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)
TUESDAY, JUNE 6, 1995
Morning Sitting
Volume 20, Number 19
[ Page 14991 ]
The House met at 10:09 a.m.
Clerk of the House: Pursuant to standing orders, the House is advised of the unavoidable absence of the Speaker.
[D. Lovick in the chair.]
Prayers.
Hon. E. Cull: By leave I move that the auditor general's report No. 5, 1994-95, entitled Compliance-with-Authorities Audits, be referred to the Select Standing Committee on Public Accounts.
Motion approved.
Hon. E. Cull: I call Committee of Supply in Section A for the Ministry of Transportation and Highways; and in the main House, I call committee stage on Bill 45.
VANCOUVER STOCK EXCHANGE AMENDMENT ACT, 1995
The House in committee on Bill 45; G. Brewin in the chair.
On section 1.
G. Wilson: With respect to Bill 45.... Quite frankly, I'm buying some time for my bill.... We were under the impression that we were going to be dealing with second reading of the pharmacy act this morning. But I wonder if the minister might just want to tell us a little bit about the significance of the striking of "Corporation" in that section.
Interjections.
The Chair: Order, hon. members.
Hon. E. Cull: This is an extremely.... I'll wait for the member to be paying attention.
This is an extremely important section. It appears that in the act sometimes the word "corporation" has a capital C; sometimes the word "corporation" has a lower-case c. We are amending them so that they are all lower case.
Section 1 approved.
The Chair: Section 2? Shall the rest of the bill pass? There are only five sections.
G. Wilson: I wonder if we could know if we're going to be dealing with this section by section, or is there an intention to simply call the...?
The Chair: Hon. member, I'm in your hands, and I'm happy to do it that way or we can call it one by one. Nobody was on his or her feet, so I just talked about the whole bill.
Section 2 approved.
On section 3.
G. Wilson: I think that the minister -- and it goes back to our comments with respect to second reading debate on this -- might want to talk about the makeup of this particular board. We've got a situation where we believe -- and we mentioned very clearly in second reading debate -- that there should be a majority of those governors which would be known as public governors -- not for them to be in a minority.
The second issue that I think is of critical importance here and would like to get clarification on is the process by which those public governors, no matter their number, will actually be determined. In the first instance, section 3(a)(1.2) it talks about the Lieutenant-Governor-in-Council appointing one-third of the governors, known as the public governors. I wonder if we might have the minister explain why that was the decision taken.
[10:15]
Hon. E. Cull: The Matkin commission did not address the question of public governors in terms of the number of public governors. It simply dealt with the manner in which they were selected, the integrity of the public governors, if you like, and the confidence that the business community and the securities industry would have in those governors. So the decision to move to a defined level of public governors was one that the government made subsequent to receiving Mr. Matkin's report.
Over the last number of years, with respect to self-regulating bodies of all types, the government has generally adopted a policy that no fewer than one-third of the governors or the members of a board of a self-regulating organization should be appointed from the public, as opposed to the particular group that is self-regulating. So the one-third rule was used, based on that broader principle that has been applied throughout the government.
At the present time there are 24 members on the board of governors, plus the president, and six of those members are public governors -- so six out of 25. We've increased it to one-third of 21. We've made the board a little bit smaller after some discussion with the VSE and others, with respect to what is a workable size of board, and we've gone that route.
Because I expect there will be some question about this, I'll just anticipate some question around two other governors under the current regime, which some people refer to as public governors and some refer to as non-member governors. Non-member governors is the more correct term in that they are not members of the stock exchange community. They have been elected by the stock exchange from the Law Society and chartered.... They have just been business governors -- sorry, I'm checking with my staff here -- that have been elected by the VSE board. In the sense of the words that I understand to mean public governors, they are not public governors, so we have never considered these additional two individuals to be fully public governors. So six out of 25 to seven out of 21 -- that is the minimum that can be there at this point, and it's consistent with how we've treated other self-regulating organizations.
[ Page 14992 ]
G. Wilson: I think the minister would agree, however, that this is not a typical self-regulating organization. I think the point that was made -- and correctly made -- by the member for Delta South yesterday, and one that certainly I underlined, is that the difference here is that this particular self-regulating authority runs the market. One of the difficulties that I think British Columbia generally has suffered from is a history -- albeit not so much more recently, but certainly in the past -- of serious concern about the manner by which the VSE operates. I think the minister should tell us why this would be treated in a manner that would be consistent with other self-regulatory authorities that do not have that kind of mandate. This is quite a unique and different animal here, and yet it has not been treated in that way. The significance of this particular authority -- the VSE -- in terms of the overall provincial economy is, I think, quite significant.
Therefore, if we're going to have any kind of confidence in the investment community here, one of the things we have to do is send out a very clear message that the kind of charlatans that have often freely played the VSE are going to be nailed and nailed hard. This doesn't seem to engender that kind of confidence, certainly not from those who have been communicating with us. I wonder if the minister might tell us why there was no thought to a distinction made, given the difference in character of this particular organization.
Hon. E. Cull: What we were trying to do was consider a number of things, including the need to increase the number of public governors -- which we have done -- and change the process by which those public governors get onto the board, to increase public confidence in the integrity of the governors that are there.
But the Vancouver Stock Exchange has to also operate in the broader community of securities regulation and securities exchanges. In this case, we are going to be going far beyond what any other stock exchange requires. For example, in the Toronto Stock Exchange there is a 15-member board, and only four are public governors. In the Alberta board, for example, public governors are optional; by-laws provide for a board of either nine to 15 member governors or three public governors plus seven to 12 member governors. With respect to the proportion of public governors -- the requirement that they be there, plus the section that we have yet to discuss, which is the requirement that a public governor be the chair of the VSE -- we are going farther than other jurisdictions have gone.
How far can you go between a third and your suggestions? If you go up to a half, you have then changed the stock exchange from a private organization to a public -- government -- corporation. It is not the intent of the government to take over the stock exchange and operate it as an agency of government. The intent of the government is to do as we have with other bodies, and while they do not have direct comparisons in terms of the nature of their business, I think some of them are equally important to individuals in this province. The B.C. Medical Association comes to mind. We have struck a balance between fitting into an overall regime which is national -- while avoiding turning the VSE into a government corporation, which I don't think would be desirable or supported by many -- and trying to improve the public interest factor in the stock exchange.
G. Wilson: I have just one more question on this particular area, and then I will yield to another member until I come back to other areas. I don't concur that just because the government puts in legislation saying that greater than 50 percent are to be public governors, it necessarily means that the government is taking over the VSE. I don't think one follows the other.
Perhaps we can turn our attention to just how the government intends to select the names of people it will appoint. What's the process involved in determining who the government will appoint? My understanding is that they are going to be taken from names that are recommended from the business community and the VSE themselves. The government is inviting a slate of names to be brought forward, from which they will pick some of the people they deem to be most eligible or best suited for that position. If that's correct, could the minister suggest why that isn't spelled out in detail here?
Hon. E. Cull: I refer the member to the October 1994 report, "Strengthening Securities Regulation in British Columbia," which I know he has a copy of, and to pages 16 and 17. Starting at the top of page 17, we outline what the Matkin commission had to say about public governors. I'll just read it: "The Matkin commission found that the appointment of public governors without consultation with the VSE had created divisions within the VSE board of governors. The Matkin commission concluded that the public governors should not be appointed unilaterally by government." It then goes on to outline the Matkin commission recommendation that the Lieutenant-Governor-in-Council should appoint only people nominated by the VSE and approved by the B.C. Securities Commission to new public governor vacancies on the VSE board of governors.
We considered that recommendation, but we're not entirely comfortable with having all of the nominees simply recommended by the VSE with the support of the B.C. Securities Commission -- for many of the reasons that you have been raising in your remarks around the concerns about the VSE, and who should be on there, and whose interests they represent. So our response, which is immediately below what I have just read, is a commitment to appoint public governors from a slate submitted by a nominating committee comprised of the VSE and the business community. This year the process we have used is a standing committee comprised of the treasurer of the Law Society of B.C., the president of the Institute of Chartered Accountants of British Columbia, the executive director and the chair of the Vancouver Board of Trade, and the president and the vice-chair of the Vancouver Stock Exchange. I have recently received a report.... As you know, there are seven positions to be filled. I have a list of 14 nominees to choose from, and we will be making that decision very shortly.
F. Gingell: I also share the opinion of the member for Powell River-Sunshine Coast, who spoke to you early on after the Matkin report came out, about the advantages of having more than 50 percent of the governors be public governors. The moment you say that, that would turn it into a government corporation -- I know the auditor general would say that; there's just no question about that. The moment the government has control of the body, it should even be consolidated into your accounts. And you clearly want the VSE to be separate.
But there was an alternative, an alternative that you have taken out of the act. The alternative, of course, was to have
[ Page 14993 ]
perhaps -- I'd have to work out the numbers -- two or three, as you referred to them, business governors, who would be elected by the members of the board of governors of the Vancouver Stock Exchange. They would be non-members; the process that did take place for those two would exclude them. If you look back to see who has been appointed since this started in 1986, when the act was amended, there was the president of B.C. Tel, a senior partner of an international chartered accountancy firm, a vice-president and treasurer of one of our major forestry companies and a fourth person I don't know. The VSE has clearly not let the people down in the quality of the appointments it has made. I'd like to suggest to the minister that if you had a board of governors that was made up one-third public governors, one-quarter or a fraction under that business governors, as they were described in that legislation, and the balance member governors, you would in fact have a makeup of the board that would be more acceptable in the minds of the public. It would give them a greater feeling of confidence but would not in fact cause it to be a government enterprise. I wonder if you have considered that? If you have, what's your response?
Hon. E. Cull: It is very interesting listening to the member's comments with respect to how the auditor general might view a 51-percent-government-appointed board. I was beginning to wonder whether this might assist in surpluses and deficits in future years if we consolidated this profit-making organization into our books. However, I'll leave that for another time to contemplate.
We thought quite a bit about how to deal with this matter. We did consider the option of leaving the so-called business governors there, but we felt that that created confusion with the three classes of governors. Because of the way we have structured the nominating committee, with the VSE still engaged in it, I see no reason why they will not continue to put forward names such as these very prominent members of the business community who have served in the past.
In fact, the list I have for consideration includes a very good list of men and women who have served the business community and who understand the broader public concerns. Some have had some public responsibilities beyond the private sector, which I think makes for a very good mix for selection.
[10:30]
F. Gingell: My question wasn't to do so much with the nomination process but with the numbers, just to keep the elected business members in so there would be a majority who would be non-members....
There used to be a requirement in this section, which is repealed now, that required one of the members to be a member of the B.C. Institute of Chartered Accountants and another to be a practising lawyer. I take it that what you've done is ask the institute and the benchers to nominate, and taken the requirement out. I understand the process that you are going through, and that's just fine. But I don't know where it is legislated. At the moment, it sounds to me as though it's just your practice -- this is what you've done. I don't see it in the amendments to the act. I just wonder: what gives us the guarantee that this process will be carried on in the future?
Hon. E. Cull: The member is correct. It is not statutory in that we have not put it in the legislation, but it is more than simply a commitment from the minister. It is a commitment that is made in the October 1994 report -- which is a report of the government, not of the minister -- to involve the business community. We have been very general in describing the business community, because from time to time there may be a need to add other bodies or to delete bodies. Once you start naming them in the legislation, you need to go back and amend legislation every time you need to make a change in a nominating committee. So we have selected this approach at this point, and I assure the member that it is not simply a policy of the minister; it's a policy of the government to do this.
In fact, the vast majority of what we are dealing with here in terms of the securities industry in B.C. is a question of reputation, which you can't pin down -- you can't legislate reputation. You can put in place laws that are tough, but any law can be got around if somebody is creative enough to do so, and that is part of the problem. One of the other consequences of putting in laws that are extremely tough is that you may solve the problem simply by moving the business to a less toughly regulated market. So if we're going to deal with questions of the VSE's reputation, then legislation alone won't do it. The government has to act in a consistent manner. It has to carry through with integrity in all its recommendations, and that is why in second reading debate I have made it very clear that we are watching the unfolding of this set of responses very carefully. If they're inadequate, fall short or miss the mark, then we'll change them, because the only way you can change the reputation of the Vancouver Stock Exchange is to consistently, over time, stick on course with the track of trying to clean up the abuses. If there was a magic legislative solution and we could pass a few words here in this chamber that would next month see the problem go away, then we would do it. But unfortunately, hon. members, that's not the case.
We are going to have to work on many fronts to do this. It will require a considerable amount of adherence to these principles of integrity that are enshrined in our response, in the legislation and in the changes to the financing formula, because that's at the root of it. If people have confidence in the individuals who are there, in the law that surrounds it and in the processes that are followed -- whether they're legislated or not -- then over time the reputation of the stock exchange will improve.
F. Gingell: I have one last issue on section 3. In second reading debate, I spoke about my concern that orders-in-council sometimes take a long, long time to get through the process, and I wouldn't feel comfortable if the number of public governors was short for an extended period of time. I appreciate that the minister can only assure this committee that they would move promptly. But I'm wondering if the minister has set up a situation, in the nomination or the recommendation for the public governors process, so that we've got one or two sort of sitting in reserve whom we would be able to move into the appointment reasonably promptly, rather than suddenly going through a selection process, which may take some considerable yet reasonable amount of time.
Hon. E. Cull: We would in future years start the process of seeking the nominees with sufficient time prior to the expiring of the terms of the sitting public governors, so that people could either be reappointed or new appointments could be made well before the expiry of sitting public governors.
[ Page 14994 ]
We are in a bit of a rush this year because of the legislation -- the timing of the changes -- but I expect to make the appointments very shortly, with respect to the nominees I have in front of me for consideration right now. In the case of vacancies occurring, the fact that we have asked for more nominees than there are positions gives us a pool to go back and draw from, if someone is unavailable or for whatever reason cannot continue to serve.
G. Wilson: On the matter of the chair being one of the "public governors," from my reading of the act I see that it's really a purely symbolic gesture in terms of trying to keep a greater degree of public involvement, because you've still got only one-third deemed public. You've got a situation where in this section of the act you provide virtually absolute authority to the governors with respect to the powers of the corporation that are in the act -- plus the bylaws, which the governors are very much going to have an opportunity to direct, with the exception of those that may come forward in general meeting. So it seems to me that, really, this notion that somehow we've created a greater degree of public involvement in the administration of this is simply not there.
I've tried to consult the best I can with those who would argue that my position is correct, and I've certainly gone on to argue with those that deem my position not correct. Reading through the Matkin report, one of the areas that was made very clear was that there has to be a greater degree of public confidence through public involvement in the expansion of those governors. It seems to me that this really is a purely symbolic matter. I wonder if the minister might tell us where the checks are.
We've gone back to pull up some of the press material on this, and the press coverage.... I have to tell you that I'm very reluctant to put any weight on what I read in the newspapers; it's not necessarily correct. But in October 1994 the minister was involved in a press conference. She was asked directly -- it relates specifically to this section of the act, particulary subsection (1.4): what powers would the minister have with respect to veto or some kind of extra authority, and would the minister have some powers to step in? At that time the answer by the minister was no; they were moving toward a public chair, and that was going to be sufficient. But there's no power there; they have no authority; they're a minority and they always will be. I don't see, within the list that's provided, where protection for the investor lies. The minister has not substantively changed the status quo in this bill. I wonder if the minister might argue how she has, because I don't see it, and others that are looking at this don't see it, either. Could the minister explain?
Hon. E. Cull: As we've already covered somewhat in this debate, we have not opted to take over the Vancouver Stock Exchange as a government agency, which appears to be what the member is suggesting. If we dominate the board of the Vancouver Stock Exchange, it does become a government agency, not only in terms of the financial rules of the auditor general but also in terms of the public perception. That is not the intent. The intent is to make a private agency work better, recognizing that it does have responsibilities with respect not only to member interests but to the public interest.
You have to look at all of the actions that we're taking as a whole with respect to the securities industry in British Columbia. If you pick any one of them out and say, "Does this clean up the VSE; does this fix the problem?" the answer will be no, it doesn't. That's why there's legislation, and that's why there are financial changes, administrative changes and a variety of things being done to bring to bear on the recommendations that Mr. Matkin put in front of us. So the public governor, who is the elected chair, will have the authority of the chair, and that individual will carry all of the responsibilities and powers that the chair of the VSE has. That's a very serious responsibility.
Quite frankly, if I've perceived any comment on it, it has been the argument about how difficult it will be for a public governor to assume that role. I don't accept those arguments. I will point to chairs of major corporations who didn't come up from the factory floor to bring all their expertise to the job; they came from the field of administration and management and brought other skills to the task. So I accept that a public governor can do this very well without having to be from the industry. But the role is important; it is significant; it is not purely symbolic. I hope it will send a very strong message, not only to the public but to the industry, about the government's intent with respect to managing in the public interest.
B. Copping: I ask leave to make an introduction.
Leave granted.
B. Copping: In the gallery today we have several students from the riding of my colleague the Minister of Aboriginal Affairs, the member for Coquitlam-Maillardville, who is otherwise engaged today. They are from Vanier and Meadowbrook schools. I gather that there are three groups: one group in the gallery and two within the precincts. They are accompanied by their teacher Miss Vlismas. Would the House please make them welcome.
The Chair: The hon. member for Powell River-Sunshine Coast?
G. Wilson: Thank you, hon. Chair. I was just reacting to my colleague, who said: "Well, pound the table at least once." I'm focused on this issue, because this is not my area of expertise and I'm really trying to get my head around it.
I understand -- and I think it's a matter of public policy -- that the government has the authority in many areas to put in place regulations, and that the government will act through a regulatory authority to be able to make sure that its rules, which it believes protect the public interest, are adhered to. In this Legislature we have seen countless appointed civil servants who have been given widespread powers to intervene, even in private business. In fact, the Employment Standards Act provides an example where small business is now being regulated to protect employees and a civil servant is empowered to come in and to act. In this act it would seem that the autonomy and authority -- i.e., the status quo -- of the exchange is maintained. I'd like the minister to tell us whether or not there is anything in this act that empowers the minister to act directly.
Hon. E. Cull: Not in this act. But the entire role of the B.C. Securities Commission is, in fact, to do that.
G. Wilson: I guess we'll wait for Bill 44 and look at that to get into that section.
[ Page 14995 ]
I have one last question, and it has to do with subsection 3(h)(2.91), which reads: "If a Public Governor ceases for any reason to be a Public Governor before the end of the term for which that person was appointed, the Lieutenant Governor in Council may appoint a replacement...." It comes to what I think the minister was talking about, this pool of people that the minister has. Is it anticipated that each time a vacancy occurs you will call for submissions, or is the minister going to simply have a shortlist of people -- i.e., have a standing roster for appointment? Where a position is vacant, is there an opportunity for a public call again, or does the minister simply act from a list that's established?
[10:45]
Hon. E. Cull: It would depend very much on how much of the term of the public governor was left. They only sit for a year before they have to be reappointed, so if after the first month someone, for whatever reason, was unable to complete their term, my first intent -- and I'm just thinking practically here -- would be to go back to the seven individuals we didn't appoint from the list of nominees and select one of those or see if one of those was still available. But if there's a month or six weeks to serve or we're at the end of someone's term, we'd just go through the regular nominating process and fill it at that time. So there's some point where you meet in the middle, and you have to make a decision.
J. Weisgerber: I'd like to go back to the issue of selecting the chair or the process for electing a chair from among the publicly appointed governors. The minister acknowledged that it was a special challenge for someone from outside the business or outside the industry to chair a board like this. She points to other public and private boards where the person didn't come up through the organization but instead brings some special skills to chair the board. I don't disagree with any of those things. I think of people appointed by the government to boards like B.C. Hydro, and other large Crown corporations and agencies.
The difference is that in this case the government appoints a full one-third of the board, any one of whom may be elected as the chair. So my question is: will the minister be looking at the entire group to be appointed and, as part of their qualifications, assess their ability to chair? Or will there be a nudge and a wink and a suggestion that: "Here are our nominees. Obviously Ms. X or Mr. Y has all of the skills necessary to chair the board, and we're putting forward our nominee also for chair"? I think it's pretty important. If indeed the government, in its appointment, is going to look for a wide range of background experience and skills in their nominees and, at the same time, have to select someone for each position who is capable of chairing the board, it's a pretty daunting task. Hon. E. Cull: First of all, the chair is elected by the VSE board as a whole, so it is the decision of the board who becomes the chair. But the nominating committee has been advised that in the list of nominees that they put forward, there has to be a sufficient number of individuals who would be eligible to be chair. I'm not saying that they could never put forward anyone who would not be able to assume the chair's responsibility, because I think you might rule out some very competent individuals who could provide a lot to the VSE without necessarily being able to take over the chair's role. But we have asked the nominating committee to consider the fact that from this group there will be a chair elected and that they have to ensure there are suitable candidates for an election to take place.
J. Weisgerber: Is it then the reverse case: that the nominating committee -- the board itself, from among its nominees -- may have already selected the chair and sent to the government a list of nominees with some indication that this person is the.... It seems to me -- the minister is shaking her head, so I'm taking that as a negative -- that somebody has got to identify the person or persons with the capacity to chair this important board. The people making the nomination have to say: "We have a group of people here. Among them are one or more individuals with the special skills necessary to be the chair." Or the government, in selecting from the nominations put forward, has to say: "Here are some people or persons with the ability to chair." Or the third option is to say: "Any and all of the people being put forward and accepted by the government have the ability and capacity to be chair." So I'd kind of like to get a sense of whether (a), (b), (c), all of the above or none of the above might apply.
Hon. E. Cull: We have to go back to the initial decision, which was not that the government appoint the chair or that some outside body appoint the chair, but that the VSE board of governors elect from among themselves the chair, which is how they've operated in the past. All we're doing is confining the pool of people they can elect from to those who are public governors. So it would be inappropriate for the government to either suggest that this person is the chair or put forward a name and say: "Here are seven people we are appointing to the board, but this one over here is obviously the chair." The government might as well just go ahead and appoint the chair if that was what they were going to do. I don't think that it would be wise to have the nominating committee select the chair. That is another model; we rejected that model.
As I said -- I thought I'd made it clear a few minutes ago -- the nominating committee knows that there has to be a chair elected from the group of nominees that they are putting forward. They also know that they have to put forward a larger group than those who will be appointed. And so in selecting individuals, they have been looking for individuals who have the capacity not only to serve well as a public governor but also to be a chair. I will do the same due diligence myself in selecting from amongst that list to make sure that there are several candidates who are able to take on that responsibility. But at the end, it is up to the Vancouver Stock Exchange board of governors to elect their chair from the public governors who are appointed. I expect that they will carry out that responsibility in an appropriate fashion.
J. Weisgerber: Let me make, then, the final observation, or what I expect may be the final observation. Selecting someone who has the ability to do the best possible job of chairing this committee, charged with an important responsibility, is going to be difficult. If I hear the minister correctly, she is saying that the nominating committee will put forward a list of nominees, among whom one or more will be qualified to chair; the Crown will select from that list and she is comfortable that they too will select the right persons.
Interjection.
[ Page 14996 ]
J. Weisgerber: The minister says it's not the Crown, so perhaps she can.... The nominees are going to come forward. The minister's going to select the people to be appointed through that process. The minister is the Crown, and so the Crown will select them. This seems to me to be pretty much a matter of hit-or-miss, if indeed the minister accepts the argument that it is going to be difficult and challenging to find the right person to chair this important board.
Hon. E. Cull: The alternative is to have the nominating committee nominate a subpool of chairs -- a group of people who would be eligible to be chairs -- and then take the matter out of the hands of the stock exchange entirely. We might as well move directly to appointing the chair.
The overwhelming concern that came out of the Matkin commission with respect to the VSE, which was ultimately translated into these decisions, was the fact that public governors had been appointed by governments, and some of those individuals did not have the full support and respect of the broader business community, or of the Vancouver Stock Exchange. By moving to a system where we consult with the broadly based business community in putting forward the names, we have addressed the major concern of the Matkin commission with respect to the integrity of the people who serve on the stock exchange as public governors.
The only way I can see to effect what the member is talking about is for the government to take the next step, which is to decide who the chair shall be, and to do that either by directing the nominating committee to do so, or by doing so directly. Again, I don't think it's necessary. I think that when the member sees the list of people who have been put forward for nomination, he will see that the nominating committee has found a number of individuals capable of doing the job. I think that will be quite evident to the electors of the board when they make their final decision.
Section 3 approved.
On section 4.
F. Gingell: I'm glad there will be a reporting process. I hope this particular body has a better understanding of time and promptness than most ministries of this government. I'm pleased to see that you're asking the exchange to report on how they have fulfilled their mandate over the past year. I believe that in the exercise of good governance, it's important for the Legislature to be advised by ministries and organizations of this type about where they are going.
I appreciate that under subsection (b), there is a provision for the minister requiring additional information. I'd like to suggest to the minister that the additional information might include the plans, in very general terms, that the exchange would have for fulfilling their mandate in the future -- which, I believe, is more important than what they've done in the past.
Hon. E. Cull: The kind of information the member has just mentioned would fall under subsection (b). I haven't given a lot of consideration at this point as to what other information we might require to be presented in the report, but I'll take that advice into consideration as we move forward with the first requirement that the VSE table a report.
G. Wilson: With respect to section 4, there was a suggestion in the minister's opening remarks yesterday that we should take comfort that now that there is going to be an annual report filed, somehow it is going to alleviate the concerns of those of us who believe this government has fallen far short of the mark with respect to what was anticipated in terms of this legislation.
I have some very specific questions about the language in section 10.01(1)(a), which states "a report of the corporation's operations for the most recently completed fiscal year (a) detailing the manner in which and the extent to which the corporation has fulfilled its purpose and objectives as described in section 2(1)...." I go back to that, and I suggest that perhaps the minister might tell us, if we're looking at an annual report that effectively is going to be describing -- as a portion of it, anyway -- the manner in which it has "fulfilled its purpose and objectives" as described in an established section, that that really is going to be almost a boilerplate kind of reporting system. What the government is going to do is require this organization to table an annual report much like the annual reports that are tabled by so many Crown corporations and that really don't tell us anything except what the company -- or the corporation, in this case -- would like us to see.
Then it says: "...(b) providing such other information as the minister may require." Now, that gives us some hope, because if we didn't have (b), I think we are just going to get a document that more or less paints a rosy picture of how all is well in the world and how this company is proceeding well, which is what most corporations would prefer people to read in an annual report, unless the minister specifically requires a reporting procedure that identifies how the exchange is cleaning itself up.
[11:00]
What is going on with respect to the changes? How has that in fact improved investor confidence? How has that improved the protection of the public investor? In what way are those artists who are out there who are less than honest -- and there are many on this exchange, unfortunately -- being found out? In what way are they being prosecuted? In what way are they actually going to improve what has become a very poor reputation?
Could the minster concentrate on that section of 10.01(1)(a) and (b) and tell us what "the minister may require" that will be in addition to what I think will otherwise be just a straight reporting system?
Hon. E. Cull: The primary purpose of this section is to give some effect to the change that was made earlier under section 2, which requires the Vancouver Stock Exchange to have as one of its purposes to operate in the promotion of the B.C. economy. We could put that in there, and it would be a nice little preamble, like some of the other parts of the preamble in this very old bill -- you'll see it's a 1920s bill, I think, if you have had a chance to look at it and read the language -- but it would mean nothing. We would have no idea as to whether they were doing that. One of the ways to focus the attention of the Vancouver Stock Exchange on this change in their purpose is to require them to make a report that will become public and that will show us how they have pursued that activity throughout the year.
There are a number of other things that can be included under subsection (b). One of the things -- and again, this gets into the second piece of legislation -- is the power of the B.C.
[ Page 14997 ]
Securities Commission to conduct an audit of the VSE. The results of that audit, subject to whatever considerations would have to be made with respect to privacy law, could in fact be part of this report.
The overall intent is to try to shine a little more light on what's going on. Going back to what I said about reputation, the only way the reputation will be improved is if people actually have a well-founded belief that there is more monitoring and more activity in terms of dealing with abuses. The only way they'll know about that.... We could improve the procedures immensely, but if we don't tell people that we've improved the procedures, then it's not going to have the kind of impact that we want it to have. This is another way of making it clear that the stock exchange has a broader interest than just serving the interests of its members; it has a role to play in the economy, and we want to know what they're doing to support that role in the economy. Subsection (b) will give us the ability to ask for all kinds of things to support that information so that it doesn't become just a kind of meaningless report of the type that you fear it could become.
G. Wilson: I have not only spent some time with the act but I have gone back to April 25, 1907, when the act to incorporate the exchange was.... The minister is correct when she suggests that there are some very old ideas; that goes without saying. But I wonder why the minister doesn't list, then, some of those things that will be required in this section.
I recognize that we will be dealing with Bill 44 shortly, and that there are some things in there that might give some comfort to us. But in this act, I wonder if the minister would not require, for example, that there be a public reporting with respect to investments that have enhanced the economy of British Columbia. Otherwise it becomes a very general, generic kind of reporting that really doesn't tell us much at all. If we are going to try to tighten up the act....
I would say that if I were to characterize the bill, it seems that the minister is almost timid in her approach to trying to clean this up. It's almost as if there was a broader agenda there that somehow the minister has backed away from. It's most unfortunate, because I think that there should be, within this particular section, some specific reporting requirements and that the minister might want to spell them out. I wonder why the minister did not include them in this act.
Hon. E. Cull: Because on the contrary, I don't intend to be timid in how we enforce this legislation. If we come up with a list, no doubt there will be something that will come up later that we'll wish we had put on the list, or there will be something that was worded on the list in such a way that it didn't elicit the information we want. Subsection (b) gives the minister very broad powers to require information.
Interjection.
Hon. E. Cull: I just heard the member say "or not."
Interjection.
Hon. E. Cull: The member has said that I may not always be the minister. I guess there's some hope that one can look forward to a different future than being the Minister of Finance for the rest of your life. But the fact....
Interjection.
Hon. E. Cull: It is a rather wonderful job; I'm not sure I do want to give it up. But there are days -- let me tell you.
The experience I've had with legislation, hon. member, in all seriousness, is that when we get into lists like this, they become restrictive as opposed to prescriptive. I would rather have broader powers to require the VSE to do things, particularly in the early years. As I've said, there are likely to be changes made if we don't see the results we want, and I don't want to be in here every year amending this legislation. I'd like to be able to respond in a much more flexible manner.
G. Wilson: I take what the minister says, and in fact I support.... Although sometimes it does become prescriptive, nevertheless, my biggest concern with this is that in a different administration -- God forbid that we might get one we don't particularly desire -- if there isn't some specific reporting requirement, ministers may very well just opt to allow their friends, those foxes that I talked about yesterday, into that henhouse. We don't have that kind of regulatory authority, then, to come back and make that requirement. That was my concern on it, and it still is my concern.
My last question on this section, however, has to do with penalty. What's the penalty for failure to file a report? Is there any such penalty? What's the redress if in fact those reports are not filed?
Hon. E. Cull: There's no penalty in the legislation. The Securities Commission has various remedies that they could pursue, although they're somewhat draconian for simply not filing a report. But the Securities Commission does have avenues they can pursue, all the way up to delisting them from the stock exchange.
G. Wilson: Delisting from the stock exchange -- an interesting topic for some debate, maybe a private member's statement.
The reason I ask that question is that the minister said in her opening remarks that the reason we should take some comfort that there's more public accounting and so on is this annual report. But if there is no penalty against filing of that annual report....
I caution this minister that we have to look at this legislation well beyond the current administration; we have to think of the worst-case scenario. I don't think I need to point that out. Most British Columbians, I think, would recognize that where you may have financial interests that determine the election of a government, and those financial interests are right up to their ears in the stock exchange, we're going to have to rely on those annual reports being filed. Otherwise we haven't really accomplished what the minister is attempting to accomplish. I wonder if the minister might entertain an amendment that would put in place some form of penalty for failure to file.
Hon. E. Cull: The Securities Commission could require them to pass a bylaw to issue an annual report, and they'd be in violation of their bylaw. Quite frankly, hon. member, if the VSE fails -- wilfully refuses to produce this report -- then I think the problems we have are much larger than simply the failure of a body to produce an annual report, and the
[ Page 14998 ]
remedies that would be pursued at that time by any government would be much more serious.
G. Wilson: All right, I'll accept that comment. I would agree that the problems we face are far greater; however, we need to find whatever ways we can to make this a more public process.
I guess, just by way of closing, then, with respect to the filing of this report and the information covered within it, does the minister believe that...? I'm just going back to where it says:
"In addition to any report required under section 10, the corporation shall prepare and deliver to the minister, within 100 days after the end of each fiscal year of the corporation, a report of the corporation's operations...."
It's intended then, presumably, that that report will be tabled in this House, even though the hundred days may not fall within the sitting-days of this Legislature. The minister is aware, then, that we as legislators may not receive that report tabled here until a year later. Is that correct?
Hon. E. Cull: I think this is fairly standard procedure with respect to reports that are being tabled. But there are other ways of releasing a report, and I would see no reason why we would not release it.
Sections 4 and 5 approved.
Title approved.
Hon. E. Cull: I move that the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; D. Lovick in the chair.
Bill 45, Vancouver Stock Exchange Amendment Act, 1995, reported complete without amendment, read a third time and passed.
Hon. C. Gabelmann: Hon. Speaker, I call second reading of Bill 17.
MISCELLANEOUS STATUTES AMENDMENT ACT, 1995
(second reading)
Hon. C. Gabelmann: This bill contains amendments to a number of statutes. In order to assist members for the committee stage debate, I'll just go through in second reading what the purpose of each of these amendments is.
The present Coal Act is used to manage the coalmining rights in the province. The act provides a method of administering title acquisition and title maintenance for all Crown-held coal rights. The amendments to the Coal Act will improve the administrative efficiency of the act for both government and industry by substituting ministerial authority for the current power of the Lieutenant-Governor-in-Council to create coal reserves. This will correspond to similar ministerial authority which is exercised over mineral and placer mineral reserves, and will reduce cabinet's administrative duties. A second amendment is housekeeping in nature and repeals a provision which refers to a previously repealed section.
The bill amends the Expropriation Act to provide that payment under the act is made when the money is tendered to the owner of the property. The act was intended to operate in this way and did so until the current section was interpreted by the courts to require the owner to cash the cheque before payment was said to have been made. This interpretation allows individuals to frustrate the expropriation process by refusing to cash cheques paid under the act.
The Family Relations Act is amended to permit spouses to agree that they will not divide Canada Pension Plan credits on marriage breakdown. The Canada Pension Plan will not recognize an agreement between spouses unless provincial legislation allows such an agreement. Although an amendment intended to achieve this was passed in 1994, after discussions with federal officials it became apparent that the earlier amendment was unduly restrictive and potentially unfair. This amendment will ensure entitlements to all benefits can be waived. Another amendment to the Family Relations Act is intended to protect pension plans and their administrators from liability for loss or damage when they rely on information provided in documents required to be filed under the division of pension entitlement part of the act.
[11:15]
Amendments to the Insurance Act correct an oversight in the 1994 amendments. Last year's amendments were intended to provide that money payable into court on behalf of a minor would be paid to the public trustee or the minor's trustee appointed under an insurance policy. However, the earlier amendments did not apply to accident and sickness policies, and they did not apply to a trustee appointed other than under an insurance policy, as was intended. The amendments to sections 171 and 205 correct the oversight. Other amendments to the Insurance Act repeal provisions defining "registrar" and creating offences that were carried over under the new Financial Administration Act.
The Jury Act is amended to allow jurors' fees and expenses to be set by regulation. Jury fees have not been changed since 1977. A jury needs assessment in 1992 indicated that fees and expenses need to be revised on a regular basis and that jurors should be compensated for expenses that result from the jury process. The current provision allows only reasonable travel and lodging expenses, and not compensation for other expenses such as child care. Most other legislated fee schedules are prescribed by regulation to allow for changes to be made more easily.
This bill also repeals the Mineral Prospectors Act. This act enables the Ministry of Energy, Mines and Petroleum Resources to provide training and grants to prospectors. These functions are now authorized through the ministry's normal budget appropriation process, making the act redundant.
The amendments to the Mineral Tax Act will clarify mineral tax filing requirements and will simplify procedures for amending mineral tax reporting forms. Filing requirements will be clarified by ending a taxation year of a mine when an operator becomes bankrupt or sells an interest in it. This will remove uncertainty regarding mineral tax filing requirements and the tax liabilities of buyers and sellers when ownership of a mine changes, and for bankruptcy trustees when an operator becomes bankrupt. Currently, any changes to the forms used by mine operators to file mineral tax returns require cabinet approval. The substitution of ministerial approval will
[ Page 14999 ]
reduce the administration required to amend these forms and will no longer require cabinet's approval for minor responsibilities.
Amendments to the Offence Act will allow the consolidation of two sets of violation ticket regulations. Consolidating them will make them easier to amend and understand. These amendments do not represent any change in the content of the violation ticket regulations or in the process of consulting with the Chief Judge before establishing fine amounts.
The Pacific National Exhibition Incorporation Act is also amended by this bill. Cabinet recently ratified a new agreement with the city of Vancouver under which the city's involvement with the PNE corporation is ended. The agreement allows the PNE to operate Hastings Park for two more years and then move to a new location. The current Pacific Nation Exhibition Incorporation Act requires significant city of Vancouver involvement with the PNE corporation. The amendments will return control of the PNE to the province, will allow the PNE corporation to search for a new location and will allow the new agreement between the city and the province to be implemented.
The bill contains a housekeeping amendment to the Power of Attorney Act by repealing a spent provision that refers to three sections of the act that were repealed in 1987.
The Property Transfer Tax Act is amended to clarify that in order to meet the 12-month B.C. residency requirement for eligibility for the first-time homebuyers' exemption, a person must have resided in B.C. for the 12-month period immediately before the registration date.
Under the Social Workers Act, a board of registration registers social workers who meet certain criteria, and it regulates the practices of those who are registered. The board is self-financing, and its members are appointed by order-in-council. However, it does not currently have any legal capacity to allow it to administer its day-to-day affairs, such as the leasing of office space and the employment of staff. Amendments to the act will provide the necessary legal capacity for the board of regulation to carry out its business and administrative functions.
The final amendments in the bill are to the Supreme Court Act. They will allow the Chief Justice of the court to relinquish the position of Chief Justice and become a judge of the court.
I move second reading.
J. Dalton: I thank the Attorney General for the overview of this. In an act such as this one, in which there are 14 or more bills amended or affected in some way, it's difficult to make any comment in second reading -- other than a couple of statutes that I will comment upon.
The Jury Act. The Attorney General is quite right: it's long overdue that we attend to the expenses of jurors. It's sometimes an onerous task. I guess we're happy that we don't have an O.J. trial to struggle with in this province. I do get a lot of comments from people saying that they might look forward to serving on a jury but that they do have concerns about the expenses that might not be forthcoming if they are given that opportunity.
The other act that I will just make a brief comment upon, and that perhaps my colleague from North Vancouver-Seymour will have some comments on as well.... It's of some interest that we're repealing the Mineral Prospectors Act. I might suggest that the actions of this government repealed that act anyway, so this truly is housekeeping, as the Attorney General would say.
At committee stage we may have some further questions or comments to make, but for the moment we will let second reading proceed and look forward to committee stage.
J. Weisgerber: In keeping with the normal practice with miscellaneous statutes amendment acts, I expect the minister will entertain a broader range of debate during committee stage. With that, I'm prepared to let this move forward.
G. Wilson: With respect to Bill 17, I think the comments of the member for Peace River South should be adhered to, and I hope they will be: that because this is a miscellaneous statutes act, there will be a much broader range of questions permitted at the committee stage.
However, I do think it's interesting to note two things with respect to the provisions of this act that we need to talk about with some direction toward a philosophical approach to the way we're dealing with matters of litigation. One is in the Family Relations Act and the Canada Pension Plan amendments. This is something that we are starting to recognize is needed, and it's something we can certainly support in this. I'm pleased to see that there is a movement in that direction.
Clearly, we are finding more and more that there has to be a matter with respect to written agreement -- where there is a provision that, in the event of things occurring, there is going to be some kind of agreement of no adjustment when there is an unadjusted pensionable earnings plan under the Canada Pension Plan. It is going to greatly facilitate a resolution of some of those areas, because in some instances that can be a very contentious issue. The minister should be congratulated for seeing that this has come forward.
I say also with respect to this particular bill that there are a couple of other areas that are interesting and that we need to look at with some care, particularly with respect to the Insurance Act amendments brought forward here -- the matter of liability for insurance money payable to a minor and how we deal with this whole question of minors. It's becoming more and more accepted in our society that the conventional age of what constitutes a minor is now under some review. We're starting to reconsider how that definition should be applied, because the workforce is changing and the manner in which young people are involving themselves in our society is greatly changing. We are finding that young people are starting to make more and more decisions on their own behalf and to act in a more and more independent way at an earlier age than perhaps in the past. As a result, we do need to start to think about those individuals in terms of their own personal abilities to make contracts and have those contracts honoured, and the many different ways in which they interact in our society.
This is one of them. When we get into committee stage, we would like to explore this a bit, because it may be time for us to look at a change in definition as to how we deal with that matter of minors. I suggest that where it comes to the question of liability, it is something that we need to address, because young people are becoming more independent. Young people are starting to change the way in which they interact with a
[ Page 15000 ]
parent or guardian, I think, and we need to look at that in some detail. That's an area we have some interest in here.
On the matter of the Jury Act, enough said. I take the commentary from the member for West Vancouver-Capilano: amen to the fact that we don't have the kind of criminal system they have in the United States. There is an absolute travesty of justice, if ever there was one, in that O.J. soap opera that's going on down there.
We have only a couple of other minor comments with respect to the Mineral Tax Act. To be quite frank in second reading, we have looked through this and at the existing act, and I'm not sure what the overall implications are going to be. I think there seems to be some potential conflict on that question. There are those who strongly support what the minister is doing; there are those who don't. That's probably true of any piece of legislation you bring in, but I think this particular section warrants some very, very careful study. When we start to look at the notion of bankruptcy and the discharge of financial obligation, and fiscal year-end reporting, that can have a profound effect; it can be a very important consideration in the wrapping up of one's affairs.
So with respect to the Mineral Tax Act, we are going to want to have a very, very careful look at that in the clause-by-clause stage, and I serve notice to the minister that we will. I would also tell you that I'm not sure where we're going to come down on this question, because the jury's still out in our research as to whether this is good or bad.
In the final comments I have at second reading, let me say also that where you do have these miscellaneous statutes acts, I hope we will have an opportunity to have a more broad-ranging discussion on some of the questions, and I would suggest and identify what those would be. With respect to the Power of Attorney Act, we're going to want to talk about the sections that are repealed there and about why they are repealed. Particularly with the Social Workers Act, there is a legal-capacity addendum there which I think is also going to have some implications with respect to the provisions of that act, and we're going to want to take a look at what they may be.
So, having identified those, and anticipating a much broader range of discussion than is normal at committee stage, I would take my seat in support of Bill 17.
D. Jarvis: I just want to make a few comments about Bill 17, Miscellaneous Statutes Amendment Act, 1995. As the minister said, sections 2 and 3 are housekeeping; one is a repeal and one is an amendment, and I can see nothing unusual about this.
Now, on section 18, on the Mineral Tax Act, I am not too sure whether this is all in order, but from all accounts I've had at this point, there doesn't seem to be too much major objection, especially by the industry itself. But we'll go into committee stage and discuss that further.
On section 17, that is somewhat questionable, in the sense that it's a repealing of the Mineral Prospectors Act. We see further on it says that it will be continued under the ministry's vote description, which also leads one to question the extent of what's been happening in past years under this government. Exploration certainly hasn't been too forthcoming in the sense of creating a sense of security in the industry. There are many areas where this government has either failed to stimulate the economy or enacted specific legislation that has deterred investment in mining and mineral exploration throughout the province. This is based on a belief that without a strong and aggressive mineral exploration industry in B.C., the mining industry will become a fifth-rate economic activity rather than the second base economic activity it presently is -- or has been in previous years.
[11:30]
Of course, in difficult times it's always the exploration end of it that is the first to be cut back, whether it's through industry or through government, because they feel that is the quickest way to reduce costs and staff. Unfortunately, this is probably the worst attitude you could take if you want to have a thriving mineral industry in the province. The minister is probably aware that the ratio of mineral discovery to exploration runs about one to 3,000, and to bring it into production, it gets even worse: it runs about one in 10,000. For every prospector who finds some minerals, it's about a one in 10,000 chance that they actually come into production. So when we get into committee stage, I would like to go into this further to see just how sure it is that the government is going to continue exploration in this province.
With that, I will sit down.
Deputy Speaker: Seeing no other speakers, I call on the Attorney General, whose comments will close debate on second reading.
Hon. C. Gabelmann: Thank you, hon. Speaker, and I thank the hon. members for their comments. Again, I think we will treat this bill in the traditional way, with expanded ability for discussion during committee stage. With that, I will simply move that the bill be referred to.... We haven't done second reading yet; that's right. Let's make sure we get it through.
Motion approved.
Bill 17, Miscellaneous Statutes Amendment Act, 1995, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. C. Gabelmann: I'd like to call for second reading debate Bill 24, which is the Miscellaneous Statutes Amendment Act (No. 2), 1995.
MISCELLANEOUS STATUTES AMENDMENT ACT (No. 2), 1995
(second reading)
Hon. C. Gabelmann: The second of the miscellaneous bills contains amendments to a number of statutes which I'll briefly explain, as I did with the first bill.
The Court of Appeal Act is amended to clarify that the Court of Appeal will not review an order granting leave to appeal under section 6.1 of the act. This change is housekeeping in nature. The Court of Appeal Act is also amended to include a procedure to allow the registrar of the court to dismiss an inactive appeal without the necessity of a hearing. The inactive appeal is only dismissed after notice has been delivered to the parties and after a six-month waiting period. This amendment will help to reduce needless crowding and
[ Page 15001 ]
confusion on the court trial list and will improve the scheduling of court time.
Section 57 of the Evidence Act is amended to provide that it applies notwithstanding the provisions of the Freedom of Information and Protection of Privacy Act. This amendment is designed to ensure the confidentiality of information provided to committees that evaluate medical staff and medical programs for the purpose of improving health care in the province. Maintaining this confidentiality is necessary for health care professionals to feel free to provide peer reviews and frank evaluation of the practice of other professionals. Section 57 applies to a very limited range of records and does not apply to a patient's own personal records or to any documents gathered in the course of treatment or care. This amendment does not limit in any way a patient's ability to obtain records about his or her own care or treatment.
This bill also contains three amendments to the Family Relations Act. Section 3 of the Family Relations Act is amended to protect the confidentiality of the information provided to family counsellors received in the course of providing counselling services. Section 37.3 is amended to provide confidentiality of information provided to a family search officer in the course of assisting a person to bring an application for, or to enforce, a custody or access order for children in a matrimonial or divorce matter. Section 63.3 is amended to provide confidentiality of information provided to a family search officer in the course of assisting a person to bring an application for, or to enforce, a custody or maintenance order for children in a matrimonial or divorce matter.
In his 1993 annual report, the auditor general recommended that the Financial Disclosure Act be amended to reduce the filing requirements from twice yearly to once yearly. The auditor general advised that the twice-yearly requirement was overly demanding, since officials were also required to file at the time of nomination and when they ceased to hold office. These amendments to the Financial Disclosure Act remove the July filing requirement and clarify what information must be provided in disclosure documents. Elected officials from municipalities, regional districts and school boards will continue to make the same written disclosure of their landholdings, debts, and sources of income and employment.
Section 105 of the Labour Relations Code provides for an alternative expedited arbitration process, involving a mediator-arbitrator appointed by the collective agreement arbitration bureau. The current wording of section 105(10) extends the one-third government cost-sharing provision of section 103 to include what is a consensual arrangement between parties to the arbitration. A transitional regulation under section 163 was introduced to clarify that one-third government cost-sharing does not apply to the section 105 consensual mediation-arbitration. This regulation expires on July 14, 1995. This amendment will remove the inclusion of the one-third government cost-sharing for consensual mediation-arbitration under section 105. Both employers and unions support this amendment. Bill 24 also contains an amendment to the Liquor Distribution Act. This amendment provides that information collected or created by the government about sales of liquor or beer by brand names will be treated with the same confidentiality respecting third-party business information as any other information received by government from third-party businesses.
The Freedom of Information and Protection of Privacy Act protects third-party business information when the disclosure of such would harm the third-party business. However, for that exception to apply, the third-party business information must be provided in confidence by the third party. Because government requires liquor and beer to be sold by liquor distribution branch outlets, sales figures of liquor and beer manufacturers are created by government itself and are not provided by a third party. It would therefore not be protected under the third-party business exception of the act. This amendment deems the sales figures to be provided in confidence, putting that industry on an equal footing with other businesses in the province. In order to protect the information from disclosure, suppliers would still be required to demonstrate harm in the same way that other third parties must do.
This bill also amends the Motor Dealer Act. In the spring of 1993, the Consumer Protection Statutes Amendment Act, 1993 -- it was Bill 21 of that year -- provided for the establishment of the motor dealer customer compensation fund, effective June 1, 1995. However, Bill 21 did not provide for payment into this fund of any moneys accrued through earnings of the fund. Bill 24 -- this bill -- will correct this situation. Any moneys now accrued through earnings by the fund, as invested in accordance with the Financial Administration Act, will be returned to the fund.
In addition, the bill will establish that the Minister of Finance is the trustee of the motor dealer customer compensation fund. As trustee, the Minister of Finance must pay money out of the motor dealer customer compensation fund in accordance with the direction from the Motor Dealer Customer Compensation Fund Board, as given under the Motor Dealer Act.
This bill also introduces amendments to the Motor Fuel Tax Act that are required for British Columbia's participation in the International Fuel Tax Agreement, the IFTA. The IFTA is a multijurisdictional agreement establishing a single, uniform system for administering and collecting fuel taxes from interjurisdictional carriers. Approximately 37 jurisdictions, including Alberta, Saskatchewan and Manitoba, have already joined the agreement. Ontario, Quebec, New Brunswick and Nova Scotia, as well as the majority of contiguous American states, have announced that they will be joining the IFTA. British Columbia's intent to join the IFTA was announced in the 1995 provincial budget speech.
Membership in the IFTA is supported by the trucking industry because it simplifies compliance with the tax legislation of all of the jurisdictions in which they travel. Currently, interjurisdictional carriers -- truckers and buslines -- are required to file separate tax returns for each jurisdiction in which they travel and to account for the fuel consumed in each jurisdiction.
Under the IFTA, carriers are only required to register in their base jurisdiction. They receive credentials allowing travel in all other IFTA jurisdictions and are only required to file one quarterly fuel tax return and make payment to their base jurisdiction. The base jurisdictions collect the tax on behalf of other IFTA jurisdictions and forward funds for net fuel taxes to each jurisdiction in which the carrier travelled.
The IFTA membership is supported by the trucking industry because it reduces the complexity of complying with the various tax requirements of the jurisdictions in which they
[ Page 15002 ]
travel. It benefits the province by reducing the administrative costs of ensuring compliance of out-of-province carriers with British Columbia's tax requirements.
The purpose of the amendment to the Municipalities Enabling and Validating Act (No. 2) is to validate bylaws that set minimum lot sizes adopted by local governments and the Islands Trust within community planning area No. 24. This geographic area extends from the outer Gulf Islands in the south to islands in the Comox-Strathcona Regional District in the north. It also includes part of the Highland district in the Capital Regional District. As a result of circumstances dating back 26 years, some parts of that area had two minimum lot sizes in place: one set by bylaw and one set by regulation. In some cases this meant that the local government bylaw was invalid. In others it meant that the subdivision approvals by approving officers were invalid. The proposed amendments to the Municipalities Enabling and Validating Act (No. 2) will validate all bylaws and actions based on those bylaws as they relate to minimum lot sizes. In other words, it will legalize what everyone assumed was already the case.
The Special Accounts Appropriation and Control Act and the Statute Revision Act are amended to correct a drafting oversight.
The amendments to the Trustee Act modernize the investment requirements respecting the investment or deposit of trust moneys by trustees in provincially regulated trust companies, credit unions and banks. The amendments also give credit unions that carry on trust business the same status under the act as trust companies. These amendments replace outdated requirements for the Lieutenant-Governor-in-Council to determine the eligibility of financial institutions to receive trust moneys, and bring financial matters under the Trustee Act in line with modern regulation of provincially regulated financial institutions and banks, while maintaining the underlying policy respecting restrictions on the deposit and investment of trust moneys.
The Wildlife Act amendments are a response to a recent legal decision that held that the present wording of the Wildlife Act does not allow a regional Fish and Wildlife manager to refuse to renew commercial guiding, trapping or fur-trading licences or certificates issued under the Wildlife Act. This has meant that regional managers have had to renew licences for those who have been convicted of offences under the Wildlife Act and other statutes and who have hearings under section 62 of the Wildlife Act regarding pending licence cancellations. This is unacceptable to the people of British Columbia and must be changed to protect our natural resources. The proposed amendments will remedy the situation by establishing a process through which regional managers can refuse to renew licences and certificates after holding an administrative hearing.
The final amendment in this bill relates to the Workers Compensation Act. Currently, the Workers' Compensation Board discloses claim file information to the worker and his or her employer for the purposes of pursuing an appeal. These disclosure policies are a result of court decisions that occurred in the 1980s. The underlying principle is that full file disclosure to both the worker and the employer is necessary to ensure natural justice in the compensation appeal system. In releasing claim file information, the board tells the recipients that this information is to be used solely for workers' compensation purposes. There is, however, no mechanism in the act to enforce this restriction. Both the Workers' Compensation Board and the government have received complaints that some employees have subsequently misused disclosed claim file information. This has resulted in some workers being discriminated against in promotion or hiring decisions, or otherwise penalized. Adding the requirement for there to be worker consent for any subsequent disclosure of file information and making it an offence is.... It doesn't flow properly from page 14 to page 15.
Adding the requirement for there to be worker consent for any subsequent disclosure of file information and making it an offence will significantly improve worker privacy protection. I'm sorry if that's not clear; it's not clear to me, either, on this reading. We'll have that point clarified more precisely during committee stage.
With that, I move that the bill be read a second time now.
[11:45]
J. Dalton: With that minor glitch at the end.... Perhaps the Attorney General can produce whatever it was supposed to be and provide it before we get to committee. The overview is useful. I might say -- and this isn't a criticism of the Attorney General -- that the galleries were full when we started these amendments, and they're drifting away. It is lunchtime, of course, so I can understand why they're leaving. There will be a few things that we will have to raise at the committee stage, but I don't think there's any comment we can make right now, because the Attorney General has basically exhausted himself and ourselves with the overview that he gave.
J. Weisgerber: Following my comments with regard to Bill 17, I want to make sure that we're going to have an opportunity to debate these in committee. I think there are some important changes here. The changes to the Motor Fuel Tax Act and the International Fuel Tax Agreement are important steps forward -- certainly welcomed by the trucking industry -- and changes to the Wildlife Act and others we will want to pursue in committee stage. But suffice it to say we're prepared to move forward to that stage of the bill.
G. Wilson: When you get an omnibus bill such as this, I can't stress strongly enough how difficult it is to try and get up in second reading and make any sense of any sort of general, philosophical positions, which is what we're intending to do here.
But we certainly can look at the manner in which this whole question of the provision of the Freedom of Information and Protection of Privacy Act has proceeded. I think that is a warranted and justifiable area to which we can add some comment. Quite clearly, one of the hallmarks that this government may go out with -- if it indeed does go out -- or may want to review if it comes back next time is the fact that it has moved forward with respect to the provision of making information more available to the public, more so than any other government, I think, in the history of this province. For that, we have to congratulate the government. I think that they really have moved forward on that area, and that's worth noting.
However, when we get into the nitty-gritty of what should be public and what should be private, and how you protect these kinds of matters, I think that it's interesting....
[ Page 15003 ]
For example, under section 3 of this bill, the Evidence Act, with a move toward protection of medical privacy.... I think that is something which is critically important. It really is difficult when you're dealing with what is necessarily almost a definitive or finite kind of language in bills -- that is by necessity often inclusive in its language, saying that the following kinds of things will be exempted, or the following will not be exempted -- that there are going to be grey areas in which people are going to take advantage, and often not for necessarily the best intentions, in accessing that information. Much of what we see in here is a cleaning up, I think, of that kind of language -- an attempt to try to strike a balance. I think that there are a number of areas in which freedom of information is, in fact, improved by this bill; I think there are some areas where we have some concerns.
I note the closeness to the hour, and the intention, I believe, is to get second reading completed before we go to lunch. I'm going to keep my remarks fairly short, but I do think that as we move into committee stage -- and there will be another vehicle with respect to the PharmaNet, which is another really serious problem with respect to provision of privacy and security and how you deal with those kinds of things -- we need to have a more thorough discussion with respect to the Freedom of Information and Protection of Privacy Act, and the extent to which that act has been used and the extent to which it has been potentially abused for the purposes of the less than scrupulous in our society. This bill does attempt to do much with that, and we can take issue with that in committee stage.
The only other thing I would suggest that we want to take a look at -- again, it comes to the whole matter of a philosophical question -- is the whole question of the Special Accounts Appropriation and Control Act, which is under section 26 of this. What we need to do is to review generally what the benefit is of the whole move toward these special accounts. It's a much broader and much more pervasive debate than, obviously, we can get into in an omnibus bill of this magnitude. But I think that the public wants to know whether this is going to be a direction of government -- be it this one or any other that may come forward. Or are we going to move more toward consolidated accounts and general distribution of tax dollars in that way?
Those are the kinds of things we might want to get into as we start to take a look at what we do with moneys that are received, whether it's through forfeited crime proceeds, as in this particular section, or matters under sections of the Criminal Code. Having said that, I think there are some general philosophical areas on which we could take issue with the government. We need to congratulate the government for their move toward the privacy and information provisions. That's a plus for the province generally. We look forward in committee stage to getting into the detail of this by section.
Hon. C. Gabelmann: As with the other bill, we'll have an opportunity for a wide-ranging discussion in committee stage. I will endeavour to ensure that the responsible minister in each case is actually here, as much as that's possible, for the debate on the sections that apply to their ministries. If for some reason they are unable to be here, I will attempt to answer for the absent ministers. With that, I move second reading of the bill.
Motion approved.
Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 1995, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. C. Gabelmann: I call second reading of Bill 16.
CLASS PROCEEDINGS ACT
(second reading)
Hon. C. Gabelmann: Hon. Speaker, as members are looking at the clock, I think what might be useful is for me to make my second reading speech and perhaps adjourn for lunch, and then pick up the debate on another occasion in the near future.
As members know, the government announced in the spring of last year that it would develop class proceeding legislation for class actions. I'm sure it's no news to members to say that many British Columbians have eagerly awaited this legislation, and I'm proud to submit it to the House.
Our legislation will allow individuals to apply to the court to bring a civil action as a group and to seek redress for injury or damages caused by the same or similar circumstances. This is an important breakthrough for British Columbia. Our government has been making important progress in opening up the justice system to the people it serves, and this legislation is another example of this campaign. Bill 16 gives a new justice option to people who haven't had access to civil redress in the past. Sometimes a civil action can have important implications, not only for individuals but also for society as a whole, yet the costs of such an action, as well as other financial and social factors, may bar injured British Columbians from ever having their day in court. Now people can join together to seek justice through the courts.
Other jurisdictions have class action legislation allowing class actions relating to consumer goods, civil rights, securities, competition laws and the environment. We have studied the experiences of these other jurisdictions, learned from them and built upon them. As we developed our bill, we also consulted widely with British Columbians and received many helpful submissions. The result is state-of-the-art legislation especially tailored for our province.
One of its features is a mechanism to ensure that our court schedules are used efficiently. The mechanism will be used to decide what is an appropriate class action before the matter goes to trial. Bill 16 is procedural in nature; class actions will follow as closely as possible other types of individual civil litigation. The legislation provides a series of steps to be followed by litigants who wish to pursue their civil action as a class action. The act is also designed to allow the court to respond to the unique needs of a particular class action. It gives the court discretion and flexibility to craft notice, trial and distribution requirements that suit the characteristics of the class.
The people of British Columbia have asked for class legislation, and this bill opens up a new justice option for them. It creates more fairness in the system, and it balances the rights of defendants with the rights of injured British Columbians to seek their remedy through a more accessible justice system. With that, I would move second reading.
Deputy Speaker: Thank you, minister. The motion is second reading. All those in favour, please say aye.
[ Page 15004 ]
J. Dalton: The Attorney General indicated that we would have his remarks and then adjourn debate.
Deputy Speaker: You're quite right; however, we need the motion on second reading on the floor. Could I have the motion first.
Interjection.
Deputy Speaker: Oh, I'm sorry. You're quite right. My apologies. Do you want to adjourn?
J. Dalton moved adjournment of the debate.
Motion approved.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. C. Gabelmann moved adjournment of the House.
Motion approved.
The House adjourned at 11:56 a.m.
The House in Committee of Supply A; D. Schreck in the chair.
The committee met at 10:15 a.m.
ESTIMATES: MINISTRY OF TRANSPORTATION AND HIGHWAYS
(continued)
On vote 55: minister's office, $432,000 (continued).
Hon. J. Pement: Today we welcome B.C. Rail. With us are Roger Clarke, group vice-president, finance and information technology; Frank Trotter, executive vice-president, WesTel Telecommunications; and Paul McElligott, president and chief executive officer of the BCR Group of Companies.
D. Symons: I would like to welcome the executives from B.C. Rail to this annual pilgrimage we go through in the House, investigating questions we might have about the operations of B.C. Rail. I am pleased to see that B.C. Rail continues to stay in the black. I would like to ask just a few questions regarding monetary matters before fun events -- until we get into other issues dealing with the railway.
Over the years, B.C. Rail has had their ups and downs, and expenses appear to be continually on the rise. Can the minister help update me by giving me both the revenue and expense figures for the fiscal years 1993, 1994 and 1995, and then the 1995-96 estimates?
Maybe before I ask that question, I can ask one other. Do you work on a fiscal year that starts April 1 as the rest do, or are you on a calendar year? That might help me on the wording of these questions.
[L. Krog in the chair.]
Hon. J. Pement: A calendar year.
D. Symons: I saw that some of the figures in the book seem to give the appearance of a calendar year. For those calendar years I'd be interested in the revenue and the expenses, and I assume that by finding the differences in there we can find the net income from B.C. Rail for those years. Would you want to give them to me at a later date, or are they easily obtainable now?
Hon. J. Pement: We can give you the 1994 figures and get back to you on the 1993 ones. The revenue for 1994 was $385 million, and the net income was $40.5 million.
D. Symons: So by finding the difference I can easily work out the expenses from those two numbers. That's fine, thank you. Can you give me the rate of return on the shareholders' equity for both 1994 and 1995? And, again, if you care to indicate that you need time to work those out or get them, I would be willing to take it later in the day.
Hon. J. Pement: We'll get that information for the member.
D. Symons: I'm assuming that the B.C. government is the shareholder for B.C. Rail, and I'm interested in what dividends were paid to the provincial government for 1994 and are projected for calendar year 1995. And while we're at it, perhaps you can get the debt-equity ratio for both 1994 and 1995, as well.
Hon. J. Pement: We'll get you the calculation on the debt equity. There were no dividends for 1994, and we do have the non-economic services through BCR that we provide to the Fort Nelson extension.
D. Symons: Again, figures that you might want to get at a later time: can you give me the number of employees of B.C. Rail for the years 1993 and 1994 and what you're projecting for your 1995 operation year? I would be interested, when you give it to me, in whether those would include the employees of Vancouver Wharves and WesTel, or you may want to give me a breakdown again at a future time.
Hon. J. Pement: We will endeavour to give you those numbers by company.
D. Symons: I realize many of these questions I'm asking.... I'm not at all put off by you saying that you'll get them to me, because that's what I expect for the first few questions here.
What was the net profit or loss for operations of the Fort Nelson extension we referred to earlier for the years 1993 and 1994 and budgeted for 1995? Could we also have the same figures, profit or loss -- I suspect loss in this case -- for the operation of the passenger service on B.C. Rail for 1993 and 1994 -- those same years -- and what might be budgeted for 1995? Again, I suspect they're coming.
[ Page 15005 ]
Hon. J. Pement: Yes, I certainly will get those figures for you.
D. Symons: I guess rail is the biggest single cost item in the transportation chain for grain, potash, coal and other mined products. Canadian rail productivity is considerably below that of the American lines. I wonder what B.C. Rail is doing to counter the disadvantage that we have in Canada. Our productivity levels seem to be lower than some of the competing American lines across the border. Wage benefits are a higher percentage of operating expenses in the U.S. CP and CN crews' earnings are based on hours worked or the distance travelled, and I wonder whether -- whichever yields the best pay -- that's also the way in which B.C. Rail crews are paid.
Hon. J. Pement: B.C. Rail has done a number of initiatives with regard to their operations, from putting on higher horsepower engines in locomotives to reducing management structures by 200 positions. With regard to the freight to the shippers, we are actually lower in the six-year time frame. Actually, there is quite a list of initiatives that have been done. Rather than going down the whole list at this point, we could send it in letter form to the member.
D. Symons: The other issue I asked about was the method of payment of the train crews. I'm wondering if we could explore that for a moment. I gather that if a CP freight crew moves the train 160 kilometres or so, they will be credited for a full day's pay, even if they've only worked five hours. I know truckers aren't paid on a per hour basis or a per distance travelled basis in the same way, so I'm wondering if B.C. Rail crews are paid in the same manner. You don't have the same situation as some of the longer lines do, but there could be some cost factors to that.
Hon. J. Pement: The employees are paid on a straight hourly basis.
D. Symons: When B.C. Rail bought Vancouver Wharves Ltd., I believe a $60 million debt came with it. I think you paid $15.75 million, so adding the $60 million, there is a cost, I suppose, in the $75 million range. What debt is Vancouver Wharves Ltd. carrying today, and has ownership of Vancouver Wharves Ltd. contributed to any increase in the tonnage carried by B.C. Rail?
Hon. J. Pement: On the debt, we'll get that particular figure back to you. It has not significantly increased the tonnage. However, it puts us in a good position with regard to the competition. We will be seeing a profit this year for Vancouver Wharves Ltd.
D. Symons: Again, this may be something that can come at a later date, but I'm wondering if you might give me, at your convenience, the book value of the properties owned by B.C. Rail and maybe the net profit for each of those subsidiaries in each of the last three fiscal years. I'll leave that with you and move on to the next one.
B.C. Rail is planning $132 million in capital projects this year including, I believe, the purchase of four locomotives for $9 million. Will any of these four be the new gas turbines that were proposed by Allied Power and Propulsion?
Hon. J. Pement: No.
D. Symons: Maybe I should just carry on with that a little. I gather that these gas turbines offer a substantial improvement to emissions, are more environmentally friendly and seem to retain the same power. I'm wondering why B.C. Rail, with the natural gas field that we have in B.C. and all the rest, might not consider gas turbines as a mode of power.
Hon. J. Pement: With a gas turbine comes new technology. Just for the member's interest, in this area B.C. Rail purchases amount to one-tenth of 1 percent of the North American market. Therefore we don't feel that we have the research ability to take on or spearhead this type of program. However, we are very interested in the development of this particular locomotive.
D. Symons: In 1992 B.C. Rail initiated a study of the Squamish estuary with the goal of developing a deep-sea port capacity at that location. I'm wondering what the status of that goal is. Has the study shown that it is feasible? In the long-term plans, will a port development take place for B.C. Rail at Squamish?
[10:30]
Hon. J. Pement: In the long term it is the desire of B.C. Rail to see the project done. At this point, however, a coordinating committee has been developed with the Squamish council. Some discussions have taken place and some plans have been developed. There are also two studies in the works -- socioeconomic and environmental -- with the Squamish first nation. They are basically in the preliminary form.
D. Symons: Last year B.C. Rail notified the communities in the Cariboo and along the line that the summer runs would not be running daily, as was the case in the past, and that they were going to be cut back to the winter schedule, with an extra little run into Lillooet, I believe, to look after tourists. I believe that in one of the announcements a B.C. Rail official -- it doesn't name the official here -- commented that "recent analysis of traffic patterns have identified opportunities to improve equipment utilization and in the process improved the passenger units' contribution to the company's overall performance." If we translate all those nice words, it means that you're cutting costs. Could we interpret it that way? Then if we could just move on, we could answer the two together.
Will the government assess the effects of these cuts on the communities? The government initiated the Victoria Line ferry service to Seattle basically to hype or assist tourism in Victoria. I'm wondering if B.C. Rail -- the government through B.C. Rail -- could do the same thing for tourism in the Cariboo.
Hon. J. Pement: Certainly assessments are being done constantly with regard to services. Meetings with the tourism association have happened. I've been at a meeting in Williams Lake as well, looking at ideas we can incorporate. But the service is on a break-even basis, and at this point we haven't reached that break-even situation. It's a case of ridership. In order to beef up the service, we need a larger ridership. We have put more service, for example, up into the Kelly Lake area where the ridership is. So if there are ways that we can increase that ridership, we certainly are open to working with those communities.
[ Page 15006 ]
D. Symons: I wonder if the minister might tell me whether the losses were greater in the summer months, when they had the five daily runs going, than in the winter months when there were three runs per week. How do the two compare for the last few years?
Hon. J. Pement: We will get those numbers for you.
D. Symons: I note from a May article in the 100 Mile House Free Press that there's a group formed by the government and the local tourist association people, and it said: "It resulted in agreements that will assist, if not restore, passenger service." I'm assuming that would mean that would not be restoring a passenger service on a daily basis this season. Depending on how you worked things out, would it happen in future years if possible?
Hon. J. Pement: In meeting with the group, we also expressed the concern that we do have a service we have outlined, that brochures are out and that schedules are developed. It is important that we keep to those schedules in this year with regard to information for tourists, particularly offshore tourists coming in. We certainly won't be changing that service this season. As always, evaluation of the service -- what ridership we have and the viability and feasibility -- will assist us in making decisions for other seasons.
D. Symons: There were some fare hikes for this year in the passenger service, and I'm wondering if you might give me the figures for adults one-way from North Vancouver to Prince George, for the concession ones for 1994 and 1995 and also for any group per-passenger fare, if you have a special rate for groups.
Hon. J. Pement: I'll have to get a breakdown of all the fares for adults, group rates, etc. There were increases, but the service was beefed up as well. There is meal service, etc. The ridership gets full service.
D. Symons: Just carrying on, does that mean that the service that's given now is what was commonly called Cariboo class before? If in giving me the figures, then, you could give me the Cariboo-class rates before and the current rates for this year that would be fine -- if we make them comparable in that sense.
D. Mitchell: I would like to join my colleague the member for Richmond Centre in welcoming the officials here today -- the executive team from B.C. Rail. This is the closest we have in our Legislature, obviously, to a Crown corporations committee that would annually review the activities of all Crown corporations. In the absence of one, this is the substitute. Of course, if we had a Crown corporations committee, we might more rigorously ask the officials to be here for longer than simply this morning. But we'll make the most out of this exercise this morning.
I would just like to say that I'm very envious, as I think many people are, of the hon. Minister of Transportation and Highways. She has the honour and privilege of being accountable to our Legislature for this most successful of all Crown enterprises, I believe -- a very well-run Crown corporation. In fact, if I had my way, perhaps it wouldn't even be a Crown corporation. I've wondered aloud in recent months and years as to whether or not it makes any sense for a profitable, successful, diversified company like the B.C. Railway Group to be under the protection of the state any longer. That's an issue we may get into a little later this morning in this discussion.
I would like to ask the minister if she could tell the committee this morning a bit about the safety record of B.C. Rail. It's a concern that's come to my attention as a member for a constituency that's seen a couple of derailments in the last year. Thankfully, there haven't been any tragedies associated with those derailments, but it does bring to mind the question of the safety record of the railway, in particular whether or not any safety audits are conducted by the railway and whether or not the Ministry of Transportation and Highways reviews those safety audits. I wonder if the minister could inform the committee of that this morning.
Hon. J. Pement: With regard to safety audit inspections, etc., that work is done through the Ministry of Municipal Affairs. Therefore it is best that the member direct his questions to that minister.
D. Mitchell: I recognize that what the minister is saying is correct. I wonder if she could tell us, though, whether B.C. Railway Group conducts any internal safety audits of the rail line over and above those that are required to be reported to the Ministry of Municipal Affairs. Surely the Ministry of Transportation and Highways, which has at least a working relationship with them through the office of the minister, must be interested in the subject. Within her ministry is there any review of the safety record of the railway? Does her ministry request a chance to review these safety audits as they're conducted?
Hon. J. Pement: There are certainly ongoing internal reviews in the corporation, particularly if there are derailments. Derailments are investigated by engineers within the corporation and reported to me.
D. Mitchell: In the reporting year covered by B.C. Railway Group's last annual report, how many derailments were reported? Were any other serious safety concerns reported? I'm referring to the fact that the railway carries hazardous chemicals and goods. I'm talking about liquified natural gas and other chemicals or commodities that might be considered dangerous. The railway also travels through residential communities along its route. The rail line is often adjacent to residential communities, and that is a concern. I think the safety record of the railway is actually quite good, but I wonder if the minister can tell us what the record is in the last completed year -- the number of derailments, the number of serious incidents regarding the transportation of hazardous goods and chemicals, etc.
Hon. J. Pement: I think it would be appropriate if we got you a complete breakdown and information with regard to derailments and such so that you have a full picture. We don't have those complete figures with us at this point. We certainly recognize the concern with regard to the communities as expressed by the member. The global area of freight by rail actually has a good record with regard to transportation of dangerous goods, etc.
[10:45]
[ Page 15007 ]
D. Symons: Just following up on the questions from the member for West Vancouver-Garibaldi, B.C. Ferries has a safety committee formed by people from B.C. Ferry Corporation and from the union, and they meet on a regular basis to discuss safety issues. Does B.C. Rail have some similar situation where the employees and the management work together on safety issues and meet on a regular basis?
Hon. J. Pement: Most certainly.
D. Mitchell: I appreciate the commitment the minister has made to provide some information with respect to the safety record, derailments and other incidents that may have occurred in the last year. This would be useful background information. I commend the railway for doing an excellent and sensitive job; carrying the traffic it does through so many communities in the province of British Columbia is a huge responsibility.
I can only assume that the safety record of the railway is probably superior to other transportation arteries that carry similar goods -- chemicals and hazardous items -- particularly truck traffic on the highways, which probably, in the longer run, poses a greater hazard to public safety than rail, which has a very good safety record. The odd derailment from time to time does heighten this concern, and that's why I asked the question.
I wonder if I could just move on to ask a question about another area. It's a question that comes up from time to time in the constituency that I seek to represent, which includes the Sea to Sky corridor travelling north from the North Shore up through the Squamish-Whistler area. As that area grows -- and it's one of the high-growth regions of the province -- the question comes up as to whether or not the B.C. Rail line might one day be used for commuter rail traffic. It's estimated that up to 12,000 people travel every day from that corridor down to Vancouver to work. The Sea to Sky Highway, Highway 99, is extremely overcrowded, and it's difficult to expand that highway. Of course, the safety issues on that highway are well known -- in fact, sometimes sensationalized in the media. The highway is really used to peak during rush hour. Is the B.C. Railway Group doing any studies to look at the future possibility of commuter rail traffic from, say, Squamish to the North Shore, to take some of the pressure off the highway? Is there any contemplation being given to that in the years ahead?
Hon. J. Pement: In terms of a light rail scenario, as you're probably aware, if you look at the type of train, to have faster trains go in that area is very difficult in terms of the grades and the curves, etc., on the right-of-way. We haven't looked at a light rail scenario or any plans in that area. Just as a matter of interest, when the highway was closed due to rockslide, extra cars were put on the train at that time, and ridership didn't increase significantly even under that situation. And it's basically because of the slower-moving train, the curves, etc.
D. Mitchell: I appreciate what the minister is saying. I only hope that as that corridor continues to grow, and as population grows.... I know the minister is very aware of the safety issues on the highway as the volume of traffic on the highway increases. I only hope that in the years ahead we can try to see if we can justify the cost of providing some kind of commuter light rail service in that corridor. I realize it's probably not there today, but I wonder if one day it could be there, and using the existing rail lines would seem to make some sense. I hope it will be reviewed from time to time to see if the volume of traffic is there to justify it, even on a trial basis.
I'd like to ask the minister about the Royal Hudson. Just this last weekend there was a very successful launching of yet another season for the Royal Hudson, which is a tourism feature in our province that is well known worldwide. People come from all over the world to ride the Royal Hudson, one of the really great historic train rides and something that we're all proud of in British Columbia. Could the minister tell us what kind of a contribution is required to maintain the Royal Hudson service? In the community it's often said that a subsidy is actually required for this experiment in rail tourism, which I certainly would like to encourage. I think tourism is becoming the backbone of the service sector of our economy, and the Royal Hudson is synonymous with tourism in British Columbia now. Does the Royal Hudson pay for itself yet, or is a subsidy still actually required?
Hon. J. Pement: In this operation, if we have a good year in terms of weather, etc., we see the ridership increase, and basically we operate on a break-even basis on operating costs. However, we absorb that cost on the capital side. For example, in redoing some of the cars, etc., about $650,000 in capital costs has been incurred at this point.
D. Mitchell: Could the minister, just for clarification, tell us if she is saying that the subsidy on capital costs for the operation of B.C. Rail would be in the range of $650,000 per year?
Hon. J. Pement: Those costs are not necessarily on a yearly basis. It depends on what the capital needs are to ensure that the run provides good service. For example, a number of cars were added last year at a cost. We could give you a breakdown over the past three years of the types of costs on the capital side. That is not subsidized by the government; that is part of the overall operating costs of B.C. Rail.
D. Mitchell: I appreciate what the minister said. I would very much value the breakdown that she's offered to me. She indicated that the Royal Hudson service on an operational basis is essentially break-even. Could the minister tell us whether or not the B.C. Railway Group is committed to continuing the Royal Hudson service for as far as we can see into the future?
Hon. J. Pement: I don't know how far you see. Nevertheless, certainly we are committed to doing significant marketing promotions of the train. In some years, I understand we have increased the ridership by 30 percent by attracting visitors to use the service. Again, it is, as you say, important to tourism in the area and for the province, and we are committed to working to see it continue.
D. Mitchell: It sounds like we're safe at least until the next election. I'd like the commend the minister for that, because the Royal Hudson is a tremendous service, not only a boost to tourism, but to local communities like the community of Squamish, which receives a tremendous benefit from the passenger traffic that comes through during the summer months. Let's hope for another great season for the Royal Hudson.
[ Page 15008 ]
I'd like to change the topic and ask the minister a question that I think is a very significant one, given the government's recent announcement with respect to property taxation in this Crown corporation. This year, after the provincial budget was tabled in the Legislature, the government made a very significant statement -- unprecedented, I think, up to this point in our history. The government indicated it was giving serious consideration to seeing that the exemption on property taxation that the B.C. Railway Group has enjoyed historically is ended. It's the first time I can find in official records that the provincial government has actually said that there is value to the property under the control and ownership of this Crown corporation, that it will be taxed and that the communities in which B.C. Rail operates will benefit from a fair share of property taxation.
The joint statement from the Ministry of Municipal Affairs, the Ministry of Employment and Investment, and the Ministry of Transportation and Highways indicated that we were going to have to study this for a while longer before a grant in lieu of taxes would be negotiated. I suppose one could say this is something that's been studied by the UBCM for many years ad nauseam. B.C. Rail has never taken a stance on it, and rightly so. I'd like to ask the minister if she could give us an indication of what kind of an economic advantage this exemption from paying property taxes has meant to B.C. Rail. For instance, in the last reporting year for this Crown corporation, what is the value of this exemption to the B.C. Rail companies?
Hon. J. Pement: We're really talking about grants in lieu. As to the overall costs, we have not got the analysis on it yet; and not to forget that overall, B.C. Rail has provided some benefits to the communities they serve as well: the non-economic extensions, assisting communities to acquire properties for community halls, recreational services and the passenger services themselves. Over those years, although you say that B.C. Rail has enjoyed this benefit, they have also given benefit to the communities they serve.
D. Mitchell: I have no doubt that B.C. Rail attempts to be a good corporate citizen; that was not the point I was trying to make, though. The question I asked was that the exemption of property taxation must amount to some kind of an economic value, and I would imagine the B.C. Railway Group of Companies has valued that at some number. My own estimation -- just for what it's worth -- looking at the most recently produced assessment values from the B.C. Assessment Authority for the year 1993, would be in excess of $6 million provincewide.
Those are very conservative numbers, because the properties that are being valued have not been updated by the B.C. Assessment Authority. The reason the assessments have not been updated is that B.C. Rail doesn't pay taxes on it, so the B.C. Assessment Authority doesn't see any merit in updating the values. I just wonder if my very conservative estimation in excess of $6 million would be in the ballpark for the amount of property taxation that would be paid if the company paid not a grant in lieu of taxes but its full fair share of property taxes, as any other company would.
Hon. J. Pement: As I said, we haven't done that analysis. Negotiations haven't happened with regard to the type of regime we're looking at. Therefore I feel we can't give you complete figures.
D. Mitchell: In that case, I'd like to just ask the minister about the grant-in-lieu policy that is now being proposed to be implemented. Some other members of the committee may want to ask some questions about this as well. I have a few areas that I'd like to canvass on this. One of them leads into the question of potential privatization. But I'll save that for a little bit later.
[11:00]
On the grant-in-lieu policy that is being proposed by the provincial government, which is the subject of an interministerial task force, why would the government not be in favour of implementing a transitional grant-in-lieu policy as recommended by the UBCM? In this fiscal year, there would be at least some recognition in terms of cash. It would not only be an intellectual recognition that there is value to this property, which the government has finally made the bridge to. I recognize that that is a big step. Why didn't the government provide some recognition in cash in this year's budget and in the budget this committee is being asked to approve for the minister, as well as implement a transitional grant in lieu of taxes for B.C. Rail? It certainly would have been of great benefit to the communities along B.C. Rail lines. I would have imagined that the government would have been anxious to please those communities.
Hon. J. Pement: Again, the Ministry of Municipal Affairs is the lead ministry dealing with this issue. I think those questions would be best directed to that ministry.
D. Schreck: I would like to pursue the line of questioning opened by my friend from West Vancouver-Garibaldi. I appreciate the advice of the minister that some of these matters are best put to the Minister of Municipal Affairs, but I would also emphasize that the Crown corporation must be undertaking some strategic planning on alternative scenarios in respect to how its profit and loss statement could be impacted by different types of grants-in-lieu policies or valuation methodologies. This is particularly relevant, given the uncertainty that has been created for the staff at B.C. Rail by the commitment of the Leader of the Official Opposition to privatize the corporation if given the opportunity. Since the head office of B.C. Rail is located in my constituency and many of its employees live there or in adjacent areas on the North Shore, I've been the recipient of a great deal of expressions of anxiety over how this could impact them.
It strikes me that if my friend from West Vancouver-Garibaldi is correct that there could be as much as a $6 million difference in terms of how the valuation of the potential liability on property taxes is handled, then it would be impossible to embark on a privatization program, should any government in the future consider that option without resolving this issue. It strikes me that the problem of how to determine underlying values is a serious one. My understanding is that railroads throughout Canada have expressed the concern that they are being unfairly taxed for property purposes and that they are being driven into uncompetitive positions in respect to alternative transportation modes by some municipalities, which essentially view every trestle as a cash cow. The railway companies believe that a more realistic assessment policy would be healthier for the industry. That, of course, would have negative impacts on the revenues of these municipalities.
One way of valuing the assets would be to put them on the market and see what they would sell for, but that, of
[ Page 15009 ]
course, depends on how they are zoned. If I took the railway right-of-way through my friend's constituency or my constituency and built townhouses on it, the land would probably be very valuable. On the other hand, if the only alternative use is for competing rail lines, and there aren't any, maybe the land would have no value. It strikes me that there is a significant challenge here in terms of how to attach a value for assessment purposes when dealing with this question of how much municipalities might get. When you add that to the overall railway policy of other rail lines saying that they are unjustly taxed in respect to other transportation systems, we might be left with a situation where this expectation of a windfall for the municipalities is unfounded, and the magnitude is somewhat less than $6 million. An alternative method of evaluation would be to take some percentage of the revenue stream generated by the use. I am a director of B.C. Hydro, and I certainly know that when we look at grant-in-lieu alternatives with respect to transmission lines, the favoured methodology is to look at a percentage of transmission costs of electricity. I presume that there would be some parallel in looking at the rail line that a method of valuing this unsaleable asset -- save and except in a fire sale recommended by the Leader of the Opposition -- would be to look at a percentage of revenues generated.
I would like the minister to expand somewhat on the question of what planning work has been done by the Crown corporation and if the Crown corporation has made any submissions with respect to valuation techniques for determining a grant in lieu of property taxes, since the policy set or any future laws passed in this area relate not only to the well-being of the municipalities and the financial health of the corporation, but also very much to these anxiety-raising promises by the Leader of the Opposition, which are causing great problems for many of my constituents.
Hon. J. Pement: B.C. Rail is definitely working with the committee that has been set up to do different analyses. But again, the final outcome of negotiations is what we will have to deal with. One can plug in a number of different numbers and come up with different scenarios. Therefore to give a specific analysis is very difficult.
D. Symons: The member for North Vancouver-Lonsdale, who was asking questions and making some rather direct references to the Leader of the Opposition and his statements about privatizing B.C. Rail, seems to have forgotten that his own government initiated through the Crown corporations secretariat a study by the Royal Bank of Canada Dominion Securities on the exact problem of privatizing B.C. Rail -- a project called Project West. While the member is telling his constituents what an awful person the Leader of the Opposition is for making such suggestions, I wonder if he's also saying that his own government was at least looking at what the options were in that regard. That's what the Liberals are looking at, as well. D. Schreck: Order, order. You can't ask a private member questions.
D. Symons: I'm not asking him any questions. I'm simply suggesting that he be forthright and not too sanctimonious in saying this is simply a one-sided issue, when his own government has been involved in it as well. I don't know if the minister would commit to releasing the Project West document so that we can show the people of North Vancouver-Lonsdale that everybody can see what the government sees.
Hon. J. Pement: Again, remember that the corporation is a business that has studies with regard to investments, etc. That information is important to the company with regard to their ongoing operations, and the types of information that you get in those types of studies are pertinent to the business operation.
D. Mitchell: I certainly understand the concern of the member for North Vancouver-Lonsdale for his constituents. I have constituents who also have very similar concerns to the ones he's raised. I wonder if the minister can tell us if she's familiar with the details of the report that's been referred to in committee this morning -- the report called Project West by RBC Dominion Securities -- which I understand was actually commissioned by the Ministry of Finance. Actually, I obtained a copy of it through freedom of information from that ministry. Is the Minister of Transportation and Highways conversant with that particular study?
Hon. J. Pement: If you have a copy of the study, I'm sure you have the information that you need. With regard to my ministry, we are conversant with the workings of the corporation.
D. Mitchell: I wonder, then, if the minister can tell us if her ministry is knowledgable about another study that was done, called Project Roundhouse, also commissioned by the Ministry of Finance. This one was by the Gordon Capital Corp., a major investment firm in Canada. It also -- like the previous study, Project West, by RBC Dominion Securities -- looks at the valuation of the B.C. Railway Group of Companies with respect to a potential share offering and how a share offering would be structured for the potential sale of the B.C. Railway Group of Companies. Is the minister familiar with the contents of Project Roundhouse?
Hon. J. Pement: There are a number of options that different ministries have looked at with regard to all the Crown corps -- Finance being one. If that one is done through Finance, I suggest you bring that issue up with the Finance minister.
D. Mitchell: Fair enough; I'll accept the minister's advice on that. But let me ask her for one further comment on yet another study, commissioned by the Ministry of Employment and Investment -- this one by the major New York investment bank Goldman Sachs. It's called Project Whistler. Again, it's a major study looking at the valuation of the B.C. Railway Group of Companies and making some specific recommendations to the provincial government on how it might be privatized through a share offering to the public. Is the Minister of Transportation and Highways familiar with that study?
Hon. J. Pement: In the whole area of Crown corporations and the responsibility of Employment and Investment with regard to provincial economic development, some of these studies are requested with regard to overall economic development in the province. This is one.
D. Mitchell: I must confess that it puzzles me somewhat, because the studies that I've just referred to, I obtained -- I
[ Page 15010 ]
should note, severed copies -- through the Freedom-of-Information process. So I don't have all the details by any means, but I do know of their existence, and I do know generally what the subject matter for these studies are. These are studies that appear to have been commissioned by the provincial government, but by ministries not including this ministry. Interestingly, the Ministry of Transportation and Highways has not commissioned any such studies and has not received any recommendations by private investment firms on this subject.
But I wonder if the minister could inform the committee this morning how she, as the minister responsible for this Crown corporation, deals with the fact that other agencies of government -- other ministries, other colleagues of hers in cabinet -- are running around commissioning studies from private investment firms seeking to dispose of the asset that she is responsible for to this Legislature? There seems to be something missing here in the ministerial chain of accountability. There seems to be something missing here when a minister is responsible for a very successful Crown corporation and yet her colleagues and other agencies of government, over which she has no control -- and she cannot enlighten the committee this morning on the contents of these studies, because apparently she hasn't seen them.... Yet they are seeking to have an impact on the very special relationship that she has with the Legislature and the linkage to this Crown corporation.
[G. Brewin in the chair.]
Could the minister tell us whether the Crown corporation officials have had any input in the commissioning of these studies whether they have copies of them, and if they're aware of the existence and have reviewed the details and recommendations that have come forward from either RBC Dominion Securities, Gordon Capital Corp., or Goldman Sachs, for instance?
[11:15]
Hon. J. Pement: In government we work together with regard to the full picture that we have to look at. Finance has responsibilities, as do Employment and Investment and certainly myself as Minister of Transportation and Highways.
With regard to those particular studies, they were done with a view to looking at the economics of the province. Therefore those studies were commissioned. Some we were fully aware of at the time and others we get updates on with regard to information that is acquired. I don't find that undue in any way.
D. Mitchell: I'm glad the minister is not insulted by the activities of her colleagues. When it comes to the issue of privatization of this Crown corporation, though, I'd like to ask the minister.... She's now indicated that there is a team approach, that she is working in concert with her colleagues on this. I think there's an implicit acknowledgment that the government is giving some serious consideration to the possible partial or complete privatization of the B.C. Railway Group of Companies. Otherwise we wouldn't be getting these kinds of reports from major investment firms in North America.
We were chatting earlier about the grant-in-lieu policy and the fact that it's been delayed but is being looked at. The government has made a major step in heading toward seeing the B.C. Railway Group of Companies pay partial property taxation, or a grant-in-lieu taxation, to the communities along the B.C. Rail line. That policy has been delayed until next year. It's not going to be implemented in the current fiscal year that we're reviewing today here in committee. It's been delayed, and no transitional grant has been put in place.
Is one of the reasons for that possibly because simultaneously the government is studying privatization options? Is it possible that the grant-in-lieu policy has been postponed, perhaps beyond the next election -- in all likelihood beyond the next election -- because simultaneously colleagues of this minister in cabinet are looking at an option which would see the full, or partial, privatization of B.C. Rail, which would, of course, make the grant-in-lieu policy meaningless or irrelevant? A privatized B.C. Rail would be compelled to pay its full share of property taxes, not a grant-in-lieu. Could the minister enlighten us on that subject?
Hon. J. Pement: I don't know. Maybe the member has time to walk up the beach and turn rocks over; I'm not sure. He's come up with various assumptions and all the rest of it.
With regard to overall decision-making, government decisions are government decisions, made in a collective sense in cabinet. Decisions are made according to the information that one brings in. It's always pertinent, I think, to any given situation in government that we do our homework, that we do look at different options and areas of concern. These studies, along with many other studies, bring in information for government to be up to date, current and on cue with the changes in economies, etc. The scenario that the member has put out is a scenario. That's basically all it is.
D. Mitchell: I would doubt that the government, just through its ordinary process of managing Crown corporations, would be seeking and commissioning studies on the privatization of all Crown corporations -- although perhaps the leader of the Liberal opposition might be interested in privatizing all Crown corporations, as he stated at his famous fundraising dinner in Vancouver a few weeks back. But I would doubt that the current government would be doing that.
With respect to B.C. Rail, it is commissioning studies, so I have to assume that when the minister says it's...
D. Schreck: It has commissioned them -- past tense.
D. Mitchell: It has commissioned them. Maybe now it's reviewing them; I don't know. I can't understand future policy as well as my colleague the member for North Vancouver-Lonsdale, but the minister has said it is a scenario. I assume that it is a policy option, then.
Could the minister tell us whether her ministry, the Ministry of Transportation and Highways, has expressed its point of view with respect to the potential privatization of B.C. Rail, and whether or not this minister has an opinion in that regard?
Hon. J. Pement: I said that the scenario was the member's scenario. Whether it is an option or not remains to be seen. Definitely I work with BCR in terms of their overall needs and aspirations, and any decisions being made would be made in concert with government.
[ Page 15011 ]
D. Mitchell: Could the minister then tell us whether or not the management of the B.C. Railway Group of Companies has expressed an opinion on this subject?
Hon. J. Pement: Again, I believe it is pertinent to the member to have listened to my replies to date. It's a case of doing the work that we need to do with regard to ensuring that we have a healthy corporation.
D. Mitchell: Prior to the tabling of the provincial budget in the Legislature by the minister's colleague, the Minister of Finance indicated that one of the reasons Treasury Board was giving some consideration to the privatization of B.C. Rail was the potential benefit to debt reduction for the province. Based on the Treasury Board document that was leaked to the media at that time, I can only assume that some consideration was being given to the fact that B.C. Rail currently has on its books some $328 million worth of debt. I believe it's in that range. In addition to removing that debt from the province's total debt load, the sale of B.C. Rail would also generate significant additional millions of dollars. The Minister of Finance seemed to be indicating that those millions would also be used to retire public debt and make a dent in a debt reduction program.
As it turned out, when the Minister of Finance tabled her budget in the Legislature a few weeks later, there was no mention of this. As far as policy advice seems to go, it hasn't really filtered through to the cabinet table yet. Perhaps a decision has been made not to proceed with privatization. That's what I'm trying to get at this morning in this committee. I'm trying to find out from the Minister of Transportation and Highways, who is responsible to the Legislature, after all, for the B.C. Railway Group of Companies, whether privatization is being actively considered or whether it has been rejected. She has indicated that it's a scenario and that it's a scenario that I brought to the table. I can assure her that I didn't bring it here and that I didn't commission major investment firms to do studies on the matter. The government did.
Just before we change topics and move to other issues today, I wonder if the minister can tell us in any definitive way whether this privatization option is still being actively considered, whether it's still a scenario or whether it has been rejected by the government.
Hon. J. Pement: With Crown corporations, one looks at a number of options. It is no different with B.C. Rail. The scenario I was pointing out was the member's scenario. If you look in Hansard, you had quite a set of assumptions that you felt were pertinent. They certainly weren't ones that I've discussed.
D. Mitchell: I'm not sure that I can go much further on this. For whatever reason, the minister doesn't want to, can't or won't answer the question. With respect to the privatization of B.C. Rail, it's a subject that's out there. The minister certainly hasn't laid it to rest in this discussion. I think the concerns that were put on record this morning by my colleague the member for North Vancouver-Lonsdale, where the head office of B.C. Rail is located, won't be put to rest by the minister's answers. Neither will the concerns of his constituents be put to rest by the answers provided by the minister. In fact, the concerns, the suspicions, the fears and the apprehensions out there about whether or not this move is going to take place and what potential impact it may or may not have on employment with the B.C. Railway Group of Companies will continue, unfortunately. The minister is unwilling to say anything definitive about these studies that have been commissioned by her colleagues in cabinet. She's indicated that she doesn't have a point of view. I think that's regrettable.
If we had the luxury of a serious forum for the accountability of Crown corporations, where we might be able to spend a couple of days on this topic -- and it's a topic important enough for the government to seriously consider such a move -- I would pursue it. But in the interest of time and efficiency, and with my regret that we don't have such a forum to pursue this in detail and to perhaps question the officials as well as the minister, which I don't propose to do, I'm going to defer to other members to move on now.
But I regret that the minister is unable to say anything definitive on a subject that is obviously being studied and considered by the provincial government. Major studies have been commissioned; it's obviously under some kind of policy consideration. The minister has not said that the government has rejected privatization of B.C. Rail. We are, I understand from what the minister has said, moving toward the payment of property taxation -- or more correctly, a grant in lieu of taxation -- by this Crown corporation, perhaps next year.
But that might be beyond the next election, and whether this government pursues the privatization of B.C. Rail or whether a future government pursues the privatization of this Crown corporation, we may never see a grant in lieu of taxes ever paid to a community. That could be hypothetical. That could be simply a scenario, as the minister says privatization could be. So there are a number of competing scenarios, and none of us are any the wiser this morning as a result of this discussion, unfortunately -- as a result of unanswered questions in this committee. That's too bad. I'll defer to other members.
R. Neufeld: I guess before we go away from the privatization of B.C. Rail, I should put on the record, because I represent the constituency that has the Fort Nelson extension, that I have some real fears in totally privatizing B.C. Rail, for the reason that the Fort Nelson subdivision could possibly be lost in the shuffle. I think it would be a real loss to the whole line. It would be a real loss to Fort Nelson, to the jobs that are created there and the investment that's presently happening. Unless there was some caveat or something to the effect that that portion of the rail line would stay operating regardless -- something similar to what's happened on the Island with the E&N Railway -- I would have some real problems approving any privatization plans.
I want to go on to a few other items, one being grain. Last year the minister and I talked a bit about grain and grain cars. I was reviewing Hansard from last year. The minister stated at one point that BCR did not own any grain cars and at another point that they did own some grain cars. Maybe the minister could first clarify for me how many grain cars we really own or lease.
Hon. J. Pement: Overall, we have a fleet of 10,000 cars. We don't have the specific figures here, but we feel that less than 50 are grain cars. We can get solid numbers for the member if he desires.
R. Neufeld: Yes, if the minister would, I would appreciate that.
[ Page 15012 ]
Secondly, I have been going through the annual report for 1993. Of course, it's not out for 1994. The Crow rate subsidy paid to the BCR was $822,000, according to the report. Can the minister tell me what the amount was this past year, for 1994?
[11:30]
Hon. J. Pement: It was $1,066,000.
R. Neufeld: Obviously, in 1995 that amount is going to be gone and will be replaced with the producers paying the rate. I ask the minister what discussions B.C. Rail is having now with the grain producers, specifically in North and South Peace, and are any discussions going on with grain producer associations in the northeastern part of Alberta?
Hon. J. Pement: Our marketing staff are the ones who have been meeting with the grain producers and there could be some fairly good opportunities for us to use this situation to route some of the grain through the Dawson area.
R. Neufeld: Just a few more questions about this and I will break; I realize we're at the time.
With the changing of the Crow rate, and with the Alberta Wheat Pool and other cooperatives changing -- in fact, moving toward centralizing their elevators in all of South Peace into Alberta -- there is an opportunity to work with grain growers in Grimshaw and Wannem, all that area of northern Alberta, to bring grain specifically to Fort St. John, process it there and move it to Vancouver, the advantage being that it's about 200 miles closer by rail, doing it that way from Fort St. John, than it is going through the Grand Prairie system. In fact, it's also quite a bit closer than Dawson Creek, Dawson Creek having a light line that joins the north-south line. There is a real opportunity there that grain producers in North and South Peace are talking to me about. We could finally capture business from Alberta, instead of what we have seen for so long -- our business going over to Alberta. Maybe we can start getting some of that business back to British Columbia.
I might add that the completion of Beatton Hill next year will certainly encourage producers to truck grain to Fort St. John. This would be a real asset that would help justify the expenditure for the hill. It would certainly increase the carload capability for B.C. Rail out of Fort St. John, as well as Fort St. John's viability. The minister spoke last year about the fact that you would like to increase grain loading capabilities. If it doesn't happen that way, our producers in Peace River North -- not Peace River South so much -- are going to be affected dramatically in what grains they should be growing and what they should be doing with their land. It's very important to the constituency of Peace River North that we look very closely at setting up a rate that is reflective of mileage.
What I mean by that is that we don't just get.... CN hasn't published its rates and neither has B.C Rail, but if we took CN's rate out of Grand Prairie and said we were going to match it, that wouldn't quite work, because the farmers have to go by truck to Fort St. John first. That has to be taken into account in the whole scope of things. I would hope that B.C. Rail would look very favourably at this opportunity for added tonnage, and at the opportunity to service the areas of North and South Peace and northern Alberta. We might be able to get a little business from Alberta for a change. Maybe the minister would like to comment on that briefly.
Hon. J. Pement: I certainly agree with the member's overview with regard to the opportunities that exist. Certainly B.C. Rail is actively pursuing this type of discussion with the associations through marketing, as I had mentioned. It would also be very supportive of acquiring capital -- cars, for example -- to accommodate that type of shipment if we can reach those types of agreements.
R. Neufeld: Obviously it's past our time. I move that we rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 11:37 a.m.
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