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 13, 1995
Afternoon Sitting (Part 1)
Volume 21, Number 2
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The House met at 2:05 p.m.
Hon. C. Gabelmann: I'd like members of the House to join with me in welcoming an old friend and former colleague of mine and of the Speaker's. Rosemary Brown was a member of this Legislature between 1972 and 1986 and is currently -- at least, she was in the last day or two -- chair of the Ontario Human Rights Commission, and has an extensive history in many national and international organizations. I'm sure that all members of the House would be delighted to join with me in welcoming Rosemary Brown here today.
L. Reid: I would ask the House to join me in welcoming today two very, very special guests -- first to British Columbia and second to this chamber. They're visiting from Atlanta, Georgia. I would ask the House to please make welcome Helen and Bill Brickell.
K. Jones: Seated in the gallery today are two businessmen: John Kelly from my riding, and the other visiting us from Hamilton, Ontario, Bill Laidlaw. I hope the House will make them very welcome.
G. Brewin: It's a pleasure today to welcome some members of my family to the gallery. Seated upstairs are Malcolm Campbell and his wife, Elizabeth. They are visiting Victoria from Toronto. Would the House please make them welcome.
F. Gingell: In the gallery today are Peter Guichon and Jack Bates, both members of longtime Delta farm families, whose family farms were expropriated from them by a previous administration in the late 1960s. They are here today to make a presentation to the Minister of Agriculture, and I trust the minister gave them a warm welcome. I ask all members of the House to join me in making them welcome.
F. Jackson: Visiting in the gallery today is a resident of Victoria, Jennifer Dyck. Jennifer told me it's been a number of years since she came to this chamber, so I advised her to visit during question period so that she could see the best and the worst in action. I would ask the best and the worst to make her welcome.
J. Weisgerber: On behalf of the member for West Vancouver-Garibaldi, I'd like to recognize and welcome a constituent of his, Mr. Tim Chizik. In the absence of the member, I have special pleasure in welcoming this constituent, as he is a member of our B.C. Reform Party, and he attended a very successful event in Kamloops last week. I know that if the member were here, he would join with other members in extending a very warm welcome to that particular constituent. To Mr. Chizik, welcome to the gallery.
B. Jones: Beaming down on this afternoon's session is a group from Burnaby North Secondary School, in pursuit of knowledge of history and government. Would the House please welcome an old friend, Jane Turner, and some 50 grade 10 students.
HUMAN RIGHTS AMENDMENT ACT, 1995
Hon. U. Dosanjh presented a message from His Honour the Lieutenant-Governor: a bill intituled Human Rights Amendment Act, 1995.
Hon. U. Dosanjh: Hon. Speaker, I move that the bill be introduced and read a first time now.
The Ministry Responsible for Multiculturalism and Human Rights commissioned a complete review of British Columbia's human rights system in February 1994, led by Prof. Bill Black of the University of British Columbia. Following extensive consultation, Prof. Bill Black published his report on human rights in British Columbia in December 1994.
Today I'm proud to introduce legislation promised in this government's election platform in 1991. This legislation implements Professor Black's structural and procedural recommendations, which were based on his considerable expertise and his consultations with business, labour, advocacy groups and the general public. These amendments are long overdue to bring British Columbia's human rights system in line with the rest of Canada. British Columbia cannot adequately deal with emerging human rights issues under the present system.
The Human Rights Amendment Act, 1995, changes the title of the Human Rights Act to the Human Rights Code. It replaces the current structure of the B.C. Council of Human Rights with a more effective structure that separates the roles of investigation, mediation, education and research from the adjudication of complaints, and it adds a public advisory body. It mandates a program of public education and research to actively address systemic discrimination and persistent patterns of inequality in the province, it revises procedures to reduce delays and the overall time required for the resolution of complaints, and it creates a fairer, more effective system for both parties.
Hon. Speaker, I commend this bill for your consideration and urge its passage. I move the bill be introduced and read a first time now.
Bill 32 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
INTERNATIONAL REGISTRATION PLAN STATUTES AMENDMENT ACT, 1995
Hon. E. Cull presented a message from His Honour the Administrator: a bill intituled International Registration Plan Statutes Amendment Act, 1995.
Hon. E. Cull: Bill 39 proposes amendments to the Commercial Transport Act and the Social Service Tax Act to accommodate British Columbia's membership in the International Registration Plan, the IRP. The IRP is a multijurisdictional licensing agreement that establishes a single, uniform system for administering and collecting licence fees and other recurring fees or taxes from interjurisdictional carriers.
B.C.'s participation in the IRP has a number of benefits. In fact, the B.C. Trucking Association has identified membership
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in this agreement as a top priority, because it will contribute to the reduction of administration and operational costs.
Membership also benefits the province by simplifying administrative processes and by increasing the efficiency of revenue collection under both the licensing program and the social service tax collection program. To accommodate IRP membership, this bill makes a minor amendment to the Commercial Transport Act to exempt trailers licensed extraprovincially from the requirement to obtain a licence for travel in B.C. This parallels the exemption provided to extraprovincial trailers by other IRP jurisdictions.
More substantial amendments are made to the Social Service Tax Act. The program model for the IRP cannot accommodate the collection of onetime fees or taxes. To ensure the province and the trucking industry obtain full benefits from IRP membership, Bill 39 replaces the existing onetime 7 percent tax imposed on carriers with an annual tax payable each year the carrier is licensed for travel in B.C. The annual tax rates have been established so that they are revenue-neutral to the province, and they do not impose an increased tax burden on the trucking industry, which is the reason the B.C. trucking industry supports this bill.
[2:15]
Membership in the IRP benefits both the province and the trucking industry. It contributes to the development of a strong and a sustainable economy by encouraging increased use of our highway systems. It improves the national and international competitive position of the B.C. trucking industry. Hon. Speaker, I move that the bill be introduced and read a first time now.
Bill 39 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Hon. D. Miller tabled the 1993-94 annual report of the Ministry of Skills, Training and Labour.
THREATENED RESUMPTION OF ADAMS LAKE BLOCKADE
G. Campbell: In 1982 the B.C. government struck a deal with the Adams Lake band: a public access road through their property in exchange for some government land. The band has lived up to their side of the deal. But after 13 years the government has still not come through with their part of the bargain, and now there is trouble brewing. While the band's frustration is understandable, as a result of this government's sorry performance at Douglas Lake, the Adams Lake band have now resorted to threats. A bridge has been burned, and in two days the band intends to cut off public access. My question is to the Minister of Aboriginal Affairs: what does the government intend to do to ensure that public access is maintained at Adams Lake?
Hon. J. Cashore: Once again, the Leader of the Opposition has faulty research. The band had agreed on the process that would result in the road right-of-way being transferred to the province. The federal government never acted on that. That was pointed out in the House by the member for Powell River-Sunshine Coast. Among all the things that can be said about him, at least in his leadership, he does recognize the importance of doing good research.
I would just point out that, again, as I have respectfully requested of the Leader of the Opposition on many occasions, the role of a statesman is not to exacerbate the situation but to bring calm and order and to support the appropriate approaches that have been taken. The fact is that a couple of weeks ago we managed to get the blockade taken down. We are working diligently to resolve any outstanding issues through that appropriate process.
The Speaker: Supplemental, hon. member.
G. Campbell: The Minister of Aboriginal Affairs has not answered the question about how we intend to maintain access to Adams Lake, so let me direct this question to the Attorney General. The confusion that was created by the NDP in Adams Lake has obviously led to a whole new set of strategies elsewhere in the province. A bridge over the Adams River has been burned. A blockade is now threatened in two days. Cattle guards are being threatened to be removed, which will prohibit people with private property to get access to their land. When will this government and the Attorney General live up to their obligations and make it clear that there's only one law for all British Columbians -- that illegal acts will not be tolerated and are not the way to any long-term resolution of grievances?
Hon. C. Gabelmann: It matters not from where the civil disobedience comes, there is one law for all British Columbians.
A. Warnke: My question is for the Minister of Aboriginal Affairs. The Adams Lake band has waited 13 years for the Ministry of Transportation in successive governments to live up to their part of the agreement. Now, according to the RCMP, the Adams Lake band has reclaimed the road that runs through its reserve. I want to know why this government has failed to live up to an agreement made by the Ministry of Transportation, denied the Adams Lake band their entitlement and jeopardized private land holders' access.
Hon. J. Cashore: It's very, very interesting that this hon. member would repeat the error his leader just made, and that he would persist in repeating an error. He knows, as has been pointed out by the hon. member for Powell River-Sunshine Coast -- who, unlike the Liberal opposition, does his research -- that it is the federal government that has failed to transfer that land into the province of British Columbia.
The Speaker: Does the member have a further question?
A. Warnke: I would remind the minister that it is the Ministry of Transportation and Highways of successive provincial governments that has failed to deal with this issue, and to deal with the Adams Lake band. And therefore....
Interjections.
A. Warnke: In terms of research, there are so many leaks on that side of the House that you could grow grass on a cue ball -- which, of course, should be of some concern to the Premier.
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My question is: what has the Minister of Aboriginal Affairs done to ensure that private land holders' rights will not be abandoned by the NDP government?
Interjections.
Hon. J. Cashore: I'm sorry, hon. Speaker, but given the noise coming out of the Liberal benches, I couldn't hear the question.
FEDERAL GUN CONTROL LEGISLATION
J. Weisgerber: My question is for the Attorney General. The federal gun control bill is widely rejected by responsible gun owners and by most rural residents in British Columbia. Indeed, the responsible use of firearms is part of the culture and recreational activities of many British Columbians in most parts of this province. Is it the intent of the Attorney General and his government to facilitate the implementation of registration of long guns, or will the Attorney General work cooperatively with the western provinces and the territories to frustrate the implementation of this law within the legal bounds available to the minister?
Interjections.
The Speaker: Order, hon. members. Order, please.
Hon. C. Gabelmann: We have expressed to the federal government over the last number of months our concern about the reach that this legislation extends into law-abiding citizens' lives. That expression of concern has been forwarded to the federal government on a number of occasions. We support those provisions in the legislation which deal effectively with serious crimes and the criminal use of weapons. In respect to the administration of justice, the province is required, under the federal-provincial system, to administer the federal gun control legislation the same way it is required to administer the Criminal Code, and we will do our job within the law.
The Speaker: Supplemental, member.
J. Weisgerber: Most British Columbians, I believe, support the law as it is today with respect to the registration of handguns and restricted weapons. What most British Columbians don't accept and don't believe is that there is a rationale for the enormous increase in costs and bureaucracy in expanding registration. Will the Attorney General facilitate today a debate in the Legislature on this important issue to allow all members of this House to stand and be counted on this important issue? Will the Attorney General call forward resolution 63 standing in the name of my colleague from Prince George-Omineca and allow today for a debate on this issue, given the fact that it will most likely pass today?
Interjections.
The Speaker: Order! Before the Attorney General responds, I would point out to members that when you refer to matters before the House for consideration, they are not proper subjects for question period.
THREAT TO TOURISM OF RENEWED ADAMS LAKE BLOCKADE
M. de Jong: The Minister of Environment is now aware that the Adams Lake band has destroyed a bridge used to watch the popular Adams River sockeye run. My question to the Minister of Environment is: what action has she taken to ensure that that popular viewing bridge, which is located in Roderick Haig-Brown Park, is rebuilt and protected in preparation for the upcoming run, which has serious implications for tourism in the area?
Hon. E. Cull: My staff are reviewing the matter and will be bringing forward the appropriate action.
The Speaker: The member has a different question?
M. de Jong: The run, as the Minister of Tourism understands, is in the Shuswap area and is very important to the tourism trade there. The ineffectiveness on the part of this government in properly guarding against the type of thing that has just happened this week is going to lead to checkpoints and potentially to other destroyed bridges and blockades. Has the Minister of Tourism at least made his colleagues aware of this? What action does he intend to take to ensure that this important aspect of tourism in the Shuswap Lake area is protected?
Interjections.
The Speaker: Order, hon. members.
Hon. B. Barlee: I'm rather looking forward to the question for several reasons. You were talking about destinations for tourism. I just read a magazine in the United States; it's the biggest singles magazine in the United States. You know, we've risen from about thirty-sixth in the world to third in the world. That's not bad. Now, mind you, I quite realize that third in the world is not good enough. We only made $475 million more in tourism last year. This year our very fine tracking system from all 79 people in Tourism indicates that we will have a $600 million increase.
Certainly I am very familiar with that area, including the Adams River, the South Thompson and Scotch Creek.
Interjections.
The Speaker: Order, hon. members. I ask the minister if he would please conclude his remarks.
Hon. B. Barlee: Well, certainly, hon. Speaker, I'll be delighted to do that.
Please bring any other bright, brilliant ideas you have to my ministry. We'll look at everything very analytically.
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FEDERAL GUN CONTROL LEGISLATION
R. Neufeld: My question is to the Attorney General. Rural residents view Alan Rock's gun control bill as a direct assault on them, and as primarily aimed at winning votes for Liberals in urban areas. It's a political ploy to play on urban voters' worst fears about hidden handguns and American-style gun violence, which is simply not valid in British Columbia. Why hasn't the Attorney General done anything to educate urban British Columbians about the tough restrictions and registration rules that already apply to firearms?
Hon. C. Gabelmann: The member knows that this is a federal issue, which has been debated rigorously in the House of Commons and has had the attention of a parliamentary committee that has travelled across the country. Canadians have had a full opportunity to be involved in debate. It's clear that, with the exception of the Conservatives, every party in the House of Commons is actually split on the issue.
The Speaker: The member has a supplemental?
R. Neufeld: A supplemental to the Attorney General. Every province and territory in western Canada is opposed to Bill C-68. Why hasn't British Columbia stood with those other provinces against this onerous bill instead of supporting it? Why haven't we heard a peep from rural government MLAs on this issue or had a special debate on gun control in this Legislature?
Hon. C. Gabelmann: I said in answer to the first question, from the Leader of the Third Party, that we made very clear to the federal government our concern about some of the onerous, bureaucratic and expensive provisions of the bill. But unlike the member, and unlike some other western Attorneys General, we're concerned about crime in this country; there are provisions within the bill that can and will deal effectively with crime -- with imported crime in this country -- and we support those provisions.
[2:30]
AMENDMENTS TO VSE ACT
G. Wilson: My question is for the Minister of Finance. In the debate in this House on the matter of amendments to the VSE Act, the Minister of Finance informed this House on June 5 -- it's in the Blues -- that Mr. Matkin joined her in the announcement, and that Mr. Matkin was in support of 98 percent of what was recommended. We learn now that Mr. Matkin did not in fact support most of those amendments that came forward. As part of the process that came into the drafting of this legislation, the minister informed this House, it was his recommendations that spurred this government to make the recommendations that came forward. Can the minister tell us, on two counts.... Why would she have informed the House that Mr. Matkin supported the amendments to the VSE Act when he clearly did not? Secondly, if it wasn't Mr. Matkin's recommendations that moved them to have these rather futile amendments put into place, what did motivate the minister to make those changes?
Hon. E. Cull: The member will recall that the debate on Bill 45, the VSE Act, was a very broad, free-ranging discussion which also covered the other bill before the House: the amendments to the B.C. Securities Act. Those two acts taken together form the legislative response to the Matkin commission. The majority of the concerns Mr. Matkin raised in his report were addressed when we released our response to it in October of last year. He used the percentage, not I. I'd be glad to share the press clippings with the member, because he'll see what Mr. Matkin said at the time.
With respect to what was before us in the VSE Act, the discussion was very broad-ranging. We were talking about both acts. I will be quite frank with respect to the amendments to the stock exchange: he supported the public governors; he did not make any recommendations on the chair; and the other two matters of the report to the Legislature and the change to their purpose were not discussed by Mr. Matkin.
The Speaker: Hon. members, the bell terminates question period.
Before I recognize the Government House Leader, I would like to table the annual report of the conflict-of-interest commissioner for 1994-95.
Hon. G. Clark: I call Committee of Supply in Section A for the purpose of continuing debate on the Ministry of Energy, Mines and Petroleum Resources. In the House, I call committee stage on Bill 42.
FOREST AMENDMENT ACT, 1995
The House in committee on Bill 42; D. Lovick in the chair.
On section 1.
W. Hurd: This is an important section of Bill 42, the Forest Amendment Act, which extends the time lines for the review of timber supply areas in the province by the chief forester. Some three sessions ago the previous minister was quite adamant and quite strident about the need to have these reviews completed within a five-year time frame, and at the time, obviously felt that there was a realistic notion that that could be completed. The minister has suggested that we now have information from the chief forester that requires the deadline to be extended. I wonder if the minister could take a minute to explain to the committee exactly what information was received by the ministry from the chief forester that would result in this delay in completing the inventory of the timber supply areas in the province.
Hon. A. Petter: I think the member's own comment and own misstatement is deeply revealing, because the member said that the previous minister had set a five-year time frame for timber supply analyses, and indeed, that is the norm under the act. It is expected that these analyses will be done every five years. However, because of the urgent need to get on with the job as quickly as possible, the minister set a much more ambitious time line of only three years for the initial round. While the minister and the Legislature accepted that five years should be the normal time frame in which subsequent calculations and decisions would be made, for the first three years that time period was shortened because of the
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necessity of getting information. As I said during second reading, I think that three-year time frame was ambitious and challenging. It was designed to be so, but as the member himself has acknowledged by his own misstatement, it was a shorter time frame than would be expected under normal circumstances, once an adequate body of information was in place.
In response to the member's question about the chief forester's communication, the chief forester communicated to me some months ago, and to the public through a press release, his view that while there was substantial progress being made on the timber supply review process and the AAC calculations, he did not feel comfortable that he could complete that process within that three-year time frame. He was comfortable that he could do so within an additional year, and he therefore asked for a year's extension.
I can provide a sense of the progress that has been made, which is substantial. The percentage of the terminations complete to date are about 30 percent of all the timber supply analyses. The percentage of timber supply analyses completed for timber supply areas is 95 percent, and for tree farm licences is 53 percent. Because of the need to provide for adequate public consultation -- which was recognized and supported in recent court decisions -- the chief forester has asked for additional time so that the public can be fully involved, input can be received, and he can make the best decisions in as short a time frame as possible. Even with this extension of one year, the overall time frame of four years is one year less than the norm in the future, and I think attests to the considerable talents and capabilities of the chief forester and his staff and the previous chief forester, in having moved this process along as quickly as it has been.
W. Hurd: As I indicated earlier, this is an important section of the bill. Under the act, the chief forester occupies an independent or arm's-length position from the Ministry of Forests. Three years ago the government saw sufficient need to require that the chief forester complete these timber supply reviews within the three-year time frame the minister has mentioned, and we are now dealing with an amendment to the Forest Act -- not an insignificant amendment -- which extends the time frame. I think that the types of communications that go on between the chief forester and the ministry on this important issue are really critical to the overall achievement of a sound forest policy in British Columbia. I wonder whether this is the type of thing under section 1 that the minister predicts we're going to see in the future; whether or not the chief forester will be required to come before, or make his submission to, the minister with respect to the time frames on these issues; whether or not he will be communicating with the minister first on the time frames; or whether he'll be dealing with the public through a press release.
I wonder if he could just clarify what the specific requirement is under section 1 for the chief forester when he determines, for example, that the three-year time frame was not realistic and there needed to be an extension. Does the act suggest the chief forester should take that information to the public first? Should he report it to the ministry first, which then bears the responsibility to take it to the public? I wonder if the minister can just elaborate on the reporting relationship here, because, clearly, whenever we deal with sections of the Forest Act, which cover the relationship between the chief forester and the ministry, it's important for us to elaborate a little bit on who takes orders from whom or who reports to whom first. Does the chief forester under this section now have an ability to go to the public first with respect to any suggested changes in the Forest Act that reflect his mandate to set annual allowable harvest in the province?
Hon. A. Petter: The chief forester's role with respect to the establishment of the annual allowable cut and the conduct of the timber supply review is one that has a degree of independence, as the member has alluded to. That certainly has been respected by this government, unlike previous governments, and the way in which the chief forester therefore chooses to communicate his concerns is, I would suggest, his choice. However, given that this legislation is contained within the Forest Act and government is responsible for bringing forward amendments, I think it was logical that the chief forester communicated his concerns initially to me and then did so to the public. Certainly I wouldn't second-guess him in that choice.
W. Hurd: One brief question, then, with respect to section 1(b), which talks about tree farm licence areas. During his initial remarks, I believe the minister made reference to 53 percent of the tree farm licence inventories being completed. I wonder if he could just confirm whether or not that is indeed the number that have been completed. If so, why is that behind schedule in terms of the overall work on inventory? Is there a difficulty here with respect to the flow of information coming from tree farm licence holders? I wonder if he could just elaborate on his figure of 53 percent, which he alluded to earlier in the debate.
Hon. A. Petter: I want to be careful in answering this, because the member's question sort of contained a non sequitur. The procedure for timber supply analyses with respect to tree farm licences is one in which the chief forester, as a matter of practice, tends to proceed in conjunction with the management working plan process. The figure I gave was 53 percent, which is the number for which analyses have been accepted. But remember this is a different procedure, one that is instigated by the licence holders who have the information, so it is slightly different in the way it evolves.
The reason I said there's a slight non sequitur in the member's question, as I detected it, is that section 1(b) deals with a different issue. It deals with the issue of the right of the chief forester to not have to calculate an AAC under circumstances where a tree farm licence holder has not provided adequate information for him to do so. We made some changes last year in the act, the member may recall, to give the chief forester some remedies where that situation applied. But we did not at the same time relieve the chief forester of the obligation of calculating a cut. Yet, clearly, if he doesn't have adequate information and if he engages those remedies, he is not in a good position to determine a cut. This provision helps to clarify that position and relieves him of that responsibility until the information is provided.
[2:45]
W. Hurd: Just following up on the minister's comments, clearly that implies that there's a problem with respect to the flow of information. Otherwise, one would assume there would be no reason to bring forth this amendment to the Forest Act, which -- as the minister has correctly stated --
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relieves the chief forester of the statutory requirement to set an AAC level in the absence of the information that he may need. That seems to me to suggest that there might be a difficulty here -- that the flow of information may not be sufficient for the chief forester to make that determination.
So I'm just seeking clarification here. Perhaps the minister can just briefly explain to the committee the overall rationalization for this change. It appears to us on this side of the House to be more than a housekeeping amendment to the bill. It suggests that there may be a problem that the government feels needs to be rectified in this area. I wonder if he'd just clarify that.
Hon. A. Petter: The problem to which the member alludes is one that was fully debated last year. It dates back to some of the concerns on Vancouver Island with respect to tree farm licence 44 and some of the difficulties that were encountered by the Ministry of Forests in securing what the chief forester of that day determined was adequate information. Last year we debated this very issue and, as a result of that debate, made amendments that gave to the chief forester additional powers to seek information and to take action to reduce annual allowable cuts on an interim basis, where that information was not forthcoming.
What we didn't do was relieve the chief forester of the obligation to set an annual allowable cut. Yet it's an obvious corollary to the notion that if the chief forester doesn't have adequate information, he cannot be required to determine an annual allowable cut. So, far from this being something new and startling, it is the completion of the process put in place in last year's amendments to give to the chief forester the adequate levers he requires to secure the information and the recognition that he can't make determinations until he does secure that information.
W. Hurd: Then, I have just one brief question with respect to the appeal process of an AAC determination. Clearly the intent of the past change to the act, and I suppose this one, is the concern that was expressed by the ministry with respect to TFL 44 -- that the licensee possessed information with respect to the AAC that the government didn't have. I wonder whether there's an anticipation here that all information germane to an appeal by the licensee would now have to be in the possession of the ministry as well. Or would there be a possibility for the company or the licensee to make an appeal of an AAC determination with additional new information? Are we attempting here under section 1(b) to level the playing field, to ensure that the same level of information is possessed by all parties?
G. Farrell-Collins: I'm just asking leave to do an introduction, hon. Chair.
Leave granted.
G. Farrell-Collins: Thank you to the Minister of Forests; I see he is busy, anyway.
I want to ask the House to welcome some students who are in the House today. There are 29 grade 7 students from County Line Elementary in Langley. I'd just like to ask the House to make them welcome. I advise them that, contrary to the document that came out of the protocol people, I'm a Liberal MLA and not an NDP one.
The Chair: I'd like to thank the member for that statement about truth in advertising.
Hon. A. Petter: In respect of tree farm licence holders, the requirements regarding provision of information are the requirements that were put in last year. Those now provide to the chief forester adequate opportunity to seek the information that is required to make his determinations on AAC. The only appeal from the determination that he would ultimately make on AAC is by means of judicial review, and in that case the information would pertain to the information that was relevant to the date at which that determination was made, not to subsequent information. What I would say, however, is that should a tree farm licence holder have new information which would radically alter the chief forester's conclusion, that tree farm licence holder could, even within the five-year time frame, come forward and request a recalculation and redetermination of the timber supply and the AAC that flows from it. The discretion would then be with the chief forester whether or not to facilitate that redetermination within that five-year time frame.
Sections 1 and 2 approved.
On section 3.
W. Hurd: I understand that there's an amendment standing in the name of the Minister of Forests, hon. Chair.
Hon. A. Petter: Hon. Chair, I move the amendment to section 3 that will shortly be in the possession of the Clerk, if it isn't already. It says:
[SECTION 3, by deleting "'under Part 7;'." and substituting " 'under Part 7; and'.".]
On the amendment.
Hon. A. Petter: Hon. Chair, this amendment is of a purely technical nature in response to some input received from those in industry, who noted that we had omitted a word that should have been retained, and that's the word "and." That has been reinserted through this amendment, and it's of a purely technical nature.
Amendment approved.
Section 3 as amended approved.
Section 4 approved.
On section 5.
W. Hurd: This is a matter that was mentioned briefly in second reading, but I think it invites a more detailed discussion from the minister. As I understand this particular change, it provides more flexibility for the holder of a woodlot licence to deal with boundary changes or reductions in harvest levels. Is that the thrust or intent of this section we're dealing with here? I just wonder if the minister could briefly clarify that.
Hon. A. Petter: In 1993, amendments to the Forest Act were adopted which allowed increases in the size of woodlot licences to give those licence holders the opportunity to make
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their operations more viable. Licensees were supposed to take advantage of these changes when their woodlot licences came up for replacement -- which is once every five years, as the member will know. For administrative reasons, those provisions of Bill 30 were not brought into force until October 1994. There were some licences that came up for replacement in the intervening period, and those licence holders felt somewhat aggrieved, I think, because the opportunity they would have been afforded had the bill been brought into force was not available to them. This amendment, then, corrects that anomaly and gives those particular woodlot licence holders the opportunity to take advantage of those changes, as had originally been intended through the legislative amendment that was made in 1993.
Sections 5 to 7 inclusive approved.
On section 8.
W. Hurd: Section 8, I think, is an important section of this particular amendment act as well, changing, as it does, the whole notion of royalty on forest licences. I wonder if, generally, the minister can tell us whether his ministry has received any representation with respect to potential expropriation action with respect to converting royalties on forest licences that have been converted into tree farm licence management units, and whether or not there is any concern here about this being, in fact, an expropriation and that there might be some legal remedies or impact from the decision to convert forest licences into what we know is a stumpage situation, which is the intention of this particular section of the bill. I understand that, from a historical standpoint, when tree farm licences were first set up in the province in the early to mid-1950s, there was an agreement in which the old forest licences were rolled into management units, even though they stayed under the old royalty concept as opposed to stumpage, which applied to the rest of the cut on the TFL. I wonder whether the ministry investigated the possibilities or the concerns or the potential liabilities of any litigation dealing with expropriation of this type of forest licence.
Hon. A. Petter: In response to the member, I and staff have not received any explicit representations regarding the issue of expropriation; but the general suggestion that some licence holders may consider legal action has certainly been raised by some licence holders. These issues were well canvassed in Dr. Scarfe's report. This is not an expropriation, and the advice received by government from legal counsel certainly confirms that view. Government has always reserved the right to set the price for timber harvested from timber licences, and that view goes back as far as 1912. In fact, I can quote to the member from Premier McBride, who stated in 1912:
"Under the special licence plan, parliament retains the power to increase both rental and royalty charges, so that as the timber values grow, so does the interest in the timber retained by the province increase. The people are guaranteed a fair share of the rise in values -- the unearned increment."
Similar sentiments have been expressed in the past. From a policy point of view, these points were well covered in Dr. Scarfe's report. These kinds of representations were certainly considered by Dr. Scarfe, and from a legal point of view, we feel very confident that the changes being made are consistent with the right of the Crown to ensure that the public, through government, receives an adequate return from those holders of timber licences. W. Hurd: I want to inquire whether the ministry has, as a matter of due diligence, gone back and looked at some of the early agreements by which forest licences were rolled into TFLs in the province, to examine what types of agreements they were and what was stipulated with respect to the rights of the Crown and the rights of the licence holder. I would settle for an assurance by the minister that that kind of research and analysis has been done, and that the ministry is totally satisfied that the licensees of the day were not agreeing to this transaction on the basis of sacrificing any abilities they would have in the future not to have the royalties on those old licences converted to stumpage, as the minister has alluded to. If there is any possibility of legal ramifications from this, then I would hope that those agreements would have been examined. I would settle for an assurance from the minister that that has been done.
Hon. A. Petter: Both Dr. Scarfe and the ministry have extensively reviewed the history on this issue. It's our view that the right to adjust royalty rates has always been a clear understanding of those who have held timber licences, and that research has certainly been at the base of all the actions we've taken.
Section 8 approved.
On section 9.
W. Hurd: I have a brief question with respect to section 9. It's more curiosity than anything else. It relates to subsection 9(c), which makes reference to stumpage not being payable on timber cut on land granted by Canada by letters patent and situated within the railway belt or Peace River block. I wonder if the minister could explain exactly what type of anomaly that is, and where we are dealing with that issue in the province.
Hon. A. Petter: This issue concerns a very small portion of private lands in the province which has been administratively costly to deal with, and which I think has taken a number of landowners by surprise. It deals in particular with Dominion patent lands. That's a term that identifies lands that were given by the province to Canada as part of the arrangement to build the national railroad. Canada sold some of the land, and the rest was returned to the province. The deeds to the lands that were sold included a provision that the owner must pay a royalty when the timber is harvested. Those provisions remain in the deeds today.
Today the timber harvested from those patent lands is negligible -- probably 10,000 cubic metres per year. Charging stumpage and royalty on those small harvests from private land is administratively costly, and it has caused some real problems for owners, who, as I say, may not even be aware, in many cases, that those provisions exist. Indeed, I recall, during my term in office as Minister of Forests, having had a representation from a landowner who didn't know.
[3:00]
In the course of his review, Dr. Scarfe felt that to continue with this provision was administratively unjustifiable and caused an unnecessary burden on those few landowners who
[ Page 15408 ]
were impacted. He recommended, therefore, that there be no charge on Dominion patent lands. It has an insignificant consequence to revenues, but it will remove an administrative burden from the Crown and a burden from landowners who may not even be aware that this constraint exists. Sections 9 to 11 inclusive approved.
On section 12.
W. Hurd: I wonder if the minister can just take a minute with respect to section 12 to elaborate for the committee the nature of the additional authority that's being conferred to the regional manager with respect to what appears to be setting a single rate of stumpage for some types of timber harvested in the province. I'd just welcome, under section 12, some sort of explanation from the minister with respect to the rationale for this change in the Forest Act.
Hon. A. Petter: All this section does, I'm informed by staff, is delete a reference to the word "royalty." It's purely consequential. We're removing references to royalties, because royalties are now being supplanted by stumpage.
W. Hurd: Then the reference in the act itself, section 86, to where more than one stumpage rate applies to timber.... Is that just the difference between stumpage and royalties? Is that the definition that we're dealing with there? I'm just curious as to the wording of section 12, which, under the bill, repeals section 86 of the Forest Act and substitutes a rather detailed explanation of the duties of the regional manager. That's the explanation I was looking for: the authority that the district manager appears to be having conferred upon him or her, based on this new section of the Forest Act.
Hon. A. Petter: When we have converted, through this legislation, royalty rates to stumpage rates, the new stumpage rate that's applying to timber licences will gradually increase to come into line with current stumpage rates. In the meantime there will be some differential in stumpage rates between those areas that are timber licence areas and those that are held in some other form of tenure, and this provision allows for some averaging to take place as a result of that. That averaging has taken place in the past between royalties and stumpage. Now it will take place between stumpage and stumpage, because the royalty is being replaced by a graduated stumpage rate that will increase over time.
Sections 12 to 15 inclusive approved.
Hon. A. Petter: I move an amendment that is in the possession of the Clerk.
[SECTION 15.1, by adding the following section immediately before section 16:
15.1 Section 257 (c) is repealed.]
On section 15.1.
W. Hurd: Since we are struggling with these amendments which have been introduced today, I wonder if the minister could advise the committee about section 257(c) being repealed. What type of rationale would the minister offer for the need to introduce this amendment to the Forest Act?
Hon. A. Petter: I'm told that this is part of a shakedown between this legislation and the Forest Practices Code. The amendment to section 3 of Bill 42 now takes care of the same issue that was provided for in the provision that is now being deleted through the addition of this section. So section 257(c) is no longer required, because that issue is now covered within section 3 of this act.
Section 15.1 approved.
Sections 16 and 17 approved.
On section 18.
Hon. A. Petter: Again, I move the amendment to section 18 that is in the possession of the Clerk.
[SECTION 18, in the proposed section 18 (1), by adding "Before April 1, 1996," before "A Rate,".]
Amendment approved.
On section 18 as amended.
W. Hurd: Just a brief question with respect to the transitional provisions in the act. I'm just wondering about the retroactivity clause under subsection (1). I wonder if the minister could just explain the transitional issue identified here with respect to the phase-in of the changeover from royalties to stumpage, which was identified under the Scarfe report and which the minister talked about earlier in the debate on second reading. Under subsection (1) are we dealing with some sort of retroactivity clause with respect to the conversion of royalties to stumpage? Or are we just dealing with this particular forest licence that has now been essentially rescinded under the Forest Act?
Hon. A. Petter: Yes, through regulation, changes were implemented effective April 1, 1995. What this legislation really does is confirm those changes and ensure that there is legislative foundation for them. But no one is prejudiced by this decision. The rate that applies here retroactive to April 1, 1995, is the same rate that was provided through regulation. Out of an abundance of caution, what we have done is ensure that the legal foundation here for that transition is carried back to the date on which the change was made, so there can be no question as to the legal foundation in the interim period.
Section 18 as amended approved.
On section 19.
W. Hurd: This is another important section of Bill 42, which relates to the exchange of timber in the Strathcona timber supply area, and which will, I suppose, enable the towns of Zeballos, Tahsis and Gold River to survive and, hopefully, prosper. I have a series of questions with respect to this section, but I was particularly interested in the reasons that there would necessarily be a change required in the Forest Act to deal with this issue. Is it because we are taking a portion of the timber out of one licence -- is that the reason or rationale we're dealing with here that requires a change in the act? Are we introducing a new type of timber reallocation with this section?
[ Page 15409 ]
These are important issues from a general standpoint that I would like to get some comment on from the minister. Clearly the reallocation of timber within the Strathcona timber supply area could not be achieved without this amendment to the Forest Act, and I wonder if the minster could just take a minute to explain why that should be so.
Hon. A. Petter: The reason that there is a legislative provision here to deal with this situation is to ensure that the licence holder in the Strathcona timber supply area could essentially relocate their cut into another administrative unit -- namely, within tree farm licence No. 6. There is no legislative provision that allows one to add to a tree farm licence while reducing from a timber supply area. Yet that was clearly a transfer that was very important to ensure that the communities within the Strathcona timber supply area were assured that there would be adequate timber within those areas to meet their needs. It was also a solution that was agreeable to the tree farm licence holders. Because there was no legislative provision that allowed that, we have to ensure that there is a legislative foundation for a solution that I think is supported by all interests in northern Vancouver Island. That is why this provision is here.
W. Hurd: Since we are talking about three communities and the many hundreds of British Columbians, I guess, or even thousands who live in them, I wonder if the minister could describe exactly what will be achieved under this section in terms of enhancing community stability in these three communities. The bill makes reference to scenario 2 contained in the report of the chair of the protected areas boundary advisory team, which the minister will know was one that caused considerable concern and anxiety in the communities about the loss of harvest and the impacts of that reduced harvest on the pulp mill at Gold River, the sawmill operations at Tahsis and the logging operations at Zeballos. I wonder if the minister could advise the committee what has been accomplished here in terms of achieving community stability and ensuring that these manufacturing facilities continue to operate.
Hon. A. Petter: I could go into a long and tortured history of all this, but I'll try to refrain from doing so. The fact is that the timber supply situation at the Gold River pulp mill, which is owned by Avenor, and the sawmills in Tahsis, which are owned by Pacific Forest Products.... The timber supply situation is a fairly positive one. Indeed, there's a very good relationship between the amount of timber that's held and the capacity of those processing facilities, to the point that Pacific Forest Products and Avenor are probably among the more secure timber and pulp operations in the province.
Having said that, some of the material which was made public and which the opposition chose to try to build upon and create public hysteria around raised some serious concern within those communities about their future security. In addition, the member will be aware that there were two reports on Vancouver Island -- or one report with two options. One entailed a larger degree of protected area within the Strathcona, which went beyond the original contemplation of the Vancouver Island land use plan, but which overall would have freed up more timber for the Island as a whole. While it would have freed up more timber overall, it had the consequence of causing a reduction in timber available to the Strathcona. There was a perception of unfairness within the Strathcona that it should take this additional reduction of timber, albeit the overall result might be better for everyone else on Vancouver Island.
What has been achieved here is that by facilitating a transfer of timber-harvesting opportunities for Doman's Western Forest Products, we are able to free up about 115,000 cubic metres of timber within the Strathcona timber supply area. That more than makes up for the difference between the two options that were being considered and leaves those in the Strathcona in essentially the same or a better position than they would have been under the other option. It also provides an opportunity to create a couple of community tenures within the Strathcona to respond to some of the very legitimate concerns of those in the area that they have some direct access to timber at the community level for management purposes. At the same time, it enables Doman -- or Western -- to relocate and achieve a smaller volume of timber in an area that's more administratively convenient to it within its existing TFL 6 -- an area that the Ministry of Forests has not been able to develop because it hasn't been proximate to other operations.
Therefore this ends up being a win-win situation in which Doman ends up with less timber but timber that is more valuable to it in its proximity and location, and the Strathcona ends up with more timber available, to more than offset the difference between the two options which had caused some controversy and contention and -- with the assistance of the opposition -- initially some hysteria within those areas.
[3:15]
W. Hurd: I don't know if this is the place to get into the discussion or not, but I will throw it out there. I wonder whether the minister is assuming that any other of these types of negotiations will be necessary with respect to the Vancouver Island land use plan, and whether they will require additional amendments to the Forest Act. Or is the situation in the North Island an anomaly that existed because of the initial review and the initial report being presented?
It seems a shame that this issue could not have been identified early on in the process somehow and the communities and the people in the North Island made aware of the considerable challenges that existed with respect to implementation of the Vancouver Island land use plan. Had the entire issue been the subject of public discussion early on, would that have been a preferable methodology to what we've had here, with the controversy the minister alluded to earlier, the need to amend the Forest Act and bring the licensees on board? I wonder if the minister could tell us whether he agrees that that might have been done in a more public and more open way during the course of the entire debate about the Vancouver Island land use plan?
Hon. A. Petter: The goal of the Vancouver Island land use plan was to produce a stable plan that would not only maximize the environmental values on Vancouver Island but do so in a way that minimized the impacts on timber production. I think the plan, notwithstanding the opposition's ongoing opposition to it and renewed commitments to reopen issues under it, has been very successful in that regard.
The problem here arose because, in implementing that plan, it became clear that the preferred option, when overlaid
[ Page 15410 ]
on administrative units, produced an impact in one particular administrative unit that was beyond the impact that those in that administrative unit had been led to believe would occur. In all other administrative units, the impact was either neutral or positive. But in this one administrative unit, the Strathcona supply area, it was an impact that was negative in terms of timber supply. In answer to the member's question, I don't foresee the need to deal similarly with other areas, because the whole purpose of the preferred option was to increase timber supply while better protecting certain crucial areas, and the only area that was significantly negatively affected was the Strathcona. In terms of the member's crocodile tears about public processes, had the member not seized upon a leaked document from a communications memo, which did not represent the real situation with respect to the Strathcona, these issues were in the process of being discussed and worked out through a consultation process with licence holders and with the communities and their representatives, and would have found their way to a solution. As it was, that solution was made much more difficult as the member and his party sought to make political hay off the fears and livelihoods and futures of those in the Strathcona.
I'm happy to report that notwithstanding his and his leader's interventions and attempts to milk those fears, we stayed the course and saw this through, and, as is so often the case, while the member and his leader were happy to visit the area when there were no solutions on the table, they were marked by their absence when I was happily able to visit those three communities with the solution that is now found in this bill. I think the member might want to consider just how publicly he now screams or complains about this bill in light of his own conduct through the course of this rather difficult issue -- an issue which needn't have been difficult but was made difficult because of his determination to seek political gain off the backs of those in the Strathcona timber supply area.
W. Hurd: I thank the minister for that detailed explanation and remind him that the memo went to the media first, as many leaked memos from the government do. They arrive in the opposition benches via members of the fourth estate. It seems obvious that somebody out there is desperate to get the information out by whatever means might be available to them.
With respect to this particular issue, I think the reason I was bringing it forward as a measure of what can go wrong.... Clearly, whenever a government is experiencing the leaks in the ships of state that this one is, you would think that internal memos of that nature, which do have the potential to create the kind of uncertainty that the minister has described, should, in fact, be dealt with in an open and public way before they do get leaked to the media and become a focal point of public debate.
I know that the people who live in those communities don't necessarily accept the version of events that the minister has offered to the House today. They're utterly convinced that, had that leak not occurred, scenario 2 may have been proceeded with, probably after the next election when it wouldn't have been an election issue on the North Island. Certainly that was the concern expressed to the official opposition. People were actually quite grateful that, in fact, the information had been made public, albeit in a way that was not entirely without impact on the community and those people involved.
Again with respect to section 19, I just had one other brief question with respect to subsection (2) particularly. It reduces the term of the licence, makes the licence non-replaceable and, I guess, reduces the annual allowable harvest specified by the licence. I assume we're addressing the licence that will be held by Doman Industries, because reference is made to the consent of the holders of the licences being a requirement. With respect to subsection (2), I wonder if the minister could tell us exactly what licence we're dealing with. Is it the one held by Doman, the one held by Pacific, or is it in fact referencing both?
Hon. A. Petter: The forest licence No. A19237 is the licence held by Doman in the Strathcona. That is the licence that is being phased out, and then a substitute amount of volume, albeit a lesser amount, is being provided to Western Forest Products -- which obviously is a company related to Doman -- within TFL 6.
Section 19 approved.
On section 20.
Hon. A. Petter: I move the amendment to section 20 that is in the possession of the Clerk.
[SECTION 20(2), by deleting "Sections 15 to 17" and substituting "Sections 15, 15.1, 16 and 17".]
On the amendment.
W. Hurd: Could I just get a brief explanation of this amendment from the minister? It does enter committee stage at a late date. I wonder if we could get an explanation, under section 20(2), for the deletions of sections 15 to 17 and the substitutions. Is this just a consequential amendment to those that have already preceded? Is that what we're dealing with here?
Hon. A. Petter: All this really does is clarify for the benefit of the Clerks and the House that when we said -- as we did in sections 15 to 17 -- that we intended to include the new section 15.1.... It substitutes the terms of sections 15 to 17 with the more specific terminology of sections 15, 15.1, 16 and 17, just in case there is any ambiguity that somehow we had not intended to include the new section which was added through earlier amendment.
Amendment approved.
Section 20 as amended approved.
Title approved.
Hon. A. Petter: Hon. Chair, I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; D. Lovick in the chair.
Bill 42, Forest Amendment Act, 1995, reported complete with amendments.
[ Page 15411 ]
Deputy Speaker: When shall the bill be considered as reported?
Hon. A. Petter: With leave now, hon. Speaker.
Deputy Speaker: The question, then, is third reading. All those in favour, please say aye.
L. Fox: For the record, hon. Speaker, the minister asked "with leave now," but leave was not asked by the Chair.
Deputy Speaker: I'm sorry. I will repeat the process in that case; I assumed that I had done so. My apologies.
Shall leave be granted, then, on third reading?
Leave granted.
Bill 42, Forest Amendment Act, 1995, read a third time and passed.
Deputy Speaker: The member will have to excuse me; I haven't been in this chair for at least three or four days.
Hon. J. MacPhail: I call Committee of the Whole to debate Bill 27.
PHARMACISTS, PHARMACY OPERATIONS AND DRUG SCHEDULING AMENDMENT ACT, 1995
The House in committee on Bill 27; A. Hagen in the chair.
Section 1 approved.
On section 2.
L. Reid: I just wish to ask a number of general questions in terms of framing this debate. Certainly the establishment of PharmaNet, section 2's new 36.1(1)(a), "the practice of pharmacy...." It seems to me we need to be very clear about whose role it is to regulate the practice of pharmacy in the province of British Columbia. This minister and I have often had discussions in terms of the role of the College of Pharmacists and the role of the B.C. Pharmacy Association. I'm wondering if either of those roles will be diminished under this new direction, this new PharmaNet program. Could the minister kindly respond?
Hon. P. Ramsey: May I suggest to the member opposite that we proceed through this by the subsections -- 36.1, 36.2 and 36.3 -- to facilitate discussion?
Section 36.1(1)(a), to facilitate the practice of pharmacy.... One of the important parts of the PharmaNet program is that it operates under the supervision of the PharmaNet committee. This is a committee that is appointed by the council of the College of Pharmacists of British Columbia. The pharmacists of the province, through their college, have said they believe that access to the data, the appropriate data, through this network will enhance both the practice of pharmacy for individual pharmacists -- because they'll have better information available to them at the point of dispensing -- and the practice of pharmacy generally in the province because of the data available for analysis through this database.
L. Reid: Speaking to section 36.1(1)(e), "a review, by the minister or a person designated by the minister, of the use and prescription of drugs and devices," I want very strongly to make the case for some kind of consideration being given to the funding of devices. The minister will know -- and he and I have covered this ground many times in debate -- that these are the individuals currently trying to access service from the Medical Services Commission and from the Medical Services Plan who simply fall through the cracks. They are not able to secure funding for what is termed medically necessary. If indeed this PharmaNet program allows those individuals to be isolated in the system, so we can discover how many individuals require a device in terms of what is medically required, it certainly makes sense that once we've compiled that information we would actually do something with it and, hopefully, meet the needs of British Columbians around this delivery system. If the minister could kindly comment.
[3:30]
Hon. P. Ramsey: Clearly, having the data that PharmaNet provides available to the ministry will enable better analysis both of use of current benefits under Pharmacare and of conditions that people who are receiving drugs more broadly in the province have. To that extent I agree with the member that the network should facilitate the investigation by the ministry of the use of devices and the analysis of the need for devices and decision-making about which devices should be funded.
As far as the second question is concerned, about the actual expansion of devices that are funded, I'd suggest that that's a question more appropriate for estimates.
L. Reid: I would simply remind the minister that he did not answer that question in estimates, either, but I thank him for that reiteration.
In terms of section 36.1(1)(h), "scientific or drug utilization research conducted at a university or hospital or as approved by the college," I'm simply standing in support of that particular section, because I do not wish to see any dilution of the responsibility of colleges and universities to continue to advance the cause of research around drug therapies. Certainly the minister heard many times during the estimates debate about what I perceive to be a very important need in British Columbia: a pharmaco-economics institute, a risk institute, some expansion -- some clearer mandate -- for the therapeutics initiative in this province and, hopefully, an ability to see those three entities merge their resources and provide some kind of outcome-based measurement. I think that's fundamentally important to this particular section. If the minister would kindly confirm his support for research, I would be delighted.
Hon. P. Ramsey: I confirm this government's and this minister's interest in research that can improve effectiveness in the use of therapeutic drugs.
L. Reid: Section 36.1(2) states: "Subject to section 36.2(1), the minister is responsible for managing PharmaNet." That is an issue that I brought forward many times to this minister in terms of the public's apprehension around their personal information being contained within a government database. The minister and I have had this discussion around whether
[ Page 15412 ]
or not it would have been more appropriate to see this information managed and handled by the B.C. Pharmacy Association or by the College of Pharmacists directly. People tend to have a greater regard, if you will, for professional pharmacists handling their information, and from what is happening in the public domain, they have less regard for politicians handling their personal information. Whether or not that's valid is irrelevant; it's simply a reality today.
This minister is aware that I, as critic, have often questioned the necessity for this particular aspect of this program to be managed directly by the minister. It concerns me to see this section included in this bill, because I do believe that we were moving to some kind of joint management practice around this particular service.
Not to take away from the previous points, I do believe that there are some avenues that we can pursue in terms of cost savings around PharmaNet. Indeed, there are aspects of that program that will be incredibly useful. In terms of who has the final say as to how that program is run, I have some difficulties with this section. I would simply ask the minister to respond.
Hon. P. Ramsey: The section that we're referring to -- "Subject to section 36.2(1), the minister is responsible for managing PharmaNet" -- speaks to the technical management of the system. This is a function that must reside someplace, since this system is replacing a variety of computer databases run by individual pharmacies and chains of pharmacies. We need to make very sure that there's a comprehensive and uniform management of this system. That duty lies with the minister and the ministry. But note, and note very clearly, that this is subject to 36.2, which specifies very clearly "a committee" that has broad responsibilities as far as who serves on the PharmaNet committee and what their duties are.
L. Fox: I have a couple of questions. It was my understanding, in talking to the Pharmacy Association, that indeed there was an approach made to the ministry for the association to bring forth a program similar to PharmaNet that would have been funded by the private sector. The ministry chose to go its own route, with subsequently this section of the bill. Can the minister tell me what kind of consideration was given to the offer from the pharmacists? My understanding is that there could have been up to a $20 million savings to the provincial government.
[M. Farnworth in the chair.]
Hon. P. Ramsey: There was indeed such a proposal brought forward, as I understand it. It was a proposal brought forward to the previous government. The member was a member of the party that formed that government at the time.
We believe that publicly running PharmaNet is appropriate, I would say, for the list of reasons specified in section 36.1(1). These go far beyond the interests of a private entrepreneur in database provision to retailers and in facilitation of payment to pharmacists. We see a variety of uses for the information, and we believe that the proposal is.... The subject agreement with the College of Pharmacists and the Pharmacy Association implemented by this legislation is the appropriate way to go in managing very sensitive information about individuals' medication and prescription records.
L. Fox: I'm very surprised by the minister's answer. I guess the minister's answer was one that.... Even though there was going to be a cost savings to the province of somewhere in the vicinity of $20 million, the fact that some poor, small business person might still make a profit was something that the minister couldn't support. That was the number one item that he brought forward.
Number two, it seems to me that any network accessed by the public and operated by independent business people is going to be susceptible to all the concerns, whether that equipment is owned by the government or by that particular group of pharmacists. It would be very easy to establish guidelines and a structure through which they could have operated, at a cost savings to the government of something like $20 million a year. I have grave concerns that the ideology of this government is preventing good, commonsense decisions on the expenditure of tax dollars. That's very unfortunate for British Columbia.
Hon. P. Ramsey: I have been asking staff whether any such proposal in such concrete terms as this member indicates was brought forward to the ministry during our time in government, and we have no information that would suggest that it was -- surely nothing with the sort of detailed specifications of cost that this member adduces with savings of $20 million. That's simply not on -- nothing that, I would suggest, is really an appropriate subject matter for debate on the PharmaNet scheme that is proposed rather than the PharmaNet scheme that the Pharmacy Association might wish to see.
The other thing I would note is that the proposal for PharmaNet -- which is being test-piloted right now, and which will be implemented in the province this fall -- has the cooperation and endorsement of two very important bodies: first, the Pharmacy Association, which represents the retailers that do the dispensing and manage the system at the counter; and second, the College of Pharmacists, which has the broad protection of the public in its interests. This is an approach which met both the professional needs of accountability to the public protection of the College of Pharmacists of B.C. and the needs of the retailers. In addition, we wanted to make sure that the network we are installing meets the needs of the broad public for protection of confidentiality and for efficiency of operation of the Pharmacare program, which provides assistance in the purchase of therapeutic drugs and protects British Columbians from catastrophic drug costs.
I see no good purpose to be served by turning the pyramid upside down and making the interests of the Pharmacy Association of the province the primary concern and all others the subsidiary concerns. The PharmaNet system has been drafted with the cooperation of pharmacists, their professional association and their retail association, and we believe that that partnership will work well for the people of British Columbia.
L. Fox: Perhaps it's because this minister has only been the minister for approximately a year and a half, but the fact is that the offer was made, and was thrown out by the previous minister of this administration. In fact, it was discouraged. Who knows? Had this government been a little more business-minded and more concerned about the tax dollar expenditures, perhaps they would have let it develop to the point where we could have been discussing that initiative today instead of this government initiative, which is going to cost the taxpayers at least $20 million more than the other alternative. It still could have met the same goals; it still could
[ Page 15413 ]
have had the support of all the agencies; and it would have been a better partnership than what is going to be created under this legislation.
Hon. P. Ramsey: A fascinating debate about the bill that is not before us, rather than the bill that is before us. Any proposal that staff has seen did not meet the needs for claims adjudication -- among other things -- for the Pharmacare system in this province. There was a variety of proposals for feasibility studies. Let me state again that I'm unaware of any proposal that would specify, in concrete terms, any savings of the magnitude that this member suggests and meet the objectives of protection of privacy, research into effectiveness of drug therapy, review of claims, integration with the pharmacy network, protection of the public and other objectives, which PharmaNet will.
Section 2, section 36.1 approved.
On section 2, section 36.2.
L. Reid: I have a couple of questions around the composition of the PharmaNet committee. It allows for not more than ten persons appointed by the council to manage access. With reference to the minister's comments about it, he indeed will have responsibility for the technical management of the program. I can assume from this section that we're talking about professional management of the PharmaNet program. Could the minister kindly confirm?
Hon. P. Ramsey: I think the simplest way to describe the split in responsibility here, hon. member, is to say that there are really two sets of data, or almost two different data systems, within the PharmaNet system. One is the PharmaNet central information system, which manages claims information and is of primary concern to managing the Pharmacare program and to British Columbians who want to receive a prompt recognition of their right to subsidy for drug cost under Pharmacare. That is the part that's managed and controlled by the ministry. The second set of data, or data system, is the drug information system, which includes patient profile information. That is not available to Pharmacare or the ministry. That is the system that is managed by the PharmaNet committee.
[3:45]
L. Reid: If we are going to differentiate the PharmaNet committee from this particular committee, my questions are relevant to this section. It is the group that has access to patient information that causes the greatest concern in the public domain. I know that the minister has heard these same claims, because I certainly have in my offices.
In terms of someone being able to piece together someone's drug history from claim information, that seems to be a contention that is borne out by the probability that it's likely that that can happen. The drug information system itself, which contains patient profile information, also allows for that same conclusion to be reached: that someone accessing the system will be able to piece together what your drug history is. That is the most contentious theme for this particular piece of legislation before us today. That is the concern the public brings to the table.
In terms of detailing the PharmaNet committee and the actual structure, to quote directly from the act: "...the PharmaNet database that contains patient record information and general drug information...." I would make the case that from both of those separate data banks that the minister has commented on, you could discover someone's drug history, which indeed puts into jeopardy someone's confidentiality. Could the minister assure the patient that there is some security around both of those separate databases? I am not accepting the minister's notion that it's possible to keep those separate. I believe that information will be merged and that there will be inappropriate access.
Hon. P. Ramsey: During second reading discussion of this bill the member and I and, I think, the member for Prince George-Omineca shared the view that there are really three issues around establishment of the PharmaNet system. One was around costs, and we've had some debate in our committee on costs. The second, which we've already had some debate on, is on improved health and health outcomes for British Columbians. The third, very important issue is around patient confidentiality.
I think it's important as we move through this section and discuss confidentiality -- a concern which I share with the member -- that we recognize that we are dealing not with a theoretically ideal system that might exist, but a system which I believe represents the state of the art in protection of privacy and security issues -- a system which is far better than current systems that are in place. As we compare protection of privacy and security issues, it is important that we compare it at times to what is in place now as well as to ideals that we might wish to see. During second reading debate, I think I shared with the member opposite my view that ultimately any system could be subject to security breaches at some point. I think that's probably safe to say in the age of some breaches of computer security. But I would like to specify for the committee a few of the measures that we have put in place with PharmaNet to ensure confidentiality.
First, personal information at the pharmacist is accessible with a personal health care number. If you don't have the health care number, you don't get the information. All personal information linked to that number that's transmitted across the system is encrypted and then decrypted at the other end. So it's not like an open sending of information that you or I might do when we are participating on an Internet chat board or something. This is a....
Interjection.
Hon. P. Ramsey: If we were, we would not. Occasionally, hon. member, I have so indulged myself, and it is an interesting experience.
Second, every time a PharmaNet system receives a transmission, it checks to see if it's coming from a valid source. Therefore, if it's coming from a pharmacy with the pharmacy codes that must be attached, it will be accepted. If not -- if somebody is trying to "hack" the system and doesn't have a recognizable code -- it will be rejected. So that's one measure. PharmaNet does not allow dial-up access, simply to prevent hackers from attempting to get into the system. You can't dial up PharmaNet. It's not on; it's not designed to allow that.
There is another set of initiatives. There are unique identifiers for each store location, each pharmacist, each pharmacy technician, each member of the PharmaNet committee and all
[ Page 15414 ]
College of Pharmacists audit staff. Every time somebody who is authorized -- and those are the groups that are authorized -- looks up a patient profile, the system tracks and records who did the looking up. So the idea that somebody can peek anonymously and then sneak away and use that information is one of the concerns of those who designed the system. Measures have been put in place to block that sort of surreptitious access to PharmaNet information. The data on who has "looked up" a patient record, then, is available to auditors who are checking on security of the system and on patient profile confidentiality. It's also available to customers. You or I, hon. member, could request at the front desk of a pharmacy in the province a record of who has accessed our information in the preceding 14 months. That information would be available to us. So we as individual British Columbians have a check on who has accessed this information, and are able to verify that nobody is on that list that we haven't had a prescription filled with or that someone hasn't been involved in illegitimate use of the system.
The system not only has mechanisms that frustrate breaking into the system but also subsystems that record any such attempt to do so. So anytime somebody tries to get in and is rejected, that attempt and rejection will itself be recorded so that those responsible for security can attempt to trace the attempt to breach security. There are others, perhaps, but I may have at least satisfied some of the member's concerns that this system has been designed as some sort of openly available Internet chat board type of system that anybody can dial up. I said at the start of my remarks on this section that protection of privacy and security in PharmaNet is, I believe, state-of-the-art. I hope that my comments have provided the member some assurance that we take these responsibilities very seriously.
L. Reid: I appreciate the minister's clarification, and I would simply make three additional comments on this section.
The minister in his remarks mentioned a pilot project. I would simply ask if the results from that pilot project will be incorporated into the implementation of these sections of this act. It certainly seems to be the feeling in the field that the pilot project is operating separate and distinct from this legislation. But, in fact, if you are going to put in place a pilot project, it makes good prudent sense to actually hear the results of that pilot project. So it seems to me that that clarification is required around whether or not the pilot project information will impact, hopefully positively, on this piece of legislation.
In terms of section 36.2(2) -- "The PharmaNet committee must include (a) 3 persons nominated by the minister" -- I'd be interested in the qualifications of those three individuals.
Hon. P. Ramsey: To the member's two questions that I heard -- she said she had three; I heard two.... The first one: will the results of the pilot project be used in further implementation of PharmaNet? Absolutely. I would mention to the member that I think PharmaNet has already proved its worth during the pilot phase. There were about 8,500 prescriptions processed during the trial period to date for some 4,500 customers, so many people had more than one interaction with the system. Indeed, the system was effective in catching the sort of drug interactions that the member opposite and I have both been concerned about. On a severity index of zero to three, which is a scale pharmacists use, there were 19 level-three drug interactions that were prevented. Level three means that if it had actually gone on, it could have threatened life. An additional 162 level-two drug interactions were avoided. Those could have caused severe illness, possibly hospitalization. So even in the limited trial period, as far as the health of British Columbians is concerned, the evidence so far is that PharmaNet is performing some of the functions of improving British Columbians' health that we expected it to do, and avoiding the catastrophic situation where a drug that somebody is taking to make them better, instead makes them worse -- and may indeed kill them.
Second, the member asked what qualifications I would be looking for in my nominees to the PharmaNet committee. My answers are several. First, I want somebody with knowledge of the Pharmacare program; we'll probably be nominating somebody from the senior members of the Pharmacare staff to sit on it. Second, I want somebody who has a broad knowledge of drug issues; perhaps a researcher or, again, somebody who works with the ministry on drug issues. Third, I want somebody who has very detailed knowledge of protection-of-privacy issues. I have actually approached the Civil Liberties Association to see if they would be interested in recommending some nominees that we might place on this committee.
L. Reid: I appreciate the minister's clarification around that first issue. In terms of the qualifications of these individuals, does the minister also have an intention to nominate lay individuals to this committee?
Hon. P. Ramsey: Hon. members, they are all lay members. Remember, this is a committee established under the College of Pharmacists of B.C., but all of them would be non-pharmacists. Indeed, all five of the members under section 36.2(2) are non-pharmacists and therefore lay members. So we have here a committee, the PharmaNet committee, which is composed half of pharmacists registered under the college in the province, and half of people who have other expertise which they will bring to the management of the PharmaNet system.
L. Reid: Will there be remuneration in place for these committee members?
Hon. P. Ramsey: Remuneration for members of the PharmaNet committee will be the responsibility of the College of Pharmacists of B.C. They will be reimbursing them as they reimburse other members of committees that serve the council.
L. Reid: Under this section the minister made reference to confidentiality in terms of not allowing folks to access the system anonymously. I'm wondering if the minister could spend a moment just relating whether or not the authorized users of this system will have a very distinctive keyword or password that allows them to access the system, but ensures that the information is secure.
[4:00]
Hon. P. Ramsey: Let me just revisit a couple of the comments I made earlier in that perhaps rather lengthy statement on some of the confidentiality provisions. Everyone authorized to access the data will have a distinct identifier, which will be attached to each use of the system by that
[ Page 15415 ]
person. As I said earlier, the ability of somebody to anonymously look up information is prevented by the design of the system. I think that is the issue that the member was addressing. If there are other confidentiality issues, I'd be pleased to respond.
L. Hanson: The minister mentioned earlier that in some test cases it had avoided serious injury to people. I'm not sure I understood that. Is the system not a system to monitor dispensing prescription drugs as prescribed by the medical profession? Can you tell me where the issue of safety came in in the one that you were talking about?
Hon. P. Ramsey: We're now running a pilot project, testing elements of the PharmaNet system in the Fraser Valley -- the Chilliwack-Sumas area. During the period of the trial, we filled some 8,500 prescriptions. In 19 cases a prescription was not filled that would have resulted in serious illness and possibly the death of the individual presenting the prescription at the pharmacy. In such circumstances, the pharmacist has access to data on the last 14 months of the patient's use of therapeutic drugs, and he or she can then assess whether the new prescription will have unintended, unfortunate or possibly disastrous consequences if filled and ingested by the patient.
This is one of the primary strengths of the PharmaNet system: when you or I go to a pharmacy to have a prescription filled, the professional pharmacist filling it will have access through the system to the last 14 months of our drug use history. He or she can then assess, as a professional, whether the prescription being presented could cause unintended and possibly disastrous health consequences. Obviously, a pharmacist has a professional responsibility not to fill it if, in their opinion, there are unintended health consequences. They refer the patient back to the physician with information on potential drug-drug interactions.
L. Hanson: I appreciate that. I guess I'm a little confused. In order to enter into the system, first of all you need a doctor to prescribe a certain kind of medicine. Is there something that the pharmacist would know that the doctor wouldn't know in the system that isn't protected now?
Hon. P. Ramsey: Yes, there is indeed additional information that the dispensing pharmacist will have available. It will be a comprehensive record of prescriptions filled in the province. Very often drug-drug interactions result from more than one physician prescribing drugs for a patient, each of them unaware of what the other has prescribed, or a patient who has taken prescriptions to more than one pharmacy to fill. Therefore pharmacy A won't know what drugs have been dispensed by pharmacy B. You might have multiple prescribers or multiple dispensers, each of them unknown to each other under the current system.
PharmaNet integrates all that and provides for a comprehensive database of prescription drugs prescribed and obtained by people in British Columbia using dispensing pharmacists. This allows a pharmacist to exercise the full range of their professional discretion in assessing the potential impacts of a prescription on the patient who is seeking to have it filled.
L. Hanson: I get from the minister's remarks, then, that it would catch a patient who attempted to use a prescription in an unusual manner, which I understood in the first place. What I was getting at, though.... That's protecting the patient from herself or himself, I suppose you might say. But what I got from the minister's remarks was that there could be a prescription issued by a doctor that the patient takes to a legitimate pharmacy, and that pharmacy has some information about the prescription.... That surprises me, because I would have thought that the offering of medicine to patients would have been researched quite thoroughly by the doctor in the first place, before it was prescribed.
Hon. G. Clark: I ask leave to make an introduction.
Leave granted.
Hon. G. Clark: I am delighted to introduce to the House today a delightful group of grade 7 students from St. Joseph's School in my constituency. St. Joseph's does a wonderful job, and has attended with a class every year since I've been elected to this chamber some eight and a half long years ago. Accompanying them as well are four adults: Jim Brown, who I think drove the bus; Maria Pires, a parent; Irma Perrault, one of the teachers; and Mike Boreham, the principal. I'd ask all members of the House to make them most welcome.
Hon. P. Ramsey: There are a number of potential health hazards in the filling of prescriptions for therapeutic drugs that this system will enable a pharmacist of the province to catch, and thus avoid health consequences for people having a prescription filled. It may be that the dosage range is wrong -- it's too strong -- and the pharmacist may well have information that the prescribing physician does not. Knowledge of therapeutic drugs and their impact is something that physicians have, but I think that many pharmacists would say that they have equivalent or perhaps greater expertise in that area.
The other point that I would make to the member is that we do find, particularly with people who may be heavy users of therapeutic drugs, that they are obtaining prescriptions from more than one medical practitioner. Those records held by the two practitioners are not shared. If you go to doctor A, he will have one set of records for you and doctor B may well have another. In all sincerity in attempting to treat your conditions well, they may prescribe medications that will have unintended and potentially disastrous impacts if you ingested both of them. PharmaNet is designed to capture such situations at the point of dispensing, enable pharmacists to work with physicians to avoid those disastrous health consequences, and serve the people of the province better. Last year, the estimate is that something like 10,000 hospitalizations occurred because of drug-drug interactions which were entirely avoidable. That's the sort of situation we want to catch and improve.
L. Hanson: I can certainly appreciate that. I think that the minister is telling us that in some circumstances there may be deliberate attempts to use different medical advisers to prescribe the same thing, which is deliberately cheating the system, if you will. I can appreciate that putting it in place has those benefits, but it does surprise me that there will be more information on the PharmaNet system than is available to the medical doctor before the first prescription is issued. I think the minister is suggesting that there will be a second opinion given if a doctor prescribes a medicine that goes through the Pharmacare system if, in the opinion of the pharmacist, the
[ Page 15416 ]
characteristics of the drug.... He may second-guess the doctor. It seems that might be a little contentious when it is actually applied.
Hon. P. Ramsey: I want to distinguish two sorts of situations that this PharmaNet database can deal with. The one that I've been speaking of is where everybody has been working with all good intentions to serve the health needs of British Columbians -- okay? Physician A may not know what physician B is prescribing and vice versa. At the counter, if the pharmacist captures one of these situations, what he or she would do is contact the prescribing physician and explain why it would be not wise to fill it. It is clearly the physician's responsibility to prescribe; the pharmacist doesn't interfere in that or subsume that. But not only are we asking pharmacists to do that monitoring, we're actually paying them for it, by saying that if you don't dispense a drug and you do that sort of contacting and consultation with the physician, we'll pay you twice your normal dispensing fee, because the health outcomes will be far better for British Columbians.
The other situation I think the member is alluding to is where an individual sets out quite deliberately to obtain multiple prescriptions and defraud the system. That too is a concern of ours. We believe it is a cost to the Pharmacare system that can be reduced dramatically by catching such instances of fraud and refusing to fill prescriptions.
L. Hanson: I'm not going to pursue this subject, but I just would like to make the observation to the minister that it seems by the way he is describing the effect of this act that they are putting some responsibility on the pharmacist to analyze the effect on the patient of a drug that is prescribed by the doctor. I suspect that may cause a little bit of tension between the two professional groups. What you're saying is that when the doctor prescribes ABC drug, and the patient takes it to the pharmacist, the pharmacist says: "What did he prescribe that for you for? I don't think..." -- for whatever reason. So I just suggest to the minister that that may be creating a little tension between two professional groups.
Hon. P. Ramsey: I don't disagree with the member that there is some potential professional rivalry between these groups. One of the goals of PharmaNet is to actually provide all with data, which will enable decisions to be made on the basis of best evidence, not professional status. PharmaNet incorporates information on some 15,000 different drug products, and among the information it incorporates are contraindications or interactions that may occur if they're ingested. Therefore the pharmacist may well encounter information at the terminal on the network that he or she was unaware of, as well as the physician. So it is a way of making sure that there is front-line, best possible data available to dispensing pharmacists on the therapeutic prescriptions that they're filling.
[4:15]
L. Reid: Again to the minister, in that we began this....
Actually, allow me to make a comment just for the record in terms of the professional-rivalry comment. I suggest to all British Columbians that they could certainly take as much care in the selection of their pharmacist as they currently do in the selection of their physician, because those two individuals need to work very closely together. They will, indeed, need to sort out some of those issues that may arise in terms of confidentiality around this section.
The only other comment I have on the confidentiality question -- and again the minister and I have.... I believe we actually agree on this particular point: I would very much like to see British Columbians have the ability to provide their password, their keyword, to the pharmacist in privacy. Right now there isn't any mechanism in place that allows them to do that. It's my understanding that they must provide that word, that term verbally to the pharmacist, and if indeed they're able to convey it in written form.... I trust at some point we'll allow them to actually punch it into the system with some kind of keypad. Can the minister comment on whether or not any progress has been made with the ability of a customer to provide the password in private?
Hon. P. Ramsey: Patients presenting a prescription to a pharmacist can simply note their password on the prescription -- provide it in written form. Pharmacists have, as part of their code under the college, the professional obligation to keep that password confidential.
L. Reid: I appreciate the minister's comments, but I'm hoping that his ministry and this committee can give some thought to how to best structure that. The concerns that were raised directly to me -- and I know, as well, to the minister -- were that these individuals don't wish to pass it along in writing where it may be passed on to the wrong individual. They are looking for a banking-type system where they press in their four- or six-letter code and only they know what that code is. Once they pass it in writing to the pharmacist, they have worries about other people in the drugstore; they have worries about the clerks. There's a whole range of access questions that we cannot respond to adequately if it's written on a piece of paper and filed in some way.
I think the minister and I agree, but I think that asking them to put it on a piece of paper and slip it across the counter will not satisfy their concerns around confidentiality.
Hon. P. Ramsey: Two things. First, in my opening remarks in debate on committee stage of this bill, I said: "Let's look very hard at comparing what we're proposing with PharmaNet -- what's going to be implemented -- with what actually exists, as well as comparing it with an ideal." The reality, hon. member, as you know, is that no such password protection exists right now for any British Columbian. No monitoring of who's accessing the profile that an individual pharmacy may have on you or me is available to the individual at all. So there are great advantages and great progress, I believe, in the current provisions of the PharmaNet system to increase confidentiality and privacy of information.
Having said that, clearly the PharmaNet committee will be seeking all ways to improve the system. It is their job, obviously, to say: "There's the ideal. How close can we get to it?"
L. Reid: I'm sure the minister will agree.... What my constituents are saying is that they simply want this minister and this ministry to respect their health information as much as we currently respect people's personal banking information -- i.e., you use a bank card, punch in an anonymous code that's known only to yourself, and access your personal information. I can only hope that this ministry moves in that direction, because one of the most contentious issues around this particular legislation is confidentiality. If we're moving
[ Page 15417 ]
along that continuum, and we can come back and ask for a report card at some future point where we will have arrived at that point, I would welcome that.
Section 2, sections 36.2 and 36.3 approved.
Section 3 approved.
On section 4.
L. Reid: Section 4 permits the council of the College of Pharmacists to make bylaws in respect of the collection, retention, maintenance, correction, protection, use and disclosure of information. The question that has been raised to me pertains to retention. How long will that information be on file? Are we talking about the lifetime of the customer, or are we talking about a certain number of years before that information is removed from the system?
Hon. P. Ramsey: The retention of patient records is clearly a requirement of the pharmacist profession. Staff advise me that current bylaws of the College of Pharmacists of British Columbia require retention of records for ten years.
Sections 4 and 5 approved.
Title approved.
Hon. P. Ramsey: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; D. Lovick in the chair.
Bill 27, Pharmacists, Pharmacy Operations and Drug Scheduling Amendment Act, 1995, reported complete without amendment, read a third time and passed.
Hon. G. Clark: I call committee on Bill 30.
HEALTH STATUTES AMENDMENT ACT, 1995
The House in committee on Bill 30; M. Farnworth in the chair.
On section 1.
L. Reid: With your indulgence, I'll certainly seek clarification of a number of sections as we move through this bill.
"The director may establish one or more panels composed of (a) the director alone...." I'm wondering what kind of scenario would allow a single individual to comprise a panel.
Hon. P. Ramsey: At second reading I may have said that this may be one of the ultimate in legislative maintenance amendments. We found that the variance committee, which has the ability to vary regulations around community care facilities, was structured in such a way that it required all members of a panel to unanimously agree to such a variance and to be actually in attendance at a meeting. This created some huge delays at times, dealing with issues of some urgency in making sure that appropriate community care was received by individuals.
The circumstance I can foresee in which the director would wish to exercise the authority, under section 5.1(2)(a), of establishing a variance committee of himself or herself alone would be in an emergency situation, where time is of the essence for action, and bringing together a committee composed of many members to deal with it would delay needed action.
Sections 1 to 4 inclusive approved.
On section 5.
L. Reid: In terms of establishing a "maximum fine that the discipline committee may impose under section 38(1)(e.1)," there seems to be a real need on behalf of the public to know what that maximum fine might look like. Could the minister kindly comment?
Hon. P. Ramsey: I just want to speak very briefly to both sections 5 and 6, if I may. The problem here is that while discipline committees under the Health Professions Act have the ability to suspend or revoke a licence, the current legislation actually doesn't allow them to impose a fine. Therefore the range of penalties that they can impose on a member of a profession who is violating ethical norms or is practising incompetently is limited.
This enables a college -- whether it be of massage therapists or physiotherapists or denturists -- to establish a maximum fine by bylaw and to impose fines on a member up to that limit. The maximum fine will, I submit, vary from college to college. These bylaws are subject to cabinet approval. Cabinet will want to ensure that the amount established is of sufficient gravity that it is a penalty to be avoided. The highest that I'm aware of now is the one that is available to the College of Physicians and Surgeons, where fines of up to $35,000 may be imposed by the college.
Sections 5 and 6 approved.
On section 7.
L. Reid: This reads: "Section 42 is amended by adding the following subsection: (3) Despite subsection (1), voting or non-voting shares of a health profession corporation may be vested in...." Needing some redefinition around health profession corporation.... I understood from the minister's remarks during the estimates debate that we were not leading to separate health corporations within the province. Indeed, based on his earlier remarks, this section does demand some ongoing clarification.
Hon. P. Ramsey: Often members of a health profession will establish a corporation, either as individuals or as a joint practice, as a means of dealing with income and expenditures and reporting under the Income Tax Act. This is a common vehicle for physicians and dentists and other health professionals. They use this. What we found in reviewing the provisions of the Health Professions Act is that we had a few dead ends and problems when a deceased registrant's executor or a bankrupt registrant of the college was attempting to have his or her affairs wound up. This proposed amendment allows an
[ Page 15418 ]
executor or administrator of an estate or a trustee to carry on and discharge their duties in respect of a corporation.
[4:30]
Sections 7 to 9 inclusive approved.
On section 10.
L. Reid: Section 10 refers to "supply management and optimum distribution of medical care, health care and diagnostic services throughout British Columbia." The mechanism for physician supply should enhance stability in our health care system. I believe that the minister and I both agree. The question before us is whether or not this particular clause will allow optimum distribution to be achieved. My question will relate specifically to how much power is vested in this section in terms of the information available to us from the BCMA committee and from the joint committee. Is it the intention of this minister to simply take the report of that committee and allow it to be enacted as a result of this particular clause?
Hon. P. Ramsey: Section 10 allows the Medical Services Commission to seek supply management and distribution measures that allow for variation in fees by the type of service performed, the geographic area performed in and the like. It is one of the two or three options available for physician supply. It has been the one, as the member notes, that has been the subject of ongoing work between the BCMA and the government. Before the Medical Services Commission enacts any such scheme, clearly I would wish to be assured that it was a step forward in achieving more appropriate distribution of physicians in the province.
Having said that, I can think of more ideal schemes. But I think this one does do some of the work that is needed in tilting the marketplace -- if I can phrase it that way -- to make sure that the rewards are greater in some areas of practice than others. Therefore, if mankind is an economic animal.... It's based on the assumption that he or she will seek those rewards where they are available in the province.
L. Reid: If the minister is indeed suggesting that my earlier contention that section 10 will allow the report of the BCMA and the Medical Services Commission to be enacted is accurate, certainly I would agree with the minister's point. I too hope it is not the final word on this issue. I can see it as a temporary measure, but I cannot see it as a measure that has ongoing life in British Columbia. I trust that a mechanism around physician supply will evolve that actually meets the needs of British Columbians regarding the issues of psychiatry. Frankly, we spent an hour and a half in Public Accounts this morning on the need for psychiatric services across this province. We haven't satisfactorily addressed the need for obstetrical services across this province, nor, frankly, have we in terms of general surgery, where -- and in his own riding, the minister will be abundantly aware -- the services are simply not there for British Columbians.
However, this shortlist of the current needs in British Columbia today may indeed change. If the mechanism can change to reflect the changing needs of the province, I would welcome that. I think there are aspects of this mechanism that are somewhat shortsighted and that disenfranchise British Columbians -- individuals who grew up in this province, went to medical school in this province and then took some additional training in another province or in another country, and who are finding it almost impossible, if not impossible, to return to practice their craft in their home province.
It seems to me -- and I know the minister and I have had this discussion on many occasions -- that if we are going to invest in their public education at the elementary, secondary and, particularly, post-secondary levels all the way to the completion of medical school, and then not allow them to come back to practice, we are not doing ourselves any favours. We are simply incurring additional cost without reaping any benefit from our graduates.
Again, I think there are sections of this particular proposal that the minister intends to implant into section 10 that leave a great deal to be desired. My contention has always been that we need to attract the finest minds in this province. I would submit that the British Columbia medical school does graduate some of the finest minds. We are sharing that tremendous resource, but not necessarily with our own voters, taxpayers and people who reside in this province. The number of individuals leaving is far greater than those we will retain, and that is further hampered by this particular mechanism, if you will.
Again, I will say that I trust that this is not the final word, and that I hope there will be some ongoing discussion around inserting this mechanism into this particular piece of legislation. I would ask the minister to comment.
Hon. P. Ramsey: I don't believe that the amendment we're debating today will be the last word in discussion about mechanisms for physician supply in British Columbia. As the member is aware, I think, the council of Ministers of Health across the country recently received a very interesting paper on capitation models for general practitioners. Back in the spring, the Ontario Minister of Health held a conference for physicians which looked at more appropriate remuneration for specialists who work for medical schools and tertiary facilities helping train the next generation of physicians. Again, there's some work to be done to make sure we get the right mix between qualifications and duties.
I would not wish to have members of the Legislature or the public think that this is the last word on physician supply measures. It enables us to more forward. There are clearly longer-term measures that need to be addressed.
L. Reid: In response, would the minister agree that one of their priorities has to be to bring British Columbia medical school graduates home to practise? I would certainly welcome that confirmation.
Hon. P. Ramsey: I am always delighted when somebody from the British Columbia medical school sets up practice in this province, and even more delighted when he or she chooses to practise where they are needed.
L. Fox: The first question I have to ask the minister is: what authority does this amendment give the minister that he doesn't already have under section 21(2) of the existing act?
Hon. P. Ramsey: The member raises an excellent point, one that I raised when the proposal for this amendment was first brought to my attention. In discussions with the BCMA around physician supply, there was some concern expressed
[ Page 15419 ]
that the authority to do this under existing provisions of the act might be challenged by an individual practitioner who was not satisfied with the results of the supply measures. Therefore, in an abundance of caution, we brought this amendment forward to the Legislature to ensure that as the Medical Services Commission instituted supply measures, it had the legal authority to do so.
L. Fox: From that answer I would ascertain that as it's presently written, the act allows the minister -- and has allowed the ministry -- to do the kinds of things that he's attempting to do and has outlined that he wants to do. This is just a clause which holds the ministry harmless should there be an approach to it. So we're not really seeing any new initiatives here; we're just seeing something that can protect the ministry from any doctor taking an action based on a constitutional challenge.
Hon. P. Ramsey: The member may recall that around this time last spring we first brought into force what we called interim supply measures, where we said to physicians who were new to the province and seeking a billing number that if they wished to practise where their services were needed, we would pay them 100 percent of fees. If they wished to work in an over-serviced area, we'd pay them 50 percent of fees. Those were explicitly flagged as interim measures in place while ongoing negotiations took place with the BCMA, with the College of Physicians and Surgeons and with others around more permanent supply measures, based on a variable fee structure. So the member is right. We are now looking at moving ahead with more permanent supply measures, and we want to ensure that we have legal authority in the act to do so without being challenged.
L. Fox: In some of those supply measures, would they be considering salaried doctors?
Hon. P. Ramsey: The measures contemplated under this amendment speak more to variations in a fee-for-service model of payment rather than alternative schemes of payment. In my comments to the member for Richmond East, I think I indicated that I share her view that we need to do further work in looking at how physicians are paid, whether it be fee-for-service, which is what the majority of physicians in British Columbia do now, whether we move toward increased salary arrangements, or whether it's on a capitation scheme or some sort of salary base plus fees above it. There are a variety of next steps that need to be taken in how physicians are paid. Some of those schemes may indeed have implications for distribution of physicians in the province, but the amendment we have before us now seeks primarily to focus on using variations within the fee-for-service structure to effect more equitable distribution of physicians around the province.
L. Fox: Let me rephrase that, because I recognize the way in which I asked the question could have ventured into future policy. Hypothetically, if the ministry decided to place some doctors in the rural parts of the province on a fixed salary, would this clause prevent them from being challenged by other physicians?
Hon. P. Ramsey: We have the ability under legislation to offer a salaried position now; we do not have the ability to impose that structure upon somebody who is practising in an area.
Section 10 approved.
On section 11.
L. Reid: Again, the minister and I have had numerous conversations regarding the possibility of an appeal process, with reference to sexual misconduct, on behalf of the College of Physicians and Surgeons. What I'm trusting is that somewhere in these subsections it actually commits to some kind of appeal process. I will refer the minister to section 11, section 25.1(2)(d)(v), bottom of page 3: "appoint an inquiry committee to act...." Is an inquiry committee going to have the mandate to act as an appeal committee, an appeal process, for women who do not believe that the committee has acted in their best interests and who would like the opportunity to appeal any decision?
Hon. P. Ramsey: The member opposite is correct. We surely have had extensive debates on this issue in the past. I will present what we are doing this year. I'm not sure we will satisfy 100 percent of the member's concerns, but I think we're getting some way there.
The legal avenue for formal appeal of a decision of the College of Physicians and Surgeons regarding an allegation of sexual misconduct still lies with the courts or, in the case of maladministration of justice, with the ombudsman. It is an external appeal -- courts or ombudsman. And I continue to submit that this is appropriate. You can only do so much with internal additional mechanisms.
[4:45]
What we have added is a provision that the sexual misconduct review committee now has a mandatory obligation to reconsider a matter if a complainant makes a written request for review within 30 days of it being issued. So an individual who has brought an allegation of sexual misconduct before the college, who has had an inquiry committee, who has had the full process concluded and who finds the outcome unsatisfactory, can request a further review and reconsideration of the matter within the college. That individual can bring forward grounds for that review if he or she feels that particular matters have not been considered adequately or that there has been a misunderstanding of evidence brought forward. They clearly have the right to have the matter reconsidered. Beyond that, I think it is still appropriate to ask that individuals bringing a charge of sexual misconduct, who are not satisfied with the college, seek external avenues for appeal.
L. Reid: Perhaps just one further clarification on this section. I was interested in the mandate of the inquiry committee, which is listed at the bottom of page 3. Perhaps the minister's remarks better fit under section 11, section 25.1(5), which states that the person who was the complainant makes a further request. If the minister is thinking that the terminology "further request" can be used synonymously with "appeal," I have no issue with that at all.
Could the minister simply clarify the role of the inquiry committee, because perhaps they are working in two separate arenas.
Hon. P. Ramsey: Let me explain the way it functions, because I think the member and I may be talking at cross-
[ Page 15420 ]
purposes. The sexual misconduct review committee that receives a complaint now has the ability to say: "This is a serious enough complaint that we should have a formal inquiry committee struck to hear evidence, reach conclusions and recommend discipline." That is what section 25.1(2)(d)(v) refers to.
L. Reid: I appreciate the minister's clarification. So indeed, a woman who was interested in appealing a decision would have the ability to make a further request. I will suggest to the minister that the concern individuals have shared with me is that they believe the process shuts down. If they take their concern to the college and the college renders a decision that is not to the individual's liking, what I am reading from section 25.1(5), subsections (3) and (4), is that there now is some possibility that the individual can make a further request and that this may allow them to reopen the discussion.
I can assure the minister that that is all the women in this province are interested in. They do not appreciate the fact that the door closes. They want the ability to go back and at least discuss the decision in terms of how it may have been reached. What I'm hoping -- and if I'm being optimistic about this section, I trust the minister will bring that information to the table immediately -- is that this particular section allows a woman to come forward with a concern about the decision that was reached. I trust the minister will confirm that.
Hon. P. Ramsey: I'm going to try again. I think that what the member is saying are points that I agree with and that have been captured by the amendments we're putting in place. But let me just confirm that, because I wouldn't want to mislead the member.
The sexual misconduct review committee operates as a separate committee within the structure of the council of the College of Physicians and Surgeons. When the Legislature of British Columbia passed amendments to establish that committee last year, we specified that it had to be a separate section with a unique responsibility, because of the importance of this issue.
That committee has the ability to do a number of things with a complaint that comes forward, and those are listed at the bottom of page 3 and the top of page 4, Roman numerals (i) through (vi). What this enables the sexual misconduct review committee to do is hear from an individual who has had an inquiry brought forward. There has been some investigation of it but no further action has been taken. The individual can go back to the sexual misconduct review committee and say, hey, there needs to be some action taken; we think there should be more here.
I want to distinguish this for the member. Once a complaint is referred to an inquiry committee -- to that formal, sort of quasi-judicial body -- and results in a decision and, potentially, discipline of a practitioner, that decision is not then reviewable by the sexual misconduct review committee. If you wish to appeal that as a complainant, your options are court or the ombudsman.
L. Fox: I just want to ask a couple of questions. I guess when I first read this, I was somewhat supportive. But the question I had to ask myself, given that we have so many other colleges and so many other professional groups, was: is it only in this act, the Medical Practitioners Act, that this kind of structure is required? I know there have been some very high-profile cases around the issue, but I wonder why this particular college is singled out and we don't have a similar initiative in this legislation to cover other colleges. We have a number of them now that operate very similarly to the medical practitioners college.
That's one question. The other question.... I think the minister clarified it there; I was trying to listen to the question. I have great difficulty with the opposition critic, in hearing what she's saying. I didn't have my earpiece on like my counterpart had.
But it does appear in this particular section that an individual has two opportunities to make their point and that the information doesn't have to vary; that he or she can just go back with the same case and plead for a second hearing. I guess the first thing that this says to me is that it will be automatic then; that, in fact, most folks, not being satisfied with the first situation, would automatically go back the second time. I would assume that. I know myself that if I felt very compelled to bring it forward the first time, I would also try the second time.
But I guess one would have to ask what would trigger.... Why the automatic second time? Should there not be a trigger, something there that opens the door? Perhaps I'm not understanding that.
Hon. P. Ramsey: I'll address the issues in reverse order. First, the trigger is the decision of the complainant to make a written request for a review of the action of the sexual misconduct review committee. And we have left it, as the member has said, without specifying legal grounds for it. One of the reasons for doing so is that we believe it is the responsibility of the college to explain to a complainant why a particular decision has been taken, and do it to the complainant's satisfaction.
I guess I would differ with the hon. member only in that I believe that in some circumstances -- both in terms of allegations of sexual misconduct by physicians and in other panels that look at instances of sexual misconduct or sexual harassment -- that sort of approach has proven to work. There is a large element of bridging communication gaps and making sure that there is a clear understanding of where the ability of the college to discipline ends and begins.
So we have left it, as the member says, where it is the complainant who has the option to seek a review. We did that quite explicitly because of concerns raised in this chamber and other venues during the last year. We believe it does provide the sexual misconduct review committee of the college with both the authority and, more importantly, the public perception that it is an avenue where a complainant can have a second hearing.
The first question by the member, which I'm dealing with secondly, was: why only physicians? That's an excellent question. The act we're debating, of course, is the Medical Practitioners Act, which governs the conduct of physicians in the province. Therefore this amendment applies only to that.
As the member knows, we are in the process of seeking more uniform regulation of health professions under the Health Professions Act, where, instead of having to enact legislation for every change in operations, bylaws can be
[ Page 15421 ]
enacted by regulation. The ministry is working with colleges of other professions on similar issues. Quite frankly, the work done here by the College of Physicians and Surgeons in many cases can provide a template, which can then be applied for other health professions and used by them under regulations enacted by cabinet and by bylaw of the college, rather than requiring legislative amendment.
[D. Lovick in the chair.]
L. Fox: Let me first say that the bill we're speaking to is the Health Statutes Amendment Act -- Bill 30 -- and that section 11 in Bill 30 deals specifically with the medical practitioners. I guess I'm wondering why we singled out medical practitioners in this particular statute. Why aren't we addressing the issue in terms of all the health professionals?
I think I understand why -- and it's not that I don't support the initiative. I think the idea is a good idea. In fact, the sexual misconduct review committee should be something that is structured for all the professional groups, because it's in their best interests. I think they support that, as well as those of us who are elected and have to look after the responsibilities of British Columbians.
I guess that was the reason I asked the question, because this isn't an act that's limited to the Medical Practitioners Act. This particular bill deals with a number of different acts. It seems, unfortunately, that we're dealing with one, and almost because of that it has a bit of a stigma to it -- because we're only dealing with one rather than the whole issue. That was the reason I raised the question.
Hon. P. Ramsey: I don't disagree with anything you've said, hon. member. There is a necessity for such provisions for the professions. While this particular amendment deals with provisions of the legislation governing the practice of physicians in the province, there is other legislation -- quite differently structured -- which could indeed be subject to a similar set of amendments. There are many health professions now governed under the Health Professions Act, for which enactment of such provisions could be done by regulation and cabinet rather than legislative debate. I want to assure the member that in my discussion and with the ministry's discussion with such professions, they evidence interest in moving forward on such issues.
[5:00]
As to why physicians are singled out, I guess I say, as I think the member said, that there surely have been some high-profile cases here and public anxiety about it. The other thing I say is that it's to the College of Physicians' credit that they actually initiated some of the work that led to these amendments. One of the reasons we've been dealing with this issue in legislation amendment during the last couple of sessions of the Legislature was the "Crossing the Boundaries" report, which was initially commissioned by the college itself. It recognized that it had a huge problem in public perception of its protection of the public around issues of sexual misconduct. Therefore, we might look on the fact that we're dealing with amendments to the Medical Practitioners Act as a badge of honour for the college in recognizing that this was a serious issue rather than a stigma.
Sections 11 to 21 inclusive approved.
Title approved.
Hon. P. Ramsey: Hon. Chair, I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; D. Lovick in the chair.
Bill 30, Health Statutes Amendment Act, 1995, reported complete without amendment, read a third time and passed.
Hon. P. Ramsey: I call second reading of Bill 40.
HEALTH AUTHORITIES AMENDMENT ACT, 1995
(second reading)
Hon. P. Ramsey: I am very pleased to be able to speak today in some detail about the amendments made this session to the Health Authorities Act. Some of the amendments being proposed I would characterize as simple technical changes of a housekeeping nature. Some amendments will enable the transfer of assets from current boards and bodies to new community health councils and regional health boards without incurring costs to the public or the province. Others are clearly more significant in scope.
We are amending the Health Authorities Act in response to a call for greater flexibility, a greater recognition of the province's diversity, and greater participation by people in the health industry in governance of our province's health system. As I said, we are also working to streamline that process of moving to local decision-making, and to do so in the most cost-effective manner possible.
The amendments to the Health Authorities Act address some vital issues of ensuring that all British Columbians are represented in our health care system. No matter how much money they earn, they need to be represented; no matter where they live or what their background, the participation of citizens is a key feature in the better management of health care in our province. Under this bill, the democratic nature of the new regionalized health care system will be enhanced. Participation from community leaders, health care providers, aboriginal groups and dedicated, knowledgable volunteers at the community and regional levels will ensure that British Columbians from all walks of life are represented and have their concerns clearly heard and addressed. More specifically, these amendments protect the quality health care currently provided by tertiary facilities by allowing regional representation on regional health boards that serve British Columbians from outside of that region, thus ensuring that the provincial mandate of those institutions is subject to governance by a board that is more widely representative of the regions of the province.
Second, the amendments ensure that councils will have their full complement of representatives by allowing vacancies to be filled on community health councils where there is not sufficient representation by municipal bodies, school boards or aboriginal communities. They also ensure that our first nations have a voice in their own health governance.
Our aboriginal population in British Columbia has one of the lowest health standards of any group. One of the results of
[ Page 15422 ]
this bill will be greater aboriginal representation and fuller participation in the design and delivery of their own health care. In specified communities -- those with a large aboriginal population -- traditional "aboriginal governing bodies" will be eligible for appointment to a community health council within the category of local government members. We will also permit seats within the category of ministerial appointments to be reserved for aboriginal representatives on both regional health boards and community health councils. I don't think any member of this Legislature can read the annual report of the provincial health officer or the conclusions of the Royal Commission on Health Care and Costs by Justice Seaton without recognizing the vital need for aboriginal people to have more say in how their health care is designed and delivered.
Over the past several months, as we've been implementing the new governance structure for health services, we have heard from many groups that say that there should be a way to involve people who work in the health system. This legislation will allow health care providers to give their input in a real and meaningful manner. The bill makes provisions for health care providers to be represented through a health care service providers' advisory committee. The chairs of these committees will represent health care providers and have a voting seat on its regional health board or community health council.
[The Speaker in the chair.]
Representation that respects the diversity of the province is one of the goals of the New Directions initiative. Another goal of New Directions is to help new boards and councils begin to take on responsibility for health services in the most cost-effective manner possible. Therefore amendments regarding the transfer of existing society facilities to new regional health boards and community health councils are being made. These amendments will help to save about $8 million in accounting and legal costs and will streamline the transfer process.
Finally, I'd like to speak to the issue of remuneration. The charitable act of volunteerism has built our health care system to what it is today. The new regionalized system requires volunteers to undertake more complex activities and play an even larger role than they have in the past. This government does not want to exclude anyone from participating in the process because they don't have enough money to incur the costs of attending meetings out of their home community, nor does it wish to penalize those who currently pay for their own travel expenses.
Last September, at the convention of the Union of British Columbia Municipalities, I pledged to undertake an examination of the issue of remuneration and bring forward amendments if they were warranted. To that end, today we are introducing an amendment that allows for consideration of the legal payment of remuneration to members once cabinet approves a regulation. Quite rightly, this amendment will open the issue up for further discussion and consultation with regional health board and community health council members.
Let me say that this issue has been a matter of considerable debate among both members of my ministry and members of the public who are serving on community health councils and regional health boards. The goal is to say that we must make participation in these governance bodies more equitable. A person who must travel from Masset to Terrace to attend a regional health board meeting incurs far more expense than somebody who travels from the West End of Vancouver to downtown. We must find a way of making that sort of participation more equitable. Similarly, while some members of our public can serve on councils and volunteer their efforts without incurring financial penalties to their personal profession or income, others cannot; we must make provision, I believe, that allows all people, of whatever employment, to participate fully in health care decisions.
Taken in full, these amendments will protect the democratic nature of our new health care system and ensure that all residents are able to participate in making decisions about health in a full and meaningful way. The amendments will streamline the transfer process of societies to boards and councils, and help save up to $8 million. They will open up further discussion with cabinet, boards and councils on the issue of remuneration of board and council members.
The goal of full representation of all British Columbians in our health care system will ensure that it is better managed and more responsive to their health needs. Who better to manage health care decisions than health care clients, health care providers and local governments? We are committed to making this happen. I move second reading of the bill.
L. Reid: I'm pleased to rise in debate today to respond to this minister as he attempted to outline Bill 40, the Health Authorities Amendment Act, 1995. Certainly I, as critic for the official opposition, have serious concerns about this bill. I don't believe it's about better health care in a less expensive fashion -- which were certainly the bywords of the previous minister and have been the bywords of this minister.
There is concern around a number of points the minister made. One of the most asinine comments I have heard in this debate is that the provincial mandate is subject to local governance. I have serious concerns that this type of thinking will jeopardize programs that we fundamentally believe in in British Columbia -- programs such as the B.C. Cancer Agency. That is the provincial program; you cannot subject that calibre of provincial program to local governance and expect the provincial mandate to be honoured. I will certainly continue to make that point, because I believe that, fundamentally, this type of legislation is giving away something we value very, very highly in British Columbia.
Frankly, this government, having gone out of its way to exclude health care professionals and service providers from the decision-making around this direction, is simply in a salvage mode at this particular time. I think it is a very weak response to what has indeed turned out to be an appalling decision. We have seen this level of health care spending being discussed by people who have never been responsible for providing service. I think that when we're talking about a budget of $6.5 billion, it only makes sense to have care providers at the table.
The fact that this government again went out of its way is shocking, because it speaks to me very strongly that implementation is not the strong suit of this government. This bill lacks merit; it's not about an ongoing implementation plan. It saddens me that we don't have in place today a government that truly understands that this should be about less expensive health care delivered in a more humane fashion. Those
[ Page 15423 ]
were the words of the previous minister and of this minister, but this bill does nothing to move us down the road to a reasonable health care system. It complicates the issue unnecessarily, and it creates tremendous stresses and strains on the system. Indeed, this minister talked about remuneration going beyond expenses, so we have the statement about less expensive health care, yet we're going to see this government stand up and defend the position where we're now going to pay individuals who we have never paid in the past for this level of administration.
[5:15]
This is not about direct patient care in British Columbia; this is about bureaucratic overlay. We're moving to 100 community councils and approximately 20 -- what used to be 21 -- regional boards, and we are now facing the potential of having to remunerate them. The minister speaks clearly of having to remunerate the 20 regional boards. Does he also intend to see this taxpaying public base pay the approximately 100 community councils? We didn't pay for that service in the past, and we were delighted with the commitment and the volunteer time that was put into that level of decision-making in health care in British Columbia. No one has ever stood in the chamber and said anything negative about the calibre of the volunteers. Yet somehow we're going to toss out their contributions and turn this into a paid position. Seems to me that that is not in the best interests of the taxpayer, and it also seems to me that this government has no basis on which to make that decision. They have never once attempted to evaluate the cost of New Directions in British Columbia and respond to the taxpayer in terms of what they've spent and whether or not they're receiving value for that. A value-for-money audit around New Directions makes perfect sense. I can suggest that that has not been contemplated, and it certainly has not been acted upon. We don't have a result around what this program actually costs, and that's a huge concern.
What we have today is a minister who will rise in this chamber and speculate about improving the quality of health care. Again, there's no basis for that speculation, and that's a concern. We've had many critics of this particular enterprise talk about a huge social experiment. Unless you base any experiment on some kind of data-gathering and actually report out on that data some kind of cost-benefit analysis.... Every member in this chamber will have heard me suggest how important it is to do a cost-benefit analysis since day one of this discussion -- since 1991 when the Seaton royal commission came down.
There are elements of this discussion that are simply missing from the debate today. The minister's intention is clouded by a lack of organization. I believe this legislation is ill-thought-out. I don't believe it makes good sense for the taxpayer today.
We talk about the minister's comment of provincial mandates being subject to local governance. I can tell you that in releases as recently as June 11, two days ago, we have this ministry talking about transferring health care responsibility to six regional councils and requiring each region to pay for capital projects within its boundaries. This was reported -- even local papers are picking up on the fact that this system is currently in disarray -- in the Vancouver Courier on Sunday, June 11, 1995.
Their concerns are borne out today by this minister's comment. Vancouver, with the greatest amount of capital spending in the region, has major hospitals serving all of the province, which is indeed a provincial mandate. These are provincial referral hospitals. Somehow we are going to suggest that provincial referral hospitals -- the cancer agency, B.C. Rehab -- will all have to go on bended knee before the Vancouver regional health board to receive funding. That is not appropriate, when we talk about those services serving the entire province and the entire population base.
The stats are absolutely clear. We have situations where Vancouver is suggested as paying for the capital costs, when patients are represented by people outside the city of Vancouver and outside the regional district. Greater Vancouver regional health district stats show that more than half the patients using Vancouver's 12 major hospitals come from other parts of the region or the province. There has to be some commitment on behalf of this government to recognize when a provincial mandate exists, and I will very strongly make the case today that provincial referral hospitals demand a provincial mandate. Only 23 percent of the B.C. Cancer Agency patients and 26 percent of those who enter B.C. Children's Hospital live in Vancouver -- another scenario where we are going to allow the governance structure within the city of Vancouver to determine programming for the entire province. When you have a provincial referral hospital -- British Columbia's Women's Hospital, B.C. Children's Hospital -- you require, in our view, a provincial mandate for those facilities.
Frankly, the quote that "anyone with any common sense can see that these are provincial hospitals".... That's ultimately what needs to underlie this particular piece of legislation -- Bill 40, the Health Authorities Amendment Act, 1995. I will make the case that what's missing from this bill is common sense.
There's a lot of discussion around empowering a health board that's largely unelected. I too share those concerns. We are entrusting these individuals with a great deal of power. Does a scenario exist where patronage could enter into this discussion? I absolutely believe that it can. I absolutely want to make the case that this discussion be about qualified professionals, if indeed this minister and this ministry are going to make those appointments. This is a major issue with very significant consequences for all of British Columbia. For those who live outside the lower mainland, they must have significant issues about the future of their health care system; because, frankly, I would not trust it to the tenets of this bill, the Health Authorities Amendment Act, 1995. It does little to improve on the original; it does not streamline the process; it frustrates more individuals than it reassures.
Again I'll make the case that I believe this government has seen the error of its ways and will invite health care providers into the discussion. But, frankly, I think it's too little too late. We have seen a government go out of its way to alienate the majority of health care providers. That is not good decision-making; that is not a decent, commonsense approach to decision-making around health care.
We have heard, too many times to count in this chamber: less expensive health care to be delivered in a more humane fashion. Again I will make the case: based on what? There is very little to substantiate this minister's speculation around the future of this program. Best practice is frankly a guess on the part of this minister. I think we need to ensure that if this government continues to have the luxury of spending some-
[ Page 15424 ]
one else's money -- the taxpayers' money -- it needs to be held accountable. This particular legislation does not reassure the taxpayer.
Remuneration was not in place when we valued and honoured our volunteers who made health care decisions in this province, and the majority of those individuals had health care experience; they were health care providers. We benefited extensively from their expertise. I would invite the minister to review Hansard on the original debate, because his predecessor very clearly stated that this would not be an opportunity for remuneration; he very clearly made that case. It cannot be mistaken for anything other than a very clear statement that this move to regionalize health care would not see members of councils and boards receive remuneration.
This bill today, Bill 40, the Health Authorities Amendment Act, 1995, is in stark contrast to what this chamber was promised and what taxpayers were promised. I have some issue around that. I believe this House has been misled, if this decision today can contrast so sharply with previous decisions. It's the same discussion around the move to regionalize health care.
I have some concerns about the language of this bill around designated corporations. It certainly was never the intention of this House or the taxpaying public to welcome or invite in health care corporations to the province of British Columbia. Again, I have raised the issue of patronage. I think the likelihood of patronage around this is significant.
I think we need to have an extensive discussion in committee on property rights. I'm not clear on how much latitude is being extended around personal property rights. And certainly, ownership of facilities comes into this discussion many, many times. I have received correspondence from many individuals, as has the Minister of Health, who talk about basically building and providing service from a facility they believed they had ownership of, that they owned. Now they're receiving letters from the ministry suggesting that they don't own this item, this facility or this entity. That's a dramatic infringement of personal property rights in the province of British Columbia. Where we are in terms of changing ownership of these facilities will raise tremendous questions around union jurisdiction.
So the opposition has little ability to see how this bill answers questions, because, frankly, it raises more questions than it answers. As such, I would ask that this minister return to the drawing board. This legislation does not streamline the process; it does not focus on the patient. It's costly. By the minister's own admission, it will cost a great deal more than we have paid for that level of administration in the past. The Liberal position in the province of British Columbia is about focusing on the patient. This legislation does not marry well with that concept. So again, Bill 40, the Health Authorities Amendment Act, 1995, will be costly. It's going to be absolutely unwieldy and, as such, will not receive support in principle on behalf of the official opposition.
L. Fox: I'm pleased to rise and speak on the principles and philosophy of Bill 40. First let me say that since the debates in 1993 around Bill 45 and the formation of this, we continue to see bills coming forward amending the original direction. This bill does nothing more than indicate to me and the rest of British Columbia that we were correct and that the regional program, the Closer to Home system, is not working as it was envisioned in the debates of the previous minister on Bill 45. In fact, it does not meet the principles, and it indeed changes the principles that the minister defended in Bill 45, and that in itself is a shame.
Let's first talk about the remuneration factor. We pushed during committee stage of Bill 45 to find out what the principles would be in terms of remuneration for individuals. We were assured on numerous occasions that there would be expenses paid for expenses incurred by board members and that they would make sure that no individual member would incur expenses through the process. But what do we see here? In the opening statement the minister implied that a salaried individual would not lose part of his income as a board member. Yet a waged individual may lose part of his income. They were going to be treated differently on the board from the salaried individual. That is a very poor principle to adopt, and we see that as being totally unacceptable.
Number two, what we've done with regional health care in this province is criminal. The very first initiative of this government should have been to put the Provincial Health Council in place to do the kinds of things that were set out in the Seaton commission. They are to report back to the Legislature, not the minister, and to structure a health care system that would reflect the interests of British Columbians, not the interests of this government. We see this as another admission of failure.
We see the evidence every day in the hospitals, in our communities, in the lack of services or in the long waiting lists -- in all those things I get phone calls about on a day-to-day basis. I'm sure all members in this house get phone calls on a day-to-day basis. But this particular bill is an admission that the government is floundering and that the system is in a mess. It lacks direction and it lacks leadership, and now they've brought this bill forward to try to correct that. Well, hon. Speaker, I've said from day one that if you're going to develop a system that is going to meet the demands of all those within the system -- the health care providers, the doctors and nurses -- all those folks should be involved in redirecting and redefining that system. This is nothing more than election platitudes. This government has been getting lots of feedback from regional directors and very serious feedback from those folks involved in health councils that the system is not working. So what's this government going to do? It's going to pay those folks.
[5:30]
Hospital boards don't get paid, societies which run home care services don't get paid, and those folks that are on long-term care boards don't get paid. They are all providing invaluable service to British Columbia today, free of charge, getting only their expenses met. What are we doing with this act? We're dissolving all those boards, and we're creating boards that we're going to pay now in an effort to save money. To me, that is quite amazing.
It's too bad this government hadn't had a little foresight and hadn't really paid attention to all of Justice Seaton's recommendations. Had they paid attention to the whole report, and not just pulled out of it some of what they wanted to use to further their own philosophical beliefs, we wouldn't be in a mess in this province today in health care. We wouldn't have to be addressing Bill 40 at this point in time.
Interjection.
[ Page 15425 ]
L. Fox: The member is free to get up at any point in time and have his remarks recorded, and I would be pleased if he would do that.
The Speaker: The member's point is well taken, and I would caution members who are interjecting from their seats. All members are aware of the standing orders. Please proceed, hon. member.
L. Fox: Thank you, hon. Speaker.
We saw a bill come forward last year called the Hospital Insurance Act. We see another clause in this bill which will move the government closer to having the capability of forcing the private sector out of the delivery of health care. We see this bill given the opportunity -- certainly voluntarily, and the minister will say that -- to take over societies or corporations.
But what corporation or society isn't going to volunteer to allow itself to be taken over, if the government has a big stick over it that's going to cut its funding? Obviously they're going to relinquish that and develop the resolution as required within this legislation, because they know that that's the only hope they have of getting their investments out of it.
That's another promise the previous minister made to this assembly on two occasions in debate of Bill 45. I ask the minister to look them up. When I asked that minister whether or not we were going to see any shift in the percentage of health care which was at that point being delivered -- 10 percent of the budget was being delivered through private companies -- that minister made a commitment to this House that there would be no shift in that percentage. But we've seen consistent legislation come forward, and hidden clauses within that legislation, that add to the government's opportunity to take away that service from private clinics and private care homes.
I am definitely opposed to this legislation. I look forward to taking it on on a clause-by-clause basis and putting the minister on the spot with respect to some of the initiatives that he's brought forward in the form of Bill 40.
G. Wilson: I wasn't quite sure whether the member who previously spoke was in favour or opposed. That's just a joke. I don't think he could have been more unequivocal about his displeasure with this act, and that's good to see.
It's nice to hear a member come forward and state specifically what their position is and why they state that position, because we are at some point going to stand before the electorate and have the electorate judge us on what we believe in and what we don't. It is somewhat refreshing to hear from the member for Prince George-Omineca the position of the Reform Party on this question. He's made it absolutely and abundantly clear.
I confess that I was only able -- partly because I was involved in another meeting -- to hear the member for Richmond East as to the Liberal position, and so I'm trying hard to discern where they are coming from.
From the Alliance point of view, I tell you we have a serious difficulty with this bill. The reason we do, in part, was outlined in the comments from the member for Prince George-Omineca. The difficulty that we have is that from a philosophical point of view, I think we have to ask ourselves what is or has been the best way for us to administer the delivery of health care within communities. Clearly this government has decided that they are going to take a new approach, through the introduction of community health councils and regional hospital boards. In doing that there has to be an attempt made to try to deal with the existing structure and move some kind of amalgamation of those existing boards and societies and -- in some cases -- corporations into this new system. I understand exactly where the government is coming from on this. We've watched with a great deal of interest, and in fact we have participated in some communities to provide assistance to those people who are trying very hard.... They are struggling with trying to put together these community health councils and these boards.
I have to tell you that the people who I have the greatest respect and tremendous sympathy for are the countless numbers of British Columbians who have put in hours and hours of work at the community level desperately trying to make this system workable. They are people who have tried very, very hard over the last number of months and years to sit down and say: "If the government insists that we do this, how can we do this to serve the best interests of the people of our communities and districts?" Many of them are extremely talented people. We're not dealing with people that jumped on this from any kind of partisan political perspective; these are people who got involved in this process because what they were attempting to do was to take a mandate that had been handed down from government and try to make it work.
In some cases the regional hospital boards and the health councils look like they may function reasonably well. But in the majority of cases, at this point in time, I think it is quite suspect as to whether these community health councils are going to streamline government delivery of health service or whether they are just going to create a much more complex, expensive and abstracted bureaucracy -- abstracted from the purpose and intention of the giving of dollars, which is the adequate and proper delivery of service.
I have to say that I'm not going to stand here and try to chastise this minister or this government for what they are attempting to do, because philosophically we clearly differ in our opinion as to how we should proceed. What I would prefer to do in second reading is to talk about some of the areas in which the minister might want to alleviate concern and fear, and about how we might start to address those areas with some degree of, I hope, constructive comment that will allow us an opportunity to see if we can't proceed in a better way.
Let me say to begin with that the single greatest problem of this act and the way that is structured is in this whole proposition with respect to the process by which amalgamation is going to take place. We have some serious concerns about that. That serious concern is driven by commentary that we've had from the community level. They have a great fear that we're likely, in the process of this amalgamation, to take this consolidation process of the designated corporations and regional health boards, and to create a bureaucracy that is going to be much more complex and top-down-driven and far less suited to the actual delivery of health systems. That is a concern.
I think the minister is going to acknowledge that it's a concern. We have to understand that if we're going to provide an opportunity for health care delivery that's going to be community-based, community-driven, closer to home and all
[ Page 15426 ]
of the kinds of things this government is attempting to do, then it seems to me that first of all we have to secure long-term base financing. That long-term base financing has to be built in over a four-year period -- something that we in the Alliance have been advocating from the inception of this party and that I've been advocating as an elected politician in this province since 1991 and as a non-elected politician since 1987. We have to make sure that this base financing is available in the communities, to be able to address long-term financing of the health system.
The second thing we have to recognize is that, because of the nature of health care delivery, there is a need for a hierarchical system of health care delivery -- from the diagnostic and treatment facilities that will be clinic-based facilities in British Columbia, to the community hospital that would be more broadly defined in terms of its funding package and approach, to the regional hospital centres that have to accommodate the larger area in terms of specialized health care provisions. Our concern with this legislation in terms of this amalgamation is that it does not take into account the detail that is required, if we're to try to understand how we're going to get into those three levels of service delivery without creating a rather complex, top-heavy and bureaucratic delivery system.
That in itself is going to be expensive. We know it is, because we're talking in this bill about a remuneration package that otherwise does not exist. So we can see here that we're dealing with the concern that I addressed when this first was introduced by the former Minister of Health -- that through the remuneration process that is going to be provided for members that sit upon these councils, what we are beginning to create is equivalent to what we have now seen with respect to regional levels of government -- regional district boards.
For those people.... I don't know if this Health minister thinks back or was in the province at the time that we moved toward the creation of regional district boards from a municipal level of government. The intention at that point was to take services in the unincorporated areas and try to provide those services in a proper manner that was not going to cost a lot of money. The argument was that regional district boards would create a new level of government, a new level of bureaucracy, and that they would cause a disproportionate amount of taxation on the property owner for the delivery of services that that property owner would get for the money they paid.
It's ironic in the extreme that it was the very government that sits in power today -- at the time, they sat in opposition -- that introduced those very objections, saying that the movement toward these middle-level management and government positions rarely is a sensible way to go and is, more often than not, going to create a large and very expensive bureaucracy. Yet here they are, engaged in doing something that parallels that regional district system. We can say with respect to this amalgamation process that we have some very, very serious concerns.
The second concern we have is with respect to the prescription of the one-third, one-third, one-third numbers of people that are put in place. It's interesting that section 3, subsection (2)(c) of this particular bill says: "...1/3 of the prescribed number nominated by the minister and, from among this number of minister's appointments, a portion may be prescribed by the minister as reserved for appointments to represent aboriginal people...."
We are going to have to come to grips with this issue in the province. We cannot be amending legislation that.... Whether it's matters under the Adoption Act, whether it's measures under this Health Authorities Amendment Act, whether it's amendments to the lands act or whether it's under provisions of environmental regulation, we must not fall into the trap where we are going to start to put in place a specific designation that runs in a system parallel to that system that is currently being negotiated with respect to self-government. It's wrong; it's fundamentally wrong. In principle, it's wrong.
[5:45]
What it does is provide a disservice to the very people it seeks to serve, and I think that the minister has got to acknowledge that. We take very strong exception to the fact that we are consistently starting to look towards special designation, special status, and special right and privilege with respect to appointment. That doesn't mean that we don't have to take care of the health needs of aboriginal people. Similarly, within a system of delivery of health care, it doesn't mean that we don't want to make sure that that delivery is evenly and equally applied and that there is equal and open access. But we have to be very careful that we do not encumber ourselves with a fiduciary obligation that we will not be able to realize, through the statutes we bring into the province. That's something I think this government has not been careful about at all, so from that point of view we take fairly strong exception.
Let me say also that we have some very serious concerns about section 4, section 13.2, because of the vagueness about what is considered in that section of the bill. It says: "The Lieutenant Governor in Council may, by order, dispose of a Provincial body, including land and other property of the government or Provincial body used or occupied by the Provincial body and specified in the order, to a board or council...." If we look at this section in terms of its application, we will see that it talks about mental health facilities, psychiatric units, or "a society as defined in section 1 of the Mental Health Act or a mental health clinic or mental health service established by regulations under section 37 of that Act...." That's a very, very serious issue in the communities, because they want to know exactly what the government is intending here. It's an enormous area, and if by way of this provision in the act the government has the intention of disposing of that kind of facility, then we have to ask ourselves: in the long term, what protection will those communities and those people have who are actively involved in those sections of the communities in terms of the continued ongoing delivery?
We hear an awful lot of rhetoric being tossed out by members of various opposition parties about protecting health care, saving medicare, not having a two-tier system, not wanting to go to privatized medicine, trying hard to.... In fact, I think this minister at one time said that he was the saviour of medicare in British Columbia. I'm not sure that he said that, but somebody said it. I'm sure that's a mantle he would like to wear as he crusades into the next election. If that's the case, then you had better change this section of the act, because nothing makes me more fearful than the dismantling of these provisions without a clear mandate to make sure that health care, the process around the health care system and the educa-
[ Page 15427 ]
tion of the population that is necessary to protect and maintain our health care are going to remain comprehensive, publicly funded and not two-tier in any way.
So the minister better check this out, because I'll tell you, it's going to be very difficult if they launch the campaign with respect to the provision and protection of health care, because all any opposition party is going to be able to simply turn around and say: "Oh yeah? Well, let's read section 4, section 13.2, of Bill 40, and let's explain how that fits into the government's agenda for saving medicare." I think the minister, as he consults with members of his back bench, who I think are probably worried by their realization of what is in place, might want to rethink that section of this particular bill.
We have been on record from the beginning as saying that we do not like the system the way it is. Unlike other opposition parties, however, we have said that we will not dismantle it. We will not dismantle the community health councils and the regional hospital boards, because countless people in the communities have given their time and best efforts to make this work. We'd like to see these systems work, and work better, without centralized control and maintenance of appointment powers being given to this minister and without the amalgamation that is going to take place, which will effectively dismantle the community-controlled, community-based delivery of service. That's been our position from the beginning, and that's why we can't support this bill in principle.
This bill takes one step further the notion of these new community health councils and regional hospital boards, which we don't believe work. Unlike some members of the opposition, if we were in a position to make this decision, we wouldn't trash them or get rid of them. What would we have liked the minister to do? What we've suggested is that we must provide a more streamlined, accessible health care system within the community, built through the coordination of health delivery services at the community level. We've talked about doing that through the creation of a ministry of community development. We have talked about that by looking at the holistic health needs of people within a community, the provision of diagnostic and treatment clinics within communities, and the provision of a hierarchical system of health delivery services through community hospitals and regional hospitals. That's what we would have liked to see.
What we don't want is to create a new level of bureaucracy that is heavily driven by the agenda of this government and this minister, which is going to be extremely difficult to administer at the local level and which is going to, in effect, diminish community control and community delivery of service, and advance yet a new bureaucracy that is going to be far more cumbersome, far more expensive and far less designed to provide the very kinds of services that this minister says he stands to protect.
So in short, I think Bill 40 is misguided; it's misdirected. Clearly this government is bound to go headlong into this. I don't know if this minister is prepared to listen with an open and clear mind to the kinds of amendments that may be coming forward from this. My guess is that he's not, and I think it's most unfortunate.
Those of us who really do believe that the foundation of a comprehensive health care system is community-driven and community-based and provides equal access to health care, and those of us who really do believe that we should be protecting what I think is the finest health care system in the world, find it irritating and somewhat frustrating that there is so much rhetoric by others who would seek to quietly dismantle the system in favour of two-tier delivery, whether it has the appearance of that or not.
Some would say that those of us in the Alliance are purists on this question. Some would say that because of the nature of the national debt and the provincial debt, we've arrived at a point where we have to start to tinker with the dismantling of our health care system. We would argue that there is nothing more sacrosanct in this country than the provision of primary services to all its citizens, and those provisions have to be with respect to the delivery of education, health services and social services. What we have to recognize in those deliveries is that when we do streamline a system, let's make sure that money gets to the delivery and provision of services, and not to a whole new level of bureaucrats who are going to be able to benefit from them.
Those are our concerns with this bill. That's why we would, in principle, oppose it.
The Speaker: Thank you, hon. member. The minister closes debate.
Hon. P. Ramsey: I thank the members opposite for a very vigorous debate on the principles of Bill 40. I must say that it is invigorating to hear members of the opposition stand up and be counted -- or not be counted, really -- on steps that need to be taken to ensure better integration of health services, better coordination at a local level and better involvement of the people in British Columbia on health issues that affect them vitally in their homes and communities and regions around this province.
I guess what really amazes me when I enter this chamber and listen to the debate on regionalization is the absolute dissonance between what I hear from the members opposite and what I hear from the diversity of British Columbians as I travel this province and meet with those who are doing the work of forming community health councils and regional health boards. I hear in this chamber the narrow partisanship that says: "Whatever it is, we're agin it, because the government's proposing it."
I must say that's not what I hear in communities around this province. When I look at the members who are sitting on community health councils and regional health boards, I defy the member for Richmond East to show me the patronage that she alleges is there. There are members sitting on those regional boards and community councils that represent all political stripes in this province, and they're united by a common commitment to preserving the highest-quality health care for the citizens of British Columbia. That is what pulls them together, and they put aside their partisanship when they walk in the door of those board meetings and those community council meetings. And that, I submit, is the spirit we need to go forward to make the changes that are necessary to ensure quality governance of the health system in this province.
I'm amazed when I hear the members opposite speak on regionalization. You would think that this has somehow sprung full blown out of a particular narrow ideological viewpoint. They ignore the fact that province after province across this country, and jurisdictions around the world, are looking at
[ Page 15428 ]
more locally governed structures for health decision-making and more local involvement in how services are delivered. The difference between this bill and what other provinces are undertaking is that unlike the Conservative -- or neo-Reform -- government of Alberta and unlike the Liberal government in New Brunswick, we have undertaken a process of forming regional boards and councils that involves the communities; that is not top-down; that does not pretend there is one solution for how governance is done that fits all communities and all regions of the province.
Unlike the members opposite, we believe that we need to respect the diversity of the province as we form regional boards and community health councils, and to build on that diversity as we empower local communities to make their own decisions about their own health services. That is the fundamental difference here. I hear from the members opposite, "Don't do this, go slow, reverse direction; oh my word, this is horrible," not: "Let's get on with it." It's "let's get on with it" that I hear from British Columbians.
We are faced with a crisis in health funding in this province, driven by the federal Liberal government's abandonment of the principles of medicare and seconded by the Reform Party of Canada and of this province, which would see us move to a two-tier health system. We have a responsibility to British Columbians to find ways of administering health care more effectively. When the members opposite talk of bureaucracy and proliferation, I ask them: what do you think we have now? With 700 boards and agencies, 700 administrations, 700 vice-administrators of that and directors of tother -- all formed together, all looking upward to Victoria, not coordinating services at the community or regional level.... That is not a health system; that is proliferation of administrative inefficiency. That is what we must take control of and streamline in the delivery of health care.
The Vancouver regional health board, to its credit, said: "We think we can find $30 million of savings." That's $30 million in savings in administration just in the hospital system in the greater Vancouver area. We can take that money and put it toward improving services for the people of Vancouver and of the province. What do the members opposite say? "Oh no, don't do that. My word, we might step on somebody's toes! As we amalgamate administration, somebody might find themselves out of a job." Well, maybe there will be some out of a job, but we are determined to preserve quality of services while increasing administrative efficiency in the delivery of health services in this province, and we are putting the vehicles in place to do just that.
There are several issues I want to address specifically that were raised in the debate by the members opposite. First, I heard the member of the Reform Party say that somehow provisions of this bill negate the commitment of the previous minister to the current mix of private and publicly run facilities. I'd be very interested in hearing any evidence of that in committee stage on this bill. It does not exist, except in the hon. member's mind.
Second, I heard that somehow we are abandoning provincial networks of care -- whether it be through the B.C. Cancer Agency, the Arthritis Society, the cardiac surgery registry or any number of other agencies. Nonsense, hon. Speaker -- errant nonsense. Those clinical guidelines need to be there, and that provincial role needs to be respected. I heard the member of the Liberal Party suggesting -- dragging red herrings across this debate from her friends on the Vancouver City Council.... They ignore the explicit policy of this government and this ministry, ignore the work that has been ongoing with the UBCM and the greater Vancouver district to make sure that funding of capital facilities in the Vancouver region is borne fairly by residents of the greater Vancouver region.
Finally, let's talk a little bit about remuneration. Nothing is more inequitable than identical treatment of unequals, and that is what these members opposite are proposing. The goal of this legislation is to make sure that people who serve as volunteers on boards and councils are kept financially whole. For the members opposite to ignore the disparities in the geography of this province and in the responsibilities of individuals in employment situations simply flies in the face of "common sense," to quote the member for Richmond East.
This is not a bill about ideology, nor is regionalization about ideology. It grew out of the Royal Commission on Health Care and Costs, which was put in place by the former Social Credit government, and to its credit it addressed some of the urgent issues that this province and others were facing. The bill is a result of a strategy put forward by this New Democratic government to make sure that we have a sustainable health system, so that we can have a universal, comprehensive, publicly run health system in spite of the federal Liberal attack on its principles and its funding, and in spite of the Reform view that the answer is American-style two-tier health.
Hon. Speaker, it's a pleasure to introduce this bill to the Legislature. I move second reading of Bill 40.
Motion approved on the following division:
|
YEAS -- 36 | ||
|
Petter |
Dosanjh |
Marzari |
|
Pement |
Edwards |
Cashore |
|
Zirnhelt |
Charbonneau |
O'Neill |
|
Garden |
Perry |
Kasper |
|
Hammell |
Lortie |
Giesbrecht |
|
Smallwood |
Cull |
Harcourt |
|
Clark |
MacPhail |
Ramsey |
|
Barlee |
Lovick |
Sihota |
|
Evans |
Beattie |
Farnworth |
|
Conroy |
Doyle |
Janssen |
|
Streifel |
Sawicki |
Jackson |
|
Schreck |
Lali |
Hartley |
|
NAYS -- 19 | ||
|
Warnke |
Reid |
Campbell |
|
Farrell-Collins |
Hurd |
Stephens |
|
Hanson |
Serwa |
Wilson |
|
Tyabji |
Chisholm |
Neufeld |
|
Fox |
de Jong |
K. Jones |
|
Symons |
Anderson |
Jarvis |
| Tanner | ||
Bill 40, Health Authorities 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.
Committee A, having reported resolutions, was granted leave to sit again.
Hon. G. Clark: I move the House at its rising stand recessed until 6:45 p.m.
[ Page 15429 ]
Motion approved.
Hon. G. Clark: Just before adjourning, there's been a slight change. I haven't consulted with all the members, so I just want to inform members of the business tonight. First, in Committee A will be the estimates of the Ministry of Municipal Affairs; and in the House the order of bills will be Bill 25, Bill 34 and Bill 13 -- the Mineral Tenure Amendment Act, 1995, I believe -- and then if we have time, we'll do the wrap-up of the Energy estimates, which just completed.
That's just for all members -- it's not a huge change.
The House recessed at 6:09 p.m.
The House in Committee of Supply A; F. Garden in the chair.
The committee met at 2:38 p.m.
ESTIMATES: MINISTRY OF ENERGY, MINES AND PETROLEUM RESOURCES
(continued)
On vote 26: minister's office, $343,000 (continued).
Hon. A. Edwards: We delayed responding to several questions until after the break. The member who asked them isn't here for the responses, but I think it's important that we put a few things on the record.
First of all, part of his question about the downstream benefits was to deal with whether or not -- if I were to generalize -- the playing field would continue to be level for independent power producers. I need to say that all the contracts for new supply that would be entered into by any utility in the province will be reviewed by the Utilities Commission. They will be reviewed in the context of the integrated resource plan that these utilities will have filed with the Utilities Commission.
To respond to some comments about the Williston reservoir, we dealt with that issue under the electrical systems operation review. The government has responded to that review. In that response we asked B.C. Hydro to document steps that are being taken by the mills, Hydro and the province to address the impacts of predicted drawdowns below 2,150 on the Williston reservoir, including public explanation for drawdowns below 2,130. This maintains B.C. Hydro's flexibility to use the full extent of the Williston reservoir if conditions warrant deep drawdowns, while addressing, to some degree, the concerns of the Mackenzie residents about the impacts on the forest industry of what could be deep but very infrequent drawdowns.
We have several agreements between the province and the mills. Specifically, we began construction in 1993 of mitigation facilities in response to low water in that year. In the summer of 1994 we finalized new 50 percent cost-sharing agreements which allow for companies to continue to operate during low-water conditions.
Basically what we have now is a direction that, in any situation in which there was an expectation that.... There was going to be a drawdown below 2,150 on Williston that B.C.... Certainly there would be least-cost mitigation measures, which would be taken over to address the impacts of the drawdowns. The written policy would also require that if there were a drawdown below 2,130, for which there is much less confidence that mitigation could be successful, a prior briefing of the responsible ministers would be required, as well as a public accounting and explanation for whatever took place, including a full assessment of the costs and benefits of the alternatives. That seemed to us to address the issue much better than without any expectation of very frequent.... In fact, it would have be extremely infrequent use or occurrence of drawdowns that deep to reverse a water licence which had already been granted to B.C. Hydro.
D. Jarvis: In today's paper, for example, there's an article basically saying that Hydro is gaining easier access to the U.S. market. Could the minister tell me if exactly the same type of access applies to IPPs in British Columbia?
Hon. A. Edwards: Yes, it would apply to IPPs as well.
D. Jarvis: Conversely, then, could the minister tell us if the same type of access to our own systems will be available to the British Columbia IPPs?
Hon. A. Edwards: This agreement would be reciprocal.
D. Jarvis: Perhaps I didn't clarify that correctly. I appreciate that the minister said it would be reciprocal, but that is for the American IPPs to have access to it. I'm talking about our own independent power producers. Are the rules such that they can have the same access to the British Columbia system as the American IPPs?
Hon. A. Edwards: Exactly.
D. Jarvis: Therefore I'd like to ask the minister.... This is a direct reversal of everything. Now the IPPs have complete access to supply electricity in B.C. and export electricity anywhere else they may see fit, providing they have met the basic qualifications.
Hon. A. Edwards: Currently IPPs negotiate with whoever they choose to want to have transmission with. If it happened to be a company inside British Columbia and they couldn't get what they thought to be reasonable access, they could appeal to the Utilities Commission.
[2:45]
D. Jarvis: There are a lot of plans for cogeneration, etc., that are proposals out there -- for example, the ones in the Kootenays that are using coal that's for ANG's plans; and Elko, I believe. They were turned down before basically because the calculations were based on their supplying power to the lower mainland, and the transportation costs were included in everything. Have those rules now been put aside so that if a cogeneration in the Kootenays could produce power for 3 percent, 4 percent, 5 percent, 6 percent, 7 percent or 8 percent, and could get a market outside...? Would they be allowed to just go and make their own contract, providing
[ Page 15430 ]
everything is according to Hoyle -- sell it to the United States or supply generation in their own area?
Hon. A. Edwards: ANG has never been turned down by this government for any proposal they have. They have certainly attempted several times to seek markets in the U.S., and they began to do that after we set the machinery in place so that they could do it. There is one final thing that we are doing right now. As I say, there are rules in place right now. We hope to improve how the transmission works in this province through the Utilities Commission, which is determining wheeling and transmission rates now.
Right now they still have the opportunity. They have always had the opportunity since we established that we would allow the export of electricity out of British Columbia. They have the right to seek a market and then to seek the ability to get their electricity to market. There has never been any way of interfering with anyone who seeks the market. Since we set up the rules for IPPs, we have assured them that we will help them as much as we can through Powerex, and that they will have access to transmission through B.C. Hydro and Powerex facilities.
D. Jarvis: I was under the impression that they didn't have the same rules, ostensibly because the cost of using B.C. Hydro transmission lines precluded them from coming to a competitive figure on a cent-per-kilowatt basis. Therefore every time the independent power producers could not search out markets locally or across the border because Hydro would charge them.... Hydro doesn't have to pay for its own transmission. Accordingly, the independents would have to pay that extra surcharge. Am I not correct?
Hon. A. Edwards: I think you're fooling yourself if you're suggesting that B.C. Hydro doesn't have to pay for its own transmission. B.C. Hydro has huge expenditures to build the transmission system in the first place, maintain it, assure that it works the way it should, allow access to others and ensure that they have the right amount of transmission for the areas that they serve. The transmission costs to Hydro are quite high.
One of the things that the Energy Council recommended to us and that we approved on the export of electricity was that B.C. Hydro consumers would not have to pay the cost of any other company using B.C. Hydro resources to do something other than serve the consumer. If a company wants to sell power to an export customer, it has to pay a reasonable cost for the transmission. That is true. B.C. Hydro has been charged by us with assuring that the costs they have for transmission would be covered. Yes, any company that wants to generate electricity, sell it to somebody else and transmit that electricity through a Hydro system would have to pay for that transmission.
D. Jarvis: Is there a basic cost figure that's established, or does it depend on the distance travelled?
Hon. A. Edwards: B.C. Hydro has suggested that it might be 1 cent a kilowatt-hour, but the application for that transmission was withdrawn in order to wait for the Utilities Commission's decision on transmission rates. So that has been put on hold.
D. Jarvis: Earlier the minister suggested that if the Columbia Basin Trust could develop power, they could sell it anywhere they wanted to. The minister suggested that the cost of producing at Keenleyside would be somewhere around 5 cents. Five cents really isn't a very good figure for them to work with. If they have to pay another cent -- for transmission, for example -- that will bring it up to 6 cents. They're going to have to sell it in the States. The newspapers, the media and everyone we talk to say that you can produce power for well below 6 cents everywhere in the United States. That was ostensibly why the memorandum of agreement wasn't complied with, because power can be produced from gas for something like 3 cents in the United States. At the same time, I think the figure in your request for proposals from independent power producers was 3 or 3 1/2 cents, which seems to be the going figure. How can Keenleyside expect to compete if it's looking at 6 cents-plus to market its power?
Hon. A. Edwards: I want to remind the member that a number of studies have gone forward. Some of them were funded by the Columbia River Treaty Committee along with the Ministry of Employment and Investment. Those studies indicated that they expected the market for electricity to be there in the U.S. That is all they indicated. I'm not here to defend the view that there will be a market for Keenleyside power. All I can give you are the figures. I can assure you, however, that one of the reasons that Keenleyside looks like it may be a possibility is that they expect that they will be able to sell the power in the Kootenays. If West Kootenay Power continues to be as interested as they are now, they would sell it right there, and obviously transmission charges would be negligible. For West Kootenay Power to accept it, their transmission lines are right there at the same.... In fact, they share dams with B.C. Hydro in the Kootenays.
D. Jarvis: Following that, then, if we were to sell the excess power that is produced through the downstream benefits, over and above the 950 storage, have there been any figures quoted as to what the BPA would charge British Columbia for generating that excess electricity to sell through their lines into the United States?
Hon. A. Edwards: The electricity is ours. Bonneville generates it; it is ours. There is no cost for the generation of that electricity.
D. Jarvis: I would assume the minister is saying that the only cost to us would be the cost of transporting it across the transmission lines. Could she tell me if there is a basic figure to expect on that?
Hon. A. Edwards: What we did with our agreement in principle, which we have talked about several times, is negotiate that that power would be delivered to us at Vantage, which is mid-Washington State. Instead of it being delivered to us at the border, which was one of the options mentioned in the Columbia River Treaty, it would be delivered to us at Vantage so that we wouldn't have to transmit it from the border.
We were also working on some of the terms of the transmission from there, but we did not negotiate the rates for the transmission itself. We had negotiated preferred customer transmission costs, and in their system it depends on the distance, so what we had negotiated was a much better situation for us. But, again, these costs go up and down, so we hadn't negotiated those numbers.
[ Page 15431 ]
D. Jarvis: I'm wondering if the minister could answer a question with regard to this new agreement that's been signed with FERC, where Hydro gains easier access to the U.S. market. I asked the minister if the independent power producers would have the same opportunity. I understand that the Americans have agreed in this agreement to allow all of their independent power producers to have equal access throughout the northwestern states. Will our independent power producers have the same ability to produce power and get onto the grid in the U.S. as the American independent power producers?
Hon. A. Edwards: I think the crucial point here is that the FERC agreement has nothing to do with the Columbia River Treaty. The FERC agreement is a separate agreement. It deals with the power that we or IPP might generate and want to sell into the U.S., but it does not deal with the downstream benefit entitlement which we consider to have special treatment. Under the FERC agreement, the IPPs will have the same treatment as any of our utilities.
D. Jarvis: Enough on that. I've gone as far as I can go. I don't want to belabour the Mackenzie situation further, but along with this operations review that Hydro has given.... On what you said just a minute ago about drawing it down to 2,130 feet and the possibility that it may happen, it is my understanding that if it does go below there, it won't just be for a short interim; it will be the long-term. It takes a considerable amount of time for the Mackenzie to get back to standards. It's not a draw-down, fill-up-again situation. It's a two-year proposition to get back up to 2,150 feet.
[3:00]
The thought of drawing down Mackenzie and the damage it's going to cause to the industry in that area is unbelievable. This government is also building a multimillion-dollar transportation barge up there -- they're financing it -- and it cannot even operate below 2,150 feet.
Is there any suggestion whatsoever that this may be drawn down? You say it's highly unlikely, but why would you take that probability into consideration if we have ample supply of energy and it should last, as you say, going up into the year 2000? Why should you even consider and prepare for the Mackenzie drawdown?
Hon. A. Edwards: I think we've got to remember that the water licence was given to B.C. Hydro, and under the basis of that water licence, they built generating facilities. Those are extremely expensive facilities. They are very costly, and they give us our capacity. You can't have a certain capacity to generate electricity if you limit that capacity by saying, "That much of the water isn't useful," or, "That much more isn't useful." So the capacity is important to B.C. Hydro in looking at our supply of electricity.
We said, following the electrical systems operation review, that we want to be sure that certain rules will be followed any time the water level goes below 2,150. We have already put a significant amount of money in, after having had agreements.... The mills had agreements with the government that they didn't keep. Then this government went in and helped those mills again. We have done that kind of thing. We have agreements with them to mitigate the circumstances of what would happen if the water went below 2,150.
We have very clear rules as to what would happen under those circumstances. If in fact it looked like it would go below 2,130 -- and there's the possibility of it happening.... Let me start first with the 2,150, because they are tied together. The probability of a drawdown below 2,150 is seven times out of 45 years -- possibly. Of those seven years, two of them might be below 2,130. Those are the worst things that we expect would ever happen. Over more than two decades, the lowest level at Williston has been about 2,148, in 1989 and in 1994.
The water licence actually permits the reservoir to be drawn down to 2,106, which is very low. So we're working at much higher levels to assure that we take a very, very close look at what would happen at 2,130. Withdrawing a water licence would be significant. We felt that the probability of the situation where we couldn't make some kind of alternate arrangement would be very rare -- probably non-existent.
D. Jarvis: Has the minister and her department given any consideration to a full-water review of that area?
Hon. A. Edwards: The system operation review looked at what would happen. We did a multiple account evaluation summary. It took into account economic, social and community values. We found that the direct cost to B.C. Hydro and government, if we had an alternative of either 2,150 or 2,130, would be somewhere between $10 million and $22 million a year.
I did not yet answer your question about how long the level would be low. The calculations are that if it were low, it would be low seasonally -- up to three months, and probably more like two to three months. As I say, the expectation is that there are other measures that can be taken if we face that kind of thing, which we can see coming.
D. Jarvis: In the request for proposals by the independent power producers, is there going to be more than one.... From what I understand, they've called for enough megawatts to serve 350. From what I understand, you had 40- or 50-odd proposals out there. It looks like we have a dearth of proposals for anywhere from five or ten up to 350 or 400 megawatts. I wonder what the Energy ministry philosophy is on that. Are those proposals being asked for and they're then going to pick one or two in one area per group -- presumably over in Vancouver Island, although they came from all over the province? Are they just going to let them lay at rest or are they going to divide them up into a bunch of them? Can you tell me just what is going to happen on that, or are you aware?
Hon. A. Edwards: We had 42 proposals for about 3,000 megawatts that came in. We asked for up to 300. The bids, of course, have various megawatts attached to each one of them, so it could be one. I doubt it will be a single one, but it could be. It is more likely to be two or three projects so that we can reach somewhere between 250 and 300 megawatts.
We are hoping that initial analysis will soon be done so that we can announce a shortlist. That's what Hydro expects, so that there will be some further.... Part of what will come is a firm connection price, which will be given to short-listed proposals, and then contract negotiations can begin. By January 1996 we could, I hope, have a key-principles agreement for an electricity sale and a purchase agreement by March 1996. We would then expect proponents to submit their proposals to the environmental assessment office beginning in
[ Page 15432 ]
April 1996, so that phase one of the review could begin. They could certainly begin construction by October 1997 and deliver power in 1998. This is beyond your question, I think, but it may be of interest.
D. Jarvis: So after the choice is made, the rest of those independent power projects, if they wish to go through the environmental assessment, could theoretically start producing power and export into the United States on their own? Could they?
Hon. A. Edwards: At the moment, we would not process anyone through an environmental review unless they could show they had a market.
D. Jarvis: Could the minister tell me what the cost of energy produced at Stave Falls would be?
Hon. A. Edwards: As you know, it's a Resource Smart project. The cost is less than 2 1/2 cents per kilowatt-hour.
D. Jarvis: People have suggested to me that there's a problem in the sense that the figure for Stave Falls is being projected at around 7 cents. Is the minister aware of that? Also, an environmental impact is required now to put more water into the Alouette River for fishing. On the economics of the Stave Falls Dam, it will be a $184 million project. Has that been factored into the figure that you originally gave me? Maybe that is why people are suggesting that your economics are wrong and that it is closer to 7 cents.
Hon. A. Edwards: There has been a suggestion from people interested in the fishery at Alouette Lake that Hydro take the opportunity provided by building the Stave Falls Dam to improve the habitat for fish in Alouette Lake. I imagine in the course of these things that people bandy figures back and forth, and perhaps that's where you heard the figure. There is discussion with B.C. Hydro right now. Again, we have to remember that this would be an issue for the protection of fisheries rather than for the generation of electricity. When the project goes to the Utilities Commission, it would have to ensure that whatever it put in there would be acceptable to the Utilities Commission.
If you're talking about fertilizing a lake for fish, that would be one thing, but if you're talking about changing the flow regime, that's where you could increase the cost significantly to the project as a generator of power. We expect that the project will be applied for, to be approved this summer -- at least, we hope so.
D. Jarvis: Well, minister, I appreciate that it would be part of whose problem it would be; it would certainly change the dynamics if that were true. Have you not heard of anything like that? If you're applying and the Environment ministry says that there's insufficient water running into Alouette Lake and they are going to have to change the whole of the economic factors of Stave Falls, it makes it not a viable project. I assume that the minister at this point has not heard of any problems that may arise out of that.
Hon. A. Edwards: I hope the member remembers that any certificate that is accrued for energy development is signed by myself as Minister of Energy and also by the Minister of Environment. If there were some fish mitigation agreements, they would have to be within a reasonable range, since this is a project for electricity. It is not primarily a project for fish.
D. Jarvis: I was wondering if the minister could give me an update as to.... We've been pumping a lot of good dollars into Ballard fuels, actually. What is the status of that situation there, as far as their producing a battery to create power?
Hon. A. Edwards: I'm not sure whether Ballard is in your constituency or not.
D. Jarvis: It was.
Hon. A. Edwards: It certainly is in North Vancouver, and it's of interest. The investment that we've been putting in as a government has come through the Science Council of B.C. Out of that -- I guess you can equate that way -- we hope there will be four demonstration buses operating on the Ballard fuel cell in San Diego this summer. That's a joint project, as you know, between the San Diego group and Ballard. There are a number of other projects, but that's probably the next one we'll see.
D. Jarvis: I thought the Energy ministry was supplying them with a grant to investigate a specific battery that would fuel a small cogeneration power producer.
Hon. A. Edwards: They are looking at distributed generation from the same fuel cell. The funding comes from the Science Council.
The Chair: Shall the vote.... Some Hon. Members: Aye. Aye.
An Hon. Member: Don't rush it, or we'll stay here all day.
The Chair: The Chair doesn't appreciate threats from the group. There was nobody on their feet, and I was giving a bit of laxity so somebody could get on their feet, but we don't need that kind of talk. The member for Peace River North.
[3:15]
R. Neufeld: I guess I was kind of sleeping, too. I was reading some notes here and didn't notice that no one was standing.
I just want to go to IPPs. So that I have clarification, can the minister tell me what the cost of generation of hydro is now -- for water? What's the average general cost for water generation of hydro?
Hon. A. Edwards: That does include more than just hydro generation, but the system average cost is about 3 cents to 3 1/2 cents a kilowatt-hour.
R. Neufeld: Does that include transmission?
Hon. A. Edwards: It includes transmission and it includes water rentals.
[ Page 15433 ]
R. Neufeld: For my information -- I'm searching for it, but I haven't been able to find it -- what was the cost per kilowatt-hour that Hydro told the IPPs was the maximum that they would pay to purchase the power from them?
Hon. A. Edwards: I think Hydro said: "We expect to pay 3 1/2 cents. You'll have a difficult time if you're in the 4-cent range."
R. Neufeld: That 3 1/2 would be generated and would have nothing to do with transmission, then? That's just straight...?
Hon. A. Edwards: That would be delivered to the load centre, the same as the Hydro price, which included the transmission to the load centre. So that would be delivered to the load centre. If the IPP was doing a hydro project, it would have to pay the water rates, too. So it's similar.
R. Neufeld: Just a comment. IPPs do not pay the water rentals, do they? To my knowledge, they don't.
Hon. A. Edwards: If you wanted to do a hydro project -- and there are small hydro projects being proposed -- you would have to have a water licence and pay a water rental.
R. Neufeld: Are you telling me that a coal-fired or natural-gas-fired IPP would pay a water rental tax?
Hon. A. Edwards: I've been very careful to say: "If it's a hydro project." Obviously, if they're not using a river to generate power, they don't need to pay a water rental licence. So they would have that bit of elasticity if they wanted to use natural gas or wood waste or whatever.
R. Neufeld: I was just a little confused with what she had said, because most IPPs that I know of generate it with something other than water.
Can the minister tell me how -- and I'm going back to earlier conversations -- the Keenleyside, Waneta and Brilliant dams would cost...? If there was a 50 percent upfronting of the costs, it would cost about 5 cents a kilowatt-hour to generate electricity. How can she equate that to Hydro telling IPPs that unless they can generate it for less than 3 1/2 cents, they're not interested. I can't quite get the correlation of how Hydro would accept 5 cents from the Columbia system or from the Waneta and Brilliant dams compared to 3 1/2 cents for IPPs in other parts of the province.
Hon. A. Edwards: I don't think there's ever been a proposal that Hydro would buy that power. Hydro has not said it would buy that power; it has other sources. However, it looks like West Kootenay Power is interested in that power at that price.
R. Neufeld: I want to talk a little bit about water licences. The minister talked about how it would be significant to change the water licence for Williston Lake. I agree; it would be a significant move. But your government has not been shy about some other significant moves with B.C. Hydro, such as setting the rates so you get a certain amount of return on investment, which increased the hydro rates to all British Columbians substantially. That was, I would say, significant. Or could the minister explain to me why she would think that would not be significant but changing a water licence would be?
Hon. A. Edwards: This is old business, of course, but yes, it is significant for Hydro to pay a dividend to its shareholders. Its shareholders are the people of the province. That includes every person in the province, not just the consumers. It's a fairly broadly held principle that a corporation should pay its shareholders, so for that corporation to pay its shareholders, it pays a dividend to the taxpayers. The consumers pay a price, which is still the lowest in Canada for residential rates, I think.
Interjection.
Hon. A. Edwards: Has Manitoba beaten us on that one? We have a very low rate, among the lowest. We still have that low rate and also pay a dividend to the taxpayers, who are the shareholders.
R. Neufeld: I'm certainly not disputing the fact that Hydro should pay a dividend to the taxpayers. My question was more on the significance of a move to change a water licence for B.C. Hydro on Williston Lake. That could allay a lot of concerns that people have in Mackenzie -- in fact, they have them in Hudson's Hope also -- about what would happen if the Williston reservoir was drawn down to 2,130, which the licence allows them to do. That was more the comparison I was trying to make. That would have an impact, if I remember the minister's comments correctly, of about.... Did she say $20 million or $25 million a year? Is that correct?
Hon. A. Edwards: It would cost $10 million to $22 million a year every year. As I say, the possibility of needing that kind of a drawdown does not happen every year. The cost is significant.
R. Neufeld: What effect would that have on electricity rates in British Columbia if that was done? Hon. A. Edwards: It would cause an approximately 1 percent lift in the rates right across the province.
R. Neufeld: So the effect would not be that great on B. C. Hydro users if it took approximately 1 percent, on average, across the whole province to allay those concerns of Mackenzie and the areas that would be dramatically affected. One percent is not a huge amount when we take into consideration that your government instructed the B.C. Utilities Commission to increase the rates much higher than 1 percent. If we're still the lowest province in Canada for the cost of generation of hydro, does the minister feel it would have a significant impact on all British Columbians if we were to do that?
Hon. A. Edwards: Yes, we feel that it would have a significant impact. Every time you make one of these decisions you have to do a balance; you have to do the probability of why you are spending that money. If we were to raise the rates of every British Columbian across the province by 1 percent for the probability of Williston Lake going down below those levels -- 2,130 is different than 2,150 -- the amount would be somewhere between $10 million and $22
[ Page 15434 ]
million every year. It seemed to me and to the government that that was not a valid reason to raise rates by 1 percent to all British Columbians.
R. Neufeld: If we use the minister's rationale of seven times out of 45 years -- I recall her mentioning that -- where there would be the possibility of the drawdown.... If you use that rationale, it certainly wouldn't need 1 percent a year to mitigate those effects. You could probably get by with very little, maybe less than one-half of 1 percent. Would that be acceptable to British Columbians?
Hon. A. Edwards: The minute you decide that you're going to cut off the water licence at a certain level, you have to raise your capacity in some way or another, and that is what you would have to pay.
The cutoff that we have is the cutoff that is there, but we have said that we expect to be reported to, we will expect measures if there is a danger of it going below 2,150 and extreme measures if there is the possibility of it going below 2,130, without interfering with the water licence or increasing the rates to British Columbians. As I say, we expect and we have seen that there are other ways that we believe we can deal with issues. To put a 1 percent increase on people's power rates seemed to us not to be necessary or desirable.
R. Neufeld: I'll leave that argument. I listened to the minister talk about drawing Williston Lake down to 2,130, suggesting that it would take two to three months to fill it back up to 2,150 or 2,160. Williston Lake is the largest man-made lake in North America; it has a tremendous amount of water. Does the minister have some studies to prove that that would actually happen without totally shutting down the river systems that run into the Peace reservoir?
Right now I understand we have negotiations going on with Alberta in regard to the Peace River, and they're feeling hard done by because we're cut off a lot of the water flow. I would think you'd almost dry up the Peace River to do that. It takes two to three months to fill that dam back up again. Does the minister have any information that would say that the Peace dam could be filled up in two to three months to 2,150 or 2,160 if you brought it down to 2,130? Hon. A. Edwards: These are always difficult questions, as the member probably knows, because you're talking about a river where the feeders come in, and you have different levels at different places. The 2,106, where the original water licence was, was the level of the Parsnip River. There's no question with the 2,130 that there would be a pretty dry river bed; there would be mud flats and so on. I don't think anybody can say how long it would be that way or how long it would take it to change, because it would depend on precipitation and on a number of things. I think you're probably aware of that.
[3:30]
The goal, and what the ESOR attempted to do, is to get a much better handle on what we could do, what the probabilities are and what the costs are. We have put forward a plan, and we want more information back from B.C. Hydro. We expect that these measures will allow us to deal with any possible emergency like that again.
R. Neufeld: I realize that whether you have a dry year or a wet year and how the rivers are flowing in the north will have a dramatic effect on how quickly you would fill the reservoir back up again. I was quite surprised that the minister had it on the tip of her tongue to say two or three months. It still amazes me that she seems to think that's a possibility. Is that actually in a study that says if you draw the lake down to 2,130 you would fill it back up in two to three months by immediately cutting off all water flow?
Hon. A. Edwards: I assure you that I'm not glib about this at all. It's just that this sort of thing is seasonal. Generally, after three months, it would be at the lowest in dry season. As you know, living in the rural part of British Columbia by one of these big rivers, the dry season is always followed by a wetter season. In our dry area there is a dry season -- and believe me, it's the driest -- and after that you hope for more precipitation so that it would fill up. I'm not giving anybody any predictions about what will happen. I was simply trying to say that we believe it would be seasonal and that we wouldn't have a serious problem. I mean, we hope that the kind of serious problem we are looking at there wouldn't be for an extended period of time. But I can't guarantee it, and you can't guarantee it. Even a hydrologist can't guarantee dams.
R. Neufeld: Then what the minister is saying is that there are no studies or reports that say you would be able to fill the dam in that period of time. That was just an educated guess by the minister as to what could happen.
I want to go now to issue of natural gas and the National Energy Board's decision about the plant in Fort St. John. What moves are afoot within the ministry? I know the minister wants to have jurisdiction over Westcoast. Maybe she could briefly bring us up to date on what's taking place with that right now.
Hon. A. Edwards: First off all, we're very pleased that the National Energy Board recognized that it does not have jurisdiction over gathering and processing in British Columbia, any more than it does in another province. It's a very gratifying decision in that sense.
We went to meet with Westcoast Energy and the producers in Calgary about two weeks ago. We are working with them so that they are familiar with our regulatory regime. It is not new to us to regulate a gathering and processing plant. As you know, not all of the plants in the northeast belong to Westcoast. We have regulated them before, but we wanted to make sure that everybody is very familiar with what's going on. We will have a workshop on June 22 which will deal with our approach to regulation. I'll leave it at that. If you have any more questions, we'd be pleased to answer them.
R. Neufeld: The minister is right. The government does regulate other gas plants, and I appreciate that. What I find difficult is that one portion of Westcoast's operation, the Aikman Creek plant, would come under provincial jurisdiction, and the balance of it, if it stays the way it is now, would be federally regulated. I wonder what problems that would pose for the province. I don't think Westcoast is quite pleased with what is taking place or what has taken place, and I'm not too sure that it agrees that it should come under provincial jurisdiction totally. Maybe the minister could enlighten me on this.
Hon. A. Edwards: This decision was on Aikman Creek, and that was what the application was for. It would seem to us
[ Page 15435 ]
to logically follow, and I don't believe there will be a problem with that. All of us will begin to recognize very soon that it's the outlet from the processing plant where federal regulation takes over right now. So rather than the National Energy Board continuing to regulate the gathering and processing.... In fact, if there is any change, we will have arranged a process so that we will become the regulator. We are the regulator.
R. Neufeld: I want to talk about natural gas storage in southern B.C., specifically in the Fraser Valley, which hasn't been mentioned for a while because there has been no drilling in the lower mainland. What has been done on that for the last few years? Has there been any progress?
Hon. A. Edwards: In the lower mainland there is currently a rig drilling for natural gas. I'm certainly sorry you missed it, because the lower mainland usually likes to let you guys know about it. In this case, Dynamic Oil is drilling right now, and they commenced on June 5.
However, to address the issue of natural gas supply to the lower mainland, B.C. Gas is currently studying a proposal to build a liquid natural gas facility, and they are dealing with that through their process of developing their integrated resource plan.
R. Neufeld: I wasn't talking about the liquid gas you are talking about over at Prince Rupert, I believe it was. I'm talking about sending natural gas from the north to the south and the capacity of the pipelines, the amount of use in the south and what the minister is doing in regard to storage facilities at high-use times during the year in the lower mainland.
Hon. A. Edwards: As I said, B.C. Gas is looking at LNG, which, in essence, is a storage process. You can store it much more easily, and then it becomes something you can use during peak periods in the winter. So that's what they're looking at right now.
R. Neufeld: I'm unfamiliar with B.C. Gas's LNG proposal. Where are they proposing to do this?
Hon. A. Edwards: Basically, they are looking at that through their integrated resource plan, and they are asking: "Would this be more valuable to us? Is this in all the various criteria that are put into an integrated resource plan? Would a liquid natural gas facility be more preferable to us than searching out more storage, increasing our lines or all the other options?" So what they are doing is looking right now at whether or not that is a possibility. If it comes out in their integrated resource plan as a preferred option, I'm sure they would look to doing the facility.
R. Neufeld: I'm certainly not an expert on it nor an engineer. But when you get to liquid natural gas, the fear of explosions becomes tremendous everywhere it has been studied. Obviously the people in the lower mainland are not aware of that yet or they would be on the bandwagon about that. I remember that happening in Prince Rupert when there were discussions about doing it there.
Going on to pipeline capacity and IPPs, I believe there was a proposal to build half a dozen fairly large plants on Vancouver Island using natural gas and, I would assume, a certain amount of wood waste. I would like the minister to tell me if there is enough capacity within the pipeline system from the mainland to facilitate that, along with the long-term goal of converting as many residential units to natural gas as possible on the Island.
Hon. A. Edwards: Again, this brings up the whole business of that VI gas contract. Yes, there is lots of capacity in the Vancouver Island natural gas pipeline. It would be very helpful for the economics of that project if there was one natural gas-generating facility. If there were two, it would be even better. The capacity is there, and the benefits would be very large for a number of reasons.
R. Neufeld: Can the minister tell me approximately how many megawatts of hydroelectricity the Island consumes?
Hon. A. Edwards: These are rough figures, but we would probably need a capacity of 2,000 megawatts to serve Vancouver Island. They probably have a heat requirement of 15,000 gigawatt-hours every year.
R. Neufeld: I want to deal a little bit with orphan wells. I know there are some problems with orphan wells in the north that are being left, specifically the ones that are usually on private farm land. I know through the last number of annual reports -- I must thank the minister; I got last year's annual report, so I don't have to go by the old one anymore -- that there is an orphan well policy. I'm not exactly sure about all that's taken place. Maybe the minister could just bring me a little up to date, because I've had some questions up north about it.
Hon. A. Edwards: I'm not sure whether your question was on the policy or on exactly what we're doing.
R. Neufeld: Both.
Hon. A. Edwards: Okay, it's both. First of all, the ministry has certainly done a significant amount of work on one problematic well in the Peace, which has cost us about $50,000. It is the only orphan well that has posed any significant health hazard. We've had only one other orphan well identified. We have deferred action on the second one because there may be a new tenure offering, so it could be dealt with that way.
As far as the actual policy is concerned.... I'd like to follow my notes so that I get it absolutely correct for you. We have a multi-year program to deal with as many orphan wells as we can. We did bring in legislation that allows us not to be stuck with too many new ones.
We are trying to deal with the wells that have historically been there. They have actually been improperly restored, and we can't identify the owners. Those are the ones that give us the trouble. I'm not sure if we have a number on those. Because it's a continuing thing and could come up again, those numbers might change from year to year.
W. Hurd: I wonder if the minister could take a minute to describe for the committee the involvement of the ministry in ongoing negotiations with the Bonneville Power Administration with respect to the return of downstream benefits. Is the ministry being asked to contribute technical expertise or peo-
[ Page 15436 ]
ple to be involved in the committee? Exactly what role is being played by the minister and the ministry with respect to this issue?
[3:45]
Hon. A. Edwards: This ministry has led the negotiations in the sense that I, as the cabinet minister, led the committee for negotiations on downstream benefits. The team was made up of a number of people from various agencies and ministries that are involved. That group worked until we got the agreement in principle. What we are now doing is a process that is going to press the point that we have an agreement that bears weight under international law. That continues to be an issue. We continue to have my ministry, the Ministry of Energy, and the ministry responsible for B.C. Hydro, which is the entity for the treaty within B.C., involved, and of course we are working together as a government to ensure that we get from here to where we need to be later.
W. Hurd: So the ministry did have an active and important role in the signing of the memorandum of a negotiated agreement dated July 8, 1994. Is that what I'm hearing the minister say -- that that agreement, which was signed on that date and was to have been completed by the end of 1995, was a joint effort of the Crown corporations secretariat, the Ministry of Employment and Investment and the Ministry of Energy, Mines and Petroleum Resources?
Hon. A. Edwards: The Minister of Employment and Investment was involved as the minister responsible for B.C. Hydro.
W. Hurd: I'm just attempting to confirm that the copy of the agreement that I have in my possession is, in fact, the agreement that we are dealing with for the purposes of the debate in the assembly and also the setting up of the Columbia Basin authority and the return of downstream benefits. I refer specifically on page 3 to section 3, which says:
"...the legal and technical teams be requested to complete drafting of the definitive agreements by December 31, 1994, and if definitive agreements are not drafted and executed by all parties by December 31, 1995, the transactions contemplated by the statement of principles not proceed and the negotiations between the parties be terminated."
I just wonder if the minister is utterly convinced, as she has indicated, that this is an agreement with legal weight in terms of the Columbia River Treaty and the negotiations that flowed from it. Could she take a minute to explain to the committee what her interpretation of that section would be?
[D. Schreck in the chair.]
It seems to imply to me that there was an escape hatch in the agreement and that once the legal agreements were not completed by the end of 1994 and we were halfway through 1995, it appeared highly unlikely that they would be completed by the end of 1995, in which case the agreement would "not proceed and negotiations between the parties be terminated." One of the items that we didn't have a chance to talk about during the special motion in the assembly was a more accurate description from the ministry of exactly what this section means in the negotiators' agreement, and whether it did, in fact, provide Bonneville Power Administration with a loophole to simply walk away from the agreement, as they have now done.
Hon. A. Edwards: The member will probably be well aware that our belief and continuing position that there is weight to this agreement is based on the fact that it was negotiated under the Columbia River Treaty. Under the terms of the treaty, it is up to the signatories to bargain in good faith to find a return agreement for the downstream benefit entitlement. That was required under the treaty, first of all.
Also, under international law there is an obligation to bargain in good faith. Bonneville bargained as the entity for the United States government. Because they bargained this agreement in principle, they were then obligated, for best efforts, to take this to the group they acted for, which was the United States government, and persuade them to sign the exchange of notes. Those requirements are there under general international law, and they are there as requirements under the treaty. And those are the bases on which we expected Bonneville, in good faith, to take the agreement to its senior body and say: "We want this agreement signed." Instead of that, Bonneville took its own commercial interest and decided not to take that agreement to its senior director.
W. Hurd: I would settle, then -- to expedite this discussion -- for an interpretation by the minister of what exactly section 3 on page 3 actually means. I think it's an important question, because it appears to me, in any case, that: "...if definitive agreements are not drafted and executed by all parties by December 31, 1995, the transactions contemplated by the statement of principles not proceed and the negotiations between the parties be terminated." I wonder if the minister could maybe zero in on that specific section of the agreement and provide the committee with some insight as to what her interpretation of it might be.
Hon. A. Edwards: Our understanding, our belief, our position is that as negotiator, Bonneville Power now has the responsibility to use its best efforts to have the United States government sign that agreement. Their position is now untenable, as far as we can see, because they have not used their best efforts to take this agreement to final resolution.
W. Hurd: Again, referring to section 3, the reference is that "the legal and technical teams be requested to complete drafting of the definitive agreements." I assume that to mean the legal and technical teams of the U.S. entity, which is the Bonneville Power Administration, and the Canadian entity, which is referred to in the agreement as the province of British Columbia and the B.C. Hydro and Power Authority. Clearly there is an obligation under section 3 that those two entities and their legal and technical teams complete the definitive agreements by December 31, 1994, and failing to do that, if they were not completed by the end of 1995, "...transactions contemplated by the statement of principles not proceed and negotiations between the parties be terminated."
Clearly this implies to me that there was a one-year window here in which there was a continuing effort by the legal and technical teams of the two entities to hammer out agreements that would be legally binding, and failure to do that would result in the agreement lapsing of its own accord by the end of 1995 and then be rescinded. That would, I assume, result in a whole new set of negotiations. So I cannot quite understand or rationalize the minister's explanation that based on this agreement, the U.S. entity should have taken it to the U.S. government, when clearly there were no definitive
[ Page 15437 ]
agreements completed by legal and technical teams for the entities. I just don't understand the answer at all.
Hon. A. Edwards: I think that most people who recognize that British Columbia has a very strong agreement here will see that Canadians have a position -- B.C. has a position -- that's very strong. We have researched it, and we continue to feel firm on our position. What the agreement in principle said was that this was the agreement; it was signed. From then, the negotiators were to continue with their technical and legal teams working out the details of the transmission and other agreements so that we could have the formal exchange of notes. The chief negotiators met as recently as early April, and they agreed that the technical issues could be resolved.
If the technical issues can be resolved, then we see no reason that we should not go to this agreement, to the exchange of notes. That has weight in law. It is not something that you simply walk away from and say: "Oops, I'm tired." They have already signed an agreement in principle that commits them to their best efforts to complete the agreement, and they have not completed the agreement, nor have they put in their best efforts. Under the treaty, they simply cannot walk away from a request from our side for a better situation than was named in the treaty and that doesn't cost them any more. So it is not something they can walk away from.
W. Hurd: Just to facilitate the discussion, it's important to emphasize that the treaty remains in place and that the energy will be returned to the province by 1998. That's not the issue here. The issue is the nature of the interim agreement that the province signed with Bonneville Power Administration and the role that the Ministry of Energy, Mines and Petroleum Resources played in the execution of that agreement.
Can the minister tell us what specific action was taken at the end of 1994, December 31, when the first deadline had passed and, in fact, no legal definitive agreements had been finalized? Can the minister tell us whether concern was expressed to the entity with respect to the progress of these negotiations, given the fact that we now had this clock ticking on a one-year window of opportunity? Is the minister telling us that regardless of the content of section 3, in her opinion it was an agreement that was legally binding and required to be presented to the U.S. government? I mean, are the deadlines of December 31, 1994, and December 31, 1995, for the completion of the legal, definitive agreements by the legal and technical teams, meaningless deadlines? What was the rationale for putting them in the agreement, if it's the position of the ministry that as soon as the agreement was signed in July 1994, it should have been immediately rushed to the U.S. government for some sort of authorization?
Hon. A. Edwards: Of course, you can't rush one of those agreements to the U.S. government. We had technical and legal work to do. We had to put it in legal language. We had to do technical work. At the end of December 1994, we were having regular meetings, and progress was being made. We judged at that time that the other party, Bonneville, was negotiating in good faith. Certainly they continued to work, to resolve problems and to agree with us that any of the problems that were there could be resolved. And we continued work.
W. Hurd: Can the minister tell us whether the definitive agreements were, in fact, drafted for signing by December 31, 1994?
Hon. A. Edwards: They were still being worked on.
W. Hurd: I assume by the answer, then, that they weren't ready for signing by the end of 1994.
Hon. A. Edwards: Definitive agreements are still not signed; they're still not ready. So no, the definitive agreements were not ready for signing. We were working on drafts. We continued to work on drafts and proceeded into 1995.
W. Hurd: Well, just one final question. Since the legal, definitive agreements were not actually drafted, completed and signed, what role would the minister expect Bonneville Power Administration to have? Given the fact that she's acknowledged under section 3 that the deadline was missed at the end of 1994 and that the legal and technical documents were not ready to be signed, what specific action could the company have undertaken in the absence of those legal agreements? Clearly, there is implied here a one-year time frame for the completion of those agreements. If legal and technical agreements weren't there, what exactly would the minister tell us is binding about the agreement?
[4:00]
Hon. A. Edwards: We worked long and hard on this. As I said, the definitive agreements weren't.... We had put best efforts in. We believe that both parties put their best efforts in to reach the December 31, 1994, date. When we didn't do that, we proceeded. Bonneville Power then backed out and ended its best effort to reach that definitive agreement, which is the agreement on which an exchange of notes would be make.
W. Hurd: I wonder if the minister is aware that the U.S. government intends to change the makeup of the Bonneville Power Administration, converting it to the equivalent of a Crown corporation or wholly owned subsidiary of the federal government. In the United States it is being argued that such a change will allow this entity, which is debt-ridden and facing a bureaucratic and regulatory nightmare, to be more competitive in a deregulated market. I wonder if she can tell us what impact such a change by the Clinton administration might have on relations between B.C. Hydro, Powerex and the Bonneville Power Administration, and in particular on the ability of B.C. Hydro and the province of British Columbia to export energy to U.S. markets through transmission lines that are wholly controlled by the Bonneville Power Administration.
Hon. A. Edwards: I don't know whether it would be appropriate for me to comment on what difference it would make if Bonneville is an administration, as it is now, or a Crown corporation. There are several differences, as anybody familiar with these things knows, but I think the important question is whether it would make a difference in terms of its dealings with British Columbia. As far as I know, it would make no difference whatsoever. Under the Columbia River Treaty, Bonneville, I assume, would continue to be the entity. As long as it is, it is the entity with which we have to deal.
W. Hurd: That's not the explanation being offered by the manager of interutility issues for Powerex of B.C. Hydro. As late as February 1994, he expressed a great deal of concern about the impact of such a change, whether it was the case of a wholly owned subsidiary or a Crown corporation like the
[ Page 15438 ]
Tennessee Valley Authority. He expressed the view that there should be some concern on the part of Powerex with respect to access to transmission lines in the United States for marketing products. Since the Minister of Energy, Mines and Petroleum Resources and the Minister of Employment and Investment are determined to play a high-stakes poker game here by upping the ante and the rhetoric with respect to Bonneville, I wonder whether there is any merit in revisiting some of these issues with Powerex.
A change in designation for the Bonneville Power Administration might enable that company to get into a whole range of alternative energy sources, such as deregulated natural gas in Alberta and gas exports from gas-fired plants in British Columbia. I wonder if there is any merit in having this ministry take the lead in reviewing whether the province of British Columbia has any vulnerability in this newly deregulated environment in the United States, and in particular the changeover of the Bonneville Power Administration from a Crown corporation to a wholly owned subsidiary. It will be a much more direct competitor in the deregulated energy market.
Hon. A. Edwards: It's the other way around. First of all, rather than becoming a wholly owned subsidiary, BPA would become a Crown corporation. As is becoming more and more clear and as continued rulings indicate, certainly the FERC ruling, there should be open access to transmission lines, which gives further opportunities to British Columbia.
I see no reason to be timid about our approach to BPA. BPA has certain things that it does; we deal with them. We deal with them on several grounds. We deal with them as an entity within the Columbia River Treaty. We also deal with them on a day-to-day basis in other energy transactions. BPA will not be sold or privatized, because it's really far too heavily in debt for that to happen. BPA has its problems; I wouldn't for a minute deny that BPA has problems. There will be some difference in impacts. One thing, of course, is that if it becomes a Crown corporation, its employees become its own and are not on the federal books. It is going to have to operate as a Crown corporation; it is going to have to be separate from the U.S. Department of Energy budgeting. I suppose it will then be able to downsize and contract out more work. There are many possibilities here that could be very positive for British Columbians.
W. Hurd: Just to correct the record, I am referring to the latest energy analysis from Canadian energy markets. It alludes to "a plan to make debt-ridden Bonneville Power Administration, the United States federal agency responsible for wholesaling electricity in the Pacific Northwest, a wholly owned subsidiary of the federal government." In fact, the article goes on to say that the Clinton administration is in the process of privatizing southwestern, southeastern and western area power administrations. The reason they can't do it with Bonneville, as the minister has acknowledged, is that the company is some $7 billion in debt. One would assume that if the debt load wasn't there, they would in fact be privatized.
I wonder whether the minister is aware that Canadian power producers, and in particular B.C. Hydro, are expressing concerns about the impact that this change will have on the ability to access energy markets. I don't think it's an issue of being timid with the Bonneville Power Administration. It's a recognition of the fact that this entity with which the province has been negotiating is undergoing and will undergo a dramatic change. The energy markets are also undergoing a dramatic change internationally. Clearly there's a need here for Powerex and the provincial government to be aware that access to BPA transmission lines, if they are deregulated, is of major concern to Powerex and to B.C. Hydro.
I wonder again whether the ministry intends to devote any resources to analyzing the changes that are being undertaken at the Bonneville Power Administration. Have they basically given up and decided to go directly to the U.S. Department of State, which is the announcement that was made recently by both the Minister of Energy, Mines and Petroleum Resources and the Minister of Employment and Investment?
Hon. A. Edwards: I'd like to respond to the last part first. We have every intention of moving toward dealing with the State Department on the Columbia River Treaty and the agreement in principle on the downstream benefit entitlement. There's no question about that.
However, I would like to return to the issue of Bonneville. Indeed, we keep a fairly close eye on what happens to Bonneville. Any suggestion that it will be a wholly owned subsidiary is okay; that's fine. But it is now a department of the Department of Energy, so there would be a change there. If in fact there were going to be a privatization of Bonneville, I might be interested to know which would be the entity to deal with under the Columbia River Treaty, but that's not the case. Since it still will be a wholly owned subsidiary, I expect that Bonneville will continue to be the entity to deal with us under the Columbia River Treaty.
Access to transmission lines will not be affected whatsoever by Bonneville's corporate structure, because that will come under their rules.
W. Hurd: I just have one final question, a fact I know the Chair will be relieved to hear. I want to know, assuming that this agreement was signed and appears to be an interim agreement in every way, but assuming that it.... Let's just say for the sake of argument that the agreement is not proceeded with, the original terms and conditions of the Columbia River Treaty apply and the province receives back the 1,500 to 1,600 megawatts of electrical energy that it is entitled to receive under the treaty. Can the minister tell us what kinds of resources are being devoted to projecting a value for that resource by 1998, given the factors of deregulation and the plummeting prices for electrical energy? Is there work being done on a potential value for that return, or is it simply too early, with still three years to go, to make those kinds of projections?
Hon. A. Edwards: It would make it much easier under the agreement to get back the downstream benefit entitlement. We don't expect that it will revert to the Oliver delivery. For various reasons, for various things that are allowed under the treaty, we have no expectation that that will happen. As far as what the value is, we have calculated the value of the downstream benefits as approximately $5 billion to $6 billion. We expect that that will be the value of the downstream benefit entitlement. We have done some exploratory work as to what would happen if we sold to other customers, and our estimate remains similar.
W. Hurd: Just to clarify, the value of the benefits is related directly to the price of power at the day in question. In
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1998, when it is theoretically returned to a substation at Oliver, the benefit that will be derived by the provincial government is the energy that it receives, subsequently marketed internationally or in British Columbia. I don't know how that projection of $5 billion to $6 billion can be made, based on what most energy experts are predicting will happen to energy markets over the next ten to 12 years. As I indicated in the House earlier, there's a definite trend towards alternative energy sources, at considerably lower cost, creating an oversupply in the market. I ask the question in the hopes that the ministry is, in fact, going to spend some time looking at the trends over the next three years with respect to the return of downstream benefits. Or is it the intention of the government to continue to treat this as an asset worth $5 billion to $6 billion?
Hon. A. Edwards: There is no change.... Well, there could be a change; there could be an improvement if we were not to have the agreement in principle as it was negotiated. There could be improvement to British Columbia as to the return from the downstream benefits.
[4:15]
Basically, over the long term, I agree with you. I believe that there will be a move over two decades or so toward energy sources that are much closer to home. I don't agree that they will make enough of a difference, considering the increasing demand that we always recognize and the fact that you need a certain amount of firm capacity. Because of the structure that we have, we believe that that will be in place. We believe the value of the downstream benefit entitlement will be similar to our calculations. We believe that the market is there for those downstream benefit entitlements for that power. We believe that British Columbians hold a very valuable asset, and it continues to be there.
F. Gingell: Perhaps we could have a change of pace. I wonder if the minister would like to give the committee a statement on how she sees the role and influence of her ministry in dealing with the use of energy in an environmentally clean-as-possible manner.
Hon. A. Edwards: I gave one of those this morning. Do you want the same one over again?
We had a very interesting meeting this morning with the Canadian Automated Buildings Association. It brought to mind a number of things that the ministry has done. In the broader sense, we've done a lot of things that fit into the government's context of insisting that any of the activities that we do are environmentally beneficent and also that we have public participation in moves that government makes. Those go together, and they are interactive. Public participation is the more important part as far as environmental benefits go.
If you're interested in what the government has done, we have done a whole lot of work. Most recently, perhaps it would be most interesting to know that we have responded to the B.C. Energy Council's recommendations. We have pointed out that nearly all those recommendations are ones that we accept. We have gone to work on a huge majority of them, and will continue to work to see how we can do other things, and that includes work that is also connected to other government ministries. I'm very proud to say that a number of other government ministries are doing energy efficiency programs as well.
The growth management strategies will include work toward urban planning, which deals with transportation that will save energy and also with possible community heating systems. We have the B.C. Hydro Power Smart program, which is, in general, an energy and water conservation program that will affect 75,000 homes in British Columbia during the program. Another 8,000 homes will have the opportunity to participate in a community-based energy efficiency program, which enhances and expands the impact on people who want to make their homes energy and water efficient. The ministry is particularly working with that community-based program, and we expect there will be long-lasting effects from that. We continue to do work on energy conservation, and we are working with the Ministry of Environment on the greenhouse gas program for British Columbia, which is basically part of a national initiative that responds to the need to meet 1990 levels of emission by the year 2000 -- in other words, we wouldn't allow any growth in emissions.
We are working on the national energy code. We continue to work on the building standards. We continue to amend our Energy Efficiency Act, which deals with energy efficiency standards for appliances, and we work with those who have set the standards to encourage them to do better. We have another program where we're working with the federal government to work beyond the National Building Code to ensure that we have the kind of consultation and involvement that will make these things work.
I've only touched on a few of the things, hon. Chair, but I know that we don't want to stay all day with the excellent work in energy efficiency that this ministry and this government does, although it is tempting to carry on.
F. Gingell: That was a little more than I wanted -- you said it all in the first paragraph. But if ever there's a vacancy in the position of Minister of Small Business, Tourism and Culture, I'll know who to recommend for the position.
If this is the policy of this government, why aren't you doing something to stop the Minister of Employment and Investment from going ahead with this stupid, pollution-heavy -- I want the right words; I can't think of them at the moment -- fast-ferry program? I sent the minister a series of tables that show clearly that per passenger or per vehicle these fast-ferry proposals will pump out up to four times the oxides of nitrogen and carbon. On any environmental test whatsoever, this fast-ferry program is a real loser. This government is doing a lot of good work, and you're going to put it all down the drain by building a series of fast flows that will pump unconscionable amounts of particulate and oxides of carbon, nitrogen and hydrogen into the air. This is just the wrong thing to do. The only fuel source that had some advantages was compressed natural gas, and as you so correctly wrote me, Madam Minister, the Coast Guard won't allow you to use it because it's not safe.
The basis for the fast-ferry program to me is really without merit. Just the environmental issues and the energy use issues.... All these emissions are the result of using dramatically more and greater volumes of energy to transport one passenger or one vehicle from point A to point B. It is so bad. Your ministry has such a clear mandate that you should be getting this thing stopped. You really should.
D. Jarvis: It will be your fault.
F. Gingell: No, it's not the minister's fault. The minister has a mandate to try and get this province, particularly in
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your own projects, to cut down on pollution, to cut down on greenhouse gases and to use energy in the most efficient manner that we can. The fast-ferry project simply doesn't do it; it's terrible.
I sent you all the data. I was really pleased that the minister's office took the time to review what I had sent and to respond, but I really do think that to fulfil her mandate and this really important role that she plays in the government, the minister needs to stand up and be very firm on this issue. You'd be right. The Minister of Employment and Investment has a bee in his bonnet about this project and is off base.
Hon. A. Edwards: I certainly admire the member's ingenuity for bringing his issue up in various places. I am not here to defend another minister. Obviously that argument is for his estimates and for him to deal with.
However, I would point out that I just happened this morning to have read an article in a newspaper which said that the critics of these fast ferries have been proven to have been wrong in suggesting they need 43 percent more horsepower to meet their target service speed. So I don't know if the calculations that indicate that they don't need so much fuel make a huge difference to some of the figures that you have.
I think those figures have to be put together. We have to be sure that if they have done new tests and the tests give us a different conclusion as to the amount of fuel that needs to be used, and, therefore, the amount of emissions, we should look at this very carefully. I would say that I agree with him that we want to be very careful with what emissions we put into the air. I'm on your side on that; I agree with you that we have to be very careful. We expect that anything that would be run in British Columbia would have to pass the AirCare requirements.
F. Gingell: That's a fascinating thought: run the ferry through AirCare. I have made my point on this. I really do believe that the minister has a role in this area.
I just went back to look at the date that I wrote to the Minister of Employment and Investment, with copies to yourself and the then Minister of Environment, and it was on December 12. So we have gone six months and one day. A whole bunch of water has passed under the bridge, and a whole bunch of ferries have travelled across the top of the water.
It seems strange that they didn't have all this information at their fingertips originally. They had made decisions that the ferries were going too fast. I don't know what this article says or where that research comes from, but the more you think about it, the more you realize what a fast ferry does and how a catamaran works. You know that it's going to take substantially more energy to move this vessel from point A to point B compared to class C or class S ferries, which have been real success stories. The class S ferries have really worked well.
This problem comes down to an inability to load vehicles effectively at Horseshoe Bay. You can always build another ferry terminal at Duke Point, whatever difficulties Duke Point has. It's very deep there, which makes it difficult to build good ferry terminals. There has to be a better solution than fast ferries, and I will look forward to getting that information. I will send it to my chemists, whose word and advice I accept, at the university that has done all these analyses for me. If the information the minister sees coming across her desk ties in and supports the position I've taken, I encourage her to encourage the Minister of Employment and Investment to find other solutions to the problem of looking after ferry service between Horseshoe Bay and Nanaimo.
R. Neufeld: I have a few questions left and then I'm finished; I'd like to get them cleaned up.
My first question is again on the Sierra-Yoyo-Desan road and the discussions that are supposedly going on. This is the fourth year that I've asked about discussions on resource roads policy. Each year Highways told me it was secret and that they couldn't give me any information. Your ministry has said that there are discussions going on over some resource road policies. Could the minister bring me up to date? Have we finally completed some resource road policies, and what are we going to do with the Sierra road?
Hon. A. Edwards: I'm certainly glad that we can do our annual review on this, because it is an issue of importance. We are at the point now where we have an agreement that the forest companies will have an assessment for the use of the road, but we haven't yet nailed down what it will be. We're a little behind on our timetable, but we hope -- we were hoping it would be midyear, and this is midyear to all intents and purposes -- to have an announcement on that fairly soon. The goal is to have the forest industry take a proportionate share of their responsibility for the maintenance of the road.
R. Neufeld: Did the minister mean the forest industry, the oil and gas industry or both?
[4:30]
Hon. A. Edwards: The oil and gas industry already pays for their share of the road. The forest industry has not yet been assessed.
R. Neufeld: I realize that different oil and gas companies own different parts of the road. I assume that's what the minister is referring to. Are they assessed a yearly fee for the use of the Sierra-Yoyo-Desan road system?
Hon. A. Edwards: No, it's only those companies that have a segment of the road that services their particular part. In other words, Petro-Canada and Mobil spend approximately $175,000 a year in total on their segments, which are 47 kilometres. They recover significant parts of that from other petroleum industry users, but basically that's the only part that the industry pays for. The rest of the road is paid for by government. The road is 150 kilometres. We pay $200,000 a year for maintenance, and that maintenance is carried out by the Ministry of Transportation and Highways. We did do a onetime contribution last year, which I believe was about $250,000, to do some work for that road. We were hoping to have maintenance money assessed from the forest industry by midyear, but it won't be that soon.
R. Neufeld: So the ministry is still going to fund an average of about $200,000 to $250,000 a year. There's going to be no change on that at all for the road, and it will still be carried out by Highways?
Hon. A. Edwards: I think that's exactly what's going to happen until such time as I or somebody can persuade the
[ Page 15441 ]
Ministry of Transportation and Highways that it is a road that is used enough by others that it should be made into a Ministry of Transportation and Highways-funded road. But that point has not yet been reached.
R. Neufeld: I can assure the minister that I tried to convince the Ministry of Transportation and Highways that they should take over that road and get down to some regular upgrading and maintenance instead of on an ad hoc basis, which certainly doesn't lead to a good roadbed. In fact, I'm going to put on the record again that it's very unsafe, at times tremendously unsafe. Your government talks about worker safety. I think you put workers in the oil and gas industry in tremendously bad situations at different times during the winter and summer by not maintaining the road as well as it should be. That is really not acceptable to most men and women that work in the oil and gas industry and have to travel the road on a steady basis -- most of them on a daily basis.
The road is absolutely deplorable in most places. There are parts of that road that are goat trail. Yet the government of British Columbia receives millions of dollars a year in oil and gas royalties but still....
It's not just your administration. It started long before your administration came along. I'm putting this on the record for the ministry: the fact that they bantered about, tried to blame one another. One says it's not their responsibility; Highways says, "No, it's Energy and Mines," and nothing gets done. I guess it will come to a point when we'll finally kill a number of people or something like that, and then maybe ministries and governments will start reacting to the tremendous problem we have on that piece of road with the increase in the activity.
That's not the only road. We've got some other roads in Peace River North that are absolutely deplorable also. It was actually part of your government's -- not your ministry's -- fault that they were allowed to get to that condition. So I want to get that on the record so it's there, because it is a real safety situation, and many people who work in those gas fields comment to me regularly about how terrible it is.
I would like to go to another issue, the Mediation and Arbitration Board. There are seven members. I understand that they have travelled to Saskatchewan for some meetings with Saskatchewan government people. I wonder if the minister could explain to me how many went, why they went and if they reported back on their findings when they were in Saskatchewan.
Hon. A. Edwards: There is an annual meeting that mediation and arbitration boards have. Recently I was in Fort St. John when our board was hosting that meeting for people from all the western provinces. This year the meeting is in Manitoba, and the members of the Mediation and Arbitration Board will be going to that meeting. They haven't gone yet.
R. Neufeld: So that always has been done -- the whole board travels to wherever in Canada to have a Mediation and Arbitration Board meeting? When it is in British Columbia, do all the other western provinces send their complete boards here?
Hon. A. Edwards: I'm not sure that all board members always go, but we do encourage board members to go because of the nature of what they do. And this organization is western Canada; it's not all of Canada. I don't suppose they would have many mediations on oil and gas in New Brunswick. I don't know; I have no idea.
Because of the nature of what they do, we find it very useful for them to have a convention and talk to each other. They do it only once a year. As I was saying earlier, Fort St. John was a very gracious host to the meeting last year -- if not last year, the year before. I happened to be up there when the boards were meeting and everybody was discussing how useful it had been for them to talk to other people about their experience, to talk about the intricacies of what they deal with and to share their knowledge and information.
R. Neufeld: Thank you for that information. I would assume that they give a report after they are finished their meetings. If they do, I wouldn't mind being privy to that report, if that's possible.
Another question I have about natural gas is value-added, and I don't mean just in generation of electricity. I mean in other things such as plastics or LNG -- the whole gamut that natural gas can be used in.
I recall seeing a press release about it that the minister produced here a while ago, and I'm just wondering how far we've been able to go to encourage industry to come either to the lower mainland or to the north -- maybe even Prince George -- to use some of our valuable resources in value-added, much the same as we are trying to do in the forest industry.
Hon. A. Edwards: Actually, the ministry itself has made a couple of publications that have tried to encourage the addition of value for the natural gas industry. One is the "B.C. Liquified Natural Gas Opportunity," which is an information memorandum. We put that together in particular response to requests from offshore, and we have distributed it throughout our offshore contacts, the people I visited when I've been over there, and they have indicated a great interest.
The "Natural-Gas-Fired Cogeneration Study" was completed in February of this year. We completed that with a staff discussion paper, and just so everybody has the opportunity to see that, we have that paper. If you haven't got them, you're very welcome to them.
Going on right now are a number of proposals for projects that would probably, most of them, happen in the Prince Rupert-Kitimat area. That is very exciting to us. The world market for liquid natural gas is increasing significantly, and we believe that when the greenfield projects begin to come on to replace the contracts that are already there, we will be highly competitive. That is certainly something that we look forward to, and we hope that will work.
These two publications are very useful, and we also have the "British Columbia Natural Gas Fuelling Industry," a car brochure that we try to put out as much as we can. It talks about opportunities for the global marketplace, energy industries and so on. We are aware of that. I agree with you that we should be doing as much of that as we possibly can, and we're beginning to see more interest in it. Certainly there is more interest as the supply in British Columbia -- the reserves -- have gone up. The northeast is sitting in a very admirable situation.
R. Neufeld: Yes, we are, and I think we can encourage a lot of value-added industry in British Columbia. It doesn't all
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have to be centred in the lower mainland; it can be scattered around the province, which will help our area totally -- Prince George, Fort St. John, Dawson Creek, the area of Kitimat and that part of the province. It's certainly a good program.
I wonder if the minister would give me copies of those. I know I've received one, but I'm not sure of all the rest. If I could get that, that would help me very much.
I have another question. Just recently, in May, the minister put out a press release about opening a new office for Mines in Cranbrook. I want to say that I think that's a good move; I agree totally. It's probably long overdue. I would like to know what moves are afoot to move to Fort St. John, because that's the headquarters for the oil and gas industry in British Columbia. Are there any moves afoot to enlarge that office and move some of the parts that pertain to the oil and gas industry to the north? I think it would be another step in the right direction and facilitate industry that's trying to work in the north. It would help them a lot.
Hon. A. Edwards: The Cranbrook office was to respond to our reorganization within the mineral part of the ministry to regionalize, partly to deal with some of the land use issues and the other sorts of planning and monitoring issues that we need to do. At the same time that we put a regional director in the Cranbrook area for the Nelson region, we sort of rationalized the other Mines ministry offices. However, Fort St. John was not forgotten, as far as natural gas was concerned, and this year we'll be adding three staff to the Fort St. John office. Those staff will be dealing largely with land issues and inspections in that sense.
R. Neufeld: Going on a little further in moving the Ministry of Petroleum Resources to Fort St. John, I want to go into pipeline and surface rights a bit. What advancement has been made with your ministry?
I'm sure the minister is aware that we have a number of situations in Fort St. John, one being a rancher who had his ranch for sale -- in fact, had a buyer -- and all of a sudden a notice of claim showed up against the property from people who had worked for a pipeline company that had gone broke. They had put a lien against the pipeline, and the pipeline crossed the ranch. In fact, I think it killed the deal; the person couldn't sell the property. But the person had no knowledge that the lien was put on their property. They had absolutely no right to say: "No, you cannot go across our property."
When I tried to find out whose responsibility it really was, it ended up that the Ministry of Lands had some responsibility, EMPR had a bit of responsibility, Municipal Affairs had a little bit of responsibility, there was the Railway Act.... It went on and on. When all was said and done, nobody really took responsibility. The owner was left out in the cold.
[4:45]
I know some meetings have taken place with ministry people in Fort St. John. What advancements have we made to bring in legislation that would make the Ministry of Energy, Mines and Petroleum Resources -- as I think it should be -- responsible for all pipelines, no matter where they are? Whether they're on private land, Crown land or ALR land, they should all be registered with the Ministry of Energy, Mines and Petroleum Resources.
It's amazing when you go to some of these meetings and find out there are pipelines all over the north -- and I've talked about them many times -- that nobody even knows are there. They're not registered any place. I'm not saying that's a fault of yours or of anyone. It's just that obviously we have not done a good job of recording them or having legislation in place where we can at least let the landowners know what's going on. They have absolutely no say in it, and the minister is well aware of that. They can drill on private land or put a pipeline across it without any formal authority being given.
Hon. A. Edwards: You've outlined a problem that took a significant amount of time, and this is what we are trying to do with it. We have met with the Attorney General, and we are talking with him right now about amendments he can make to the Builders Lien Act so that won't happen again. That legislation that will not come this session, but we are just trying to move forward on what we can do with the Builders Lien Act to prevent this situation from occurring again. We are also preparing signs that owners can post so that it will relieve them of any legal liability under the act. If they have the appropriate sign and they post it, then they will be able to absolve themselves of the liability, which this owner you're talking about seems not to have been able to be protected from. We've also entered into a mapping program for the properties that had pipelines on them pre-1960s. We're doing that mapping progam with the Ministry of Municipal Affairs so that we can determine where other things are and so that people will know where the liens exist.
R. Neufeld: At the present time an oil company -- getting away from pipelines to drilling -- has the authority to go onto private land and drill. That's what the arbitration board is for: it's there in case there are problems with that. At the present time, I understand, if the oil company is sold.... That happens an awful lot now. I guess that's part of the problem we've had. At one time there were a certain number of oil companies around, and they were all large ones. Now there are hundreds and hundreds of small ones that deal here and there, and properties are purchased back and forth without the owner of the property knowing what's going on.
In one specific case, the person that had a well drilled on his property did not know that it was sold to another person, because the terminology they used in the lease had not been cleaned up properly. The new company has gone in there and cleaned it up to specifications. But it now wants the landowner to give them a letter saying that it meets all requirements and that he will never hold that oil company responsible for any further cleanup on that lease. That makes it pretty difficult. You're talking about a person who farms being asked to give a letter stating that they will never sue that oil company again to get their compensation costs back from that company. I find it hard to believe that we would allow some of these major oil companies to do that. Is there something in place now that this particular farmer can go to?
Hon. A. Edwards: It sounds to me as if this is a situation where the owner should seek legal advice. He has been receiving a return for...? R. Neufeld: No, he hasn't.
Hon. A. Edwards: Well, he could have. I don't know the circumstances, but certainly it seems that this is a situation where he should seek legal advice before he signs any such contract, because obviously it will have implications that could be significant and extensive.
[ Page 15443 ]
R. Neufeld: First of all, the person who owns the land does not have the authority to say no. What happens is the oil company goes in and drills it. Okay? They've drilled it, and now you're saying that this person should seek legal advice. We're talking about a well that was just done in the last year. I think they get a minimal amount, maybe $500 a month at the very most. I'm not sure what they get on average, but it's pretty minimal through a year. Your ADM would know better. On average it's not very much money, and you don't hire a lawyer that cheaply. The government has some responsibility, since they give the authority to the companies to come in and drill, to help this person out in these kind of situations.
Hon. A. Edwards: He should have had some advice before he signed a service lease, which would have had to be in place before the company could drill. If he needed advice on that, he could have got legal advice, which he might have charged to the company -- who knows? He probably needed legal advice and certainly that advice is also available through the ministry, particularly through the Mediation and Arbitration Board, which will give that kind of advice.
R. Neufeld: Then I could advise this particular landowner that he could go to the Mediation and Arbitration Board and receive legal advice?
Hon. A. Edwards: He can get advice from our board, or he can get it from the Ministry of Agriculture. They have a board representative as well.
R. Neufeld: In this year's annual report, I could not find anything about geothermal exploration. The year before there were some permits awarded for some exploration for geothermal. Could the minister explain what happened? It was in 1992. What took place, and what's happening in Lillooet now?
Hon. A. Edwards: Ministry officials met just last week, I believe, with the company that's drilling in Meager Creek -- I believe it is Commonwealth Construction. They bid into B.C. Hydro's RFP and have some hope they may be able to go ahead. They continue to have their interest and continue to do their work.
R. Neufeld: I'm asking for the minister's help on this LRMP process. You mention in here that it's going on in Fort St. John and Fort Nelson and at present has all the ministries responsible, one being Lands. Lands has opted to drop out of the LRMP process, for whatever reasons, and I'm trying to lobby the minister to get Lands back at the table, because I think it's very important that they be there. I just wonder if I could engage the help of the minister to have that happen.
Hon. A. Edwards: I'm really pleased to be able to tell you that I have been actively pursuing having Lands continue their participation in those LRMPs. I am not able to report, however, that I'm successful yet. I agree with you that Lands has been very active in that area and have been extremely helpful in getting the process going, so I assure you that I'm with you on that.
R. Neufeld: Thank you, I appreciate that, because they do play an important role, and we need them there.
I want to move to the enhanced oil recovery that was started in 1993 with Imperial Oil out at Boundary Lake. Could the minister just give a little progress report on what's actually taking place? I think the minister will remember I was fairly critical at the time -- in fact, I believe I still am. Imperial Oil is one company that moved its office out of Fort St. John, out of Boundary Lake into Grande Prairie, Alberta. Here we are with the largest oil company in the world -- if you take into consideration it's owned by Exxon -- that we pick to subsidize with taxpayers' money for a process that certainly wasn't new and that was previously used in Alberta quite regularly.
Hon. A. Edwards: This project has been relatively successful so far. I want to clarify that what government did was agree to a royalty pattern that leaves us no worse off than we would have been otherwise. If they hadn't done the enhancement, we would have had no royalties by a certain period of time. Now they continue to produce their product and we have a royalty, which is lower, but continues to go up. It's been relatively successful, and we are certainly no worse off than we would have been. At the end we will be better off if it continues to be this successful.
R. Neufeld: If the company had just tapered off and not done any more oil recovery, your analogy would be correct. The price of oil will dictate whether they will go ahead and do those types of things that they're doing in Boundary Lake, which other companies are doing successfully in Alberta without any reduction in royalty rates. Part of the difficulty I have with this is that we picked on Imperial Oil to try this program in British Columbia.
I'll go on to just a few other items, one being supplying hydro to some people at the Bennett Dam. Their names are Bob, Ethel, Mary Lou and Jim Beattie. The minister has had letters regarding these people. They are settlers who have been in the Hudson's Hope area for many years; some in fact were moved when the dam was built. We're talking about a hydro line extending about 4.5 or 5 miles to where they were resettled. The cost for B.C. Hydro to put that line in would be in the neighbourhood of $100,000. Actually, I have a letter from the manager of transmission and distribution for the northern region stating that it would cost $109,000. It was interesting that the gentleman used some analogies here and offered to help with the purchase of diesel-fired generators for the Beatties. I guess they've been generating their hydro with diesel-fired generators for long enough. They have felt, through all the years -- from when the dam was first built until now -- that they should have hydro. It was promised to them at some point, and they have not received it.
The gentleman from B.C. Hydro talks about a hydro line being not very reliable over five miles. Using that analogy just doesn't make sense. He tries to support this by talking about the Prophet River area: "Fort Nelson suffered six outages in five years averaging 2.75 hours each. This is why we don't want to build a five-mile hydro line to your place." The hydro line that this gentleman speaks of is sixty miles in length -- all the way from Fort Nelson to Prophet River. Using that analogy is just ridiculous. It is ridiculous that they would say: "Well, this is why we shouldn't do it. We should be helping you purchase more diesel generators."
[5:00]
I wonder if the minister could help get B.C. Hydro to service that area. I'm sure she must have the same feelings for some of the people in the Kootenays who were displaced when the dams were built there. She should understand, and I
[ Page 15444 ]
think does quite fully, some of the hardships that these people have endured.
Hon. A. Edwards: I'm going to have to talk again about another of my less successful endeavours. I agree with you that the Beatties should have this power. The ministry has done everything in its power to persuade B.C. Hydro, which has some reluctant directors, I understand, to get this power line in. I believe it was not a written promise, but it was a promise. It was an understood promise, and I believe that B.C. Hydro should be honouring that commitment. We have tried everything we can. Every time we were a little optimistic about it, there seemed to be a change at Hydro. So we continue to work at it, but it's not something that I can fix from the ministry.
The Chair: With the Chair declaring the fact that he's a director of B.C. Hydro, the hon. member continues.
R. Neufeld: I would then ask the Chair -- not through the Chair; I'm directing this to the Chair -- to take this part of Hansard, and I will copy him with the letters I have in hand. I'm not quite sure who on the board is not willing to do this, but I'm sure with your good, capable skills of convincing people to do things, you will be able to help the Beatties get their hydro at $109,000.
I want to add that the government had no problem paying Mr. Gathercole about $130,000, at the end of his two-year contract, to thank the fellow for the two years he spent with them. They think nothing of that and leave these people -- although you have been in government for only four years, you have been aware of it -- for this many years without hydro. I think that's a good comparison that we should make, and maybe the minister could work a little bit harder on getting hydro for the Beatties.
I want to go on to natural gas servicing of the province. The minister and I have had many discussions about this. I saw a press release that came out of the Ministry of Small Business, Tourism and Culture at the end of May, which funded a small amount, $15,000, for a natural gas study for the Columbia Valley. I was totally unaware that the Ministry of Small Business, Tourism and Culture was in the business of giving out grants to fund studies for getting natural gas into different areas of the province. In fact, I'm going to urge a number of the companies in my constituency, if it is under the purview of the Ministry of Small Business, Tourism and Culture, to start making applications to that ministry. Maybe the minister could just explain to me how that took place and why it wouldn't go through her ministry.
Hon. A. Edwards: My ministry has been working very closely with the proponents for an extension of the gas line up into the Columbia Valley. This is one of those uneconomic extensions that has to have some assistance in order to make it work. Of course, you would understand this kind of community. It's one of those where you have to take a great leap from a number of customers, but you would get to another large number of customers.
The small business community is certainly involved in that. So are regional and municipal governments, and the ministry has been working with them and with both B.C. Gas and Alberta Natural Gas to look at the possibilities of funding the project enough so that it can go ahead under the rules that the B.C. Utilities Commission has laid out.
It's a problem for all of us. We hope, and we expect, that we will be doing a study that will ensure that any solutions we may propose would be the best solutions. A number of ministries have been involved in looking at that because of the nature of the problem.
R. Neufeld: Going further, we received the news release the last time we were in estimates about the Infrastructure Works program that funds 30 natural gas projects in British Columbia. I've gone through the list briefly, and I see that the district of Hudson's Hope was granted $80,000. Centra Gas for Wonowon and the Shepherds Inn area, Mile 60-something on the Alaska Highway, was funded $143,289 and $232,248, respectively. So about $500,000 went into funding natural gas extensions in the constituency of Peace River North. The Regional District of North Okanagan has about $88,000. I think those are the only three areas that are not represented by NDP MLAs. The total dollar value for the whole project is about $9.4 million.
I have consistently talked to the ministry about servicing the Peace River North area. Some of them have pipelines running through their back yards but cannot tie into them -- cannot get natural gas for heating. The minister is aware of it. Every set of estimates we go through, I ask. I sit through most of her estimates, and I don't hear a lot of conversation from other MLAs across the province asking for it. I'd like to know what input the minister had in awarding the almost $9 million for the areas it went into. I would hope that the minister had some input, but maybe she didn't. Maybe she could clarify that, to start with.
Hon. A. Edwards: I'd like to be very clear that the first ranking that was done was done by our ministry. We used four economic criteria to rank gas projects. The first criterion was grant cost ratio; second, long-term jobs per grant; third, customers per grant; and fourth, individuals per grant. Those are the same criteria we have used over the years when we have looked at these uneconomic extensions. They represent, certainly, both an economic impact and an employment impact and relative cost per customer and energy supply cost factors. The gas projects from us were ranked that way.
The ranking results from that step were used to calculate the weighted average rank for each project. Then the weighted average was used to assign a priority number from highest to lowest. That went from us, as the ministry dealing with these projects, to the Ministry of Employment and Investment and the federal government, who did the next ranking as to whether they would get the grants from the infrastructure program.
I might say that there were different criteria there. I think several criteria were most applicable to the gas projects, which included -- and this is where you will find some of the answers -- the regional distribution of program benefits. With the other parts of the infrastructure program, if there were a lot of them somewhere, there were more grants given to areas that had not had any recognition in the other parts of the infrastructure grant.
That is probably the most important reason that you would find, for example, some fairly large numbers of projects in some areas where they had no or very little other infrastructure money. That was certainly a criterion that was fairly closely observed.
R. Neufeld: I believe I only have one question left. This is one that was just given to me, so I'm not really familiar with it.
[ Page 15445 ]
You're going to have to bear with me a bit. It's from Steve Fulbrook from Armstrong, and it's about the Mineral Tax Act. The Mineral Tax Act states that if an operator is an individual whose expenditures do not exceed $50,000 during the fiscal year of the mine, or if the mine was not in commercial operation and the operator was not engaged in any reclamation activities, no reports have to be made.
I guess there were some discrepancies back and forth between the ministry and this gentleman. The result was that the gentleman had to file claims for 1991, 1992 and 1993. He is being fined $5,000 -- $2,500 on each count for 1991 and 1993 -- for failing to file mineral tax forms within six months of a mine's fiscal year, which would specifically be to tell the ministry that he owes the ministry nothing. He's obviously behind in his reporting, no doubt, but he has been fined a total of $5,000 by the ministry, which is $2,500 a year for each of those two years. The gentleman says: "I have been reasonable by submitting all information the taxation branch asked for. Abuse of the system is withholding tax, not showing that no tax is due." This gentleman seems fairly confident that he did not owe anything at the end of the time, but because it went six months after the fiscal year ended at the mine, he's being fined $2,500 per year. Maybe the minister could explain that for me a bit.
Hon. A. Edwards: Our staff is not familiar enough with that specific issue to deal with it right now, but we would certainly be pleased to have you come to the ministry to discuss it. Or you could submit the letter, and we could respond. I'm told the only reason that a person is likely to have a penalty assessed is if it seems more money was made than was reported. It's an issue where we would have to have close detail to discuss it intelligently. If you would like to discuss it with the ministry, we'd be able to do that.
R. Neufeld: Yes, I will just take a copy of this letter for myself and give it to the ministry. But it does seem that after filing the returns, the ministry agrees he doesn't owe any money, but he's still being fined the $2,500 for each year. It's a lengthy letter, and I'll give it to the ministry.
With that, I thank the minister and her staff for answering the questions candidly. I appreciate the information.
D. Jarvis: Just a couple of little questions here to the minister. I think the question this Fulbrook gentlemen should ascertain is what the six-month date is in question. He's faxed everyone; you should have one in your office by now.
I'd like to ask one quick question with regard to the BPA memorandum. You stated that you had a legal opinion. I wonder if you could tell me who gave you that legal opinion.
Hon. A. Edwards: It was Chris Sanderson from the firm of Lawson Lundell.
D. Jarvis: Does the minister not think it's unusual that the law firm that did the negotiation would also give you the legal opinion that they are right and that Bonneville was wrong? Shouldn't you have gone elsewhere to get a legal opinion from outside people? Hon. A. Edwards: It's a very complex issue, this Bonneville issue. Obviously the first firm you go to is one that understands the issue. We asked for that legal opinion. Certainly we are going to assure that what legal advice we have is advice that is firm, and I assure you that we will seek to be very sure of our legal advice as we proceed.
D. Jarvis: I think it's incumbent on the minister not to go to the same individual who put you into that type of an agreement. After all, they're certainly not going to tell you that they were wrong in their opinion. There's a direct conflict in that situation.
[5:15]
In any event, I'd like to ask the minister one other question with regard to the National Energy Board's decision on a Westcoast application in the north. It's obvious that the NDP decision is that it lacked the authority or jurisdiction to deal with the facilities application. In view of that, it looks like the competition aspect of it should be unlocked to a certain degree; deregulation is the norm throughout North America at this time. Is the minister going to buy into the basic reason for the dispute between Westcoast and B.C. Gas: who was going to pay for the cost of processing and delivering the gas in the lower mainland? Or is she going to proceed and deregulate this whole situation?
Hon. A. Edwards: As I said earlier, we're very pleased that the National Energy Board determined that they did not have jurisdiction over gathering and processing within British Columbia. We expect to work with both Westcoast and B.C. Gas and other stakeholders to ensure that we reach a market-based process that will offer the best return to the people of British Columbia in total.
Vote 26 approved.
Vote 27: ministry operations, $62,664,990 -- approved.
Vote 28: British Columbia Utilities Commission, $10 -- approved.
Vote 29: resource revenue sharing agreements, $810,000 -- approved.
Hon. A. Edwards: I move that the committee rise, report resolutions and ask leave to sit again.
Motion approved.
The committee rose at 5:18 p.m.
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