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 20, 1995
Afternoon Sitting (Part 2)
Volume 21, Number 9
[ Page 15827 ]
The House resumed at 6:36 p.m.
[The Speaker in the chair.]
Hon. G. Clark: I call continued debate in committee stage of Bill 29. In Committee A, I call Committee of Supply for the purposes of debating the estimates of the Ministry of Employment and Investment.
EMPLOYMENT STANDARDS ACT
(continued)
The House in committee on Bill 29; D. Lovick in the chair.
Sections 68 and 69 approved.
On section 70.
Hon. D. Miller: I move the amendment to section 70 standing in my name in Orders of the Day:
[SECTION 70, in the proposed section 70 by deleting subsection (4) and substituting the following:
(a) An amount received in trust by the director earns interest at the prescribed rate from the date the amount is deposited in a savings institution to the date of payment to the person entitled.]
The amendment is for clarification that interest is paid on money once it is deposited, not at the point of collection. Deposits must be made in a timely manner by the employment standards branch.
[B. Copping in the chair.]
Amendment approved.
Section 70 as amended approved.
Sections 71 and 72 approved.
On section 73.
G. Farrell-Collins: With section 73 we're now into the part on variances. Section 73(1)(a) says: "a majority of the employees who will be affected by the variance are aware of its effect and approve of the application...." Can the minister tell us how that's going to be determined, and what percentage is required to approve it? Is it 50 percent plus one? Is it 65 percent, as earlier? What are the requirements for that variance?
Hon. D. Miller: The question, I think, is how the branch would ensure that a majority of employees.... Upon investigation, they would simply have to be satisfied that in fact a majority of employees approve of the application, and that would be, as the term implies, over 50 percent.
G. Farrell-Collins: A majority is clear to me. I just wanted to make sure that that's where we're headed. The other section requires 65 percent, and I'm glad this is 50 percent. I could go back to the other section and make the argument again that if we're talking about a majority of 50 percent plus one in this case, it probably would have made sense to have done that earlier. We disagreed on that section; the minister felt strongly that it should be 65 percent. I think that to have the provision here be parallel, it would have made sense then to have brought that down to 50 percent plus one also. Can the minister tell us how this is going to be determined? What process is going to take place to determine whether or not 50 percent of the employees are in favour, and whether the employer is in favour?
Hon. D. Miller: It's a joint application, so the branch would investigate it and have to be satisfied that the majority exists.
I just want to make a very brief point with respect to the difference between the sections covered here and the nature of the other issue that required 65 percent, which is a shift schedule. These are typically onetime issues, if you like. In terms of good management, a shift schedule is an enduring issue -- one that people have to deal with day after day after day. I would venture to say that most employers would want to be assured that they have a comfortable majority of employees who are satisfied with the variance to the hours of work, as opposed to some of the issues dealt with here -- special clothing, paydays, minimum daily hours, and those kinds of things, for example. While there may be a difference and members might want to continue to take the position that with respect to variance on the shift schedule it should be 50 percent, I disagree. I think that for all concerned, everyone is better off with 65 percent in that particular section.
G. Farrell-Collins: Can the minister give me some examples of where these variances might be allowed and what situations would be approved? Obviously, these variances are contradictory to section 4 and whatever else is in the act that says that you have to adhere to the act. This now says that you don't necessarily have to adhere to the act, if you can get some agreement. I'm just wondering what sort of parameters are going to be provided for that. How wide-ranging is this? Is it hours of work? What limits the amount or extent of the variances that can be put in place through this provision?
Hon. D. Miller: The variances are applicable to the sections listed in this section, subsections (a) to (i).... Oh, sorry. I was reading from the wrong section.
I think that with any act of this type.... We talked earlier about -- and I tried to describe earlier -- how, in writing a piece of legislation that represents a minimum standard, it is virtually impossible to capture, if you like, every unique circumstance that might exist in terms of a workplace practice or the relationship between employers and employees.
[6:45]
Of necessity -- and obviously this is not new -- there needs to be an opportunity, where circumstances require it, for people to apply for a variance from the act. I think that's something that most people would agree with. Certainly I have not heard any complaints, either from employers or employees, about the opportunity to look at variances to reflect the perhaps unique circumstances that might exist and where it's mutually satisfactory to both the employer and the employees.
G. Farrell-Collins: There are provisions here for the director to put a time limit on a variance. Is there also a
[ Page 15828 ]
provision for this variance to be revisited, either at the instigation of the employer or a majority of employees? Can they kick in, as a group, and opt out at any particular time along the way? Or once it's done, is it done until such time as both parties agree?
Hon. D. Miller: It's under sections 73(3)(b) and (c). Clearly, it's spelled out where there could be an expiry date for a variance or an attaching of conditions to a variance. I should also point out that these are issues that have heretofore been dealt with in regulations, and that by bringing them into legislation, they're there for all to see, which again is, I think, an improvement.
G. Farrell-Collins: I'm not questioning the minister's argument that it's probably better to put it in legislation; I think he's probably right. The question I had, though, was: once that variance has been decided upon and entered into by the two parties, is there any means by which those two parties -- either unilaterally or in concert -- can go about changing that variance and throwing it out? I suppose together they could just do another variance, but is there any way that one of those two parties -- either the majority of the employees or the employer -- could, by themselves, unilaterally back out of that variance?
Hon. D. Miller: I guess I have just a couple of points. One is that the employer could arbitrarily say: "I no longer wish to operate in that way." The employer's obligation, obviously, is to comply with the act. Let's say it was some of the provisions outlined in section 72 that were the subject of a variance. As I say, the employer could do that.
The other is a situation that might arise as a result of a complaint that was filed. The branch would obviously have the responsibility to investigate. If, during the course of the investigation, it was determined that in fact the employer and the employees wish to continue with that variance, then that would be the result. Alternatively, if it was the opposite, presumably it would end.
G. Farrell-Collins: The minister has stated that the employer could unilaterally opt out of a variance once it had been entered into. That was my understanding of his comment. Could 50 percent plus one of the employees also opt out of a variance if at any time they felt that it wasn't working to their advantage? Or would they be required to go through a complaint process with the branch?
Hon. D. Miller: Again, it's hard to determine, because obviously we deal with real situations. For argument's sake, let's say that a majority of the employees determine that they don't like the particular variance, and they reach an agreement with the employer; then it would presumably end, with their mutual consent. Alternatively, if that were not successful, they may have the opportunity to file a complaint with the branch and have it dealt with that way.
G. Farrell-Collins: I'm trying to work through the scenarios here, and I think it's important that we do so before it's passed. If the employer can unilaterally opt out of a variance at their discretion but the employees must either seek an agreement with the employer or file a complaint with the branch in order to back out of a variance that they found, subsequent to an agreement, was not working in their best interests, then I would suggest that the bill is probably unbalanced in that regard, unless there's some principled reason one would give that unilateral clout to one side and not the other. Perhaps we can deal with that. I have a couple of other questions, but perhaps we can try to sort that one out first.
Hon. D. Miller: The opportunity for a variance under the act must meet with the approval of both the employer and the employees -- depending on which section: some, 65 percent; some, a simple majority. In that sense, it deals with mutual interests and the branch being satisfied that those mutual interests in fact are real. But there is still the right, if you like, of management to say in an arbitrary fashion: "I do not want to have a flexible shift schedule. This is the only schedule I'm prepared to accept, and that's the way things are." The employees can't, in those circumstances in a non-union setting, force the employer to adopt a schedule that they might prefer.
I hope you appreciate what I'm trying to get at here: the thrust is that the act provides for change, and it provides the process to initiate that change and the requirements of support to be evidenced; but it nowhere compels an employer to agree to a request by employees, whether it's a variable shift schedule or any of the other issues that can be dealt with under the variance section.
G. Farrell-Collins: Perhaps I'm not making myself clear. What I'm trying to understand is.... If we put in a system of variances where both parties must agree -- the employer and 50 percent plus one of the employees -- and they enter into a variance and decide that that's how they intend to operate, it would seem to me that it would require an agreement amongst the two parties to back out of that variance. There should be some guarantee that, once entered into, the other side will live up to it and won't just arbitrarily back out. The minister has stated, contrary to that, that the employer may at any time opt out and go back to the standards that exist in this act. They may just arbitrarily say: "I know we had an agreement, but I don't like it anymore; I'm outta here, and we're going back to the old standard." However, the same right is not accorded to the employees. The employees cannot as a group -- 50 percent plus one -- say to the employer: "Look, we've tried this for three months, and it's not working; it's not what we thought we were getting ourselves into. We don't want to do it anymore; we'd rather go back to what was there before."
I'm asking if, in the minister's mind, that is balanced -- if that's what we're doing. Or is the only recourse for employees who seek a change in that variance, or an elimination of a variance they've already agreed to, to go through a complaint process with the branch and have the director of the branch decide?
Hon. D. Miller: I know there has been a lot of discussion on this. Contrary to some opinion that's still afoot, the act is not a collective agreement for the unorganized, nor should it be looked at as a collective agreement for the unorganized. As I indicated previously, it is simply a set of minimum standards that contain provisions to vary from those minimum standards as set out in the bill by mutual agreement. That does not impinge on what have been determined as management rights, I would argue.
[ Page 15829 ]
For example, if management did not want to enter into a flexible shift schedule, nothing that the employees did could compel management to do so. They could not go to the branch and use the branch as a vehicle to, if you like, initiate a grievance or a complaint. There are issues of so-called management rights that prevail in terms of the operation of any business. Where there is a desire on both parts to change or to vary, then the act lays out the processes and the rules and the thresholds that must be followed.
Where a variance has been entered into, the branch is fairly cognizant.... It really does go back to the 50 percent; I mean, the threshold is 50 percent in this section. Good judgment will tell you that in areas that may be somewhat contentious, if all you've got is 50 percent plus one, you may not have the solid ground to make a change. In those kinds of circumstances the branch has the opportunity to say: "We'll allow this change to take place for a short, defined time to see how people like it, to see whether it works."
If the variance has been granted, and subsequent to that granting the employees determine that it's not something they like or desire, they can initiate a complaint to the branch. If the 50 percent threshold is reached, then presumably the variance would be rescinded.
G. Farrell-Collins: Just so we're clear, then, the employer may withdraw from the variance at any time; the employee group may not withdraw unilaterally but may follow a process whereby they file a complaint with the branch to state that they no longer wish to be part of this variance -- they would like it terminated because they don't think 50 percent plus one of them still agree to it. That would be the process through which they would go. As long as I understand that....
Second, I want to ask the minister..... Section 73(3) talks about what the director may and may not do. Is there a provision for that to happen at the beginning of the variance? Or may the director enter at any time and append those requirements to that variance? Is it something that's done up front -- when they sit down, you apply for a variance, and they say: "Here's the time limit we think you should have, and here are some other conditions -- e.g., that you advise me on a three-month basis how it's working?" I don't know what they might be, but whatever they are, are those requirements appended at the beginning, when the variance is initially applied for? Or is there opportunity for the director to step in at any time during that variance and append new restrictions, new requirements or a new expiry date to that variance?
Hon. D. Miller: The conditions that might be attached to the variance, whether they deal with the time or whatever, are really determined at the time the variance is issued. At any time, the director can, of his own volition, intervene if it's the opinion of the director that there's some inconsistency with the intent of the act. As to the conditions, they would apply when the variance was issued.
G. Farrell-Collins: I guess my last round of questions on this section -- at this point, anyway -- deals with the propagation of these variances. If there becomes a pattern in a sector, or if there is a variance that's obtained by one or more members of an industry, is it more likely that variances will be accepted on an industrywide basis if they so wish?
[7:00]
For example, I'm looking at an employer who has a number of mines around the province, say three or four. There's a variance negotiated and entered into at one mine and then at a second mine, and they find that it's in their best interests to try and do that throughout the whole company, rather than just in one location or another. Is there a provision for that to occur? If so, would it have to be sought individually or could it be done as a collective throughout the whole organization? I guess it really comes down to how you measure the employees affected: are we going to take the broader view or the more narrow localized view?
Hon. D. Miller: In fact, that has been some of the experience of the branch in working with an employer that has employees in a number of jurisdictions all doing essentially the same kind of work. They could be considered as a whole with respect to variances.
G. Farrell-Collins: In this case, then, an employer -- or employee groups, for that matter, but it would most likely be the employer -- could go to the branch and say: "Rather than do this at one mine or another mine, we'd rather have this variance right across. It's much easier for us with regard to accounting purposes -- keeping track of holidays, those sorts of things." They could apply for that variance throughout the whole organization and then have that vote taken amongst the employees -- 50 percent plus one -- and it would be 50 percent plus one of the employees at all of the locations.
Hon. D. Miller: That's correct -- if we're talking about a single employer, not a multi-employer.
L. Fox: Subsection 73(1) states:
"The director may vary a time period or requirement specified in an application under section 72 if the director is satisfied after an investigation, that (a) a majority of the employees who will be affected by the variance are aware of its effect and approve of the application, and (b) the variance is consistent with the intent of this Act."
Is the investigation referred to in the top paragraph based on only the conditions of sub-subsections (a) and (b), or is it something more than that?
Hon. D. Miller: I think the two capture it. One deals with the majority; the second deals with the director's ability to determine whether the variance is consistent with the intent of the act.
L. Fox: With that in mind, I'd like to propose an amendment that I think would clear that up. The amendment I propose is to subsection (1): that we delete the words "after an investigation."
I'd just like to speak to that for a moment. It seems that if you read it without that in there.... "The director may vary a time period or requirement specified in an application under section 72 if the director is satisfied...that..." and then it goes on to state the two specifics under (a) and (b). It makes it very clear that in order to satisfy himself that (a) and (b) are being complied with, there would have to be some investigation for him to do that. But by specifying it, it points out that perhaps there's something more than just (a) and (b) that is going to be investigated. It reads a lot clearer with this amendment and is more specific and clear in its intent.
On the amendment.
[ Page 15830 ]
Hon. D. Miller: The deletion certainly doesn't, if you like, impair the director in carrying out his duties. But at the same time, you know, it's maybe a moot point here with respect to language -- neither does the current language, the current wording, describe in detail the type of investigation or how the director needs to be satisfied that the conditions under (a) and (b) are okay. So the current wording doesn't do any harm. In fact, some might say it gives a bit of comfort that at least there is an onus on the director to conduct some type of investigation; it can't simply be a matter of opinion.
So I don't see, in going through this, the need to pursue an amendment such as the one you've described. I don't think it adds or detracts in any way. I'm satisfied that the wording here is satisfactory.
L. Fox: I take it from this that the minister understands and respects the intent of it, but the concern I have has been given to me by a number of individuals -- not a lot, admittedly. They're somewhat concerned about what kind of investigation would be necessary. It leaves it a little more open and more confusing with that in there.
But if it's merely that the director is satisfied that (a) and (b) are complied with, it seems to me to be pretty explicit that in order for the director to satisfy himself or herself that those conditions are being met, they would have to do some kind of investigation to satisfy themselves of that. So I really think it's a redundant statement. It implies something more than what it's intended to do.
Interjection.
J. Tyabji: I'd like to speak in favour of the amendment, mainly because.... I should put a proviso on it. Later on, we're going to be talking about the arbitrary determinations of the director. But having said that, the act primarily, in talking about investigations, is quite clear that investigations are triggered by a complaint. That's probably where the member for Prince George-Omineca....
Hon. D. Miller: No, that's a different proposition.
J. Tyabji: The minister is saying no. But later on in the bill, everything we're talking about in investigation is about the director following up on something and investigating many, many different items. So it probably is a good idea, to make it consistent with the rest of the bill, to just have the director satisfied.
G. Farrell-Collins: I wouldn't take the minister's side on this one, and there's a reason why. I want to explain. It's as important as the two arguments that have been made already. It's that the whole act has to be read as a whole act. If one looks through the other sections, there are many occasions where the phrase.... I've just in the last 30 seconds flipped through here and found four. Here's another one, section 37(3)(b): "the director is satisfied that the employer...." Another one was section.... I don't know; I had a whole bunch of them here. In just flipping through the act, one can see a whole bunch of places where it's merely required that the director be satisfied. By including this section, any decent lawyer could stand up and argue that in this case, by including "after an investigation," there must actually be a formal investigation. It's over and above that which is required in dozens of other places in the act, and therefore an actual, formal investigation must take place. Aside from just getting submissions and maybe talking on the phone, something over and above what would normally be inspected is required just to satisfy him or her that these requirements have been met.
That is probably a more pressing argument for excluding the word "investigation." I hadn't thought of it, but I think it's a good comment by the member for Prince George-Omineca. Taken in the context of the argument made by the member for Okanagan East and the argument that I just made, the case can be made that by including the words "after an investigation," you are directing by legislation that a formal investigation take place before this variance exists.
The employee group could come back to you and state that it wasn't an accurate or real variance, because not all the criteria had been met. In fact, there could well be some liability accrued to the director, and through that to the government, for not actually performing a formal investigation. If the employees were to decide after a period of time that this wasn't working in their interests, and they were losing out on overtime pay because of what was included in this act, they may come back to the ministry. A smart lawyer -- in fact, a smart union organizer -- may come back to the branch and say: "You did not do due diligence. This act specifies that you must do an investigation and be satisfied. Did you do an investigation?"
"Well, I looked at the submissions and made a phone call, but I didn't do a formal investigation as described elsewhere in the act."
The director could be found negligent and perhaps liable for any overtime pay or benefit that may have failed to accrue to the employees as a result of this variance. It's a significant issue to be discussed, and I'd like to hear how the minister responds to that.
Hon. D. Miller: I'm overwhelmed by the arguments being presented opposite, particularly one set of arguments that refers to decent and smart lawyers. I'm sure the two are not mutually exclusive -- nor are any of the other adjectives that might be used to describe lawyers.
I feel a little uneasy about taking this out. I'm a cautious, conservative type of person myself. Given the arguments made by members opposite, I should say that I'm satisfied that the removal of those three words will not impair the section. Perhaps I can go on record -- and I obviously will, because I'm talking and it's being written down -- that I am a touch reluctant. Nonetheless, having listened closely to the arguments of members opposite, I'm prepared to.... I can't recall. Was a formal amendment moved?
An Hon. Member: Yes.
Hon. D. Miller: It was? Okay. In that case, I'm prepared to accept the amendment put forward by the member for Prince George-Omineca to delete the words "after an investigation."
Amendment approved.
On section 73 as amended.
G. Farrell-Collins: The minister warns us that he's not getting soft on this. I do want to say that the victories in
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opposition are often minuscule. The member for Prince George-Omineca should be happy with that. It is a small amendment, but I want to also say that the intent from the opposition's point of view is not to impair the section in any way. I think we've, perhaps, headed off even one complaint three years down the road. I think that's probably a good decision.
J. Tyabji: On this amended section, we note that....
Interjection.
J. Tyabji: I haven't had a chance to speak to this section yet. I'm certainly lucky I missed section 71 on the adjustment committee; I had a few questions on that.
With respect to this section, we note that the powers of the director to specify variances are creeping in. Of course, later in the act, we get into section 79, with sweeping powers of the director.
In subsection (3), where we talk about the specification of a variance, what I find interesting is that the minister may, by regulation, make exemptions to the act. And the minister may -- for example, in agriculture or with paper carriers, and all the different areas that the minister has chosen to exempt -- for the purposes of allowing that sector of the economy to function well, make exemptions or exceptions to certain parts of the act or to the act. Under this section, we see the opportunity for the employer and the employee to do something similar to what the minister is doing, and that is to come together, come to an agreement and then make an application to the director. The director, as the minister's representative, is going to allow some form of exemption or variance -- exemption being too strong a word.
[7:15]
What I think is interesting about subsection (3) is that when you read subsections (1) and (2), you'll see that, first, the employer and the employee have to come together and come to an agreement on something. The director has to be satisfied that it's a majority and that it's consistent with the intent of the act, and then the director can accept that variance. But there's even more of a provision in here for the director. The director may not only do that but may also arbitrarily change it. And that's what I find interesting under subsection (3), where the director may specify that it "applies only to one or more of the employer's employees, (b) specify an expiry date...and, (c) attach any conditions...." We're saying that with the minimum amount of power that the employer and the employee have to come to an agreement that is consistent with the intent of the act, and that may, for the purposes of this act, need a little more flexibility, the director may still come and impose conditions.
I guess one question that comes up is, in the event of us having a director who may.... I brought this for the minister: Time magazine's "Welcome to Cyberspace" edition, for our comments from the last debate about the changing work environment. Reading through some of the changes in the work environment, I would note that there are going to be times when the director may not be that familiar with what's going on in the marketplace or the workplace. In the event of the director specifying conditions to the applied variance that the employer and employee have come up with, and that becoming a determination -- which is under subsection (4); this is a determination of the director -- are any of these determinations eligible for a hearing in front of the Employment Standards Tribunal, which is created in part 10?
Hon. D. Miller: Believe it or not, I occasionally get the feeling I'm in cyberspace in here.
If a complaint is filed and an order issued by the director, that is appealable to the tribunal that will be established under the act.
J. Tyabji: Just to make this clear, if there's an application for a variance, it's very specific; the director imposes conditions on that. The employer and employee may take that determination to the Employment Standards Tribunal and say: "This is what we asked for; this is what we got. We still want what we first asked for." They will get a hearing if the tribunal decides to hear it.
Hon. D. Miller: That's correct.
Section 73 as amended approved.
On section 74.
G. Farrell-Collins: We're into part 10 now, the "Complaints, Investigations and Determinations" portion of the act. Section 74(1) states: "An employee, former employee or other person may complain to the director that a person has contravened..." essentially any portions of the act, or parts 2 to 8 of the act, or any requirements under.... Essentially, what's there is that it's not just up to an employee or a former employee to complain that something has been violated: it throws the doors open to others to complain also. Perhaps the minister can explain why that requirement is necessary. I do know that history has shown that this tool has been used in other jurisdictions, fairly aggressively in some cases, by organizers as a form of harassment of an employer during an organization drive -- a certification drive. Can the minister tell me what rationale he has, other than that, for inclusion of this in the act, and if he is at all worried that that type of aggressive use of this provision may well occur in this province?
Hon. D. Miller: First of all, there's no prohibition in the existing act of third parties activating complaints, and it has not proven to be a particular problem. One circumstance that readily comes to mind is parents. If a parent thinks their child is being exploited unduly and the act is not being applied, they have the ability as parents to file complaints or to initiate a complaint to the director.
G. Farrell-Collins: Perhaps this is a better estimates question, because I doubt that you have the statistics here. But given the minister's comments that there is no prohibition in the current legislation that precludes any other individual from filing or making a complaint, do you have any idea of the number of other individuals, compared to employees, who would be complaining? In this province anyway, to the best knowledge of the minister or the deputy or any of the staff, has a complaint ever come forward as to the use of that provision as a harassment technique?
Hon. D. Miller: No, none of my staff are aware of any particular problems associated with the current wording of
[ Page 15832 ]
the act. As I say, we've rewritten it; it's a little clearer. The current wording has no prohibition on third parties, and we're not aware of any particular problems that have arisen as a result of that.
L. Fox: Just one follow-up question: I wonder if the employer could be considered under the category of "other persons" if he or she had difficulty with one of the employees contravening the conditions of the act.
Hon. D. Miller: I will draw the member's attention, hon. Chair, to an answer I gave previously. This is not a collective agreement; it is a set of minimum standards that prescribes, for example -- whether you're dealing with variances or whatever -- how the act is applied and administered. It's not an act that will allow parties to use the branch or the director as an arbiter in terms of grievances or complaints that they may have between themselves on any particular issue.
G. Farrell-Collins: In the same vein as the last question.... There are numerous provisions within this act that require the employer to either not allow or to ensure that an employee does or does not do things -- i.e., does not work a certain number of hours, to ensure that.... It's not just that the employer can't ask the employee to work an excess number of hours but that they must ensure that the employee does not do that.
I can think of a number of more or less unsupervised workplaces -- the sales business and others -- where the employer isn't right there with the employee all the time to physically ensure that the employee goes home. We have all, I think, if we've been part of an organization or had employees.... There always seem to be those one or two people who think they're doing you a great service by working 16 hours a day, and you have to constantly go by and tell them to go home or to.... Well, the minister has never experienced that, but I have -- employees who are very diligent and really want to work hard and who, in many cases, give up their lives outside of work to try to....
Interjection.
G. Farrell-Collins: Sort of like this job, yeah. Constituents could hear from a number of MLAs, I think, with regard to putting in 20 hours on many days.
So there are often cases where an employer has to continually go back to an employee and say: "Look, I told you to go home. What do you want me to do, lock you out of your office?" It could happen that an employer is put at risk financially through this act. Is there any way -- aside from firing the person, which you obviously don't want to do -- that an employer can insulate themselves from that?
Certainly a complaint from a co-worker could happen: "This worker is working too hard; they think they are getting ahead. I don't want to work 16 hours a day, but this person is. They're getting ahead of me." The co-worker could file a complaint with the employment standards branch stating that the employer is letting this person work too many hours. Is there any way an employer can insulate themselves from that by dropping a note to the employment standards branch and saying: "Look, I have somebody here that I just can't send home; I don't want to end up in a difficult situation somewhere down the line"? It's not a formal complaint, but at least it's an advisory note that they have an employee who is -- complaint of complaints -- working too hard.
Hon. D. Miller: I'm not sure it's a problem that is that widespread, but perhaps I'm wrong. In any event, employers are quite free to phone the branch to try to get some advice in terms of how they might handle that. But the relationship between the employer and the employee is really just that. In most cases, the act will not be applicable in those kinds of circumstances. It's up to the employer to try to resolve any particular problems he has with employees showing up and working endless hours.
J. Tyabji: Under 74(4), the minister has put a six-month time limit on a complaint, which is a good idea. We think we want to have some time limits. But what I find interesting is that when we look up sections 8, 10 and 11, we're talking about specific acts that may occur -- for example, section 8: "No false representations"; section 10: "No charge for hiring or providing information"; and section 11: "No fees to other persons."
This isn't going to be the main part of my questions on this section, but what I find interesting is what would happen in a case -- and sometimes this is the case -- where someone who contravenes the act.... An individual might encounter that and not realize that there are other people who have encountered that as well. It might take some time before they realize that it wasn't an isolated incident, that there has been more than one incident. Would there be consideration given to activities under sections 8, 10 or 11 that could be taken into account for a complaint? There is a very specific expiry date, and I'm just curious to see what would happen if there were a series of actions that had occurred over a period of time.
Hon. D. Miller: Essentially, there is no extension of the time limit for filing complaints.
J. Tyabji: That wasn't quite my question, but that's fine; I'm not going to push it.
I note that under 74(1) we talk about "an employee, former employee or other person." I'm assuming that "other person" includes absolutely anyone in the province who "may complain to the director that a person has contravened" -- and then we say -- "a requirement of Parts 2 to 8." Well, part 2, which is the "purposes" section, is absolutely wide-open. There is no consideration of the fact that the other person perhaps has less knowledge of how an employer could have contravened part 2 than a former or current employee has. I find it interesting that we don't specify that there should be some direct knowledge, or something, that would justify the kind of investigation that would occur later on.
When we go through parts 2 through 8, there is a lot of latitude for complaint. I think it's important to raise a concern about this section that basically anyone can make a complaint about almost anything. Obviously, we want to have some protection for workers, but at the same time, we have to remember that employers are going to end up on the hook if -- as happens in a minority of cases -- we have a squeaky wheel.
I think what I'd like to speak to for a second is that although we have had a very friendly debate so far, and I
[ Page 15833 ]
think we have commended.... The member for Fort Langley-Aldergrove has called division on some sections where we are all in agreement on good aspects of this bill. Notwithstanding that, there has to be a balance in this section for the employer, and I note that although there is a time limit of six months for a complaint, there is no time limit for the investigation, the proceedings of the investigation and the reporting out of the investigation.
When we go through part 10, there are some specifics about how the determination comes about, but there's no time limit. What we would have liked to see in section 74 is some allowance to say, for example, that once it has been filed, notice will be given to the person who is the subject of the complaint within seven business days of a complaint being filed. So you couldn't have the director launch an investigation, for example -- which the director is under an obligation to do -- without some provision in law for the person who's the subject of that investigation to be notified. We know that in the next section we talk about confidentiality. The minister has quite properly built in protection for people who want to be able to register a complaint without fear of retaliation. But for the employer, who may be the subject of this, there's no protection at all for notification or procedure. There may be something in regulation coming later, but it's....
[7:30]
Of course, we know that we don't debate the regulations, and I find it interesting that we have some very specific provisions in the bill, which is in legislation, for all the other protections. If the minister is going to say, "We may have time limits coming up by regulation," then why wasn't it in the bill? Why isn't there something in here that would say that the person involved will be notified if it's relevant? If it will be disclosed to the person and they will be notified of the nature of the complaint, then certainly the nature of the complaint should be provided within a certain time limit. With that being the section on the time limit, I don't know why that hasn't been done.
Most importantly, I think that sometimes what happens when these things go on, as the minister may be aware, is that there will be a negative public relations campaign that will accompany it. Rightly or wrongly, unfortunately, sometimes the media will take one side or the other, and until the investigation is reported out, whichever side is taken in the popular press will be the side that will prevail. That could have very serious implications on the business person.
So that's what I'd like to speak to. Why were there no statutory time limits for the director notifying the person, providing the subject matter of the complaint and giving the person who is the subject of the complaint some idea about how the procedure will advance from there?
[D. Lovick in the chair.]
Hon. D. Miller: With all due respect, we are really covering, in a general sense, about three sections in this discussion. Under section 74, the act says that a complaint must be filed within six months after the last day of employment. Those are hard-and-fast rules with respect to filing complaints. Other issues the member has canvassed are dealt with in succeeding sections -- sections 75, 76 and 77 -- and while the member may indeed feel that there should be the ability to extend the time when complaints can be made, we have not done it in the act. Obviously, there has to be a limit at some point. One has to draw the line, and six months seemed to be a reasonable period of time.
J. Tyabji: I don't know if the minister heard a word I said. Okay, two questions ago I put the question about the six-month situation. The last question was about this section, which is headed: "Complaint and time limit." There was a request for a time limit under which the person who is the subject of complaint would be notified that the director had received a complaint, notified about whether or not an investigation was going to proceed and given some idea of the subject matter of the complaint. So let's just keep it simple. Those are three things. Why were there no time limits for that?
Hon. D. Miller: With all due respect, section 77 deals specifically with notification of a person under investigation. All I tried to point out was that the member was canvassing about three or four sections, and that I want to do it one at a time. So I think we should just deal with section 74 and move on. I'm sure that the member's questions that are germane to succeeding sections will be answered.
J. Tyabji: I don't care which section we ask it under; it's just that the heading of time limit....
Hon. D. Miller: There are rules, that's all.
J. Tyabji: The minister is not really being particularly truthful. Section 77 is not about how long you have until you notify someone that they're under investigation. It talks about their response, and I'm assuming that's at the point where the investigator has already begun the investigation. What I'm asking is that under section 74, where we talk about filing a complaint, there could easily have been a subsection (5), that upon receipt of a complaint by the director, the person who is the subject of the complaint shall be notified within seven days.
That's the sort of thing I'm talking about. It's the kind of protection that employers like to have so that they don't suddenly find that an investigation has been underway for three months, and they're suddenly asked to respond within four days, which has happened. When we get to the later sections and when we get to part 12, we'll find out why it's really important to actually build in within the statute some protection for the employer. Otherwise, it's wide-open. The minister clearly doesn't understand that. I can get up and ask again under section 77, but it isn't quite what I was asking.
Hon. D. Miller: I don't wish to jeopardize the ability of the branch to investigate complaints that are launched under the Employment Standards Act by restricting them in the manner the member has talked about. In fact, that might be the case. By putting limits, for example, when people have to be notified and others.... The branch operates -- and is a very hard-working branch that, in my view, is overworked.... There is a general notion afoot these days in British Columbia -- and it's occasionally raised in a political context -- that we have far too many civil servants, and that we should cut back on our expenditures and on the number of people we employ to conduct these issues.
If we tried to be too narrow in a bill, we could jeopardize investigations that the branch wanted to carry out, because it
[ Page 15834 ]
might not be able to meet the kinds of time limits that the member is suggesting. I wouldn't want to have that kind of situation. The current act talks about six months. This one is the same, and there are other provisions dealing with complainants requesting confidentiality, investigations after or without a complaint and opportunity to respond. It is all laid out. We have chosen six months. We have been consistent with the existing act, and we're not going to change.
J. Tyabji: The six-month issue is not what I'm talking about. I don't want to belabour the point, but I would like to say to the minister that I wasn't saying the investigation could not proceed until the person had been served with notice. That is a different request. It actually isn't a bad idea, but I understand that it would hamper the director.
What I was asking for was something as simple as electronic mail. It's a computer system that's set up; it's a form letter. They have it in every other branch of government, including this minister's. It just means that a complaint comes in and a letter is fired out, and there's no provision for that. It just means that the person who is the subject of the complaint is notified, and because there will probably be an investigation, if we wait for the director....
As the minister said, the directors are often overworked; they've got a lot on their plates. It provides the director with some protection that he's not going to end up with a really angry person on the end of the phone when he finally gives them a call and says: "By the way, I've been investigating this complaint for four months, and now it's your turn to answer some questions. I've given you a reasonable time -- you've got a few weeks." That's what this is about. I'm not going to belabour the point, but it's not about restricting the investigation, creating more work or halting the process of government. It's just about letting them know that a complaint has been received.
Section 74 approved.
On section 75.
J. Tyabji: Subsection (1) says: "...the director must not disclose any identifying information about the complainant unless (a) the disclosure is necessary for the purposes of a proceeding under this Act...." I'm curious. The minister has clearly written it so that unless otherwise necessary, there will not be disclosure of who has registered the complaint -- at least, that's the way I read it. Is there a reason for that? Would the identity of the complainant automatically be confidential unless the minister or a section of the act requires disclosure?
Hon. D. Miller: The act says: "If requested in writing by a complainant, the director...."
Section 75 approved.
On section 76.
J. Tyabji: I'm just being a squeaky wheel on the same time-limit provision I asked for under section 74. Under section 74, we were specifically asking for notification. In this one, there's no closed end for reporting out. So the question is: will there be specific time limits in a regulation for some method of reporting out, and some way of keeping the parties to the complaint or investigation informed about what the status is?
Hon. D. Miller: No.
J. Tyabji: Is there a reason why there's no time limit? If the minister feels this is somehow frivolous questioning, that's really unfortunate, because surely to goodness the minister has received the same letters we've received on the opposition side. I can't speak for the other members, but I've seen whom all the letters are copied to. My name isn't at the top of the list, given my status in this Legislature.
So if I'm getting this amount of letters about how closed things are in terms of process and how frustratingly slow government is, I would hope that the minister has some awareness about the frustration that business feels when anyone.... We have to have the protection that anyone can launch a complaint about anything. We need that protection. But where's the protection for the employer under section 76? They need it so that they don't get tied up in court, they don't get bankrupted by legal proceedings or litigation and they don't feel like they're being harassed by a particularly vengeful former employee. To what extent is there any protection in section 76 for employers so that they won't be left in limbo for three or four years?
Hon. D. Miller: My staff advise me that generally employers are fairly complimentary with respect to the timeliness of investigations by the branch. It has not been identified as a problem, and it wasn't identified as a problem during the Thompson review. So I'm satisfied that the section deals with the situation adequately.
J. Tyabji: So the minister is saying that so far in the history of the director's work, there have not been significant complaints about the time limit for reporting out. Is that correct? He disagrees with me that there's been a problem.
Hon. D. Miller: That's correct, and in addition to that, there's a fundamental point that I think is very, very important. We do not want to lose the ability to investigate complaints, simply because we have not complied in the strictest sense with some arbitrarily imposed time limits about how long it should take to do an investigation. That would be contrary to the best interests of the individuals who use the act for their protection, whether they be employers or employees.
Speaking of mail, the last letter I received with respect to the Employment Standards Act was one I signed just earlier today to an individual who will now be in receipt of over $10,000 in unpaid wages as a result of work done by the branch. So I think they're doing a fairly good job.
G. Farrell-Collins: It was overtime for the last session.
Hon. D. Miller: My hon. critic says that it was overtime for the last session.
Hon. Speaker, I do believe we really have canvassed this quite thoroughly.
J. Tyabji: I guess the minister and I have to disagree about whether we've canvassed this thoroughly.
[ Page 15835 ]
The reason I'm pushing for this time limit is that there are a few things that are new in this bill. We have an Employment Standards Tribunal, and under section 79, we have a very contentious section on determination of the director. In addition to that, what I think the minister is missing -- and this could be just a philosophical difference -- is that the director is, in effect, the investigator, the judge and the jury. The director will be setting the schedule of penalties and making the determinations, but those determinations shall have precedence over determinations in a court of law. In fact, when we go on in the bill, we'll find that the ruling of the tribunal is final. So unlike the court system system -- where it has to be a public process, where time limits are set, where there are methods of applying for extensions of those limits and where there is a system of justice -- this is completely closed. We have a government employee who's going to have full power over employers. That's basically what it is.
Later on, I'm sure we're going to come back to the philosophical difference that we in the Progressive Democratic Alliance have with adjudicating bodies that exist in the bureaucracy where there is no right of public input, public hearing or, in this case, appeal to a court of the public justice system. That's incredible power.
I'm not asking for the minister to suddenly say that if you don't make it within this narrow window, you're closed. What I'm saying is: let's apply the same standards that we have in our court system. It's not that people are out championing the court system as the perfect model of justice, but it's better than this. Let's look at the fact that our court system, which was set up to protect the greater interests of the people of British Columbia, is the last avenue of power in this province; it is more powerful than this assembly. We may provide guidance to the courts, but the courts will be the ones pronouncing the interpretation and determination of the law. The court system has a very strict set of time limits.
[7:45]
When the minister stands up and says, "We don't want to set arbitrary standards; we don't want to be preventing justice," it's quite the opposite. The scales of justice will insist that there be protections in there for employers. The employers must have some confidence that within a certain period of time whatever worries or fears or concerns they have will be met. The minister can make it exactly the same model that we have in the justice system. If you don't make it within this set period of time, you can apply for a longer period, provided that you have some reason: you say that your workload has been too long, or whatever. We know how slow the court system is. What the minister is saying is that they don't even have to meet that.
Even if this minister is satisfied that his staff are not having a problem in terms of time limits, he has no idea what the next government or the government after that may put in place. By that time, people may stand up and say: "It hasn't been a problem for ten years. Why should we try to introduce some sort of time limit now?" That's what I'm talking to.
It's obviously a philosophical difference. The minister, in the tradition of this government, doesn't mind a dictatorship, provided that they are the ones who are determining how that works. It may have worked fine up to this point; that doesn't mean it's going to work fine in the future. A time limit is a reasonable request to ensure that the employer's needs are met in the investigation process -- especially as we meet the tribunal later on and the determination under section 79.
Hon. D. Miller: Just to advise you, hon, Chair, there are no time limits on court decisions.
I think we've canvassed the section quite thoroughly.
L. Fox: In a slightly different vein, 76(3) says: "Without receiving a complaint, the director may conduct an investigation to ensure compliance with this Act." I can understand part of the rationale behind that. Perhaps, if there is a history within a corporation of non-compliance with employment standards, I can see that coming to be. Earlier we discussed the issue that I could see of more and more requirements in terms of paperwork for small business.
I'm wondering a couple of things. Would whether or not there were signed slips of paper in the payroll book around the variance issues be a consideration that this director would be investigating? If a corporation were found to be not fully in compliance with some of the requirements of the act, what authority does the director have, if any, given that no complaints have come out of that particular business?
Hon. D. Miller: This section of the act has existed for decades. I can't recall that there has been any particular problem with it. In any event, if the director undertakes certain actions and issues certain directives, they are appealable. I don't think the member's fears are based on anything.
J. Tyabji: I just want to put on the record that I don't know where the minister got his information about the court system. Most clearly, there are very specific rules of court. There are two binders full of them. I'm sure the Attorney General would be happy to provide him with that information. In the court system, if you miss that time limit and you haven't made an application for an extension, you're out of luck. In fact, we just debated some amendments to the Attorney General's statutes that would allow them to clean up the books if people didn't comply with the rules, and they wouldn't even have to make an application. So it is very specific. And it's a reasonable request for this model.
Hon. D. Miller: Gee, really. The member talked about wanting to change the language to ensure that the branch had to issue decisions in a timely way. The courts are not under any rules with respect to the timeliness of their decisions. There are court cases that have been heard years past...where the courts have still not rendered decisions.
Interjection.
Hon. D. Miller: We have gone around and around and around on this section, so I'm prepared to vote on it.
L. Fox: One more time. I understand it's getting late, and we've been debating a lot of clauses.
Hon. D. Miller: That's right. Everybody go somewhere else.
L. Fox: I'm not trying to delay the system.
The minister suggested that clause (3) has been in the existing act and has never been a problem. The only observation I make is the fact that there weren't the stringent requirements in terms of paperwork in the existing employment
[ Page 15836 ]
standards, so my concern was whether we'd see a resurgence. In fact, I've never seen this clause exercised, to be quite honest, in the old act.
I guess my concern is that, given the added responsibility of an employer to comply with written requests and all the rest of it, is that going to see more situations where under this section we'd see a director enter a business -- which may never have had an employee complaint -- just to review payroll records and see whether they're complying with the standards of the act? That was the concern and the reason I asked the question.
Hon. D. Miller: The branch used to be, in the old days, much more proactive. They used to do routine audits, not because there was any cause to believe anything was wrong, but they simply as a matter of routine. That doesn't take place now. The resources are stretched pretty thin. So I repeat, the member's concerns with respect to the potential impact really are not grounded in anything that will happen as a result of this legislation and this section, which remains unchanged.
Sections 76 to 78 inclusive approved.
On section 79.
J. Tyabji: Obviously, section 79 is going to be a contentious section for members of the opposition. We have a lot of powers being given to the director. I don't need to repeat myself from the previous section about why we think there should be some safeguards built into this. Will there be some parameters of this so-called satisfaction, or the fact that the director has to be satisfied, built into the regulations? Or will it be at the full discretion of the director?
Hon. D. Miller: There are really only two new sections to this from the old act. They are subsection (3)(c), where the director can impose a penalty on a person under section 98 -- that's a new provision discussed mostly in second reading, the penalty provisions that some employers supported -- and under subsection (5)(b), with respect to the issue of a flexible work schedule under sections 37 and 38.
J. Tyabji: Perhaps the minister was consulting and didn't hear the question. The question is: in the regulations, will there be a provision or a definition of how the director will be satisfied for the purposes of this section? What will be the process to get to that, and to get to outlining the method of investigation?
Hon. D. Miller: It's the process of investigating complaints and making determinations that has been used by the branch for many years, and obviously those are appealable.
J. Tyabji: The minister has mentioned that under subsection (3) we have a provision now for the director to impose a penalty under section 98, which obviously we'll get to later on. Why was that put in there? I think later on.... It's interesting, because the act is quite clear in trying to prevent the director from being in a conflict of interest with respect to the administration of penalties. Yet the director sets up the schedule of penalties, and under section 79 the director can impose the penalties. So why was this added to this section of the bill? Why was this changed? I think that question will become more important as we move on in the bill.
Hon. D. Miller: Under the terms of the act, the only redress for a particular complaint that's found to be valid is to redress the situation -- if it's an unpaid wage issue, by paying those wages. There is nothing in the act that deals with people who are frequent abusers of the act. In submissions to Professor Thompson there was general agreement that penalty provisions could be used, if you like, where there have been repeat offenders. The employers generally supported that on the basis that they wanted to have those repeat offenders isolated and singled out. That's the purpose of the penalty section.
Sections 79 and 80 approved.
On section 81.
J. Tyabji: With respect to notifying others, obviously this is similar to the concerns I raised earlier. Here we see a time limit and process for appealing determination. But at this point, in section 81, is where the director clearly has completed an investigation, has come to a decision, has made a determination, and now must serve. Now we see the language that I'd asked for in the earlier sections: must serve the person with a copy of the determination. I don't see anything in here that would allow.... For example, if a very large determination has been done.... If the employer isn't planning to appeal but is planning to pay out the amount that's been adjudged against him or her, I suppose that would also include a penalty, if a penalty applied. Is there a negotiation process with the director to determine a schedule of payment? How will that work in this section?
Hon. D. Miller: Yes, that is possible.
J. Tyabji: In this section, is it possible that that would be the first time the person would be aware that there is an investigation ongoing?
Hon. D. Miller: I refer the member back to section 77.
J. Tyabji: I know section 77 is the reference to "reasonable," so I'm assuming the minister is saying that it would not be reasonable for the person to not have been contacted prior to the determination being made.
Section 81 approved.
On section 82.
J. Tyabji: Could the minister explain what "another proceeding" might be? Is this another proceeding under this act?
Hon. D. Miller: No, it's other avenues that may be available -- for example, the courts.
Section 82 approved.
On section 83.
L. Fox: I would just make note that in section 83, it would appear that.... Previously we discussed the clause in section 74(2) that if an individual employee was frivolous in their process and found by the director to be such, this section still
[ Page 15837 ]
allows that employee to maintain his or her job. But if, for instance, there were continuous actions by an employee, and the director constantly had to discard this because it was seen as frivolous or trivial but was causing a disruption in the workplace, shouldn't the employer have the right to fire that employee to deal with the overall better good of the workplace for the other employees? Subsection (1) says: "An employer must not (a) refuse to employ or refuse to continue to employ a person...." But it makes no allowance under this legislation for a continual, frivolous or trivial pursuit under this legislation by an employee.
To that end, I would propose an amendment for the minister's consideration that would add (3) to section 83. It would read: "Should a director determine that a complaint is frivolous, vexatious or trivial, as referred to in section 76(2), then subsection (1) of this section shall not apply."
On the amendment.
J. Tyabji: On a point of order, is it possible in committee to direct questions to the mover of an amendment?
The Chair: No.
J. Tyabji: Okay. Then perhaps if I speak to the amendment, my questions might become obvious.
It's my reading of this amendment that it would in effect empower the employer to refuse to employ, threaten to dismiss or basically discriminate against someone who may have filed a trivial or vexatious complaint. I would almost think that it would have to be the conclusion of the investigation that would determine if it were a vexatious complaint in the first place. If that were the case, then it would be after the fact, so I'm not sure how the amendment works.
[8:00]
The Chair: I think the minister has now had an opportunity to review the amendment, and therefore I'll turn to him.
Hon. D. Miller: The amendment is really not required. As I read it, it gives authorization to fire an employee and is not something that has a place in this act. If an employer has a problem with an employee, regardless of what the problem is -- whether it's dealing with complaints that the employee may have filed under this act or with attendance or any other matter -- that is an issue between employer and employee. This is not a collective agreement, as I have indicated on a number of occasions now. Under section 76, the director is able to determine whether complaints fall under the frivolous, vexatious or trivial category.
With respect to somebody continually using the act for reasons of their own, this section is not intended to deal with that at all. It simply says that where an employee uses the act to file a complaint about whatever it might be, the employer, in response to the employee doing this, cannot threaten them, use dismissal or refuse to employ, etc. In the event that an employer was sufficiently dissatisfied with an employee over whatever issue, I assume that is an issue they would deal with. On termination, in fact, it may even be an issue the branch might deal with, depending on the circumstances. I must reject the amendment. It has no place in this section.
J. Tyabji: I think I understand the nature of the amendment better, and I look forward to hearing from the member for Prince George-Omineca. But it sounded like the minister was saying that this section of the act would actually save harmless someone who launched a complaint, even if that complaint were found to be frivolous or vexatious. The reason I mention that is that, notwithstanding the amendment.... If we had a subsection (3) that said, for example, "Subsections (1) and (2) will not apply after a determination of the director if the director has found that," which I guess is what the member was basically saying.... Is the minister saying that an employer couldn't fire someone if they had launched a frivolous complaint against them?
Hon. D. Miller: It may be that someone might actually file a complaint with the branch which, upon investigation, may be determined to be frivolous, vexatious or without foundation, but that person might have filed it in all good conscience, thinking that they had a reasonable case.
Interjection.
Hon. D. Miller: Well, if they didn't, they don't; they will be dismissed. What's the problem? The section is pretty clear. It simply says that if people avail themselves of the protections offered in this act, their employer can't turn around and discipline them. Why do you think, for example, that most of the infractions of the Employment Standards Act...? There's never an application to the branch; there are never complaints filed. Why do you think that might be?
If people want to water down the only section that protects employees, if they want to use this act that is the minimum protection in this province.... The response from the opposition is: "Let's make it weaker." We're not going to do it.
L. Fox: Once again, we see the minister get on his high horse and...
Interjection.
L. Fox: ...gallop off into the sunset -- exactly right. There was no attempt to water it down. Vexatious, in my understanding, is repetitive -- something would have to be of a repetitive nature in order to be classified as that. Frivolous and trivial -- I'll live with the minister's concerns. Each of us considers those two words differently. While an individual may, indeed, have what they consider a legitimate complaint, and it may be seen by the director to be frivolous or trivial.... I can understand it. But vexatious is a different issue. That kind of suggests to me that it would be of a repetitive nature -- a similar complaint in a repetitive nature. That was the issue I was speaking to.
If the minister doesn't want to accept the amendment, that's fine; I accept that. What I was trying to do was not take away anybody's opportunities or rights but put some balance into it to stop, for instance, a plant. We see in the retail business today where actual employees are planted with the competition. All you have to do is go in and talk to people in sales in the music business and those kinds of things. In actual fact, they hire people to disrupt the competition. That's a real fact out there. All I was looking at was whether or not.... If there was somebody that was planted in a competition's place.... They're doing it now, but not through employees at
[ Page 15838 ]
this point; they're doing it by sending false customers in. Who knows what the next step will be if we leave loopholes in legislation? That was the concern I was trying to address -- not legitimate employees. That's the reason I raised the question.
Hon. D. Miller: Fair enough. Perhaps I got a bit heated there. Certainly, if the marketplace has gotten that bizarre -- and I'll take the member's word for it -- I guess that might speak volumes about those who say that the marketplace is going to solve all our problems. But I don't think we should construct a bill to react and to compel resources of the province to deal with those kinds of bizarre situations. In practice there has not been a problem. Therefore I don't think we need the amendment.
J. Tyabji: I can never resist a good rant by the minister, and that last display of tilting at windmills was irresistible.
What the member for Prince George-Omineca has proposed with his amendment is to allow that in the event of someone who is a particular pain, and who is causing the employer grief to such extent that the director or the tribunal has said, "This complaint is trivial or vexatious," that person could actually be let go. Imagine that! Somebody who has filed a trivial or vexatious complaint could actually be let go. Do you know what I think is interesting? I actually would like to ask this question of the minister on this amendment, and I'll wait.
He's not listening. I'll just have to ask it twice. To the minister, on the amendment: how many times in the last year has the branch deemed a complaint to be vexatious or frivolous?
Hon. D. Miller: I don't know the answer to that, but perhaps the member might like to ponder and ruminate on this question: how many employees who are legitimately aggrieved under the provisions of the Employment Standards Act actually file complaints? Think about that one for a long time.
The Chair: Perhaps the rhetorical questions could be abandoned and we could focus on the amendment before us. Member for Okanagan East, I think we are close to the end of canvassing this thing in any reasonable and comprehensive way, and so....
J. Tyabji: That's a very moving question by the minister, and he's absolutely right; many employees are intimidated. At the same time, I wasn't asking a rhetorical question when I asked how many times a complaint has been deemed vexatious or frivolous. The reason I asked is that it is so difficult to have a complaint deemed as that, because a director will not want to come out with a heavy hand, rather than.... A director has the option; a director can just dismiss the complaint and say: "Well, I looked at it and there wasn't a lot there."
But to actually deem it frivolous and vexatious.... That's actually a term that is used in the courts quite often to shut down nuisance litigants. That's what it's for. Going back to that court model that we talked about earlier, the reason you have that provision for frivolous and vexatious complaints is to shut out those people who are just pests -- so the member for Prince George-Omineca obviously doesn't have any hope of getting his amendment passed.
The minister should realize that if someone is a pest, and if this minister's own director -- with all the protections for employees that this minister has put in place, and with all the wonderful things -- has still said: "This particular complainant is a real pest. This is a frivolous, vexatious person...." This minister is saying that the employer can't get rid of him; they're stuck with him. That's what the amendment is trying to do; it's saying that.... What the member for Prince George-Omineca is saying....
Interjection.
J. Tyabji: Let me just get this on the record. The member for Prince George-Omineca is saying that he would like to agree with the minister and his director, and to say: "You know what? You guys" -- this minister and his director -- "have said that this person is just so bad that we are going to give him this label." The member for Prince George-Omineca is saying: "Great! Let's let the employer have the same power to label this person and get rid of them." That's what the amendment does.
Hon. D. Miller: I can only say that I'm beginning to feel some empathy with that mythical employer described by the member for Prince George-Omineca.
L. Fox: It's probably too bad that vexatious is in with frivolous and trivial, because I see it as something totally different. Just for the record...
Interjections.
L. Fox: ...to be vexatious is to bring trouble, distress and harassment; that's what it suggests.
Interjections.
L. Fox: Just for the record, I don't see any legitimate employee concern coming under that category. What I see here is something which would be repetitive in nature and designed to harass the employer. But I accept the minister's argument....
Interjections.
L. Fox: Gee, the attitude of the Minister of Social Services is overwhelming this evening.
Amendment negatived on division.
Sections 83 and 84 approved.
On section 85.
J. Tyabji: The new act is different from the old act in its construction. I wasn't able to cross-reference it adequately, but it seems as if there are a lot more powers in section 85 of the new act than there were in the old act. If I'm wrong, then I beg the minister's indulgence. If not, I'd like to talk about the possibility of search and seizure without a warrant.
[ Page 15839 ]
Hon. D. Miller: The only new part here is subsection (2). That takes into account that the act has been extended to include work at home. The warrant has to be issued before the director can use the powers to search private residences.
Section 85 approved.
On section 86.
J. Tyabji: With respect to the director's powers to vary or cancel, is there a process by which this would begin? Is this on application by one of the parties, at the full discretion of the director, or both?
Hon. D. Miller: Without beginning and without end. It's at the discretion of the director.
[8:15]
Section 86 approved.
On section 87.
Hon. D. Miller: I move the amendment to section 87 standing in my name on the order paper.
[SECTION 87, in the proposed section 87 by deleting subsection (1) and substituting the following:
(1) Despite any other Act, unpaid wages constitute a lien, charge and secured debt in favour of the director, dating from the time the wages were earned, against all the real and personal property of the employer or other person named in a determination or order, including money due or accruing due to the employer or other person from any source.]
The reasons are that it reflects language in the current act. Unpaid wages constitute a lien from the time wages were earned. The language in Bill 29 changes the time period for the lien by adding that the lien was only relevant once a determination or order was issued. Court cases have upheld the language in the current act.
Amendment approved.
On section 87 as amended.
J. Tyabji: With respect to this section, and just a point of clarification, I'm assuming that this would include, in the case of an unscrupulous employer who has declared bankruptcy, assets that would be secured first for the unpaid wages. I ask this because I've had a case like this. The employee tried for so long to get the unpaid wages, and because of the time it had taken to get to the judgment, the employer had declared bankruptcy at a certain point and had hidden some of the assets. The time limit was the problem, and it was actually the investigation that took up the time. In that case, does this also involve assets that were the subject of a bankruptcy action?
Hon. D. Miller: Once bankruptcy has occurred, that legislation takes precedence. It's under the Bankruptcy Act that the issues are determined.
J. Tyabji: When it says "despite any other Act" in both of these sections, would that not...?
Interjection.
J. Tyabji: Oh, I see. The Bankruptcy Act is a federal act. Okay. So it's impossible for the minister to secure some sort of lien against that property prior to it being secured in bankruptcy.
Section 87 as amended approved.
On section 88.
Hon. D. Miller: I move the amendment standing in my name on the order paper.
[SECTION 88, in the proposed section 88:
(a) by deleting subsection (2) and substituting the following:
(2) No interest accumulates under subsection (1) from the date a determination is made under section 79 requiring payment of the wages or other amount until 23 days after that date.
(b) by deleting subsection (5) and substituting:
(5) An amount collected under this Part, or deposited under section 113 earns interest at the prescribed rate, payable by the Minister of Finance and Corporate Relations, from the date the amount is deposited in a savings institution to the date of payment to the person entitled. , and
(c) by adding the following subsection:
(6) Subsection (5) does not apply to any security provided or bond posted under section 100.]
The reasons, very briefly, deal with interest. Interest will always be applied to unpaid wages. After a determination is made, a person will have 23 days to pay or appeal. Interest will not accrue during this time. Bill 29 now removes interest from the unpaid wages if payment is made within 23 days.
Under subsection (5), a clarification -- interest is paid on money once it is deposited, not at the point of collection. Deposits must be made in a timely way by the employment standards branch.
Under subsection (6), a bonding act does not require that interest be paid on securities or bonds. Section (3), too.... This addition makes all parties aware that interest will not be paid.
Amendment approved.
Section 88 as amended approved.
On section 89.
J. Tyabji: On this section, notwithstanding the plain language, it's still a little difficult to understand. Could the minister explain the significance of this section?
Hon. D. Miller: The question actually struck me a little bit. It's really just standard process for third-party demands.
J. Tyabji: I'm not a lawyer. I'm sure the Clerks are probably having a good chuckle. But on this, I'm assuming that this is saying that in the event of somebody being liable under this act to pay unpaid wages, if that person is liable to become indebted to a third person, this act takes precedence, or the unpaid wages take precedence, over that. Is that what it's saying?
Hon. D. Miller: In the face of an order to pay by the branch, you can't avoid that payment by trying to give your money to, or park it with, a third party. Really, it's very simple.
[ Page 15840 ]
Sections 89 to 92 inclusive approved.
On section 93.
J. Tyabji: Back to the same question that I asked on other sections: are there any time limits, or will there be any time limits by regulation? Because I'm assuming that this is....
Interjections.
J. Tyabji: Under this section, then, are there time limits to allow for the release of the assets that have been seized?
Hon. D. Miller: There are no time limits specified.
J. Tyabji: Is there a reason why there wasn't a provision at least for reasonability in release of the assets?
Hon. D. Miller: There never has been.
Sections 93 to 95 inclusive approved.
On section 96.
G. Farrell-Collins: Section 96 is the corporate officer's liability for unpaid wages. Without provoking the minister into another episode, I would like to canvass this somewhat without fighting the class war all over again. I want to ask some questions about it if I can. Section 96, as I said, is the officer's liability for unpaid wages. There is an issue to be.... The Premier wasn't here for the earlier occurrences of the minister's comments, so trust me, I know of which I speak.
I do want to ask what measure there is here for due diligence to be done. If the directors have done what they can -- if they've tried their best to bring a company along, and haven't deliberately tried to make sure that the employees were the only victims of a bankruptcy, but rather have gone through what one could consider responsible leadership of a corporation or an organization -- is any measure of that to be taken into consideration here? Or is it pretty cut-and-dried?
I ask that because, as an issue, it does affect what happens to a corporation as they start to wind up. If it looks like the corporation is in difficult straits, the directors may well push the company into bankruptcy at an earlier stage -- and possibly a premature stage -- before various rescue plans could come into effect, including the job protection commissioner, who I'm sure the minister is very familiar with. There are often corporations that are rescuable, if I can put it that way. There is a possibility of turning them around with discussion and with accommodation from the municipalities and the province in the form of taxation, from the workers in the form of a collective agreement, from suppliers in the form of rates on costs for supplies, credit amounts and credit criteria. There are all sorts of opportunities that can be provided to a struggling company to keep it going and to keep those jobs up and available.
I would like to ask the minister if there is some insurance of due diligence or some insurance of responsible action that would insure the directors from this type of personal liability and would stop them from prematurely pushing a company into bankruptcy to avoid that liability?
Hon. D. Miller: It's a very complex area, particularly the issue around due diligence and the definition of that. I recommend that members might perhaps want to look at pages 155 and 156 of Professor Mark Thompson's report, where he canvassed in a pretty good way the problems and the different tests, if you like, with respect to due diligence. The tests under the Company Act are somewhat different, in that the obligation is to the shareholders versus what we're trying to look at, which is the ability of employees in certain circumstances to collect wages or to have a way to pursue wages owing to them. We were mindful of those issues when we drafted this section.
The changes address a B.C. Supreme Court decision this year concerning Westar Mining Ltd. The court held that the current section 19(1) of the Employment Standards Act provides a payable test rather than an accrued test in fixing liability for unpaid wages. The last three directors of Westar resigned on August 24, 1992, whereas the company was not declared bankrupt until August 31, 1992 -- but by then, the directors were no longer directors and section 19(1) did not apply. In other words, the bailout happened in a very, very short period of time. The situation the member has described was not there, in some respects. It was simply an attempt to jump to avoid the responsibility the existing act had defined. In other words, the act of resigning one week prior to the bankruptcy, even though the resignations left Westar with no directors, was sufficient to avoid any personal liability. We don't want that to happen either.
Changes are the adding of "were earned" to this section. This is the same wording that is in section 99(1), in defining the point at which the lien arises for unpaid wages. In order not to capture the responsible director who leaves a company at the time some wages were earned -- that is, vacation pay or money in a time bank -- but the next set of directors, who do not pay this money, sections 2(b) and 2(c) have been added.
With respect to this, there is a body of opinion, and essentially two different opinions, about the desirability of trying to capture directors as being liable for some of the unpaid wages that may be owed to employees at the time a company shuts down.
G. Farrell-Collins: I guess what we've said with this section is that the liability accrues to the corporate officer at the time the wages were earned, as opposed to when they may be payable or the end of the pay period, I guess we could say, which in this case would be up to two months of unpaid wages. If the company goes bankrupt at any time, those directors can be liable for up to two months' salaries, plus a few other things as far as holiday pay, banked time, etc., goes. But there is no test here whatsoever for due diligence. Is that deliberate? Is there no way that a director operating and doing their best...? You would think that if somebody came into a company, the company wasn't doing very well and was on its way down, and the shareholders came in and fired the board of directors and brought in some new people -- some very skilled people who were trying to rescue the company, trying to bring it back up again to keep those jobs there -- which may well happen with the job protection commissioner.... That happens sometimes: you bring new people in, everybody gets together and you try to save those jobs; that's the whole idea behind it.
Isn't the result here that those very people who were brought in to try to rescue the company and save the jobs could end up carrying the load for the directors who were fired who actually put the company in that state, perhaps
[ Page 15841 ]
through negligence? I understand the intent of what the minister is trying to achieve here, and I agree with it to a great extent. However, I don't agree that there should be no test of diligence for the directors. If they've done their best, if they've worked their hardest, if they've made decisions that were in the best interests of the company and the employees, why should they be held personally liable for that? If they've done everything they possibly can and you can't see them as being negligent, why should they be punished, especially in the case where they may well be the sharpshooters who were brought in to try to turn the thing around?
I think we're going to end up in a situation with this section.... I think this is a very far-reaching section and it has long-term effect. We may find that those companies that would normally go to the job protection commissioner for help to turn around and save those jobs will simply close up before we've had a chance to try to turn things around. I believe that you will find it very difficult to get new directors to come in to try and open that company again and put those jobs back into the market. That's my concern. By trying to achieve a good, I think we may, in effect, achieve a bad, and perhaps more far-reaching one.
[8:30]
Hon. D. Miller: I appreciate the comments of the member, and I just want to quote very briefly from Thompson's report, pages 155 and 156. I think he does essentially deal with the conflict -- the measure of due diligence. Maybe it's quite conceivable that.... Normally one thinks of directors operating a company in the best interests of the company, and de facto that becomes the best interests of everyone associated with it, including the employees of that company -- but not always. In some situations you could say that the best interests of the shareholders are in fact the worst interests of the employees. Therefore it goes to the issue of due diligence and how one could define that. In terms of consistency, one obviously could look at the Company Act and conceivably come up with one definition and at the Employment Standards Act and come up with a different definition. I will quote very briefly from page 156 of the Thompson report:
"Adoption of the due diligence test would mean that officials of the ministry who have a background in employment relations would be put in the position of deciding the wisdom of business decisions. To guide them, it would be necessary to establish detailed standards for directors' conduct in the law or in ministry policy, a substantial intrusion into what are essentially the private affairs of business organizations."
Given the inherent conflict that could be in place -- obligations to shareholders or employees, and the difficulty of developing that definition of due diligence -- we tried to ensure that the liability of directors for certain things was there. I don't think that we'll have all that negative consequence in British Columbia for people to.... In other words, something to dissuade them from sitting as directors of corporations or companies. It really is consistent with the act's overall thrust, which is a minimum set of protections for employees. I do recall, in the case of the Westar employees, that in fact it was pretty hard; it was pretty tough. A lot of those people ended up selling their houses, being on welfare and occasionally being castigated by those who don't like people on welfare. They had a very, very difficult time on the pension side; there were people who lost partial pension rights, which they had for all the time that they had worked and assumed they were going to collect. I think we have to consider the position that those people found themselves in. On balance, I think the section does a good job of recognizing the role that directors have, the responsibility that directors have and the obligation to do the best that we can to protect the employees' opportunity to collect unpaid wages.
[L. Krog in the chair.]
G. Farrell-Collins: I would agree with the minister that -- and again I come back.... I think the intent of what we're trying to achieve here -- to protect workers, to provide some accountability at the senior levels not just for the shareholders but for the employees -- is something that is warranted. I don't argue that point with the minister at all. I do disagree, however, with the way this section has been brought in and the implications that will, I believe, arise from it. The minister talks about the conflict that Mr. Thompson refers to in his report, which I have read several times -- that there is a conflict under the Company Act between the requirements and responsibilities of shareholders and a provision that would itemize, detail or direct some responsibilities towards the employees under this act. Well, I put to the minister that that happens all the time. There are literally thousands of things that are perhaps in the best interests of shareholders that don't fall within a whole series of laws and other bits of legislation through this House, the federal House and municipal councils, for that matter.
I understand what Mr. Thompson is saying, but I don't buy that argument. I think we're taking the easy way out here. I think we're unloading it all and saying: "Let's just put that onus on the directors and leave it there." It will help to secure the employees, but it doesn't do much for the employers. It certainly puts the blinders on your own eyes and says: "Let's not even look at the impact that this type of section may have on those corporations that are on the edge, and at whether or not we can keep those corporations, those companies, up and running and keep those jobs in the various communities." That's why I say I think we're taking the easy way out here.
Yes, it's more difficult to take this section, draft it and spend time on it to ensure that we have responsibility for directors; at the same time, we look at due diligence, and we try to prescribe it as best we can. And we don't have to restrict ourselves to the employment standards branch at all. There are people in government who could put that together, no problem; and if there aren't, then there certainly are people available who could come in and help with that type of drafting. I just think that in this case, rather than step into that somewhat muddied water and perhaps even quicksand of actually drawing those arbitrary lines of what due diligence is, what it means -- what the responsibilities of the directors are to the employees, and dealing with those conflict issues.... We're choosing to ignore all of that and put in a fairly simplistic section, hoping to ignore or not have to deal with what the side effects of that may be. I'm concerned that that's where we're going.
I disagree with this section. I don't think we should be taking the easy way out on this section. I believe there is a better way to do this, probably a more difficult way -- I'm sure a more difficult way, and certainly more time-consuming -- but I think in the end probably more beneficial to both the employers and the employees in the long term. I disagree with the minister's assessment of this section. I will be voting against it and just put that on the record. I think there is a better way -- yes, more difficult, but I think better.
[ Page 15842 ]
Hon. D. Miller: Just very, very briefly, I appreciate the member's remarks. Number one, one should not assume that the directors -- in other words, companies that are folding -- would not have assets out of which employees' wages could be paid. We should not try to cast this in the light of some poor directors having to shell wages for employees out of their own pockets. But number two, really.... For 40 years federal legislation has denied workers the status that they should have in bankruptcies. Why shouldn't workers' wages be the number one priority ahead of everybody else's needs? If they are not paid, the state ends up paying them through our income support systems. If people have worked and earned those wages, then they should be entitled to receive them. That's a fundamental principle, and if the federal legislation were changed, I think all of our problems would be...or not all of them, but certainly it would be a heck of a lot better than it is today.
So I appreciate the member's remarks. I think we have a difference of opinion. It's on the record, and we'll leave it at that.
C. Serwa: I have a couple of comments on that, because I also think this is probably not fair or balanced, but perhaps just a different philosophical viewpoint. One of the Deputy Attorneys General feels that anybody who has any money at all is either lucky or inherited it, and perhaps that's the socialist view. Perhaps the minister doesn't recognize that individuals who have acquired have worked hard for the money and have accepted risk with respect to the corporation.
But I might remind the minister that the concern here is not the shareholders' concern and we're not talking about multinational corporations; we're primarily talking about small businesses. During the devastation that occurred in British Columbia and in the rest of Canada during the early 1980s, a multitude of small corporations, small companies and small businesses went bankrupt. They went bankrupt not because of inconsistencies or wrong decisions on the part of directors; they went down because interest rates went far beyond normal -- up to 24 or 25 percent -- and the businesses operating within normal parameters couldn't handle that. All of a sudden, in that type of climate, the assets aren't worth a great deal of money. There's no real opportunity.... We had inflation in a recession, as far as trade and commerce were concerned.
So you've got a situation where you're going to attack directors in a scenario where they're not responsible for an international situation that occurred in Canada. I think that's where the legislation really does fall short. In a normal situation, the minister is quite correct that there would be no cause for worry. Normally a corporation does have assets, and because of the bimonthly pay period that you're required to pay, you can't be all that much in arrears with employees' wages. So when the minister is referring to people not getting their wages and then having to sell their homes and go on welfare, I don't know what state of affairs would have premised that; but it's certainly not missing two weeks of wages.
So the member who spoke before me spoke quite well and quite eloquently about the fact that this section is not really fair or balanced or appropriate, considering all perspectives.
Hon. D. Miller: Hon. Chair, I always appreciate the observations of that member. I have a couple of brief observations. I think this legislation was originally brought in by W.A.C. Bennett, that great socialist. Even Bill Bennett at his worst -- throughout that terrible recession in the early eighties -- did not propose changes to this section. So I think the member's comments.... Perhaps he isn't aware of some of the history of his own party in this respect, and may be reacting to the fact that it's an NDP government that's dealing with this and bringing it into a more modern context. But the principles were established many, many years ago by political leaders that I know that member holds in very high esteem. All of that, of course, leaves me extremely perplexed as people's positions shift from time to time.
Section 96 approved.
On section 97.
G. Farrell-Collins: The member for Okanagan East has advised me that she has a couple of questions on this, and she's been meeting with a member of the executive council across the way. So I'm sure she is running back to her seat right now so that she can engage in the debate.
J. Tyabji: Who says there isn't a constructive atmosphere in this House?
I'd like to ask the minister a question on section 97. For all intents and purposes, section 97 reminds me of the debate we had in 1992 on the Labour Code. Under section 35 of the Labour Code, which is entitled "Successor rights and obligations," subsection (1) reads.... I know the member for Fort Langley-Aldergrove spent quite a bit of time on this at that time -- on successor rights. It reads, in part: "If a business or a part of it is sold...or otherwise disposed of, the purchaser, lessee or transferee is bound by all proceedings...as if no change had occurred...." That was a very controversial provision at the time.
When I see section 97 of this act, which reads: "If all or part of a business or a substantial part of the entire assets of a business is disposed of, the employment of an employee of the business is deemed, for the purposes of this Act, to be continuous and uninterrupted by the disposition." That sounds like successor rights to me. Could the minister clarify whether or not that's what section 97 represents?
Hon. D. Miller: The act is unchanged. It simply provides that where a business or a part of it is sold and the employees of that business are retained by the new employer, for their purposes, their years of service and vacation entitlements are maintained.
[8:45]
J. Tyabji: Could the minister direct me to which part of the existing act section 97 continues from?
Hon. D. Miller: Section 96.
Section 97 approved.
On section 98.
G. Farrell-Collins: Section 98, "Monetary penalties," is, I believe, a new section; at least, I couldn't find the old one, so I guess that's new. Can the minister tell us what sort of schedule
[ Page 15843 ]
is going to be struck with regard to this section as far as penalties go? Do we have any idea what form those regulations are going to take? I'm wondering what the schedule of penalties may be and if he has some indication of where we're at on that, because it's done by regulation.
Hon. D. Miller: No. We've submitted proposals for a range of penalty levels to Treasury Board and ultimately for approval by cabinet, and we are looking at penalties ranging from about $150 to $500, depending on which offences.
G. Farrell-Collins: My understanding of this section is that it allows for a penalty in addition to a fine. Why would there be both? Why would you be subject to a fine and a penalty in addition, I suppose, to paying back wages in the event of a dispute? There are really three things that an employer could get hit with as a result of a violation: payment of back wages or other benefits over and above wages, fines and penalties. I see a shaking head, so maybe the minister can explain it to me.
Hon. D. Miller: If there's an application or a complaint filed with the branch and it's found that an employer, for example, didn't pay wages, and they have to pay those as redress, they're not being hit with anything; they're being instructed by the branch to do what they should have done. It's not a penalty for them to pay wages that they ought to have paid. Let's take that one out. Secondly, the penalties are for violations of the act and can be applied by the branch. We're looking at escalating penalties -- in other words, first offence, second offence, etc. Finally, with respect to fines, they would only be applicable if an issue ultimately wound up in court and a fine was levied as a result of that.
G. Farrell-Collins: Thank you for the explanation of the fines and the penalties. It wasn't something I was aware of, but it makes perfect sense now that I hear the explanation.
The issue about wages.... In probably 99 percent of cases, yes, those wages would have been owing anyway. But there is the example that I gave the minister earlier, where in the event of a strike, payments may come as a result of a termination. We parted ways on that section and disagreed on how it may be applied, if I remember correctly. In that case, an individual could end up paying wages and paying penalties. That is perhaps not intended, but then I guess the payment of wages where not intended is not intended either, despite the fact that I think that will probably occur from time to time.
Subsection (3) of section 98 is an interesting one. Perhaps the minister can walk me through it, because it sounds pretty arbitrary to me. It say: "A person on whom a penalty is imposed under this section must pay the penalty whether or not the person (a) has been convicted of an offence under this Act or the regulations, or (b) is also liable to pay a fine for an offence under section 125." How can we impose a penalty on someone when they haven't been found guilty of anything?
Hon. D. Miller: We can, in those circumstances, impose administrative penalties. The language says -- and I'll read it again -- "whether or not the person (a) has been convicted of an offence under this Act," which is somewhat different than being found to have been in violation of some sections of the act by the director. The two are quite different. This simply separates them.
G. Farrell-Collins: The difference between the two being that the director could find someone in violation of the act and impose a penalty, or it could go to the courts and the employer could be found in violation of a section of this act. That terminology means the finding of a court as opposed to a finding of the director, in which a penalty could also be applied. Is that correct?
Hon. D. Miller: Yes. Getting back to the fundamental principle for the penalties, as I explained earlier, for repeat violations of the act there really is no extraordinary penalty, if you like, or.... I just indicated that I didn't feel that redress of a particular circumstance was, in fact, a penalty. Employers want those repeat offenders to be dealt with in a little different way than someone who might occasionally, for whatever reason, violate the act or cause a breach of the act. So this gives the director the power to impose what will be escalating penalties.
Let's take, for example, someone who deliberately and quite consciously says: "Well, I'm not keeping records; I have no intention of keeping them." He doesn't do it. We have to investigate two or three complaints, and we find on every occasion that those records are not available. Under those circumstances the director has the opportunity to levy penalties. Those things can be appealed. But, as well, if there is a violation of the act, that can go all the way -- as, I think, with all legislation -- through to the courts, and the courts obviously can impose fines as prescribed in legislation.
J. Tyabji: It would appear, then, from the debate that has occurred between the member for Fort Langley-Aldergrove and the minister, that concurrent with a proceeding under this act, an employer could be in the courts for a potential offence under the act. It's quite possible that the same evidence could be presented in two separate proceedings, and the employer could be administered a penalty under this act by the director and, conceivably, be fined by a court. Is that correct?
Hon. D. Miller: Yes, that indeed is possible. I'd just like to read some information with respect to enforcement and encouraging compliance with orders:
"Enforcement of employment standards orders has been a significant problem in the case of a few chronic offenders. Some 18,000 claims were filed last year, worth approximately $8 million. Because there has been no penalty or interest payable on such orders, some employers have used the branch to effectively obtain an interest-free loan."
So I think it's needed.
J. Tyabji: Certainly I don't think anyone would object to a penalty against someone who's been found to be wilfully in contravention of the act, and there should be interest accruing, or there's no incentive to pay. Having said that, what I'm concerned about is that the minister has acknowledged that there could be two concurrent adjudication processes with the same evidence being presented against one employer. What that sounds like is double jeopardy.
What I think is interesting is that in this process, the director is judge, jury and jailer, in effect. The director will be the person who will be conducting or setting the terms of the investigation, setting the penalty schedule, administering the penalty, and setting the boundaries of evidence collection and what can or cannot be presented. This is a very closed system, and the person may be going through the same system in a
[ Page 15844 ]
court of law. For that purpose, I think it's.... No one would quarrel with the motives of the minister in setting up the penalty system, but in terms of how much power there is with the director and the fact that there's potential for the same process to be occurring in two different jurisdictions, I don't know why it would be exclusive to this act that that could happen.
Hon. D. Miller: I think I've tried to respond to the questions raised by the member.
Sections 98 to 101 inclusive approved.
On section 102.
L. Fox: Moving right along, the only concern I had with this section was around subsection (4): "The members of the tribunal hold office for the term set by the person who appointed them, and they may be reappointed for successive terms." I guess the first question I had with respect to this was: does the minister envision that to be in regulation -- as to how long those appointments would be? Is there going to be some consistency in terms of that? What is the intent of that clause?
Hon. D. Miller: Not really. The adjudicators are appointed by the chair, and they are on an as-needed basis. In other words, they're not full-time. Therefore it's conceivable that someone who performs that work in a very good way might be in place for a considerable period of time.
J. Tyabji: Under the establishment of the tribunal, is there a time frame set up for this? Does the minister foresee this as something that will be set up by this fall, or is it in the next fiscal year?
Hon. D. Miller: In the fall, I would expect, when the act is proclaimed.
J. Tyabji: Was there any consideration given, in setting up this tribunal, to having it cross-reference any of the other existing mechanisms for hearings, whether it's the Labour Relations Board or the...? There are so many different adjudication processes, but the one that comes to mind is the Labour Relations Board. There will be a lot of overlap in terms of the kinds of matters that will be before them.
Hon. D. Miller: No. In canvassing that issue, there was some rather vehement opposition to crossing over into the labour relations field, particularly from the employers.
J. Tyabji: When the minister says that there was vehement opposition from the employers to crossing over, is that because of the terms of reference of the Labour Relations Board? As I read this, in fact the Labour Relations Board has a more open system of hearing grievances, of accepting evidence and of setting down all the conditions of what comes before the board. Obviously, what goes before it is collective agreements, but if you're trying to streamline government and you have two different boards set up for roughly the same thing -- one collective agreements, one not -- why wouldn't there be some move to integrate them?
Hon. D. Miller: I think the process outlined in the bill is more appropriate for the clients who will be using the bill.
G. Farrell-Collins: I just want to put on the record our support of having the tribunal and the appeal under employment standards. There are inherently greater legal costs involved with the Labour Relations Board, and indeed a whole lot more legal bent and legal intent of mind before the Labour Relations Board that certainly isn't conducive to individual employees coming forward with complaints, given their limited resources in the vast majority of cases. This, I think, has been almost universally accepted -- if not universally, then pretty darned close -- as a good way to go. I'm glad to see it in here, and I hope it works well for both the employers and the employees.
[9:00]
Sections 102 to 104 inclusive approved.
On section 105.
J. Tyabji: Could the minister describe whether or not there will be a registrar, and how this will be established in terms of the staffing for the tribunal?
Hon. D. Miller: In addition to the chair, the employees of the tribunal will be the registrar and two support staff.
J. Tyabji: I'm almost begging the question for the next section, but I'd just like to know if that would also apply if there were more than one panel sitting at the same time.
Hon. D. Miller: Yes.
Sections 105 and 106 approved.
On section 107.
J. Tyabji: In looking over some of the similar legislation on tribunals and adjudication proceedings.... Section 107 says: "Subject to any rules made under section 109(1)(c), the tribunal may conduct an appeal or other proceeding in the manner it considers necessary and is not required to hold an oral hearing." Why was that put in here, given the power of the tribunal and the fact that the tribunal is the last avenue of appeal for someone who objects to a determination of the director?
Hon. D. Miller: Practical reasons.
J. Tyabji: I'm not sure what practical reasons the minister is talking about, or why the.... In the event of the tribunal deeming an appeal application or complaint about a determination to be serious enough to actually continue with its proceedings, why wouldn't there be a mandatory oral hearing -- or some method, at least, for the person who has launched the process to be aware of what's going on? The reason I raise this is that it's the kind of section that does tend to haunt an MLA afterwards. If someone is, for the purposes of this act, upset with the determination of the director, and their only course of appeal is the tribunal, and the tribunal has said that it's prepared to look at that determination to consider whether or not it should change it, why wouldn't there be an oral hearing? If it's valid enough to proceed, then there should be some public domain. Otherwise, it's extremely closed.
Hon. D. Miller: Written submissions, in many, many cases, are sufficient for the tribunal to make a determination.
[ Page 15845 ]
In any event, if people are not satisfied with the operation of the tribunal, they have access to a judicial review of that. It's simply a practical way of doing business.
If you want to go back to some of the earlier issues, one of the reasons that I suspect the business community -- particularly the small business community -- did not want this to become a type of Labour Relations Board process is that in some respects it can be time-consuming and expensive; it can require legal counsel. This is simply laying out a very practical way for the tribunal to proceed.
J. Tyabji: I'd like to put on the record that if the employer or the employee were upset with the determination of the director, took it to the point of taking it to the Employment Standards Tribunal and requested an oral hearing, that person should have every right to have that oral hearing take place. I don't think you'd need to have counsel; I don't think you'd have to get into any kind of litigation. The person would have a right to at least hear how the determination was being evaluated by the tribunal.
Section 107 approved on division.
Section 108 approved.
On section 109.
G. Farrell-Collins: Section 109(1)(d) talks about the ability of the tribunal to enter.... If I can read it correctly from my notes, it allows the right of search. Is that correct? Can the minister tell me why the tribunal would need those powers when the investigators already have them? Is there a need to accrue those powers to both parties, or could they not just put something back to the investigators to go and find more information?
Hon. D. Miller: Actually, the answer is: similar powers to those of the director. It may be that the tribunal, in assessing the case before it, feels that it needs that.
G. Farrell-Collins: I would have thought that if the tribunal needed more information and needed to do this, they would ask the director to get that information. Those powers to do investigations would rest with the director. Is there some compelling reason to keep this separate from the director? You're tribuning his or her decision, so to speak. What would be the rationale for that?
Hon. D. Miller: Once an appeal is started, the tribunal sits to hear appeals of the decisions of the director. I presume that if more evidence were required or if the tribunal determined that they needed further investigation, to go back to the director to do that might somehow tinge the independence of the tribunal with respect to hearing appeals of the director.
Sections 109 to 111 inclusive approved.
On section 112.
G. Farrell-Collins: My concern here is the time period for an appeal. It sometimes takes a small business -- or an individual, for that matter -- time to look at a case or maybe talk to somebody again. We're not trying to get a lot of lawyers involved here, but certainly somebody.... No offence intended, hon. Chair, but the intent of this whole portion of the bill is to try to keep it simple, straightforward and cost-effective. And if you have an employee -- or indeed an employer, a small business person -- who has a decision under this tribunal they wish to appeal, I would think you would want to give them a little more time than 15 days or eight days to come up with a determination as to whether they even have grounds for an appeal, what the options are and what the process is. It's fairly intimidating -- particularly for an employee -- to have to go through this process at all, let alone to have to then decide whether or not they have grounds for an appeal and what the appeal process is.
How were these time frames arrived at? Does the...? I suppose the minister does think they're reasonable; he has put them in the bill. But perhaps we can get a justification as to why these are reasonable time limits. They seem fairly narrow to me, for an employee or even a small business person who doesn't have access to legal advice, to make a determination as to whether or not an appeal is warranted.
Hon. D. Miller: The time frames are drawn in some sense from the current act, and they're amplified with respect to the definition in section 122(2), for example, which says: "If service is by registered mail, the determination or demand is deemed to be served 8 days after the determination or demand is deposited in a Canada Post Office."
G. Farrell-Collins: I guess that's the first part of my question: where do they come from? The second part of my question is: are they reasonable? Despite the fact that they exist in the current legislation, it seems to me that those time frames are fairly limited, given the level of legal knowledge -- and even, perhaps, knowledge of this bill -- that individual employees and small business employers may have. Is there no reason this couldn't be extended to three weeks -- or a month, as a nice round number -- so people would have a chance to review this and make a determination? A month certainly doesn't appear to be unreasonable or to cause unnecessary delays, unless there's something the minister can advise me about. I would like to see it be a month, unless there's some reason why that's not appropriate.
Hon. D. Miller: The act provides a total of about 23 days for individuals affected by decisions of the tribunal or of the director to appeal, which I think is.... That's three weeks; that's not bad.
G. Farrell-Collins: Perhaps the minister can point out those 23 days to me; I don't see them. If my addition is incorrect or if I'm missing a section, perhaps he can advise me. But I see 15 days, and I see eight days, and that to me seems an unreasonably short period of time in which to react to a decision and determine whether or not an appeal is warranted.
Hon. D. Miller: There are two points. One, if it's service by mail, I have referred to section 122(2) already. Combined with section 112(2), which has the 15 days after the date of service, if you add the eight days under section 122(2), it's 23 days. If the service was personal, then it's eight days after a personal service. I'm advised that most of the decisions are issued by mail.
Sections 112 and 113 approved.
[ Page 15846 ]
On section 114.
J. Tyabji: This goes slightly to the conversation that we had earlier about the frivolous, vexatious or trivial determination. We were talking about the director having been through an investigation and making a determination that a complaint may be trivial and vexatious, and therefore could be dismissed. In this case, section 114(1) says: "The tribunal may dismiss an appeal without a hearing of any kind if satisfied after examining the request that...(c) the appeal is frivolous, vexatious or trivial or is not brought in good faith." Is there going to be anything to accompany this section of the bill to help guide that tribunal in making that determination just from examining the complaint?
Hon. D. Miller: The tribunal will be establishing rules for appeals.
J. Tyabji: The minister mentioned earlier that there would be a provision for a judicial review if someone was upset with decisions of the tribunal. I'm assuming that if the tribunal had determined that the appeal was frivolous, vexatious or trivial, that person would then have the ability to apply for a judicial review. Is that correct?
Hon. D. Miller: Only on the basis that the tribunal or the director, I guess, had exceeded their jurisdiction.
J. Tyabji: I couldn't quite hear that. It sounded like the minister said a judicial review is allowed only if the director has apparently exceeded his or her jurisdiction. Is that correct?
Hon. D. Miller: If the tribunal has exceeded -- gone beyond -- their jurisdiction.
J. Tyabji: It could be the lateness of the hour, or maybe I'm just getting old. I couldn't hear that. It sounded like he said "If the tribunal had exceeded its jurisdiction."
If that's the case, and it's only if the tribunal has exceeded its jurisdiction that a party may have the ability to go before a judicial review, who determines whether the tribunal has exceeded its jurisdiction? Will there be any provision for a party who is trying to have an appeal heard by the tribunal to go to any other process, if that judicial review is not open to him or her?
Hon. D. Miller: I'd just like to add one more reason to exceeding jurisdiction, and that is if it's patently unreasonable.
The answer to the second part of your question is no.
J. Tyabji: And the answer to the first part of the question, where I asked who decides if the tribunal has exceeded its jurisdiction, would be what?
Hon. D. Miller: The courts.
J. Tyabji: So that I can understand it, under section 110, we know that a decision or order of the tribunal is not reviewable by a court. Would that include if a tribunal has dismissed an appeal without a hearing of any kind?
Interjection.
J. Tyabji: The question was this. Under section 110 it says the decision of the tribunal is not reviewable by a court on any grounds. Given section 114, which we're under, would that include a tribunal dismissing an appeal without a hearing of any kind? Is that a decision of the tribunal? It says under section 114 that there are three subsections under which the tribunal may throw an appeal away.
[9:15]
The reason I'm asking this is that we're talking about the principle of natural justice. A determination has been made by the director. Someone would like to appeal that determination. The tribunal has the power to dismiss it on examination without a hearing of any kind. So the minister said that on application to a court, there could be a judicial review if it's deemed that the tribunal has exceeded its jurisdiction.
Is it possible that under section 114 a person whose appeal has been dismissed by that tribunal would have any recourse to the courts, given section 110?
Hon. D. Miller: Maybe it's the lateness of the hour, and maybe it's making me old.
This is pure hypothesis that we're dealing with here. A person can appeal to the courts on certain grounds. The courts will determine if they should appeal or not, if there's any basis for the appeal. One of them is the tribunal exceeding its jurisdiction. The other is the tribunal being patently unreasonable. Most of us like to think that we know when people are being patently unreasonable. That's not always the case, but that's it. It's pretty simple and straightforward.
J. Tyabji: Let me try again. I'm asking about when a person feels that the determination of the director is not acceptable -- keeping in mind that the director has the power of the judge, jury and jailer in the previous section. If that party comes forward to the tribunal and says, "I would like to appeal the decision of the director," and the tribunal says, "We deem, under subsections (a), (b) or (c), that we will not have a hearing of any kind of this appeal," does that person have recourse to the courts?
Hon. D. Miller: At the risk of getting into the legal nuances here, the answer is that I think they would be able to. If a person did not like a decision of the director, that decision went to the tribunal and the tribunal refused to hear it, the issue of the tribunal refusing would presumably be one that would be....
Interjection.
Hon. D. Miller: Yes, it could be. Who knows?
J. Tyabji: Under subsection (2), I would like to say again that there are no time limits for any of this. Are there going to be any reasonable standards for the determination of whether or not there will be a hearing or a referral to the director for a further investigation or recommendation for settlement?
Hon. D. Miller: I think I previously answered that the tribunal will be drawing up rules of practice.
Section 114 approved on division.
On section 115.
[ Page 15847 ]
J. Tyabji: Section 115 says: "(1) After considering the appeal, the tribunal may, by order, (a) confirm, vary or cancel the determination under appeal, or (b) refer the matter back to the director." Will this be one of the sections where there will be further rules developed? If so, I assume, given that the tribunal can decide whether or not they have an open hearing, that this determination to vary, cancel or confirm could be done behind closed doors at the full discretion of the tribunal.
Hon. D. Miller: No, the tribunal's orders will be.... Reasons will be given for the decisions of the tribunal.
J. Tyabji: I don't know that that answered either of the questions. The questions were: are there going to be further rules to accompany this section? Secondly, I didn't really ask a question, but I'm assuming that this falls under the category of no open hearing being required. It's encouraging to hear that there will be reasons from the tribunal, but the second thing.... When it says that they must make a written copy of the order with reasons available to the person who requested the appeal, will there be any procedure in place to notify that person of how that appeal is proceeding prior to them actually receiving a written statement?
Hon. D. Miller: It will be in the rules that the tribunal draws up.
Section 115 approved.
On section 116.
J. Tyabji: I feel a bit like a Jack-in-the-box -- or a Jill-in-the-box -- in this House.
Section 116 says: "(1) On application under subsection (2) or on its own motion, the tribunal may (a) reconsider any order or decision of the tribunal, and (b) cancel or vary the order or decision or refer the matter back to the original panel." What is the process for this? This is saying that the tribunal has full discretion to actually take one of its decisions -- I would assume it has already been pronounced and the reasons have been sent out in writing to the person who initiated the process -- and arbitrarily change it. What would be the grounds for the tribunal varying or rescinding an order on its own motion, and how would the people affected by that be notified?
Hon. D. Miller: It is simply intended to contribute to the orderly and proper functioning of the tribunal. Where mistakes are made, as they sometimes are in these matters, the tribunal will have the authority to change orders or decisions made.
J. Tyabji: The second part of the question was: by what process will the parties to that order be notified of the tribunal -- first of all, of the intent to vary, rescind or confirm the order, and second, of the changes that have been made, if any?
Hon. D. Miller: By processes established by the tribunal.
J. Tyabji: Will the minister be providing any kind of guidelines to this tribunal as they set up these rules? We have canvassed quite extensively the time limits and the procedures that should be put in place for notification of parties. There has been no indication from the minister that he has any of those concerns.
Hon. D. Miller: The minister will approve the rules.
Sections 116 to 118 inclusive approved.
On section 119.
Hon. D. Miller: I move the amendment standing in my name in Orders of the Day. It's a typo, hon. Chair. Believe it or not, one small mistake.
[SECTION 119, in the proposed section 119 (1) by deleting "a another" and substituting "another".]
Amendment approved.
Section 119 as amended approved.
Section 120 approved.
On section 121.
J. Tyabji: Under this section I note that we've talked quite a bit tonight about parallel proceedings in a court of law. For example, the same evidence could be presented and there could be concurrent processes going on in a court of law. It would appear that under this section no evidence or proceedings could be subpoenaed under this act, even though there could be.... For the minister's perspective, let's say that if an employer has been contravening the intent of the act and someone would like to pursue a fine in a court of law against that employer, there would clearly be evidence taken in these hearings that would be directly relevant to the proceedings in the courts. Is there prevention of any of that evidence being subpoenaed? It says that it must not be required. That sounds like you can't even subpoena it. Second, given that there have been some provisions for a closed hearing and arbitrary hearing processes, why would the minister allow that to be such a closed process and then not even allow the courts to have a more open process?
Hon. D. Miller: I don't think I'm allowing or disallowing. It simply says that the director cannot be required to give evidence in other proceedings. It's the same as the act reads now.
J. Tyabji: I'd just like to put on the record that there are so many things in this bill that are not in the current act. Clearly there's going to be a lot of different adjudication processes that didn't exist before, and the minister has confirmed that there will be the potential for parallel litigation in the courts, so I don't think it washes. The minister stood up a number of times and said that it's the same as the other act. But this act is very different, so obviously it has different implications.
[ Page 15848 ]
Hon. D. Miller: It may be true that there are some new provisions in the act, but the other thing that is true is that we have tended to streamline provisions. The tribunal is a new process that employers specifically wanted to have in the act. We have constructed it in such a way that it will be efficient, it will render timely decisions and it will make the act work to the benefit of employees and employers.
Sections 121 to 142 inclusive approved.
On section 29.
Hon. D. Miller: I move the amendment to this section as follows.
[SECTION 29, in the proposed section 29 (2) by deleting paragraph (a) and substituting the following:
(a) on each payday; .]
I have copies available for the Clerk and for members opposite.
In speaking to the amendment, I want to particularly thank the member for Okanagan West. He brought to the attention of the House some unintended consequences of the existing wording during debate on that section the other day. As a result of that intervention, my staff went back and looked at section 29, which we stood down. I do hope that we now have it correct in terms of the issue covered under section 29, which is "Producer to receive farm labour contractor's payroll records."
Amendment approved.
Section 29 as amended approved.
Title approved.
Hon. D. Miller: I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 29, Employment Standards Act, reported complete with amendments to be considered at the next sitting of the House after today.
Hon. D. Miller: Hon. Speaker, I call committee stage on Bill 35.
[9:30]
FIRE AND POLICE SERVICES COLLECTIVE BARGAINING ACT
The House in committee on Bill 35; L. Krog in the chair.
Hon. D. Miller: I'll make my amendments at the appropriate sections, hon. Chair.
On section 1.
L. Fox: At this point I would like to propose an amendment that's in the hands of the Clerks but not on the order paper. Earlier today I delivered a copy to the minister. It proposes to add in the definitions section the definition of "final-offer selection"
[SECTION 1, by adding the following definition:
"final-offer selection" means a method of arbitration whereby the arbitrator or arbitration board shall choose from among the last offers the parties to arbitration did make prior to the selection of an arbitrator or an arbitration board, and that an arbitrator or arbitration board shall choose no other offer other than those made by the parties;]
In proposing this amendment and the motion to do that, I recognize an amendment that's been passed out by the minister, which comes in section 3 and which makes some reference to final-offer selection. It would make good sense to me -- because the reference is made in the amendment proposed by the minister -- that we have in the definition section what is intended by that particular statement.
Hon. D. Miller: I really am advised that there is no requirement to have a definition of "final-offer selection." The member may not be aware that that issue was canvassed during the debate on the labour legislation brought forward by the previous administration, I believe, in 1987. The decision at that time was that the definition of "final-offer selection" was not required. It is a device that is well known, and there is no reason to have that defined in the act.
Amendment negatived on division.
Section 1 approved.
On section 2.
J. Weisgerber: I'd like to propose an amendment that is in the hands of....
The Chair: Hon. member, the amendment you propose is section 2.1, which will follow section 2.
J. Weisgerber: As long as there's an opportunity to propose an amendment before section 2 passes. Because if, indeed, it does, we're on to section 3.
Section 2 approved.
J. Weisgerber: I'd like now to propose an amendment presented to the table earlier, which I believe is in the hands of the members. The purpose of this amendment is to define what all of us seem to have accepted -- in fact, to put into legislation what all of us here in various debates around this legislation appear to have accepted -- and that is that police services and fire services are indeed essential services. The minister has brought in legislation to deal with the situation at Vernon, because it seemed to be recognized by both the employer and the employees that strikes or lockouts were not a way to resolve the issue. Both the employees and employer saw the service as essential to the safety and well-being of the community.
I think that it's critical, in considering this legislation, that we acknowledge the fact that police services and fire services
[ Page 15849 ]
are essential to the safety, health and well-being of the community, and that we proceed with the rest of this legislation acknowledging that fact and defining police and fire services as essential.
I therefore move that section 2 be amended by adding the following section:
[2.1 Policing and Fire services to be deemed essential
(1) Notwithstanding section 2, the services provided by fire fighters' unions and police officers' unions shall be designated essential services and as such shall preclude strikes, lockouts or other matters stopping work related to disputes involving collective agreements.
(2) Police and Fire services shall operate as if designated as essential services under the requirements of subsection 72(8) of the Labour Relations Code.]
On the amendment.
Hon. D. Miller: Three points. One, I can't disagree that, almost in a de facto way, those are essential services, and I think that's recognized by both parties, employers and the unions.
Two, I note that in second reading debate, members of your party, if I'm not mistaken.... I should have taken the time to research Hansard, but members of your party, in fact, indicated that in their view, that was the case. Therefore it seems to me that adding the proposed amendment is unnecessary; it doesn't achieve anything.
Number three, I would say that given that it's not required, to some degree there's a de facto understanding of the situation with regard to these essential services. I think I've even used -- if not explicitly, then at least implicitly -- in my own rationalization of the need for this legislation the fact that fire and police can't withdraw their labour, nor can employers lock them out, which are the final kinds of weapons, if you like, in terms of collective bargaining.
But neither do I think, in terms of practice, that it's a good idea simply to want to put this kind of clause in the legislation. The thrust of the legislation is to try to assist the parties in these kinds of areas to achieve collective agreements, and the bill sets out a variety of provisions that will assist the parties in doing that. Surely that is the primary interest that members should have, not a clause that in a very tight, declarative way says that they are essential services and that people can't resort to those other methods, whether they be strike or lockout, that are employed by other people in the trade unions and in the employer community.
[D. Lovick in the chair.]
G. Farrell-Collins: I don't have any particular problem with the amendment. I think we all agreed, essentially, in this House during second reading debate that fire and police services are just basically understood to be essential services. I think history has pretty much shown that, although I don't know if there has been a specific ruling from the Labour Relations Board. I think that if anything were to fall within the provisions of the health, safety and welfare of the community of British Columbia, then police and fire services certainly would.
Given other determinations that have been made of essential services -- and even some of the aborted attempts to recognize education as an essential service, which were deliberately frustrated by the former Minister of Labour during the education disputes -- I think it became quite clear that these two services in particular definitely fall within that category of essential services. I don't think there's anything.... I'm not opposed to it being put in this bill, but I think that if it were to be done, a cleaner way to do it would be to merely state in a section 2.1 that the Labour Relations Code be amended to.... Section 72 was essential services; section 72 could be amended to include the words "police and fire services" in that clause. It would be a simpler amendment, and I think in that case it would also be cleaner as far as achieving the end result if we want to do that by legislation. I'm not opposed to that, and I'm not opposed to this amendment. It could be done in a little cleaner way, but I'm comfortable that we all realize and the Labour Relations Board probably realizes that these are essential services.
J. Weisgerber: First of all, at second reading we made it quite clear that we intended to bring forward amendments specifying that fire and police services are essential services.
With respect to the comments by the Opposition House Leader, the difficulty for us is that we're not in a position to bring forward an amendment to the Labour Relations Code in this forum; we are restricted by the fact that we have in front of us a separate piece of legislation. The member's arguments are solid enough inasmuch as perhaps this whole issue could have been dealt with as an amendment to the Labour Relations Code rather than as a separate piece of legislation. The government, having chosen to make a statement by way of bringing in this legislation.... The remedies to us seem pretty clear -- that is, bring in the amendment as outlined.
Just to reinforce the fact, no one seems to want to disagree; everybody agrees that police and fire services are essential. Why not step up, face the facts, acknowledge in the front of the legislation that these are essential services, and then go on to deal with the remedies in lieu of strikes, lockouts or work stoppages. I looked at the letter to the minister dated May 26 from the GVRD. On page 2 they say: "We recognize, as do the unions representing these essential service employees, that traditional labour relations sanctions such as strikes and lockouts (or even controlled strikes) simply cannot be contemplated."
I would ask the minister to consider the spirit in which these are put forward, and say: "Let's not dance around the issue." There's legislation being brought in. It's being brought in because, the minister argues, these services are essential, and traditional collective bargaining arrangements don't work. I would submit that this is an amendment in keeping with the tone and the thrust of the legislation, and I would urge members to support the amendment.
[9:45]
Amendment negatived on the following division:
|
YEAS -- 15 | ||
|
Dalton |
Warnke |
Campbell |
|
Farrell-Collins |
Gingell |
Stephens |
|
Weisgerber |
Serwa |
Neufeld |
|
Fox van |
Dongen |
K. Jones |
|
Symons |
Anderson |
Jarvis |
|
[ Page 15850 ]
| ||
|
NAYS -- 31 | ||
|
Marzari |
Pement |
Priddy |
|
Cashore |
Zirnhelt |
Charbonneau |
|
Garden |
Hammell |
B. Jones |
|
Lortie |
Miller |
Harcourt |
|
Gabelmann |
Clark |
MacPhail |
|
Barlee |
Pullinger |
Sihota |
|
Randall |
Farnworth |
Doyle |
|
Janssen |
Simpson |
Jackson |
|
Tyabji |
Krog |
Brewin |
|
Copping |
Schreck |
Lali |
| Hartley | ||
On section 3.
Hon. D. Miller: I move the following amendment to section 3, in the proposed sub-subsection (2)(b), by deleting "and" at the end of sub-sub-subsection (i), by adding "and" at the end of sub-sub-subsection (ii) and by adding the following sub-sub-subsection: "(iii) stating whether, in the opinion of the associate chair, the dispute or some elements of the dispute should be resolved by applying the dispute resolution method known as final-offer selection." I distributed some copies to the Clerk earlier, and I believe they have a copy of it.
On the amendment.
G. Farrell-Collins: I will try and speak at the top of my voice.
Interjections.
The Chair: Excuse me, members. Could we have a little quiet in the chamber so we can hear the debate.
G. Farrell-Collins: Nothing like a good division to grind the House to a halt.
I must say that I'm glad to see this amendment by the minister. I was surprised to see it, but I was glad to see it. I think it is a good addition to the bill in that it brings forward one of the issues that we discussed in second reading. That is the issue of final-offer arbitration, which, in my opinion, is a way of putting some risk back into the collective bargaining process.
Hon. D. Miller: I'm having a great deal of difficulty hearing the hon. member.
The Chair: Could I just ask those members who are not participating in the debate to perhaps take their conversations elsewhere so the rest of us can hear. I'm sorry that sounds rather threatening. I don't mean it to be, but would you help us out.
G. Farrell-Collins: The sub-sub-subsection is a welcome addition to this section....
Interjection.
G. Farrell-Collins: I'm trying to move through this at a reasonable pace, but it's difficult. There are, I'm sure, more interesting things for members to be doing -- hint, hint.
We raised the issue in second reading that this final-offer arbitration would impose an element of risk on the two parties, which is something that's not there with a simple arbitration or interest arbitration. So I'm glad to see it here. However, I think leaving interest arbitration in there as a recourse is certainly, I would think, a more favourable option -- at least if history is any indication -- for those people to follow. I'm not sure that the profession of arbitrators out there is necessarily going to draw upon the final offer process as much as I would hope, but I'll wait and see. As I say, I'm glad to see it in there. I'm not convinced it's going to have as extensive a result as we were hoping, should the whole bill be structured around that principle, but it is certainly one of the tools that is available, and it is a significant improvement over what was there before. I just hope it is used to a great extent by the arbitrators.
J. Weisgerber: Similar to the opinions expressed by the Opposition House Leader, I think it's a step in the right direction, as will be indicated by some amendments that my colleague from Prince George-Omineca will table in a couple of moments. We believe that, indeed, final-offer selection should be the vehicle on wage issues in every case. But given our track record with amendments to date, it would be foolish of us to oppose this amendment, which is a halfway step. It's too iffy; it doesn't give enough direction to the associate chair; it shouldn't be a decision made by the chair. But, indeed, final-offer selection should be the accepted way of resolving at least the wage disputes -- the monetary elements of a dispute.
Having said that, we will support this and hope that the government side is reciprocal in their support of our amendments.
Hon. D. Miller: Just a very brief comment. I appreciate the support the members are giving to this approach, but just to caution, I suppose.... I read a very interesting letter from Professor Weiler earlier today that was addressed to the chief negotiator at the GVRD, Mark Leffler, in which he set out a fairly learned text with respect of these matters and the use of final offer and a number of other issues.
One of the things that comes through clear to me -- I guess having gained some experience, both previous to this job and in this job over the last short while -- is that.... For those who think that there is a magic bullet, one way that will suddenly be able to see resolution of disputes in a peaceful way and life will go on and unfold as it should, just a caution. Even final offer can be inappropriate for certain issues in dispute -- even certain wage issues in dispute.
I just throw that out. Members may get a copy of that letter, and I'd urge them to wade through it. It's among a menu of choices that it seems to me.... Keeping in mind the overall and primary thrust of the bill, which is to have the parties resolve disputes, this bill provides an opportunity -- and I see the Leader of the Opposition in the background shaking his head ever so slightly.... I don't know whether it's nerves or he disagrees with me.
G. Campbell: It's experience.
Hon. D. Miller: Yes, it's experience; we all have our own experiences. They all come to bear in this House in terms of how we approach issues, and sometimes we find there are some fundamental differences between us.
G. Farrell-Collins: I just want to make sure that people aren't left with the impression that the official opposition is
[ Page 15851 ]
advocating final-offer selection as the panacea for all problems which may be encountered in collective bargaining, because it certainly is not. But we do feel that it is a better approach to the problems illustrated historically by these two professions of policing and firefighting, and that it would be a more appropriate venue for them. We obviously disagree with the minister to that effect. I'm glad to see he's put in the tool kit of arbitrators, so to speak, that they have that option. We're glad to see it there. I don't think it will have as big an impact as the minister thinks or.... I don't know what he thinks. I certainly don't think it will have as big an impact on this bill as I would hope it would have, but we are glad to see it there.
K. Jones: Could you please tell us how this amendment will expedite the completion of an agreement where the two sides are at loggerheads or are unprepared to sit down and negotiate even after having a mediation officer? Aside from having only the choice of final-offer selection, could you tell us how the rest of that amendment would actually work?
Hon. D. Miller: I think the issue that the member raises is covered in another section of the bill.
[10:00]
Amendment approved.
On section 3 as amended.
G. Farrell-Collins: Subsection 3(3) is where we have difficulty with the bill, in that it says: "The minister may specify terms of reference for an arbitration under this Act." The minister and I talked briefly on the phone once about this bill. I think within the first two sentences we agreed that we completely disagreed with what those parameters should be. I suppose one must always look at the legislation in terms of who the minister is, because the minister ultimately makes the decision. But the minister has stated clearly that he does not feel that particular local measures of economic activity, wage settlements in other parts of the public sector in that locality, individual standards of living and expenses, or living costs in that area are things that should be considered part of what the arbitrator uses as their framework for making a determination.
I think all of those items are valid as measures to be used by the arbitrator to determine what a fair settlement is. They should be able to look at the local living conditions, the local costs of living, and settlements that have taken place in other elements of the public sector and the private sector. They should be able to look at those settlements over a period of time and see what's available. To take what I think has historically been the case and look strictly at firefighters and police, and then look at them on a national or an international scale and use that as the only means of measurement, is invalid. It certainly should be part of the decision, but not to the extent that it has been in the past. That's where we disagree, and that's why I have strong opposition to this bill and in particular to this section.
Hon. D. Miller: For clarification, subsection (6) deals with a list of criteria that will guide an arbitrator. I'm prepared to deal with the issues raised by the opposition by the fact that we do have an amendment to subsection (6).
Section 3(3), simply provides the right for the minister to specify any additional terms of reference. I can't come up with a particular example of what it might be. It may be, for example, on the recommendation of the associate chair that the minister would stipulate that one of the terms of reference would be that the wage issues should be determined by final-offer selection. There may be other issues germane to a particular dispute where, upon investigation, the associate chair might advise the minister that terms of reference should be included. The main body of criteria, as I said, is dealt with in section 4.
Section 3 as amended approved.
On section 4.
Hon. D. Miller: I would move the following amendment to section 4. I believe it is with the Clerk and should be copied to the opposition.
[Section 4, in the proposed subsection (6) by adding the following paragraph:
(b.1) terms and conditions of employment for other groups of employees who are employed by the employer; .]
On the amendment.
G. Farrell-Collins: I am glad to see this amendment to the bill. I think it's another good reference point upon which the arbitrator can stake their ground and which they can use as a benchmark to survey the rest of the terrain. I think it's an addition to the bill, and we'll be supporting that amendment. Again, though, I think there are other things that could have been added to this section to improve that benchmarking.
Amendment approved.
On section 4 as amended.
L. Fox: Given the fact that in section 3 we now have a situation where, in the opinion of the associate chair, some elements of the dispute could be resolved by final-offer selection, in the spirit of that I would move the amendment that's in the hands of the Clerks. It's indeed to section 4, by adding the following subsection (5.1), which reads: "In rendering a decision under this Act, the arbitrator or arbitration board must utilize the following: (a) for monetary issues in a dispute a system of final-offer selection, and (b) for other matters of dispute a system as outlined in subsection (6)."
Now, I think it's fairly clear that we recognize comments made even by the minister earlier that, indeed, there are monetary issues as well as other issues. I think the minister recognized this in making his amendment to section 3. This is proposed as a friendly amendment to better clarify how the process would work. In our view, it's an attempt to make a piece of legislation which may not be workable into a workable piece of legislation. I hope the minister will view it as a constructive amendment and one that helps to clarify the arbitration process.
On the amendment.
Hon. D. Miller: I do believe that we really have covered the issue. The member has chosen to submit an amendment under section 4, and the amendment that's just been passed
[ Page 15852 ]
under section 3 essentially deals with the issue of the opportunity to use final offer. In addition to that, the terms of section 4 provide a variety of mechanisms that are available for arbitrators to use in trying to effect a settlement between the parties, not the least of which is section 4(5), which provides the arbitrator the opportunity to use a mediation process. In other words, having been appointed, the arbitrator is not obliged simply to write a report setting forth the collective agreement, but rather has the opportunity to at that point work with the parties to see if an agreement can be effected between the parties, in which case the arbitrator obviously would not have to provide a report at all. So I think we've covered it off in the previous section.
J. Weisgerber: Further to the debate on section 3, the minister suggested that he was going to make available a letter from Mr. Weiler, spelling out the dangers, as he saw them, of final-offer selection. I guess one is tempted to go to the advice they most like, and that's rather a common occurrence.
I would refer the minister again to a letter that he received from the GVRD on May 26. In addition to calling for police and fire services to be deemed essential, on page 3 of the letter the GVRD says: "We submit the time has come for police, firefighter unions and their employers to risk the use of final-offer selection on all monetary issues in the dispute."
That's the essence of the amendment that we've put forward. It's not a discretionary call by the associate chair or someone brought in to arbitrate the dispute. What we're suggesting is that monetary issues should be required under this legislation to be dealt with by way of final offer-selection. That's a fundamentally different approach, although certainly not one that is unfriendly to the essence of this bill and the amendments brought in by the minister himself.
Hon. D. Miller: Just to clarify, the letter from Mr. Weiler that I referred to, in fact, was a six-or maybe even eight-page letter that was sent to me by the GVRD, by Mr. Leffler. Mr. Leffler obviously commissioned Mr. Weiler to write the letter to offer his opinion. I did not state that it was a letter that suggested final offer was inappropriate at all, but rather that it was a fairly intelligent letter which pointed out that in certain circumstances final-offer selection was not the be-all and end-all that some people like to think it is. That's all I pointed out.
I don't know Mr. Weiler well; I've talked to him on the odd occasion. But he does end his letter to Mr. Leffler by saying: "I hope that the foregoing is sufficient to convey the reasons..." -- blah, blah, blah. "You should feel free to show this letter to the Minister of Labour, and I would be happy to speak to him." So if the member thinks that there's some plot where we've sort of gone and got an opinion from Paul Weiler that simply favours our opinion.... Nothing is further from the truth.
If you want a copy, we can certainly.... Maybe the Liberal Party opposite does have copies, in fact. Maybe they don't; I don't know. But I would point out that we have dealt with the issue raised by the member's amendment.
There does appear to be a slight contradiction in terms of the construction of the bill being altered by the proposed amendment, in that subsection (5), as I indicated in earlier debate, offers the opportunity for an arbitrator or an arbitration board, for that matter, to effect a resolution without resorting to writing the final collective agreement. Yet added to subsection (5.1) is wording that says the arbitrator must utilize final offer. Well, if the parties actually agree through this mediation-arbitration process on a collective agreement, how does it jibe with the following section that says the arbitrator must use this process? I only tried to point that out in debate. We tried to accommodate a variety of interests and expressions in the amendments that I've made to this bill.
As I've said right from the very beginning, and as I've said in meetings with the GVRD and with the Okanagan Mainline Municipalities Association and others, this is simply a bill that will provide an opportunity to resolve these disputes rather than having them be protracted disputes that in some cases -- I think, quite obscenely -- have run three and a half years since the collective agreement expired. I think that is just plain dumb in anybody's language. This is an attempt to try to provide the parties with an opportunity to solve their disputes. It makes sense to me.
J. Weisgerber: I know it's been a long day for the minister, but the fact of the matter is that if the minister had been a little clearer in his first explanation of his letter from Mr. Weiler, indeed he might have saved himself a longer explanation the second time around.
The minister says that if mediation has resolved the issue, then it shouldn't have to go to final-offer selection. That's patently obvious. If mediation has resolved the issue, then it wouldn't be before an arbitrator. Surely the minister, with his experience in labour negotiations, would understand something that fundamental. So let's get on with the substantive part of this.
[10:15]
Amendment negatived on the following division:
|
YEAS -- 15 | ||
|
Dalton |
Warnke |
Campbell |
|
Farrell-Collins |
Gingell |
Serwa |
|
Symons |
Stephens |
Weisgerber |
|
Fox |
van Dongen |
K. Jones |
|
Anderson |
Jarvis |
Tanner |
|
NAYS -- 31 | ||
|
Marzari |
Pement |
Priddy |
|
Cashore |
Zirnhelt |
Charbonneau |
|
Garden |
Hammell |
B. Jones |
|
Lortie |
Miller |
Harcourt |
|
Gabelmann |
Clark |
MacPhail |
|
Barlee |
Pullinger |
Sihota |
|
Randall |
Farnworth |
Doyle |
|
Janssen |
Simpson |
Jackson |
|
Tyabji |
Krog |
Brewin |
|
Copping |
Schreck |
Lali |
| Hartley | ||
On section 4 as amended.
L. Fox: Following with the intent of the amendment that the minister put forward, I would therefore move an amendment that the Clerks have in their hands -- not in its entirety,
[ Page 15853 ]
but a portion of the amendment, which calls for deleting sub-subsection 4(6)(c) and substituting the following new classification under (c): "Terms and conditions of employment for employees doing similar work in the community served by the employer and employees. Where similar work does not exist in the community, then regard shall be given to the comparative ratios of terms and conditions for similar work to the terms and conditions paid to other occupational groups in other relevant communities." I move that amendment, hon. Chair.
In speaking to it, what this amendment attempts to do is provide some reference points for the arbitration board and the arbitrator to look at. What we want to see is fair comparisons to other employees doing similar work within that respective community. Failing having the opportunity to find those fair comparisons, we would like to see the comparisons done with similar-sized communities, not matching a firefighter in Vernon to a firefighter in Vancouver, or one from Prince George to one in another area of larger jurisdiction. So we want to see similar comparisons used in terms of making the award by the respective arbitrator. That's the purpose of the amendment.
On the amendment.
Hon. D. Miller: I must reject the amendment, really just to draw the member's attention to the bill, including the amendment that's been passed that was proposed by me. We've covered off terms and conditions of employment for employees doing similar work and the need to maintain internal consistency. The amendment: terms and conditions of employment for other groups of employees who are employed by the employer -- and on and on it goes. To be charitable, I think that all the member has proposed is a lawyer's paradise. The bill, in the terms under subsection 4(6), provides sufficient guidance to arbitrators to assist them in resolving the dispute in question.
J. Weisgerber: The intent of the amendment is to give the person arbitrating the final-offer selection a clear indication that, indeed, in choosing the final offer, consideration has to be given to other settlements in that community -- similar occupational groups. And if there are no similar groups, then it requires the arbitrator, in making that final-offer selection, to look at other similar communities, rather than what has been the case for the city of Vancouver, for example, in setting the standard for police forces and fire departments around the province.
So the amendment is designed to give the arbitrator a sense of the importance of looking at similar communities and settlements within the community under question. I think it's quite a sensible and straightforward amendment, and it's unfortunate that the minister chooses to reject it.
Amendment negatived on division.
On section 4 as amended.
J. Tyabji: I wasn't actually planning to get up, and this may have been canvassed, but I just note that my colleague's bill has some scribblings on it, and I would be remiss if I didn't at least raise the scribblings to the attention of the minister. I'd hear about it later.
The two things under (6)(d)....
Interjection.
J. Tyabji: No, it's not an amendment. It's just a question.
First of all, is a potential rise in taxes taken into consideration when we talk about the interest and welfare of the community? Was that one of the things that was part of the drafting of this subsection of the bill?
Hon. D. Miller: It is conceivable, and I certainly appreciated the very strong support from the member for Powell River-Sunshine Coast. I think I recognized that when I spoke in second reading of the very strong desire that that member had to see this legislation pass.
J. Tyabji: A last question, then. Is there any direction from the minister about the ability to pay being provided for by sub-subsection (d)?
Hon. D. Miller: The minister has the opportunity under section 3, which we've already canvassed, to require that additional terms of reference be put in place for the arbitration.
Section 4 as amended approved.
Section 5 approved.
Title approved.
Hon. D. Miller: I move the committee rise and report the bill complete with amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 35, Fire and Police Services Collective Bargaining Act, reported complete with amendment to be considered at the next sitting of the House after today.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. J. MacPhail: In case it hasn't been noted already, we'll be sitting tomorrow, with pleasure, starting at 2 p.m.
Hon. J. MacPhail moved adjournment of the House.
Motion approved.
The House adjourned at 10:30 p.m.
The House in Committee of Supply A; G. Brewin in the chair.
The committee met at 6:40 p.m.
[ Page 15854 ]
ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT
On vote 24: minister's office, $375,615.
D. Symons: It is pleasure to do the transit estimates with the minister again. From past experience, I think this minister is very forthright and expansive in his answers, so we will probably have a delightful time going through this.
I would like to start, as I usually do, with the numbers. Looking at the government subsidies for transit, I find that if we go between 1992-93 and the projected figures for 1995-96, we have about a 10.6 percent increase on the operating side of things. On the capital side, we have gone up about $27 million, which is a 23.2 percent increase. How are the capital costs divided up between buses, buildings, etc? We'll take the capital costs that are estimated for this year, the $143.8 million.
Hon. G. Clark: I should introduce my staff. I have Frank Blasetti, the acting assistant deputy minister for the Crown corporations secretariat, who was, until very recently, vice-president of the Transportation Financing Authority. He has been with the government for many years. On my right, appropriately, is Lecia Stewart, the general manager of commuter rail. Behind me is Rick Krowchuk, longstanding vice-president of B.C. Transit and chief financial officer of the corporation.
I think, hon. Chair, it's appropriate in this committee to have some of the technical questions answered by staff, so I'm going to ask my assistant deputy minister, Frank Blasetti, to answer this particular question.
The Chair: At this stage, hon. minister, the rule apparently is deputy ministers only, as opposed to assistant deputies. I think we can let it happen, but it is meant to be deputy ministers only. In this case, it will be an assistant deputy.
F. Blasetti: The debt-servicing costs are increasing by $24.55 million in the Vancouver region. Of this, $9.26 million is as a result of the acquisition of conventional buses and custom vehicles. This is the result of having a four-year impact of the debt-servicing costs for these vehicles, some of which came on stream last year.
The SkyTrain debt-servicing requirement has increased by $11.29 million. This reflects the coming into service of 20 new SkyTrain vehicles during the coming year, the payout of some SkyTrain phase-out debt and some increases in short-term interest rates, which have caused the debt to increase. Another component for the debt increase is $4 million. That's related to the West Coast Express -- the cost of servicing a debt that they have incurred to date. That adds up to $24.55 million for Vancouver.
For Victoria, the debt-servicing cost increase is $600,000. It reflects the coming into service of some 17 new vehicles, plus some miscellaneous charges that are in the few tens of thousands of dollars, and also some custom vehicles that are coming into service.
[6:45]
For the municipal systems, the debt service increase is $10.07 million. This is primarily due to annualizing 33 new vehicles for 1993-1994 and 1994-1995, and also some new vehicles that are coming into service later this year.
Hon. G. Clark: Just before we do that, I can tell we're already beginning an absolutely fascinating discussion around this, but I want to give the members of the committee a hot tip, because I'm quite confident that the....
I know the press are probably paying attention, but I'm going to take this risk that the press aren't listening. Tomorrow night our B.C. Transit is to be presented by the Canadian Urban Transit Association -- CUTA -- with an award for being the Canadian transit system of the year for 1994-1995. This is a very significant award. The ridership is up 5 percent, which is the highest in the country, and as well there is continued cost control because of the remarkable efforts at B.C. Transit in bringing down overhead costs. [Applause.] I appreciate the applause from members. I really think it's important to frame our discussion on transit with this unique achievement.
D. Symons: I'm wondering if the minister might tell me if the government picks up any of the capital costs for B.C. Transit, and which capital costs they pick up and cover.
Hon. G. Clark: While I'm getting that, hon. Chair, the member may know that, largely as a result of a very convoluted governance question, different elements of the transit system are paid for with different funding formulae. Formula or formulae? You were a teacher weren't you, Doug? Is it formulae?
Interjections.
Hon. G. Clark: My critic is advising me that it's formulae.
So that's why it's not instantaneously available to me.
I just want to quickly run through the provincial share of the debt portion. Phase 1 of SkyTrain, excluding the guideway -- that's interesting, actually -- 65 percent provincial share, 35 percent local share. The guideway itself, for phase 1 of SkyTrain, was 100 percent provincial funding. Phase 2 of SkyTrain was 73.75 percent provincial share, 26.25 percent local share; phase 3 was 100 percent provincial share; and then additional rapid transit vehicles, 73.75 percent provincial share, 26.25 percent local share.
I'd just like to remind people that the government initially announced SkyTrain without any real support from any of the municipalities. I'm not saying that in a nasty way, but when the province announces a major capital investment in transit and doesn't have local government on board in advance, generally speaking the province pays the bill. That's sort of what's happened here, including phase 3. Just before the election, Rita Johnston had big meetings with the transit people and then, to get everybody to go along with it, ended up paying the cost of it. That's why you get these different funding formulas. Generally speaking, on the debt side, the province has paid a significant amount because these major expenditures have been largely provincially driven.
The non-rapid transit debt service -- i.e., buses -- is 31.2 provincial share, 68.8 percent local share. Just to clarify so people realize, there really isn't any local share, because it's all provincial taxes in this system. The gas tax is a provincial tax, and if they want to raise it 1 cent, we have to actually raise it and we get all the applause from the citizens for doing so. In addition, they get the revenue from fares. So we say, as I just
[ Page 15855 ]
said earlier, that we're very proud of a 5 percent increase in ridership. All that revenue goes to the local share. In addition, they have this outrageous, in my view, B.C. Hydro surcharge. It's very regressive and imposed on citizens. Again, that's a local share even though it's a provincial tax. The only truly local tax is property tax, and in every place outside the lower mainland 50 percent of the funds come from property taxes. Appropriately, that really is a local tax. They deserve a lot of credit. They drive the system because they're paying the bill. In Vancouver, it's all provincial. Homeowners don't pay anything, and the municipal politicians don't really pay anything. They want all the benefits, and they want influence. We try to give them some influence, but they don't actually pay for anything.
In Victoria, I'm very pleased to say -- the member may know this -- the transit commission here really took the bull by the horns. They eliminated the transit surcharge on residential property, and they imposed a very modest property tax in its place. I think that means that they take local control seriously. They now have a small local tax base and are in a very good position, I think, to drive the agenda further with the provincial government, because they're taking some responsibility for their actions. That's just to canvass the turf on local versus provincial shares.
D. Symons: Just for clarification on the figures I was given earlier on the debt-servicing charges, are they inclusive of the provincial government share? The figures I was given earlier, the debt-servicing charges, when I was asking for the capital costs and so forth divided up.... A lot of them were debt servicing. That's inclusive of the provincial share?
Hon. G. Clark: The answer is yes.
One point I forgot about was on custom transit -- the handyDART system. In Vancouver, it's 56 percent provincial and roughly 43 percent local share; in Victoria, it's 63 percent provincial and 37 percent local. In the municipal systems outside the lower mainland, it's 67 percent provincial and 33 percent local. I understand that's both operating and the debt portion. That's the formula for the handyDART system.
D. Symons: I'm not sure of the number of buses that are on a lease arrangement, but could you give me an idea of what the lease payments were for the 1994-95 year and what is budgeted for leases in 1995-96? Those are leases on buses that I'm referring to.
Hon. G. Clark: You're asking about leases. There are no leased buses.... I'm advised that there are about 28 out of 900 that are leased buses. That was, you might recall, sort of a tax deal, to put it politely, with Xerox Corp. We're still paying some lease payments on that. I don't have it here, but I can get it if the member is interested.
D. Symons: What proportion of the operating costs are for drivers and maintenance workers? I wonder what dollar figure was budgeted for this coming year and what was the actual figure for last year.
Hon. G. Clark: I'm not absolutely sure. Let me give you the '95-96 budget by expenditure type and see if that answers it. We have a number here for wages of $184.09 million, or 31.3 percent of the expenditures made by B.C. Transit. We also have $56.15 million for salaries, or 9.5 percent. And then we have property tax and rent, etc., as 2 percent of the budget, or $11.65 million. Fuel and electricity totals $22.31 million or 3.8 percent. I'm not sure how many the member is interested in. Earlier I mentioned debt service; the global debt service number is 36.1 percent of the budget. Well, I think that's probably enough; I'm not sure.
Let me just check and see what it was last year; I think that's part of the member's question. The total wage budget increase for B.C. Transit between '94-95 and '95-96 is 1.1 percent. The total salary budget increase between '94-95 and '95-96 is minus 1.5 percent. Good government.
D. Symons: We had a commercial in there at the end.
Probably contained in those figures is what I'm asking for in the next question: what part of the operating costs are for supervisory and management personnel? Before, I was asking what they were for the drivers and maintenance. I was trying to divide it up into.... I suspect the best way of getting that figure may be wages versus salaries.
Hon. G. Clark: I'm quite sure that the $184 million, when I said wages, was for operations and maintenance. So that's essentially bus drivers and maintenance. The other component I talked about is if you want office workers, OTEU, as well as management.
R. Neufeld: I'm going to ask a few....
Hon. G. Clark: Do you have a transit system?
R. Neufeld: Yeah, we do. No Skytrain, but we're looking for it.
You talked about salaries, wages and a 1 percent increase for 1994-95. The 1995-96 figure is minus 1 percent. Does that include wages and benefits? Are you telling me that transit workers took a rollback this fiscal year of just over 1 percent?
Hon. G. Clark: The member is correct, in a sense. It's a 1.1 percent increase one year over the other. It was a zero negotiated settlement; I think it was zero for bus drivers this year.
On the management side, we've reduced costs significantly. I think it's minus 17 percent -- sorry, a reduction of 17 staff. We've contracted the administrative side. Head office is where you see the minus 1.1. percent. The cost of 1.1 percent is to be given a zero increase because we've added staff to meet population growth.
Generally speaking, at B.C. Transit our minimum attempt each year with Treasury Board, quite candidly, is to keep pace with the rapidly growing population. While we haven't had the expansion we'd hoped to -- and we're working on it in terms of a vision for transit in the future -- at the very minimum we try to keep pace with population growth, and by and large we've been doing that.
R. Neufeld: One other question about handyDARTs. I know there was an application made for a handyDART in Fort St. John. I don't have any information with me. Is the minister aware of it, and can his staff inform us whether that was processed or not?
[ Page 15856 ]
Hon. G. Clark: The last time I looked, there were about 28 requests from municipal systems, either for new or expanded systems. There's a lot of demand. I'm very sympathetic to it, in part because 50 percent are paid for by local taxpayers. But the demand is larger than we've been able to accommodate. In the past couple of years we've tried to skew this tougher budget toward municipal systems, in part because at the margin...they're very important in small communities.
I was privileged to announce a new transit system in Parksville-Qualicum as well as the first completely handicapped-accessible bus system in Penticton. Today the Premier announced that this year's budget allows Revelstoke a brand-new bus system. As well, you'll be happy to know -- this is important for the member, because I know he used to be a proud Social Credit member -- that we also brought new buses and an expanded system to Kelowna. We just made that announcement today, and I know he'll be very pleased with that; deep down in some roots there, Kelowna is important to the member.
[7:00]
In addition, what we try to do as objectively as we can is literally rank the 28 applications on the basis of need. With each year's funding, we try to work down the list. I can say to the member -- and it has not been made public yet -- that we managed to fund seven new or expanded systems. The handyDART systems are a bit more challenging. The subsidies are a little higher and they tend to be.... The choice the government has to make is: do we do a brand-new system in Revelstoke or do we provide a handyDART system expansion to an existing service area? Those are very difficult questions, and we try to qualify them. The short answer is that I don't know precisely about Fort St. John, other than I know that there is quite a lengthy lineup. Now that the member has raised it, I'll pay special attention to it and see if we can't do it. Clearly these are important services. We try to fund them within our available costs. We have skewed the budget towards the municipal systems, and we intend to continue doing that.
R. Neufeld: I can't resist. The member mentioned three NDP constituencies and one Socred. I just want to remind the minister that this is not an addition; this would be a one-and-only handyDART in Fort St. John. Presently a lot of people are retiring there; they are staying there simply because it's far too expensive to move further south. A lot of them are finding that living in the community that they've lived most of their life.... That's where their family is, and they're staying there. We see some expansion in the seniors' homes, etc., but it would certainly be appreciated by the elderly people in Fort St. John if we could have that handyDART -- the first one.
Hon. G. Clark: I won't belabour the point. I certainly agree with the member, and we'll do what we can to fund them. I would say, however, that there's another interesting area, and that's that we are moving to have the existing system more accessible. The handyDART system is very good, very useful and very important, particularly for those who are handicapped. For seniors, it can be as effective to move to.... As members know, in Victoria we have these low-floor buses. This is a great innovation, and we're trying to move very significantly on that. A low-floor bus in some of those communities would be very helpful.
R. Neufeld: You need four-wheel drive.
Hon. G. Clark: A four-wheel-drive, low-floor bus for Fort St. John, I think, could be quite helpful. But seriously, we are looking at accessibility generally, and the member is correct that an aging population is a fact of life in many parts of British Columbia. The transit system has to respond accordingly.
D. Symons: Some figures from the 1992-93 annual report involved a levy on residential hydro of 3 percent, a 3-cent-per-litre fuel tax.... I beg your pardon. It wasn't 3 percent; it was 3 percent of the total revenue source. The 3-cent-per-litre fuel tax gave 12 percent, and non-residential property tax gave 6 percent, adding up to 21 percent. The provincial share was 45.5 percent, and the operating revenue was 30.1 percent of the various revenue sources for it. That left a funding shortfall for that particular fiscal year of $12.7 million. I'm wondering if you might give me the updated figures for the provincial share in the operating revenue? Was there a funding shortfall for the 1994-95 year? Also, could you possibly provide your projected figures -- I guess you won't be sure of the funding shortfall -- for the 1995-96 years? That was for greater Vancouver, by the way.
Hon. G. Clark: I'm not exactly sure what the member asked me. I think what he's saying is: how do we deal with the deficit, and where are they at today?
D. Symons: I was leading up to that.
Hon. G. Clark: Okay. Here's how we dealt with it. We allowed them to have one more cent a litre. They asked for it, and we did it, so it's 4 cents a litre for transit for my constituents and those in the lower mainland. The member might not remember this, but I originally proposed a potential tax on parking, which I still think has some merit. Again, it's a local share, and there is a logic and synergy in it. They, including that member's leader, of course, were vitriolic in opposing taxing parking in downtown Vancouver and have a philosophical opposition to it. He led the attack on it. Obviously we didn't want to impose....
Interjection.
Hon. G. Clark: The member says he wasn't leader then. He wasn't; he was the mayor of Vancouver. Maybe he's seen the light now that he has to take a provincial perspective, but at that time he certainly did not. We brought in the legislation, and it's still on the books, and I hope that some day we will get a transit commission with the guts to request that kind of move. I think that could be quite positive. However, we did not do that then.
As Minister of Finance, I brought in a sales tax on parking, which the members may be familiar with. I offered that to the transit commission, and they still said no, even though I had already imposed it, and I offered to give them the sales tax revenue on pay parking in the lower mainland for their local share. They said no, but the government gave them $7 million a year anyway. We gave them their notional share for one time initially, to try to convince them that this was a good idea.
So they have taken a very political position, which is basically that they want the province to pay for this, and they
[ Page 15857 ]
are not prepared to accept any responsibility. I have been quite upfront about that, including with them. That's been part of the ongoing governance challenge at B.C. Transit.
Where are we today? I'm happy to report that they have a projected balance in the transit fund -- that's their share -- in 1994-95 of $14.71 million surplus. In 1995-96 a $19.87 million surplus is forecast. There are two things happening. One is growth in ridership, which is providing more revenue to the local share. The fuel tax component is growing faster than inflation in our costs. Some of the things we've just talked about and the measures that we've taken have reduced costs to them as well as to the province and have had a very positive impact. So in fact they have a surplus. I'm not sure if commuter rail funding is in here. Yes, it is. That's after the cost of the local share contribution to commuter rail funding, so they have a very healthy surplus in the local share. I have already said to the committee, and I'll say again, that it's all provincial sources of revenue, but they actually have it in the bank.
D. Symons: Just for the sake of interest, when you changed the Vancouver fuel tax from 3 cents per litre to 4 cents per litre.... When it was 3 cents, it contributed 12 percent, I think, to operating. I wonder what change the 1 cent a litre will make in that percentage part of the tax source -- not on the grand total.
Hon. G. Clark: I'm not absolutely sure where the member got those percentage numbers. I'm not criticizing him; I'm not sure what numbers he's using. Let me just tell you that the transit tax on fuel in 1995-96 will raise $75.5 million in the lower mainland. Their total funding for the local share is $273 million -- that's the local component. So it is a large proportion of the local share, something like 26 percent or 27 percent of the local share. If the member is asking me what percentage of the total operating budget does the transit tax on fuel pay.... Is that what the member is asking?
Interjection.
The Chair: Excuse me, gentlemen. It makes it a little difficult for Hansard to cope when there's a lot of cross-questioning. Perhaps we could do it one at a time. I take it that the hon. member wants to clarify his question.
D. Symons: Let's hear it for Hansard.
Anyway, the figures I had given you before were for tax sources, and you had hydro, fuel and property tax. Those three things add up to 21 percent of the total operating budget. Then we had provincial share and operating revenues adding up to something to give us that shortfall I referred to. I was curious, when you added 1 cent more per litre, how that might change the mix of sources of funding.
Hon. G. Clark: As I understand it, using the numbers you had, 14.7 percent of the total revenue now comes from that. One cent a litre is about $18 million annually.
D. Symons: I'm dealing with Vancouver transit again. I'm wondering if you might be able to tell me for the years 1990-94 -- and I suspect you will give me this at a later date -- the figures for maintenance and operations, how much might have been budgeted for consultants used by B.C. Transit or the Vancouver Transit Commission and the amount of money that went into head office and planning. So those are figures for the years 1990-94 and the estimated budget in 1995-96 for those, and I would expect those at a later date.
Hon. G. Clark: I'd be happy to provide that for the member some time after the estimates pass.
D. Symons: It wasn't something I expected you would be able to have on the top of your hat.
Moving on to the Sam Ahad report of 1992, it seemed to say that your staffing overhead had increased dramatically -- with the figures the minister gave us, apparently they may have that under control now -- but without any real increase in service or productivity. I'm wondering what has been done to rectify the situation. You indicated earlier, when you were telling us about the salary figures, that something had happened there. Exactly how did you manage to turn that around?
Hon. G. Clark: Let me just give you some figures. I don't know where the member is coming from. We've had an ongoing process of service enhancement and productivity improvements at Transit. Let me just give you some numbers. The number of salaried or administrative staff has increased from 867 in March 1992 to 895 in March 1995, so it's an increase of 28 FTEs.
Service hours have grown at a faster pace, resulting in an increase in service hours per administrative employee from 4,900 to 5,300, or an 8 percent increase, in the last three years. In other words, we have essentially been cutting back on our administrative overhead while driving any scarce dollars into improving service. There have been, as the member may know, service enhancements each and every year we have been in government. My critic and I might both agree that we haven't done enough in terms of keeping pace with rapid population growth, but we are probably the only jurisdiction in North America that has actually increased transit services each and every year at the same time that we have been reducing the administrative overhead.
Let me just tell you what has happened with productivity on ridership per service hour. At 3.1 percent....
Interjection.
Hon. G. Clark: I'll leave it for now, then.
D. Symons: The minister is anticipating what I will be asking shortly. It will be easier for me to ask things in order, since I have them in a certain order so I can find the questions and not duplicate them.
I'm wondering if the minister might be able to give to me again -- and this might be something that I could get at their convenience -- the total number of employees for the Vancouver Transit Commission, and if that could be subdivided into the various divisions: how many operators -- this figure you might have -- are full-time and how many operators are part-time, and how many mechanics are full-time and part-time? Again, if you don't have those figures, I quite understand.
Hon. G. Clark: I can give you more detail, or have staff do that, but let me give you a flavour of what you're asking
[ Page 15858 ]
for. The Vancouver bus system -- and that includes everything associated with Vancouver buses -- has 3,454.1 FTEs -- which is an interesting challenge. I don't know the breakdown of how many are full-time and how many are part-time. SkyTrain has 337 employees -- again, this is SkyTrain attendants as well as computer software engineers and the like -- for a total of 3,791.1 FTEs in the lower mainland system. In Victoria there are 497.4 personnel.
[7:15]
That's the total number of employees -- administrative and maintenance, as well as bus -- allocated for those regions. In Victoria there would be some employees associated with the municipal systems, largely the planning and support staff, who are not B.C. Transit employees. They are employees of a contractor, and the municipality does the contracting.
Interjection.
Hon. G. Clark: Yes, like the blue buses, but similar to Kamloops or Fort St. John or anywhere else. Having said that, there is a staff associated with what we call small communities. They are located in Victoria.
D. Symons: Thank you. I would like those other figures, at your leisure. I guess you'll read Hansard to find out what I asked.
I have been asking people who seem to be in the know, and they say there's a lower proportion of part-time drivers with B.C. Transit than there are in other jurisdictions. I think they're particularly referring to the greater Vancouver transit system. I'm wondering why we don't use part-time drivers more, so that we can maybe cut down on the use of the spare board and overtime and that sort of thing.
Hon. G. Clark: I'm advised -- and we'll have to check this -- that there aren't any part-time drivers in Canada. There are no part-time drivers in British Columbia, that's correct. In fact, there were some strikes associated with some of those issues. We do not have any, and I'm advised that they don't have any across Canada. There are some American systems that employ part-time drivers.
D. Symons: Something else I have been told -- and people are always willing to go to the opposition with things.... They suggest that the security guards for B.C. Transit are paid more than Vancouver city police constables, but don't face the same problems and don't carry guns. I'm wondering if you might be able to give us an idea of what the security guards are paid, and how that may compare to Vancouver police constables -- I can check that figure out.
Hon. G. Clark: There are two forms of security. I think the member is really referring to SkyTrain. There are the SkyTrain attendants, or STAs, and a surprising number of those are part-time, actually. They're not what you might call security. They're fare checkers and service agents. There is, on the other hand, a sort of transit police, started by the previous administration, who are like law enforcement officers. The last time I looked, I think the majority of them were, in fact, at one point or another, police officers of some kind -- either city police or RCMP. The person who headed it up and did an outstanding job was a retired RCMP officer. I believe that there is now a retired RCMP officer in charge of security. I'm not sure.
What do they get paid? They get paid competitively with police officers in the region, and that's obviously to attract the quality of the personnel we're talking about. It is a fairly decent wage, and -- not to be pejorative -- one could argue that they don't carry firearms and they're not sort of.... But having said that, you have to be a bit careful with that, because SkyTrain security issues are significant. I've talked about them for three years and they personally concern me greatly. I think it's really important that we deal with security on SkyTrain and make sure people feel comfortable riding it. We have enhanced the security budget rather significantly, and that is expensive.
In addition to that, they are the first responders, to use a terminology sometimes referred to in emergency situations. So when there's a problem, they tend to be the first ones on the scene, and sometimes the problem can be quite serious. They often might call for backup from the police force in the area, but they have to go into situations which are quite significant. We expect them to be trained and highly qualified; therefore we have to pay competitively.
Just on that note, we had a full review of security department functions -- the member may recall that I made some comments publicly about this -- designed to substantially improve passenger transit safety. We added $500,000 in '95-96. The full-year cost of the increments is $900,000. Basically, it's 11 FTEs to increase what we call a special constable staffing level. So that means they'll be hiring an additional 13 positions, phased in over two years: six to be hired in '95-96 and a further seven the following year. The total incremental increase in cost to transit is $900,000.
D. Symons: I'm still referring to the Ahad report of 1992, and in there he made some comments about a fair amount of duplication. He talked about four personnel departments, four purchasing departments, five public relations, three labour relations, three training and four planning. All this was overlapping in various departments that were having these groups within them rather than one large public relations department for B.C. Transit. So I'm wondering if you might be able to tell me whether any of those duplications that he referred to in his report have been amalgamated.
Hon. G. Clark: I can give the member more detail. The member is correct that we have identified some significant savings, as you can see by the administrative reductions. The reason why we targeted administration, first of all, was to protect service levels in the system and to expand them in the face of tough budgets, but also because we think there's some scope for administrative savings. We've been doing that every year, including this year, and that has resulted in some merging of some of those positions. So we no longer have the same kinds of duplications.
I will say sort of in defence of duplication -- that doesn't sound right -- that one of the issues that we grapple with at Transit, with this large system, is.... I'll just use one example that I think the member might be familiar with: SkyTrain. SkyTrain is actually a separate company. It's called Rapid Transit Company. I suspect it was formed by the previous government to try to get a different union in or something.
[ Page 15859 ]
Having said that, what's happened at SkyTrain, I think, in defence, is a culture that's a little different than a bus driver culture and one which we shouldn't diminish. It's a new system that came in. Lots of people became involved in new technology. It has developed a service quality. It's important internally to have a division which drives the SkyTrain system and has a different outlook than say, the traditional bus company. That doesn't necessarily mean you have to set up a separate company and all of that, but it's a defined unit. As the member knows, they have a different kind of uniform and they've tried to develop a certain culture.
I want to say for the record that we'll get to commuter rail, but we want to do the same thing at commuter rail in terms of the look of commuter rail. It's part of the transit system, and we want the benefits of the seamless system. We don't want to duplicate overhead. We do want to make sure that we're marketing a different product, that it has a different identity, and that the people who work there develop a commuter rail service quality that is different from the bus system or even SkyTrain. We'll be serving coffee and doughnuts, and that requires more upkeep and a bit of a different clientele. It's not labour-intensive; there will be very few people, frankly. I don't know how many -- maybe 20 or 30 people.
D. Symons: On the train?
Hon. G. Clark: No, total, all in. There are only a couple of people on the train. It will be some kind of split-shift thing. I'll say that it looks like SkyTrain, but there's a separate duplication. There are a lot of benefits to having a separate operating unit within Transit that has a bit of a different culture and a different way of doing business, because it's a different service. While we've been driving more amalgamation for cost savings, more efficiencies and reduced duplication, we want to protect the values and benefits of having a separate identification, culture and service quality ethic without increasing the costs of duplication.
I say candidly to the committee that one of things we haven't resolved yet is the question of commuter rail. One option would be to set up a SkyTrain kind of model, which has some advantages. The other option is a separate division of SkyTrain. Another option is to simply have it as an adjunct to some other feature of the system.
I'm very sympathetic to carving out a separate operating unit within Transit to run the commuter rail system. How we structure that, I think, is almost a moot point. I've come to appreciate trying to make sure that the system works well, is interconnected and seamless, but has some of the values and advantages of identification and personnel being attached to that identification.
D. Symons: I'm very pleased to hear the minister's comments on that. It seems to be coming very close to where we are as well, dealing with Transit and having various identities maintain a bit of identity in it.
I think you can get a smaller working unit. Indeed, you seem to have done that already with commuter rail, because you have a general manager for commuter rail.... When I phone B.C. Transit to ask any questions relating to commuter rail, they basically say: "We don't know" or "You shouldn't ask us. Go over there." So I go over there and ask my questions. I'm aware that you're doing that. It certainly shows up when you try and question B.C. Transit on anything to do with commuter rail -- you get referred elsewhere.
M.M. Dillon consulting engineers did a report on the Vancouver operational productivity. This was in December 1992. They say:
"In general, the analysis indicated B.C. Transit drivers in Vancouver spent less time driving than their counterparts in other Canadian cities. The recovery time allowance is 7 percent to 10 percent in most large Canadian cities. It amounts to 4 percent to 6 percent per hour of non-driving time in Vancouver, which gives them about 10 percent."
Is the minister satisfied that this particular Crown corporation is about 10 percent less productive than other transit systems?
Hon. G. Clark: First of all, I don't accept that. As the member knows, because he has some of these studies, we've been doing a variety of extensive studies on transit. The major one we did, which was after that one, looked at North America. In fact, we had some experts up from the United States. The review of North American transit systems -- this was a couple of years ago -- showed that B.C. Transit was about in the middle of the pack, not at all at the bottom. In fact, the way Transit has developed over time shows it to be roughly in the middle.
I think it's no secret that I've been concerned about the efficiency and productivity at B.C. Transit. I've tried to be upfront about that, and we've made some changes in management to deal with that. Some are more successful than others.
Let me just give you some other numbers, because we have been trying to work hard at dealing with some of these questions. In the Toronto system, for example, the operating expense per service-hour was $83.73; for B.C. Transit, it was $77.65; for Calgary, it was $74.80. This was for 1994. I think B.C. Transit has made some improvements, and the cost efficiency -- the operating expense per service hour -- has been improving. I'm not satisfied that we have improved efficiency in operating costs per service-hour to the extent that we can. Is there room for more improvement? The answer is yes.
In part, we do have a problem with -- the member may be getting to this, but I'm not sure -- sick days, which impact on productivity. The member may know that we have a higher-than-average number of sick days utilized in the Vancouver system. This is significantly higher than just over here in Victoria. That says something is endemic in the system. In defence of transit drivers who take sick days, in an urban environment, which is an increasingly violent and hostile kind of world -- what with the challenges we face, particularly in Vancouver and the big city -- it's not always pleasant driving the bus at certain times on certain routes. This can be a very stressful occupation, and that reflects on people taking time off.
There are a variety of reasons, but it's not acceptable to the government, to be candid. It's not good enough, and I don't think management believes that they've done a good enough job. There are too many sick days being utilized. How you fix that is something you really have to work hard on in terms of morale, in terms of dealing with the root cause of it and in terms of getting a better labour-management relationship. All those things we've been working on for three or four years. Again, if you look across the water to Victoria, you don't have nearly the same challenge.
[ Page 15860 ]
[7:30]
I say categorically that our productivity has improved each and every year for the last four years. The cost per service-hour is more productive than, say, Toronto, and we've made significant improvements in overhead costs. Is significant improvement yet to come? The answer is yes, I believe. And further, there is a particular problem with sick days, which I fully acknowledge, and which we've been working hard to resolve.
My last point is simply this. I don't want to repeat myself on the productivity issue, but remember that like a lot of these things, the cost per service-hour can come down with ridership, and quite significantly. The challenge is that if you have nobody riding the bus and the cost per service-hour is very high, the marginal benefits of getting more ridership.... You don't have to hire any more bus drivers or buy any more buses to get 5 percent more riders. That has a dramatic impact on your bottom line, on productivity, etc.
We're receiving an award tomorrow night, which deals in part with the fact we have had significant ridership increase, unlike a lot of places in North America. That goes right to our bottom line in terms of all those numbers we're talking about. It's one of the reasons we're doing better. So all these things have to be weighed together: promoting ridership, expanding service, getting more people on the buses, dealing with the labour-relations question, dealing with productivity and dealing with some underlying causes and problems associated with sick days. All of them have to be worked on together to continue to improve this system. I think we've made a really good start, but certainly improvements can be made.
D. Symons: This is totally off my agenda here, but since you're talking about ridership, I think you missed a golden opportunity, actually, in the repairs that are being done to the Oak Street Bridge. It appeared to me, and apparently Mr. Corrigan indicated, that it was only on April 7 that B.C. Transit was notified about the bridge and the idea that they would have to get some buses for it. I think they found four buses in Vancouver and 11 buses on the Island to increase the number of buses. But it would have seemed a very good idea, I think, to really have promoted using public transit at that time. They could have suggested to people: "Hey, we'll have extra buses on there. Take the bus rather than an alternative route, and we'll make sure you get there at least as fast as if you had taken your car." It might have been an excellent way of getting people to go green and to realize that the bus isn't that bad at all.
If the bus purchase plan that the minister referred to six months ago -- he was talking about major purchasing plans for ferries and buses -- had been started a little earlier, the whole process of planning that the Oak Street Bridge would be down for three months.... If you'd begun that a little earlier, brought some of those buses on line at that time and fed them in through queue-jumping, it would have been a great way of introducing people who may not have ridden buses before to riding buses. As it is, the whole planning process means that the Oak Street Bridge is going to be down for three months. I'm just wondering why B.C. Transit wasn't on the ball a little more. Why didn't Highways get together with B.C. Transit and coordinate what they were doing?
Hon. G. Clark: First of all, I don't think that's fair. We have been advertising "Go Green" and "Use Transit." All the Ministry of Transportation ads have been arguing that. We've been trying to use this opportunity to extol the virtues of transit. In fact, ridership is up, and we have dealt with some of the reallocation.
I want to say one thing about why we didn't buy buses earlier. The member is a member of a party demanding that we cut costs and attacking us for increasing costs every day. You can't have it both ways. You can't say, "You should be spending more money buying buses," which are very expensive, and then stand up in the House and attack us for spending money.
When we announce the ten-year transit plan, with a significant increase in funds committed to transit, I fully expect that member to support us. I know that he is one of the last remaining Liberals in the Liberal Party. He might support us, but I know that his leader will not.
Having said that, I will say that even if we had decided to order buses, there is a significant lead time associated with that. It is in excess of a year -- I think it's higher than that because of demand in North America -- before we receive the order. It's very challenging to get your hands on new buses. We would have had to have decided on the Oak Street Bridge a couple of years ago to buy new buses for that, and that simply wasn't the case. Obviously, we're still working on our transportation plan.
I think we have done a pretty good job. It's a challenge to the motoring public. I think it makes them think twice about it and take transit. I think it is also responsible for us to point out alternative routes in our coordinated response to the Oak Street Bridge rehabilitation project -- and not just for transit.
D. Symons: In your responses, you always lead me into another area.
The minister brought up the transportation plan. I remember last October, when the transportation plan was going to come out very shortly. I believe it was announced to be coming out in November. At a November meeting, as a matter of fact, I happened to ask the then head of the TFA at that time when this transportation plan was coming out. He indicated that it would be January. We're now into June, and I wonder if the minister might give me another look into the crystal ball as to when this transportation plan is going to be coming out.
Hon. G. Clark: I think the member has made some good points, and I have to be careful how I respond.
As the member knows, we have an integrated transportation plan for the province. There are three legs to that transportation plan: one is ferries, one is transit, and one, for want of a better word, is roads. We have announced the ferries capital plan, which is a big component. We have not yet announced the transit capital plan or, other than a one-year sort of highways plan, a five- or ten-year vision for where we want to take highways. We have been planning that. I have to confess it has not been as fast as I would like. Most of the work has been done.
The transit side is complicated by the fact that we have a debt management strategy. Any expenditure on transit, ferries and highways has to be integrated into the debt management plan. That has been a big challenge, particularly transit, because some of the expenses over time are very big. While
[ Page 15861 ]
we had those plans when the member referred to them, the debt management plan really superseded our ability to do some things. We had to go back and make sure that they fit, made sense and were affordable; we've done that.
The further complicating factor is trying to work with local government, particularly in the lower mainland. The member knows full well that his mayor and others are demanding attention. Increasingly, I agree with them in this respect, which is unusual for me. I agree that you cannot make major commitments to transit, particularly rapid transit, unless it's integrated into growth management and land use planning.
We are not going to do what the previous government did, which is announce that we are building a SkyTrain system through people's neighbourhoods and yards without any consultation. I think and hope those days are gone. We have to work with local government and make sure they are comfortable, even though I'm annoyed at them in the sense that I believe we're paying all the bills. I've learned that it's important to work with them. We've been doing that at both the staff and the political levels, and we continue to do that. The Premier met with the GVRD last week. I had planned to be there, but unfortunately, I had to go to Washington and Oregon, as the member knows, on another matter. So the Premier met with them and had some discussion about that, and we anticipate that the transit and transportation plan will be unveiled some time in the next few months.
D. Symons: Back to my schedule here. I notice that the B.C. Transit 1993-94 annual service plan for Vancouver showed that employee productivity had declined by 5.3 percent since 1988-89, over that roughly five-year period. To the year ending in 1992-93, rather, 1,469 hours of service per driver were provided in 1988-89 compared to 1,395, so there is roughly a difference of 70 hours in 1992-93. More recent reports seem to show that this trend is continuing. If we look at that, productivity seems to be going down.
The recovery time on routes 3 and 41 was increased recently, and I believe this is part of a pilot project. I'm wondering why there was the thought of increasing the downtime on that route and what the results of that pilot project on routes 3 and 41 were.
Hon. G. Clark: That's a detailed question, and I apologize to the committee, but I don't know the answer. I'd prefer to get staff to follow up and give you details. If the member is not satisfied with the response, I'll make sure he gets one that is satisfactory.
D. Symons: I gather that recently the 1995-96 maintenance schedule was put on hold. I'm wondering if that has now been taken off, whether you have a maintenance schedule for 1995-96 and why there was some need to postpone the announcement of what the schedule was.
Hon. G. Clark: As I understand it, all of these questions.... There is certainly no hold on it. Every year at budget time, because this is the most heavily subsidized transit system in North America from the senior level of government and because budgets are tight, we've been going in and really taking a hard look at all these questions. You don't want to cut on the maintenance side, but sometimes you really have to put a hold on things and go back and revisit them. I'm quite sure that is what happened this year. We wanted to deal with it.
I mentioned earlier that we are reducing head office staff somewhat to accommodate.... It's largely budget-driven but also efficiency-driven and productivity driven. That means we have to look at every area where we can make savings. I believe there is no hold now, but I think there was for a period when we had to go back and ask if there was any area where we thought we could save money without compromising our maintenance schedule.
D. Symons: I realize this may be a bit of a fishing expedition, but I believe that in 1991 a Professor Fielding of UCLA studied productivity at B.C. Transit. I'm wondering if I might be able to get a copy of his report.
Ernst and Young apparently was paid $500,000 for some facilitator's job. I've got all sorts of question marks after that, because I'm not quite sure.... Maybe the minister can enlighten me as to what Ernst and Young might have done for half a million dollars.
Hon. G. Clark: First of all, I have no problem getting the earlier report for the member. I gather it was actually quite good. This has been a very studied Crown in order to deal with some of these challenges.
On Ernst and Young, is the member referring to the productivity improvement program, which has been canvassed in court in the last few days? Ernst and Young was part of that report, and that is where the figure....
Derek Corrigan, the chair of B.C. Transit, has joined us here, and if the member wants to ask questions about that, I'd be happy to have Derek answer them.
D. Symons: I guess what I can ask, just to see whether I am on the right track or totally off track, is in regard to this Ernst and Young report that you said I might get information on. Was it somewhere in the neighbourhood of $500,000?
Hon. G. Clark: Yes.
D. Symons: Then that's what I'm after. Could you give me just a brief outline of what it was and what findings you were able to get out of it?
Interjection.
The Chair: Excuse me a minute. I would like the minister to introduce the deputy minister.
Hon. G. Clark: Sorry, hon. Chair. Derek Corrigan is the chair of B.C. Transit. His is a deputy-equivalent position, and so I would ask him to answer that question.
D. Corrigan: The performance improvement program was initiated by the former CEO of B.C. Transit. The program was a $500,000 study by Ernst and Young, directed specifically toward improving performance throughout the corporation. What it entailed was a review of all our operations in order to find ways in which we could enhance our productivity. A series of recommendations were brought forward as a result of the Ernst and Young study. Those recommendations have been studied in detail by our management team and have
[ Page 15862 ]
been implemented throughout the corporation as a result. We feel there was considerable benefit derived from this review of our operations. We have implemented, for the most part, the recommendations that were provided.
[7:45]
D. Symons: Thank you. I'm glad to see that there's a feeling that the money, then, was well spent on that. What employee gains were there in the most recent signed contract with the ICTU?
Hon. G. Clark: I would ask Mr. Corrigan to answer that question.
D. Corrigan: The contract on actual wages was 0.5 percent in the first year, which was payable during the second half of the year. There was a 1 percent increase in the second year and a 2 percent increase in the third year. Overall, there were some benefit enhancements, but at the same time there were productivity improvements. The total value of the contract over the period of three years, I believe, was an approximate total of 4.21 percent.
D. Symons: I gather there are shift premiums, and these were granted a few years ago. Is it 15 percent after 8 p.m.? You'll have to tell me later if I'm correct on this. Fifteen percent would work out to about a $3 per hour shift premium. I gather the new contract calls for a 45-cent increase in the first year of this contract. It goes up to 60 cents in the second year and to 75 cents in the third year. Are those figures correct? That is close to a 20 percent increase in the shift differential, if that's true.
Hon. G. Clark: Yes, I believe that's correct.
D. Symons: A 20 percent increase in those driving after 8 p.m. can make a significant....
Hon. G. Clark: No, the 20 percent increase is the differential.
D. Symons: It can still make a significant increase to payroll, I would suspect.
I wonder if we might move to the spare board for a moment. I'm wondering if the minister can tell me what percentage of drivers are on the spare board. I think you have a percentage figure that you use.
Hon. G. Clark: The figure is 12 percent.
D. Symons: I'm not too sure about the workings of a spare board, but I gather that these drivers are there ready to take the place of drivers who don't turn up, or if things go wrong or whatever. So basically you're saying that you bring in 12 percent of the drivers to be paid for a shift that they may not work. Is that correct?
Hon. G. Clark: I was just getting up to speed, so I'm not absolutely sure of the question. But what the member says is, I think, generally correct. Remember, it's a very large system with a large number of drivers. So we have drivers there who fill in when people are sick, and as you know, we have sick days, which are high, and we have to deal with that. Secondly, we deploy drivers where there are problems, so we have a quick response. If SkyTrain breaks down, etc., we press everybody into service, or if there are congested routes, or if we are dealing with an Oak Street Bridge question. So we retain the flexibility.
Very few drivers on the spare board attend work, get paid and don't actually drive a bus. It's not like 12 percent of the drivers are sitting around in case there's a problem. On most days they are all put to work dealing with sick days or problem areas; they are pressed into service for a variety of reasons. You have such a system because of reliability and the routes are critical to maintaining service for what is, after all, a critical public service for people trying largely to get to work and do important business.
D. Symons: I have a slightly different impression from people who gave me information -- or misinformation -- that some drivers are very good at working the spare board and manage not to do much work and still get paid for it -- and paid very handsomely, according to what I was told. I gather from what you say that if a problem develops with buses and people out there -- and I gather you have very few spare buses that you can put into service in the event of a need somewhere -- that there just aren't the buses. In fact, there are days when you have a few buses break down and you don't have a bus to put in there, so you actually have to cut a bus out of that route in order to continue the system, because there are so few buses available to fill in for breakdowns and all the rest. Is that not correct?
Hon. G. Clark: It's a balance, as all these operating companies are. We could go and buy a couple of hundred buses to park and only use them every third day or at peak periods. You'd be criticizing -- correctly, I'm sure -- that we had spent a heck of a lot of capital dollars for a peak problem. On the other hand, you do want to have some reserve buses to bring in. I think it's fair to say that with tight budgets we have probably squeezed such that we do need more buses. If that's really what the member is looking at, I tend to agree with him.
He'd be happy to know that we've ordered -- as the member probably knows -- 20 natural gas buses for the Coquitlam route, because we have a natural gas compression station at no extra cost. Sorry, it's 25, and they'll be arriving in September. We've ordered 50 more low-sulphur diesel buses, and they'll be arriving in February.
These are expensive propositions, and I think we obviously are pushing hard for more and expanding service, but it's that balance. The member is correct that during peak periods there are not that many buses sitting around idle. I'm sure the member wouldn't want many, if any. There are some, and we press them in. When there are breakdowns at peak periods, there are challenges in trying to provide that service. It's a balance between having the staff available and the capital available to deploy during those periods.
If the member is saying that we have more staff available than we have buses, there's some truth to that, and we have to work on reviewing it. We do have a relationship-by-objectives program that we've employed between management and labour. We're looking at these questions and trying to reduce costs. It is on a seniority basis, so there are senior bus drivers on the spare board who end up not having to drive from time to time, and that's obviously something we want to try to minimize.
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D. Symons: Just talking on the absenteeism I was referring to a few moments ago, and tied in with the spare board, I believe that in 1992, Mr. Williams and the Crown corporations secretariat asked for a study of absenteeism in transit employees. I think they found that it was about seven times higher than that of Toronto -- or was it more than double? It was somewhere around there; it was fairly large. Again, you mentioned earlier what you're doing about it. That brings us into overtime, I suspect, when you have drivers away and spare board people. I gather that at the Oakridge transit centre there are overtime costs somewhere in the neighbourhood of $400,000 a month. Is that figure somewhat correct for absenteeism, overtime and so forth at the Oakridge transit centre?
Hon. G. Clark: I can't answer specifically, but I can get the member the answer. I mean, that's what the spare board attempts to avoid -- overtime and some of those other questions -- but it doesn't do it perfectly.
On the absenteeism question, just for the record, I think it's between 11 and 13 days lost per year in the Toronto system and 22 in the Vancouver system. Here in Victoria it's 11 or 12, so Victoria is obviously doing a much better job on this than Vancouver or Toronto. That's an area which I fully acknowledge. We've done some work and studies on it -- Mr. Williams and the Crown corporations secretariat you referred to. It's of great concern to us, and we're working hard to deal with it. I'll just reiterate that this is not a simple question. There is a lot of stress associated with bus driving, which is increasing in the lower mainland for a variety of sociological and other reasons and a series of work patterns that we have to work on and resolve cooperatively with the people who work there to reduce that, but clearly it's unacceptably high.
D. Symons: You might get me figures at some later date.
Just continuing on absenteeism, I wonder if I might have the number of employee hours off for absenteeism from the Oakridge Shopping Centre, and that could be for the last 12 months, if you have those figures available, and maybe absenteeism as a percentage of the total working hours from that particular centre, and the overtime costs as well for our Finance critic.
Moving on, B.C. Transit's productivity compared unfavourably with other North American.... I think I've read and covered that. How many illegal work stoppages, wildcat strikes, etc., have occurred over the last three years with B.C. Transit?
Hon. G. Clark: None, I believe, since my first budget. I believe there was a wildcat strike at Transit on the day I brought in the first budget. I don't believe there has been one since then. Unless there have been some minor things, there have not been any bus shutdowns for several years. In fact, there were more than one a year prior to that, and there hasn't been any since then that I'm aware of.
D. Symons: I believe it was last summer when I got caught in one, because I decided my quickest way downtown was to drive to Joyce Station and get on the SkyTrain -- that is part of the transit system, I would assume. I parked the car and was almost inside the gates when I heard the announcement that the SkyTrain was down due to a work stoppage and so forth, and I had a meeting in 25 minutes time in downtown Vancouver. The minister might find this hard to believe -- because he'll want to push that SkyTrain would get me there faster -- but I made the meeting on time.
An Hon. Member: Speeding.
D. Symons: Without speeding. I don't know how I managed to do it.
There has been a work stoppage, and that leads into another question I will get to at once on the work stoppage you might have referred to, and any others that may have occurred -- because there have been ones, I know, where the buses have been down around the time this government took power. I can't think of the numbers, so I'm wondering if you might tell me how many work stoppages there have been over the last five years or so. In how many of those were the employees who downed their buses for a period of time actually docked pay for the time they downed the buses?
Hon. G. Clark: I have to go partly from recollection, but there have been no illegal bus work stoppages since the stoppage which took place shortly after we took office on budget day. Prior to that, there were literally dozens. I can get that information for the member; I don't know it offhand. I believe there was only one two-hour work stoppage by SkyTrain people, which the member happened to get caught in. I don't believe there have been others; there was a little ripple in the SkyTrain thing dealing with negotiations.
My understanding is that the individuals were paid at some point -- certainly prior to us taking office. When they went back to work, part of the condition of settlement was that they were paid for the time they were off. That practice ended when I was advised that this was required to solve the work stoppage. That was drawn to my attention the first time, and I said that that wasn't acceptable. They weren't paid, and there hasn't been any stoppages since.
R. Neufeld: The minister talked about low-sulphur diesel buses earlier. Could the minister explain what he means by that? Again, how many natural-gas-powered buses are there? To follow that a little further, I think natural gas is much better for the air quality than diesel, even low-sulphur diesel. So why wouldn't we try to get more natural-gas-fired buses into the system?
Hon. G. Clark: An excellent question, and one which has been hotly debated within Transit. Let me just give you a sense of it.
First of all, one of the challenges of natural gas buses is that you need a compressor station. A couple of million dollars were invested in a compressor station in Coquitlam, and there isn't one anywhere else in the system. It was done in a kind of strange way, because there weren't any natural gas buses. They built the compression station in advance, which is fairly expensive to do when you're not trying to do it.
Secondly, because we have no natural gas buses in the system, we're very concerned, There are several aspects to that: one is maintenance. We have a highly trained, specialized maintenance crew who do superb work on the bus system, and we have a particular type of bus. Moving to a completely different operating system within a bus causes some concern
[ Page 15864 ]
about increased costs. That's one point. Thirdly, and I'll be candid with you -- there's concern among drivers: will it work as well, will it drive as fast, will it have the pickup? Fourthly, there's concern about the cost, because the capital costs are significantly higher for natural gas buses.
Having said all that, I agree with the member. For the environment and other reasons, we want to try to promote this kind of technology. We entered into negotiations with B.C. Gas to get them to subsidize the capital costs, because we believe it's obviously in their commercial interests to pursue this. We were also prepared to pay a little more because the environmental benefits were so significant.
[8:00]
The board decided, and I agreed with them, to take advantage of the sunk capital costs in the pumping station in Coquitlam. They said: "Let's do a pilot project to see how it works, with a sufficient number of buses that we can invest in some retraining, etc., at that particular garage." So we agreed to do 25 natural gas buses -- we call them clean air buses -- on that particular route. Now we'll learn about it. It will be a pilot project with a view to expansion. I'll be candid with you and say that politically, and for a whole bunch of other reasons, mostly environmental, I think it would be nice if we moved significantly in this direction. We want to try that.
Having said that, we talked earlier about the pressure on the system to expand the number of buses. We did this pilot project and had the budget to pursue the expansion of buses. Do we then buy another 50 natural gas buses and make it 75, or do we do something else?
As a result of intense examination, including Crown corporations secretariat work and others, the new low-sulphur diesel technology showed a dramatic reduction in pollution without a quantum technological leap. The existing maintenance crews, etc., were very familiar with operating on low-sulphur diesel and did not require particular retraining. We found the environmental quality benefits still superior for natural gas, but very close to low-sulphur diesel, which had significant cost savings on the capital side and no associated retrofit infrastructure costs.
The board decided -- and I strongly agreed with them after a lot of debate on this question -- to move on the 25 pilot project natural gas and 50 low-sulphur diesel buses in the system with a view to seeing how the natural gas buses perform, whether they bring the costs down, etc., and then look at expansion from there. Any expansion of the bus system.... I'll say for the record that government and B.C. Transit policy is that it has to be better environmentally than the stock we're replacing. That means either trolleys, low-sulphur diesel or natural gas buses, but not the old-fashioned buses, which are by far the vast majority of the 900 we have now.
R. Neufeld: Further to the question, it surprises me that the cost was extremely more for natural gas buses. I guess that's because of the reconfiguration. If the minister doesn't have the figure, that's fine.
Hon. G. Clark: I have it.
R. Neufeld: Okay, if you can give it to me....
I have another add-on about absenteeism. You quoted Vancouver being 22 days, and Toronto as 12 or 13.
Hon. G. Clark: For the record, I think the member got that -- it's 22, and an average 12 to 13 absenteeism days in Toronto.
The cost for a CNG Fuel Systems bus is $400,000 on average. The cost for clean diesel is $320,000. The subsidy we received from B.C. Gas for the 25 pilot projects is $50,000. We managed to extract a $50,000 subsidy from B.C. Gas, which makes it more competitive, but it's still significantly more.
While I'm on the topic, I'll just give you the air emissions: hydrocarbons, 0.01 for clean diesel, 0.085 for natural gas, so it's worse for hydrocarbon emissions; for carbon monoxide, 0.6 for clean diesel and 0.263 for natural gas, so it's better for natural gas; for nitrogen oxide, 1.238 for clean diesel and 0.532 for natural gas; and for particulate matter, 0.04 for clean diesel and 0.01 for natural gas. Those are metric tons of annual emissions per bus over an average of 100,000 kilometres per year of operation. We did an analysis of the environmental impact. We did an analysis of fiscal impact. We had to make some trade-offs between the two. We decided on the pilot project for the 25 natural gas buses. We will take advantage of the pumping station, the learning curve, a pilot project and a subsidy from B.C. Gas and expand the existing fleet with clean diesel in the interim while we review the new technologies.
D. Symons: Just before we leave the gas, then -- and I see you were speaking on gas there, too -- was it not planned at some stage of the new Surrey service centre that they were going to put in a gas compressor and bring in gas buses? Was it for the reasons that you've now discussed that the plan was on-again, off-again and, I believe, ended up on the off-again stage?
Hon. G. Clark: I think it is fair that the government and B.C. Transit really want to move aggressively on the alternative fuels approach. They want to take a leadership role in this regard and really move on natural gas. It's no secret that we have been looking at this question and exploring it for some time. Staff just advised me that there is a recent study that shows growing concern for the particulate matter in the air, which might actually drive it further toward the natural gas side. I'd like to announce tomorrow that all incremental additions to the bus system will be natural gas. That may happen yet, but we really, I think prudently, have to look at the pilot project before we make such announcements. I can obviously say that it is going to be alternative fuels, meaning clean diesel, natural gas or, hopefully someday, Ballard bus technology, once we get the experience.
We have to look at the environmental side and then we have to look at the capital cost side. The problem, again, with natural gas, and the reason we didn't in Surrey.... We have to add the increased infrastructure costs of the pumping station, and that helps tilt the balance against natural gas until we get more evidence that it makes sense. I can tell you that there is a subjective element to this, which is not insignificant. It's not simply a financial question; it's a question of how much you value certain environmental components. The government and B.C. Transit value them very highly, but even with that we simply had to move, I think, with the pilot project first before we proceeded in a more aggressive way.
F. Gingell: I didn't get all the numbers when you were dealing with emissions, but the general sense of them, to me,
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was that the emissions we are concerned about with the quality of air in the lower mainland airshed are dramatically better with natural gas than they are with low.... You were talking about NOx at half and particulates at one-quarter, weren't you? That issue is the important one in air quality.
Hon. G. Clark: Let me just give you some of the relative scale, if I could. Hydrocarbons are 0.075 for conventional diesel, 0.01 for clean diesel and 0.085 for natural gas. You should never forget that natural gas is still a hydrocarbon fuel; it is therefore still polluting. In that case, natural gas is worse. On carbon monoxide, it is 1.072 for conventional diesel, 0.6 for clean diesel -- almost a 45 percent gain -- and 0.263 for natural gas. That is another significant gain. For NOx, it's 1.2 for conventional diesel, 1.2 for clean diesel and 0.5 for natural gas. For particulate matter, it's 0.1 for conventional diesel, 0.04 for clean diesel and 0.01 for natural gas. I acknowledge that natural gas is a cleaner fuel, and we want to move in that direction.
The question is that there is a huge capital cost difference that we have to weigh, and we're getting some subsidy for the pilot project from B.C. Gas. There are concerns about the productivity and technical nature of driving it from drivers, and I don't want to overstate that, but we want to get some operational experience with them. There are concerns about the infrastructure costs on top of that, in terms of providing the pumping stations required to service them, and there are concerns about infrastructure costs with respect to setting up whole new maintenance regimes for natural gas and training the personnel to do it.
So we thought it prudent to start with 25 and then, hopefully, have significant expansion from there on in. In the meantime, we have to get on with providing expanded service, and that requires some more conventional buses now.
An answer to a question has just come in on overtime costs at Oakridge. In 1994-95 overtime costs ran at approximately $400,000 per month at Oakridge. This was due to a manpower shortage, which was due to higher-than-anticipated attrition rates. The first two months of 1995-96 show an improvement of approximately 50 percent. So we are down to about $200,000 per month.
R. Neufeld: I'm really surprised at the difference in the capital cost of natural gas buses and diesel buses. I would assume that would change over time. Obviously there's a changeover in engines that the bus company -- whoever you're buying your buses from -- would have to make, and that's obviously figured quite substantially into the $80,000 difference between the two. So I would think that over a period of time this would not be consistent. It would probably go the other way, as other jurisdictions probably move to a clean air policy, the same as Vancouver. Would that have shown up in your...?
Hon. G. Clark: There is no question about it. Even with 25, we're on the leading edge in North America of moving to natural gas. People are very nervous about moving in this regard, so we're driving the envelope.
I think Seattle made an announcement that they were going to go completely to natural gas. They've now backed off that for largely the same reasons. They want to move incrementally. You're absolutely right that obviously there are economies of scale in the production of these buses. If no one is buying natural gas, it costs more for the short term, which is why B.C. Gas gave us the subsidy in part. They want to stimulate this industry.
So that is the challenge. We have a natural gas bus now, you may know, which is a retrofitted existing diesel bus, and it's had some challenges in terms of making it run efficiently. I guess that was because it was not a new bus -- it was a retrofit -- and that, of course, has added to some operational concerns at the rank-and-file level of Transit, to be honest.
I've got the numbers here. I was correct; it's $1.7 million for a compressor station. That's what the sunk capital cost is. In addition, there's $800,000 for renovation to the maintenance facility. Again, it makes sense that if we move in this direction -- I shouldn't say this categorically, but intuitively -- and we expand on the natural gas side, it will be for that Coquitlam garage, to take advantage of the capital costs. Moving to Surrey will be further down the road, as we get the operational experience.
If you talk to my former colleague the member for Esquimalt-Metchosin, I think he would argue, in looking at clean air and all these questions, that the way things are driving in California, there is every expectation that in fact they'll start to move into natural gas production in a big way in order to bring the costs down. Then clearly it will be a slam dunk, even with these extra costs associated, to move expansion in that direction.
F. Gingell: Just before we leave the issue of overtime, which was $400,000 a month and is now down to $200,000 a month, what's the size of that payroll, just to get its quantum?
Hon. G. Clark: Just roughly, Oakridge, according to staff, has about 40 percent of the budget for wages in the lower mainland. It's obviously by far the largest centre, and wages are $184 million a year. Crudely we're looking at $70 million a year in total costs, so if it's 200,000 a month, that's....
F. Gingell: Six million dollars.
Hon. G. Clark: Six million dollars, right. So it's not insignificant; it's something we have to constantly work at improving.
[8:15]
I'd just tell my colleagues across the way that I have commuter rail staff here today. We are hoping to canvass that, if it's possible, tonight, so they don't have to come back tomorrow -- if I could just ask your indulgence in that regard.
D. Symons: Just tying in with some of the other questions I was asking, I gather there was an IRC ruling in 1991 dealing with B.C. Transit and Independent....
An Hon. Member: Canadian Transit.
D. Symons: Canadian Transit -- I can't read without my glasses, and I can't read with them -- Union, Local 1, dealing with articulated buses in Maple Ridge. Part of the IRC ruling that came down is rather interesting. I'll leave out all the things I was going to read, and just skip to the last little part here, where the ruling came down:
[ Page 15866 ]
"I am somewhat surprised by the apparent ease with which Transit was convinced to substitute regular buses for Artics" -- the articulated buses -- "at the first suggestion that union members would not drive the Artics. While no explanation was offered for this lack of discipline, I can surmise that it may stem from transit's frustrations and its desire to avoid disruption of service to the public, which it is mandated by statute to deliver. On that basis, I have some sympathy for Transit. At the same time, I recognize that the union's willingness to resort to refusal to work is equally rooted in frustration."
"I see the makings of a disturbing pattern. It appears that the union is only too ready to refuse to work at the slightest perceived provocation; Transit is only too willing to accommodate them and then apply for a part 5 order."
And he goes on to explain that it seems that the transit company is depending on the IRC to sort out their labour differences. Basically, he's saying: "Don't bother doing that; solve your own problems."
I'm wondering if you have a better relationship with the union now. Do you have some cooperative group that tries to head off these problems before they get to the stage where they threaten to strike and you run to the IRC?
Hon. G. Clark: I can say honestly that I'm just delighted by the progress we've made on the labour relations front in the last year. Everybody who looks objectively at B.C. Transit -- and I say it as a new minister looking at the portfolio -- can honestly say that probably the biggest challenge and problem facing B.C. Transit has been management-labour relations. They are something out of the nineteenth century; it's ridiculous -- wildcat strikes, archaic management problems, old-fashioned union tactics. You know, these things are never one-sided. Usually there's a reason you get this problem, and it becomes embedded in the culture of the organization. One of the highest priorities I made for Transit was to try to deal with that question -- not one way or the other, but by trying to solve the long-term relationship problem.
Are we there yet? Probably not. But, boy, in the last year there has been huge progress made. That progress has been partly new management, but also -- to give credit to the older management -- we had a relationship-by-objectives program which was supervised by the registrar of the Labour Relations Board, Brian Foley. A couple of days of intense workshop by Don Jantzen, who works on contract with the Chair, has been instrumental in helping to improve the labour relations question. Management attitudes are changing. I think union attitudes are changing.
For the first time, we got a collective agreement before it expired, which was within the tough guidelines of the government. That's unheard of at Transit. I think it was the first time in a couple of decades that they didn't have a strike vote. We got a resolution to the question. The number of grievances are down. Obviously, we haven't had any wildcat strikes. It's just been very good news, and it's really nice to see.
Again, you don't solve these kinds of systemic or endemic problems overnight, and I'd be the last one to say they're solved. But there's been just a huge improvement, finally, in the last year. And that's after it being one of the highest priorities for me in the last three and a half years. I think we're well on the way to much-improved progress. You are always going to have an adversarial relationship; you are always going to have tough questions, and you're not going to agree with each other on a range of questions. In a mature relationship, you have a process for resolving these questions and then moving on to fight another day with an aura of mutual respect.
That's really what we're working toward, and I think we're closer to resolving it. I might just say that the new chair and the new CEO have been instrumental in helping government to improve that situation.
R. Chisholm: While you're still on buses, I'd like to explore a situation we have in the Fraser Valley. For the last number of years, the situation has been that we have lost the bus service of Fraser Valley Bus Lines. Then we brought a bus service from Alberta, and it left the province after two or three months, and so on and so forth. We have lost the service between Agassiz and Chilliwack, and, of course, we're losing the service all the way up the valley into Vancouver.
I'm wondering if B.C. Transit is looking into taking on that service. Is there a possibility that they could take it on to at least stabilize that particular service up through the valley? There are an awful lot of constituents throughout Agassiz, Chilliwack, Abbotsford and Matsqui and all the way into Vancouver, who are no longer being served due to the upheaval we've had for the past two or three years. I think that B.C. Transit could settle this down, if at all possible. After all, we're spending an awful lot of money to make our buses environmentally correct and this type of thing, which is a great goal, and if we had this bus line, it would get people off the road and stop them from using their automobiles. I'm wondering if B.C. Transit has looked at this and decided if they would or not.
Hon. G. Clark: First, let me say to the member: Come on over! It's nice to see the member advocating an expanded public sector role in transit. I certainly agree that there are some challenges in the valley, and we've been looking at it. I will say a couple of things on the challenges we have to deal with.
First, B.C. Transit does not run an intercity service, which is essentially a highway service. Those are done by the private sector, so that if you want to go from Kamloops to Penticton, B.C. Transit doesn't take you. Similarly, if you want to go from Chilliwack into Mission, it's not run by the government. We've never dealt with intercity questions; that has always been left to the private sector. It's instructive that the member wants us to look at that question.
Second, we do have a transit service area. The Vancouver Regional Transit Commission has a 4-cent-a-litre gas tax on my constituents, which is very significant. I haven't had anybody from Abbotsford or elsewhere say to me to put that 4 cents on them and fix this problem. If they were to say that, then that is obviously something we would look at.
Last, commuter rail will have some assistance -- obviously, Mission. I'm having to talk against myself, but that really is a kind of intercity service, and we're dealing with it. There's a huge interest in Abbotsford. As the member for Abbotsford may know, there's a lot of interest, and we've been very surprised by market surveys of the number of people who want to go across to Mission and take the commuter rail downtown. That will be a service. Fifty percent of Mission ridership will come from Abbotsford; that's our latest market
[ Page 15867 ]
analysis. It's something we didn't expect, but there's just a lot of interest in Abbotsford from people working downtown and going across there.
But at the end of the day, it's the private sector that does the intercity service, and we appreciate that it's a challenge. We have to be careful here, because we have a heavily subsidized service that can easily put a private sector service out of business if it creeps into the field, and we try to draw a ribbon around it.
I want to say that for the first time -- and my critic probably doesn't know this -- we have established an intercity bus committee, chaired by Dr. Setty Pendakur from UBC. It has on it private sector bus lines and B.C. Transit precisely to deal more with the private sector concern, particularly in places like Vancouver Island, where the publicly subsidized system keeps moving along, which starts to jeopardize the viability of a private service up and down the Island. As you do a transit service to Parksville-Qualicum, you start to take out pieces of the private sector system. I'm very concerned about doing that.
Also, at the same time I want to deal with demands for public sector services -- subsidized service. We have a similar problem developing in the Fraser Valley, so we have a forum now with the private sector to look at where we draw those lines and how we try to deal with those questions. That might be of some assistance out there. We're certainly aware of it, and we're quite concerned about any reduction in service in the Fraser Valley, but we're loath to move into a private sector domain with a very heavily subsized service, where we've never gone before.
D. Symons: At the minister's request, we'll move into commuter rail and come back to these other things another day. I don't know if the minister wants to be a little less full in his answers. We might complete commuter rail this evening.
I have a lot of questions on commuter rail. I wonder how to handle this, so I'm going to be jumping around a bit. I thought I'd go back in history a little bit. Back on June 22, 1993 when commuter rail was announced, there was a headline in the Province that said: "Commuter Rail System on a Fast Track: Clark." The article said something to the effect that a highly placed source said that government estimators had pegged the figure at about $80 million, with $50 million for new track, park-and-ride facilities and other infrastructure and $30 million for trains. When I add those two figures up, I get the $80 million. We find now that indeed the...
An Hon. Member: It's not a very good source.
D. Symons: It didn't seem to be a very good source, because we now find that it's over $100 million for the upgrading of the track, the stations and so forth, and another $71 million, I believe, giving us somewhere near $180 million or $190 million for the total cost in commuter rail. That's certainly a lot different than the $103 million that was given as a figure soon after this.
I guess I have some problems with whoever the source was that leaked that information back then, but I rather suspect it was a source that was close to the member there who probably thought those to be the numbers at that time. Can you give us an idea of the total cost, because I can't imagine when you were giving a figure of $103 million before -- and that seems to be the figure thrown out by members who've criticized the fact that I've said it's over that.... I gave out figures considerably more than that a while back, and two of the members on your side wrote articles to the newspaper suggesting that I was totally all wet, and it seems I was under on the figure.
But I cannot imagine you putting a train in without wheels, so to speak. So when you're talking of $103 million and this did not include wheels, I'm having problems with the minister, I guess. The same thing happened with the superferries. I found out that when this was on budget, it didn't include the engines. So in this case, the $103 million did not include the wheels. Can the minister tell us the figures given then? What is the total figure now that you're estimating for the cost?
Hon. G. Clark: I've been very consistent, hon. Chair, on this question. I don't know about this highly placed source. I'll try to keep it short, but I just have to back up for a second.
There was a northeast sector task force, chaired by Mayor Len Traboulay of Port Coquitlam. It had private sector people, and a group called Gridlock was involved. At that time they did some very good work scoping out all the old studies on commuter rail, and they recommended that we should look at commuter rail.
Some of the older studies and numbers had different numbers in them, so I can't verify them. There wasn't a lot of detailed work. We did the detailed work and went forward and made the announcement to proceed with it. The member is correct that $103 million has been quoted. I've tried to be very upfront about that; I said we planned to lease the rolling stock and spend $103 million on infrastructure. The member sitting next to you will be one of the few people who would understand some of this, and I have to be careful how I say that. I think the member next to you will understand the nuances of accounting policy in how you deal with these questions.
If it's a long-term lease, it becomes capitalized in our books. If it's a capital lease or an operating lease..... We've always maintained, notwithstanding that I believe that this will be an enormous success and will be here forever almost, a view -- and certainly staff might share this view -- that commuter rail is a short- and medium-term solution and that at the end of the day, a rapid transit line to that sector will make moot commuter rail some 20 years down the line or sometime. That may be the case, and you have to plan. So we have always said we'll invest in the infrastructure so it works, but we'll lease the rolling stock on the understanding that at the end of 20 years we can decide whether we want to sell it or maintain the service or whether rapid transit comes out." We have always taken that position.
There has been a debate with Treasury Board and others about how we structure that, and with the financing agencies with respect to whether it really is an operating lease or whether we have to capitalize it, etc. We have decided that we are going to purchase the locomotives, but have an operating lease on the railcars. So I believe it will be treated for accounting purposes as a genuine operating lease, not a capital lease, on the Bombardier cars. But we're purchasing the locomotives, largely because it's cheaper: a $1.1 million net present value savings .
[8:30]
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I have always made the argument that there is going to be rolling stock worth $70 million on the service. I've never hidden that fact, and I've done editorials around that. I've said that we're leasing the stock. I originally anticipated that the whole $70 million would be leased -- genuinely, an operating lease -- and ten, 15 or 20 years from now, we'll deal with it if there's rapid transit. I've always been upfront that we're facilitating that happening.
We've decided, however, to purchase the locomotives for $16 million. That saves us money. It doesn't cost us any more money for a lease, although we do have to borrow the money now, whereas before somebody else could do it. There are -- and this is particularly for the Finance critic -- significant tax advantages for Bombardier for the passenger cars on an operating lease basis. That significantly reduces our annual cost to them.
On the infrastructure, the member is correct. I've always said that we intended this for $103 million with no contingencies or anything else. The costs have increased somewhat since then, by how much is yet to be determined. But I'll give you an example: $1 million for unforeseen environmental questions, including receding of sea lettuce under the Second Narrows Bridge and a few other environmentals -- unbudgeted costs, $1 million. In addition, there are some power costs -- to power up and run the locomotives -- which were in the neighbourhood of $3.5 million and which were originally envisioned to be part of our operating costs. We now find that we're probably going to have to build them ourselves rather than.... Hydro could do it, so it still might be an option.
So there were some operating costs we budgeted for which have pushed into the capital side, and there are some geotechnical findings in some of the work we have done which have increased the costs somewhat. The total cost increase over the $103 million is $15 million for pressures, costs, contingencies and everything. I don't anticipate that it will be that high, and some of it has moved from operating into capital. But we are definitely up 5 to 10 percent over the projections we had on the infrastructure side. And I say to my colleagues here in committee that this is the only area where I accept the issue. In other words, I've been completely upfront on the locomotives, on the rolling stock and on everything. If anything, the decision to purchase has reduced our costs and is fully transparent in our operating budget. There's no change from the debate; they are not higher than we anticipated. We're coming in a bit lower in terms of our annual costs of servicing the debt versus a lease payment.
On the infrastructure side, we will have about 5 to 10 percent at the end of the day in unforeseen costs. I think that's not bad, considering the size and scope of the project.
D. Symons: I was at the announcement that you made out in Port Coquitlam, and it must have passed over me, because I didn't see the distinction in there of the rolling stock being separate from the figure at that time. Maybe I'll have to go back and look at the documents that were given out to the press at that time. I certainly missed the point that that was separated.
I have just one other point, and you can do both at once. Have you got an agreement with CP Rail yet? That had been, up to fairly recently, the last unknown factor, and I'm just wondering about that, because that certainly enters into your costs as well.
Hon. G. Clark: First of all, we've always said it was $103 million in capital costs, and the rest was incorporated into the operating side, so that's always been the case. We've been upfront that this is what we're doing -- we're leasing it -- and there are costs associated with that, which are in our budgeted projections. Most of the time I've said it's between $105 million and $110 million in capital costs, because I anticipated that there would be some contingency. It did get reported as $103 million in capital costs, and the rest is operating.
On the question of the CPR, we have a signed infrastructure deal. I'm not blaming the CPR, but at the end of the day, when you budget for the infrastructure side, after the engineers go there and we have an arbitration process for a dispute between B.C. Transit and CPR on what's required, so they don't offload some costs onto us, that's where the cost pressures have been. The independent arbitration says, "You do need this," and sometimes we say: "We don't think we need to do that; CPR should do that." So that's where there has been some cost pressure. We have that all signed off -- a deal.
On the operating side, we already have an arrangement with them on the fuel costs, the staffing and everything else, so we're pretty well there.
F. Gingell: As for these trains that you're going to buy for $16 million, what rate are going to depreciate them at?
Hon. G. Clark: They're amortized over 20 years -- General Motors.
F. Gingell: The minister talks about an operating lease, but the lease is for a fixed term, it would seem -- 20 years -- which is as long as the period of time that you're going to write the engines off. You are in effect taking them for this long-term period. I presume that the province is going to give some guarantees on this. Perhaps we could deal with the guarantees first.
Hon. G. Clark: I think the operating lease is going to be 20 years, but I'm just checking that. It might be 15. The residual value of the cars after 20 years is as much as 35 percent. Obviously looking ahead is difficult, but you can't get used cars right now. Commuter rail is the fastest-growing area of transit in North America, and we were originally looking at buying used rolling stock. You can't buy used rolling stock. You'd think that we might be able to scramble up enough after two or three years of work, but we couldn't actually buy used rolling stock. That used rolling stock -- GO transit cars -- is over 20 years old, and it has significant value. We don't anticipate that this will be completely written down after 20 years, so they'll have a residual value.
F. Gingell: The question, in addition, was: are there any provincial government guarantees as to the lease payments?
Hon. G. Clark: I think the answer to that is yes, at the end of the day. It's a provincial agency entering into a lease arrangement, and the actual lease will have to be scrutinized by the comptroller general. There is a possibility that he'll rule that it has to be capitalized.
F. Gingell: I bet he does.
Hon. G. Clark: He might. You know the comptroller general as well as I do, so that's a good chance. Bombardier is
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keen on making it an operating lease, as well, for the tax advantages associated with it. We save 200 basis points by having a provincial guarantee.
I'm not trying to be cute about this. If the comptroller general requires us to capitalize it, that is fine with me. We are borrowing $105 million to $110 million; that is what we had said. We are going to commit to an operating lease, which doesn't require us to borrow money. If we have to capitalize it because of the nature of those questions over 20-year periods, then we will capitalize it. I'm not debating that. The Business Council of B.C. did a study on commuter rail. They did an analysis of the question, and they capitalized it in their analysis. That came out in the newspaper. I don't have any problem with the nuances of doing that.
On the Bombardier cars, the operating lease was a guarantee. It was significantly lower than us actually buying the cars, whereas on the locomotives, it was obviously lower for us to buy them. Treasury Board's rule is pretty simple. What is the cheapest way of doing it -- borrowing the money and buying them or entering into an operating or capital lease? Those are the issues we deal with all the time. In this case, we've always said that we are going to try to do it on an operating lease, because we've generally thought it was operational. At the end of the day, we will look at the best deal we have.
F. Gingell: Just so I have a statement after the minister's statement in Hansard.... I would hate to let it pass. I can assure you that the credit used to borrow the money for Bombardier to pay for the rolling stock is the credit of the province of British Columbia. That is the way it is, and that is why it is 200 basis points less. It's the same as you borrowing the money; we shouldn't fool ourselves. Do you have an option to purchase this rolling stock at the end of the prime term of the lease?
Hon. G. Clark: Yes, at market prices.
I will make just one other point to make sure the member knows. The lease is off the balance sheet with B.C. Transit in any event, although it does show up as a government guarantee. In that respect the province does guarantee it, so it shows up as guaranteed debt associated with it. But from B.C. Transit's perspective -- or so our financial officer advises me -- it shows up as a lease arrangement, because it is a lease. We don't have to borrow the money.
F. Gingell: That may well be, because maybe B.C. Transit, with its municipal or regional function.... When you were looking at the issue of whether it was cheaper to purchase or lease, you must have made some assumptions about the fair market value at the end of the lease. Can you let us know what those assumptions were?
Hon. G. Clark: That is where the 35 percent came from; it came from Wood Gundy in Toronto.
D. Symons: I have some concerns over commuter rail. The GVRD did the Transport 2021 study. I know that when I asked questions in my first year, the answer I generally received was: "Well, you'll have to wait until we do something on this particular transit project, because we are waiting for the 2021 study." They were basically saying: "Once we hear what they say, then we'll know what we are going to do to fit in with their plans."
Commuter rail did not rate very high in that study when it finally came out: "Commuter rail links do not appear in the project's long-range recommended system. Based on available information and a balance of advantages and disadvantages, commuter rail did not emerge as a strategic element of the plan." That is from the 2021 study. On one side of the page they list the advantages and disadvantages of commuter rail. Let me just say, to save time, that the disadvantages seem to outweigh, at least in terms of space on the page, the advantages. I have concerns that the advice that seemed to be coming out was that commuter rail isn't the way to go, yet somehow the government brought in Bill 11, which is a community strategies plan. The community brings out a strategy, and yet that's ignored for what some crass people would say are political reasons. I don't think this bodes well for the decision. If it seems to be made based on the fact that the community is supporting it, then I think there's a better chance of it being accepted, and you won't have political brickbats thrown at you.
I'm reading from the Vancouver Sun, October 31, 1994, where the headline is: "Coquitlam Residents Fear They'll End Up as a High-Density Beat for Transit." I have heard it said by people from the GVRD and the ministry as well that one of the reasons we're choosing commuter rail to go to that particular neck of the woods is the same reason we're looking at rapid transit: we can use this as a lever on those communities to have them bring about the development that we'd like -- densification and so forth.
[8:45]
I wonder if these communities feel threatened by using transit as a lever for developing their communities or if they're not too happy about that. I wonder if the minister might comment about the disparity between what seems to be done and what Bill 11 and community strategies seem to be implying should be done.
Hon. G. Clark: I don't accept that. The member is correct in that Transport 2021 said it's not a good long-range program, but 2021 also said that it's a good short- to medium-term solution. I think that's the quote: "a good short- to medium-term solution." I think I said earlier that there is a debate about whether this will be a long-term solution.
I have to be careful that I'm not becoming a true believer, because I've been working on this project for a few years, but I have to say that I find it hard to believe that commuter rail will not be a significant component of the transit system 25 years from now. I think it will develop a ridership. There is a debate, and it's a legitimate one. I can say that 2021 looked at patterns of transit ridership and densities. I support all of those, and we're working on a transit plan which incorporates them. But I believe that commuter rail will actually build ridership.
In some respects, it's just anecdotal evidence that I hear. People say: "I'm going to move to Mission because of commuter rail." I do acknowledge that commuter rail will not drive densities. That's why it's not a long-term solution and doesn't fit in with the kinds of growth management strategies and densification we require in the lower mainland to maintain a livable region. We've done some work all around North America and looked at commuter rail, and it has not driven densities. It will drive some growth, but I don't believe it will drive densities. It doesn't have the volume required to do that.
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It's a short- to medium-term solution. I believe it will be longer, but 2021 simply says it's not a good long-term solution. I agree that if that's all we did in the long term, it wouldn't be acceptable.
D. Symons: I don't think the GVRD study used the words: "It's a good one." The words they use here are: "The service would give some congestion relief in the short term from the northeast sector." That's a little different than saying it's good, I think. There are disadvantages that outweigh that on the other side.
I wonder if we might just look again.... I'm reading from a newspaper article of February 20, 1995, so we're getting more updated. It talks about all the years on tracks that the boom has predicted. I guess I want to know if this development is part of the GVRD's living regions strategy. How much was the GVRD really involved in the choice of commuter rail? It's certainly not in its 2021 study as a favourable route. Did you get them involved after the 2021 study came out? How much input did they have into it?
Hon. G. Clark: Well, first of all, as early as 1971, the GVRD actually studied commuter rail; that's part of it. Remember that the northeast sector task force that looked at transit options consisted in great measure of municipal politicians in the regions. I think it's fair to say we did not involve the GVRD in a formal way in the planning of commuter rail. We wanted to make sure it was consistent with 2021, and I believe it is on the short to medium term. We want to make sure that it's supported by the municipalities in the region it's servicing. It's not of sufficient moment or occasion, if you will, like a major rapid transit line that requires a driving land use pattern and the cooperation and support of the GVRD and municipal planners to fit in with the livable region strategy.
What I'm really trying to say is that I don't think they're incompatible. This is an incremental improvement in a particular region which has some significance. By the way, our latest studies show that rapid transit actually is not competitive with commuter rail in terms of a downtown destination. For people going downtown, it's actually faster on commuter rail than on some of the alternative rapid transit routes, simply because it's a dedicated ride with fairly few stations. That's another reason why I believe it's likely to survive.
The GVRD did propose a rapid bus solution on this corridor, as the short- to medium-term solution. I think commuter rail does that job quite nicely, as opposed to rapid bus. I don't see the inconsistencies, and I think the people in the municipalities in the region affected are very supportive of this. We don't anticipate driving huge densification, which is required for a livable region plan. That will be driven by other transit initiatives.
D. Symons: The minister mentioned a rapid bus. Tied in with that, of course, is the Hastings-Barnet people-moving project. Apparently, when this government took over, they slowed down highway projects, basically not funding any new capital projects for a year or two. That was one particular route that was delayed considerably. It should have been open, and I gather that it was downsized, as well, from two lanes plus an HOV to simply the HOV lane being added.
It would seem that if they had finished that project first and seen what effect that would have.... Once that project is finished, commuter rail is really going to be competing with it. You mentioned a rapid bus. We won't have a comparison, I suspect, between what commuter rail might have done and what a rapid bus using the HOV lanes on the Hastings-Barnet connector would have done.
The Hastings-Barnet connector will have the one advantage that commuter rail doesn't have, in the sense that there would be much easier cross-traffic to it. Once you get past the Port Moody station, there's pretty well no place for people not heading to downtown Vancouver to head off south from that particular route. They have to go to downtown Vancouver. Whereas on the Hastings-Barnet connector route, once they put that in, people will have the option at any stage in using that particular faster route -- autowise, anyway -- of making a left turn and heading into various parts of the lower mainland peninsula.
That project should have been finished first to see what effects it would have had on traffic, and then you could see whether there would be a demand for commuter rail. Right now the two are competing. I would suspect that bus service along that route -- east-west traffic heading downtown -- is going to be curtailed in order to force people to take commuter rail, even though it may not serve their needs that well.
I suspect, from something the minister said earlier, that people in Abbotsford are going to find that getting into Vancouver -- or even getting into Surrey or other places -- is going to be rather awkward for them if they want to take buses, because buses will be reconfigured to service commuter rail to give them the ridership they're going to need to make that thing worthwhile.
Hon. G. Clark: Eighty percent of the people using HOV terminate at Burnaby. All of our estimates show that the people taking HOV are going to multidestinations in the peninsula. People taking commuter rail are working downtown, so we don't see it as a competitive threat. In fact, we took great pains to plan both the HOV and commuter rail.
On the other hand, as the member may know, we did look at the Burlington Northern commuter rail option. As the member knows, we're also looking at HOV lanes on the existing freeway. Those tended to compete directly, and therefore you don't make both those investments at the same time. There are other infrastructure problems with the Burlington Northern commuter rail route, particularly toward downtown at level crossings and the like. But in general, they were very competitive.
The HOV lane on the Barnet and commuter rail are not servicing the same population. We have horrendous congestion problems in the northeast sector of the lower mainland that have to be dealt with, and we need a multitude of solutions, not one particular solution. We want a transit solution, short- to medium-term, to get on with congestion and service this rapidly growing population -- a 215 percent increase in population in the northeast sector in the last 15 years and no investment from a previous administration in that community. We had to make some significant investments in commuter rail -- I'm sorry, there's nobody here from the previous administration...
Interjection.
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Hon. G. Clark: Your roots are there, my friend.
We had to make investments in old-fashioned road improvements dealing with some congested bottlenecks, the Mary Hill bypass, etc., and HOV. I think it's fair to say -- and the member said it -- that HOV should have been opened earlier. I think we all agree with that, and we have been moving as best we can. I know the members opposite are constantly attacking us for spending money, so that is again an interesting observation, but we had to do it within our ability to pay.
It's a significant project. I don't know if the member has been along the Barnet Highway lately, but you can see why that's a $130 million project. This is a very large urban project and very expensive, so it has taken us a bit longer to complete than we would like. In addition, there is some investment now linking up with commuter rail, with some modest improvement in the system down at that end. We're very confident that there isn't competition between the two forms of transportation the member referred to.
D. Symons: We were dealing there with ridership not going all the way downtown, as far as the HOV lanes go. I gather there are some problems or disagreements with the figures that commuter rail is using to justify its existence. I guess that's the problem, where we have great differences.
I believe it was the 1991 census that actually determined that the number of people going from Mission to downtown Vancouver was extremely small. I think we were dealing with numbers in the tens rather than in the hundreds, but they found it out from the census that year the number of people travelling downtown. I'm concerned when we look at the ridership that we're going to have numbers that you predicted aren't going to be there. The cost you predicted on the operating side will be considerably higher. If I can find the actual words in here, the GVRD study showed that actual ridership may be 18 to 35 percent lower than that projected by the province. We're going to have a problem when that happens.
I just want to see what my next question is so that I don't get.... Okay. I think I'll just leave it at that and see if you might give me some figures on ridership, because B.C. Transit used a transit planner, Teresa Watts, as a consultant on ridership. I think, on close examination, that Miss Watts has a very close relationship with one of the managers of Transit. I don't know if you could consider a study on ridership, which she might have given, to be the definitive and unbiased ridership figures that you might need to make your transit planning on. I have a concern that you really didn't go to somebody who might have given an arm's-length opinion; rather, you used the wife of an official who's committed to the project.
Hon. G. Clark: First let me say that there's a model that predicts ridership. Like any model, it's not perfect. It's called the EMME/2 model. It's exactly the same as the GVRD. The GVRD study in 1991 stopped at the Pitt River Bridge. This service that we're embarking upon goes to Mission, and there's a huge difference in ridership associated with extending it to Mission. That's the first point.
Secondly, in general the debate revolves around this: the only sure people to take commuter rail are bus riders. Why do we know that? The member is correct: we can feed the buses into commuter rail, and we know that somebody who is taking public transit today will likely be taking public transit in the future. The only sure ridership for commuter rail, it's true, are current bus riders that go downtown.
The ridership on bus transportation in the northeast sector is the lowest in all the lower mainland. If you take the lowest ridership today and put it on commuter rail, and if you don't project too much growth and stop at the Pitt River Bridge, you get very low numbers.
This is an important question, and the members opposite can take a different position if they like. I believe that the reason we have low ridership is that we have incredibly poor service. The evidence is such that: why is it lower in that part of the lower mainland than anywhere else? Because the service is worse. If you believe that, as I do, then when you improve service dramatically with commuter rail, more people will take it. If they move to the average ridership on transit in the rest of the lower mainland, then our numbers are conservative for ridership, in addition to the Mission question.
[9:00]
Also, our ridership did not project at the time the Abbotsford growth. I'm not saying that there are going to be thousands of people from Abbotsford taking commuter rail, but we didn't count on anybody -- very few -- from Abbotsford taking commuter rail. Now we are finding that 50 percent of the people we estimate are going to take commuter rail at the terminus in Mission are going to come from Abbotsford. Remember, it cuts the travel time in half, and there is a direct relationship in all of the modelling between travel time and people taking the service. If this is competitive with cars by half the time it takes in a car, then we believe people are going to take it.
Just to reiterate, this goes all the way to Mission -- doesn't stop at Pitt River -- and there is significant ridership in Mission and Abbotsford and relatively low incremental costs to take it across. There is a problem at the Pitt River Bridge, but it is not insurmountable, in that it has to slow down there.
We believe that we will grow ridership, because all the evidence suggests that with dramatic improvement in service and cutting travel times in half, more people will take it. If you don't believe that, and you think only bus riders are going to take it, then I think the ridership numbers are objective. There is a certain amount of debate with legitimate, subjective opinions that people can have about this question. We've done the best we can on market survey and research, and we are very confident in our numbers being on the conservative side of the estimates. It may not be there for the first six months, but it will be in the first couple of years.
D. Symons: We'll see whether the estimates are on the conservative side. You didn't answer my question about your arm's-length choice of somebody to do a study, but we will pass on that.
You've got a projected ridership of about 6,000 passengers each rush hour. Right now B.C. Transit carries only 178 people across the Pitt River Bridge, so that's Port Coquitlam, Mission and Maple Ridge that you are putting service into as well. Even if you get twice as many people riding public transit, you certainly are going to be short of people on those five-train coaches. There are only 1,200,
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roughly, from Port Moody into Burnaby on the Barnet Highway -- current screen lines -- that use public transit. Again, doubling those figures is not going to give you the 6,000 that you are projecting. So if you manage to double the number of people that were using public transit by running that route as well, you still aren't getting the numbers that you are predicting.
I do think you are going to have some problems in reaching the numbers that are predicted there, and, of course, that is going to impact on either how much the taxpayer is going to subsidize this service or how much you are going to have to charge for this faster service into Vancouver. I don't know if the minister wants to comment on that or if I should move on.
Hon. G. Clark: Just to clarify the record, I'm not sure the member has the numbers right. We're looking at roughly 5,000 to 6,000 passengers each way per day -- you know, 10,000 to 12,000. That is the estimate, and we think that is doable. We did a 1,200-sample Canadian Facts opinion market research on this question. They confirmed our ridership numbers and said yes, they are in the ballpark. There is not a problem there. That's not as scientific as the EMME/2 study and all that other stuff, but it has confirmed it. Remember, every new service we brought in has exceeded ridership by 50 percent. SeaBus is 50 percent higher than all the projections of Transit, and SkyTrain is 50 percent higher than all the projections at the time.
I'm not counting on that. I'm just saying that this is a dramatic improvement in service in a highly congested area. The evidence suggests that this will be successful in that regard, and I strongly believe it will be.
D. Symons: We will come back to some of the comments the minister made at a later date.
I understand that you have a special office set up for commuter rail, and it operates outside the environs of B.C. Transit. I am wondering about public accountability for what's going on in the commuter rail office and the whole operation of commuter rail. Who are they accountable to -- to the B.C. Transit board or to the minister -- and how do we get the information on what's going on there, such as annual reports, costs and all the other things that go along with that? What are the lines of authority from commuter rail back to the public?
Hon. G. Clark: The commuter rail office is not an entity, a limited company, a subsidiary or anything else; it's a division of B.C. Transit. It reports to the board of directors of B.C. Transit and therefore only indirectly to the minister, as representative of the shareholders. So it's fully accountable in the same way that any other transit operation is accountable.
We had this discussion earlier, and I made no secret of the fact that we like the idea of it having its own engine, working it through all these problems and developing a culture and an ethic. We want to maintain that, but it's still going to be part of B.C. Transit. It's not going to be separate and distinct from that.
D. Symons: I'm wondering if we might get into the general manager. I'm wondering if that position was advertised and competed for and what the previous experience of the person who is holding that current position is. I gather that she had previous experience with a labour union and a short time as a corporate secretary in B.C. Transit. Was that position put out to competition, or was it given without going to competition?
Hon. G. Clark: The general manager of commuter rail was a former director in the Ministry of Aboriginal Affairs in a previous administration, then moved to B.C. Transit and was vice-president of corporate services at B.C. Transit. When we put together the commuter rail team, we did not hire a whole bunch more staff. We seconded a team from the existing system.
I have to say for the record -- and not just because the general manager is here -- that they've done an outstanding job. It's a delight to go into the commuter rail office, because they have a small staff. Not to criticize anybody at Transit, but they probably have one of the ablest engineers, Rick Lee, seconded there. They have a younger group there, and they have hired a couple of people on the marketing side and some others to carry on the business plan and work of commuter rail.
When you go into the commuter rail office in Vancouver -- and I invite the member to do so -- you'll see a very dynamic place, driving hard to get a new service up and running. They're doing a superb job, and I know the board of directors feels the same way. Their presentations to the board are monthly updates. I get copies of those updates, and they're moving along well. I'm hoping that we can retain that unit -- I'm not sure we can, but I'm hoping we can -- when the thing becomes operational because of the work they're doing on bringing this project in on time and on budget, albeit with some challenges.
D. Symons: Those questions were coming later. It makes it very difficult for me to keep asking these questions regarding your general manager. I have listened to her speak on the radio, and she speaks very well for commuter rail. I have also spoken to her on the phone on a couple of occasions and to a few other people at the office, and they've been very good to me.
But I note that soon after she was given this position, she went off on a management training course at Harvard University. I'm wondering if you might be able to give me the costs of that particular course -- the total cost of having her take that course -- and tell me whether that was picked up as a commuter rail expense or where the expenses came in that.
Hon. G. Clark: There's a policy at B.C. Transit for senior management to take leave to pursue studies at Harvard Business School. Lecia Stewart, who is now the general manager, is the third B.C. Transit manager to take such a course. It was not a special deal. Rick Krowchuk here took advantage of that as well. It is something that we offer to the vice-presidents and some of the senior management of B.C. Transit. It's not something that we did as a government. It's a policy that existed, and Lecia Stewart took advantage of that prior to commuter rail.
I want to say further on that question that Lecia Stewart took advantage of that management opportunity, which existed previously for any management person, before she worked for commuter rail, as a vice-president of B.C. Transit -- just so you know the sequence. She then went on behalf of the board to negotiate the MOU with CPR, to go into detailed
[ Page 15873 ]
negotiations. It was as a result of her work on the MOU that she became seconded to start up the commuter rail office and was subsequently appointed as general manager. That's the sequence of events.
I'm sorry, I don't know what the cost for the Harvard question is, but I'm sure you can get that. It's probably been FOI'd many times.
Again, I appreciate that in the current climate, it's difficult to justify any expenditure on training. But I do think that the previous management.... In 1985 Bob Lingwood took advantage of this, and he's now head of the Victoria division of B.C. Transit. In 1990 Rick Krowchuk did, and in 1993 Lecia Stewart did. It's about $30,000 for three months at Harvard Business School. Frankly, it's probably not fashionable to do so, but I think it's important to offer that kind of training to senior management. I think it's been worthwhile, and those three individuals no doubt have benefited from it. They're still at B.C. Transit, and it's a good investment in senior personnel.
D. Symons: I wonder if I might ask one further question on that. Was that $30,000 the tuition fee or was that the total cost, including housing, transportation, babysitting and any of the other expenses that might have been passed along to B.C. Transit?
Hon. G. Clark: That's the all-in cost. I believe that's tuition, residence and everything associated with it. I would think the individuals are paid their salary in addition to that while they're there. It's a leave with pay to pursue this management course.
D. Symons: The figure I was given was considerably higher, so maybe the salary is added in. With three months' salary, would that all add to up over $100,000?
Hon. G. Clark: Yours and my salary.
D. Symons: I have about $120,000. Yes, we should be taking other jobs, shouldn't we?
I wonder if we can move on to something we canvassed a little bit already, and that's dealing with the rail cars. Many of these questions have been asked, but I gather there's a 15-year lease on those, if that could be checked.
The lease is at $6.8 million per year, and if I multiply that by 15, I get $102 million that you're basically going to pay in today's dollars over a period of time. Then you're telling me that at that time you'll have the option of purchasing the cars. So you'll have paid $102 million for some rail coaches that are worth $55 million, and you'll have the option of purchasing after you've paid $102 million for them. Am I right on that? If not, why not?
I'd also like to know, going to Bombardier, whether that particular thing was tendered in the usual way.
Hon. G. Clark: First of all, you can't do it by sort of adding up the interest charges, because if you borrowed the money, you'd still pay interest on it. So it's apples and oranges.
Secondly, the contract for commuter railcars was bid. The two big bidders, aside from the former East Germans, were Morrison Knudsen and Bombardier. Bombardier was the low bid by a significant margin -- several million dollars. The financing is by Wood Gundy. We tendered the financing of the operational lease as well. We haven't concluded that entirely yet, and we haven't concluded the decision as whether it's 15 or 20 years. I'm having a debate among staff around that, but that will be something that comes out of the discussions, no doubt, as part of the financing package. I think both the financing and the leasing of the cars were tendered.
D. Symons: I was looking for some figures, and I'm not finding them here, so they will turn up later. I'll leave that for a moment, and we'll find it in a short while.
You named the other bidders, and Morrison Knudsen was one of them. I gather that they offered something that nobody else did, and that was basically a package deal on rebuilds of engines and rail cars. You mentioned earlier that you couldn't get used rail cars anywhere. I gather that they offered something, and that package deal was a better price than the others. Considering that their rebuilds are, I gather, ground-up rebuilds, not just simply refurbishing, it seems that you might have passed up a good deal.
Hon. G. Clark: No, the member is incorrect. First of all, I think we have to be careful not to be confused between the locomotives and the passenger cars. On the passenger cars, there was a bidding procedure, and they weren't offering rebuilt passenger cars. They were offering new passenger cars, and the price was significantly higher than the new Bombardier passenger cars.
The member may know -- I don't know if he does -- that I actually travelled to upstate New York and visited the Morrison Knudsen facility in a small town. I was trying to lever a bit of a bidding debate on getting jobs in British Columbia. I was trying to convince Morrison Knudsen that if they upped their B.C. content in jobs, that would be helpful to us in adjudicating the bids. I think it was helpful in getting Bombardier's attention, and we did get a very good arrangement with Bombardier for more B.C. content -- $66 million worth of offsets in B.C. I think there will be some announcements to that effect coming up soon. They're doing some good work as a result of that. But at the end of the day, the cost was significantly cheaper for Bombardier -- partly because of the Canadian dollar and partly, having been to the plant in New York, because I'm sure the Canadian plant is much more efficient.
[9:15]
On the locomotives, Morrison Knudsen also builds locomotives, and they bid on a rebuilt locomotive as part of that package. The member is correct there. We had to make a choice on rebuilt freight locomotives or new passenger car locomotives. There was a big debate on that, and on the cost there, Morrison Knudsen was very competitive. The board adjudicated between the two and chose the new passenger locomotives.
Having said that -- I may be out of line here -- I think, in retrospect, it looks pretty good. Morrison Knudsen has declared chapter 11 bankruptcy, I believe, or is on the verge of it. It would have been very problematic, had we contracted them to do business. So it may be fortuitous, but I think they've got some serious problems. They've declared in default. In any event, it's a moot point. We chose not to do so.
[ Page 15874 ]
D. Symons: We were down to the locomotives, and I think you covered part of it. I was going to ask whether there were some side deals with Bombardier, and I think you've covered that.
I'm wondering if this is part of the tendering process normally, because it makes it very difficult if firms don't know that the amount of money we spend on the side in B.C. or purchases we might make here or there can affect the fact that the dollars they might offer on the locomotives or on the rail cars can be considerably cheaper. Because of something you might be able to do as a side deal in Kuala Lumpur, that could have some effect. Or because of the fact that we're buying some SkyTrain cars, as we did from Bombardier, these things make it rather difficult for somebody to put in a fair bid. When there are so many little strings going off in different directions, I don't know how you can compare two firms on an equal basis under that system.
Hon. G. Clark: I think there's lots of experience in this regard, and these companies know full well that offsets are a key component in decision-making. It's right in the tender documents. We ask them to maximize B.C. content.
The member is correct. If it is a very close bid, there has to be a subjective weighting. My ministry does this all the time, and my position at the end of the day is that as long as we can tell the people of B.C. and the opposition members how we ranked it -- "We gave price 90 percent of the weight; we gave a few points for creating B.C. jobs; we gave a few points for buying B.C. companies; we gave a few points for Canadian" -- then when we balance it all together, we have a bid that wins and is defensible. That's how you have to do it. As long as you've got some objective analysis of the bids that you can go public with, I think it's fine.
I have to tell you, though, that in this case with Bombardier, we did lever out of them a significant offset, which I'm very pleased with. It was largely, I think, a result of our trip to New York and our meeting with Morrison Knudsen. Their price was so competitive that it would have been almost impossible not to give them the bid at the end of the day, even if they built the things half in British Columbia.
Price has to be the dominant factor in all of our discussions. Offsets are really important, and we work hard at it in our ministry. We're very proud of the success we've had in that regard. But at the end of the day, the only way you can take a more expensive bid is if you're prepared to stand up in the House and document to the House and to the public all of the other value benefits to British Columbia in making your case. At the end of the day, it's a government decision, one that we are held accountable for here and in the court of public opinion. Fortunately, other factors often lead to an obvious conclusion, which was the case, I think, with Bombardier.
D. Symons: Just going back to the bidding on these, I would gather that the Bombardier cars are not going to be ready for the November 1 startup date that was projected for this project. That's going to a bit of a problem. I think you're bringing in some GO cars to cover the initial start date and that as these Bombardier cars come in.... I'll leave that; you might want to respond to it in a moment.
I'm looking back to the initial one I brought up at the very beginning of commuter rail. I was reading from a newspaper article of June 22, 1993 -- fully two years ago. It says in here: "Finance Minister Glen Clark confirmed yesterday that government officials with the Crown corporations secretariat have nearly worked out the cost of the system with CP Rail." I would gather that "nearly worked it out" occurred very, very recently, because I kept phoning around to find out whether that deal had been signed or not. The minister did, indeed, tell me today that it has been signed, so I'm sure it was after Christmas. It's a real concern that it dragged on so long. You had options of going with CP Rail or Burlington Northern, and there are problems with which part of town they put you in and maybe the speed you can get up to on those particular routes.
With the bringing up of rail service now between Seattle and Vancouver again, it would seem that Burlington Northern is much more amiable to working with people, to using their lines in innovative ways and to bringing in rapid transit and the whole bit. They were extremely helpful in setting up that thing and, really, subsidizing it in a sense with the setting up of a new service to Vancouver. CP Rail, however, has had a history of people trying to deal with them. Commuter rail is not a new invention of this particular government; it's been around for 20 years and various governments at various times have said they were going with this. It has always bogged down in dealing with CP Rail, because basically they want the pound of flesh for using their track.
So the minister went into this with a corporation that they knew was going to take them down to the wire. The minister went into this and committed to buy rail cars, locomotives, properties for putting up things and all of this before he had a firm deal signed with CP Rail, which he knew was going to be a hard bargainer. It would seem that sinking all that money in and committing yourself to it simply strengthened CP Rail's hand. You have made it easy for them to keep on holding out to the very end. They basically have the strong hand and you have the weak hand. In doing it that way -- not getting an agreement first, and then going ahead with the others....
I know there is the time involved, that you want it up and running as soon as possible -- prior to the next election is what the press say; I wouldn't say that -- but the problem is that when you did it in the order that you did, you really gave CP Rail a very strong hand.
Hon. G. Clark: I disagree with that for several reasons. First of all, let me answer the first question. The deal we have with Bombardier is to get eight to ten cars by November 1; that is still on track. The remaining 18 are going to be leased from GO Transit -- and Bombardier has to do that -- for the short-term while the new cars come on. So we hope to have two train sets on opening day, and then the other three train sets will be moved on as they come along. It still allows us to open November 1. We could, I suppose, delay the opening for a couple of months if we wanted to get more new cars and get some bugs out of the system; it is always an option.
On the CP question, here is the problem with the member's analysis. There are only a couple of tracks here, and you can't really get into a bidding war on the two different tracks when they serve two different areas. At the end of the day, you have to make a decision as to which line makes most sense. You can try to entice them to bid against each other, but at the end of the day the Burlington Northern route didn't
[ Page 15875 ]
make any sense from a commuter rail point of view. So it's kind of phony. We can't fool the CPR into thinking that if they don't give us a better deal here, we're going to do Burlington Northern. It just doesn't work that way.
So we had to make a decision on a line that made sense first. I do acknowledge that that means you are therefore captive to the people who own that one line, and that's a challenge. CPR would say -- and I think with some justification -- that they've always been blamed for the failure of the commuter rail project as a convenient whipping boy and that they never really seriously were engaged in the discussion around it. I have to say -- and it's really uncharacteristic of me -- that they have been superb in dealing with the provincial government on this and on some other factors. They really have come to the table and worked with us on solving it.
We bargained. There's been a challenge from here; it's not been all nicey, nicey. These are tough decisions. We estimated $65 million in capital cost. They estimated it, after negotiations came in, at $61 million. So we came in under our projections for the capital costs on their component of the line. It's not for the stations or anything, just their component. Obviously it's proof that they didn't take us to the cleaners. I won't say that there aren't some debates between us and CPR on these questions, nor will I not acknowledge that because we have made some commitments, they have some bargaining strength. I just have to say that they have acted professionally. They want to make this happen; they believe it's an opportunity for them. They worked very closely with us, and there are other elements that the provincial government works with the CPR on, which aid us in our negotiations on commuter rail. One should never underestimate that.
D. Symons: I believe there was a recent study, an independent project analysis of the costs and timing of the commuter rail project. I believe it was by one gentleman, Wydman -- I can't think of the other man at the moment -- but I wonder if you might be able to supply that report to me. I believe you received that a while back. I would be interested in what the terms of reference to the consultants for the study were, whether the study was tendered or put out to bid and the actual cost of the study. If I could have a copy of it, I'd appreciate that very much.
Hon. G. Clark: The cost, I think, was about $31,000, to start with that. I think there was a slight extension. It was $25,000; I think we've given $6,000. I don't think there is an actual document that we asked for on that. I'm not positive on that; we just have to check. There was a verbal....
We had the Crown corporations secretariat, as they are required to do as part of their mandate, keep tabs on these projects that the government is pursuing to make sure they are working on time, on budget, etc. So CCS brought in, essentially, a review audit: how we're doing, where we're going and if the budget is adequate. It was partly as a result of that review that I just acknowledged today that there are some cost pressures on the infrastructure side. That review did a detailed review and audit of where we're at, and they made a verbal presentation, with overheads, on some of the cost pressures. Then we took that cost pressure information and went back to commuter rail, firmed them up, went back to Treasury Board and said we needed the $10 million to $15 million in contingency. That's where it stands now. I don't believe there's a major question here. Maybe I could give the member a summary from something I've got here.
It said that the scope required to implement the project is greater than put forward in the original CCS report -- some of the problems we talked about. There is an incremental extra cost associated with that. Project staff have identified areas where additional funding is required. Project and budgetary controls are in place, and project management has done an excellent job under very difficult time and funding constraints. The requirement for more funding is strictly related to the underscoping of the project before the project team was assembled. Maybe that's what I can give the member -- the summary of this question.
I've touched upon these, but just to give you more detail, environmental mitigation costs are more than we anticipated. Geotechnical costs at station sites are slightly more. As to the improvements to the Heatley Diamond -- I'm not sure the member is familiar with it; that's the level crossing on Powell -- there's a big debate with CN and CP around those improvements. I'm not sure we're going to end up doing those, but it's still part of the debate; it's a few million dollars if we have to do that. Level-crossing costs at the port of Vancouver -- that's a debate around where Rogers Sugar is and how we deal with that question. We're arguing that it's something the port should deal with, and we're incidental to that. They're saying we should pay some costs associated with that.
As for costs related to pedestrian overpasses and underpasses, you're familiar with Mission. Working with Mission council imposed some costs on us, which we believe we should pay as a result of being cooperative and working with them. I believe an overpass is the big expense, and there's some escalation in land acquisition costs around the station.
[9:30]
So that's what the CCS review found, and I'd be happy to share that with the member. They didn't do a big report; it was more of a quick, intense review of where we're at so that we could be guided in how we were going to completion on the project.
D. Symons: I have just one more question on that. I have some concerns with the minister's answer. He said that he paid $31,000 for somebody to show a few overhead slides and give an oral presentation. That sounds ridiculous and rather unbelievable to this member. If you're paying $31,000 for a few slides and an oral presentation by somebody, I think you must have something.... If you don't, you've been terribly negligent in how you asked for things from firms. Words are transitory; slides are transitory. If you see them up, you've got to have something in hand to look at and work with over a period of time.
To pay $31,000 and simply have a presentation given to you seems to me to be a total waste of money. I would say that either somebody there is totally irresponsible or you must have something you're not sharing with me.
Hon. G. Clark: We didn't pay for the document; we paid for the review. They spent weeks living in the commuter rail office, going through it -- essentially auditing where they were at, and doing that. As I said earlier, I could give you the results of the review, but I can't give you a major report, because I don't think we asked for one. I thought the member had FOI'd this some time ago.
D. Symons: Yes, I did; I haven't got it.
[ Page 15876 ]
Hon. G. Clark: I'm sure that's why.... I'll certainly review it. I'll have staff sit down with him and go through the findings. It was more working with our staff to review our forecasts. I think we called it a "project success review." We were driving on the deadline of November 1, and they were in there working in an iterative way with staff, which resulted in us going forward and seeking cost-pressure solutions to a variety of questions. We didn't want to pay for a lot of report-writing; we wanted to pay for their time working with our staff to solve problems.
D. Symons: I'm just reading from an ad in the Vancouver Sun, of March 22, 1995: "B.C. Transit capital project westcoast express commuter rail project: construction of statements and invitation to pre-qualify." What I note in here is -- remember the date is March 22 -- that you've got a November 1 date for startup, and it says that time is of the essence at the end of this ad. I would agree with that statement. It said that all three contracts must be completed by October 1995, and this is March 22. Further down in the ad, it says: "Submissions to be received by B.C. Transit until 3:30 p.m. PST on March 30, 1995."
In other words, they have eight days from the date of this thing appearing in the newspaper to the date that they are to have their submissions in the transit office. I somehow think that if time is of the essence, you should certainly give people a better opportunity than eight days to respond to an invitation to pre-qualify.
Hon. G. Clark: It's not the quote; they're not asking them to bid. This an invitation to pre-qualify. I don't think this is unusual; they come in and pre-qualify. We haven't had any complaints -- I don't know if the member has -- of people saying that there wasn't enough time.
D. Symons: Actually, I've covered this one dealing with costs, so it's going to go quicker than I thought. In the costs that you talked about -- the $103 million and the $71 million more if you count the rail cars and locomotives, which is about $181.7 million, but you've added more than $103 million, so it's getting slightly larger than that.... I'm curious about the Coquitlam station. The property was bought in 1982 when the previous administration was going to bring a commuter rail in. I believe they paid $8 million for it at that time. I'm wondering if the cost of that purchase back in 1982 is part of that $103 million -- or whatever that figure may now be -- and if it's counted now as expense. Or are you simply saying that it's a freebie because it was bought by the previous administration?
Hon. G. Clark: You have to put this in context. That's that huge park-and-ride across from Coquitlam Centre, so it's not like it's vacant land that we're just throwing in for free. It's an existing park-and-ride facility which will continue to be an existing park-and-ride facility, so we're not allocating the costs to commuter rail. The only cost we'll allocate to commuter rail is the little station, the platform that we put adjacent to that park-and-ride facility.
D. Symons: I wonder if you might be able to tell me -- because I think it's finished by now -- the total cost of property acquisition for stations and then add in the station construction, so it's the whole thing dealing with stations. I wonder if you might be able to give me the figures for that.
Hon. G. Clark: Land acquisition right-of-way -- maybe I'm anticipating a question -- is $9,041,000. The actual cost in the revised budget is $10,241,000. So it's $1.2 million over our original budget for land acquisition and right-of-way acquisition.
It's a bit premature, because we're still bidding some of the stations and that, but we think it may be as high as $22 million for stations and park-and-ride facilities. We budgeted about $16 million, so that's a big cost pressure, particularly the park-and-ride costs. I think members intuitively know that land price escalation is dramatic in that area, and park-and-ride facilities are land-intensive. That's been the biggest single cost pressure on the system.
D. Symons: It's a touchy topic, but you had two people closely involved in negotiations with Bombardier and also with General Motors on the engines. Two of those people are Mr. Denhoff as chair of the board at the time and Mr. Bob Tribe as VP of engineering in the projects office. Both of these persons now work with SNc Lavalin, which is in a business partnership with Bombardier, in selling SkyTrain technology. Considering that they are now working for the people that they were negotiating with, it is difficult to know, when that happens afterward, that you were getting the full force of their negotiating abilities when they were working for you. I don't know if you are trying to follow this ethical issue of how you deal with this situation, where your former employees are now employees of the people that they were negotiating with on your behalf.
Hon. G. Clark: Maybe this will help. Neither Mr. Tribe nor Mr. Denhoff were involved in any way in negotiating the Bombardier deal or the General Motors deal. They had left, and when I travelled to New York to meet with Morrison Knudsen, I travelled with Blair Trousdell -- I think he'd just been on the job -- Derek Corrigan and Lecia Stewart. That was before we had done any negotiations, early on in the bidding process. So they weren't involved in any way, shape or form.
It's an interesting philosophical question generally, however, and I'm not sure how you deal with that. Fortunately, in this case they weren't involved.
D. Symons: I'm very pleased to hear that answer, because I was very concerned when I discovered who these individuals were working for. I knew they had very prominent positions with B.C. Transit.
Going back to the time of the decision to choose General Motors as a supplier of the locomotives, there was a Transit board meeting. At that point, a recommendation was brought forth from B.C. Transit or commuter rail or someone. This recommendation was passed out to the board members, and it recommended the Morrison Knudsen purchase. Then the minister himself appeared at this meeting and gave a rather eloquent presentation, at which point the board rightly chose General Motors. If a recommendation had come forward to choose Morrison Knudsen, why did the minister come in and use his very eloquent persuasive methods to convince them otherwise? I believe it was primarily the minister and Mr. Georgetti who were the two main spokesmen for GM, whereas the rest of the people were either open-minded or going along with the recommendation that had been handed to them.
[ Page 15877 ]
Hon. G. Clark: I just have to correct the record. That is absolutely not correct. I did not go into the board meeting and argue against the recommendation. I did attend that board meeting, and I can assure the member that there was lively debate on the subject. I did not have a vote, nor did I voice pressure on the parties. I won't go any further than that. I can only say that the debate was a good one; it was a well-informed debate. The cost difference was very marginal. The board made a decision, as is their right.
The Chair: The hon. member for Richmond Centre continues.
D. Symons: I think, hon. Chair, that the hon. member for Richmond Centre is about to conclude this portion of it, which is very nice.
I have one other that I want to note here, and I mentioned it earlier. I read in a rail magazine -- and I won't be able to locate the name of the magazine right now -- a report on your leasing of rail cars. The report basically said that it was a 15-year contract for $6.8 million per year. I have a document: B.C. Transit to Mayor Len Traboulay and members of the regional transit commission from Glen Leicester. It is dated December 2, 1994. Under rail operating costs, they have $4.85 million, and rolling stock operating lease based on lease of new rather than rebuilt passenger cars and locomotives, $3.69 million. In this particular document they have $3.69 million, yet in the other magazine article I read, there was a $6.8 million figure there.
[9:45]
I assume that that other figure came from someone who had contact with people working for commuter rail. Indeed, I find that the things in the sea magazine on B.C. Ferries seem to be material written right in the B.C. Ferries' office to say what is happening in B.C. I rather suspect that this thing to do with commuter rail was the same. I'm getting two figures, and one is almost half the other.
Hon. G. Clark: That's because '95-96 is only for five months. It starts in November. Let me just give you the numbers; you had it right. For the full annual cost of rolling stock, including both the passengers and the locomotives, it's $8.85 million. The member is correct that it is $1.8 million for the locomotives, and that leaves about $7 million, so I think the numbers in the magazine sound accurate to me.
I'll just wrap this up. There are a couple of points I want to briefly make on the locomotives, just to canvass it for the member. It was a good debate, and I want to say that it wasn't clear that the rebuilt one was the better option, for a variety of reasons. One was that the operation and maintenance of a new service is significantly less -- about $30,000 per year per locomotive for the new version. In addition, the board was also swayed by the environmental point of view. Obviously a new, leading-edge-of-technology locomotive is significantly better for the environment than the older-version diesel and freight locomotives that Morrison Knutsen was talking about. In addition, there are more employment impacts for Canada because they're built in Canada. Finally, the cost of the locomotives was significantly cheaper than commuter rail purchases in both Los Angeles and Florida.
I don't think the debate over whether one was obviously better than the other was as clear as the member might say. It was a long debate.
The member has one last question?
D. Symons: When you brought up locomotives again, you twigged my memory on something.
I have a newspaper article from January 16, 1994, and it talks about Burlington Northern buying some Canadian-made cars from GM locomotives for $890 million. They are buying a large number of them, but it works out to about $2.5 million each. It doesn't say whether it's U.S. or Canadian. They are 400-horsepower diesel-electric locomotives, and apparently they are the gutsiest of them: model SD-70-MACs. I'm wondering if those are the ones you're getting. Are you getting these ones that Burlington Northern thinks are going to be showpieces in locomotives?
Hon. G. Clark: I'll answer that tomorrow.
I just want to make the point that park-and-ride facilities and the costs associated with that.... Remember that those are still assets owned by the government when commuter rail was shut down. They are still increasingly valuable assets.
With that, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee adjourned at 9:48 p.m.
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