the branch recommended an archeological impact assessment in December. Delta notified the applicant, Kenneth McNames, of the need for the assessment.
On January 23, 1995, Delta forwarded a letter by Dean Locke purporting to represent an archeological impact assessment. However, Mr. Locke is not an archeologist. Both Delta and the property owner were notified on January 25 that Mr. Locke's letter did not represent a report of an archeological impact assessment. The need for an assessment was reiterated. It was emphasized that no further ground alteration should take place until a permit was obtained. On January 30 the branch learned that additional preparation work was occurring. This was by an individual who was not a bona fide archeologist. Delta police were contacted, and arrangements for Bob Powell, of the archeological branch, accompanied by a member of the Delta police, to visit the site.
F. Gingell: And a police dog.
Hon. B. Barlee: Yes, that may be.
Upon their arrival on the morning of February 1, 1995, machinery was observed working within the area of the archeological site. Mr. Powell asked the property owner to stop work until the assessment was done under the appropriate permit. Work was halted.
Now the interesting part of this assessment is this: McNames stated that he thought Mr. Locke's work had been what was required and that Mr. Locke and his crew had worked a number of evenings doing a dig. It means they were undoubtedly working by some type of light. You do not do an archaeological dig by evening. I've never seen one anywhere, even when it's in imminent danger. Subsequently, Mr. McNames retained Arcas Consulting Archeologists Ltd. to do the assessment. That's much after the fact. He had an individual who was certainly not a professional, an individual who obviously did not know much about archaeological excavations if he was excavating at night. So some of that falls right back on Mr. McNames, I'm afraid.
An application for permit was received on February 8, 1995. The application was reviewed, found acceptable and sent that day to the Tsawwassen band, requesting written comments by March 10, 1995. Legal services, Ministry of Attorney General, advised that charges against Mr. McNames for disturbing the site would not likely be successful -- that could be argued, by the way -- as it could be reasonably argued that he acted in good faith. Well, that's questionable, to be quite candid. As far as the $2,836, I think his chances of getting that back from the Crown are virtually nil. It was felt, however, that there was scope for a charge against Mr. Locke, who had previously been investigated for illicit artifact collecting -- and that does take place, especially from the middens of British Columbia. Here's a guy working at night. To be quite candid, he didn't do much due diligence.
The Delta police were asked to investigate and report to Crown counsel. On February 24, the branch received a call from Fred Gingell, MLA for Delta South. Mr. McNames had contacted Mr. Gingell as he felt that he was being unreasonably delayed. Mr. Powell contacted Ms. Kim Baird, councillor for the Tsawwassen first nation to inquire as to the band's response. A written reply was quickly forthcoming, and a
[ Page 13515 ]
permit was issued that afternoon for an archaeological impact assessment. The field work was done two days later, on February 26, 1995. An interim report was sent to the archaeological branch on March 2, 1995. The report recommended that disturbance of remaining impact midden deposits be avoided and that no further archaeological work be required for the proposed house construction. Mr. McNames, the corporation of Delta and the Tsawwassen first nation were informed in writing on March 2, 1995, that these recommendations were accepted.
Frankly, I think the property owner did not really do his homework. Certainly I would recommend very definitely against reimbursing him for $2,800. I know that would not sit well -- and I understand why the member wrote the letter enquiring about it -- but he hired an individual who was certainly ill-suited. That, I think, is a generous assessment of this individual, who has a history of artifact collecting, and that's all right, but evidently he's a seller as well.
F. Gingell: Mr. Minister, you obviously know a great deal more about this issue than I do. I understand nothing about archeology, nor do 99.99 percent of the population of this province. If your government brings in legislation, you have to ensure that your government ensures that people are aware. First, you know where the middens are. Your archeologists are well aware. Why don't you file something in the land titles office? There's nothing on the title of that property that indicates that anything is required -- not a thing. I believe that your ministry has been deficient in its responsibilities to ensure that people understand. You make Mr. McNames sound as though he's an irresponsible citizen. That couldn't be further from the truth. He has reacted in a responsible manner in every single instance. He is, I believe, a retired senior Canadian civil servant...
Hon. B. Barlee: I wouldn't hold that against him.
F. Gingell: That may be amusing to you, but I think there needs to be a clearly established policy. You have a responsibility to ensure that people who have property on lands that may be archeologically significant are aware of their responsibilities. He was originally told by the municipality of Delta that it was not required. This is a real bureaucratic overreaction. My last question asked if there was a clearly enunciated policy on the way this is to be handled, if it's in writing and if the committee can have a copy of that. Could you answer that question, please?
The Chair: I do not wish to interrupt the member for Delta South when he's in full flight, but could he try to direct his comments and questions through the Chair as opposed to directly to the minister?
Hon. B. Barlee: We will pass this over momentarily. This is an archaeological impact assessment, and these are the guidelines. As far as the member is concerned, the Crown knowledge of the archaeological sites in British Columbia is not nearly as great as people think.
Some years ago I was doing some archaeological assessment work on the south Thompson. I was amazed, because frankly I was not an archaeologist. They asked me to lead an archaeological expedition, which I was not prepared to do because it came from the States, and I wasn't interested in doing that. They had virtually no knowledge of the various archaeological sites along the south Thompson, in which keekwillies and a few middens remain. Between Chase and Kamloops, there were probably about 120 to 123 different sites. There was nothing in the archaeological branch, because the rivers were the highways of the past, as were the waterfronts. Generally, the coastal Salish were canoe Indians, and the Salish Indians in the interior were generally canoe Indians as well, with the exception of a few in the south. So the Crown doesn't know a lot of these sites.
Midden sites are very difficult to spot, as are keekwillie sites. They are a little different. The Crown can take some responsibility, but I would imagine there would be literally thousands and thousands of sites on the various rivers in British Columbia that have not even been catalogued. First of all, we have some archaeologists, but not many. I think the Crown can accept some responsibility, but I also frankly think that if a house owner comes across an obvious midden -- and even an inexperienced eye would recognize a midden -- I think he has a certain responsibility. I'm not saying Mr. McNames was at fault, but I am saying that his chances of getting remuneration from the Crown are very slim indeed.
F. Gingell: I'd like to leave the issue of the remuneration on one side.
An Hon. Member: Here we have the Liberal Party talking for more government spending.
F. Gingell: No. I'd like to suggest that there is a sensible means by which you can ensure that the objectives you are trying to accomplish with this program are carried out, that at some point, before anybody does any construction of a house or something else, they need a building permit. I don't know whether you have done this, but if you have, your communications haven't been sufficient or haven't been recognized. Clearly, the way to solve this problem is to ensure that everybody who hands out a building permit -- whether it be a municipality, or whoever looks after it in an unorganized territory, or in the cities in their building permit department -- has a supply of those policy books and has clear instructions that when somebody comes in, the building permit form or whatever, triggers the understanding that this may apply. That to me is a fairly commonsense method.
[10:30]
This $2,836.24, as I understand it, is money that was paid for the archaeological work that did meet your requirements. That was a result of the recommendations of your ministry. Mr. McNames immediately fulfilled the requirements of your ministry, he had the work done -- again, if that's the right term -- by people who did meet the qualifications and this is the cost.
If you refer back to Hansard to the debate on Bill 21, page 12488, you were speaking at that point, Mr. Minister, on the issue of funding. I'd like to suggest that if one were to read that and look at all the circumstances -- as is always the case in these instances -- there's a little different focus and a little different attitude on the part of the government, or on the part of the citizen. You might find it in your heart to recognize that this does clearly fit within the circumstances that you were suggesting in the debate on the bill would be subject to refund.
[ Page 13516 ]
I'm going to leave this subject. I believe the member for Peace River North has some archaeological issues too.
Hon. B. Barlee: I accept the first suggestion of the member. I think if this is not in Delta city hall, it should be. We will check that out to make sure that there are, because certainly those....
F. Gingell: Every city hall.
Hon. B. Barlee: Well, certainly -- everywhere where there is a chance of there being an archeological dig. Most of that is on the foreshore in greater Vancouver, with some on the river.
When I look at the background, I have some difficulties: Mr. McNames admitted that this Mr. Locke was digging at night with a crew. The police were contacted. Mr. Locke, who purported to be an archeologist, was not an archeologist; he was a....
F. Gingell: He was a student.
Hon. B. Barlee: He may have been, but when you go there at night and dig with a crew, that is certainly not archeology. It comes under another bracket.
F. Gingell: It could be.
Hon. B. Barlee: I do not think Mr. McNames followed due diligence. Frankly, I haven't seen the police report on Mr. Locke or what he obtained from those digs at night with his crew. I would like to see that report. I think Mr. McNames, if he is indeed a former civil servant, should recognize that these types of laws have been in effect for many years all across Canada and are not unique to British Columbia. Again, I will accept the statement that.... If city hall did not have the archeological assessment impact guidelines, they should have had them, and we'll make sure they do. I would think that Mr. McNames is going to have a hard push to get his money back.
The Chair: The member continues -- briefly.
F. Gingell: I can understand that this issue not going to finish that fast.
I would like the minister to appreciate that people who live in cities have a different knowledge and understanding of these issues than people like himself, who -- I won't say come from the sticks -- live in the more rural communities. We simply do not have the same triggers in our minds that make us recognize these things.
I'd like to suggest to you that many important things are done under artificial light. If artificial light is well placed, you don't get shadows that you might otherwise get with sunlight. I don't know that.
Hon. B. Barlee: I do.
F. Gingell: You do, fine. But I'm trying to get you to recognize that a reasonable person who has not had an interest in archeology, who has followed other interests in their life, will not recognize that using artificial light is not appropriate. It certainly would not have occurred to me. I would think that if you placed good artificial light in the right positions you would get better vision, and you wouldn't lose things in shadows that the natural sunlight might create.
I think you're drawing a lot of conclusions about this exercise that are not valid. I have seen Mr. McNames as being very responsible, immediately offering to do things that he had been originally told were not required. Also, please recognize that this is a site that has been owned by his family since 1960. This property has been in their family for 35 years. It isn't as though they've just suddenly come into some location.
I can appreciate that you're not going to happily concur with a reimbursement where you have a feeling you've been brow-beaten a bit over the issue, but I know that your maturity will not allow that to affect your decision in this matter.
Interjection.
F. Gingell: Make sure that's on the record.
With that, perhaps a good approach to the issue of the money is to get Mr. McNames and your officials in the same room and see if it fits within the category, and you and I to stay out of it, Mr. Minister.
With that, if that's the end of it, I'll turn it over to the member for Peace River North.
R. Neufeld: Just a couple of quick questions, one about archaeology -- the Charlie Lake Caves, of which the minister is quite well aware. Every once in a while they come up in the newspaper, or in discussions in Fort St. John about what's happening with the Charlie Lake Caves, which of course show how man came across the land bridge from up to 10,000 years ago into the North American continent. I wonder if there's work proceeding within the ministry to protect the caves, or to do something with them other than.... As I understand it, they're lying pretty well dormant right now. Is there anything in the works that the minister can explain to me about?
Hon. B. Barlee: At the present time we have not moved on the Charlie Lake Caves, which I think are relatively important, but everything in that ministry is prioritized and, I think, perhaps rightly so. I have not seen them personally, and when I get up there, I imagine you will take me. I will be glad to look at them...
Interjection.
Hon. B. Barlee: Yes, you have to buy me supper, that's true.
I will be quite willing to look at that, and I think I will be up there in three months. I am going to take a trip through the north, and I will drop in to see you on the way up and we will have kind of a luxury supper. I will try to get some information prior to that time. I don't know if they are in imminent danger; perhaps you could give me more information on that.
Of course, the land bridge theory is correct as far as archaeology is concerned. There have been a number of sites in the Yukon, which is not that far away, that attest to that as well. My knowledge on this is peripheral. Caves usually are not at risk, but there are some exceptions; if this is an exception, we will do something about it.
[ Page 13517 ]
R. Neufeld: I don't believe they are at risk either. It's just an issue that keeps being brought forward -- some wishing something to be done, and others saying: "Leave them alone, because we may destroy more than we save if we do something about it."
There are other sites related to the land bridge further north in B.C. that date back to the same period of time. I'll get that information to the minister also. It is up around Mile 175 on the old Alaska Highway. There's some archaeology up there, too. So I will get some information for you before you come, and, like I say, I don't know whether it's in danger. I think that maybe we should be looking at it, though, to make sure that nothing happens to it. It is certainly a site that means a lot in archaeology.
There is one other question I have of the minister. I had written a letter a number of months ago regarding wetlands on some people's property close to Fort St. John. I know it transgresses a few ministries, but I am going to ask you and the other ministers responsible. These people have some wetlands or sloughs that they want to keep intact on their land. They're farmers who don't want to see anyone drain the wetlands for any reason; rather, just leave them as they are for the waterfowl and whatever else inhabits that area.
But they've had some difficulty. In fact, they've gone to the Ministry of Environment and put in a proposal to the water branch. The water branch, in its quick manner of replying, takes between four and five years, which is normal, I might add. When I asked about that, I thought, "This is a little ridiculous." But they said: "No, it takes a minimum of four years and up to five years to get a response, because you have to get a hydrologist." Interestingly enough, we have one in Fort St. John, employed by the Ministry of Environment. I guess that's too far away. You have to bring them from Vancouver. I don't know what the reason is.
The water branch said there was nothing they could do, because they didn't want to construct any works on this site. Well, that's exactly what this person doesn't want to have happen. They don't want to construct any works on the site. They don't want to take any water out of the pond. They don't want to raise it, and they don't want to lower it. They want to leave it intact, as it is, for future generations. They're having trouble getting anybody to do this.
It amazes me, when we talk about the environmental movement and all the things that we're doing in British Columbia, that these people would have problems getting the government to give them some permit to leave this piece of wetland -- which is not 100 acres, not huge, but a small lake, minister, just a small wetland -- intact, as it is, for future generations.
Hon. B. Barlee: I surrender. Send me a letter. I will take it directly to....
R. Neufeld: I sent you a letter.
Hon. B. Barlee: Well, send a letter -- deliver it to me personally. I will take it personally to the hon. Minister of Environment and make sure that it is done immediately. I don't see why there should be a bureaucratic bungle on that. You mentioned it to me probably five months ago. I remember the case vaguely. Frankly, I didn't follow it up. I thought it would be resolved easily, but it has not been resolved, so I'll make sure it is resolved. If you'll just give me the letter, I'll take it over there and take care of it.
R. Neufeld: Those are the only questions that I have on archaeology, but I can go into Tourism and Small Business. I have some questions on that.
First, I'd like the minister to tell me briefly, or as quickly as he can -- he wants to be out of here by noon; I don't think he's going to make it -- what specific proposals the ministry is taking to enhance tourism on the Alaska Highway, specifically in the northeast. The Alaska Highway is a big tourist draw for Americans going to Alaska. Along with that, my constituency touches the Yukon, the Northwest Territories and the Alberta borders. What agreements do we have in place with the Yukon and the Northwest Territories specifically? The Northwest Territories is not as large a tourism opportunity as the Yukon and the Alaska Highway, but it is there. Also, the northwest -- Highway 37, down through the Stewart-Cassiar area -- is basically all the same kind of country. What proposals does the ministry have to enhance tourism in those areas?
[10:45]
Hon. B. Barlee: Actually we have a number of tourism initiatives that will affect your area significantly. I think the growth in that area last year was impressive -- a total of $130 million out of that northeast sector. That was strictly in hotel accommodation, if I remember correctly. Yes, overnight revenues -- that would be hotel-motel -- of about $130 million in 1994, which is a significant improvement over 1993. This year we are launching Vacation B.C., and we are expending a number of dollars to emphasize all corners of the province.
To follow that up, I have been in contact with Doug Phillips, who is a Conservative member in the Yukon and an old friend of mine. He's in charge of tourism. We are in contact with Alaska as well. We will bring Washington and Oregon into the scheme. I have discussed this peripherally with my ADM of Tourism. In 1996, 1997 and 1998, there is the 100th anniversary of the discovery of gold in the Yukon. We think the Alaska Highway should be used. Of course, the highway leading up to the Alaska Highway is Highway 97, which starts in Bend, Oregon, if I remember correctly. We think we can draw a lot of short-haul traffic from California, Oregon and Washington up through that route. We will be emphasizing that and all the spin-offs from that route.
Highway 97 goes as far north as Prince George, and then you get on the Hart and then you get onto the Alaska Highway, isn't that correct? So there's a natural link there. We're going to take advantage of that link. Frankly, I think we have significant advantages. There will be four states involved, plus the Yukon Territory, and we will be the longest part of the route, of course, and much of that goes through the Peace country, which is really quite spectacular many times of the year. So we'll be emphasizing that. I think it will bring considerable business to the Peace River country and that northeastern sector. So we have looked at it very, very closely.
We will probably be erecting some historic signs in the area. Whether we get them up in the Peace this year or not, I'm not sure; certainly they are on the drawing board. I think the member would be impressed, because they are spectacular. We're putting the first one up in Princeton this Saturday, I think. If you wish to discuss this further, I'm quite willing to
[ Page 13518 ]
do so. It's quite a lengthy, long-term strategy and it will have an effect this year because of Vacation B.C.
We lose about $4.9 billion a year on people travelling out of British Columbia. We think we can stem that hemorrhage by several hundred million dollars this year, and probably several hundred million dollars next year. In fact, when I came into the House one of the guards stopped me and said: "You know, we've travelled all over Canada. We've never really travelled in British Columbia." I didn't prompt him when he said: "This year we're going to spend all our holidays in British Columbia." I think this is seeping into the public consciousness. Certainly we have much more to offer than any of our competitors.
I'd be willing to discuss this at leisure over lunch some time and tell you exactly what we're doing. I have no problem doing that.
R. Neufeld: I guess quite a number of years ago -- probably 15 or better -- our family decided to travel B.C. before we travelled out of B.C., and we're still not finished. I know what the minister means: it is difficult to get British Columbians to come north, whether it's for tourism, whether it's professional people, whatever. We just have a real tough issue. The highway is beautiful; it's paved all the way; it's fixed up. Of course that's not the NDP government -- before you start patting yourself on the back. The federal government looks after that portion of the highway.
I took the opportunity last year to travel north. I do so through my constituency once a year. I travel to the Yukon border, and I continue up through the Yukon and through the Top of the World Highway and down through Alaska. I was quite appalled when I entered the beautiful tourism building in Whitehorse. It's beautiful. It's unbelievable, actually. The Yukon government promotes tourism like no one else; obviously they have lots of dollars to do it. I'm not suggesting that we should be doing that all over.
What amazed me in the Whitehorse tourism information centre was that there was no literature to speak of about British Columbia, other than about 400 pamphlets on the lower mainland ferry sailing times. I don't know who's responsible, but it amazes me that in that kind of a building we would flood them with information about ferry sailings between Tsawwassen and Sidney and the lower mainland, and not have anything on the Alaska Highway, or specifically Fort St. John, Fort Nelson, Dawson Creek, Prince George, the Cariboo -- any of those areas. Whose responsibility is this?
Hon. B. Barlee: The building you're referring to just outside of Whitehorse is actually a bit of a white elephant -- according to Doug Phillips, who's the minister. It does serve a purpose but there's a lot of wasted space in it. We are cooperating with the Yukon. We're trying to get some anchors up there.
The Peace River country is spectacular. I know that; you know that; probably the general public of the province doesn't know that. One of the two major anchors is Dawson City, right in the Yukon itself, which is a significant draw, and the other is Atlin. Atlin is the Switzerland of the north: you have sternwheelers, gold rush history, ice fields and glaciers. It's quite spectacular. We did do some work in Atlin last year; I had a meeting there, in fact. I think that our overall strategy in our Vacation B.C. program will certainly include Atlin, will certainly include the northeast. I'll have the final figures from the northeast sometime early next month; in fact, I checked that the other day. I'll let you take a look at those, and I think you'll see quite a dramatic rise in income, generally speaking, in that area.
I think our plans are going along on the right schedule. I think they will be successful, and certainly when that program on Highway 97 is launched -- hopefully next year -- in conjunction with those other four areas, it will be equally effective, because we're hoping to draw that short-haul traffic, the real traffic, from various parts of the States. We have some advantages: the Canadian dollar, safety and so on. I think you'll be pleased with the results.
R. Neufeld: I appreciate those words. The Yukon does have a lot more to draw, like Dawson City. They really promote tourism, and the cruise ships all land so that the buses take people from there through the Yukon and into the U.S., or wherever they want to go. I think that could be expanded to possibly come down the Alaska Highway and go to Fort St. John or Dawson Creek and then fly back to their destinations. It's something that can certainly be promoted. The Yukon government certainly does it. I witnessed that fully last fall. In fact, as late as September 15 you could still witness bus after bus of tourists, mostly European tourists, travelling that part of the country, which is quite amazing.
Along with trying to promote more traffic along the Alaska Highway is the difficulty that some of those lodges and lodge owners have trying to operate their businesses. I think the minister is well aware that the cost of providing services along the Alaska Highway is extremely high. The cost of getting gasoline, supplies -- everything -- is dramatically more than it would be in Prince George or Fort St. John.
We have some regulations within government.... There is a sign policy put forward by the Minister of Transportation and Highways that does not allow signage along the highway, and this crosses ministerial boundaries again. Now when you're in the lower mainland, or where there is a lot of private property, you can go to property owners and make agreements with them along the highway to put up signs on private property to advertise a place of business. The people along the Alaska Highway, the lodges, the difficulty they're having.... And although they appreciate the sign program that the ministry has in place, they're all very individualistic people. You have to remember that there aren't many lodges between Fort St. John and the Yukon border, which is about 500 miles of highway. Most of those individuals live there year-round. They close up in the winter time and only operate for maybe three months in the summer. They want to advertise as much as they can. The difficulty is that the ministry will allow them to put one two-faced sign on their property.
The lodges were built many years ago in a lot of cases, and in fact encroach on highway right-of-way. The highway right-of-way on the Alaska Highway is 300 feet, which is very abnormal in British Columbia, so there are quite a few lodges that have their pump islands on highway right-of-way. Government decides that they can't even have signs on the right-of-way -- in some cases, on their pump islands. All this does is create an awful lot of hassle in the north and along the Alaska Highway. They can't go to private landowners on each side of their property. They'll have maybe a ten-acre piece. They can't go two miles down the road and talk to a private landowner. Who they talk to is government, because it's all
[ Page 13519 ]
Crown land, every bit of it is privately held. So they have difficulty putting up signs, and they continually fight the ministry. In fact, I think the ministry has backed off some, but they still will not allow them to put signs up. Even if they put them up and maintain them well, they send....
In fact, just to take you back a bit so you understand some of their frustrations, the ministry had enough money to send crews 300 miles to cut down signs, haul them back to town and say: "If you want your sign, you can come and get it." What a way to promote and work with small business people! That certainly doesn't help. In one case, a sandwich board sign was removed from a person's pump island because it was illegal. You can leave the pump island there, because we can't take that in the back of the truck, but we're going to take your sandwich board sign.
Those kinds of things don't do anything to help small business. I don't know whether you have any influence on the Ministry of Transportation and Highways on that issue so that we can let those people advertise their services. They offer different services there. Some of them have horseback riding, guide-outfitting and fishing camps. It's from A to Z, and they have such a short period of time. The period of time for them to make money on the Alaska Highway is a minimum of three months, and they'd better make it for the rest of the year or they're in trouble. If they're going to stay open, the rest of the year is just kind of break even. They have to generate their own electricity by diesel fuel and all the things that go along with that. So they do have some difficulties. Is there anything the minister can do to work with the Minister of Transportation and Highways to alleviate this problem?
Hon. B. Barlee: When you talk about diesel fuel, I think about a night I spent in Lower Post, breathing in the diesel fumes, when I was prospecting and stopped there many years ago.
Believe me, I know some of them need help; certainly that area did. But we have a problem, and I can sympathize with the owners. I can also sympathize with the Ministry of Highways, because the ministry, like all ministries close by -- that would include Washington, Oregon, Idaho, Colorado, Montana and California -- does not allow any signs at all. There are none in the States.
Frankly, they do that for several reasons. One is that they are flooded with requests if they allow one. Two, it does affect the ambience of the country. And three, it is partly the responsibility of the Ministry of Tourism to get enough people into that area so that it will have a beneficial effect upon those businesses. Some businesses put up signs, as the member well knows, that are rather attractive; most of the signs are rather unattractive. One sign leads to two, two lead to four and four lead to eight. It is a problem that the Ministry of Highways does try to get around, and it is doing some more signage now. I've noticed it in various.... If the signs are approved by the Ministry of Highways, we will be putting up some, as I say, historic markers in various parts of British Columbia. The Ministry of Highways is quite aware of that.
As far as the previous questions asked by the member are concerned, we do contribute $250,000 per year to the Peace River Alaska Highway Tourist Association. And certainly part of the responsibility that lies with that -- that's a quarter of a million dollars as our share -- is to make sure that places are being advertised.
[12:00]
As far as Dawson City is concerned, Dawson City is unique. You say you got there on September 15. That's about their closing date, as the member well knows. Usually you don't go beyond that. I know that, because my daughters dealt cards for the government of Yukon for several years up there and enjoyed it immensely. They were 22 or 23 years old and have fond memories of Dawson City, and so do I. I think it's marvellous. That's why we are cooperating with Doug Phillips up there. He is, I think, a very effective minister. He's not of my political persuasion, but he's lots of fun and has some good ideas. But he has one anchor, and that anchor is certainly Dawson City. We have a number of them in the province of British Columbia.
As far as signs on private property are concerned, I think the member probably knows that the only signs allowed on private property are essentially on Indian reserves in British Columbia. They're not on private property as such, if I remember correctly, unless they're on a stationary building. Highways can actually, if I remember correctly, move in and take those signs away, which they have done in the States, by the way.
R. Neufeld: On the right-of-way.
Hon. B. Barlee: Yes. They've done that in the States.
So, frankly, there are some things we are working on with the Highways minister. She's quite evenhanded about it and has helped us in a number of areas. We got in some signs, for instance, last year in the wine-tour country in the Okanagan, which were effective. There were not many, but Highways leaned for us on that.
So I think you will like our overall plans -- the Vacation B.C. We also have a joint promotion with the Yukon in the western diversification program. We do cooperate with the Yukon there, as well as, coming north, on Highway 97 and Highway 96 and then up the Alaska Highway.
R. Neufeld: The minister's correct if he's referring to signs on highway rights-of-way, but there are lots of signs off highway rights-of-way on private property all over the province. In fact, in the states that he mentioned, there are thousands of them. That's what we're talking about. The difficulty here -- and maybe the minister missed it -- is a 300-foot right-of-way. If you set a sign out 150 feet from the centre line, in some cases it could be 250 feet depending on where the highway is configured in the right-of-way, and you have to have a sign so big to be able to see it. That's the difficulty they're facing, Mr. Minister.
You may be talking about 20 lodges along the whole highway, at best...
Hon. B. Barlee: At best, yes.
R. Neufeld: ...that would need something, or that have asked for something.
To be perfectly candid, there are some that like the proposal the way it is -- I must say that. There are some lodges that say, "Yeah, I'm glad there are no signs," so it works both ways. But the majority do want to be able to advertise what they sell and what they do at their lodge, in a different way.
[ Page 13520 ]
Maybe I could go on a little further to the Muskwa Kechika, an area the size of Nova Scotia that was set aside by the Ministry of Environment a year ago and closed to vehicular traffic of any kind. There's some industrial activity in there. It's called the Serengeti of the North. There's a lot of guiding and outfitting in there. It includes the trench; it's beautiful country. I just wonder if the Ministry of Tourism has any involvement with the Ministry of Environment over the LRMP processes that are taking place in both Fort St. John and Fort Nelson, in regards to tourism in those areas, whether it's fishing, fishing lodges or hiking trails. The Wokpash is in there, and the Redfern Lake trail is in there. Are any discussions going on with the Ministry of Environment regarding the Muskwa Kechika?
Hon. B. Barlee: Not at the present time, although on frequent occasions we do discuss areas of mutual interest with the Ministry of Environment -- more in the heavily frequented areas. As I say, it doesn't fall under the aegis of this ministry, but certainly we have an interest, because it does impact upon tourism.
As far as tourism is concerned, yesterday I was asked a question by Mr. Gingell about the freshwater fishing resorts. This is the reply and the complete report. I see he is not here, but the other member could pass that on to him. He has all the information we have on that.
R. Neufeld: Along with the freshwater fishing resorts, my next question concerned the back-country recreation policy put together, again, by another ministry. I find it really difficult that Parks is not part of the Ministry of Tourism. It just doesn't seem that it should not be, because it's specifically a big part of your ministry. I know it gets difficult for the minister to answer questions that he doesn't have responsibility for, but there are some issues around Parks.
The back country recreation policy is one that's specific to my country -- very much so. I have a lot of people who want to and have for a long time flown into the lakes in the back country -- fishing, fishing camps, you name it. What input does your ministry have into the back-country recreation policy, or has it had in the past? What proposals would you like to see for back-country recreation? [Laughter.] That might be the better question.
Hon. B. Barlee: The member tried to slip that in very smoothly; I'm quite impressed. I couldn't help laughing.
We have ongoing discussions with the Ministry of Environment and the Ministry of Recreation. For instance, the Jumbo Pass area, Whitewater and a number of these back-country recreation facilities are areas we think they are very, very important to the overall infrastructure of tourism in the province. We have had continuing discussions with the Ministry of Environment over that. We think we're making some headway on that, to be quite frank. It has been slow, I admit that. It's not because we have not kept at it but because there are a number of ministries involved, not just Environment. So we're making some progress. I have three or four very high-priority items in that particular area, not all of them in the north. One is in the north, two are in the south and one is on Vancouver Island. We are making some progress, and I think they will be resolved this year. I wish that the policy and the procedure could be hurried up a little bit. It seems to be rather slow.
R. Neufeld: I agree, the process is very slow. It's been ongoing for quite a number of years. In fact, I think it started before the election in 1991 and is still carrying on. To my knowledge, we're still no place where these people can make the investment needed and carry on with their business.
I wish Parks was part of the Ministry of Tourism, because the movement by the Ministry of Environment to close some of the parks earlier in the north certainly affects tourism. Some private owners say: "Well, that's great, they should never be open." Basically, they're used by a tremendous number of people. We've got a good infrastructure of parks in the north. Some of them need a little upgrading, but there are some beautiful parks in my constituency and also on Highway 37. I just wonder what input your ministry has in those decisions to close some of those parks early, because they certainly impact on the hundreds of millions of dollars of revenue that you talk about in your ministry.
Hon. B. Barlee: That's a very good question. We're both looking at the same thing. You want to extend the shoulder season, and so do I. Keeping those parks open does extend that shoulder season. Even if it were only two weeks either end, that means an extra month on the shoulder season which essentially keeps that tourism traffic flowing through. Once the parks are closed down, we realize that tourism traffic goes right down to a trickle. Again, we're working with the Ministry of Environment on that, hoping to make our case, which is pretty strong.
Tourism revenues jumped $472 million last year. We led the country by quite a long ways, but we feel we have to work on that shoulder season. My senior staff and I are still discussing how we can get around that. I think we're starting to make an impression on Parks. I hope we do make that impression, because it's very important in various parts of the province, specifically in the interior and far north.
R. Neufeld: I agree. Actually, the traffic continues. The difficulty we face in the north -- and it should be evident to the Ministry of Environment -- is that those people still camp along the highway wherever they can. They still pull off the highway wherever they can because the parks are blocked off. They still light fires, and they still have their campfires in areas that are not designated. I think it probably leads to a garbage problem and I'm sure it leads to a sewage problem -- all those kinds of things that we really should be concerned about. I think those should play a part in whether we decide to keep the parks open for a longer period of time. American tourists, especially in the north, travel at a bit of a different time than we do in Canada because of their school year and what happens prior to the school year recessing in the U.S. After, there are many seniors that travel at that time, with their motor homes and holiday trailers and such. That plays an important role, too, in what we should be looking at in maybe keeping the parks open longer.
Talking about park revenue, I just wonder if the minister can tell us a little bit about the Tatshenshini and its designation as a park. What has been done by the Ministry of Tourism since the designation to promote the Tatshenshini as a wilderness area? What kind of revenue does the minister see coming out of that area? Is there a track on the revenue or the number of people who visit it now? It's my contention that the only people who can visit the Tatshenshini are the very wealthy. It's pretty difficult to get into that area. I wonder if you could
[ Page 13521 ]
confirm for me that those are the only people who are able to visit that part of British Columbia.
Hon. B. Barlee: As far as the Tatshenshini is concerned, I have not tracked the revenue yet. We do track the revenue in the major parks and the general area and compare it with the rest of the province to see how the growth rates are doing. The northeast sector, if I remember correctly, was up quite dramatically this year. Of course, it's always spotty. There are certain areas that do better than others. If I remember correctly, a trip down the Tatshenshini costs $2,500 per person, which does place it out of the reach of many individuals who would travel the Alaska Highway. Of course, I'm familiar with the area.
Interjection.
Hon. B. Barlee: Yes, I'm familiar with the area. You go down from Squaw Creek, and it runs right into the Tatshenshini. So I know it fairly well. I think it will be a draw over the long haul. Although I have a mining background, I still think it's important. I think the decision was right, and I could defend that publicly, although I have been in mining for a number of years. I think it will prove to be a flagship for the north and that it will certainly affect the member's riding, because people will start to travel more frequently up the Hart and the Alaska Highway, and certainly on Highway 97.
R. Neufeld: I'm sure it will in time. Highway 37 and that part of the world will also benefit. I was just a little curious as to how the development is. The minister didn't answer whether his ministry is promoting anything in the Tatshenshini to speak of. I see him shaking his head, so I understand not. If that is the case, are you planning to promote the Tatshenshini worldwide? It is a world-class park, or is said to be. Are we promoting it worldwide so that we can get some people in to see this beautiful piece of wilderness?
[12:15]
Hon. B. Barlee: That's a good question, and I would think that we will go over all the figures as far as tourism is concerned in about two and a half months. We'll look at the areas where we're drawing. For instance, adventure tourism is up; there's not much doubt about that. River rafting is probably up, but I can't say for sure; I imagine it is. Our rivers most frequently used are the Thompson, the Chilcotin and a few rivers in the southern part of the province. I think the potential in that area is quite staggering, but we prioritize our spending; we will have to check the figures to see how those rafting companies are doing on the Tatshenshini and see what the growth patterns are before I would devote a lot of money to advertising it worldwide. I think we get some peripheral benefits. It's about a million acres, if I remember correctly, of pristine wilderness. It connects to territory on either side that is really quite spectacular. So I think that will probably be looked at relatively closely. I cannot see, unless there is a dramatic increase in the river-rafting excursions down the Tatshenshini, that we would devote a lot of money to that. We would leave that to the private sector.
Part of the overall benefit of having a Ministry of Tourism is that the ministry does generic advertising. Our basic responsibility is to draw people into the province by using some of the flagship draws -- that's true -- and some of the attractions. So in that respect, we would use the Tatshenshini, for instance, in our advertising for Vacation B.C. -- no doubt about that at all.
As for pinpointing it and coming up with a specific program, I think it may be a little early for that.
R. Neufeld: I guess that's part of the problem that some people in the north have. Every time I read an article, it says that this watershed is the last pristine wilderness in British Columbia, or that this is the last pristine area in British Columbia. I constantly see that.
In fact, there are promotions going around now about the Muskwa Kechika, areas in the Kootenays and those types of things. People in the north live there specifically because they like that kind of country, and they can go into those pristine areas. So they don't want to log it all, and they don't want to have activity on all of it. But they also see very much of an encroachment on their part of the world, where they have lived for so many years and have made a living in the oil and gas industry, in agriculture or in the forest industry. All of a sudden, driven from, again, the south, they hear: "My goodness, we have to protect that area up there because we have already inhabited everything down here."
What happens is that those people are starting to see a way of life that they have enjoyed for a long time changing. Maybe they can't make a living anymore, or they have to move away from there for whatever reason. It is a concern. If you go back in the history of the part of the province you come from, I'm sure you will find the same thing. It is certainly a concern with people in the north when we continue to set aside the Muskwa Kechika area or the Tatshenshini.
Some of the articles and the videos put out by the Chetwynd Environmental Society, which promotes closing up a lot more area in the north, bother us a bit. I would hope that the minister would have some input into those decisions to have industrial activity, so we can continue to have good-paying jobs along with some pristine area -- that's for sure.
Getting back to the small business along the Alaska Highway, yesterday you were talking to the member for Delta South about the ability to pay taxes. I don't want to get into that argument at all, but I do want to talk about dock rental. Of course, this again transcends ministries. A boat tour was put on Muncho Lake by a private entrepreneur. I'm not sure if he got some help from government to set it up; it's very attractive for tourists going through. But he quickly found that under this government's tenure the boat-dock rentals either doubled or tripled. In some cases, they were nothing to start with. I'm not saying, and I don't think this individual is saying, that they shouldn't pay something, but it's a little different having a boat dock in the Okanagan, where you rent boats from for nine months out of the year, compared with Muncho Lake, where you may have your boat tours for three months of the year. It may not sound like a significant dollar amount, but it certainly pays a part in the bottom line.
I wonder if something can be done for areas that have a short season or if there can be some acknowledgement of that from government so that they can continue to provide this service. Also, the Ministry of Environment is getting an awful lot tougher on boat docks, ramps and those kinds of things. These people have lived along that lake all their lives. All of a sudden they have someone coming in and telling them they can't do this anymore, because of whatever reason. It gets difficult for some of the old-timers to swallow. I'm not talking
[ Page 13522 ]
about people who say that this is the way they used to do it and this is the way they're going to do it forever. These are people who appreciate the wilderness, who love the wilderness, who live in the wilderness for those specific reasons. They're not there to destroy it and to make a fast buck. These are people who have lived there all their lives.
Hon. B. Barlee: Several good points have been made by the member. I have, and I would be quite willing to share this with you. In fact, we'll send it across to you. I've addressed that with the Assessment Authority, as well as Environment, and mentioned that some of these are only three- or four-month operations in the far north or at high altitude and that some provision should be made for that. They are starting to do that, and they have sent me a long dissertation and study on it. We'll also share that with you. We sent some of the information to the member who was just here.
When I look at the total operating expenses, compared to 1989, they are virtually unchanged except in one area. In the outfitter area, 3.4 percent of their total operating expenses were for fees and licences. That was in 1989. At the end of 1993, that had risen to 5.8 percent. So it did rise 2.3 percent. I had some problems with that and sent it back, in part to Assessment Authority because there's something else involved as well. As far as all participants, that has not changed at all. In 1989 total operating expenses were 0.9 percent; in 1993 total operating expenses were 0.9 percent.
Hunting licences actually have gone down. Outfitter licences have gone up from $125 in 1989 to $305 in 1993. I'll be quite willing to share that with the member, because I think it's a fair and reasonable question -- one I've asked myself. I have resolved some of it but not all of it.
The member made kind of an offhand remark that this agenda for the parks was driven from the south, where I come from. Well, that's true. My family has a long history in the north. You're surely familiar with White Pass. Darcy Strickland, who was an inspector with the North West Mounted Police, was second-in-command to Sam Steele. He had the first white child in the Yukon. So we do go back. As far as your area is concerned, another one of my great-uncles, Inspector J.M. Moodie, drove through the Mounted Police trail in 1898 through the northern part of the Peace River country from Edmonton. So I have some connections to the north.
Fort St. James is not in your riding, I don't think, is it? Well, we have connections there, too. Another great-uncle was factor for 30 years.
R. Neufeld: It's always interesting listening to the minister talking about who he's related to and where they've been in the province. You certainly have covered the province, and quite a long time ago. Actually, I said when you were put into the Ministry of Tourism that that's where you should have been put to start with. I think you do a good job, but don't pat yourself on the back too hard.
I have maybe one last question, depending on the answer: the community grants program. I appreciate the minister sending me a copy of the grants that were given out to the different areas of the province. Those are the ones that are approved. The minister said that there were not very many applications from my constituency. Is there a possibility that we could have a copy of all the grants that were not approved for each area. That may lead to some further research that I could do on grants.
Hon. B. Barlee: What I did was give a list of the constituencies in the province who did receive and the exact amount they did receive. I follow this very closely. I think the member also recognized at the time that I'm quite even-handed; I'm chair of that committee. However, I must admit that out of every grant that we give, we probably receive five or six that we turn down because they don't qualify, they don't meet the criteria, or for various other reasons. It would be a gargantuan task; there would be many thousands. If you want to go through that, we would do it, but frankly I think a lot of time would be expended. I don't mind doing it, but I think I try to be even-handed. I mentioned in the chamber yesterday that the only two ridings that didn't get any funding at all were both NDP, and I have no problem with that. They did not apply or they didn't qualify.
N. Lortie: Shame.
Hon. B. Barlee: Yes, I know. So I would do that, but I would do it reluctantly because I think it would require vast staff time. We could do that, but it would be thousands and thousands of forms that we'd have to go over.
R. Neufeld: I'm not asking that, and I appreciate that you even responded positively. I didn't realize there were that many that were turned down. But, for my benefit.... People don't come to me for counselling about their grants. Some of them do. Some come in and get the applications from my office; some go to the government office. If there's not a lot, maybe you could give me the names of the people in my area so I could tell them the mistakes they're making -- unless you already do that by returning a letter that explains that to them. Maybe it would help some groups in my constituency -- not to bend the rules, but to fit their proposals into the criteria.
Hon. B. Barlee: Again, that is a reasonable statement and a good question. However, I find that even in my own riding, sometimes they don't approach me directly. They go to through the goverment agent or they may write a letter, and so on. We do reply and tell them where and why they did not qualify. We're pretty careful of that. That's available under FOI, but I kind of hate to open Pandora's box for one member. If I do that, then in fairness I should do that for every member. It would require many, many thousands of hours expended in doing that. It doesn't work perfectly for every member. Certainly it varies from constituency to constituency. Some of the members come directly into my office and say, "This is the proposal we have," and deliver them personally; some do not. Some send them by mail, and some send them accompanying.... We always look at that. I try to be evenhanded about it. I think a pretty thorough examination of the record will indicate that I have been pretty evenhanded.
R. Neufeld: I'm certainly not trying to get at the minister or say he hasn't been evenhanded. That's not the intent of my questioning, that's for sure. I do know that some organizations that thought they would fit within the criteria didn't. That was the reasoning. If I could find out why, maybe there just has to be a change in the application. Maybe they have to change something they do to meet the criteria. That was basically the question.
[ Page 13523 ]
I'm actually done my questions; I just have one remark. The minister said I had made an offhand remark about parks and people in the south making decisions for people in the north. I just want to relate to the minister the Muskwa Kechika decision to red-circle an area the size of Nova Scotia in my constituency and to ban it from all vehicular traffic, meaning all-terrain vehicles. That was done by people in the south, not specifically from your ministry, but from the Ministry of Environment. The papers that backed up the decision stated that they had meetings on Vancouver Island and decided -- and believe it or not, this is true -- that they should circle the area because it's the Serengeti of the North.
[12:30]
There's an LRMP process going on actively in Fort St. John and in Fort Nelson, which is dealing with that specific area. They weren't even notified. This is a process set up by government to decide what areas should be set aside and what should be for industry -- all those types of things. All the players are at the table and boom, something comes down from the Ministry of Environment saying: "We're doing this, and we're going to study this area for setting it aside." So, Mr. Minister, people in the north do feel that many of the decisions, whether it's your government or previous governments.... I'm not attacking your government. It's just a fact that people in the north feel that decisions which affect them dramatically are made in the lower mainland, and this is one recent indication that certainly shows that.
I could probably go back to my municipal life in Fort Nelson and come up with quite a few examples of where decisions were made on the Island, specifically about land in Fort Nelson just for residential purposes. My goodness, you'd think you were pulling hen's teeth. If you stand in any part of Fort Nelson, as far as you can see it's all Crown land. But you try to get a piece of Crown land from Lands....
In fact, the last person I talked to who wanted to start a small business in Fort Nelson -- and this affects you.... For two years he tried to buy a piece of land from Lands to set up a small sawmill to cut specialty wood and employ a number of people. He finally got so upset that his lawyer actually came to me. And when I phoned Lands, they said: "Our job is not to sell land. Our job is not to provide land."
They had an industrial park put there by Lands. It was government that put it there some ten or 15 years ago. They had not sold one parcel. They had to give one parcel away to the rodeo association so they could have an area to have their rodeos in. This person wanted to buy it, yet Lands said: "It's not our job to provide land to private entrepreneurs."
I find that hard to believe. But we have since had that changed, and the gentleman is happy. He's going to be able to purchase the land. But it's that frustration that people in the north have, when someone down here says: "No, you can't have it, because we're not going to sell it to you. We'll put up the industrial park, but we're not going to sell you any land. We just want to leave it there forever." As far as you can see, there's land. So it wasn't an offhand remark; it's a remark felt by most of my constituents in the north, and it has been felt by my constituents in the north for a long time.
L. Stephens: I just have a few questions for the minister, and they revolve around the education system and whether or not the Ministry of Small Business is active in programming at the high school level. I'd like to know whether or not he has any kind of protocol with the Ministry of Education to introduce business into the K-to-12 system, particularly at the secondary level.
Hon. B. Barlee: It's a good idea, and although I see why the member asked that question, it's not hight on our list of priorities. It's an intelligent question, and I think I have discussed this peripherally with the Minister of Education -- that people should have some sort of background in the business community. I think it probably starts at that 11 and 12 level -- or should start there.
L. Stephens: There was an 1989 Task Force on Small Business (Programs and Services), and in their report, and through this current ministry, the provincial government made a commitment to small business to address some of the issues included in that. This was one of them.
In the report, Strengthening Small Business in the 90s, under the section "Recommendation On Business Climate Issues," they recommended closer cooperation between the independent business community and the education system at all levels. Business is becoming more active now in the education field and is wanting to have more input into the K-to-12 system, the colleges and the universities. It would seem appropriate that there be some kind of facilitation at the provincial level between business and government agencies, particularly Education, to come up with programs that link schools and the business community much more closely. I think we all recognize that students are going to be out in the work world and that they need as many skills as possible in that direction.
The Skills, Training and Labour ministry has a number of skills and training initiatives in the schools as well. It would seem appropriate that small business be linked, too. I wonder if the minister has some thoughts on that and whether he would like to pursue it.
Hon. B. Barlee: First of all, it is a good idea. I did check, for instance, my own riding -- in Grand Forks and Midway -- where this program is being carried out. There are several programs being carried out through the Ministry of Education which I think are quite effective. In Grand Forks, if I remember correctly, they took 12 boys and girls from the high school who were not in the academic stream, and had them build a house on Hardy Mountain. It's a little area out of Grand Forks. They did a remarkable job, and made a good profit, and the locals got in on it and were helped by a number of mentors in that area. The same thing happened in Midway itself, which I was quite impressed with. Midway is a very small village of about 900, and there are probably 35 or 40 businesses of any consequence there. Virtually every business in Midway participated and became mentors to the students, who came out to apprentice in those businesses for a given period of time -- I think somewhere around three weeks, but I could be slightly mistaken. Some work is being done there mostly by the Ministry of Education, and I believe that Skills and Training is also looking at similar programs and is probably cooperating with the Ministry of Education.
L. Stephens: There are a lot of different career preps, work experiences, and so on, at high school level, and there is quite a bit of involvement from the local chambers of commerce as well in their Junior Achiever programs, where local
[ Page 13524 ]
businesses go into the schools and help facilitate. So some things are being done.
The Ministry of Small Business has a number of programs through the chambers -- like the info centres, for instance -- and all kinds of initiatives that go on between the chambers to promote small business. Perhaps the minister could think of something that would put more resources into the education system through his ministry to help facilitate that. It's really important, and I think it's becoming more important as the years go on, to make sure that our students have access to the business community. I think the minister's ministry could facilitate that in a really meaningful way.
I'd like to go back to interprovincial trade. I know that in June 1994 there was quite a bit of discussion at the interprovincial level to eliminate some of those trade barriers. Could the minister update me on what has happened since then, or is the Ministry of Small Business not participating at all in this?
Hon. B. Barlee: The particular ministry involved is Employment and Investment, and he is the lead minister there. I had some peripheral intervention in that when I was the Minister of Agriculture, Fisheries and Food, but it really does fall under another ministry.
L. Stephens: I will take this up with the Minister of Employment and Investment.
One of the other areas is the Kettle Valley Railway. I don't know whether it has been discussed or not. If it has, I apologize. I would like the minister to talk a little bit about this initiative. The society, as I'm sure the minister knows, is trying to arrange a project within the community to allow a historical living museum, as they call it, on a 16-kilometre stretch of the Kettle Valley Railway. Could the minister elaborate a bit about this and tell us what is happening or what's possible?
Hon. B. Barlee: It will be my pleasure to answer that question. The Kettle Valley Railway is one of the most historic railways in the province. The CPR abandoned the various subdivisions such as the Princeton, Kaslo and Boundary subdivisions, and so on. We decided that at least some of that line should be saved. So we saved the most magnificent trestle on all of the CPR lines, and that's about 300 feet from top to bottom in the Trout Creek canyon. The CPR happened to give that to me. I haven't given them a dollar yet, but I will. They also saved 16 kilometres of line, which was unusual for the CPR. I suggested that they didn't want to wrestle with me, and they agreed. So they essentially gave us the line.
It isn't the most spectacular part of the Kettle Valley Railway. The most spectacular part of that line is on the opposite side of the valley in the Mara canyon section. Mara is beautiful. There are about 18 tunnels and trestles in about nine kilometres. It is probably the most spectacular line in North America. It would be hard pushed by the White Pass and Yukon, which runs out of Skagway and up into the Yukon Territory -- and they carry 700,000 passengers.
This is a pilot project. I hope we will carry 10,000 passengers this year. Initially, we wanted to open that line on May 24, which is the Queen's birthday. Isn't that right? We are delaying that, probably until about July 1. We have to do some restoration on a locomotive, which took a little longer than we anticipated. I think we will quite easily get 10,000 passengers on that line this year. It will be priced so that the average family can take their children; I think it will be somewhere between $5 and $9.50. It will be quite an attractive line. It goes through the desert country and also through the orchard country in that south part of the Okanagan.
L. Stephens: Could the minister tell us if there were grants or contributions made by the Ministry of Small Business?
Hon. B. Barlee: Yes, under our special projects fund we contributed several hundred thousand dollars to that line and we'll probably contribute another several hundred thousand dollars this year.
Frankly, when I look at the income it brings in in other areas, I think it's a good investment. I think we'll prove that. As I say, the target levels this year are low: 10,000 is my number. I think we'll exceed that, but not dramatically. I think the second year will prove that it is a paying proposition. I think there will probably be 20,000 people in the second year. We have received all sorts of help from various local businesses in the area, the chambers of commerce and so on, and the press has been rather cooperative as well.
L. Stephens: Could the minister be more specific about the couple of hundred thousand dollars? Could he explain whether there is a business plan -- I'm presuming there is -- and whether or not that would be available?
Hon. B. Barlee: Most of that is involved in restoring the locomotive, which is a 1921 Shay locomotive out of Duncan. I think we have to adhere to the engineering criteria, because it will be carrying the public. It has probably cost more than we anticipated and more than anybody anticipated, because once you break down a locomotive, you don't know what's inside. So we're doing due diligence on that. We have the rolling stock, which cost us a reasonable amount. I think the rolling stock cost us around $40,000. I got the cooperation of both the CPR and the CNR for virtually nothing, which was nice. I think the restoration costs, by the time we are finished with that locomotive, will be somewhere around $370,000, and I'm guessing a little there.
[12:45]
F. Gingell: I know the minister will remember that last year we had a discussion on the small business incentive program, which has basically ended. But the fund, as we discussed last year, is available and is used by government for the purposes of the job protection commissioner. You'll remember that in 1993-94, you budgeted a total of $5 million to be paid out. In fact, only $575,000 was paid out. In 1994-95, in last year's estimates, you had budgeted an amount of $2.3 million. But this year's estimates -- of course, the final numbers are not in -- would indicate that the amount is only in the $300,000 range. This year you have budgeted $1 million for disbursements. Last year you explained to us that these estimates dealt with commitments that had been made in previous years but had not been completed, and with amounts recommended by the job protection commissioner. You have been disbursing amounts that are substantially below the amounts estimated. I wonder if you could comment on that and if you have any update for the year ended March 31, 1995, which can tell us if the number of $300,000 that you are
[ Page 13525 ]
putting into this year's estimates as the estimate of last year is the more accurate number.
Hon. B. Barlee: We have a bad-debt provision under vote 52 of $250,000, but I don't think you're referring to that. We have $1 million this year in contingency for the Job Protection Commission. I don't think you're referring to that.
F. Gingell: Yes, I am.
Hon. B. Barlee: Oh, you are. Well, that's what we have this year.
F. Gingell: What I'm referring to is your original estimate last year for the job protection commissioner. If you turn to page 208 in this year's estimates, you will see last year's estimates on the left-hand side of the page. You had budgeted for disbursements of $2.3 million. You will see, underneath that, an amount that's described as "difference between 1994-95 estimates and projected actual disbursements of $2 million." So instead of the $2.3 million that you had provided for when these were prepared, you expected the disbursements to be about $300,000. The $2.3 million had been reduced to $300,000. These estimates were prepared in January. We are now toward the end of April. I wonder if the $300,000 is accurate or if anything happened between January, February and March that would have changed that estimate.
Hon. B. Barlee: That's fairly involved. We will get back to you after lunch with the details on this.
The Chair: I recognize the member for Delta South, assuming we're getting close to the time.
F. Gingell: Last year we were discussing the fact that there had been no recoveries under any small business incentive program loans or payments shown in the last four years. We also discussed the Job Protection Commission payments, and you suggested to the committee that their record was exceptionally good and that there would be no bad debts.
My understanding of the way these accounts work is that when repayments are made on these loans, they're credited; there's just a financing arrangement. The interest is credited to the consolidated revenue fund. The capital sum of the repayment of the loan is credited as a financing arrangement back to this special account. There were no receipts at all in 1992-93, 1993-94, or 1994-95, and there are none anticipated in 1995-96. Yet you suggested to us last year that the record of recovering these advances is exceptionally high; in fact, you even suggested it was better than the banks. Is there some confusion about this? Are none of these incentive advances or payments under the job protection commissioner repayable to the province? If they are, where is the receipt of funds being shown?
Hon. B. Barlee: My staff will look up the details and give them to you after lunch.
F. Gingell: That being the case, I move that the committee rise, report considerable progress and ask leave to sit again.
Motion approved.
The committee rose at 11:50 a.m.
[ Return to: Legislative Assembly Home Page ]